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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.

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03 Mar 09 Freddie Mac CEO to Resign

Freddie Mac’s chief executive, installed last year after the government took over the troubled mortgage finance company, is resigning, the company and its regulator said Monday. David Moffett will step down by March 13. Freddie Mac said it would announce a successor by then.  Moffett said that he planned to return to the financial services sector. He served as chief financial officer of U.S. Bancorp from 1993 until 2007. “We are very sorry to see David go,” Freddie Chairman John Koskinen said in a statement. “He made valuable contributions to Freddie Mac as the company transitioned into conservatorship.” Moffett replaced Richard Syron as Freddie CEO in September, when Freddie and Fannie Mae were placed under conservatorship by its regulator, the Federal Housing Finance Agency. Herb Allison, former CEO of pension provider TIAA-CREF, replaced Daniel Mudd as CEO of Fannie Mae.

Both companies back mortgages held by private homeowners, and have received massive cash infusions from the government. Freddie Mac, which has accessed nearly $14 billion in government funds, said it may need up to $35 billion more when it reports its financial results in coming weeks.  According to Freddie Mac, Moffett was hired “to provide leadership for the company during one of the toughest housing markets in decades” and to work with the FHFA in bringing stability to the housing market.  Back in November, Freddie Mac reported a third-quarter loss of $25 billion, or $19.44 per share. In the next few weeks, the company is expected to report a fourth-quarter loss of $10.27 per share, according to a consensus of analyst opinion compiled by Thomson Reuters.

Fannie Mae reported a fourth-quarter loss of $25.2 billion, or $4.47 per share, its sixth straight quarter of losses. President Obama announced last month that Fannie and Freddie will be used to provide access to low-cost refinancing for borrowers with little or no equity in their home. The Obama administration intends to help five million home owners avoid foreclosure through this plan.

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05 Dec 08 2009 Mortgage Loan Limits

The Federal Housing Finance Agency announced the conforming loan limit will remain $417,000 for 2009 for most areas in the U.S. but specified higher limits in specific high cost cities and counties. The conforming home loan limit is the maximum size of loans that Fannie Mae and Freddie Mac can purchase in 2009.  Mortgage lenders across the country have been praying for positive news regarding the home loan limits.

According to provisions of the Housing and Economic Recovery Act of 2008, the national mortgage loan limit is set based on changes in average home prices over the previous year, but cannot decline from year to year.  FHA home loan limits for two-, three- and four-unit properties in 2009 will remain at 2008 levels as well: $533,850, $645,300 and $801,950 respectively, for houses in the continental U.S.  Read complete article > 2009 FHA Mortgage Loan Limits.

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