02 Sep 10 Mortgage Rates Fall for 11th Week in a Row
Freddie Mac announced today that the average 30-year mortgage rates dropped once again to a new record low of 4.32% with an average 0.7 point for the week ending September 2nd. In the previous period, the average was 4.36%, and the year-ago average was 5.08%. “The 12-month price growth of core personal expenditures remained at 1.4% in July, which kept overall inflation expectations well at bay. Federal Reserve chairman, Ben Bernanke reiterated this in his August 27th speech, noting that with inflation expectations reasonably stable and the economy growing, inflation should remain near current readings for some time before rising slowly. Amy Crews Cutts, Feddie Mac deputy chief economist said that as a result, home loan rates fell further this week to new historic lows.” It will be interesting to see if the record low mortgage rate streak can continue.
01 Sep 10 Home Loan Applications Rise
Home loan applications increased 2.7% last week as more American consumers took advantage of the lowest rates in decades to lower their mortgage payments. The Mortgage Bankers Association said Wednesday the increase was led by a 2.8% increase in refinance applications. The number of home mortgages taken out to purchase a home rose 1.8 %.
Mortgage refinance activity is at its highest level since May 2009 and makes up almost 83% of all new home mortgages, its highest share since January 2009. However, home sales continue to struggle. Buyers are sitting out because they are worried about jobs or are deterred by strict mortgage requirements. New purchase loan activity is 40% below the levels seen at the end of April, when two federal tax credits for homebuyers expired.
Home loan rates have fallen since spring as investors, worried about the health of the global economy, seek the safety of Treasury bonds. That lowered their yield, and mortgage rates tend to track those yields. The average interest rate for a 30-year mortgage with a fixed rate fell to 4.43% from 4.55% a week earlier. Rates on the 15-year fixed-rate mortgage, a common refinancing option, decreased to 3.88% from 3.91%.
27 Aug 10 Is the Streamline the Best Loan for Refinancing?
Streamline refinancing helps borrowers who are struggling with home equity, credit and income qualifications get approved for a low rate refinance. Homeowners may qualify even if they are over 100% loan to value because there is no appraisal required.
Refinance and Save
The streamline refinance is great for borrowers that are having problems qualifying for a refinance because their debt to income ratio is too high, because there is no income verification. In most cases, refinancing will cost a borrower somewhere between $3,000 to $5,000. Mortgage Refinancing Buzz suggests that the streamline refinance is the best home refinancing available for consumers in the U.S. today. Read the original article online > Choosing the Best Refinance Loan
26 Aug 10 Lead Planet Reports Increasing Volume for Mortgage Leads Online
The Lead Planet, a mortgage lead generation company from California published their monthly mortgage lead survey and it indicates that many homeowners are still searching for refinancing with record-low home loan rates.
The survey reported that 12.5 % increase in the overall number of mortgage loan leads generated and a 16.7 % increase in the number of people who applied online for a refinance loan. Home mortgage rates continued with the record low trend this week.
The 30-year home loan rate averaged 4.55 % and the 15 year interest rates fell to 3.91%. The 15-year FHA rates also dipped below 4% for the first time. Most economists have forecasted poor employment and housing figures for the 3rd and 4th quarters of 2010, so we anticipate the record low mortgage rates will roll into 2011.
23 Aug 10 Home Mortgage Rates Fall to Record Lows Again
According to Freddie Mac, mortgage rates dropped this week to more record lows amid concerns about the state of the U.S. economy. Home mortgage rates on 30-year fixed-rate home loans, the most widely used loan, averaged 4.42 % this week, down from last week’s 4.44% and its year-ago level of 5.12 %, according to the survey. Home mortgage refinance loan volumes have risen for three consecutive weeks as the 30-year mortgage rates have fallen to record lows for nine straight weeks. Freddie Mac started the survey in April 1971. Meanwhile, 15-year fixed-rate home loans averaged 3.9%, down from 3.92% last week, the lowest level since Freddie Mac began surveying this loan type in 1991. 15-year mortgage rates have hit record lows for six straight weeks.
Freddie Mac said rates on 5/1 adjustable-rate mortgages, set at a fixed rate for five years and adjustable in each following year, was 3.56%, unchanged from last week, remaining at its lowest level since Freddie Mac began tracking this loan type in 2005.
Last year at this time, 15-year mortgages averaged 4.56 %; the one-year ARM was 4.69%, and the 5/1 ARM was 4.57%. Rock-bottom rates should continue to spur demand for home loan refinancing, putting extra cash into consumers’ hands that they can save, use to pay off existing debt or funnel into the economy through extra spending.
Home loan applications rose 13% in the week ended August 13th, fueled more by homeowners seeking a house refinance than by new buyers looking for loans, according to an index from the Mortgage Bankers Association. Record low interest rates have yet to spur home sales, which are being weighed down by unemployment and the end of a federally sponsored home-buyer tax credit.
17 Aug 10 Fed Bans Lenders from Paying YSP to Mortgage brokers
The Federal Reserve announced that they were banning mortgage lenders from paying bonuses to brokers for higher interest rate sold to the lender. The change is among several announced by the Federal Reserve, which has been criticized for failing to rein in high-risk lending during the housing boom. The Federal Reserve on Monday approved a rule banning mortgage lenders from paying bonuses to mortgage brokers and loan officers who get borrowers to agree to a higher mortgage rate than they need to pay. The Fed also proposed requiring clearer disclosures about how payments on adjustable-rate loans can change over time.
One of the proposed rules is designed to give consumers more time to review lenders’ disclosures for their home loan costs. Lenders would be required to refund any loan fees collected if the prospective borrower withdraws the mortgage application within three days of receiving the disclosures. That proposal is open for public comment. The change in required disclosures for adjustable-rate loans is set to take effect at the end of January as an interim rule. Mortgage lenders must show the maximum interest rate and monthly payment that can occur during the first five years, a “worst case” example showing the maximum rate and payment possible over the life of the loan. The disclosures must also include a statement that consumers might not be able to avoid rate and payment increases by mortgage refinancing.
The ban on mortgage lenders’ paying bonuses to brokers and loan officers for higher-interest loans takes effect in April. The Federal Reserve said that its consumer tests found that borrowers generally were unaware of the payments and how they could affect the total cost of a loan. Critics have called the bonuses little more than kickbacks that encouraged mortgage brokers and lender salespeople to steer borrowers into costlier loans.
Mortgage brokers have argued that they can use the payments, also known as rebates or yield spread premiums, to cover borrowers’ closing costs, so a homeowner wanting to refinance a mortgage with no upfront costs might accept a higher interest rate to accomplish that. In making the rule final, the Fed said a loan originator “may not receive compensation that is based on the interest rate or other loan terms. This will prevent loan originators from increasing their own compensation by raising the consumers’ mortgage costs.” Mortgage loan originators would still be able to receive compensation calculated as a percentage of the loan amount.
Another rule finalized Monday would require borrowers to be notified when their home mortgage has been sold or transferred. The Fed also proposed a rule to make it easier for consumers to learn who owns their loans. Under the provision, once a mortgage servicer is asked by a borrower for that information, the loan servicer would have to provide it within a reasonable time, which generally would be 10 business days
17 Aug 10 Mortgage Costs Rising Nationally
BankRate reported that mortgage closing costs such as origination fees and third-party fees increased 36.6% from last year’s average of $2,739. The financial survey company also indicated that that New York mortgage loans had the highest closing costs at $5,623 and Arkansas had the lowest, at $3,007. According to a Bankrate spokeman, the financial reform law penalizes loan companies if they underestimate mortgage closing costs, so this year’s survey reporting could be a high estimate.
14 Aug 10 FHA Loans Costs Increasing in October
HUD announced they have increased the annual FHA mortgage insurance premium. FHA costs are rising from 0.55 % of the FHA loan amount to 0.90% (for loan to values higher than 95%) or 0.85% (for LTVs lower than 95 %). This insurance premium hike will go into effect, October 4th, 2010. In an effort to save face, FHA will be lowering their upfront mortgage insurance to compensate homeowners for their rising monthly payments. This is good news for new homebuyers because the FHA lenders are offering record low rates and loan fees are being reduced to 1% of the loan amount from 2.25%. The FHA requirements are becoming more demanding for both lenders and consumers, but HUD believes that tighter guidelines can salvage FHA lending now and for the near future. Read the original article online > FHA Mortgage Costs Rising
14 Aug 10 Has Obama Mortgage Relief Gone Too Far?
The Obama administration funded the Home Affordable Refinance Program, Home Affordable Modification Program, Hope for Homeowners and now the Emergency Homeowner Loan Program. Most of these tax-payer funded mortgage-bailout programs failed miserably. However, the Home Affordable Refinance Program,initiatve did help underwater homeowners with 125% mortgage refinancing , but only a small percentage of homeowners met th Fannie Mae and Freddie Mac loan requirements. Rates on fifteen-year loans dropped to 3.92% this week and the thirty-year rates fell to 4.44%. Nationwide reported that economist have forecasted that approximately 20 million homeowners will have an underwater mortgage at some point in 2011. The Fed announced this week they it would use the proceeds from Fannie Mae and Freddie Mac portfolio of mortgage-backed securities to purchase government debt.
FHA refinancing requirements are getting more difficult for the average borrower as HUD is said to be tinkering with a minimum credit score of 500. Lenders are bracing themselves for tighter FHA guidelines in the coming year as HUD moves to rebuild the reserves for the FHA insurance premiums. Read the original article online > Relief for Refinancing with Short Refinance and Emergency Homeowner Loan Programs
11 Aug 10 Fed to Keep Mortgage Rates Low
The Fed Reserve’s announcement yesterday moved the mortgage markets. Industry insiders continue to brace for the feared double dip recession. Many analysts that aren’t in Obama’s pocket believe the economy will take another dip. The housing sector is pretty flat and there are many regions that are in desperate need of some good news. Consumer bankruptcies in the U.S. continue to rise (in 2006 there were less than 600,000 filed; last year there were 1.4 million, and this year is on pace to top 1.6 million). The private sector does notappear to be ready to hire. These factors should contribute to the Fed keeping mortgage rates low for the near future.
11 Aug 10 Emergency Homeowner Loan Program
Word on the finance street is that the Federal government will soon announce the Emergency Homeowner Loan Program. The latest round mortgage bail-outs from the Obama Administration is said to be focused on aiding homeowners who have under-water mortgages.
According to CNNMoney, the Obama administration pledged another $3 billion in additional funds available to assist distressed homeowners in a foreclosure prevention effort. One part of the mortgage bail-out plan, includes a new $1 billion program that will offer self-employed home loans to unemployed borrowers at risk of losing their homes. The mortgage loan relief, which will be dispersed through non-profit and housing agencies, will carry 0% interest and be good for a maximum of $50,000 for up to two years. In the coming weeks, HUD said it will announce details about the new loan relief program, called the Emergency Homeowner Loan Program.
It was not clear whether or not the Emergency Homeowner Loan Program would be part of the recently discussed bail-out for Freddie Mac and Fannie Mae. HUD announced just last week more government loan relief with the FHA short refinance program that was created to help homeowners refinance their under-water mortgages. It also wasn’t clear whether or not the FHA short refinance program would be part of the Emergency Homeowner Loan Program. HUD was unavailable for comment.
Recent Government Mortgage Relief Programs
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The administration also added $2 billion in home loan aid for its mortgage program that helps struggling homeowners in the states with highest unemployment rates. Today, the Obama administration announced an additional $2 billion that will expand the mortgage relief program to a total of 17 states and the nation’s capital. The regions chosen have suffered significant home value depreciation, high unemployment and high foreclosure rates well above than the national average for a year.
Tags: Emergency Homeowner Loan Program, FHA short refinance program, self-employed home loans, under-water mortgages
09 Aug 10 1 in 5 Homes Are Plagued with Underwater Mortgages
Zillow published a mortgage report that revealed that more 1 in 5 U.S. homes have a mortgage that is presently underwater. This is the primary reason that so many lenders are offering loan modification agreements in regions that have seen significant declines in home values. Fewer Americans are strategically defaulting on their mortgage loans, foreclosure rates continue to increase with RealtyTrac reporting a first-quarter foreclosure rate of 1.65 million. Analysts project that the number of mortgage defaults, repossessions and scheduled auctions are likely to reach 3 million by the end of the year. Read the original article online > 20% of US Mortgage Loans Under-Water
