What are tops agents saying? One broker wrote, “Things have been good for me lately, which has been much needed. Hopefully it will keep up, as I have a lot of brokers that were waiting to lock for 15 days, so unfortunately they’re in a little bit of trouble now. The DU Refi Plus is helping some, although most only go to 95%.  I’ve been getting a lot more FHA loans lately and I’m also starting to get some VA loans, so they help as well. I’ve definitely noticed that the 5/1 IO has been pricing well but so many people are scared to do anything other than a fixed rate mortgage - If the fixed rates stay a little higher, the 5/1 IO might seem worth it for those that aren’t planning on staying in their current homes forever.” Sound comments.

Yesterday we found out that “Pending U.S. Home Resales” were up 6.7% in April, the most since 2001, and the fourth increase in five months and much higher than expected. Of course lower prices are attracting buyers – that is how most markets tend to work. But still, it is a promising statistic.

Will all those mortgage professionals who think that HVCC is good for the industry please skip to the next paragraph? For everyone else, there seem to be a slew of petitions circulating trying to do away with it (in spite of the government having a lengthy public input period). For example, take a look at http://www.hvccpetition.com/.

Flagstar Bank announced that they will permit existing loans with lender paid mortgage insurance to proceed under the Fannie Mae DU Refi Plus Program. LPMI loans with Genworth, however, will remain ineligible. “Existing loans with LPMI are acceptable as long as the following criteria are met: Flagstar must be the current servicer, must verify that Fannie Mae is the investor, must confirm that existing loan has LPMI, and MI provider is not Genworth.”

Fannie Mae re-sent an update to their credit score and nontraditional credit score requirements. Although the changes don’t take affect until the loans are pooled after August 1st, most investors are already using the new requirements due to the lag in loans funding and being placed into a security.

Next Monday Wells Fargo Wholesale Lending will accept certain types of subordinate financing, including Down payment Assistance Programs, on conventional conforming and High Balance conforming loans. Currently subordinate financing with LTV’s greater than 80% are not allowed, but after Monday it will be as long as the maximum LTV/CLTV/TLTV are not exceeded per product/program. And after Monday they will no longer purchase conventional 3/1 ARM loans with a temporary buydown, and are increasing reserve requirements for second homes and investment properties. Wells wholesale group also stated that, for foreclosed properties, if the seller is owner of record for 90-days or less the property is not eligible for FHA financing. FHA requires the seller to be the owner of record for at least 91 days. Lastly, on and after June 8, 2009, AVMs will not be allowed for loans on condominiums.

In the meantime, Wells Fargo Home Mortgage is hiring. Wells plans to add up to 200 employees in its San Antonio customer service operations center to deal with loan-application processing and default/retention.

Losing less money than expected is a good thing, right? Toll Brothers, the largest U.S. luxury homebuilder, reported a narrower second-quarter loss after write downs for land, developments and options fell by almost $170 million. According to their CEO, coincidentally named Robert Toll, “With interest rates near historic lows and housing affordability near historic highs, it appears that some buyers are beginning to re-enter the new-home market.”

As one would expect, mortgage applications here in the U.S. dropped last week, primarily due to rates moving higher. The Mortgage Bankers Association’s index of applications fell 16%, with refinancing -24% (back to February’s levels) and purchases increasing a little over 4% (hitting a 2 month high). What are the stock and bond markets doing today? Overnight Asian stocks were up, and our Treasury market was pretty much unchanged. This morning, however, we’re seeing a little rally in prices, pushing rates down – nice to see! Maybe the news that GM plans to sell Hummer to China's Tengzhong, saving 3,000 jobs is helping. The only news is out at 7AM PST, 10AM EST, with Factory Orders and the ISM Services index. Also, Ben Bernanke will be testifying before the House Budget Committee. Rates are a little better, with the 5-yr Treasury and mortgage prices better by .250-.375, and the 10-yr at 3.57%.

An elderly couple had dinner at another couple's house, and after eating, the wives left the table and went into the kitchen. The two gentlemen were talking, and one said, “Last night we went out to a new restaurant and it was really great. I would recommend it very highly.”

The other man said, “What is the name of the restaurant?”

The first man thought and thought and finally said, “What is the name of that flower you give to someone you love? You know, the one that's red and has thorns.”

“Do you mean a rose?”

“Yes, that's the one,” replied the man. He then turned towards the kitchen and yelled, “Rose, what's the name of that restaurant we went to last night?”

Rob

(For archived commentaries, check www.robchrisman.com, or to subscribe write to rchrisman@robchrisman.com)