8-24-17 Newz .Fannie Freddie appraisal waivers, AVMs and HELOCS, Passwords

Excerpts: They hitchhike across Europe, instantly recognizable in the wide-bottomed, corduroy trousers, white shirts and colored jackets that identify them as bricklayers, bakers, carpenters, stonemasons and roofers.

While on the road, journeymen are not supposed to pay for food or accommodations, and instead live by exchanging work for room and board. In warm weather, they sleep in parks and other public spaces. They generally carry only their tools, several changes of underwear, socks and a few shirts wrapped into small bundles that can be tied to their walking sticks – and that can also double as pillows.

In an adaptation of the old rules to modern times, journeymen do not carry devices like cellphones that allow them to be found. They carry digital cameras, if they like, and write emails from public computers.

My comment: Fascinating with great photos!! Yes, there are women travelers now…

By Shelly Palmer

Excerpt:  According to the Wall Street Journal, Bill Burr (the man who wrote the NIST memo back in 2003 that recommended the cryptic craziness and frequent replacement guidelines) has had an epiphany. “Much of what I did I now regret,” said Mr. Burr, 72 years old, who is now retired. If the reporting is accurate, he had very little evidence upon which to base the NIST’s recommendations. (Sort of makes me think about the USDA Food Chart I grew up with. But that’s for another article.) Why were Mr. Burr’s assumptions wrong?…

Do what the experts are now telling you to do. Start using the longest passwords possible. I would not use correcthorsebatterystaple, but “passwordswedontneednostinkinpasswords” will absolutely do the job.

In an article written by Rob Chrisman in Mortgage News Daily published 8/21/17, the move to use AVM’s for home purchases by the GSE’s is outlined.

It is interesting to note the different perspectives of the mortgage giants.  I have bolded those below.

Freddie Mac is introducing an automated appraisal alternative for some purchases and refis. “Freddie Mac’s automated collateral evaluation (ACE) assesses the need for a traditional appraisal by leveraging proprietary models and using data from multiple listing services and public records as well as a wealth of historical home values to determine collateral risks.” ACE has been available for some refis since June, but will also be available for some purchases starting in September. So starting this fall borrowers looking to buy a new home could forego a traditional appraisal as Freddie Mac expands its big data valuation alternative. ACE uses more than 40 years of historical data and public records to model and vet home values. ACE mostly applies to low-risk mortgages. The program became available for qualified refinancings in June but the roll out for new home purchases is Sept 1 for primary residences. Borrower savings of about $500 expected when using appraisal alternative, closing times on new loans to narrow by seven to 10 days.

Fannie Mae is updating Desktop Underwriter® (DU®) effective Saturday, August 19, to offer Property Inspection Waivers (PIWs) on some purchase transactions (view DU Release Notes). “This update responds to market changes, and allows our lenders to offer your borrowers a choice for efficiency and cost savings by foregoing an appraisal on some lower-LTV loans. Eligibility is limited to one-unit principal residences and second homes up to a maximum 80 percent loan-to-value ratio. It is estimated that PIW offers will be issued on less than 5 percent of purchase transactions. Offer rates will vary by lender and fluctuate over time.

“Lenders have the option to exercise a PIW offer, and may not accept it if they have any reason to believe that a full appraisal should be provided (for example, if there was a hurricane or other natural disaster in the area of the property), or if the borrower wants an appraisal. Borrowers always have the choice to obtain an appraisal…we expect the acceptance rate on appraisal waivers for home purchases to be low. Many home buyers want an appraisal to support the price they pay for a home, and most of purchase contracts include a contingency clause for an appraisal.

Link to original article. Thanks to Dave Towne for excerpting the Most Important sections!!

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Freddie Mac Press release dated: 8/18/17

Main Property Inspection Waiver page with links –  scroll down the page for links to documents and other info – FAQs etc.

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Excerpt: One of the largest origination costs for lenders is the appraisal product. Drive-by appraisals or interior appraisals are prohibitively expensive. Many lenders have determined that the “cost” of the valuation is not commensurate with the “value” of the information in the underwriting process. This is why AVMs are returning to dominance in the valuation space for home equity lending.

I have been thinking for many years to get a heloc for emergency, easily accessible, cash. It is time to do it!! I have about a 30% ltv. Don’t need an appraisal.

WASHINGTON, D.C. (August 23, 2017) – Mortgage applications decreased 0.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending August 18, 2017.

The Market Composite Index, a measure of mortgage loan application volume, decreased 0.5 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2 percent compared with the previous week. The Refinance Index increased 0.3 percent from the previous week. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 3 percent compared with the previous week and was 9 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 48.7 percent of total applications from 47.8 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.4 percent of total applications.

The FHA share of total applications decreased to 10.1 percent from 10.2 percent the week prior. The VA share of total applications decreased to 10.2 percent from 10.5 percent the week prior. The USDA share of total applications remained unchanged from the week prior at 0.8 percent.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($424,100 or less) remained unchanged from the week prior at 4.12 percent, with points increasing to 0.39 from 0.38 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate remained unchanged from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $424,100) decreased to 3.99 percent from 4.04 percent, with points decreasing to 0.26 from 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 4.02 percent from 4.01 percent, with points decreasing to 0.37 from 0.40 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.40 percent from 3.41 percent, with points increasing to 0.38 from 0.35 (including the origination fee) for 80 percent LTV loans. The effective rate remained unchanged from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.27 percent from 3.34 percent, with points increasing to 0.31 from 0.29 (including the origination fee) for 80 percent LTV loans. The effective rate
decreased from last week.

The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.