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PARAMOUNT MORTGAGE - LENDER'S BLOG

Rate of Loan Delinquencies Decline in St. Louis District

July 20th, 2009 9:15 AM

Rate of Loan Delinquencies Decline in St. Louis District

St. Louis, MO - The Post-Dispatch reported this week that the loan delinquency rate is less in the St. Louis metro area than in other parts of the country.

A new study released by the Federal Reserve Bank of St. Louis indicates that the rate of delinquent loans in the Fed's 8th district, which encompasses Missouri counties as far west as Lawrence and all the southern Illinois counties to the east, was lower and grew slower than the nation as a whole.

The report produced by a team of St. Louis Fed researchers revealed that foreclosures in the district were at their peak by the end of the year in 2007. Foreclosure rates at that time were 0.78 percent, compared to 0.71 percent for the entire country.

The rate of foreclosures increased throughout 2008 as the broader economy produced more job losses and delinquency rates spread beyond borrowers with risky subprime loans.

At the end of 2008, 1.52 percent of mortgage loans were at least 90 days overdue in the 8th district states of Missouri and Illinois. The national average had climbed to 1.81 percent. The St. Louis region has been spared the worst of the manufacturing crunch that affected states like Ohio and Michigan and the devastating housing bubbles in California and Florida.

Lake St. Louis Makes List of Top Ten Towns

Money Magazine's annual listing of the 100 best towns in the U.S. has given the residents of Lake St. Louis a reason to be proud. Coming in at number nine, the city beat out a few other Missouri cities including Ellisville at 25, Liberty at 29, and Jackson at 59. Glen Carbon, at 91, made the list as the nearest Illinois town.

The list of best towns is published in the August issue of Money Magazine where it described Lake St. Louis as a "friendly town" with parks, lakes and golf courses as some of its best amenities.

Employment opportunities weighed heavily in this year's contest. The magazine noted that recent layoffs at the General Motors assembly plant in nearby Wentzville could make the employment market tougher in the near future lessening Lake St. Louis' chances to make the list in 2010.

Last year the Missouri towns of St. Peters, O'Fallon and St. Charles made the list, but were no shows this year as the August issue of the magazine went to press.

Posted by Customer Service on July 20th, 2009 9:15 AMPost a Comment (0)

Sales of New Homes Surge

July 31st, 2009 7:06 AM

Sales of New Homes Surge

Reported by Adam Shell, USA Today

New home sales surged 11% since May and the nationwide inventory of new homes continues to shrink. This is the latest news released by the government on Monday and indicates a robust pace of home sales since November 2008.

Sales were driven largely by lower prices and low mortgage rates. The numbers, seasonally adjusted, show 384,000 units sold last month vs. 346,000 units in May. More importantly, the inventory supply of homes for sale dropped to 8.8 months in June, down from 10.2 in May. These figures represent the lowest monthly supply of homes since October 2007. Late last year, in the final quarter, home inventory units had swelled to a 12.1 month supply.

Clearly, the trend is for the better. "We are finally working through this excess inventory," says Randall Guttery, professor of real estate at the University of North Texas. "Once we get that excess inventory taken off the market, we can get back to a healthier supply-and-demand-driven-market."

Most experts agree that an inventory supply of six to seven months of new homes for sale represents a normal balance between buyers and sellers. Excessive inventory exerts downward pressure on prices.

Sales gains got an additional boost from the $8,000 Federal Tax Credit for first time homebuyers. This Tax Credit was part of legislation signed into law by President Obama. The American Recovery and Reinvestment Act of 2009 increased the Tax Credit amount and rescinded borrower repayment.

This Tax Credit program has just 17 weeks to go before it expires on November 30, 2009. As the deadline steadily draws near and Johnny-come-lately buyers scramble to take advantage of up to $8,000 in free federal money, lenders and Realtors may feel added pressure to get their deals done in time.

New regulatory rules effective July 30, 2009 introduce mandatory wait times for borrowers to review cost disclosures. Now, regardless of how expeditiously a mortgage file can be processed and underwritten, it cannot close any earlier than the seventh business day after the initial disclosures have been issued. Lenders and Realtors must abide by these new directives.

But even with the new regulatory constraints and the approaching end of the Tax Credit, "evidence is mounting that we have turned the corner for home sales, and that is a precursor for a recovery," says Bernard Markstein, senior economist at the National Association of Home Builders.

Posted by Customer Service on July 31st, 2009 7:06 AMPost a Comment (0)

New Government Regulations Become Effective July 30th

July 24th, 2009 12:50 PM

New Government Regulations Become Effective July 30th

Starting July 30, 2009, new regulations affecting mortgage loan transactions become effective. Borrowers must now be presented with cost disclosures much earlier in the mortgage process allowing them to make better and more informed decisions.

These new regulations will radically affect the timeline for completing a mortgage transaction. The era of the quick closing is over. Now, regardless of how expeditiously a file can be processed and underwritten, it can not close any earlier than the 7th business day after the initial disclosures have been issued.

Saturdays count in the definition of a "business day", but all Federal holidays and Sundays are excluded. Communication with the borrower may utilize email if a consent document is sent and the borrower acknowledges they can receive, view, print and save all emailed disclosures.

The new rules affect both purchases and refinances and apply to primary residences, second homes and investment properties.

New Regulations Include:

Upfront fees cannot be collected and processed prior to providing initial mortgage disclosures. Disclosures will be considered received three (3) business days after being sent, whether by email or surface mail.

The earliest a borrower can close is seven (7) business days after initial loan disclosures have been issued. Changes have been made in the Truth In Lending Act (TIL) to ensure borrowers will have adequate time to review important loan information. Realtors must carefully consider critical timing issues when completing a sales contract.

Borrowers will receive a copy of their appraisal at least three (3) business days before their closing. On May 1, 2009, this procedure became effective for borrowers with conventional loan applications and their appraisals can be sent via email. Receipt of the appraisal by the borrower does not necessarily mean an underwriter has reviewed the appraisal.

APR Changes; If the APR (Annual Percentage Rate) changes during the processing of your mortgage and falls outside of allowed tolerances (0.125% for a fixed rate mortgage, or 0.25% for an adjustable rate mortgage), or if the loan terms and/or fees change, this will automatically trigger the need for a new TIL disclosure. If changes occur at closing, a minimum delay of four (4) days will occur. The new TIL disclosure must be received no less than three (3) business days before closing, or the loan closing cannot proceed. Many factors can contribute to a change in the APR including increases or decreases in the loan amount, fees and closing agent charges just to name a few.

The new rules are a result of several newly enacted laws including, The Home Ownership and Equity Protection Act (HOEPA), the Housing and Economic Recovery Act (HERA), the Mortgage Disclosure Improvement Act, as well as regulations published by the Federal Reserve Board under the Truth in Lending Act (TIL). Fannie Mae and Freddie Mac also implemented the Home Valuation Code of Conduct (HVCC) to ensure accurate property appraisals.

These regulatory changes were implemented to protect the consumer by making them more informed and to guard against deceptive lending practices.

Posted by Customer Service on July 24th, 2009 12:50 PMPost a Comment (0)

Mortgage Fraud Rampant and Growing According to the FBI

July 20th, 2009 9:14 AM

Mortgage Fraud Rampant and Growing According to the FBI

Washington, DC - The Federal Bureau of Investigation (FBI) released its 2008 Mortgage Fraud Report on Tuesday indicating that losses increased 83 percent last year and are expected to climb even higher in 2009. Missouri and Illinois rank in the top ten states with significant fraud activity.

The federal agency said the downturn in the economy, a spike in foreclosures and defaults, and diminishing credit availability "fueled a rampant mortgage fraud climate fraught with opportunistic participants desperate to maintain or increase their current standard of living."

"Industry employees sought to maintain the high standard of living they enjoyed during the boom years of the real estate market and overextended mortgage holders were often desperate to reduce or eliminate their bloated mortgage payments," the report said.

The FBI considered two types of mortgage fraud:

Fraud for property - This fraud involves an applicant making misstatements like embellishing income and concealing debt to get a loan.
Fraud for profit - Elaborate schemes are used to falsify appraisals and loan documents. Other techniques involve straw buyers, identity theft and employing shell companies to deceive.

The FBI says victims include borrowers, the mortgage industry and neighbors who ultimately lose housing value. The report collected data from law enforcement, the mortgage industry and other government agencies.

An FBI Snapshot of Mortgage Fraud:

Estimated Annual Losses*: $4 billion to $6 billion
Total Mortgage Fraud Suspicious Activity Reports (SARs) in Fiscal Year 2008: 63,173, with more than $1.5 billion in losses. (2009 SARs through 4/30/09: 40,901)
Total FBI Mortgage Fraud Task Forces/Working Groups: 65
Pending FBI Mortgage Fraud Investigations (through 4/30/09): 2,440
Cases opened in Fiscal Year 2009 (through 4/30/09): 965 (compared to 136 in all of Fiscal Year 2004)
Successes in Fiscal Year 2008: 574 indictments/informations; 354 convictions
States with Significant Mortgage Fraud problems in 2008*: 1. Rhode Island 2. Florida 3. Illinois 4. Georgia 5. Maryland 6. New York 7. Michigan 8. California 9. Missouri 10. Colorado

*Source: The Prieston Group - Source: Mortgage Asset Research Institute

Link: Mortgage Fraud

Posted by Customer Service on July 20th, 2009 9:14 AMPost a Comment (0)

New Incentive to Buy Now Through St. Charles County Program

July 6th, 2009 1:32 PM

New Incentive to Buy Now
Through St. Charles County Program

St. Charles, MO - If you are a first-time home buyer wanting to purchase a new home in St. Charles County, or an existing homeowner planning to move to St. Charles County and buy a new home, free money is waiting for you.

Home St. Charles, a program of the St. Charles Economic Development Council (EDC) has just created a "Welcome Home" incentive program offering new home buyers in St. Charles County an extra $1,000 to purchase.

A first-time home buyer could add this to their Federal Tax Credit increasing their purchase incentive. The program has a budget of $10,000 and is limited to 20 buyers. Buyers will need to obtain a $500 commitment from a builder or lender which will then be equally matched by Home St. Charles and then made available at the closing table.

"As part of our broader economic solutions campaign, the Welcome Home Incentive Program is designed to help attract new residents, sell new homes, and impact local jobs in St. Charles County," said EDC President Greg Prestemon.

"We also hope this effort will serve as a challenge to other community groups, businesses, and organizations to encourage them to consider how they can refocus resources and programs to have an immediate and positive impact on the local economy."

Here are some of the basic details:

$500 new home incentive to new residents of St. Charles County or first-time home buyers in St. Charles County.
Applies to single-family new construction or new inventory.
Purchase price cannot be more than $267,000 (the median sale price of a new, single-family home in St. Charles County.
The incentive will apply to NEW contracts signed after July 1, 2009.
$500 must be matched by participating home builder, banker, or mortgage broker for $1,000 total credit.
Incentive is paid at closing.
20 rebates will be available for a total of $10,000.
The incentive application form is available at homestcharles.org.

In addition to low interest rates, affordable sales prices and the $8,000 Federal Tax Credit, potential St. Charles County buyers have a profitable incentive to buy now!

The "Welcome Home" Incentive Program offered by HOME St. Charles, the Economic Development Center and Partners for Progress of Greater St. Charles is designed to attract new residents, sell new homes and impact local jobs in St. Charles County. Details can be found on the web site at www.homestcharles.org

Link: Welcome Home

Posted by Customer Service on July 6th, 2009 1:32 PMPost a Comment (0)