o Wednesday, December 4, 2013: New Home Sales (Oct) 444K versus 420K market expectations
o Thursday, December 5, 2013: Jobless Claims –298K versus 330K market expectations
o Friday, December 6, 2013: Unemployment rate ticked down to 7% versus the 7.2% expectation ; 203K jobs added in November, higher than the 180K Wall Street anticipated. Consumer sentiment jumped to 82.5 for December, up from 75.1 in November.
• Janet Yellen is expected to be confirmed next week as next Federal Reserve Chairperson. She has indicated she will follow suit with current Federal Reserve quantitative-easing policy until employment picture is much stronger. Employment participation rate is at 63%, the lowest level in 3 decades.
2013 Reflective Highlights:
- FHA increases monthly mortgage insurance premiums and lengthens length of time requirements that mortgage insurance remains in place on loans
- Minimum down payment was raised to 5% on all conventional loan programs
- Asset based lending makes it debut – Asset rich borrowers with non-traditional income streams will now have the opportunity to finance real estate
2014 Looking forward:
- Buckle your seat belts and be ready for a financial strip search… The QRM (Qualified Residential Mortgage) is set to take effect January 10, 2014 as part of further Dodd-Frank legislation.
- QRM requires borrowers to show greater strength in employment history, lower debt to income ratios, and qualify based on tighter credit and income guidelines than in the past.
- Buyers be prepared for a financial strip search and get pre-approved prior to shopping for a home. Preparation and education is key!
- Don’t be caught in a web of surprise. Even buyers who think they are among the qualified elite may be in for surprise with the strengthened guidelines.
- There are still plenty of great loan program options for borrowers even with all of these changes!
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