HomeSection.comHomes By Herman

Archive for 'Loans / Financing'

FHA & Conventional Loans About To Evaporate For Some Benicia, Vallejo Homebuyers?

June 18th, 2011 categories: Benicia, Buying, Loans / Financing, Solano, Vallejo

How Much Can You BorrowUnless Congress steps in soon, some Benicia, Vallejo homebuyers may find it impossible to get an FHA or conventional loan by early Fall.

That’s because loan limits for the two loan programs that cover probably at least 90% of the loans originated in Solano County are set to change come Oct. 1.

And barring Congressional action, the maximum you can borrow under both programs is going to drop substantially, which means that many Benicia, Vallejo and Solano County home buyers could suddenly find themselves needing to come up with tens of thousands more in down payment or accept a costlier “jumbo” loan.

Right now, the maximum you can borrow with an FHA or conventional loan is $557,500. But as it stands right now, after September 30, the conforming loan limit in Solano County will drop to $417,000 and the FHA limit to $400,200, which is certain to impact local borrowers who are planning to finance a home with a loan amount that exceeds the new limits.

In plain English, that means that any borrower in Solano County who is today planning to buy a home for more Read the rest of this entry »

Written by Rod Herman | Discussion: No Comments »

Big Vote Thursday: The End Of Loan Mods?

February 28th, 2011 categories: Foreclosures / Short Sales, Loans / Financing, The Economy

HAMP SINKINGIf you own a home in Solano County and are thinking of applying for a loan modification under the government’s widely publicized Home Affordable Modification Program (HAMP), come Thursday you may find yourself out of luck.

For that’s when the House Finance Services Committee plans to vote  on a bill that, if passed, would signal the end the White House’s failed loan mod program.

When the HAMP program was announced by President Obama almost two years ago, there were high expectations and hopes that it would help millions of underwater borrowers restructure their loans so that they could stay in their homes with newly affordable monthly payments.

Well here we are two years later, and only about 3% of the $29 billion (yes, billion) that was allocated has been spent. Less than 15% of the Read the rest of this entry »

Written by Rod Herman | Discussion: No Comments »

Obama’s Mortgage Reform Plan: A Bitter Pill

February 19th, 2011 categories: Loans / Financing, The Economy, Viewpoint

Many years ago, another agent in my office shared a great little saying with me.

It was one that really cut to the chase with a seller who wanted to hold out Bitter Pillfor a better offer when the one they had in front of them was clearly the best they were ever going to get.

She would say: I know it’s a bitter pill to swallow…but do you want that pill now or do you want it later?

And that little saying of hers resonated with me the moment I heard about the White House’s proposed mortgage reform plan, which was announced just over a week ago.

I wrote about that plan a few days ago. In a nutshell, the Obama administration has proposed sweeping mortgage policy changes that would:

  1. Require higher down payments
  2. Drop the maximum loan amounts for conventional loans in many areas
  3. Raise loan fees to borrowers
  4. Do away with mortgage giants Freddie Mac & Fannie Mae

Making all these changes would definitely be a very bitter pill for the mortgage and housing markets to swallow right now. But if we really want to make sure we don’t have a repeat of the recent mortgage meltdown, there’s no doubt some changes have to take place.

Mortgage Reform Is Needed…But Now or Later?

We have to make sure the riskiest borrowers really have the means to own a home before letting them slip through the cracks and Read the rest of this entry »

Written by Rod Herman | Discussion: No Comments »

What Obama’s Mortgage Reform Plan Means For Solano County Home Buyers & Sellers

February 17th, 2011 categories: Buying, Contra Costa, Loans / Financing, Selling, Solano, The Economy

You may have heard that President Obama unveiled his plans to reform the mortgage industry last Friday. Since then, his proposal has taken a lot of heat in real estate circles, especially since one of his recommendations is to reduce the maximum loan limits on conventional mortgages in high-cost areas by more than $100,000 as early as this fall.

Among some of the proposals in Obama’s plan:

  • Drop the maximum loan amount in high cost areas (which includes much of the Bay Area) from $729,750 to $625,500.
  • Phase out both Fannie Mae and Freddie Mac by reducing their loan portfolios by 10% a year
  • Raise fees for borrowers
  • Increase minimum down payments borrowers

What This Means To Solano Home Buyers & Sellers

It’s still unclear whether the White House’s proposal to lower the maximum loan limit would really impact Solano County. Currently, for most of the U.S., the limit is $417,000. The majority of the Bay Area, though is at $729,750 — which is the amount that Obama’s plan wants reduced by about $105,000.

pull quoteIn Solano County, however, our limit is $557,500, which is higher than the rest of the U.S., but lower than most other Bay Area counties.

So if the White House plan reduces the loan limit for all high cost areas on a proportionate basis, then Solano County buyers and sellers could definitely feel a pinch, since buyers of homes priced above the new loan limit would be forced into higher-rate “jumbo” loans, which would no doubt kick some buyers out of the market or force some sellers to lower prices to attract conventional loan buyers.

But if the White House plan keeps our limit at $557,500, since it’s already below the proposed $625,500 ceiling, then Solano County Read the rest of this entry »

Written by Rod Herman | Discussion: No Comments »

Even Without Uncle Sam’s Help, Mortgage Rates Still Holding Steady

April 23rd, 2010 categories: Loans / Financing

Interest Rates Still OKIf you checked out the Freddie Mac Weekly Mortgage Survey box on the left sidebar of our web site late yesterday, you’ll see that interest rates remain virtually unchanged from last week’s survey — which is a very good sign.

It’s now been three weeks since the federal government stopped buying mortgage-backed securities. And despite a prevailing consensus that rates would go up perhaps a half-percentage point shortly after Uncle Sam stopped propping up the mortgage market, so far so good.

As you’ll recall, the first week after the government got out of the mortgage-buying business was a little iffy, as rates immediately  jumped 1/8%. But then last week, they dropped back down by almost that same amount to an average nationally of 5.07% with 0.6 points.

And, as you can see in the box on the left side of our website, this week’s rate is essentially a carbon copy of last week: 5.07% with a 0.7 point for a 30-year fixed rate mortgage. Read the rest of this entry »

Written by Rod Herman | Discussion: No Comments »

Haven’t We Learned Anything?

April 20th, 2010 categories: Loans / Financing, The Economy, Viewpoint

I just got the following email in my spam folder, from a mortgage lender out of Southern California:

Subprime Part DeuxEven though we’re not even close to getting out of our nation’s worst financial mess since the Great Depression, we’re already beginning to see a smattering of snake oil salesman peddling loans that look and feel just like their subprime cousins that started this whole economic tailspin.

I guess I was naive to think that those flim-flam men and women who pushed people into homes they clearly couldn’t afford had left our industry for good.

No, it looks like they’ve just been laying low for the last few years. Read the rest of this entry »

Written by Rod Herman | Discussion: No Comments »

Good News For Solano Home Buyers: Interest Rates Drop Back Down This Week

April 17th, 2010 categories: Loans / Financing

There’s been a lot of talk in recent months (including right here) about what would happen to interest rates once the federal government stopped buying mortgage-backed securities and mortgage Rates Drop To 5.07pricing was left solely to the free market.

The prevailing sentiment at the end of March was that rates would go up by about a half-percentage point in the coming weeks. And that’s exactly what started to happened when the calendar changed from March to April.

As I reported last week, Freddie Mac’s weekly mortgage survey on April 8, showed that rates had reached an 8-month high at 5.21%.

So we all waited with baited breath for this week’s report to come out, wondering whether we’d see another 1/8 point jump in the rates.

Well, this week, the mortgage market did an about-face and rates are again right back to where they were on April 1, which is a very encouraging sign. Read the rest of this entry »

Written by Rod Herman | Discussion: No Comments »

Mortgage Rates Up This Past Week; How Will That Affect Solano County Home Buyers?

April 8th, 2010 categories: Loans / Financing

Interest Rates Going UpIn the first week since the government officially exited the mortgage assistance business, interest rates have started to rise, as many experts predicted would happen.

Highest Rates In 8 Months

Freddie Mac released its weekly mortgage market survey earlier today (see the left sidebar) , which shows that the average 30-year mortgage is 1/8% higher today than it was a week ago (5.21% this week vs. 5.08%) and the highest its been since the middle of last August.

Now the big unknown is whether this is the start of a continued climb to even higher rates or just Read the rest of this entry »

Written by Rod Herman | Discussion: No Comments »

6 Big Real Estate Changes For Benicia-Vallejo Home Buyers & Sellers This Month

April 5th, 2010 categories: Buying, Foreclosures / Short Sales, Loans / Financing, Selling, The Economy

Big ChangesIf you’re planning to buy or sell a home in Benicia, Vallejo or even anywhere else in Solano County, you may need a scorecard to keep track of all the changes that either already have occurred or will take place by the end of April.

I’ve been a real estate agent since 1995. And before that I worked in the title and new homes sectors of our business — dating all the way back to 1978. And in all the years I’ve been in the real estate business, I can’t remember another time when this many changes occurred in one single month.

So if you’ve got your scorecard ready, here’s a quick overview of some of the changes that are taking place in April: Read the rest of this entry »

Written by Rod Herman | Discussion: No Comments »

Is The Party Over For Low Mortgage Rates?

March 31st, 2010 categories: Buying, Loans / Financing, The Economy

March 31 - Uncle SamWill Rates Skyrocket As Some Previously Predicted?


Today marks the end of an unprecedented era for the mortgage market.

That’s because this is the final day of the Federal Reserve’s 14-month program to buy up mortgage-backed securities (MBS) — a practice that has kept mortgage rates down in the 5-percent-and-below range.

The Fed’s MBS purchase program was initiated by the government in order to keep mortgage money flowing at the time our economy was suffering through its darkest hours.

Buoyed by a consensus that the economy was on the mend, last fall, the government proclaimed that it would end its MBS buy-back program by the end of the first quarter of 2010.

In other words: today.

A New Era Starts Tomorrow

So starting tomorrow, MBS purchases will fall on the shoulders of regular investors, which means that mortgage rates will again be determined by the free marketplace, without any governmental support. Read the rest of this entry »

Written by Rod Herman | Discussion: No Comments »