16 Jul 10 Home Loan Applications Decline
The number of home loan applications in the U.S. for home purchases fell to a 13 1/2-year low last week, the Mortgage Bankers Association reported yesterday, in a further sign of the slump in home buying since a federal tax credit concluded at the end of April. There have been fears for months that the incentive was stealing future sales and would result in a new leg down for the housing market once the support ended. New-home sales sunk to a record in May while pending total sales tumbled 30% from April.
Home loan applications for new homes were down 43% from the Independence Day week last year, said the MBA. The bad news comes even as home mortgage rates sink to new record lows. Those rate declines have been giving some lift to applications for home refinancing, which hit a 14-month high two weeks ago. But even the MBA refinance mortgage report fell 2.9% last week from a week earlier as its gauge for purchases dropped 3.1%. The share of applications for refinance loans was flat at 78.7%.
Tags: Home Loan Applications
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
27 Jan 10 Mortgage Loan Applications Decreased 11% Last Week
According to Bloomberg, the number of mortgage loan applications in the U.S. dropped last week for the first time in a month, led by a slump in home refinancing. The Mortgage Bankers Association’s index of home loan applications fell 11% to 513 in the week ended Jan. 22 from 575.9 a week earlier. The group’s refinancing gauge decreased 15%, while the purchase gauge fell 3.3%.
Mortgage refinance applications dropped significantly over the period. The mortgage bankers group’s home refinance gauge decreased to 2,260.4 from 2663.8 the prior week. The purchase index fell to 215.6 from 223 the prior week. The group’s refinancing index often turns volatile near year-end, making it difficult to determine the underlying trend. The measure plunged 38% in the last three weeks of 2009 then rose 35% in the first two weeks of January. FHA and VA loan applications followed the trend as well.
| Nationwide Mortgage Loans announces discounted mortgage refinancing for all 50 states! | FHA on board with 1st Time Home Buyers Tax Credit. See more on FHA Loans. |
The looming end of the government’s first-time homebuyer tax credit in November caused sales to slump at the end of last year. According to Russell Price, a senior economist at Ameriprise Financial Inc, “We’re seeing some stabilization in the housing market.” Price continued, “The spring selling season should be fairly positive, especially if we do start to see some positive employment growth and mortgage rates remain fairly low.”
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.
13 Oct 09 Uncertainty in Mortgage News with Predatory Lending Reform
Uncertainty highlights the mortgage news as the fate of government-sponsored mortgage agencies Fannie Mae and Freddie Mac, pending regulatory changes that are still under debate and a growing unease over the soundness of the FHA, which has come to dominate the mortgage-origination market in the wake of the financial crisis. “It’s going to be a couple of years of a really tough environment.” The more significant concern may be unemployment, which Brinkmann predicts will hit 10.2% by mid-2010. The continued bad news on the job front is sure to push loan delinquencies and foreclosures to new records next year. “We’re just getting into a lot of prime-mortgage adjustments, so we’re a long way from the bottom. Bad credit home mortgage opportunities continue to dwindle as FHA loans remain some of the only options for borrowers with less than perfect credit.
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
02 Jul 09 Trend Upward for Mortgage Rates
The average rate on a 15-year fixed mortgage dropped to 4.81 % from 4.93 % the prior week. The rate on a one-year adjustable mortgage loans decreased to 6.52 % last week from 6.54 %, according to the mortgage bankers. Home loan rates tracked by McLean, Virginia-based mortgage buyer Freddie Mac climbed along with Treasury yields through late May and early June on investor concern that a greater supply of government debt being sold to fund federal spending would fuel inflation.
This year the Federal Reserve purchases of mortgage bonds guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae brought down the yields on those securities, allowing lenders to reduce rates on new home loans and still sell them at a profit. Still, rising foreclosures that sell at discounted prices are flooding the market and depressing home values, according to Lawrence Yun, chief economist of the Chicago-based Realtors’ group. This year the number of foreclosures may rise to 2.5 million, the highest on record, Yun said.
Tags: Fannie Mae, Freddie Mac, mortgage bonds, mortgage loans, mortgage rates, new home loans
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
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 4th 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 >
25 Feb 09 Obama Mortgage Rescue Plan Rolls Out as Median Home Price Drop Below $300,000
While most real estate evaluators would agree that Obama’s mortgage rescue plan is likely to slow foreclosures for many homeowners, some financing experts question how much it can help in a high-cost regions such as San Diego where home values have fallen so sharply. For example, the rescue plan offers much-needed refinancing to borrowers who owe more than 80 % of the value of their homes. But homeowners would be ineligible for mortgage refinancing to a lower, more affordable rate if their first loan exceeds 105 % of their home’s current market value.
Home refinancing would be limited to loans guaranteed by Freddie Mac and Fannie Mae, the government-controlled secondary mortgage agencies. “How is 105 % loan-to-value going to help people who are upside down by 20% to 50 %?” said Dave McDonald, president of the San Diego chapter of the California Association of Mortgage Brokers.
Less critical was Dustin Hobbs, spokesman for the California Mortgage Bankers Association, who lauded Obama for coming up with a flexible program that could yield some positive results. Much will depend on the implementation, he said, especially the part of the proposal that aims to provide mortgage modifications for borrowers in danger of default or foreclosure. Obama is proposing to have the Treasury Department partner with financial institutions to reduce mortgage payments so that borrowers pay no more than 31% of their income. Under the new mortgage rescue plan, mortgage rates could be reduced to as little as 2%; they now stand at about 5% for thirty-year, fixed rate home mortgages. “I would certainly hope that when they’re working on the implementation details, they’ll take into consideration that California is in a unique situation with so many borrowers in high-cost regions who are 15% or more underwater,” Hobbs said.
FHA has attempted to stem the foreclosure crisis with their Hope for Homeowners program that was designed to reward lenders who write-down mortgages to 90% for borrowers with negative home equity and delinquent mortgage payments. CFB mortgage advisor, Jeff Moran said, “Hope for Homeowners looks great on paper, but the FHA mortgage lenders have not wanted to touch them.”
Nonprofit counseling agencies approved by the federal housing department to work with financially struggling homeowners said they expect the plan will be able to avert foreclosures but caution that there are still those who may have to walk away from their homes. “Some individuals, though, may find there may not be a solution or option to prevent foreclosure. But in renegotiating with their mortgage lender or credit counselor, they can prepare for a new location for their family.”
Part of the strength of the Obama plan is creating clear loan modification standards, said Mark Goldman, a real estate instructor at San Diego State University. “So many of the programs that were supposed to help last year have really done nothing,” he said. “Now, they’re really putting pressure on the lenders, saying you cannot keep the rapid pace of home foreclosures and clearly it’s bad for everyone involved when the foreclosure news continues to worsen.” The proliferation of foreclosures was reflected in DataQuick’s report, which showed that 1,232 of January’s 2,240 re-sales were foreclosure properties, compared with 340 of 1,038 re-sales in January 2008.
As President Barack Obama unveiled his plan to stem the tide of foreclosures, new figures showed distressed properties continuing to drag down San Diego’s housing market. MDA DataQuick reported yesterday that the county’s median home price fell below $300,000 last month for the first time in seven years depressed by reduced sales prices of foreclosed homes.
The January median of $280,000 was down 6.7% from December, the largest single month percentage decrease of the current slump. While home sales volume was up 34.7% from a year earlier, a record 55% of re-sales were homes that had gone through foreclosure in 2008. “I think for a lot of buyers in inland areas, this has become a bargain bonanza,” DataQuick analyst Andrew LePage said.
The Census Bureau and U.S. Department of Housing and Urban Development reported separately that construction of new homes and apartments nationwide dropped 16.8% last month to a seasonally adjusted annual rate of 466,000 units, the slowest pace for a survey that dates back to 1959, two years before Obama was born.
Meanwhile, DataQuick’s LePage said some neighborhoods – Lemon Grove, Oceanside and South Bay as a whole turned in record sales counts for any January since the company began tracking San Diego in 1988. “All indications are that prices will continue to erode, but not everyone is waiting for the ultimate price bottom,” LePage said. Mortgage interest rates remain incredibly low but the credit crunch continues with mortgage lenders continuing to offer tighter guidelines that prevent the average consumer from purchasing a new home or refinancing an existing property in an effort to avoid foreclosure.
As of January, San Diego County’s overall median had dropped 45.9% from the November 2005 peak of $517,500. The resale house median was down 44.3% from its $574,000 peak to $320,000, and resale condos were off 51.3% from their $400,000 peak to $195,000. Among signs of an eventual recovery, however, is a continuing drop in the number of homes for sale.
According to the San Diego Association of Realtors, active listings yesterday totaled 15,108, down 18.1% from a year ago. “There’s very little we can say positive about the economy or job market,” Dennehy said, “but we can certainly say this is an encouraging sign that qualified buyers are responding to the bargains available to the market and volumes are improving from last year’s levels.” Read complete UNION-TRIBUNE CA Housing Article article written by Roger Showley and Lori Weisberg
Tags: FHA, home foreclosures, Home refinancing, Hope for Homeowners, loan modification, mortgage refinancing
03 Feb 09 Washington Attorneys Seek Loan Modification Reform
A group of state attorneys general is urging federal officials to push national banks and federal thrifts to modify home mortgage loans that are becoming unaffordable for struggling buyers. In their letter to U.S. Comptroller of the Currency John Dugan and director of the Office of Thrift Supervision John Reich, the attorneys general said loan modifications would help many Americans remain in their homes by avoiding foreclosure.
“Every day, our office hears from families struggling to make their mortgage loan payments and those who have lost their homes,” Washington Attorney General Rob McKenna said. “They are our neighbors and we have as much of an investment in helping them as do officials in the other Washington.
The states want to work with federal regulators – not against them – to help prevent foreclosures and get homeowners through these difficult financial times.” The letter was signed by attorneys general who are members of the State Foreclosure Prevention Working Group. Get the latest Mortgage News from the Industry’s Choice for Mortgage Rates and Blog Post.
Tags: loan modification, mortgage loan, prevent foreclosures
02 Feb 09 Republicans Call for Additional Mortgage Relief
A top Republican called for more additional mortgage relief and more tax cuts in President Barack Obama‘s massive economic stimulus package as Democrats conceded privately they will drop items that have drawn bipartisan criticism. Senate Minority Leader Mitch McConnell, R-Ky., told reporters Monday that “a stimulus bill must fix the main problem first, and that’s housing.” He promised that Republicans would offer a plan to have the government step in to reduce mortgage interest rates to the 4% range, which could shore up home prices and lower housing payments for millions of Americans. Most government officials are behind a mortgage modification plan that would encourage mortgage lenders to offer loan workouts to help struggling homeowners. Read the complete loan modification article >.
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