Your Minneapolis St Paul area mortgage broker. Our Minnesota mortgage loan programs include: Conventional, Jumbo, FHA,VA,HARP,& Investment property mortgage loan programs-Both fixed rate (15-30yr) or adjustable (ARM) for your purchase/refinance!  How can we help YOU?

When you're ready, call Patti  Mazzara-Vice President or John Mazzara-President at 952-285-4319 to discuss your loan scenario and current Minnesota mortgage rates.  

Take a look at our mortgage calculators to calculate your debt consolidation savings with a refinanced mortgage payment. 

Minnesota Mortgage Broker- Venture Development - has been committed to your Minnesota real estate mortgage loan needs since 1995-whether it be for a home purchase, refinancing to a lower rate, or debt consolidation.  We source loan options & investors.

We offer Minnesota loan financing for first time buyers, move up buyers, home remodel and rehab,  and investment property loans throughout the Twin Cities, MN-Minneapolis St Paul and Greater Minnesota. We are located in Edina, Minnesota.

Our mortgage loan programs offered include: Conventional fixed rates, 30 year, 15 year, 10 year, ARMS, adjustable rate mortgages, Interest Only loans, FHA, VA, Veteran loans, USDA, Reverse mortgages, new construction, second mortgage, lines of credit,  low closing cost & "no closing cost" loans-(these loans have a higher interest rate/apr).

SERVICE: WE REMAIN IN BUSINESS BECAUSE OF YOU!

Customers First! Satisfied customers are more important to us than anything else. We strive to be your Minnesota mortgage lender/broker for life for all your real estate financing.  Our goal is to make the loan process as simple and worry-free as possible. We at Venture Development pride ourselves in offering the highest level of customer service, and appreciate the opportunity to earn your business. We do it all-whether you want to refinance to a lower mortgage rate, consolidate debt, get a new home mortgage for a purchase, home equity line of credit or second mortgage, or purchase of an investment property.  We have grown our business one loan at a time, based on repeat business and referrals.  

We have the tools you need to make the correct decision regarding your next home mortgage.  We  can help you compare products so that the loan you select will match your goals.  We can create a special report specific to your situation by utilizing a number of special software programs.  We are your "mortgage doctor" we only "prescribe" the recommended product after a financial consultation. Whether you are a first time home buyer or have obtained many mortgages throughout your lifetime you will find that the depth of knowledge and products that we have access to will meet your needs.

Want more of an explanation of the job duties & responsibilities of a Mortgage Broker?   Watch the video below:

SOLUTIONS: PERFECT CREDIT-POOR CREDIT-DEBT CONSOLIDATION

If your credit score is not quite where it needs to be for a specific loan program, we will use one of our credit analyzer programs to see if there is something we can do to improve your scores.  In some cases, we have dramatically improved the borrower's scores to where the borrower can qualify for a better set of mortgage loan products.  At the same time, we have some clients that are in credit repair mode for the next 6-12 months.  We believe in being proactive.  We can make some suggestions on how you can re-establish credit.  Start now-so you can buy a home in the future! Credit repair just takes time-Let's get started today! The sooner you do, the sooner you will be in a new home.  Not all mortgage brokers will take the time to help you make permanent fixes to your credit.  We take pride in doing business the right way. Use our debt consolidation mortgage calculator to see how much you can save.

Bankruptcy, Chapter 7, Chapter 13, Foreclosures and Short sales-we've seen it all.  Different loan programs have different requirements for re-establishing acceptable credit.  For example, FHA loans can be obtained while in a chapter 13 bankruptcy if certain conditions are met.  The key is to start planning for your future mortgage sooner rather than later.  We can refer you to companies that work with you to restore your credit and we might be able to provide you with some helpful tips.  We understand that bad things can happen to good people-Life Happens.  It's how you deal with the circumstances that matter.  CALL us to discuss your scenario.  We can give you some idea of what to expect during underwriting and what steps you may want to take to get back on track.

WE OFFER A WIDE VARIETY OF HOME LOAN CHOICES

Think of Venture Development when you need a  "Minnesota mortgage" for " Minnesota Real Estate".  We can help.  We only do loan originations in Minnesota as a Minnesota mortgage broker.  Whether you are a first time home buyer, move up buyer, second home buyer, investment property buyer, vacation property, or interested in financing commercial property please call us.  As a mortgage broker, we have access to some products that other lenders and other mortgage brokers simply don't have.  Here are just a few of our products and unique situations:  Fixed rate loans, adjustable rate loans, ARM, second mortgages, HELOC's, cash out refinance, interest only loans, debt consolidation, 100% financing, investor loans, no cost loans, low cost loans, first time buyer, and investment property financing, HARP loans for underwater homeowners-Fannie DU Refy Plus and Freddie Open Access loans, FHA, Veteran, and VA loans.

REVERSE MORTGAGES: STAY IN YOUR HOME OR EVEN PURCHASE A NEW HOME

WE CURRENTLY DO NOT OFFER THESE LOANS-BUT MAY AGAIN IN THE FUTURE-THEY ARE AVAILABLE FROM OTHER SOURCES IN THE MARKETPLACE.

With regards to reverse mortgages-if you are over age 62 and own a home, you are eligible for this type of loan.  There is no financial qualifying! There is a new JUMBO reverse mortgage product that allows you to get a loan of up to 4M.  This can be used for purchasing a new home or accessing the equity on a second home.  WOW!   Let's review the criteria again-Are you age 62, and would like to purchase a home but either on a fixed income-SS and/or pension, retired, good credit/bad credit?  YES you CAN use a reverse mortgage for a purchase a home in Minnesota.   There is NO QUALIFYING-other than your age, required downpayment, and new loan amount must be over 200K.  Remember, with a reverse mortgage you make no payments.  This means you could purchase a new home without qualifying and have no payments. Venture Development currently is unable to provide this loan, but it does exist.  John can help you purchase a home with this type of loan.

NEW STATE OF MN AND FEDERAL MORTGAGE LAWS-ALWAYS CHANGING

Minnesota has some new mortgage laws that became effective on August 1st 2007.  These laws have removed the ability of Minnesota mortgage brokers to offer no documentation loans on primary residences but not for investment property purchases.  We STILL CAN do low/no documentation programs for investment and commercial properties that are not considered residential properties.

Lenders/Investors change programs qualifying criteria on a regular basis.  We keep up to date on what the new laws are and how they affect your ability to get a mortgage. Call us with your loan scenario.

CONVENTIONAL FIXED RATE MORTGAGES AND ARM's (ADJUSTABLE RATE LOANS)

The 30 year fixed rate mortgage is probably the most popular loan that we write for our clients.  At the same time, we offer 10 yr loans and 15 year loans.  In addition, we have all types of Adjustable Rate Mortgages-ARM's.  We try to counsel borrowers to select the correct loan product based on the length of time they will remain in the property.  Both Fixed Rate loans and ARM's can be amortizing-where you pay both interest and principal or just interest only.  Some people prefer to pay down their loan whereas other will want the maximum tax deduction combined with the lowest payment that interest only has to offer.  There is no right answer as everybody has a different situation and specific goal that they would like to accomplish.  We at Venture Development will take the time to inform you of the options so that you can make the correct choice.  Call us and ask us what our most popular program is at this time and why it is so popular. 

FHA LOANS - VA-VETERAN LOANS| FHA MORTGAGES- VA VETERAN MORTGAGES

With FHA loans, we can utilize Down Payment Assistance programs-like Nehemiah, Ameridream and Genesis to help you pay for the downpayment and closing costs so you can purchase a new home.  Don't let the lack of money be an obstacle to home ownership.  Read more about down payment assistance using gifts from qualified charities.

In addition, many subprime lenders have either left the business or the loan programs that used to be offered have gone away.  The government is trying to create some new solutions by revamping old programs and creating new programs.  These proposed adjustment primarily are occuring in the FHA programs, but there may be some in VA (Veteran loans) too.  Call me for details as these changes are evolving.  Click under the tab FHA to your on the side bar for updates on FHA.  This may be a solution to stemming the foreclosure crisis in the Minnesota housing market. 

If you have an existing FHA loan there is also the FHA Streamline refinance that is available for a lower cost refinance.  This program may not require an appraisal, credit check or proof of employment-but must have made your last 12 months payments on time.

There is an FHA 203K loan available for rehabilitation of an existing home for an owner occupant.  There is the "lite" version allowing up to 35K and an expanded version allowing for greater repairs.  The investors available to purchase this loan come and go-we may or may not have an outlet for this loan.  Would you like more info on the 203K?  We have created a downloadable PDF that covers a lot of the highlights-Streamline 203K

Existing FHA programs allow the seller to pay some of your closing costs-usually up to 6%.  There are down payment assistance programs too.  We are creative, so call us with your situation.

As a side note, do you know what the anacronym stands for? FHA stands for "Federal Housing Administration." The mandate of the FHA is to be an agency of the federal government that will insure private loans that are issued for new and existing housing.  In addition, FHA loans can be granted for approved  home repairs. The entity FHA was actually created by congress in 1934 and subsequently became part of the Department of Housing and Urban Development's Office of Housing (HUD) in 1965. 

KEY FHA LOAN ADVANTAGES:

*Total buyer contribution required is 3.5%

*Fixed rate loans, ARM's and Buydowns

*Buyer contribution can be a gift from a relative or qualified charity program-up to 100% of the amount for down payment and closing costs

*Credit scores as low as 640 (possibly lower w/manual underwrite)

*Credit can be non-traditional credit with manual underwriting

*No cash reserves required unless 3-4 unit

*Sellers can contribute up to 6% towards closing costs w/minimum down payment

*Cash out refy to 85% loan to value-consolidate first & second to 97%

*Borrower can have an open Chapter 13 w/12 months of on time payments

*Non occupying Co-borrower allowed-come together as one on the application

*Mandatory loss mitigation by the loan servicer-not automatic foreclosure-if asked

*31/43 qualifying ratios- compensating factors allowed for additional flexibility

*U.S. Citizenship not required

*FHA loans can be assumed at the note rate with full qualify (credit & income)

*Streamlined refinance for existing FHA loans-less documentation, limited qualifying criteria and less expensive.

*Condominiums are acceptable with 51% owner occupancy within the project and high rises are allowed-project must be on approved list-other factors may apply

*1 % mortgage insurance can be financed in the loan, then 1.15% monthly.  If you put more than 5% down the monthly MIP is 1.1%.   If you get 15 yr instead of 30 year loan the monthly MIP is .5% with up to 10% down and .25% monthly if you put more than 10% down.

VA LOANS-FOR VETERANS ONLY

If you are a Veteran, you are eligible for 100% financing with a VA loan.  VA loans are insured through something called the funding fee.  This protects the administration against loan defaults.  The funding fee can be added to the back of the mortgage but is a reasonable trade off, when you consider that the loan is financed at 100% of the properties value. 

When all things are compared, it may turn out that a conventional loan or FHA loan might be a better fit.  Veteran loans take a little more time to process, so if that is the route you want to pursue, please allow ample time. The nice thing is that you have more mortgage finance options to evaluate. If you have served our country in the armed forces since 9/11 or are currently serving full time or in the guards, let us know.   Thank you for your sacrifice.

Great news for Veterans!  The Minnesota state legislature has just passed a new state law that allows disabled vets to receive a permanent property tax exemption on their primary homestead.  Here is how you qualify-if you have a service related disability that is between 70-100%, you can get a $150,000 exclusion.  If you have a service related disability that it 100% and qualified as total and permanent, then you can get a $300,000 exclusion.  You need to file a form with the county assesor in order to qualify.  The form is CR-DVHE100.  You can find out more at http://www.taxes.state.mn.us/  Read property tax fact sheet #13

KEY VA LOAN ADVANTAGES

*100% Purchase financing possible

*Funding fee can be financed in the loan

*Funding fee may be waived for disabled vet

*90% ltv cash out refinance

*Sellers can contribute 4% towards buyers closing costs

*41% qualify ratio

USDA GUARANTEED RURAL HOME LOAN PROGRAM

The USDA offers a program to finance single family homes in rural areas.  So it won't work in major population areas, but might on the fringe.  Here are some of the highlights and things to consider:

*The loan is a fixed rate for 30 years

*Up to 100% of the appraised value can be financed.  This needs to include the 3.5% guarantee fee on a purchase an lower on a refinance.

*Sellers are allowed to contribute up to 6% towards the closing costs

*Only 1 unit single family residences allowed

*Purchase and Refinances-OK.  The refinance is ONLY for rate and term improvement, not cash out.

*Full documentation loan underwriting

*$417K is the maximum loan size allowed

*No cash reserves required

*No minimum contribution from the borrowers funds required (FHA loans require 3.5% for example)

*NO PMI-there is an upfront USDA Guarantee fee of  up to 3.5% required which can be financed into the home loan.  On a refinance, the cost of the guarantee is lower.

MINNESOTA CORPORATE MORTGAGE BENEFIT

Patti Mazzara is our corporate real estate benefits director.  She will be happy to review this program with you if you have any questions.  Here is the internal link to an overview of the program- Minnesota corporate mortgage  

The formal website for this program is located at http://www.minnesotacorporatemortgage.net/

Common mortgage questions answered at our site!

Throughout our website you can find tools available to answer virtually any mortgage question. Trying to decide if now is a good time to refinance? Check out our Refinance Mortgage Calculator. Wondering if a new home equity loan or second mortgage can lower your monthly payments? Use our Debt Consolidation Mortgage Calculator! Confused by all the loan programs from which to choose? Our Loan Program page will help you find the right type of loan for you. Also, we'll be happy to prepare a personalized mortgage quote for the home mortgage program of your choice. 

WIN A FREE MONTHS MORTGAGE PAYMENT-SWEEPSTAKES

Please check out all the tabs on the left.  Under the "Venture Development" tab you can enter the mortgage payment sweepstakes.   How would you like to win a one month's mortgage payment-up to $5K?  You have to enter to have a chance at winning!

Venture Development Inc is operated by John Mazzara - President & Patti Mazzara - Vice President.  We can be reached at 952-285-4319.  We schedule appointments out of the RE/MAX Results office at 7300 France Ave S Suite 410, Edina, Minnesota 55435.  Call us for directions and to schedule a time to take your loan application. 

If you are looking for real estate information on any of the communities within the 7 county metro area, just ask John Mazzara.  We recently wrote a series of reports on the various cities in and around Minneapolis and St Paul.  You can find them on the tabs to the left.  Just click and read up on the cities to see which community you might want to call home.  We  have specific reports about the real estate activity in each city at John's real estate site under "press releases/reports".  Visit http://www.minneapolisstpaulhomes.com/  to find out more.

MINNESOTA MORTGAGES AND REAL ESTATE

We are more than just a Minnesota mortgage broker, we are able to help you with all aspects of a Twin Cities relocation. John has been successfully selling Twin Cities real estate since 1986.  The first 9 years were with Burnet Realty and the balance has been with RE/MAX.  John sells homes throughout the metro area.  We live and work in Edina and know the Edina real estate market extremely well.  John has lived in Edina MN since 1986 and in Minnesota his entire life.

You can visit our real estate site at http://www.minneapolisstpaulhomes.com/  and go to reports and press releases to get a ton of information or start your ON LINE HOME SEARCH for a new home IMMEDIATELY.  If you are moving from out of state, not working with another real estate agent, and need a relocation package we can help-call us.   If you are leaving Minnesota-we can refer you to a top Realtor in your new community.

If you find yourself needing to sell your home in light of a distressed situation that might involve letting the home go to foreclosure, I would encourage you to consider ALL of your options first-then decide what is right for you-loan modification, forebearance repayment plan, as well as a short sale may work as well or better.  There are a number of tax and credit implications to whatever your decision will be-so you are highly advised to contact an attorney and accountant and possibly the IRS at http://www.irs.gov/ If you do decide that a short sale is the route to pursue, then contact John Mazzara to help sell your home.  John has completed the CDPE-Certified Distressed Property Expert program-and can share his knowledge of how to proceed with the short procedure.  You can learn more as well at Short Sale Option

REAL ESTATE INVESTING BOOK- "REALITY BASED" REAL ESTATE INVESTING

John Mazzara recently wrote a book about investing in investment real estate.  The book covers over 23 years of his personal experiences and insights into selling/owning/managing rental real estate.  You can find out more about the book and investing in real estate at our investment property book's website.  While the book is based upon Twin Cities Minnesota real estate, much of the lessons and information is applicable across the US. Visit http://www.realitybasedrealestateinvesting.com/ and get your personal copy today.

  This is the cover of the book.

FIRST TIME BUYER AND LANDLORD EDUCATION CLASSES

We offer classes throughout the Twin Cities through various community education and corporate locations. Call us to see what class location and time would be most convenient for you. Our class topics include:  the importance of credit, obtaining a mortgage, purchasing a home, selling a home, and becoming a successful landlord.  These classes are always offered in the evenings.  For those of you who are unable to attend our classes but would like home buying and landlording education, let me offer the FREE online classes offered by MGIC.  MGIC is a leading private mortgage insurer and underwriter.  They have created a two online classes that you can take.  Upon the successful completion of the course and passing a test online, you will obtain a certificate.  Besides obtaining knowledge, you MIGHT be required to complete a home buying class under certain first time buyer mortgage programs.  This class MAY be acceptable.  Here is how you get to the classes:  go to http://www.mgichome.com/  sign up and take the class, when you are done, you will need the lender code-here it is:  learning@ventureloanapp.com 

You don't have to be a MN home buyer to take the class.  Feel free to share this resource with anyone that will be looking to become either a home owner in need of understanding the process or a landlord looking to do landlording successfully.  The best part is that you can take the class from the convenience of your home or office online at on your time line. 

If you are a landlord-let me give you a link to a Free landlord website.  This site allows you to enter data and photo's about your property.  Once you have your site built, you can advertise your URL on Craigslist, the newspaper or even online on your website. Go to my Twin Cities real estate site and scroll down under Investment Property in Minnesota-click on the link that offers the website

MORTGAGE CALCULATOR WIDGET

We just created the widget you see below. It allows you to calculate a mortgage payment or see an amortization schedule.  Would you like a copy for your blog or website?  Just visit mortgage payment calculator and get yours today-it's free!

We help sell and finance mortgage loans throughout Minnesota in cities such as Minneapolis, St Paul and all surrounding suburbs such as Edina, Eden Prairie, St Louis Park, Minnetonka, Plymouth, Maple Grove, Robbinsdale, New Hope, Crystal, Chaska, Chanhassen, Waconia, Savage, Prior Lake, Shakopee, Richfield, Bloomington, Mendota Heights, Eagan, Apple Valley, Lakeville, Rosemount, Brooklyn Park, Brooklyn Center, Fridley, Columbia Heights, Shorview, Vadnais Heights, Lino Lakes, Roseville, Falcon Heights, North East Minneapolis, St Anthony, Stillwater, Inver Grove Heights, Lake Elmo, Afton, Cottage Grove, So St Paul, West St Paul, Woodbury, Oakdale, and Greater MN Minnesota.  We are your Minnesota mortgage broker and we finance Minnesota homes all throughout the State of MN.

	Mortgage News Daily MBS RECAP: 2/3/2012 - 18 hours ago Posted To: MBS CommentaryMBS Live : MBS RECAP Open MBS Live Dashboard FNMA 3.5 103-24 : -0-10 FNMA 4.0 105-17 : -0-09 FNMA 4.5 106-26 : -0-04 FNMA 5.0 108-01 : -0-02 GNMA 3.5 105-02 : -0-11 GNMA 4.0 107-24 : -0-07 GNMA 4.5 109-03 : -0-05 GNMA 5.0 110-27 : -0-03 FHLMC 3.5 103-16 : -0-09 FHLMC 4.0 105-06 : -0-08 FHLMC 4.5 106-09 : -0-04 FHLMC 5.0 107-20 : -0-01 Pricing as of 4:02 PM EST Afternoon Market Updates A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBS Live Dashboard . 1:54PM : NY Files Lawsuit Against Big Banks for Deceptive and Fraudulent Use of MERS Attorney General Eric T. Schneiderman today filed a lawsuit against several of the nation?s largest banks charging that the creation and use of a private national mortgage electronic registry system known as MERS has resulted in...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it. MERS, Banks Sued by New York State; MERSCORP Responds - 18 hours ago Posted To: MND NewsWireThree major banks and Virginia-based MERSCORP, Inc. and its subsidiary Mortgage Electronic Registrations Systems ( MERS ) were sued Friday by the state of New York. The suit, filed by the state's Attorney General Eric T. Schneiderman , charges that the creation and use of a privately national electronic registration system, MERS, "has resulted in a wide range of deceptive and fraudulent foreclosure filings in New York state and federal courts, harming homeowners and undermining the integrity of the judicial foreclosure process." Further, the lawsuit charges that the employees and agents of the three banks, Bank of America, J.P. Morgan Chase, and Wells Fargo , acting as "MERS certifying officers," have repeatedly submitted court documents containing false and misleading information that made...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it. Mortgage Rates Higher Following Employment Report - 19 hours ago Posted To: Mortgage Rate WatchThe monthly Employment Situation Report was released at 8:30am this morning, with much better-than-expected results. Stocks rallied sharply and most every interest rate in fixed-income markets moved higher. The economic optimism created by this sort of data tends to increase demand for riskier investments like stocks and lower demand for things like fixed-income notes and bonds. MBS (the "mortgage backed securities" that most directly govern mortgage rates) fall into this fixed-income sector, and definitely weakened following the jobs data. As a result, Mortgages Rates moved higher at their fastest pace in some time, traversing most of this week's territory, but leaving Best-Execution rates mostly at 3.875%. (learn more about how we calculate Best-Execution in THIS POST ). We'd said yesterday...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it. Geithner Outlines Accomplishments, Future of Financial Reform - 19 hours ago Posted To: MND NewsWireTreasury Secretary Timothy Geithner told the Financial Stability Oversight Council that the financial system is getting stronger and safer and that much of the excess risk-taking and careless financial practices that caused so much damage has been forced out. However, he said, "These gains will erode over time if we are not able to put our full reforms into place." He outlined the basic framework has been laid, with new global agreements to limit leverage, rules for managing the failure of a large firm and the new Consumer Financial Protection Bureau (CFPB) up and running, and the majority of the new safeguards for derivatives markets proposed. Geithner ticked off the major accomplishments of reform. First, banks now face much tougher limits on risk which are critical to reducing the risk of...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it. HOPE NOW Conference Focused on Military Families, Mediation - 20 hours ago Posted To: MND NewsWireHOPE NOW, the voluntary private sector alliance of mortgage industry stakeholders, recently concluded a two day conference in Washington which focused on assistance to military homeowners and foreclosure mediation. One group of servicers, investors, and housing counselors met with regulators, investors, and members of the military to discuss ways of reaching military families facing foreclosure because of their unique situation which includes Permanent Change of Station and other issues. A second group of HOPE NOW stakeholders met with judges, attorneys, and several state housing agencies to discuss best standards related to foreclosure mediation. John Dalton, President of the Housing Policy Council, former Secretary of the Navy, and a panelist at the conference said "The current housing crisis...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it. MBS Down, But Not Out Following Strong Jobs Report - 20 hours ago Posted To: MBS CommentaryThere is plenty of play-by-play on the post-NFP sell-off in the MBS Recap . If you haven't seen those updates already, that's a good place to start, and in terms of where MBS are and what they're doing, there's not much more to say. So we'll focus instead on the longer term implications, look at charts, and consider the week ahead. First off, here's some pictorial accompaniment for today's movement. MBS turn out to have been relatively drama-free since the initial sell-off, returning to bounce fairly convincingly for a second time at 103-18. Even if MBS were now to break below that pivot, volume has basically dried up for the week, leaving the big bounces seen in the earlier heavy volume as the more significant from a technical perspective. To quantify the relative change in volume on the day...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it. MBS MID-DAY: Mostly Sideways After NFP-Inspired Losses - 23 hours ago Posted To: MBS CommentaryMBS Live : MBS MID-DAY Open MBS Live Dashboard FNMA 3.5 103-23 : -0-11 FNMA 4.0 105-20 : -0-06 FNMA 4.5 106-26 : -0-04 FNMA 5.0 108-01 : -0-01 GNMA 3.5 105-03 : -0-10 GNMA 4.0 107-25 : -0-06 GNMA 4.5 109-05 : -0-03 GNMA 5.0 110-29 : -0-01 FHLMC 3.5 103-16 : -0-09 FHLMC 4.0 105-09 : -0-06 FHLMC 4.5 106-10 : -0-03 FHLMC 5.0 107-20 : -0-01 Pricing as of 11:02 AM EST Morning Market Updates A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBS Live Dashboard . 10:20AM : ALERT: MBS Struggle to Hold Lows Following 2nd Round of Econ Data Admittedly, ISM Non-Manufacturing and Factory Orders are not the most critical market-moving economic reports. Case in point, see the 58k 10yr contracts traded in the 10 minutes following these two, versus the 268k contracts in the 10...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it. PHH Restructuring; MBA Classes; Servicing Comp Change Bearing Away; Harsher Fraud Penalties Coming? - 1 day ago Posted To: Pipeline PressThe e-mail wires here in Miami have been burning up with...e-mails. PHH clients received a note from Norm Fitzgerald , explaining the recent restructuring. "I am writing to let you know we recently decided to reallocate resources from our Correspondent Lending channel to our Private Label Solutions and Real Estate Field Sales distribution channels. Although this action will reduce our Correspondent Lending volume, I want to be clear that we are committed to Correspondent Lending and will continue to participate in the business with a renewed focus on our high quality and long term customers. We made this decision in response to ongoing challenges posed by the volatility in the global economy, the capital markets and the housing markets. We believe these market uncertainties require an increased...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it. Calculating Current Coupon in a Record Low Rate Environment - 1 day ago Posted To: Secondary MarketsThe recent drop in rates has created some interesting situations in the market, especially for lenders.   First of all, I'm not aware of any consensus on how to calculate a "current coupon" rate in this environment.  The current coupon is calculated by interpolating between coupons that are above and below par, adjusting for the delay days associated with the securities in question.Let's take an example from the old days when coupons traded below par.  Let's assume the following, assuming (for simplicity's sake) that we're calculating the current coupon for February settlement, with FN 3.0s at 99.00 and FN 3.5 at 101.25.  First, you have to adjust for the delay days.  Fannie Mae pools pay on the 25th of the month following the record date, which results in a 24-day delay.  (The delay results from all the accounting and financing complications involved with managing the vast numbers of loans in the MBS universe.)  The prices can be adjusted for the delay by adding 24 days of coupon payments.  For a 3% pool, the price is adjusted higher by 0.20 (i.e., 3.0 x 24/360), resulting in a 99.20 adjusted price; the 3.5% pool has an adjusted price of 101.2333.  You would then interpolate between the two prices to get the rate that equates to par.  In this case, it is 3.1967%.  The last adjustment is to convert it from monthly yield (since MBS pay monthly to a semi-annual bond equivalent yield, which result in a current coupon rate of 3.218%.However, we are in a world where the lowest tradable coupon (30-year 3.0s) is both highly illiquid and well above par.  In past periods of low rates, the practice would be to extrapolate (rather than interpolate) to par.  This looks like what some people are doing; however, it gives you some very bizarre numbers if you try to track this number (or look at the current coupon spread over Treasuries or swaps).  A major provider shows the current coupon rate rising on Thursday from 2.52% to 2.70%, even though MBS prices were higher on the day.  This in turn means that the spread of the current coupon over the 10-year Treasury yield, a closely-watched benchmark, has fluctuated this week between +65 bps and +88 bps with minimal change in MBS relative value.  As they say...go figure.The huge run-up in MBS prices has impacted the market in other ways.  Matt Graham wrote about the liquidity (or lack of liquidity) in 30-year 3.0s.  As he noted, some lenders are originating loans that would be securitized as 30-year 3.0s (as well as 15-year loans that would go into Dwarf 2.5s), although it's unclear what's being done with the loans.  (They could be sold to the GSEs' cash window.)  With rates pushing down, a 3.75% loan can still be pooled into a 3.5% security (with a proviso-see below); however, the poor execution on 3.0s, and lenders' unwillingness to short the coupon, has been an impediment to rates moving even lower.  For example, the spread between the Freddie Mac survey rate and the 10-year Treasury yield is at +204 basis points, versus an average (over the last two years) of +162.  The "stickiness" of rates at current levels is, in my mind, largely a function of having limited outlets for loans with note rates of 3.625% and lower.  The biggest problem is that there is no natural buyer for 30-year MBS with 3% coupons.  I've recently written that the Fed should buy all outstanding 3% pools, which would do more good than just "buying the market."  In any case, markets for these very low coupons need to develop for rates to move decisively lower.Another complicating factor is the impact of the recent tax on mortgages, paid as a 10 basis point addition to a loan's guaranty fee.  Consider the above example on pooling 3.75% loans into 3.5% pools.  It's almost certain that the new g-fee can be bought down entirely (although there has not yet been a definitive statement to that effect from Freddie or Fannie), leaving 25 basis points of servicing to be held by someone.  A question that the GSEs are grappling with, however, is the cap on agency buy-ups.  Most contracts are written such that the total amount that can acquired by the GSEs on any loan (including both the g-fee and servicing) is capped at 37.5 basis points.  This means that the 10 basis point tax limits the amount of servicing that the GSEs can buy as part of the pooling transaction.  While buy-ups have not been a big factor in the past (since most big lenders just held excess servicing, rather than sell it to the GSEs at puny multiples) this could be a factor in the future, especially in light of the shrinking number of players willing to take down servicing.   Supposedly, the GSEs are looking at increasing the caps, but it's unclear whether the contracts will (or can) be revised.If you'd like to receive an email alert when this commentary is published, sign up for email alerts for this channel in the right menu....(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it. Day Ahead: All Eyes On Employment Situation Report - 1 day ago Posted To: MBS CommentaryFirst Friday of the month and time, once again, for The Employment Situation Report, or more specifically, the Non-Farm Payrolls headline. Both Manufacturing and Private payrolls are expected to have fallen somewhat from last month's report with the 200k headline falling to 150k. With both stocks and bonds near their best levels in about half a year, there aren't the usual foregone conclusions about a positive report hurting interest rates or a negative report hurting stocks. Without being overly optimistic about the team for which we cheer, it seems like Treasuries and MBS would have an easier time keeping a bid in the face of threatening data. To clean up that hypothesis a bit, let's say NFP comes in between 150-200k, beating the 150k consensus. Historically, such a result would tend to lead...(read more)Forward this article via email:  Send a copy of this story to someone you know that may want to read it.