Michael Jackson’s death yesterday was quite a shock to the mortgage world, so much so that I will not make any jokes at his expense at the opening of the daily commentary. I think that it would be more appropriate to take the high road, and only put one or two at the end of the commentary.

Which investor will take the home buyer credit? Taylor Bean Whitaker, which I believe does not hold the mortgage on the Neverland Ranch, has sent this note out to the clients about the first-time home buyer credit: “HUD recently released Mortgagee Letter 2009-15 regarding the use of the First-Time Home buyer Tax Credit.  The program provides up to $8000 tax credit to qualified first-time home buyers. Although the program allows certain entities covered by Section 528 of the National Housing Act to use their current authority to offer tax credit advances with second liens, TB&W will not provide the second lien.  The Second Lien must be provided by an FHA approved non-profit agency or Federal, State, or Local government agency or instrumentality. Use and approval of the first-time home buyer tax credit is the responsibility of the entity providing the secondary financing.  All documentation must be submitted to the entity providing the secondary financing.  TB&W will only approve the use of the secondary financing being provided by the approved entity. TB&W will begin to accept this type of secondary financing immediately.”

I barely know where I am going to eat lunch today. So how am I supposed to “know” what my property is going to be worth in 10 years? And would it make a difference to me? This site rides to the rescue, and estimates what your home will be worth ten years from now:www.smartzip.com. Unfortunately it only gives estimates in California and Florida. (I love sites like this, which of course either didn’t exist or have any inkling a few years ago about what was going to happen to values in the last 24 months.)

Everyone in the mortgage business knows that the Fed has been in buying securities backed by mortgages for several months. But what exactly does the Fed own? Their 15-yr securities, which include mortgage rates ranging from 4.75%-6.125%, only amount to about $725 million. On the 30-yr side, the bulk of their holdings (about $60 billion) are mortgages from 5.25%-5.625%. The remainder, which totals many billions & growing at about $5 billion per day, ranges from 4.25% up to 7% 30-yr fixed rate loans.

RMIC is implementing a 4506‐T and tax return transcript policy. All MI applications (whether salaried or self‐employed) “submitted on or after September 1, 2009, a completed and signed Form 4506‐T is required to be obtained from all borrowers (where income is used for qualifying) covering at least the most recent year’s tax return. In addition, prior to closing, the tax return transcript(s) for at least the most recent year’s tax return must be obtained from the IRS (or designee) and used to validate the income documentation provided by the borrower(s). If a loan with a mortgage insurance application date on or after September 1, 2009, is sent to RMIC for underwriting or auditing purposes, the file submission must include the 4506‐T and the transcript(s) from the IRS.”

We had a nice little improvement in rates yesterday (prices up, rates down), and a nice improvement in the stock market. (Folks who think that every time the stock market moves in one direction rates should move in the opposite direction are not always correct.) Today for news we have Personal Income and Consumption (in recent years popularly known as “spending”) at 5:30AM PST, along with the Michigan Consumer Sentiment Survey around 7AM PST. The bond market is relatively quiet ahead of this, with the 10-yr at 3.53% and mortgages unchanged.

Far be it for me to post any “on the edge” jokes. I would never say anything like, “How did Michael Jackson know it was time for bed? When the big hand was on the little hand.” That would just be tasteless. It is better to just point folks towardhttp://williambader.com/mj.html

Rob

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