USDA Rural Housing 2012 Income Limits Published

The 2012 Income Limits for USDA RD home loans have been published.  Effective  January 18, 2012.  USDA’s  and the Income Eligibility calculator in the Eligibility website (http://eligibility.sc.egov.usda.gov) has been updated to use the new income limits.

USDA Rural Development Annual Fee Payments

 All section 502 guaranteed loans require a 0.3 percent annual fee effective October 1, 2011.  Some lenders have attempted to pay a portion of the annual fee payment in advance.    USDA will bill lenders annually or when the loan is paid off.  USDA will bill lenders for the fee 12 months from the date the loan funded.

• For example, if a loan was closed October 25, 2011, the first annual fee will be billed by the Agency and due on November 1, 2012.  The first billing for the annual fee will be in October 2012 and will be due November 1, 2012.

Lenders should collect 1/12 of the annual fee on a monthly basis into an escrow account, until billed by USDA Rural Development.

USDA has its guarantee up-front and annual fee calculator it will be posted on the USDA LINC website identified below.  This version corrects the annual fee payment date information and is the most current version to utilize. 

https://usdalinc.sc.egov.usda.gov/USDALincTrainingResourceLib.do

Know Before You Owe: Closer to Closing — Testing, Testing ….

The Consumer Finance Protection Bureau has begun testing two new forms to replace the current HUD-1 and Final TIL, which integrate the existing forms into one consumer user friendly form.

The Bureau is seeing feedback on which of the two designs works best.  To see examples go to:  http://www.consumerfinance.gov/knowbeforeyouowe/  and share your thoughts.

Unlike previous changes that have impacted mortgage brokers and bankers, the Bureau is seeking input on the forms, the process and how functionality of disclosures.  The new forms are being tested in Birmingham Alabama.  To have your say go to:

http://www.consumerfinance.gov/knowbeforeyouowe/

• Which design works best? Why?
• Is the information presented in a consumer-friendly format?
• Could consumers easily identify key loan terms and closing costs?
• Does the disclosure cover all the important information you need?
• Is the document easy for lenders and settlement agents to use?

Mortgage Market Update

Good morning,

We are seeing unprecedented trading in the MBS markets this morning and traders as well as Tier One lenders have been struggling to come up with prices to convert to mortgage rates-we will have pricing posted as soon as possible however the lock desk may be delayed slightly from the 11am ET start time to allow some consensus to be built in the markets.

MBS is trading up 24 ticks after the huge run up late yesterday so expect some improvement once pricing is established.

 

Thank you,

Mike Brown

Capital Markets

Mortgage Market Update

After a wild week last week economic releases are light in the coming days, so focus in bond and equity markets is the world-wide recovery, or more importantly lack thereof. With 10 year treasury dabbling with the 2 handle last week, we find the yield early today at 2.99% so the safety play is still on.

Stocks appear slightly weak at the open but no 200 point drops in the works for this morning. MBS is trading close to the closing price from Friday so do not expect much excitement today-for a change.

Greece, Portugal and the growing concern of losing momentum in the US is driving yields lower-stocks still holding up after a long run from the bottom in 2009, as it appears the only place the US stimulus activity seems to have made a difference is in corporate treasuries! Now that that has run out, we shall see how the earnings look this summer.

 

Mike Brown

Capital Markets

Stonegate Mortgage Corporation