Dean Davidson ABR/CSP

October 23, 2008

In the mortgage world a self employed borrower is one who receives income from a business they have 25% or more ownership interest. This can be the only source of income or a supplement to another job. The self employed borrower should expect a request for the most recent 2 years personal and business tax returns. Does this mean self employed borrowers cannot get a mortgage loan? NO! Just expect a full documentation process like everyone else is experiencing these days. Rates are the same for self employed borrowers as for salaried borrowers, but credit score requirements may be higher for the self employed depending on the loan product. Call me when you have a self employed client to discuss specific details.

Here's a sample of Primary Home Purchase money rates today, up to 0+1, with escrows for a borrower with median credit of 720-760. These are subject to vary based on loan amount, occupancy, LTV, credit quality and other factors.

Conforming (using 250K as amt)

30 yr fixed 5.875%

15 yr fixed 5.375%

5/1 ARM, 30 yr am 5.25%

Jumbo (using 650K as amt)

30 yr fixed 7.375%

15 yr fixed 6.000%

5/1 ARM, 30yr am 5.5%

Super Jumbo (using 1M amt)

30 yr fixed 7.5%

15 yr fixed 6.00%

5/1 ARM, 30 yr am 5.625%

Compliments of Ashleigh Sumlin, Bradford Mortgage Company 704-373-2289

October 9, 2008

Friends in Real Estate,

For the 2^nd straight day both mortgage backed securities and stocks fell significantly. Usually they move in opposite directions, but due to margin calls and investor redemptions, many investment funds are forced to sell assets to reduce their leverage. So MBS and stocks moved lower and rates have bumped up. Keep in mind the historical average for a 30 yr fixed loan is somewhere between 7 to 9%, so we are still in a low priced environment that is great for buyers!!

Government loans used to be the exception but are quickly becoming common. At this week's Home Builder's Association the director of FHA in NC reminded us that FHA is much more user friendly - closing costs are similar to conforming, no extra inspections on stick built homes (just a copy of the certificate of occupancy), no more long repair checklists, no income restrictions, no reserve requirements and best of all a minimum 3% downpayment (changing to 3.5% January 1, 2009). The greater Charlotte area maximum FHA loan is approximately $303,000.

Here's a sample of today's Primary Home Purchase money rates, up to 0+1, with escrows for a borrower with median credit of 720. These are subject to vary based on loan amount, occupancy, LTV, credit quality and other factors.

Conforming (using 250K as amt)

30 yr fixed 6.00% 15 yr fixed 5.75% 5/1 ARM, 30 yr am 5.875%

Jumbo (using 650K as amt)

30 yr fixed 7.375% 15 yr fixed 6.125% 5/1 ARM, 30yr am 5.875%

Super Jumbo (using 1M amt)

30 yr fixed 7.5% 15 yr fixed 6.125%

Compliments of Ashleigh Sumlin, Bradford Mortgage Company, 704-307-9908 / 704-373-2289

We as a nation are close to making the wrong decisions at the ballott box next month due to lack of knowledge, understanding, and in many cases just ignoring historical facts. The recent collapse of the financial markets was not, in great part, of this administrations doing. President Bush is far from the fiscal conservative that Ronald Reagan was, but he is not to blame for the failing of Fannie Mae and Freddie Mac. Both have been overseen by the Democrats since their inception. But President Bush did call for a tightening oversight of Fannie Mae and Freddie Mac his first year in office.

Both of these organizations were founded as governmnet sponsored entities, GSE's. So, they are far from the free enterprise status many believe. The government helped get them in the mess they are in, and that is why I said on August 8th, that it would be the right thing to do for the government to back them up and steady our economy, and try to prevent as many foreclosures as possible.

What got us here was the Clinton Administrations insistence on providing more home ownership among minorities, regardless of income or credit standing. Pressure came upon Fannie Mae and Freddie Mac to back the loans financial institutions were being encouraged to write. All the time, and against the warnings of Senator John McCain, the Democrat power brokers close to these institutions were telling investors that both were financially stable and had no problems. All the while, Frank Raines, CEO of Freddie Mac was amassing over $100 million dollars in compensation, while Democrats, Maxine Waters, Barney Frank, Charles Schummer, and the Charlottes own Mell Watt were insisting there need not be any reform of these two institutions. Barney Frank has resisted reform since 1992.

Rep. Richard Baker, R-Louisiana, in a Government Sponsored Enterprises Subcomittee, redicted the collapse of Fannie Mae if nothing was done to reform its practices. Former President, Bill Clinton even stated on Good Morning America, September 25, 2008 that his party (Democrats) responsibility may rest more on their resisting efforts of Republicans in Congress, or by him when he was president, to put those standards in place to tighten up on Fannie Mae and Freddie Mac.

Another interesting fact in all this is who in Congress has benefitted from the lobby of these entities. The top four are Sen. Christopher Dodd, D-CT, #2 Barack Hussein Obama (and the activist organization ACORN which he used to lead) D-IL, #3 Sen. Charles Schummer, D-NY, and #4 Rep. Barney Frank, D-MA. This is why there was so much reluctance to reform.

Can you imagine how they were all scrambling to fix the problem last week, and try to side-track a full investigation into their activities. That shoe is yet to drop.

The Federal Housing Enterprise Reform Act was sponsored by Senator John McCain, R-AZ, was not supported by any of the four Congressmen above, was basically blocked by Democrats, and never made it out of committee. None of the politicians return any of the money which is very possibly tainted by fraud. At least two of the leaders and primary financial benefactors of Fannie Mae and Freddie Mac are key finacial advisors of Presidential Candidate Barack Hussein Obama.

We are getting ready to put the fox in the hen house.

Interest rates are low; incentives for buyers are abundant, property values in the Charlotte Area market have increase in spite of national news. So, where are the buyers? Opportunities for instant equity are plentiful. What is driving the reluctance or fear to take advantage of these market conditions?

My take on all this is lack of education, and listening to outer voices that know no more about the real estate market than they. We have a healthier than most climate for purchasing homes, new or resales. Our unemployment numbers are average for our area, and people continue to spend in other areas. Yeah! I know, and especially at the gas pump.

Those that have a home to sell are in a little more different situation than those that don't. The same incentives that appeal to buyers by new home builders, are competing with the resale market. People that have a home to sell, and don't have to, won't and shouldn't. While they wait for more favorable conditions to sell their homes, another buyer is taken out of the market. Even they however, can offset any sacrifice in equity from the sale of an existing home, with the incentives gained in the purchase of the new home.

But the financially qualified buyer without a home to sell is missing the boat if they don't take advantage of the current benefits to buy now. It is a buyer's market, and it is going away in the near future, especially in the Charlotte area. Builders are already reducing some of their inventories left from 2007, and their prices will begin to creep up, and the healthy incentives will be gone, to say nothing of interest rates which will also rise again.

That's what I meant by "waiting will cost you money."

Underwriting rules are being modified just as quickly as mid-day rate prices. Compensating factors and exceptions for income, debt ratio, credit or down-payment that used to be the "norm" may still be listed in investor's guidelines, but are unlikely to pass underwriting. Automated underwriting is only the first step for approval. After automated underwriting the file goes to a live underwriter, which is where new rules that haven't even been entered in the automated machines yet are being enforced.

Prepare your clients in 3 ways by suggesting for them to:

•1) check their credit at http://www.annualcreditreport.com/ or http://www.myfico.com/ and gather payoff letters to prove any inaccurate credit reporting

•2) gather the most recent 30 days' paystubs, 2 yrs W2s and tax returns, and 2 months bank/brokerage statements because full documentation is the standard now

•3) talk to a reliable mortgage consultant who is quick to communicate any issues BEFORE you write an offer

Here's a sample of Purchase money rates today, 0+1, with escrows for credit 700. These are subject to vary based on loan amount, occupancy, credit quality and other factors.

Conforming (using 250K as amt) 30 yr fixed 5.625%

15 yr fixed 5.125%

5/1 ARM, 30 yr am 4.875%

Jumbo (using 650K as amt) 30 yr fixed 6.625%

15 yr fixed 6.25%

5/1 ARM, 30yr am 5.25%

Super Jumbo (using 1M amt) 5/1 ARM, 4.875%

(30 or 40 yr am)