It’s no surprise that we are enjoying historically low interest rates. However, at least here in the Denver area, we are also dealing with very low inventory levels as well.  If you follow www.insiderealestatenews.com you may have read a recent article from John Rebchook where he talks about the decrease in the number of released deeds in 2011.  A recent report released by the Colorado Division of Housing shows a decrease from 251,861 in 2010 to 235,749 in 2011.  In short, release activity falls as home purchases and refinances drop.       

            So why have low interest rates not correlated into an increase in recent market activity?  “Ten years ago, even a small decline in the mortgage rate would have produced quite a bit of new refinance and sales activity.  But since 2008, tighter lending standards and a drop in the number of eligible buyers has prevented a sizable surge in new activity in spite of record-low rates,” said Ryan McMaken, spokesperson for the Colorado Division of Housing. 

            As we look forward to inventories rising in the spring there may be some good opportunities right now.  With the imbalance of low inventory and the number of buyers right now there is great potential for new listings.  I’ve heard realtors saying that they’ve shown their clients everything that’s currently on the market and their waiting for new listings to become available.  I’ve also seen numerous instances lately where a listing receives 3-4 strong offers as soon as it hits the market.  This could be a great opportunity to help homeowners that are currently upside-down to list their properties.  With limited competition, there’s potential to receive offers that could help them get out from under their current property and shop for something else. 

            The other positive spin is that there was an increase in released deeds of 15.5% from the 3^rd to 4^th quarters of 2011.  “Real estate activity perked up a bit during the fourth quarter, which would reflect some very recent growth in employment and some mild increases in home prices,” McMaken said.  With many qualified borrowers waiting for more listings to hit the market hopefully this trend can carry into 2012.

Let Mark or me know if you have any questions or if we can help with your mortgage needs. Thank you, Joel Houwer.

We also have to tell you that  here in Colorado we are regulated by the division of real estate and now you know.

Posted by Mark Afman under Home & Mortgage & Mortgage Information & Real Estate | 4 Comments »

A few days ago Joel posted an article on G-Fees or Guarantee Fees and how rates on Conventional loans will be going up due to the fact that Mortgage borrowers are being saddled with paying the Temporary Payroll Tax Cut Continuation Act of 2011. Interesting how a “tax cut” is still costing someone money and that someone could be you if you are looking to buy or refinance soon. Now they not be calling this a tax increase but since you may have to pay more money for a government action, it is the same thing as a tax hike to you. In addition, even though the Payroll Tax Cut Continuation is being called “Temporary”, I doubt if this increase in G-Fees will be “Temporary”. A wise man once said “There is nothing more permanent then a temporary tax”. At any rate, in that article Joel correctly pointed out that there will be interest rate hikes of around one eighth or one quarter percent on conventional loans but no interest rate hikes on FHA loans.

However, after a little more research we have come to find out that even though FHA rates are not going up, It looks as though FHA Mortgage Insurance Premiums may rise to help pay for this Temporary Tax Cut. I do not have any specifics at this time but as soon as I do, I will get them posted.

The bottom line is that if you are looking for a home or are thinking if refinancing, it would be better to do it sooner then later.

More to come.

Let us know if we can answer any questions.

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Recently, there’s been a lot of talk about G-fees (guaranty fees) increasing and how this may affect interest rates.  You may have heard about this from a number of sources and there seems to be varying opinions…some more dramatic than others…floating around about what this will do.  

          The reason for the G-fee increase is because the Temporary Payroll Tax Cut Continuation Act of 2011 was recently signed into law.  Among its provisions, this new law directs the Federal Housing Finance Agency (FHFA) to increase guarantee fees charged by Fannie Mae & Freddie Mac. 

          So you’re probably wondering what this all means to you.  Because the increase specifically affects Fannie Mae & Freddie Mac we only expect to see changes in Conventional/Conforming products at this time.  With the increase in G-fees we are starting to see a decrease on what investors are paying for a loan at a certain interest rate.  Based on what we’ve seen so far, we can expect rates for Conventional/Conforming products to increase by .125% to .25% in the foreseeable future.  So, it doesn’t translate into a dramatic increase but any increase is worth noting so it’s gotten its share of attention.  

          Also, it’s worth mentioning that this does not affect FHA.  This will result in an even larger spread between Conventional and FHA rates.  So, with FHA rates most likely staying the same and Conforming rates rising, FHA may be a more attractive option.  For savvy borrowers with less than 20% down, it might make sense to put 3.5% down and save/invest the difference. 

          In conclusion, no…the sky is not falling.  Yes, we will probably see a slight rise in Conforming rates in the coming months.  However, we expect to continue to enjoy historically low rates for the foreseeable future.  You can spend your time worrying about whether Tebow can continue passing like he did against the Steelers instead of stressing too much about where rates are going. 

          Summary:  The Temporary Payroll Tax Cut directs the Federal Housing Finance Agency (FHFA) to increase G-fees charged by Fannie Mae and Freddie Mac.  Interest rates on Conventional/Conforming products will likely rise .125% to .25% in the near future.  This does not affect FHA rates so the spread between FHA and Conforming rates will increase.

If you have any questions, feel free to contact Mark or me and we will be happy to help.  Joel Houwer

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Are you a “glass is half full” or “glass is half empty” kind of person? Growing up, I was very cynical about life and even into my adult years I was a pretty pessimistic guy. When something bad would happen I would justify it by thinking that it was going to happen anyway so why should I think that life would be any better. Sad huh? I was one of those people that thought that life owed me somehting and I could not figure out why life was not paying up. Then I realized that life did not pay back something that it did not owe. It took me awhile but I came to realize that life is what I could make of it. Not the other way around. I still have difficult times, as I’m sure you do. But it just makes more sense to me to know that I can work my way out of it using whatever brains and talents I might have.

So what does this have to do with anything? It occured to me that during this time when the economy is percieved to be in pretty rough shape, I thought I would share a few items that could give us all a little boost. In the Real Estate world, the more knowledge you have, the better your chances are of doing well so here are a few “glass is half full” points. 1) The Denver Business Journal reports that unemployment is down to 8.1% in Colorado. Still too high but it’s better then the national average and the state added 8800 new jobs. 2) Colorado Small Business jobs are up .5%. OK, not a huge number but it’s a step in the right direction. 3) Forbes rates Colorado the 5th best state for business. Not bad, 5th out of 50. 4) The Boulder County Business Report is reporting that foreclosures are down in the Denver Metro Area. Down is better then up. 5) CNN reports that existing homes sales were up in October and since the Wall Street Journal reported that buying a home is less expensive then renting, right now, Why not get the word out.

Let the people in your database or sphere of infulence know these things. If they are anything like I used to be, they could use some good news right about now.

Let me know if you have any thoughts or comments.

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It’s always nice to get a note from people telling me that I my services are appreciated. My company askes for feedback after a deal is done and, although I don’t do this very often, I just wanted to share these kind words and say thanks for the opportunity to help them.

My Family and I have known Betty Armbrust and her son, Patrick, for many years and they recently said that “Many of my clients have used Mark Afman for loans to purchase their homes in the past. All have been more than happy with Mark and the loans that closed. Always on time and he keeps me and my clients fully informed” and “Mark is a problem solver who gets loans closed. We include Mark in our mortgage broker referrals to buyers. Many of our buyers have used Mark for home financing and he has never failed to fulfill promises and get them closed. One of many things I particularly value about Marks approach to business is the fact that he is “cool headed”. If a problem comes up he simply solves it. Thanks Mark for all your efforts on behalf of my buyers”

Rebecca Hamlin was a buyer that I helped and whe wrote “Mark Afman was very helpful and always kind and patient. That is really nice to have in situations when people are new to the process.”

Dave Browning is a Realtor and recently wrote “Without hesitation I recommend Mark Afman for any lending needs – he’s the absolute best at making clients comfortable with what can sometimes be an unfamiliar subject, while at the same time giving them expert advice and working in an efficient and professional manner. As a result, I’ve recommended Mark to important clients over and over, and will continue to do so; and hope you have the chance to do the same.”

Carla McCue was a relocation buyer and she wrote. “Mark Afman was great and continued to communicate with me even when I was busy coordinating the rest of my move to Denver.”

Leslie Downey told me that “Mark has been able to assist in putting together tough mortgage deals, counseling clients and helping them plan and get ready so that they can purchase a home within 6 months to a year when they have a few credit problems. He is willing to put in the extra time it takes with a first time homebuyer to be sure that they understand the financial process.”

On  January 27, 2011, Glyn Scourfield-Thomas wrote that “Mark is an excellent Mortgage Banker. He is thorough and has helped my clients obtain the best available motgages for their circumstances. Great knowledge of CHFA and other special programs.”

Thanks to all of these kind words. Sometimes in this difficult process we the call mortgage loans, it’s nice to hear that your offorts are appreciated.

Mark Afman

Senior Residential Mortgage Specialist

Universal Lending Corporation

6775 E Evans Ave, Denver, CO. 80224

NMLS # 299217ColoradoLic #100017652 

Direct: 303-759-7392, Cell: 303-905-2488, Fax: 866-896-9240

I’m honored to be selected as a 2011 Five Star Mortgage Professional by 5280 magazine.

 Apply online at mafman.ulchomeloans.com

Please visit me at www.facebook.com/AfmanHomeLoans, or www.twitter.com/afmanhomeloans

 Check the license status of your mortgage loan originator at http://www.dora.state.co.us/real-estate/index.htm

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I just received this information and wanted to pass it on.

Here is some information on the Emergency Homeowner Loan Program (EHLP) that you may want to forward to your Realtor clients. The program is designed to assist homeowners who are currently 90 days or more delinquent on their first mortgage.  The program will offer a declining balance, deferred payment “bridge loan” (non-recourse, subordinate loan with zero interest) for up to $50,000 to assist eligible homeowners who have become unemployed or underemployed due to the economic downturn or a medical condition. 

Information about the program including eligibility requirements and the application can be found at www.findehlp.org  

The funds will be distributed through a state-wide lottery which will be held in early August.  If a homeowner is interested in getting into the lottery they must complete the application and send to Douglas County Housing by 5:00 p.m. on July 22, 2011.

Completed applications may be sent to Douglas County Housing Partnership as follows:

• Email to: ahugh@douglas.co.us
• US Postal: Douglas County Housing Partnership, c/o Ann Hugh, 9350 Heritage Hills Circle, Lone Tree, CO 80124
• Fax: 303-814-2966

So if you know of anyone that might benefit from this program, send them this information.

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You need something and someone else has that something and that someone wants something in return (that you have) for providing what you need. So you enter into a transaction to  exchange the one thing for the other. It can get more complicated then that but that is the core of how an economy works. To me the question is this. Is the transaction  a battle where there is a winner and a loser or do both parties walk away happy because they worked together to come to satisfactory conclusion? An old real estate agent once told me that anytime two parties are trying to get a transaction done “one is selling and the other is being sold…just make sure that you are doing the selling.” I could not disagree more. The sales transaction does not have to be an adversarial one but rather a cooperative effort to get both parties what they need or want. I do understand that the buyer has to “beware” and many times the seller is doing the “selling” and the buyer is getting a bad deal. But I do firmly believe that if a buyer does some research and a little due diligence, they can find someone that will work with them to get them what they want or need and still come away with a fair profit for themselves. Ask for referrals from someone you trust. Ask for references from the party you are thinking of working with. Do some internet research on that person or company that you are thinking of using for a product or service. Even after doing all that, at some point you will have to have some trust in that person or company.

When I meet with a potential client, they usually sit on one side of the deak and I sit on the other side. It would be nice if the image of that relationship were one where we are all on the same side of the desk working together to get to a closing. It would be a little crowded with my desk but still image is what I’m shooting for here.  I don’t have any problem with a buyer asking questions about my rates, costs, or how I do things. In fact, I encourage that. I want the borrower to be comfortable with me and the loan that I am providing. But when it gets to the point where I am thought of as the enemy or, worse, my integrity is being questioned, then either I have not done my job or that borrower needs to find another lender. 

Your whole life is filled with transactions, don’t make all of them a battle. There is no way you can do that and live a happy life.

I welcome your comments and, as always, feel free to contact me if I can answer any questions or help you with a home loan.

Then and Now: The Denver Natural History Museum or The Denver Museum of Nature and Science…depending on how long you have lived here.

The Denver Natural History Museum was built in 1900 at the east end of City Park with an incredible view of the skyline. At the time it was near the very eastern boundary of the city. Now, the Museum of Nature and Science is housed in a building that wraps around the original. This “then” photo was taken in 1917 showing the original building and the granite sculptured entrance that is still there today but the museum takes up a lot more space. I can remember going there as a little boy marveling at the skeletons of dinosaurs and whales and seeing the dioramas of life as it once was.

Click on the photo for a larger version.

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There is a comedy sketch that has been done by several British comics called Four Yorkshiremen. <iframe title=”YouTube video player” width=”480″ height=”390″ src=”http://www.youtube.com/embed/Xe1a1wHxTyo” frameborder=”0″ allowfullscreen></iframe>The version I like the best is done by 4 of the members of Monty Python. The gist of the sketch starts out with 4 well dressed gentlemen sitting in what appears to be an exclusive club, sipping some expensive french wine. They go on to remember their childhood “30 years ago” and how tough it was and proceed to try to outdo each other in their descriptions of how difficult they had it until it gets into the ridiculous. “We got evicted from our hole in the ground, we had to live in a lake”. “We had 150 of us living in a shoe box in the middle of the road”. “I used to have to get up half an hour before I went to bed and go work at the mill for 29 hours a day”. The punch line…well I’m not going to tell you the punch line. Google Four Yorkshiremen and watch it.

The reason I bring this up is to ask the question, how will we look back on our lives.  It’s a little bit of human nature to want to build ourselves and our accomplishments up in our minds and that seems to work better when we look at where we came from and how we overcame a lot of adversity. So we make that adversity even worse then it really was so that our accomplishments seem better then they really are. It makes us feel good. However, I submit that as funny as this sketch is, if we have a good attitude and outlook on life, then we don’t need to exaggerate the good or the bad. Life was not more difficult or easier in years past and it is not any better or worse now. Circumstances can be better or worse but not the basic tenants of life remain the same. Life is what you make of it. You can’t always control what happens to you but you can control how you react to it…for what it’s worth.

Then and Now:

Speaking of tough times, Cherry Creek has always been temperamental. In the 1860′s the native people tried to tell the new arrivals that the buildings they built next to the creek bed (sometimes in the creek bed) were going to washed away when it floods. This advice was ignored until one day in 1864 when the little trickle became a torrent and did wash away several buildings including the office of the Rocky Mountain News. It has flooded several times since then but one of the worst was when the Castlewood Canyon Dam (just upstream from Franktown) broke in 1933. The resulting rush of water downstream ripped several bridges out but this one across Wynkoop Street survived. Click on each picture for a larger version.

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When the Sub Prime market blew up and went away (thank goodness) there was a gap in the the kind of loan product that would help buyers who did not have the greatest credit. FHA loans, although not as easy as Sub Prime If-you-are -breathing-you-get-a-loan loans, filled that gap pretty well. The combination of good rates, low down, and a little more lenient credit standards makes it a very desirable product even now. It became a loan that people with excellent credit even began to prefer. The only down side of FHA loans is the mortgage insurance. Recently that down side has become worse due to 2 separate increases in the FHA MI premiums. So with that in mind, people with good credit are looking foran alternative that still has a low down payment. I am starting to see more interest in a conventional loan with a single, up front, premium and no monthly MI payments. Private Mortgage Insurance (PMI) companies are offering this and even though it may require a little bit more up front, in the long run it saves buyers a great deal because there is no monthly MI payment. Let me know if you want more details.

Then and Now: here is my new feature showing historical pictures of the Denver area and what that spot looks like now.

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When you think about FHA 203K loans, what comes to mind? How about when you think of CHFA? Maybe some of the following thoughts come to mind: Too much hassle, Extra paperwork, Takes too long, I can’t say that I blame you for perceptions that you may have been told are real or that you have even experienced. How would you feel if I told you that we can combine the two and do a 203K using the CHFA Down Payment program?

Maybe you are asking yourself what a 203K loan is or what is CHFA. So quickly here is a rundown of these two programs. A 203K is an FHA loan program that allows a buyer and seller to close on the sale of a property that might need some fixing up, sprucing up, or flat out redoing. You can close on the property in it’s current condition and then have money set aside for doing the work after the closing. Obviously there are more details but that is the jist of it. The CHFA program allows a buyer that meets certain criteria to get some help with the down payment. This assistance does not come from the seller but rather a small 2nd mortgage to assist with the 3.5% down payment of an FHA loan. CHFA is in essense, a non-profit bank that purchases loans and services them and is specifically for low to middle income buyers that need a little help with the down payment.

These two programs combine to get folks the help they need with the down payment to be able to buy distressed properties that need some fix up. Obviously, this tends to be a more involved process then a regular purchase loan but the benefits clearly outweigh the extra hassle and if you work with a lender that has a long history with both CHFA and 203K loans, (this is where I drop a little hint that Universal Lending and I meet that criteria) then that process is made even easier.

As I said before, there are more details that you and your buyers need to be aware of so feel free to contact me with any questions but it is just one more tool for you to use to help more buyers.

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