Nick & Kreg - Weekly Mortgage Update - 5/15/2023

Week of May 15th, 2023 Review

Fannie & Freddie Rescind Controversial Rate Adjustment

Key Takeaway: Finally, some good news for all of us in the mortgage world! If you have been following Kreg and I these past couple months, you know we have been voicing our concern over the newly implemented rate adjustments that were affecting all Conventional loans moving forward. This past week, the Federal Housing Finance Agency (FHFA), the governing body of our industry, responded to our industry wide concerns and made the decision to cancel the controversial fee that would have affected Conventional borrowers with debt-to-income (DTI) ratios at or above 40%! Woohoo!

Now, to be clear, all the other newly implemented pricing adjustments you have been hearing about are still in place. However, over biggest concern was this DTI pricing adjustment that was supposed to go into effect in August. The removal of this adjustment is a huge score for the industry and, more importantly, for our clients!

MAY 10th Inflation Data Bust

Key Takeaway: Everyone in the mortgage biz had May 10th circled on our calendar as a day to remember. Many of us follow Barry Habib, a mortgage guru, as he had been predicting inflation and mortgage rates to drop with the May 10th CPI inflation report. The long-awaited report was released on Wednesday and the results were incredibly uneventful. The numbers came in right where most economists had projected. Contrary to Barry Habib’s forecast, there was no significant decrease in inflation data ? Further evidence that no one has that crystal ball capable of accurately predicting market outcomes.

Thankfully, Kreg and I were cautious to get on the “lower rates by May 10th” bandwagon. One valuable lesson we have learned after 13 years in this business is that when everyone anticipates or predicts a certain outcome, it often turns out to be the exact opposite.

WHAT COULD CAUSE RATES TO DROP IN THE NEAR FUTURE?

Key Takeaway: We currently have all eyes on the banking sector. Whenever we hear of more banking turmoil, we gain renewed optimism that the FED has reached its interest rate limit and could begin to lower rates in the future. Should this occur, interest rates in the 6% range will be a thing of the past, as we will witness a nice reversal in rates. We just pray that it is not at the expense of thousands losing their jobs from a deep recession ?

Mortgage Hack of the Week – Depreciation and Business Miles!

I recently was trying to get a self-employed truck driver approved for a home loan and was amazed that he did not write off depreciation or business miles on his tax returns! We LOVE depreciation and business miles in the mortgage business! Reason being, we can add these two items back in as income when it comes to qualifying! So spread the word that you are free to claim as much depreciation and business miles as humanly possible! If you are self-employed, it might end up being the reason you are able to qualify for a home loan ??

Instagram Posts from Last Week

• 5 Mistakes to Avoid When Buying a Home
• Crisis Averted!?Loan Level Price Adjustments Cancelled