Below is an update on the latest that has to do with the QRM issue. This is slightly eencouraging news. Please send your comments if you have not done so yet. It seems that we have someones attention and as we all know the attention span of regulators is only a big as the rucous made over an issue.
This is the updated link to send place your comments. http://www.regulations.gov/#!documentDetail;D=HUD-2011-0056-0001
Treasury Official: 'Seriously Considering' Criticism Of Mortgage Rule
By Alan Zibel
Of DOW JONES NEWSWIRES
533 words
24 June 2011
05:00
Dow Jones News Service
DJ
English
(c) 2011 Dow Jones & Company, Inc.
WASHINGTON (Dow Jones)--The Obama administration is "seriously considering" criticism of a proposal by bank regulators that could cause mortgage rates to rise on all but the safest home loans, a Treasury Department official is set to say Friday.
The administration and regulators have been under fire in recent weeks from lawmakers and an alliance of housing industry lobbying groups and advocates for minorities and consumers. They argue that a proposal mandated by the Dodd-Frank financial overhaul law to overhaul the market for mortgage-backed securities will restrict credit and undermine the already weak housing market. The Dodd-Frank law aims to spur sounder lending practices by requiring banks that package mortgages and other assets into securities to have more "skin in the game." They are to meet this requirement by holding 5% of the credit risk for those loans.
An uproar on Capitol Hill has grown in recent weeks over how regulators interpreted a portion of the law that allows certain loans to be exempt from the requirement. Lawmakers, industry officials and consumer groups argue that regulators have misinterpreted the law and drawn up too-stringent criteria for these gold-standard loans, which are likely to cost borrowers less.
Regulators have given the public until August 1--nearly two months longer than originally planned--to comment on the proposal. "We are seriously considering feedback and are committed to getting this rule right, so that we can ensure securitization is a stable and reliable source of credit for consumers, businesses, and homeowners," said Jeffrey Goldstein, under-secretary for domestic finance at the Treasury Department, in remarks prepared for a speech at a housing conference on Friday.
Under the proposal, a "qualified residential mortgage" exemption would kick in when borrowers make down payments of at least 20% and meet certain debt-to-income thresholds. Those loans would be exempt from risk-retention.
But critics worry that the exemption requirements will create a de facto underwriting standard for home buyers, making it hard for many first-time buyers to buy a home without a 20% down payment.
Earlier this week, a bipartisan group of lawmakers decried the rule, with Sen. Johnny Isakson (R., Ga.), saying it would "make recovery in the housing market almost impossible" and Sen. Kay Hagan (D., N.C.) saying that " strict, inflexible restrictions proposed by banking regulators could put home ownership out of reach for many creditworthy American families."
Goldstein, however, said the regulators, by establishing so-called risk-retention rules, aim to solve "one of the major problems we saw in the financial crisis--the lack of alignment of interests" between investors in mortgage-backed securities and the companies that make loans and package them into investments. "We are committed to implementing risk retentionreforms in a thoughtful manner that ensures continued access to sustainable mortgage credit for low- and moderate-income borrowers and protects the health of the still-fragile housing market." he said. Better lending practices, he said, "make future housing crises less likely and less damaging."
-By Alan Zibel; 202-862-9262; alan.zibel@dowjones.com [ 06-24-11 0500ET ]
Dow Jones & Company, Inc.
Document DJ00000020110624e76o0000y
It used to be that if you had VA loans then you could take advantage of lower rates anytime they came about. No appraisal and most of the time no cost. This can still be done. You just have to go through the same bank you have your loan with. That being said I am not employed by Bank of America or Wells Fargo but because Homeowners Financial Group works with them as a mortgage bank I can still get those streamline refinances done without the appraisal.
Most of the time I can give a credit to cover the costs of the refinance. This ends up to be a win for you as a homeowner since there will not be principle added to your loan that you would then pay interest on for the rest of the life of that loan. In a time when rates are this low and you could literally own a home for what could be the same as a car payment it has to be worth the phone call to see how much money you can save.
For more information on VA Loans and Streamline Refinances.
In case anyone has not seen these yet here is a copy of the bipartisan letter that spoke to regulators about the effects of QRM and the housing industry. There has been some serious railing on the NAR over how they are handling the upcoming QRM regulations. It's not just the 20% down issue that is the problem. They know this. From my own personal experience and I have had a few over the last 2 month when speaking with the lobbyist's from the NAR they are concerned about this whole package and this is not the only piece of regulation coming. There are more. A lot of them don't connect with the last regulation which will cause confusion and a tightening of credit. I am trying not to sound like a zealot here but there is a BIG picture that needs to be looked at and the 20% down is one small part of this.
The signitures are possibly your reprsentatives activily trying to help our industry by having the regulation but not the way it is written now. If you would like to see the policy being debated over on QRM please go to http://www.regulations.gov/#!submitComment;D=OCC-2011-0002-0001 . It is there in it's entirety and while there are good things about it there are also something that are just to restrictive for the housing markets right now.
Well lets find out. Here is a flyer for a ministry that is close to my heart. The Clothing Shop clothes people in need here in our community everyday for free. They get their donations from a ton of sources and then are sent people by referral when they are in need of clothing . They have an oppurtunity to collect 5000 pairs of brand new shoes of all shapes and sizes for free. Thats right. I said 5000 pairs of BRAND NEW shoes for men, women and children. They just need to get them from Tempe, AZ to El Mirage where the clothing shop is located. I spoke with the Chick who runs the clothing shop this afternoon and they seem to have the get there part taken care of. It's the packing up that is the issue.
There is limited time for them to get these shoes packed up. There is limited access to the place where the shoes are being stored. They need volunteers to get the shoes boxed/bagged up so that they can be loaded on a truck and trailer to get from Tempe, AZ to El Mirage. Sometimes giving a day to service can be just what the doctor ordered. If you have nothing on your plate tomorrow and you are reading this please come help. Here is the information.
MBS markets have been volatile this morning, even in the face of news that is typically positive for bond markets. The good news is even with all the economic news coming out that should be swinging rates higher they are still holding low. The rates did dip a little lower late yesterday and are holding their own today. This would be that day I was referring to if you were on the fence about locking your refinance or purchase to get that little extra low in your low rate.
In economic news Housing Starts came in higher than expected and building permits have risen substantially. Jobless claims came in slightly below expected. The big news today is that the Philadelphia Fed came in much lower than expectation, it is actually showing a contraction which is not good for the economy. There is a lot of talk today so far about a banking system meltdown in Europe, as we are finding that Greece is not their only issue.
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