Mortgage
Latest changes to the Bank of America short sale process
When processing short sales, it’s important to know about how each of the lending institutions handles loss mitigation and paperwork processing. If you have done a few short sales in Equator with different lenders, you may see what while your same Equator account is used for all your short sales at all the lending institutions, each of the servicers uses the platforms in a different manner.
Using the Equator system
When processing short sales, it’s important to know about how each of the lending institutions handles loss mitigation and paperwork processing. Many folks already know that Equator is the online platform used by 5 major lenders (Bank of America, Wells Fargo, Nationstar, GMAC, and Service One). If you have done a few short sales in Equator with different lenders, you may see what while your same Equator account is used for all your short sales at all the lending institutions, each of the servicers uses the platforms in a different manner.
And, my hat goes off to Bank of America for really raising the bar when it comes to short sale processing online. And, believe me, after processing short sales with Bank of America in 2007, this change is much appreciated.
New Bank of America Short Sale Process
Effective April 13, 2012, Bank of America made a few major changes that may make our short sale processing times more efficient. The goal of these changes is to make short sale processing through Equator (the Internet-based platform) at Bank of America so efficient that short sale approval can be received in less than one month.
First off, Bank of America now requires their new third party authorization for all short sales being processed through the Equator system. Additionally, the folks at Bank of America will be working to improve task flow for short sales in Equator by making some minor changes to the process.
According to the Bank of America website,
Now you are required to upload five documents (which you can obtain at www.bankofamerica.com/realestateagent) for short sales initiated with an offer:
- Purchase Contract including Buyer’s Acknowledgment and Disclosure
- HUD-1
- IRS Form 4506-T
- Bank of America Short Sale Addendum
- Bank of America Third-Party Authorization Form
And, now, you will have only 5 days to submit a backup offer if your buyer has flown the coop.
The last change is a curious one, especially for short sale listing agents, since it often takes awhile to find a new buyer after you learn that the current buyer has changed his or her mind.
Short sale listings agents should be familiar with these changes in order to assure that they are providing their client with the most efficient short sale experience possible.
Mortgage
Mortgage application volume falls 8.1 percent in one week
Mortgage application volume fell last week, even accounting for the federal holiday, as certain interest rates jumped up a bit in the same period.
Mortgage application volume took a dip last week
According to the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 25, 2013, mortgage application volume fell 8.1 percent from the week prior, including adjustments to account for the federal holiday.
The Market Composite Index, a measure of mortgage loan application volume, decreased 8.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 17 percent compared with the previous week. The Refinance Index decreased 10 percent from the previous week.
The seasonally adjusted Purchase Index decreased two percent from one week earlier. The unadjusted Purchase Index decreased six percent compared with the previous week, but was two percent higher than the same week one year ago.
The refinance share of the mortgage application volume fell to 79 percent of total applications from 82 percent the previous week, continuing to hover around 80 percent where it has been for years. The adjustable-rate mortgage (ARM) share of activity increased to 4 percent of total applications. The HARP share of refinance applications increased to 26 percent from 25 percent the prior week.
The MBA reports, “The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances rose to 3.67 percent, the highest level since September 2012, from 3.62 percent, with points decreasing to 0.42 from 0.43 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The contract interest rate for 30-year fixed mortgages has increased for six of the last seven weeks. The effective rate increased from last week.”
Current average contract interest rates
According to the MBA:
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) increased to 3.95 percent from 3.85 percent, with points increasing to 0.39 from 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.48 percent from 3.40 percent, with points decreasing to 0.33 from 0.53 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
- The average contract interest rate for 15-year fixed-rate mortgages increased to 2.95 percent from 2.87 percent, with points decreasing to 0.38 from 0.39 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
- The average contract interest rate for 5/1 ARMs decreased to 2.60 percent from 2.61 percent, with points increasing to 0.33 from 0.32 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
Mortgage
Mortgage application volume surges in second week of 2013
Mortgage application volume in the second week of the year jumped, led by new mortgage applications, a healthy sign for housing and buyer interest.
Mortgage application volume jumps in January
According to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 11, 2013, mortgage application volume increased 15.2 percent from one week earlier, led by a strong increase in new mortgage applications.
The Market Composite Index increased 15.2 percent on a seasonally adjusted basis from the week prior, and on an unadjusted basis, the Index increased 45 percent during the same period as the Refinance Index increased 15 percent from the previous week.
The seasonally adjusted Purchase Index increased 13 percent from one week earlier to the highest level since April 2011. The unadjusted Purchase Index increased 47 percent compared with the previous week and was 5 percent higher than the same week one year ago.
The refinance share of mortgage activity remained unchanged at 82 percent of total applications from the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 3 percent of total applications.
Current mortgage interest rates
According to the MBA:
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) remained unchanged at 3.61 percent, with points decreasing to 0.38 from 0.41 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) increased to 3.88 percent from 3.78 percent, with points unchanged at 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.39 percent from 3.35 percent, with points decreasing to 0.58 from 0.69 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
- The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 2.88 percent, with points decreasing to 0.27 from 0.39 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
- The average contract interest rate for 5/1 ARMs increased to 2.66 percent from 2.64 percent, with points decreasing to 0.34 from 0.37 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.
Housing News
Fiscal cliff uncertainty means new low for mortgage rates
While mortgage rates have remained low in recent years, mortgage application volume rose last week as rates hit a new low, resulting from uncertainty over the fiscal cliff, according to the MBA.
Mortgage rates hit new low, application volume rises
According to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 7, 2012, mortgage application volume increased 6.2 percent from the previous week, with an 8.0 percent increase in refinance applications and a 1.0 percent increase in new mortgage applications.
“Continued uncertainty due to the lack of resolution regarding the fiscal cliff led interest rates lower last week, with mortgage rates reaching a new low in our survey,” said Mike Fratantoni, MBA’s Vice President of Research and Economics.
“Refinance activity increased,” Fratantoni said in a statement, “with the refinance index hitting its highest level in two months, and the refinance share reaching its highest level since January 2009. Applications for purchase increased for a fifth consecutive week, and are running almost ten percent above their level at this time last year.”
The refinance share of mortgage activity increased to 84 percent of total applications from 82.0 percent the previous week, while the adjustable-rate mortgage (ARM) share of activity remained at 3.0 percent of total applications. The HARP share of refinance applications increased to 29.0 percent from 27.0 percent the prior week.
Current mortgage rates
According to the MBA:
- The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 3.47 percent, the lowest rate in the history of the survey, from 3.52 percent, with points decreasing to 0.36 from 0.41 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.
- The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 3.77 percent from 3.79 percent, with points increasing to 0.35 from 0.32 (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 decreased to 3.32 percent, the lowest rate in the history of the survey, from 3.34 percent, with points decreasing to 0.51 from 0.62 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
- The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.85 percent, the lowest rate in the history of the survey, from 2.86 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 5/1 ARMs increased to 2.63 percent from 2.62 percent, with points decreasing to 0.34 from 0.40 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.
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Roland Estrada
May 15, 2012 at 3:33 pm
It always seems like one step forward and two steps back these. The buyer replacement process reminds me of a Seinfeld story about a rental car – “You know who to take the reservation, you just don’t seem to able to HOLD the reservation.” If you lose a buyer, the banks need to able to HOLD the reservation. When you get a new buyer, all things being relatively equal, you should just be able take up where you left off. The red tape is horrendous. I’m dealing with a credit union right now and lost a buyer. However, the new buyer should have an approval and be ready to start closing in couple of weeks.
I get back to same old commentary. The Feds needs use an iron fist with the banks give them all a clear standardized process. If they don’t comply, the get heavily fined and quickly. And the fines continue until they do comply. I know this a rant but it frosts me because the process puts buyers and sellers through unneeded extra stress.
benjaminficker
May 15, 2012 at 6:15 pm
As with most “New” bank programs, I’ll believe it when I see it. B of A also, just launched a new program today similar to CHASE where they are offering up to $30k to the homeowners. Again though, when the results start happening, then I’ll believe it.
calsrfgrl11
May 16, 2012 at 1:48 am
@ask_wellsfargo Just entered into a short#sale process with @WellsFargo as a buyer. I have high hopes for a speedy response. So far…Offer accepted by seller 5.10.2012. Paperwork sent to WF 5.11.2012. Will update the timeline to track short sell process.