Joshua Lerette St. Petersburg Florida FHA/VA Mortgage Specialist

Freddie Mac and Fannie Mae will implement a revised Home Valuation Code of Conduct beginning May 1, 2009. In an attempt to increase the reliability of appraisals, the revised code builds on existing seller-servicer guidelines and will apply to lenders that sell single-family mortgage loans to Fannie Mae and Freddie Mac.

One major difference in the code is that lenders will be required to order appraisals from one central clearing house, which will in turn select an appraiser. The down side of such a process is that lenders will have little to no communication with the appraiser, which means there won't be an opportunity to have a discussion or touch base with appraisers before they go out to appraise the house. The new code is intended to help assure that borrowers, home buyers and secondary mortgage market investors receive fair and independent property valuations.

In some areas, lenders have already implemented these changes, and in the next few weeks and months, more will have to begin the process.

Additional Resourses:

Federal Housing Finance Agency's News Release

Federal Housing Finance Agency's Home Valuation Code of Conduct

The Fed was back in the markets this morning aggressively buying Mortgage Backed Securities pushing prices higher as it tries to lower home loan rates. The Fed will be buying $500B of Mortgage Bonds - that equals approximately $4B in buying power each trading day...that is pretty good buying support, which could help mortgage rates move steadily sideways to lower over the first two quarters of 2009.

At 2pm ET the Fed will release the Minutes from the December 16 Meeting which may shed some light on the Fed's view of the economy and the reasoning behind the aggressive cut. The Fed lowered the Fed Funds Rate by .75% to a range of 0 to .25% at that meeting.

With the Fed providing underlying buying support to Mortgage Bonds, I am recommending to float longer-term, but on short-term transactions we should be ready to lock at a moments notice to protect pricing. We will likely see the lowest rates in our lifetime during the first two quarters of 2009. This will be a once in a lifetime opportunity.

For more information about mortgage rates in Pinellas County and surrounding Tampa Bay, contact The Tampa Bay Mortgage Pro.

Mortgagee Letter 08-40 communicates changes to FHA refinance transactions and are effective January 1st, 2009. Although this update includes guidelines that have not changed, I have listed the unchanged ones anyway as a review for those of you already familiar with FHA guides.

Here are the 10 things you need to know about these changes:

1. The max LTV for rate & term refinances (including streamlines WITH an appraisal) is 97.75%*

2. The max LTV for cash-out refinances is 95%* for loan amounts less than the conforming limit and 85%* for loan amounts at or above the conforming limit. (Must have 12 months seasoning and no 30 day late payments)

3. Two appraisals will be required for all cash-out refinances with an LTV above 85%.

4. The mortgage must be current for the month due.

5. New or current 2nd mortgages are eligible with no maximum CLTV.

6. Loan amount for streamline refinances WITHOUT an appraisal cannot exceed the original loan amount.

7. UFMIP rates: 1.75% for all rate & term and cash-out refinances AND 1.5% for all streamline refinances.

8. The FHA Secure refinance will be terminated.

9. Loan amount CAN include: Closing costs, discount points, current interest, prepayment penalties, prepaids, late charges, and escrow shortages.

10. Cash back on rate & term and streamline refinances CANNOT exceed $500.

*All LTVs are before adding the UFMIP

Mortgages are in the news again today...but this time, the news is good! Especially for people looking to buy or refinance a home, as interest rates have dropped to the lowest levels seen since April.

You've probably heard that Fannie Mae and Freddie Mac were taken over or "bailed out" by the Federal Government over the weekend. The announcement came as the government felt that both of these institutions were potentially unable to meet their obligations. These agencies must pay off maturing Bonds every month, and they do so by selling new Bonds. But during the last twelve months, investor appetite to purchase new mortgage-backed security Bonds has deteriorated. As such, it has become more difficult for Fannie and Freddie to replenish capital to fund more loans. If both Fannie and Freddie became insolvent, the housing market as well as the mortgage market would come under further pressure.

With the Treasury stepping in to provide a "backstop" for the mortgage giants, investors now have confidence to purchase Mortgage Bonds. And the greater interest has helped lower interest rates today.

Call me today, so we can discuss what the news means to you and how you can benefit.

Every day St. Petersburg Police Officers risk their lives to protect ours, The City of St. Petersburg recognizes that and so do I. The City of St. Petersburg offers a Police in Neighborhoods (P.I.N.) Home Buyer Loan Program that gives St. Petersburg Police Officers $14,000 as down payment assistance. The funds can be used towards the down payment and/or closing cost on a purchase of a property within the city limits of St. Petersburg.

With that, when financing your purchase with Joshua A. Lerette, The Tampa Bay Mortgage Pro, St. Petersburg Police Officers will also receive an additional $1000 off their closing cost in appreciation for their heroic services provided. The $1000 off closing cost applies on all purchase and/or refinance transactions.

The City of St. Petersburg's $14,000 down payment assistance is a mortgage at 0% interest with a 7 year term. The loan is forgiven during years 1-4 at 10% and 20% for years 5-7. At the end of 7 years, as long as the Officer continues employment within the City of St. Petersburg Police Department and keeps the home as their primary residence, the loan will be completely forgiven. If for any reason the Officer chooses to end their employment with the City of St. Petersburg Police Department or no longer resides in the property as a primary residence, the loan will become due and payable.

How to qualify for St. Petersburg Police Officer Down Payment Assistance

First, the Officer will submit a request for permission to participate in the program to the St. Petersburg Police Department. The department will then determine the employment status with the SPPD and if qualified, forward the request recommending the Officer to the St. Petersburg Housing Department. The Officer will then have to meet with the Housing Department and complete a P.I.N. Loan Application. Once the Officer has completed their P.I.N. Loan Application, they will then need to apply with a City of St. Petersburg approved lender for their mortgage needs. You may contact The Tampa Bay Mortgage Pro for all your mortgage needs. A complimentary pre-approval and credit analysis may be obtained over the phone, on-line, or in person, whatever is more convenient. Once approved for financing, the City of St. Petersburg will transfer closing documents and checks to the title company for closing of the mortgage and purchase transaction.

For more information about the City of St. Petersburg Police in Neighborhoods (P.I.N.) program or other down payment assistance programs in Pinellas County, you may contact Joshua A. Lerette, The Tampa Bay Mortgage Pro.