Nick Pakulla - Mortgage Lender Loan Officer in MD, DC, VA

With the new year approaching (wow it's almost 2011 already?) and "best of" 2010 information coming from other sources, I thought it would be fitting to post a recap of what happened to mortgage rates in 2010.  2010 presented an unexpected rollercoaster ride when it came to mortgage rates. 

We were able to witness some of the lowest mortgage rates ever recorded.  The year started out with benchmark 30 year conforming (below $417,000) fixed rates very steady around 5% from about January until April.  There was a small uptick in rates to about 5.25% in early April followed by an unprecedented 21 week period where rates continually went lower, down to about 4.32%.  Rates had some hesitancy breaking the 4.25% mark until October and early November where there were a couple days where 4% with 0 points was the going rate!  Unfortunately for rate-shoppers and late refinancers, near the end of November and into December we saw rates climb back up into the low 5%'s and the high 4%'s.

2010 started out steady but a few key issues controlled the mortgage market for a large part of the year driving rates to historic lows and shooting them back up again near the end of the year.  The ride kicked off in late March when the Federal Reserve ended its $1.25 trillion mortgage-backed securities (MBS) purchase.  Everyone speculated that less demand for MBS would drive mortgage rates up.  Instead, the Greece debt crisis re-emerged, which developed into a European debt crisis.

The general fear of a potential further world economic collapse drove investors into safe-haven buying of bonds and MBS thus pushing mortgage rates to all time lows.  For the rest of the summer and into early fall continuing fears about the economy and mixed economic reports stayed at the forefront.  In October, there was speculation about the Fed pumping more money into the economy via a new round of bond and MBS purchases.  In the background, general sentiment on key economic indicators were improving, but not at a pace fast enough for the Fed.  On November 3rd the Fed announced that they would release a $600 billion dollar purchase package for the bond market over the coming months.  This should have continued to drive rates down further, however, 40 hours after the announcement the October jobs report tripled analysts estimates with 151,000 new jobs created.  This sparked an intense reaction about inflation fears that shot around the world.  In a matter of days the mortgage market rocketed back up, 12 weeks of gains gone in 10 days, 26 weeks of gains gone in 5 weeks.  The bond rally ended and the stock market rally may just have begun!

Coming out of the greatest recession we have faced in the last 7 decades, it is no wonder why 2010 showed to be an uncertain year when it came to the economy.  As was evident by the remarkable year mortgage rates had in 2010, 2011 will likely continue on an uncertain path.  If you are interested about consulting with a loan officer about your specific situation please don't hesitate to contact me.  I would be happy to add you to my list of clients who I monitor rates for.

First Place Bank is an established community bank new to the MD/DC market. With all of the struggles the "large banks" are facing, the community banking model has proven to be much more efficient.  Our level of service is unsurpassed as all of our processing, underwriting and closing operations are done in our Rockville, MD office and we have a select group of local bank-approved appraisers familiar with our area.  Additionally, we offer some unique financing opportunities such as bridge loans, 80/10/10 loans, along with all of the standard products. 

Marcie has an excellent blog post explaining the transfer and recording taxes in Montgomery County MD.  Remember, at my bank we get out the final Hud's DAYS before settlement and I personally walk you though the Hud so there are no surprises on settlement day!

FHA Condo Expiration of 12/7/10 Now Extended!!

In what seems like a last ditch effort (without any warning that I know of) FHA has extended the condo projects that were set to expire December 7^th 2010.  The new expiration dates are based off of the initial project approval year.  Great news for condo owners and condo sellers!

FHA announces extension of condominium project approvals with an expiration date of December 7, 2010. Provided below are the extension dates based on five-year time frames with the exception of those condominium projects with original approval dates from 1972 -1985.

Initial Project Approval Dates     Current Expiration Date        New Expiration Date

1972 - 1980                              December 7, 2010               December 31, 2010

1981 - 1985                              December 7, 2010               December 31, 2010

1986 - 1990                              December 7, 2010               May 31, 2011

1991 - 1995                              December 7, 2010               July 31, 2011

1996 - 2000                              December 7, 2010               August 31, 2011

2001 - 2005                              December 7, 2010               September 30, 2011

2006 - 2008 (Sept)                    December 7, 2010               March 31, 2011

The extensions were granted to reduce the impact of processing and reviewing the number of project approvals expiring at the same time while recognizing current housing market conditions.  Lenders and/or other interested parties are encouraged to begin the re-approval or recertification process as early as possible as it is not anticipated that any further extensions of project approvals will be issued.

The Condominium look-up page and the FHA Connection databases were updated on December 7, 2010 and now reflect the extended expiration dates.  The links to the sites are:

Condominium look-up page: https://entp.hud.gov/idapp/html/condlook.cfm