Who is left to refinance?


Plenty of folks, per the number crunchers at CoreLogic. Putting aside the question of, "What will a world of 3.5% 30-yr borrowers look like in five years?" there are still oodles of homeowners with rates in the 5% and 6% range who could benefit. "Roughly 69% of American homeowners with mortgages at the end of the second quarter had rates of 5% or higher and about 33% of them had rates above 6%, according to detailed mortgage data provided to The Times by Santa Ana research firm CoreLogic."

-Terry O'Donnell

I know there are many people who have tried but various problems keep them from refinancing.  If I haven't talked to you about it shoot me an email or call at (615) 777-4663 and we can discuss it. 

Fee Increase to Impact Home Loans

The Federal Housing Finance Agency (FHFA) has again increased the guarantee fee they charge to lenders delivering loans to Fannie Mae and Freddie Mac. This is important to know, as this increase has a rippling effect that will impact the cost of mortgage financing.

Here's what's happening and what it means to home loan rates:

What exactly is this "g-fee"? The guarantee fee or "g-fee" is an amount charged by mortgage-backed securities (MBS) providers, like Freddie Mac and Fannie Mae, to help protect against credit-related losses in the overall mortgage portfolio. In other words, it acts a lot like insurance and helps lower the overall risk...which means home loans can be offered at terrific interest rates to borrowers that have good – but not perfect – credit.

What exactly is the impact of the rate increase? The increase will impact loans with different amortizations in different ways. For example, for a $200,000 home loan, the increased g-fee (assuming a .125% increase in rate) would equate to $250 more per year in interest, or $7,500 more over 30 years. Someone buying or refinancing a home can certainly choose to buy down the cost with cash up front – but most folks will not do this.

Why is the guarantee fee being increased? FHFA has increased the guarantee fee to collect more revenue to enhance the safety and soundness of the Government Sponsored Enterprises (GSEs), and perhaps indirectly encourage private firms to participate in the mortgage market.

Who will this impact? The change will impact all new borrowers using Fannie Mae and Freddie Mac loans.

When will it start? Officially, the increase to guarantee fees will begin on December 1, 2012. However, Fannie Mae will also be making adjustments to pricing for those loans that are committed on or after November 1, 2012. It’s important to note that the increase is already being seen in rate sheets right now, since home loans being originated now will likely not be closed, pooled and securitized until December and therefore will need the increased g-fee priced in earlier.

The bottom line is that the g-fees will be going up...and this will impact homebuyers looking to obtain a home loan through Fannie Mae and Freddie Mac.

~Mortgage Market guide

P.S. I am told that most if not all companies have already reflected this is this in their pricing. And as you know the rates are still amazing. But bottom line it is another case where big government is getting paid by you and you probably didn’t even realize it.

Learning To Use Credit Wisely

While we were driving back to Nashville, we listened to the “Dave Ramsey show”, which I haven’t done in a while. I think he does a tremendous amount of good, except if you follow him completely you will wind up without a credit score. He teaches folks to live without credit and I believe people should learn to manage credit.


He does that because there are a lot of people who will never manage it. They fall victim. So credit may be  similar to addiction to alcohol, gambling or tobacco. You just learn to use it, not abuse it.

He also talked about all the good people trying to talk to the major mortgage servicing companies about missed payments, late payments, short sale approvals and the like. He used their names which I will avoid. He points out that the person receiving the calls hates their job and for the most part doesn’t want to be there. That is probably why they aren’t there the next time you call. They found a better job and moved on, leaving you to talk to someone who could care less. He just says to keep trying, but lower your expectations. And if they tell you you have to be late or skip payments, don’t listen. You just hurt yourself more in the long run.

If you want someone to talk to, to find out if you have options, please give me a call at 615-777-4663 or send me an email at george.margrave@migonline.com, I am here to help in any way I can.

Meet Our Newest Team Member

This week I am pleased to announce that I have added a new member to my team.  You may know him from past times at MIG.  He is David Baker.  It will be his job to do everything that will make our clients continue to believe that no one can give better service than the George Margrave team at MIG.  He comes in with experience with a lot of the things he needs to know.  The rest he will pick up quickly. Welcome him when you get a chance.  You can reach us at 615-777-4663.

Fannie Mae, Freddie Mac Issue New Short Sale Guidelines

by:  Sorohan, Mike; MBA NewsLink

The Federal Housing Finance Agency yesterday announced new standard short-sale guidelines to be used by Fannie Mae and Freddie Mac.

The guidelines to Fannie Mae and Freddie Mac mortgage servicers are designed to align and consolidate existing short sales programs into one standard short sale program. The streamlined program rules will enable lenders and servicers to qualify eligible borrowers for a short sale more quickly and easier.

The guidelines, which go into effect Nov. 1, will permit a homeowner with a Fannie Mae or Freddie Mac mortgage to sell their home in a short sale even if they are current on their mortgage if they have an eligible hardship. Servicers can expedite processing a short sale for borrowers with hardships such as death of a borrower or co-borrower, divorce, disability or relocation for a job without any additional approval from Fannie Mae or Freddie Mac.

Key components of the new guidelines:


• Offer a streamlined short sale approach for borrowers most in need. To move short sales forward expeditiously for those borrowers who have missed several mortgage payments, have low credit scores and serious financial hardships the documentation required to demonstrate need has been reduced or eliminated.


• Enable servicers to qualify certain borrowers who are current on their mortgages for short sales. Servicers will be permitted to process short sales for borrowers with certain hardships, such as death, divorce or other life change, without additional approval from Fannie Mae or Freddie Mac, even if the borrowers are current on their mortgage payments. Borrowers would qualify for a short sale if they need to relocate more than 50 miles from their home for a job transfer or new employment opportunity.


• Deficiency judgments. Fannie Mae and Freddie Mac will waive the right to pursue deficiency judgments in exchange for a financial contribution when a borrower has sufficient income or assets to make cash contributions or sign promissory notes. Servicers will evaluate borrowers for additional capacity to cover the shortfall between the outstanding loan balance and the property sales price as part of approving the short sale.


• Service member guidelines. Service members who are being relocated would be automatically eligible for short sales, even if they are current on their existing mortgages, and will be under no obligation to contribute funds to cover the shortfall between the outstanding loan balance and the sales price on their homes.


• Consolidate existing short sales programs into a single uniform program. Servicers will have more clear and consistent guidelines making it easier to process and execute short sales.


• Provide servicers and borrowers clarity on processing a short sale when a foreclosure sale is pending. The new guidance will clarify when a borrower must submit their application and a sales offer to be considered for a short sale, so that last-minute communications and negotiations are handled in a uniform and fair manner.


• Second lien holders. Fannie Mae and Freddie Mac will offer up to $6,000 to second lien holders to expedite a short sale. Previously, second lien holders could slow down the short sale process by negotiating for higher amounts.

FHFA announced guidelines in June that establish strict timelines for servicers considering short sales, part of a broader effort known as the Servicing Alignment Initiative, to streamline Fannie Mae and Freddie Mac programs for short sales and other foreclosure alternatives to assist struggling homeowners.

The programs being aligned are Fannie Mae’s Home Affordable Foreclosure Alternative and proprietary short sale programs and Freddie Mac’s HAFA and proprietary short sale programs. The current Fannie Mae and Freddie Mac HAFA programs are modeled on the Treasury Department’s Home Affordable Foreclosure Alternative program, but with this guidance, there will be one program offered by Fannie Mae and Freddie Mac, known as the Standard Short Sale/HAFA II.

“Short sales have become an increasingly important tool in preventing foreclosures and stabilizing communities,” said Leslie Peeler, senior vice president with Fannie Mae. “It is vital that servicers, junior lien holders and mortgage insurers step up to the plate with us. These new guidelines will open doors to help more homeowners qualify for short sales, remove barriers to completing short sales and make the process more efficient for homeowners and servicers.”

TN Closing Costs Are Average for U.S.

Origination and title costs on a $200,000 mortgage averaged $3,754 nationwide, down 7.4 percent from 2011, based on Bankrate's annual survey. Origination fees declined 1 percent; while title and closing costs shrank nearly 12 percent. For the third straight year, New York had the highest closing costs at $5,435, followed by Texas at $4,619 and Pennsylvania at $4,467; while Missouri, Kansas, and Colorado had the lowest closing costs at $3,006, $3,193 and $3,199, respectively.

The average closing cost on a $200,000 mortgage in Tennessee in 2012 is $3,747 (in line with the national average) -- $1,587 for origination fees and $2,160 for title and closing costs.

Bankrate.com surveyed up to 10 lenders in each state in June 2012 and obtained online good faith estimates for a $200,000 mortgage to buy a single-family home with a 20 percent down payment in the state's largest city. Costs include fees charged by lenders, as well as third-party fees for services such as appraisals and title insurance. The survey excludes taxes, property insurance, association fees, interest and other prepaid items.

To see results for the entire U.S., go to: http://www.bankrate.com/finance/mortgages/2012-closing-costs/closing-costs-by-state.aspx

[SOURCE: Bankrate.com]

Call me at 615-777-4663 or email me at george.margrave@migonline.com .

Check out our credit tips at www.youtube.com/teammargrave

MIG Took 4th Place in TN in Market Share Gain

• Statewide Market Share Gain—MIG took over the 4th place in statewide market share for the first 6 months of 2012. AND we are only $25M behind SunTrust to move up another position. I feel confident that we can pull it off in the next 6 months.


• Great Customer Survey Responses for June—we had our highest response rate yet with 24% of closed loans responding. My personal belief is that customers respond to “satisfaction surveys” when the experience is really great or really poor. The fact is proven in our rising response rate. I would put these results up against any competitor in the state.

• Survey responses

o 98.4% rated the LO good or excellent

o 100% rated the processor good or excellent

o 96.1% stated documents were ready on time

o 96.9% stated clear where to make first payment

o 97.6% expected or better than expected overall experience

o 97.6% good or excellent total experience

o 97.6% would recommend MIG to others

~~~From Steve Smith

You can reach me at 615-777-4663 or via email at george.margrave@migonline.com if you would like to find out what we can do for you or to chat about these numbers.