Making Sure Your Credit is in Tip-Top Shape!

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Ukraine and China

Tensions in Ukraine flared up again this week, causing investors to shift assets from stocks to the relative safety of bonds. Weaker than expected economic data in China also favored bonds over stocks, while the US economic data was roughly neutral. As a result, mortgage rates ended the week lower.

The most significant US economic report released this week, Retail Sales, contained some good news and some bad news. On the positive side, the results for February were stronger than expected. Unfortunately, the figures for January were revised lower. Overall, this left the data over the two-month period a little weaker than expected. Given the offsetting effects of the solid headline number and the downward revisions, combined with weather related distortions, the report caused no change in the economic outlook and had little impact on mortgage rates.

There was a lot of talk in the mortgage industry this week about a proposal out of the Senate Banking Committee that would replace Fannie Mae and Freddie Mac. Together Fannie and Freddie purchase or insure the majority of fixed-rate mortgages, so any changes to their structure would have enormous implications for mortgage lending. In the proposal, a new government entity would take over many of the functions of Fannie and Freddie, while some of the default risk would be shifted to private insurers. Both political parties support a reduction in the risk to taxpayers, but beyond that opinions vary widely about the appropriate role of government in the housing market. As a result, this proposal is viewed as a starting point for a long political debate, and the implementation of major reform of Fannie and Freddie is projected by most experts to be many years away.

Delayed Financing After a Cash Purchase!

   


If you’ve got a client who is doing a quick closing with cash but may want to consider doing delayed financing, we have an option for your client!  Help them conserve their cash and have them give us a call!

Your borrower might qualify as long as their cash out refi loan doesn’t exceed their initial investment in the property purchased and was an arm’s length transaction.  We must also be able to verify that no financing was acquired for the cash purchase and we must be able to source/trail all the funds used for the cash closing.  All other refi requirements must be met, but this is a great option for clients who are interested in conserving their cash.  (Note on jumbo delayed financing, the transaction must be completed within 90 days of the initial closing or cash out rules restricting the dollar amount of cash out will apply)

As you know, making a cash offer can be of great value in negotiations and getting delayed financing after closing helps refill your client’s bank account.  It’s a win win for everyone!

We look forward to hearing from you and your clients about all your mortgage needs.  Call us any time!