Benefits of The New Conforming & FHA Loan Limits

Per the economic stimulus package, temporary conforming and FHA loan limits have been released and they are higher then we anticipated. This is for FHA and Conforming loan amounts through the end of the year:


Richmond City MSA $528,750
Washington DC Metro $729,750
Charlottesville MSA $425,000
Winchester MSA $475,000
VA Beach/Norfolk MSA $428,750


What this means:


Lower Rates on mortgages greater than $417,000.
Higher Loan to Values on loan sizes greater than $417.000.
More Flexible underwriting guidelines for loans over $417,000.


Loan limits are higher for 2,3 & 4 family properties. These loan amounts apply to all conforming and FHA loan types (except reverse mortgages), this includes fixed terms of 40, 30, 25, 20, 15 and 10 years and a variety of ARM and interest only products. This is a temporary increase is valid for loans closing through the end of 2008.

For additional information contact Paul Cantor at (804) 433-1510 or on the web at www.PaulCantor.com .

Weekly Mortgage Rate Commentary for the week of March 9, 2008

Mortgage backed securities experienced one of the most volatile rides ever seen last week, once all was said and done rates on fixed rate mortgages were up about 0.375%. Economic news continued to be mostly sour last week with the Labor Department's Employment Report highlighting the current economic challenges. While the unemployment rate did tick downward to 4.8%, the drop was due mostly to qualified job seekers giving up on finding a job. The economy also shed another 63,000 jobs last month, and the ISM Manufacturing Index slid below 50, indicating that manufacturing may be contracting. Generally, this much negative economic news would drive mortgage rates downward. However, because investors have been less interested in mortgage-backed instruments, mortgage rates have been held higher. Additionally, many institutions have been selling parts of their portfolios of mortgages, often at a discount. This additional supply of cheap mortgage investment products in the marketplace has kept rates from dropping even further.

The instability in the market is likely to continue this week as several indicators of the economies health will be release, including: Retail Sales, Initial Jobless Claims, Consumer Sentiment and the inflation-measuring Consumer Price Index. Advice to borrowers is to lock to protect them from the volatile market swings.

Paul Cantor is a mortgage planner at TrustMor Mortgage Co., in Richmond, VA. He may be reached at (804) 433-1510 or on the web at www.PaulCantor.com

FHA & Conforming Loan Limits

An Early present from HUD.

About one week prior to the date required by legislation, FHA & Conforming loan limits per the economic stimulus package have been released and they are higher then we anticipated. This is for FHA and Conforming loan amounts through the end of the year:

Richmond City MSA $528,750
Washington DC Metro $729,750
Charlottesville MSA $425,000
Winchester MSA $475,000
VA Beach/Norfolk MSA $428,750

All other areas of the state are showing the max loan amount of $417,000. Homes with more than one unit have higher loan limits.

To look up other areas visit: https://entp.hud.gov/idapp/html/hicostlook.cfm

Weekly Mortgage Rate Commentary

Last week was another volatile one for the mortgage market. Mortgage rates marched higher for much of the week as investors continued to be hesitant about even good-quality, mortgage-backed investments. Existing and new home sales numbers again revealed that the bottom has yet to be found for the struggling housing market. Fed Chair Bernanke's comments last week regarding the Fed's increasing willingness to provide economic stimulus, and an unrevised GDP should provide some downward pressure on rates as we start the first week of March. By the end of the week fixed mortgage rates began to see some improvement ending up slightly lower.

This week will probably be another bumpy week for mortgage rates, with some very important data due. The week starts with expectations of a below-50 ISM Manufacturing Index. If the reading drops below 48.5, we could see rates reverse much of last week's climb. The week ends with an extremely important monthly employment report. After last month's net loss of jobs, another loss of jobs would very likely drive mortgage rates downward. Add in an increase in the unemployment rate, and all interest rates are likely to end the week, and start the following week, on a downward trajectory.

Paul Cantor is a mortgage planner at TrustMor Mortgage Co., in Richmond, VA. He may be reached at (804) 433-1510 or on the web at www.PaulCantor.com

Bridge Loans - Making Buying a New Home Easier

With a Bridge Loan you can buy or build your dream home now, before selling your current home.

A Bridge loan eliminates the need for a contingency clause, requiring the sale of your current home, you can start building or move into your new home now!

Sell without the stress and maximize your cash flow.
This program gives you the time you need to efficiently market and sell your current home.

No need to liquidate other assets to meet down payment requirements.
using equity from your existing home toward the purchase of your new home, the Equity Bridge loan allows you to avoid liquidating other assets to make the down payment.

Pay down your new loan, and lower your payments without refinancing.
Once your current home is sold and you repay the Equity Bridge loan, you may want to use any excess cash to pay down the new mortgage(s).

For more information or to apply for a bridge loan call Paul Cantor, TrustMor Mortgage Co. at (804) 433-1510.

Weekly Mortgage Rate Commentary

Mortgage rates climbed higher last week on news that inflationary pressures could be heating up. The release of the minutes from the last Federal Reserve meeting also helped propel mortgage rates higher. It noted that once the economy appears to be in better shape the Fed may need to rapidly raise interest rates. While we may still dip into recession, the Fed's continued fight to add liquidity to the credit markets, the now signed economic stimulus package, and the debate beginning on another stimulus package does raise the probability that the economy will heat up in the not-too-distant future. Unfortunately, all this effort will likely create additional inflation.

This week again has the potential to see mortgage rates move significantly in one direction or the other. The first revision to 2007's 4th quarter GDP is due this week. Expectations are for a slight revision higher. A downward revision could calm bonds and help push rates back down. The Consumer Confidence Index is also due. If moods are stilling souring, rates could push downward.


Paul Cantor is a mortgage planner at TrustMor Mortgage Co., in Richmond, VA. He may be reached at (804) 433-1510 or on the web at www.PaulCantor.com

Weekly Mortgage Rate Commentary

Cupid's arrows might have been flying around everywhere last week - but little love came calling for the Bond market. First, Retail Sales for January were far better than expected - which was good news for Stocks, but as money flowed into Stocks, and out of Bonds. Federal Reserve Chair Ben Bernanke gave his semi-annual testimony to the Senate Banking Committee last week. While he stated that the Fed stands ready to provide further stimulus to the economy if needed, he believes the US is neither in a recession, nor will go into one this year. Some of the week's data backed his words. Retail sales data came in higher than expected, and Industrial Production numbers showed minimal change. All of this, along with the passage of the economic stimulus package, resulted in long-term mortgage rates moving upward.

We start this week off with the release of the Consumer Price Index. Given all the recent effort to stimulate the economy, a spike upwards in the CPI could easily spook the markets and drive mortgage rates upward in fear of expanding inflationary pressures. Alternatively, a drop in the CPI could give the Fed additional flexibility in cutting rates again. The minutes from the Fed's last meeting also come out this week; any hints of future rate cuts will push rates downward.

Understanding Fixed Rate Interest Only Mortgages

Fixed rate interest-only loan, home buyers choose their monthly payment and either qualify for more home, or have more cash in reserve for investment, paying down higher-cost debt, or making home improvements. This is not a negative amortization product, your principal balance will never increase!

Interest-Only Loans Offer:

Potential for lower monthly payments: for the first 10 years of the loan you can opt to pay interest only-plus any portion of the principal you wish. The opportunity to afford your dream home-buy up to 25% more home with Interest-Only monthly payments. Tax deductibility benefits, a wealth of money-management opportunities, with savings for other investments, including high-yield and tax-deferred savings or maximizing your retirement contributions. Pay off high-interest, non-tax-deductible debts, home improvements, tuition costs, or a dream vacation

Here's how it works:Take advantage of this innovative approach to home financing and realize the double benefits of more affordable payments plus improved cash flow. Each month you choose the payment amount. You can make the minimum interest-only payment in order to maximize your available cash for other uses or allow you to qualify for more home at a payment you can afford. Or you are free to pay down any portion of the principal you wish--it's your decision. Either way, your principal balance will NEVER increase.

Paul Cantor, CMPS is a mortgage planner with a practice in Virginia at TrustMor Mortgage Co. He may be reached at (804) 433-1510 on on the web at www.PaulCantor.com.

Weekly Mortgage Rate Commentary

Last week economic news was mixed, with the ISM Services Index plummeting to its lowest point in its ten-year history. However, Factory Orders ticked up nicely and weekly jobless claims dropped. While we did not get any convincing evidence one way or the other about the economy, the major economic stimulus package has passed both houses of Congress and will be signed by the President. While there is debate on how effective the package will be, the elements regarding conforming mortgages will be very interesting to watch.

The item that seemed to have the biggest impact on mortgage rates last week was from Dallas Fed President Richard "Loose Lips" Fisher's off the topic comment made during a speech in Mexico City: "Monetary policy acts with a lag. I liken it to a good single malt whiskey or perhaps truly great tequila: It takes time before you feel its full effect. The Fed has to be very careful now to add just the right amount of stimulus to the punchbowl without mixing in the potential to juice up inflation once the effect of the new punch kicks in. ...My dissenting vote last week was simply a difference of opinion about how far and how fast we might re-spike the monetary punchbowl. Given that I had yet to see mitigation in inflation and inflationary expectations from their current high levels...I simply did not feel it was the proper time to support additional monetary accommodation.". This comment caused havic in the bond market resulting in home mortgage rates to increase by about 0.125%.

Next week heats up a bit with three very significant items. Retail sales data will give provide a glimpse at how consumers started off spending in 2008, and Industrial Production will provide some manufacturing insight. An unexpected spike in either could push rates up a bit. The most important event of the week is likely to be Fed Chair Bernanke's semi-annual testimony before the Senate. If he hints that inflation is under control, meaning more cuts are likely, rates will trend downward.

Paul Cantor is a Mortgage planned and a pricipal of TrustMor Mortgage Company in Richmond Virginia. He may be contacted at 804-433-1510 or on the web at www.PaulCantor.com.

New Conforming Loan Limits - The Real Story

The US Senate passed an expanded version of HR 5140 – an economic stimulus package that includes a temporary increase in the conforming loan limits from $417,000 to as high as $729,750 in high cost areas. The two things you must know in order to determine if you are in a high cost area:

1. You must know the formula. If 125% of the local area median home price exceeds $417,000, the temporary loan limit would be that 125% of the median home price with a cap of $729,750.

2. You must know the median home price in your area. According to HR 5140, the Secretary of Housing and Urban Development will publish the median house prices within 30 days. The Public Affairs office of HUD was asked if there is anything definitive to reference in the interim, and they said, "no." The Wall Street Journal published median house prices recently, and you may want to reference this information to get an idea of which areas will exceed the $417,000 limit.

Here are some examples of average home prices in Virginia:


Lynchburg: $146,071
Richmond $232,536
Roanoke $151,288
Virginia beach / Norfolk $241,535
Washington, D.C. Metro $434,718

Looking at these numbers, only the Northern Virginia area will see higher conforming loan limts of up to $543,398.

To check the numbers in other areas go to The Wall Street Journal.


I will continue to keep you informed!


Paul Cantor is a pricipal of TrustMor Mortgage Company in Richmond Virginia. He may be contacted at 804-433-1510 or on the web at www.PaulCantor.com.

Weekly Mortgage Rate Commentary

Last week was another frenzied week for financial markets. While the debate still rages over whether we are in, or are entering into, a recession, there was plenty of ammunition for both sides in the debate. Our first look at GDP for the 4th quarter of 2007 came in at a weaker-than-expected 0.6%. Consumer Confidence dropped again, and January appears to have started with a net loss of jobs in the US. On a more positive note, Orders for Durable Goods popped upward, and the ISM Manufacturing Index moved over 50, which indicates that manufacturing is expanding. The unemployment rate ticked down to 4.9%, and we all know that January's lost jobs could be revised into gains in next month's report. The Fed also knocked another '/2 point from both its interest rates, and continues to pursue other means of shoring up the credit markets and stimulating economic growth.

With little data due this week, we could see rates settling down and not moving as much. However, given current conditions, signs of a strengthening economy may push mortgage rates up quickly.

The Federal Reserve Lowers Interest Rates AGAIN... What Does This Mean?

In order to answer this question, it is helpful to understand the four major interest rates that are affected by the Fed:

Discount Rate (currently 3.5%) - the interest rate that banks pay when they borrow money directly from the Fed. The rate has been largely symbolic in the past because banks prefer to get short term financing by:

· Issuing "commercial paper" – these are short term IOUs of typically one to ninety days that are sold on the open market to Wall Street investors. Interest rates on these short-term loans are often better than the discount rate offered by the Fed.

· Borrowing money from other financial institutions using the Fed Funds Rate as illustrated below. In most cases, this rate is also better than the discount rate offered by the Fed.

· Borrowing money using the Fed's new "Term Auction Facility" that allows Banks to bid anonymously on what interest rate they want to pay when they want to borrow money from the Fed.


Fed Funds Rate (currently 3%) - the interest rate that banks pay when they borrow money from each other here in the US. This rate is also determined by the Fed because banks in the US are part of the Federal Reserve System. You see, the Fed's main role is to maintain "monetary stability" by keeping a close eye on the flow of money throughout the economy. One way they do this is by regulating the interest rates that banks charge each other for short term funds.

LIBOR Rate (One Month LIBOR is currently 3.14%) – the London Interbank Offered Rate (LIBOR) is the interest rate that banks pay when they borrow money from other banks anywhere in the world (primarily in the international wholesale money market based in London). There are various types of LIBOR rates including the 1 week LIBOR, 1 month LIBOR, 6 month LIBOR, and 1 year LIBOR; these are the rates banks would pay if they want to borrow funds for 1 week, 1 month, 6 months, etc. Although the LIBOR rates are determined by the financial markets at any given time, they are very closely related to the Fed in that LIBOR most often changes when the market anticipates that the Fed will change their Fed Funds Rate. LIBOR is the base rate that is used on most adjustable rate mortgages (ARMs) in the US and large corporate / commercial loans. The reason LIBOR is used most often for US adjustable rate mortgages is because LIBOR is really the most accurate measure of a bank's cost of borrowing funds since most banks do business internationally these days.

Prime Rate (currently 6%) – the Fed Funds Rate + 3; this is the base rate that is used for most consumer loans such as credit cards and home equity lines of credit, as well as most small business loans. Like the LIBOR, the Prime Rate is also tied to the Fed Funds Rate.

So there you have it.

You see, as the Fed lowers the Fed Funds Rate, the business and consumer-based interest rates of LIBOR and Prime will also go down as illustrated above. The Fed would be reluctant to continue lowering rates if they feel that businesses and consumers would start borrowing and spending so much money that inflation will go up significantly.

Remember, the Fed's main goal is to "maintain monetary stability" by keeping a close eye on the flow of funds in the US economy. It would be reckless of them to artificially encourage too much borrowing and spending as this would only artificially drive up asset prices and cause money to lose its purchasing power. This phenomenon is known as "inflation." The good news, however, is that inflation seems to be under control based on some of the latest economic reports.

How does the Fed affect mortgage rates?

Well, if you have a home equity line of credit based on Prime or short term ARMs based on LIBOR, you should see an immediate reduction in your interest rate in the coming weeks. However, if you are considering a fixed rate loan or longer term ARM with a fixed period of 3, 5, 7 or 10 years, rates on those types of loans are not directly related to the Fed. Instead, these rates are closely tied to the Mortgage Backed Securities that trade on the bond market. For more on how this process works, please reference the article entitled, Saga of the US Mortgage Industry.

With all this in mind, it is more important than ever to work with an experienced mortgage loan officer, who can decipher market conditions and help you make informed decisions in today's volatile market. A good mortgage professional can look at Fed decisions and economic reports that are coming out and help you make the right mortgage choices. Whether you have or are considering an ARM or a fixed rate loan; whether you are buying, selling or refinancing a home; whether you are dealing with a primary, vacation or investment property; now is the time to be dealing with an expert.

Weekly Mortgage Rate Commentary

In what should have been a quiet week for financial markets, turmoil reined. The Fed started the holiday-shortened week by slashing the Fed Funds rate to 3.5% from 4.25%. The official position was that the move was in response to the weakening economy, but there may have been another reason. A rogue trader in one of France's largest financial institutions orchestrated a $7 billion fraud. The Fed's move likely helped mitigate the damage from this fraud and the global impact of unwinding the trader's positions in various international markets. Mortgage rates experienced a whiplash effect, first dropping, and then bouncing back upward as the week ended.

In addition to dealing with the fallout from last week, this week has an extremely full calendar of economic data releases. New Home Sales on Monday will kick off the excitement, followed by Durable Goods Orders and Consumer Confidence on Tuesday. Wednesday previews employment numbers with the volatile ADP Employment Report, along with advanced fourth quarter GDP and inflation data. Also on Wednesday, the Fed will release their formal policy statement and decision on interest rates, likely to be yet another cut. And as if that weren't enough action, Thursday will bring the Fed's favored measure of inflation - the Core Personal Consumption Expenditures Index - followed by the official Jobs Report on Friday.

What will make the end of the week particularly interesting is the inflation and jobs data coming out following the Fed's scheduled move on Wednesday. Will controlled inflation and/or higher unemployment make them look like heroes, who made the right moves over the past two weeks? Or...could healthy job growth or high inflation, which is likely to be exacerbated by cuts to the Fed Funds Rate, make the Fed look like goats? It's sure to be turbulent - so strap in, hold on, and stay tuned - and feel free to call me for updates as the week progresses

Surprise Fed Action and Mortgage Rate Response

Yesterday in a surprise move, acting over growing concerns of the US economy possibly moving towards recession, which resulted in crashing world stock markets yesterday, the Fed today has cut down interest rates to 3.5 from 4.25, the largest rate cut move since 1990. Also, the discount rate was lowered by 75 bps to 4%.
Market response to this action has not been typical of other Fed rate cuts. Typically investors view such moves as what the economy needs and start investing in equities, which results in less money in the bond market resulting in higher long term rates. Yesterday's move has been viewed as an act of desperation by some and the bond market is still strong and their has been a little improvement in fixed mortgage rates. This may be short lived and those looking to refinance or lock in a rate for a purchase should be locking or at least be ready to lock on a moments notice.

Friday President Bush came up with roughly a $140 billion economic stimulus package to provide pickup for a slowing economy. In addition, he has urged Congress to make his 2001 tax cut plan permanent. Federal Reserve Bank chairman Bernanke also stressed the need for quick implementation of a stimulus package in his testimony before the house budget committee. Bernanke admitted that the economy has a slow growth pace, but we’re not in a recession.


The last three weeks have gone well for the mortgage market, as 30-year mortgages dropped to 5.69%, the lowest rates in 2 and half years. 15-year mortgages were at 5.21%, compared to 5.41% last week as per Freddie Mac.

Weekly Mortgage Rate Commentary

Mortgage rates dropped to near three-year lows last week with economic data continuing to point to a slowing economy and inflation data revealing a nearly stable inflationary environment. This should allow the Fed to drop interest rates again at the end of the month. Note that while there is clear evidence that the rate of economic growth has slowed, we do not appear to be in a recession. The economy faces significant challenges.

The Stock market has gotten hammered lower since the beginning of the year, and last week was no exception. But when Stocks move lower, money can flow over into Bonds, helping home loan rates improve. What caused last week's action was a combination of terrible earnings reports from Citigroup and Merrill Lynch; higher inflation numbers indicated in the Consumer Price Index; lower than anticipated Retail Sales; a weak report from the Philadelphia Fed showing a sharp contraction in manufacturing activity; and a Housing Starts and Building Permits report showing the worst levels of starts and permits in about 16 years.

The slowdown in new home construction is actually not bad news, as overbuilding has helped to create a glut of inventory in the real estate market. Less inventory coming on the market is actually a real positive as the housing market continues to settle. And with home loan rates at multi-year lows, now may be the time to act on that home purchase or refinance.

The week ahead has very little scheduled economic reports in store, with only Existing Home Sales and Initial Jobless Claims coming on Thursday. Remember that as Bond prices move higher, home loan rates move lower.

Weekly Mortgage Rate Commentary

by Paul Cantor

With very little economic data last week, mortgage rates continued to move downward after the previous week's lackluster employment report. The Federal Reserve's recent moves, in conjunction with several other countries' central banks' actions, are beginning to have a positive impact on interest rates. The Fed has already announced additional funding for its short-term auction facility, which allows banks to borrow from the Fed anonymously, enabling them to make more loans.

A flood of important economic data is due this week, including retail sales data, industrial production data, housing starts, and both the Producer and Consumer Price Indices. While all of these are very important, the CPI may be the big driver of mortgage rates this week and next. With clearer signs of economic slowing, the market has begun pricing in a ¼ point or better rate cut from the Fed. If inflationary pressures do not advance more than expected, the Fed will have an easy argument for a '/z point cut to stimulate economic activity, and rates should continue to drift downward.

Construction / Permanent Loans

Planning on building your dream home or renovating your existing home? Construction-to-Permanent Loan is a single loan for both construction and your permanent mortgage.

• Provides a single approval and closing for the three stages
of construction:

1.Land Acquisition
2.Construction Financing
3.Conversion into a permanent home loan

• No need to re-qualify for the permanent loan when
construction is finished

• Protection from changes in mortgage rates. Lock rate on permanent mortgage up front with float down option.

Although Construction / Perm (C/P) financing is the most popular way to finance the construction or renovation of a home other apes of construction financing are available. For more information on construction loans you may contact Paul Cantor at TrustMor Mortgage Co.

Weekly Mortgage Rate Commentary

After months of appearing to be only marginally affected by housing and credit challenges, both manufacturing and the labor market began to show signs of stress in December. The ISM Manufacturing Index came in at 47.7. Readings below 50.0 indicate that manufacturing is very likely to be contracting. The Employment report was also disappointing with a surge in the unemployment rate from 4.7°/0 to 5.0%, and only 18,000 new jobs were created in December. Mortgage rates fell across the board as the probability grew for a rate cut from the Fed at the end of the month. On a very positive note, existing home sales popped up to an annualized rate of 5 million units. The markets are beginning to see positive signs that the Fed's efforts to encourage lending are working.

Mortgage rates are likely to trend downward during this week with very little economic data due to be released. If their are signs in the next few weeks that inflation is moderating, the Fed may be able to aggressively cut rates, which would likely pull mortgage rates further downward and spur more home sales.

Annual Mortgage Check-Up

Annual Mortgage Check-Up

by Paul Cantor http://www.PaulCantor.com/

Like an annual physical with a family physician, it is a good idea to perform an annual physical of a mortgage. For most a mortgage is the most important dent and when managed properly it is a an asset. When performing a mortgage check-up an experienced mortgage planner will look at a persons whole financial picture and in many cases will advise clients to maintain the course. However, life changes such as change in employment, health care, family status, and education needs may alter those plans. A good mortgage planner will help with these changes. Sometimes mortgage rates have dropped and taking advantage of lower rates may save one tens of thousands of dollars.

TrustMor Mortgage Company will be glad to perform a check-up on your mortgage, whether or not they originated it. You may find them on the Internet.

Good News For Richmond's Real Estate Market

A boom for the Richmond housing Market. The Richmond Times Dispatch reported this morning the results of a Manpower survey that the creation of new jobs will be strong in the first quarter of 2008. Thirty percent of the companies surveyed indicated they will increase the number of employees while only thirteen percent plan to eliminate some jobs.

This news is a very good sign for the Richmond residential real estate market. History has proved that when the job market is strong the strength flows through to housing. This combined with the Richmond areas low unemployment rate should keep the local housing market stable.

Read the Times Dispatch article.