• 97% financing and up 3% down payment assistance, so essentially 100% financing. 
• Please do not misunderstand the term down payment assistance, this amount in financed as well, it is not a gift.
• As with all loans above 80% loan to value, borrower pays PMI
• File is underwritten twice once by lender and once by government entity because it is a government loan.
• Recommended that file be pre- approved, esp. if requesting down payment assistance, before offer is extended because of turn times- at least 45 day close and sometimes longer
• Underwriting and approval process have tighten guidelines- esp. regarding debt to income ratios
• Interest rates in mid 6s to 7s depending on loan amount and other specifics of the scenario

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As you all read the new HR 3221 bill, a new down payment requirement was sent out for FHA. As we all know that bill will take effect October 1, 2008, however, per FHA, the 3.5% minimum down payment will take effect on and after January 1, 2009. So Until, Dec.31 2008 - 3% is still the minimum down payment that we can use for FHA.

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Below is an excerpt from an article in the Wall Street Journal, analyzing the winners and losers of the Fannie/Freddie bailout:

Homeowners: The national mortgage default rate is a whopping 9%, but the rescue plan should bring some relief, as the government can exercise more control than private-sector companies can. Interest rates will likely come down, and, as Jim Cramer said this weekend, “The government can cut the mortgage payments, and it can extend the terms, say to 45 years. It can take any hit to keep you in your home, and the paper is still insured.” Of course, homeowners are also taxpayers and eventually could end up footing the bill anyway.

Hank Paulson: Paulson was a reluctant combatant in the Fannie and Freddie “holy wars” but he canvassed the big thinkers on the subject, tapped outside advice from Morgan Stanley and pushed for a solution quickly.

Short-sellers: Nationalization is likely a victory for many short-sellers who bet against the ability of Fannie and Freddie to rebound from their troubles. Fannie and Freddie shares, already down roughly 90% since October, probably won’t be pretty to look at Monday. But their success won’t be morally complicated: The blame for Fannie’s and Freddie’s troubles fall squarely on their odd structure and the housing crisis, Paulson said in his statement.

Pimco’s Bill Gross: The co-chief investment officer of the bond giant Gross bet that his Fannie and Freddie bonds would be saved by Federal intervention, and he was right. He tripled his bet on mortgages in May so that they comprised as much as 61% of his fund. Then he boldly plumped for Treasury to use its own balance sheet in a bailout, preferably buying Fannie’s and Freddie’s preferred shares. Gross wasn’t above talking smack: He provocatively ended his last investor letter with the taunt, “Booyah Hank?”–poking at Paulson’s insistence that shareholders suffer “moral hazard.” Anyone “aspiring for a perfect 800 on the Wall Street policy exam would conclude that the tab will be less if paid up front, than if swept under a rug of moral umbrage intent on seeking retribution for any and all of those responsible,” Gross nudged.

Republicans: The Bush administration gets kudos for avoiding the economic meltdown that likely would have resulted from further Fannie-Freddie troubles, at least for now. That could boost the candidacy of John McCain, or at least dull any Democratic attacks on things economic. Fannie and Freddie have long been generally supported by Congressional Democrats and generally loathed by Republicans, who wanted the two giants to shrink to a more-manageable level. In conservatorship, Fannie and Freddie are temporarily making “big government” even bigger. But, as McCain economic adviser Doug Holtz-Eakin said today, “the long-term reforms are to scale down Fannie and Freddie so their size is no longer a threat. And then privatize them.”

Stockholders: Common and preferred shares will remain listed but those juicy dividends are gone. Still, it isn’t the total wipeout many expected. Many banks and financial institutions, including J.P. Morgan Chase, had poured money into Fannie’s and Freddie’s preferred shares. The threat of the banks’ holdings becoming worthless raised the threat of a broad banking crisis. But Treasury will buy some of the preferred shares, and banishing the dividends will save Fannie and Freddie $2 billion a year.

Lobbyists: The mortgage giants wove a mantle of invincibility with their $170 million lobbying bills in the past decade. They spent $3.5 million on lobbying just in this year’s first quarter, spreading their largesse among 42 outside lobbying firms. Treasury has turned off the Fannie-Freddie lobbying spigot. Sen. Barack Obama pointedly said in a statement about Fannie and Freddie today, “any action we take must be focused not on the whims of lobbyists and special interests worried about their bonuses and hourly fees.”

Congress: Congress has been publicly censured for Fannie’s and Freddie’s troubles–even by its own members. Sen. McCain has long derided the political strength of Fannie and Freddie as an example of “crony capitalism.” Obama said, “Washington ignored the warning signs in the housing and financial markets.” Cramer railed in a column this weekend, “We are at this extreme because our policymakers have simply been lazy, wrong, intransigent and foolish. If this were the private sector, all of these people would be candidates to be fired.”

Management: Paulson didn’t blame management, diplomatically saying “I attribute the need for today’s action primarily to the inherent conflict and flawed business model embedded in the GSE structure, and to the ongoing housing correction. GSE managements and their Boards are responsible for neither.” He added that he hoped most of the employees would stay on. Still Fannie CEO Daniel Mudd and Freddie CEO Richard F. Syron will be succeeded by former TIAA-CREF Chairman Herbert M. Allison and Carlyle Group senior adviser David M. Moffett, respectively. Regime change isn’t exactly a ringing federal endorsement.

Value investors: Long-term managers with big stakes in Fannie and Freddie included David Dreman of DWS Dreman Concentrated Value, Richard Pzena of John Hancock Classic Value, and John Thompson of Thompson Plumb Growth as well as beleaguered Bill Miller of Legg Mason Capital Management. Miller was so confident that Freddie would rebound that he took his stake up to 12%, making him its largest shareholder. Fannie and Freddie stock will stay listed, but it’s a bold bet to believe that it will recover enough to make a significant profit.

-Source, Joyce Conlin, Loan Source

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Two new laws dealing with the use of wireless telephones while driving go into effect July 1, 2008. Below is a list of Frequently Asked Questions concerning these new laws.

Q: When do the new wireless telephone laws take effect?
A: The new laws take effect July 1, 2008.

Q: What is the difference between the two laws?
A: The first prohibits all drivers from using a handheld wireless telephone while operating a motor vehicle, (Vehicle Code (VC) §23123). Motorists 18 and over may use a "hands-free device." Drivers under the age of 18 may NOT use a wireless telephone or hands-free device while operating a motor vehicle (VC §23124).

Q: What if I need to use my telephone during an emergency, and I do not have a "hands-free" device?
A: The law allows a driver to use a wireless telephone to make emergency calls to a law enforcement agency, a medical provider, the fire department, or other emergency services agency.

Q: What are the fines(s) if I'm convicted?
A: The base fine for the FIRST offense is $20 and $50 for subsequent convictions. With the addition of penalty assessments, the fines can be more than triple the base fine amount.

Q: Will I receive a point on my driver license if I'm convicted for a violation of the wireless telephone law?
A: No. The violation is a reportable offense, however, DMV will not assign a violation point.

Q: Will the conviction appear on my driving record?
A: Yes, but the violation point will not be added.

Q: Will there be a grace period when motorists will only get a warning?
A: No. The law becomes effective July 1, 2008. Whether a citation is issued is always at the discretion of the officer based upon his or her determination of the most appropriate remedy for the situation.

Q: Are passengers affected by this law?
A: No. This law only applies to the person driving a motor vehicle.

Q: Do these laws apply to out-of-state drivers whose home states do not have such laws?
A: Yes.

Q: Can I be pulled over by a law enforcement officer for using my handheld wireless telephone?
A: Yes. A law enforcement officer can pull you over just for this infraction.

Q: What if my phone has a push-to-talk feature, can I use that?
A: No. The law does provide an exception for those operating a commercial motor truck or truck tractor (excluding pickups), implements of husbandry, farm vehicle or tow truck, to use a two-way radio operated by a "push-to-talk" feature. However, a push-to-talk feature attached to a hands-free ear piece or other hands-free device is acceptable.

Q: What other exceptions are there?
A: Operators of an authorized emergency vehicle during the course of employment are exempt, as are those motorists operating a vehicle on private property.

 _____  
DRIVERS 18 AND OVER

Drivers 18 and over will be allowed to use a "hands-free" device to talk on their wireless telephone while driving. The following FAQs apply to those motorists 18 and over.

Q: Does the new "hands-free" law prohibit you from dialing a wireless telephone while driving or just talking on it?
A: The new law does not prohibit dialing, but drivers are strongly urged not to dial while driving.

Q: Will it be legal to use a Bluetooth or other earpiece?
A: Yes, however you cannot have BOTH ears covered.

Q: Does the new "hands-free" law allow you to use the speaker phone function of your wireless telephone while driving?
A: Yes.

Q: Does the new "hands-free" law allow drivers 18 and over to text message while driving?
A: The law does not specifically prohibit that, but an officer can pull over and issue a citation to a driver of any age if, in the officer's opinion, the driver was distracted and not operating the vehicle safely. Sending text messages while driving is unsafe at any speed and is strongly discouraged.

  _____  
DRIVERS UNDER 18

Q: Am I allowed to use my wireless telephone "hands-free?"
A: No. Drivers under the age of 18 may not use a wireless telephone, pager, laptop or any other electronic communication or mobile services device to speak or text while driving in any manner, even "hands-free." EXCEPTION: Permitted in emergency situations to call police, fire or medical authorities (VC §23124).

Q: Why is the law stricter for provisional drivers?
A: Statistics show that teen drivers are more likely than older drivers to be involved in crashes because they lack driving experience and tend to take greater risks. Teen drivers are vulnerable to driving distractions such as talking with passengers, eating or drinking, and talking or texting on wireless devices, which increase the chance of getting involved in serious vehicle crashes.

Q: Can my parents give me permission to allow me to use my wireless telephone while driving?
A: No. The only exception is an emergency situation that requires you to call a law enforcement agency, a health care provider, the fire department or other emergency agency entity.

Q: Does the law apply to me if I'm an emancipated minor?
A: Yes. The restriction applies to all licensed drivers who are under the age of 18.

Q: If I have my parent(s) or someone age 25 years or older in the car with me, may I use my wireless telephone while driving?
A: No. You may only use your wireless telephone in an emergency situation.

Q: Will the restriction appear on my provisional license?
A: No.

Q: May I use the hands-free feature while driving if my car has the feature built in?
A: No. The law prohibits anyone under the age of 18 from using any type of wireless device while driving, except in an emergency situation.

Q: Can a law enforcement officer stop me for using my "hands-free" device while driving?
A: For drivers under the age of 18, this is considered a SECONDARY violation meaning that a law enforcement officer may cite you for using a "hands-free" wireless device if you were pulled over for another violation. However, the prohibition against using a handheld wireless device while driving is a PRIMARY violation for which a law enforcement officer can pull you over.

 The two laws were the result of SB 1613 and SB 33, authored by Senator Joe Simitian and signed into law by Gov. Arnold Schwarzenegger in September 2006

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Bernanke says rate "well positioned," watching dollar

Federal Reserve Chairman Ben Bernanke Tuesday signaled he is finished cutting interest rates for now and has turned his attention to concerns about inflation in the world's foreign exchange markets in the wake of the U.S. dollar's 16 percent decline against the Euro over the past year.  Speaking to the International Monetary Conference, Bernanke stated that, "For now, policy seems well positioned to promote moderate growth and price stability over time.  We will, of course, be watching the evolving situation closely and are prepared to act as needed to meet our dual mandate."

MAKING SENSE OF THE STORY FOR CONSUMERS

• Observers called Bernanke's statement a "strong defense of the dollar" and a sign that the Fed believes a weaker U.S. dollar would be detrimental.  Declines over the past year against the Euro and more recent oil price surges have increased fears of inflation. These fears are one reason the Fed is not expected to pare interest rates further at least through October.
• Bernanke called financial market conditions "strained" and reiterated that U.S. consumers face challenges from declining home prices and stricter mortgage and other lending standards, a weaker job market and higher energy costs.  He added that economic growth will remain limited until home prices and the housing market show clearer signs of stabilization.

**Resource: Bloomberg.com

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