October 21st, 2010 6:54 PM by Richard T. Cirelli
Update on HVCC Appraisal Ordering:
The Federal Reserve Board has released its new rule regarding appraisal independence replacing what was known as HVCC – the Home Valuation Code of Conduct. As expected, there are no significant changes. Although the rule is largely silent on how brokers would interact with wholesale lenders and banks when it comes to appraisals, Fannie Mae and Freddie Mac are maintaining their ban on broker and Loan Originator ordered appraisals. And, you can expect portfolio lenders to do the same even if the rule doesn’t require them to. In my opinion the new Regulation only served to better define the terms. It did not enforce the issue of portability meaning that lenders are not required to transfer an appraisal to another lender if the borrower wants to switch. Accordingly, borrowers are often forced to pay for a second appraisal with most lenders.
Good News for Reverse Mortgage Loans:
When congress recently passed an extension of the Fannie Mae/Freddie Mac loan limits of $729,750 in high-priced markets, they also extended the temporary limits on Reverse Mortgage loans to $625,500.
FHA has also introduced a low-closing cost version of the program. High Costs has been the main criticism of the program since its inception. The biggest cost is the up-front Mortgage Insurance Premium. Now there is a variation of the earlier program that reduces the initial cost.
Don’t forget, Reverse Mortgage loans can also be used to finance the purchase of a home. It’s not just for refinances. It’s a great product for seniors that may not qualify for a traditional mortgage.
Mortgage Rates This Week:
Mortgage rates remain relatively flat this week compared to last but they are still ridiculously low. Unless there is some startling news – positive or negative – we are probably staying in a narrow range until the next Fed meeting on November 3rd. That’s when the Fed will announce its anticipated plan for more quantitative easing.
What Exactly is Quantitative Easing?
Reporters seem to use the term as though everyone knows what it means. Here’s the definition:
The term quantitative easing (QE) describes a monetary policy used by central banks to increase the supply of money by increasing the excess reserves of the banking system. This policy is usually invoked when the normal methods to control the money supply have failed, i.e the bank interest rate, discount rate and/or interbank interest rate are either at, or close to, zero.
Here’s a link to more info if you are really interested: http://en.wikipedia.org/wiki/Quantitative_easing