03 Feb 10 FHA Credit Improving

The FHA home loans originated last year went towards borrowers with better credit scores than in previous years. These borrowers migrated to FHA when the subprime market disappeared.  The average credit score of an FHA borrower is now 690, up from 630 only two years ago, agency officials said. 

The agency banned 268 FHA lenders from making FHA mortgage loans last year, more than double the total terminated in the previous eight years. The FHA suspended six other firms. Among them were some of the largest FHA mortgage lenders –Taylor, Bean & Whitaker and Lend America, both of which shut their doors soon thereafter.   Consumers taking out FHA mortgage loans will have to pay higher upfront fees, perhaps as early as this spring. Those with especially weak credit scores will also have to put down at least 10% instead of the usual 3.5% down-payment.  Read the original article from the FHALoanBlog, > Better Credit FHA Loans Performing Well

08 Jan 10 Will the Fed Let the Mortgage Market Walk?

Many mortgage industry insiders believe the Federal Reserve will take their hands off the housing sector in 2010, when the central bank enables mortgage market to stand on its own two feet.  The Fed is unlikely to step in again after its bad credit mortgage buying program devised at the height of the financial meltdown expires. That would take a renewed crisis, like a sudden and destabilizing hike in mortgage interest rates.

Besides conventional and FHA mortgage rates, there are other impediments to a fresh round of mortgage-backed debt purchases, including the Fed’s desire to keep inflation expectations under control.  One of the reasons the Fed capped its bond-buying program, which included more than $1.4 trillion in mortgage-related securities and $300 billion in Treasury debt, was the perception that the central bank was “monetizing” federal deficits printing money to keep the government solvent.  This latent fear, prevalent in financial markets and reflected in the elevated price of gold, has the potential to turn more than $1 trillion in dormant excess bank reserves into a runaway rise in prices, analysts say.

Barring a double-dip in housing, however, Fed officials are unlikely to meddle.  Their reluctance to intervene anew has many roots. For one thing, it would signal a policy about-face that could adversely affect markets as investors reassess what they believed was an improving economic outlook.  > Read the original article online.

17 Dec 09 Mortgage Rates Up but Stay Below 5 Percent

Mortgage interest rates crept up for the 2nd consecutive week, but borrowers who applied for mortgage refinancing remained strong.  Refinance applications continued to rise, as homeowners are making a last ditch effort to lower their monthly home loan payment before the rates rise.

Freddie Mac reported the average fixed rate on a thirty-year home loan was 4.94% this week, up from 4.81 % last week.  Mortgage rates are closely tied to yields on long-term government debt, which have risen since the average fixed rate on thirty-year mortgages hit a record low of 4.7% the week of Dec. 3.

A Federal Reserve program to buy $1.25 trillion in mortgage-backed securities has kept rates on thirty-year mortgages under 5% this year. The government mortgage programs, like FHA and VA were created to make home buying more affordable, is set to end next spring.

The low rates resulted in a wave of refinancing activity: The Mortgage Bankers Association reported that nearly 3 out of 4 home loan applications were for home refinancing during the first few weeks of December, Freddie Mac collects mortgage rates each week from lenders around the country. Home mortgage rates often fluctuate, even within a given day.

The average rate on a fifteen-year fixed mortgage rose to 4.38% from 4.32% last week. Mortgage rates on five-year, adjustable-rate mortgages averaged 4.37%, up from 4.26% last week. Rates on one-year, adjustable-rate mortgages rose to 4.34% from 4.24%.

16 Dec 09 Lend America Banned from FHA Mortgage Lending

According to a recent article from National Mortgage News, mortgage company, Lend America was banned from FHA mortgage lending on Monday.  Apparently, the company was refinancing certain customers without paying off their prior existing lien.  According to veteran mortgage banking attorney Robert Lotstein, who has clients that did business with Long Island-based Lend America, said this has created a situation where customers received a new loan from the mortgage lender but without their existing lien being paid off.

14 Dec 09 HUD Says FHA Guidelines Changing in 2010

FHA mortgage products have helped support the housing sector for decades, but over the last few years FHA home loans has significantly supported borrowers for home buying and mortgage refinancing.  HUD has plans for revising FHA guidelines.  Below are at least several revisions HUD is making with FHA loan programs.

1. Upping the minimum required down payment. HUD is looking at whether increasing the required minimum down payment from 3.5% to 5% will help stabilize FHA loan defaults. If home buyers have more “money invested,” HUD officials wonder, will they be less likely to default on their mortgages?

2. Changing mortgage insurance premiums. HUD officials are considering whether changing the way FHA mortgage insurance premiums are structured will keep more buyers from becoming delinquent. Should there be an extra fee up front? Should the amount paid over time change for maximum stabilization?

3. Raising the minimum credit score required for an FHA loan. While credit scores have been lousy at predicting what happens to people with good credit who lose their jobs, they have been more accurate in identifying risky behavior. At the height of the housing boom, FHA approved loans to borrowers with credit scores below 500. Discussions underway wonder whether the minimum acceptable credit score should be 620 or higher.

4. Dialing back how much money sellers can give FHA home buyers. Right now, sellers can give buyers up to 6% to help cover closing costs and fees. Experts recommend reducing that to 3%.

5. Requiring FHA lenders to have more cash on hand. Like borrowers, lenders need to have more “skin in the game.” Right now, lenders need only have $250,000 in cash to cover fraud-related loan originations, but HUD officials want to see that amount rise to $2.5 million. That will reduce the number of lenders that can offer FHA loans, and hopefully cut down on mortgage fraud.

6. Eliminating abusive lenders. HUD is asking Congress for more power to prevent abusive lenders from making FHA loans. According to HUD Secretary Shaun Donovan’s testimony before the House Financial Services Subcommittee on Oversight and Investigations, lenders will be required to “indemnify the FHA fund for their own failures to meet FHA requirements” and will be held accountable nationally for any improper activities. Donovan said that HUD “will also develop a Lender Scorecard that will summarize the performance of lenders who do business with the FHA. This scorecard will be posted on (the department’s) Web site to ensure transparency and accountability for lenders, borrowers and the market.”

HUD officials say the quality of the FHA loan portfolio has improved over the course of 2009. The typical borrower’s debt-to-income ratio has declined, meaning the mortgage payment is a smaller portion of the borrower’s monthly income.  While HUD officials are pleased to see borrowers with a stronger personal finance balance sheet, there are two big concerns. First, the number of borrowers who are delinquent in paying their mortgages is growing. If those borrowers don’t figure out a way to make up their missing payments and start paying their mortgage on time, more homes will fall into foreclosure, further depressing housing prices.

The second concern is rising unemployment. “If unemployment continues to track at high levels and goes to 11 or 12%, that’s a real struggle,” the senior HUD official said. “The big risk is a stagnant, slow recovery that keeps unemployment rates high because there is no loss mitigation technique for that.  In other words, if homeowners lose their jobs and can’t find replacements that pay enough to cover their monthly expenses, the FHA’s capital reserves fund sinking into the red will be the least of the government’s problems.

08 Dec 09 FHA Mortgage Insurance Premiums Rising

FHA unexpectedly delayed the release of a much-anticipated audit of its capital reserves in November.  Of course, the mortgage lending industry feared the worst that the government’s FHA mortgage insurance fund was negative.  After the audit was released showing a thin $3.6 billion cash cushion with promises from FHA to keep the fund solvent, a new worry emerged revealing the government could move to raise the FHA mortgage insurance premium it charges borrowers, increasing closing costs for millions of potential customers.  At a press conference unveiling the audit, housing secretary Shaun Donovan confirmed that FHA is weighing its options, including a possible hike in the upfront MIP. Mr. Donovan would not rule it out entirely but also said that it was not imminent.

Currently, FHA mortgage lenders charge a borrower roughly 165 basis points at the closing table plus 50 basis points monthly. The points are often financed and the borrower cannot recoup the premium. The 50 bps are part of the monthly payment and can be adjusted up or down, depending on the FHA’s needs and concerns.  Today, FHA mortgage loans account for between 25% and 30% of all new originations and have become the program of last resort for homebuyers with both poor credit and low or no down-payments.  “If they (FHA) need to raise cash I would rather see them raise the monthly rather than the upfront MIP,” said one mortgage executive following the issue.  But Jim Pair, president of the National Association of Mortgage Brokers, wasn’t thrilled with the idea of raising the MIP unless FHA really needs to.  “An increase at this time would be detrimental to the housing market,” Mr. Pair told Origination News.  The audit found that the Mutual Mortgage Insurance fund actually has $30.7 billion in cash on a total book-of-business approaching $700 billion but $27.1 billion of that amount has been set aside to cover anticipated losses on FHA mortgages, leaving it with a cash cushion of just $3.6 billion.

The new study believes the MMI will stay in the black unless the housing recession deepens significantly. If that happens, the fund would have a negative capital ratio of 0.46%. But if the mortgage market suffers what FHA calls a “downward interest rate shock” the fund could go negative by as much as 2.33%.  The actuarial study (audit) of FHA was done by IFE Group of Rockville, Md. Mr. Donovan said the release of its findings were delayed because HUD wanted the firm to conduct “more extreme” stress modeling on the reserve fund. “We felt some of the loss scenarios were not as bad as we expected,” said the HUD secretary.

Commenting on IFE’s findings, Howard Glaser, a former HUD attorney who is now a lobbyist, said FHA is not immune from the laws of economics. “Facing the equivalent of a 500-year flood in the housing market, and having stepped into the void left by reckless lenders who pillaged the mortgage system, FHA now finds itself tight on capital.”  To many mortgage bankers, the FHA loan program is the only game in town, and without it originations to cash strapped and low-income borrowers would seize up.

03 Nov 09 Home Mortgage Rates Climb 3 Weeks in a Row

Home mortgage rates for 30-year home loans rose to 5.03 % this week, the third consecutive weekly increase. The average home loan rates rose from 5% a week earlier, mortgage giant Freddie Mac said last week. The last time the average was higher was the week of September 24th, when rates averaged 5.04%.   The average rate on a 15-year, fixed-rate mortgage loans rose to 4.46% from 4.4 % last week, Freddie Mac said.   Home mortgage rates on five-year, adjustable-rate home loans averaged 4.42%, up from last week’s 4.4%. Mortgage rates on one-year, adjustable-rate mortgages rose to 4.57% from 4.54%.

Home buyers can reduce their payments and mortgage rates by buying points, which amount to 1 % of the loan total. The average for home loans in Freddie Mac’s survey was 0.7 points for 30-year home mortgages and 0.6 points for 15-year, five-year and one-year loans.  “It’s still a very low rate by longer-term historical standards,” said George Mokrzan, senior economist at Huntington National Bank in Columbus, Ohio. “It’s still very supportive of the housing market and recovery.”

The Federal Reserve last year pledged to buy bonds backed by home loans in order to encourage lower mortgage rates. It increased the size of that program to $1.25 trillion in March.   The bond purchases from Fannie Mae, Freddie Mac and Ginnie Mae brought down yields on mortgage-backed securities and allowed lenders to reduce rates on new loans while still selling the securities backed by them at a profit. The plan helped drive mortgage rates to a record low of 4.78 % twice in April.   The central bank’s purchasing program is scheduled to end in the first quarter next year, the Federal Open Market Committee said in a statement September 23rd.

Rising borrowing costs and uncertainty over whether Congress will extend a government tax credit for first-time home buyers may have contributed to a drop in mortgage applications last week. The Mortgage Bankers Association’s index of applications to purchase a home or refinance fell 12%, and sales of new homes declined in September, the Commerce Department said Wednesday.

According to the Mortgage Bankers Association, home loan applications dipped 5.2% in the week ended October 23rd and mortgage refinancing volumes declined 16%.  New-home purchases in September dropped 3% to a 402,000 annual pace, lower than even the most pessimistic economist’s forecast. It was the first month-to-month decline in sales since March.

08 Oct 09 Low Rates Driving Refinance Boom

More than 16 million homeowners owe more on their mortgage than their properties would be valued at.  To many distresses homeowners, mortgage refinancing represents lower loan payments and more money in their pockets. Many phone calls mortgage brokers received last week came from borrowers who couldn’t qualify for a refinance loan because of lower incomes, stricter credit standards or declining home values.  Les Berman of EB Financial said the new guidelines were designed to reduce the conflicts of interest for home appraisals but the stricter guidelines have hindered refinance loan approvals applications because appraisals are coming in too low.  The FHA streamline refinance requires at least six months of payments before a borrower can take advantage of the program, and verification of assets, job and income.

Mortgage brokers say a refinancing is worthwhile if you can shave off at least $100 from your monthly payment or get a full percentage point rate reduction.  That’s why mortgage rates below 5% are so appealing. Refinance rates hit a record low of 4.75% in the spring.    Read the rest of the article online> Mortgage Refinance Boom

15 Sep 09 Mortgage Backed Securities

The Fed’s next key decision is how to wind down its program to buy home mortgage securities and to assess its effect on mortgage rates as that occurs. The central bank now accounts for all but a sliver of the market for mortgage-backed securities, crowding out private activity and raising doubts about how the market would function without government involvement.  At their August gathering, some Fed policy makers believed that a “tapering” of those purchases beyond their scheduled conclusion in December “could be helpful in the future as those programs approach completion,” according to minutes of the meeting.  Two weeks later, Richmond Fed President Jeffrey Lacker said in a speech that he “will be evaluating carefully whether we need or want the additional stimulus” that purchasing the full announced amount would provide.  But another policy maker, Chicago Fed President Charles Evans, said he expects the Fed to carry out the entire amount of purchases. Other Fed officials share that view, worrying about the Fed breaking from a commitment the market is counting on. The central bank’s program has pushed mortgage rates down substantially over the past year, helping to spur the housing market and support the overall economic recovery.  How much mortgage loan yields rise when the central bank ends its purchases will depend in part on how the Fed communicates its plans and how private investors respond.  Policy makers are considering two main views of how the central bank’s involvement influences mortgage rates: by its total stock of mortgage-backed securities, or by the flow of its purchases.

10 Sep 09 Bonds for Mortgage Loans Yields Decline

Bloomberg reported that yields on Fannie Mae and Freddie Mac mortgage securities declined to the lowest in more than three months, signaling that mortgage rates on home loans will drop more and bolster the U.S. housing market.   Yields on Washington-based Fannie Mae’s current-coupon 30- year fixed-rate mortgage bonds fell 0.1of a percentage point to 4.29% as of 3 p.m. in New York, the lowest since May 26, according to data compiled by Bloomberg. The drop followed benchmark Treasury yields lower after stronger-than-forecast demand at the last of three government debt auctions this week.   “If Treasury auctions are oversubscribed day after day, it is only natural that mortgages shouldn’t be far behind,” Tae Park, a portfolio manager in New York who oversees mortgage-bond investments at Societe Generale, said.

Lower mortgage rates may help the housing market offset a forecasted further flood of foreclosure sales to build on recent signs of strength, including the first month-over-month increases in property prices since 2006 registered in an S&P/Case-Shiller index in May and June.   The drop in mortgage-bond yields also suggests home-loan rates may reach the levels below 5% that analysts including Credit Suisse Group AG’s Mahesh Swaminathan say are needed to send refinancing to elevated levels, bolstering consumer finances and spending.   The average rate on a typical thirty-year fixed-rate mortgage dropped to 5.07 % in the latest week, McLean, Virginia based Freddie Mac said today in a statement. That’s down from as high as 5.59% in June, and up from the record low of 4.78% in April. While mortgage refinance applications rose to the highest since late May in the latest week, they remained 64% below the high this year set in January, according to a Mortgage Bankers Association index.

Yields on so-called agency mortgage bonds, the type of debt being bought by the Federal Reserve under a $1.25 trillion program as well as by the Treasury Department, are now guiding rates on almost all new U.S. home lending, following the collapse of the non-agency market in 2007 and retreats by banks. The almost $5 trillion market includes securities guaranteed by government- controlled Fannie Mae and Freddie Mac and bonds of U.S.-insured, low-down-payment loans backed by federal agency Ginnie Mae.   While “after four years of decline, the housing market is showing signs of turning,” sizable challenges remain, including more than 2 million foreclosures over the year ahead, Deutsche Bank AG analysts Peter Hooper and Torsten Slok in New York wrote in a report yesterday.  “The question is how strong the bounce,” they said. “Recent movements in sales, prices and builder expectations looked quite promising, but there are good reasons to expect that home building and prices will remain relatively depressed well into next year despite the recent bounce.”  Article was written by Jody Shenn.

01 Sep 09 Mortech Responding to LendingTree with Legal Challenge

Mortgage technology software provider Mortech, Lincoln, Nebraska, said it has plans to address a legal challenge by Lending Tree, Charlotte, N.C. Mortech said in an e-mailed statement that it would deal with the issue in a “timely fashion,” and noted it has a good track record and reputation when it comes to its dealings with industry partners and customers.

According to a New York Times press report, the suit alleges that Lending Tree feels that Mortech, as its business partner, is in violation of its contract because it is planning to make its pricing engine services available for another online provider’s use Google and those services would compete with Lending Tree’s lead generation system that promotes mortgage loan shopping for consumers online.  

01 Sep 09 Freddie Mac Compliant for NYSE Listing

Mortgage rates are low and the home financing industry looks like it’s getting back on track.  Is Freddie Mac poised to gain their NYSE listing back on the stock market?  Mortgage giant, Freddie Mac soon may be receiving a notice from the New York Stock Exchange, saying it is back in compliance with the NYSE’s listing requirements. As of yesterday, Freddie Mac’s common stock was trading at $2.22, which means that its average share price will have been north of $1 for the past 30 days – that is, as long as its stock price doesn’t collapse by close of business Monday. Under NYSE rules, the exchange can initiate delisting proceedings for companies whose 30-day average price falls below $1. “We’re waiting for official notification from the NYSE,” a company spokeswoman said Monday. In a week it will mark the one-year anniversary since Freddie Mac and its sister company, Fannie Mae, were taken over the government and placed into conservatorship. The share price of both GSEs has been rising over the past month. Some stock analysts attribute the price increase to bottom fishing and speculation by short sellers. Freddie’s 52-week low is 25 cents, its high $5.52. In the second quarter Freddie actually posted a profit while Fannie lost money. 

17 Aug 09 Mortgage Delinquency Rate Climbs to All Time High

The delinquency rate on U.S. home loans reached an all-time high in the second quarter.  However the pace of growth for the mortgage delinquency rate slowed and some industry analysts see this as a possible sign the mortgage crisis may be beginning to turn the corner.  Data provided by credit reporting agency Trans Union shows the ratio of mortgage holders who are 60 days or more behind on their payments increased for the 10th straight quarter, to 5.81% nationwide for the three months ended June 30.  That’s up 65%, from 3.53%, in the 2008 second quarter.  Delinquency of 60 days is considered a forecasting sign to foreclosure, because of the difficulty homeowners would have coming up with two back payments to bring themselves current.

While the delinquency rate hit a new high, however, the increase from the 1st quarter to the 2^nd was 11.3%. In the two prior quarters, the delinquency rate spiked almost 16%.  That slowdown may be a good sign, said FJ Guarrera, vice president of Trans Union’s financial services division. “We have reason to be cautiously optimistic,” he said.  While there’s no way to know exactly why the pace of growth is slowing, Guarrera said, it appears that loan modification programs aimed at helping distressed homeowners from both the FHA mortgage and conventional lenders are beginning to help. In addition, he said, consumers are being more careful with their spending.  Read the original article written by EILEEN AJ CONNELLY >

Tags: FHA mortgage, foreclosure, home loans, loan modification programs, mortgage crisis, Mortgage Delinquency, Trans Union

12 Aug 09 Mortgage Loan Application Activity Slowing

According to the Mortgage Bankers Association home loan rates hopped last week and the response was less mortgage applications. The volume of mortgage loan applications declined 3.5% compared with the previous week.  Home loan applications filed were still up an unadjusted 16.1% for the week ended Aug. 7 from the same week in 2008, according to the MBA’s weekly survey. The survey covers about half of all U.S. retail residential mortgage applications.   FHA mortgage applications filed last week to purchase homes rose 1.1% from the week before. Volumes for conventional, VA and FHA loan applications were all lower than expected.

Mortgage refinancing applications to refinance existing mortgages decreased 7.2%, on a week-to-week basis, reversing the 7.2% increase during the week ended July 31, according to the Washington-based MBA. The four-week moving average for all mortgages was down 0.7%. Home refinancing applications made up 52.3% of all applications last week, down from 54.2% the previous week. ARM mortgage loans accounted for 5.8%, up from 5.4%.

According to the MBA survey, thirty-year fixed-rate mortgage loans carried an average interest rate last week of 5.38%, up from 5.17% the week before. As for 15-year fixed-rate mortgages, the average rose to 4.71% last week, up from 4.60% the week before. And 1-year ARMs averaged 6.71% last week, up from 6.67% the week before.

To obtain mortgage interest rates this low, borrowers are charged of an average 1.125 points when locking a thirty-year fixed-rate home loan.  Loan officers typically refer to these lending costs as “points.” A point is 1% of the entire mortgage amount and it is considered prepaid interest for disclosure purposes.  Sign up and have the latest mortgage news emailed to you with mortgage rate alerts and special lending offers when they arise.

Tags: FHA mortgage, home loan, loan application, mortgage loan, Mortgage News, mortgage rates, mortgage refinancing, thirty-year mortgage

07 Aug 09 FHA Having Trouble Insuring Reverse Mortgages

The increase in FHA funding authority means the government is following the marketplace. FHA mortgages now represent some 35% of all new financing, up from about 5% just a few years ago when the program was crowded out of the marketplace by bad credit loans. It would be counterproductive to restrict the program when FHA loans enjoy great public confidence, especially FHA loans for borrowers with poor credit. In this economy we need home buyers, reason enough to encourage people to enter the marketplace.

Reverse Mortgages: what HUD calls home equity conversion mortgages (HECMs) — those reverse mortgage loans remain attractive for many senior borrowers, but have become troublesome for HUD to insure because of falling home values. While HUD asked Congress for $800 million to subsidize the reverse mortgage program this year, Congress in this bill is saying forget it. Instead of more money, the bill requires HUD “to ensure that the program operates at a net zero subsidy rate.” Given that reverse mortgage are amazingly risky to insure in a slow market what can HUD do to meet the net zero requirement? It can cut back on the number of reverse mortgages it’s willing to insure, it can reduce the maximum amount it will cover, or both. The bottom line: If you want an FHA-insured reverse home loan it might be best to get one before October 1st, the start of the new fiscal year.  Read the rest of the article at FHA Loan Pros.

Tags: bad credit loans, FHA, FHA loans, FHA mortgages, FHA-insured, HUD, reverse home loan, reverse mortgages

20 Jul 09 Current Mortgage Rates

Current mortgage interest rates are up this past week brought on by higher Treasury rates, 10-year U.S. Treasury rates rose from about 3.30 % to 3.65 % this week. Today’s mortgage interest rates remain historically low.  The low rates home mortgages are slowly starting to resurect the home purchase market.  Home-buyers are being lured back to the housing market slowly, but surly with the Federal Reserve looking to end the nationwide housing crisis. Low rate mortgage loans are also igniting home refinancing activity. Last week, the Mortgage Bankers Association reported that the Refinance Index rose 17.7% from the previous week on a seasonally adjusted basis.

Another index released this past week further supports the fading of housing and subprime mortgage crisis. The National Association of Realtors released their Pending Home Sales Index which showed a slight increase in May 2009. The increase was only 0.1% but it was the fourth consecutive monthly increase which hasn’t happened since October 2004.  Mortgage Related News continues to refer visitors to mortgage brokers and lenders offering free mortgage rate tables based on your state and neighborhood lending postings.

Adjustable Mortgage Rates
Adjustable mortgage rates were mixed this week. The average rate for a one-year conforming ARM decreased to 4.51 % from 4.55 % the prior week. Jumbo one-year ARMs increased to 5.24%, up from the prior week’s average rate of 5.20 %.

Three-year ARM mortgage rates (conforming) decreased to 4.64% this week, down from last week’s average rate of 4.66%. The average mortgage loan rate for a jumbo three-year ARM is at 5.32%, up from the prior week’s average home mortgage loan rate of 5.30%.

Five-year Adjustable Rate Home Loans (conforming) were all over the map this week from several lending sources like Freddie Mac, MBA, Bank Rate and Bloomberg. Five-year ARMs are averaging 4.53%, down from last week’s rate of 4.57%. The average (jumbo) 5-year mortgage rate rose to 5.42% from the previous week’s average rate of 5.34%.

The average interest rate on a seven-year adjustable rate mortgages rose. Conforming seven-year ARMs are averaging 5.14 %, up from 5.00% the prior week. Jumbo seven-year adjustable mortgage rates increased to 5.95, up from last week’s rate of 5.90%.

10-year adjustable rate home mortgages were mixed. Conforming 10-year ARMs are at 5.47 % this week, up from the prior week’s average mortgage rate of 5.30%. Jumbo 10-year ARMs averaged 6.26%, down slightly from 6.28%.

Smart Home Equity reported interest rates for home equity loans and home equity lines of credit remain unchanged.  Slight increases and decreases were reported from Lenders offering HELOC’s and fixed rate equity mortgages.

Tags: adjustable rate mortgages, ARM, current mortgage rates, fixed rate equity mortgages, HELOC, home equity lines of credit, home equity loans, housing crisis, mortgage interest rates, mortgage rates

07 Jul 09 Top Loan Modification Company Chooses Kelly Media Group for Marketing

Owings Mills, MD – July 6, 2009 – When the owners of The Renegotiate Mortgage Rates Corporation, an East Coast law firm that specializes in foreclosure prevention, loan modifications and forensic audits announced yesterday that they were awarding their marketing business to Kelly Media Group, an advertising agency based in Los Angeles.  Renegotiate Mortgage Rates was seeking technology to automate their lead generation, so they turned to Kelly Media Group to solve their mortgage marketing problems.  A spokesman from RMR believes that the KMG advertising team will increase their totals for loan modification leads at a fraction of the cost of their competitors.

The account executives at Kelly Media Group have a combined total in excess of 50 years solving technical and marketing woes generating mortgage leads.  Call 877-788-8463 and get a free lead generation quote from one of our lead sales representatives. 

Tags: advertising agency, Kelly Media Group, lead generation, loan modification company, loan modification leads, mortgage marketing

30 Jun 09 Top Court Allows NY State Home Lending Probe

A recent Reuters’ article revealed a divided U.S. Supreme Court ruled on Monday that the New York attorney general’s office can investigate whether national banks and mortgage lenders discriminated against minorities seeking mortgage loans.  The justices overturned part of a ruling by a U.S. appeals court that blocked state Attorney General Andrew Cuomo from investigating or enforcing the fair lending laws against national banks because they are subject instead to what has been viewed as less stringent federal regulation.

In a 5-4 ruling, Justice Antonin Scalia, one of the Court’s more conservative members, joined the four most liberal justices in allowing Cuomo to bring lawsuits, though he could not at the same time issue subpoenas. The ruling struck down a regulation by the Office of the Comptroller of the Currency that essentially preempted states from enforcing their own fair lending laws, even when federal law appeared inadequate to protect consumers.  Scalia said it would be “bizarre” for states to be blocked from enforcing valid, non-preempted laws against national banks, such that “the bark remains, but the bite does not.”  Cuomo, in a statement, called the ruling “a huge win for consumers across the nation,” saying it reaffirms the role of state attorneys general “in protecting consumers from illegal and improper home loan practices by our country’s biggest and most powerful banks.”

The Clearing House Association LLC, a group of big banks supporting the OCC rule, was “disappointed that the principle of uniformity in national bank enforcement has been breached,” according to a spokesman.  Comptroller of the Currency John Dugan said he was disappointed but his agency would work with the states to ensure fair access to financial services and consumer protections. “  Everyone benefits from clarification of the law,” Dugan said in a statement.

Cuomo was trying to revive a probe begun in 2005 by his predecessor, Eliot Spitzer, into possible racial discrimination in FHA mortgage lending.  Spitzer sent letters of inquiry to mortgage providers including Citigroup Inc, HSBC Holdings Plc, JPMorgan Chase & Co and Wells Fargo & Co in response to data he said appeared to show a significantly higher percentage of high-interest home mortgage loans issued to black and Hispanic borrowers than to white borrowers.  Two lower federal courts ruled against Cuomo, whose appeal won support from the other 49 states and Washington, D.C. Cuomo contended that the economic crisis, due in large part to reckless subprime mortgage lending, has shown the need for more regulatory oversight and consumer protection.

Spitzer told Reuters by telephone that his office was driven to pursue the case because of concerns about disparate lending practices and concerns that subprime debt was becoming pervasive. “Obviously, it’s a little late to forestall the cataclysm that emerged when the subprime debt fuse finally exploded,” Spitzer said.  “As we look forward, this is a good thing for states to be able to ask the questions and get the information from nationally chartered banks as well as state chartered banks.” 

The ruling is a “serious loss for the banking industry,” and also gives attorneys general a “bully pulpit.” said James Cox, a securities law professor at Duke University. “Even without subpoena power they can still hold press conferences and take steps to swing public opinion.”  Groups representing real estate agents, state bank officials, and consumer and civil rights organizations supported Cuomo’s appeal.

Monday’s ruling “is a victory for taxpayers, who have suffered enormously as a result of abusive business practices in all types of mortgage lending,” said Michael Calhoun, president of the Center for Responsible Lending.  The Supreme Court last addressed a similar issue in 2007, when it ruled that states cannot regulate the mortgage-lending subsidiaries of banks regulated by the Comptroller’s office, which is part of the U.S. Treasury Department. The case is Cuomo v. Clearing House Association LLC, No. 08-453.  (Additional reporting by Elinor Comlay, Jonathan Stempel and Joseph Giannone in New York and Karey Wutkowski in Washington, D.C.; Editing by Gerald E. McCormick and Tim Dobbyn)  Read the original James Vicini article >

Tags: FHA mortgage, home loan, mortgage lending., mortgage loans, nationally chartered banks, NY State Home Lending Probe, OCC rule, state chartered banks, subprime mortgage lending

23 Jun 09 Thirty Year Mortgage Rates Continue to Rise

Mortgage interest rates on U.S. 30-year fixed-rate mortgages rose to 5.57 % a few days after hovering around 5.47% earlier in the week.  According to Zillow Mortgage the rate are down sharply from the previous week when mortgage rates were reported nationally with an average of 5.76% on home loans that were fixed for thirty years.

Conventional and FHA mortgage rates have remained historically low in 2009 and most industry insiders believe that interest rates will maintain low levels for the remainder of the year and into 2010 before climbing with the forecasted inflation. The higher mortgage rates reflect a rise in yields on U.S. government bonds, which are linked to the mortgage market.  The mortgage rate, however, is sharply higher than the roughly 5.00% level seen at the end of May and at the beginning of this year, Zillow said. 

Home loan refinancing activity has dropped precipitously in recent weeks. A move higher in FHA mortgage rates should further dampen demand.  According to Lawrence J. White, professor of economics at New York University’s Stern School of Business, “Higher mortgage rates are certainly an impediment to a U.S. housing market recovery, but other factors are also suppressing demand.  “People are worried about the overall economy, how secure their jobs are as well as their overall financial status,” he said.  “So, while higher mortgage rates matter, they are not the sole driver of housing demand,” he said. 

The applications for mortgage refinance loans dropped as expected, but loan modification requests rose significantly as bad credit mortgages are beginning to reset to the higher adjustable interest rates that have homeowners around the nation fighting to keep their home from foreclosure.  The battered U.S. housing market, which is in the midst of its worst downturn since the Great Depression, is both the source of and a major casualty of the credit crisis.  A setback for the market could hamper a turnaround of the U.S. economy.

Tags: bad creditmortgages, FHA mortgage rates, home loans, loan modification, mortgage rates, mortgage refinance loans, thirty year mortgage rates

01 Jun 09 Mortgage Rates Spike

A significant rise in mortgage rates is threatening to undermine the already shaky real estate market and toss sand into the gears of the Government’s plans to rescue the economy. Beginning last fall, the Federal Reserve rolled out a series of initiatives–such as the purchase of Fannie Mae and Freddie Mac mortgage-backed securities and long-term treasury bonds–that worked to drive mortgage rates down to all-time lows. Federal officials hoped that by pushing the cost of purchasing a home artificially lower, they could lure more buyers into the market to gobble up the massive supply of unsold homes. Meanwhile, lower mortgage rates could also enable scores of homeowners to lower their monthly payments by refinancing. That, in turn, would free up cash to be pumped back into the economy. For some time, the mortgage market acted accordingly, with rates of less than 5 percent triggering a flood of refinancing applications. But last week, rates surged, a development that could create all sorts of headaches for federal officials, consumers, and the economy as a whole.

Here are five things you need to know about the surge in FHA mortgage rates:

1. The jump: Thirty-year fixed mortgage rates had been holding in the 5 percent range since mid March, averaging 5.03 percent on Tuesday, May 26. But rates jumped in the following days, hitting an average of 5.44 percent on Thursday, May 28. By midday Monday, rates had fallen back a bit, to 5.36 percent, according to HSH.com.

2. Key Factors: Fixed mortgage rates have been pushed higher by a surge in 10-year Treasury note yields, which climbed to 3.67 percent on June 1 from 2.68 percent on April 1, according to Bloomberg news. (Fixed mortgage rates typically track the yields on 10-year Treasury notes.) A number of factors have worked to increase Treasury yields. Nascent optimism about the economy has made ultra-safe investments like Treasuries less appealing. “If you look at the broad aggregate of economic data, it’s not great but it’s better on balance,” says Keith Gumbinger of HSH.com. “So the Treasury market especially is going to be moving away from those emergency and panic modes we’ve been in now for 6 months.” In addition, concerns about deflation are giving way to worries about inflation, he says. However, the bulk of the pressure is coming from concerns about the massive amount of government debt needed to finance the Obama administration’s huge bailout and stimulus programs that encouraged lenders to offer loan modification plans to qualified borrowers..

3. Home purchase impact: It’s important to remember that thirty-year, fixed rate for bad credit mortgage loans of 5.36%, 5.5% are still incredibly low by historic standards. Still, higher rates have the potential to force home prices lower to compensate for the higher purchasing costs. “If [the higher rates are] in place for a while it could have the effect of putting some additional pressure on home prices,” Gumbinger says.

4. Mortgage refinancing impact: But the impact on the mortgage refinancing market could be more significant. Rates in the 5.5% range would evaporate roughly 65% of home refinancing demand because the higher rates don’t offer enough savings to make the transaction worthwhile for many consumers, says Mark Hanson, a managing director who handles real estate and finance research at the Field Check Group. “Why would you want to pay $5,000 to close a loan when you are saving $20 or $30 a month,” he says. “It’s just not enough.” Even more concerning, many consumers have already filled out mortgage applications without locking in their mortgage rates because they expected rates to drift lower before closing. The recent spike in FHA mortgage rates, however, has made many of these yet-to-be-closed, non-locked loans unsalvageable without a sharp drop in rates. “Of all the applications in, 60 to 70% are [not locked],” Hanson says. “Out of those, 75% are dead.”

5. Federal response: Given how aggressively the federal government has moved to bring mortgage rates lower, it’s possible that Uncle Sam will step in to the market again. “I expect some sort of intervention,” Hanson says. Federal intervention could take any number of forms, including plans to beef up its already expansive mortgage-backed security or Treasury bond purchase program.

6. Rate outlook: Gumbinger says the recent spike reflects uncertainty about the broader economy. “We are at the portion of the economic game where you are going to get this kind of fits and starts arrangement,” he says. “Things are rosy one minute, and then somebody is going to catch wind or something and we could run the other way.” He says rates may revisit the 5 percent range in the coming months. “And if we do, know that that may be temporary as well,” he says. “If you really want a 5% number or a high 4% number on your mortgage, you need to be prepared in this market to take advantage of it.

Tags: bad credit mortgage loans, FHA mortgage rates, loans, mortgage rates, mortgage refinancing

18 May 09 Low Mortgage Rates Continue

Mortgage rates were lowered slightly today for conventional and fixed rate FHA mortgage loans.  Mortgage interest rates continued their trend with 30-year fixed rate home loans being reported under 5%.

Average mortgage rates on 7/1 conforming adjustable rate mortgages is now at 4.84 % down from 4.95 %. The average rate on 7/1 jumbo ARMs is at 6.14 % from 6.17%. Average rates on 5/1 conforming ARMs is now under 4.50% at 4.39%, a big drop from 4.52%. Average interest rates for jumbo 5/1 ARMs is 5.38 % down from 5.43%. Conforming 1-year ARMs averaged 4.82% down from 4.88%. Average jumbo mortgage rates for 1-year ARMs is now at 5.74% up from 5.70%.

Interest only adjustable rate home mortgages were also down this past week. The average rate on 5/1 conforming interest only ARMs is now under 4.50 % at 4.45 %.  Average rates on Jumbo interest only 5/1 ARMs are still a lot higher at 5.70 %. Average rates on 3/1 interest only conforming loans is at 4.81% down from 4.92%. Jumbo 3/1 interest only loans now average 5.64% down from 5.70%.

Watch the Analysis and discussion reported by Bloomberg News with Mahesh Swaminathan of Credit Suisse talking about the mortgage interest rates, home loans, loan modifications and mortgage market in general.

Tags: 30-year fixed rate, adjustable rate mortgages, Conforming 1-year ARMs, conventional, FHA mortgage, jumbo mortgage rates, mortgage interest rates, mortgage rates

20 Apr 09 New Mortgage Industry Policy Affects Consumers

Mortgage interest rates and house prices are down which sounds great for buyers and refinancers. But mortgage lending underwriters and appraisal changes taking effect this month are putting new hurdles in the way of borrowers and loan officers.

Take Fannie Mae’s and Freddie Mac’s add-on fees for mortgage loans purchased after April 1st. In some cases, applicants are being hit with extra fees of 3percent to 5percent because of the type of property they want to purchase a home or refinance their mortgage, their credit scores or the size of their down payment.

 

Some major mortgage lenders who sell loans to Fannie and Freddie are going further tightening underwriting rules beyond what either corporation requires. For example, as of April 6, Wells Fargo, one of the country’s largest mortgage originators, imposed a new minimum FICO credit score of 720 up from the previous 620  on all conventional loans purchased through its wholesale system that have less than a 20 percent down payment. It also began requiring a total debt-to-income ratio maximum of 41 percent down from the previous 45 percent.  Read the complete article>

13 Apr 09 HUD Warns FHA Lenders in Mortgagee Letter

The Dept. of Housing and Urban Development recently released an important FHA Mortgagee Letter that is important for all mortgage brokers, lenders and finance companies that would like to continue originating FHA loans in their future.  In an effort to protect the public trust and the FHA Insurance Fund, HUD has vowed to ensure that mortgagees are accountable for their home loan origination practices. FHA expects each mortgagee to exercise the same level of care in originating, underwriting and servicing an insured FHA mortgage as it would for a loan in which the mortgagee would be entirely dependent on the property as security to protect its investment.   

When a mortgagee fails to comply with HUD’s policies and procedures, HUD will take the appropriate action.  For example, FHA mortgage brokers or lending companies that materially violate FHA program statutes, regulations and handbook requirements may be referred to the Mortgagee Review Board for appropriate sanctions, which may include termination of mortgagee approval.  For a mortgage broker in 2009, losing a FHA license would be like a barber have their scissors revoked.  It seems that brokers may start following the rules.

Read the original finance article from Jason Cardiff tips online > HUD Updates FHA Mortgage Letter and Cracks Down on Lenders. For more questions, you can go online to HUD.gov or for additional FHA resources, please call 1-800-CALL-FHA.

Tags: FHA, HUD, lenders, mortgage brokers, Mortgagee Letter

31 Mar 09 Credit Monitoring More Popular with Credit Crunch

Don’t forget, credit line declines will usually cause FICO scores to drop if there is any balance at all. These are a few of the gory details coming from the consumer stories declaring damages to credit reports stemming from finance companies cutting credit lines.

 

Credit repair has been popular for the last decade…But the latest trend is credit monitoring which really helps out the paranoid consumers who are always nervous about someone trashing their credit history.  Did I say, Stupid?… I meant to say Smart, because this is a wise move as access to credit reporting becomes easier and easier every day.  Credit scores can also be damaged by account closures or late payments (delinquencies) triggered by due date mortgage loan modifications or minimum payment increases. A recent Trans Union study found that the credit card delinquency rate in the 4^th quarter of 2008 was 1.21 %, an increase of 11 % over the third quarter.

 

In this tumultuous financial market, consumers can use credit monitoring programs as a way of keeping a close eye on their credit scores. Credit monitoring subscriptions vary but usually include ongoing access to three credit reports, three credit scores, identity theft insurance coverage, and other credit management tools.  Monitoring services also deliver email alerts to consumers regarding credit data changes. This key feature ensures that consumers are notified early about damaging credit account changes. “We typically see upswings in identity theft linked to downturns in the economy,” said Intersections Chairman and CEO Michael Stanfield in a company release. “Today’s difficult economic climate is likely contributing to this spike in identity theft. Now more than ever, consumers must be vigilant, and take a more holistic approach to protecting their identities from being compromised by fraudsters.” With credit monitoring, consumers can maintain some control over their credit standing despite the uncontrollable changes and trends in the economy.  Read more of the credit monitoring article >

19 Mar 09 Mortgage Rates Lowered Based on Fed plan

Variable mortgage rates were also lower, with the average one-year ARM falling to 5.48% and the 5/1 ARM declining to 5.24%. Home mortgage rates fell in response to the Federal Reserve’s plan to buy up to $300 billion in longer-term Treasurys and raise the size of mortgage lending programs already aimed at reducing mortgage rates by another $750 billion.

Federal Reserve Buying Spree Causes Mortgage Rates to Plunge

The average thirty-year fixed rate mortgage loan dropped to 5.29% from 5.37% a week ago, according to Bank Rate’s national survey released every Thursday. The average fifteen-year fixed-rate mortgage also fell to 4.86% from 4.88%, while the average jumbo 30-year fixed rate declined to 6.88%.