Aloha Friday,

This is an important email today regarding changes in the Fannie/Freddie underwriting systems. Please read completely.

Starting Monday the automated underwriting systems for both agencies have put new maximum ratios into effect. The maximum ratio allowed now is 45% with few exceptions based on large assets and very high FICO’s up to 50%. This all begins Monday and does not affect any loans that are approved with a property now, but does affect anyone shopping who is not locked in yet with a property. In the past we have been able to get files approved with ratios up to 60% in the automated system and based on our past closing portfolios our portfolio has had approximately 22% of loans over 45% and 13% of loans over 50% ratios.

One other announcement is that FHA will now require an appraisal to be randomly picked by an appraisal management company starting January 1st. Are we having fun yet?!!

We still feel the biggest problem in the residential market today is the implementation of HVCC and the inexperienced or out of area appraisers that are negatively affecting deals. I encourage you to ask an appraiser where he is coming from when you schedule an appraisal. If they are from out of area or in Hawaii, off island, tell them you will back to reschedule and promptly call the lender involved and request another local appraiser. You DO have the right to reject an appraiser who is out of area.

Now to rates; the rates are up about a .25% from last week due mainly to the job market numbers coming in lower last week for the first time since 2007 and a few other economic factors that most likely will begin to push rates higher as time goes forward. Have your buyers take advantage of these low rates now!

ALSO...  I have some disappointing news I need to share with you today. We just received this email below that Bank of Hawaii is discontinuing Condo-tel financing.

If you have any questions this weekend, please do not hesitate to phone me at any time.

HOME