Brandon Watson, Wells Fargo

BRANDON WATSON

Area Sale Manager

Wells Fargo

What are some of the most popular loans? And what are most homebuyers qualifying for? Why?

From a product perspective? The 30-year fixed mortgage. The traditional 30-year still is a very, very most popular product out there, because the rates have been relatively low for the past several years. There are other ARM products out there, and people definitely need to explore their options with their lenders, but traditionally, we’re still seeing the 30-year product as the most popular because it’s still affordable. The rate is at an all-time low still, so it’s still an affordable option and people feel comfortable with the 30-year. But, though our fixed-rate product traditionally remains pretty popular, I do see, with the rise of interest rates, the possibility for some of the ARM products to come back in the near future.

Have FHA loans changed at all in the past year? How? Are very many buildings still FHA-approved, or are FHA loans phasing out?

There have been a few changes. FHA is a very, very viable option for our consumers, it allows for a lower credit score and definitely a lower down payment than our traditional conventional loans. But yes, there have been a few changes. For example, the FHA increased their annual mortgage insurance premiums (that’s for most of their mortgage products), which now requires a borrower to continue paying a premium in the life of a loan, before it was down to a certain percentage of the loan and they could look to the least of mortgage insurance that FHA changed this year.

I don’t think FHA is phasing out. I think FHA is a great product. I think it’s a very viable product in the marketplace. We still look to do some of the FHA approvals on the condos and it remains a highly viable option for borrowers.

Have jumbo loans have changed at all?

Our jumbo product and volume has definitely been increasing. Wells Fargo is the largest jumbo mortgage lender. We’re at some of our highest funding levels since 2007, prior to the market going down. This year, we’ve had some success in the jumbo market. If we look at high-end homes out there, the prices are really good and the rates are really low. You see definitely a surge in the jumbo lending arena. And I think the reason why you see that more is because in years past, there was a larger spread between a conforming loan and a non-conforming loan (which is a jumbo), and now that spread on the interest rate is not that far. So the interest rates are very comparable between a conforming and a non-conforming. I think you see that wall that makes the jumbo with the lower interest rates a viable product.

What are some of the biggest trends you are seeing?

There have been a lot of trends in today’s housing market. I can note for 23 straight months, existing home sales compared to the same months themselves years prior have been higher, according to the National Association of Realtors (NAR). So, that’s on the rise, which is great news, right? We’ve been seeing a small increase in interest rates over the last 60-90 days. But the levels still remain attractive for borrowers with low competitive rates over 20 years.

As you may know, Wells Fargo is moving into more of a purchase market. Refinance/business has inclined, due to interest rates moving up a little. Home prices are on the rise. I think that homeowners are starting to get equity in their homes again, which is very positive. While the rates and prices make it an attractive time to purchase a home, borrowers in some markets are faced with limited inventory, including right here in South Florida. Wells Fargo experienced our seventh consecutive quarter with more than a billion dollars in originations so the benefit for homeownership in these low interest environments remain viable

Are you seeing many buyers who have lost homes to short sales/foreclosures coming back to the market for loans? What is the process when they have a foreclosure on their credit report?

The housing market continues to see improvement, so you definitely have some consumers who have lost their homes to a short sale or foreclosure and they’re trying to find ways to achieve the dream of homeownership again, so the road back is not easy. But with careful planning and consumers putting themselves in the position to become homeowners again, one of the most important things they can do is speak honestly to a refutable lender and talk about their situation. I’ll give you an example: FHA allows borrowers and customers who do a short sale or foreclosure to purchase a home in as little as three years. Other investors have different guidelines and have to wait a little longer.

Rates are still low and the dream of homeownership is still alive. I think it’s a great time to be on the market and purchase a home.