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May 18, 2011

Lenders Report Lower Mortgage Rates for Refinancing

Category: Mortgage News,Mortgage Rate Report – admin – 8:55 am

Just when you though it couldn’t happen again –refinance applications shot up again last week.  Most financing insiders attribute it to the falling interest rates. Many homeowners are making a last ditch effort to improve with a mortgage rate refinance. The Mortgage Bankers Association announced lower than expected rates in their report of seasonally adjusted index of applications for home financing activity.  The MBA report monitors the demand for purchase loans and home refinancing, climbed 7.8% in the week ended May 13.

Can Mortgage Rates Get Any Lower?

The MBA’s seasonally adjusted index of house refinance applications rose 13.2%, while the gauge of loan requests for home purchases dipped 3.2%. The refinance share of loan activity increased to 66% of total applications, the largest amount since late January. Michael Fratantoni, MBA’s vice president of research said, “The 30-year fixed mortgage rate is now 53 basis points below its 2011 peak, and has decreased for five straight weeks.”  He also noted that the mortgage refinance activity has risen nearly 33%.” The 30-year fixed interest rates averaged 4.60% in the week and that was the lowest rates reported since November 2010, when low rate records were being set.

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May 10, 2011

Nearly 30% of Homeowners Have Underwater Home Loans

Category: Mortgage News,Mortgage Relief News – admin – 9:01 am

Almost a third of borrowers have experienced a significant loss of value in their home as over 28% of homeowners are strapped with an underwater mortgage. Property values fell 3% from the prior quarter and are now nearly 30% lower than the June 2006 peak. Real estate data analytics firm Zillow said its home value index for the first three months of 2011 declined 8.2% from a year earlier to $169,600. The first-quarter decline was the steepest since 2008. Zillow now doesn’t expect home values to reach bottom before 2012, “at the earliest.” “Home value declines are currently equal to those we experienced during the darkest days of the housing recession,” Zillow Chief Economist Stan Humphries said. “With accelerating declines during the first quarter, it is unreasonable to expect home values to return to stability by the end of 2011. We did expect substantial payback from the homebuyer tax credits, which buoyed the housing market last year, but underlying demand post-tax credit, as well as rising foreclosures and high negative home equity rates makes it almost certain that we won’t see a bottom in home values until 2012 or later.”

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According to Zillow the level of single-family homeowners who owe more on their home loan than the property is worth rose to a new high of 28.4% at March 31, up from 27% at the end of 2010. Home loan default rates increased during the first quarter as banks ended moratoriums related to last fall’s robo-signing debacle. Zillow also reported that one out of every 1,000 homes in the country was lost to foreclosure in March.

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May 2, 2011

Mortgage Lending Demand Rising

Category: Mortgage News – admin – 3:15 pm

We have heard reports from MBA and local loan officer surveys that home loan guidelines have been less restrictive as of late, with companies seeing an increase in approvals for conventional and FHA mortgage submissions in the last few months. According to a Federal Reserve survey, mortgage lenders and banks loosened lending terms in the first quarter as they forecast improvement in the U.S. economy and companies sought more home loans. “The April survey indicated that, on net, mortgage lending standards and terms generally had eased somewhat further during the first quarter of this year,” the central bank said today in its quarterly survey of senior loan officers.

The Federal Open Market Committee renewed their pledge to hold the home loan rate low for an “extended period” and complete a $600 billion bond purchase program by the end of June. “Clearly, we are seeing a turn in the cycle,” said Mark Vitner, senior economist for Wells Fargo Securities LLC in Charlotte, North Carolina.

55% of American banks surveyed reported improvements in the credit quality of large and middle-sized home loan applicants, the Fed said. About 35% reported improvements in the credit quality of small firms, according to the survey. U.S. economic growth slowed in the first quarter to a 1.8% annual rate after a 3.1% pace in the final three months of 2010 as government spending declined and consumer purchases cooled. The economy will probably expand by 2.9% this year, according to a Bloomberg News survey of 74 economists in April. The survey of loan representatives at 55 American banks and 22 U.S. branches and agencies of foreign banks was conducted from March 29 to April 12, the Fed said.

Some categories of mortgage lending have shown signs of improvement in recent months. Commercial and industrial loans increased at an annual rate of 11.3 % in March, the largest gain since October 2008, according to Fed data, and the fifth consecutive monthly increase.  Lending to businesses is still far from its peak. Commercial and industrial loans rose to $1.25 trillion as of April 13 after reaching a trough of $1.21 trillion in October. Commercial real estate loans have dropped to $1.46 trillion from $1.73 trillion in December 2008, according to a separate Fed report.

Some banks also eased standards for mortgage loans, though demand was mixed, according to the survey. Consumer interest in home mortgages dropped. U.S. consumer borrowing increased for a fifth straight month in February on an increase in non-revolving credit as education loans expanded, the Fed said in a separate report last month. Credit climbed $7.62 billion, the most since June 2008, to $2.42 trillion. Revolving credit, which includes credit cards, and home equity lines of credit indicates Americans remain reluctant to take on more debt even as the economy and job market improve.

The Federal Reserve said last week that “the housing sector continues to be depressed.” Conforming and FHA rates have risen since the Fed began its second round of asset purchases in November, rising to 4.8 % on April 21 for a 30-year fixed-rate loan from 4.17 % in November.

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April 20, 2011

New Rules and Standards for Home Mortgage Loans

Category: Home Loan Guidelines,Published Articles – admin – 2:12 am

Before the housing bubble exploded, many home mortgage lenders and brokers were not operating with consumers’ best interest in mind.  They enabled and sometimes encouraged borrowers to take out mortgages with interest rates that shot upward after an introductory period even ones in which the principal balance rose over time. The Dodd-Frank mortgage reform bill passed last year aims to prevent these practices from coming back, mandating that lending companies ensure that all borrowers have the ability to pay back their home loans. As required by the Dodd-Frank law, the Federal Reserve on Tuesday proposed a set of minimum standards for home loans, creating an “ability-to-repay” requirement for most home loans, as part of an effort to make sure that U.S. lenders don’t return to the shady practices of the housing market boom.

Mortgage lenders would be able to meet that standard by verifying the consumer’s income or assets or making a “qualified mortgage” that requires the lender to calculate the maximum interest payment in the first five years. Home mortgages that meet that standard would have protections against lawsuits. They also would have restrictions on fees and would not allow the principal balance to grow.

The Fed also provided two more options for satisfying the “ability-to-repay” standard. Those affect lenders who are providing mortgage refinance loans with risky features and those in rural and other underserved areas. The Fed is seeking comments on the proposal by July 22. However, the central bank will not complete the process, as its authority over mortgage lending rules is scheduled to transfer to the new Consumer Financial Protection Bureau on July 21. At that point, the consumer bureau is charged with taking over the proposal.

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March 14, 2011

Forecasting Mortgage Rates in 2011

Category: Mortgage Rate Report,Published Articles – Jenny King – 12:54 pm

Most economists belive that rates will go higher in 2011.  So far, we have seen higher FHA rates, conventional rates, and mortgage refinance rates on the whole.  According to Lead Planet chief economist, Josh Emmons, “Expect rates to continue to inch up in 2011, before inflation kicks in, causing rates to jump significantly.” While a higher FHA insurance premium and other rates on those holding a 15-year mortgage or 30-year mortgage are expected to rise which means the economy is improving, as long as mortgage rate refinancing and other rates in regards to mortgages increase at a gradual, manageable pace.  Having said that, rates are still quite favorable, and you can still take advantage of fixed rate refinancing.  Read the original article online> Mortgage Refinance Rates Forecast for 2011.

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March 10, 2011

Congress Votes to Kill FHA Short Refinance Program

Category: Mortgage Relief News – admin – 5:13 pm

According to Reuters, the U.S. House of Representatives on Thursday approved the first of four bills aimed at eliminating government mortgage relief programs for homeowners hurt by the housing crisis, though none are expected to clear the Senate. The House voted 256-171 to kill a popular Federal Housing Administration program that enabled borrowers who were stuck with an underwater mortgage to refinance into a better loan.  Specifically, the FHA short refinance allowed people who owe more than their home is worth to refinance into a government-backed 30-year fixed rate mortgage. Republicans argued the mortgage relief program was ineffective and not worthy of taxpayer support and the vote to kill the program broke largely along party lines.

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March 4, 2011

Is the End of Mortgage Deductions Inevitable?

Category: Mortgage Industry Rumors,Mortgage News – admin – 6:46 pm

One of the biggest selling points of home buying is the money you save from the mortgage interest tax deduction. For people who are already a homeowner, the ability to deduct the closing costs on home mortgage refinancing, certainly keeps lenders busy. one of the significant benefits is the mortgage interest tax deduction.  One would think that the home loan interest is a sacred benefit for homeowners, but there is a buzz in the Nations’ Capitol to eliminate the deductions, at least temporarily. Pundits argue that the mortgage deduction does not really promote buying a home like it should. Some say even suggest that the Federal government should not be promoting being a homeowner anyway. And the recent Democrat talking point is that the government must stop extending the tax write-offs for homeowners because it’s costing the government billions of dollars in lost revenue. Sure we the national debt in the U.S. is out of control as we continue to face astronomical deficits, but has the mortgage interest deduction really had a negative impact on our economy and the national debt?  

  Despite the grasp for the Obama administration to redistribute wealth to help fund their social agenda, most politicians agrees that it would be very difficult to end the mortgage interest deduction and tax credit on home sales. For nearly a hundred years, Americans have been writing off the interest on home loans, refinance mortgages, lines of credit, home equity loans and second home loans. 

The mortgage and housing industry will certainly put up a fight if this administration forges ahead with their plans to dissolve the tax deductions on mortgage interest. With the housing market sputtering along, you could make the argument that it might not be the best time to gouge homeowners to pay more in taxes. In December, the national debt commission proposed eliminating mortgage deductions in an effort to raise tax revenues. Then a few weeks ago, the Obama administration released their plan to wind down the government-managed companies like Fannie Mae and Freddie Mac.

The debate on tax benefits will surely continue. With presidential elections just around the corner, I seriously doubt Obama or the Democrats will take the political risks that cutting mortgage interest tax deductions would pose. Stranger things have happened though, so pay attention to the mortgage news and don’t worry about issue beyond your control.

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March 1, 2011

The Truth About FHA Loan Programs

Category: FHA Mortgage,Published Articles – admin – 12:44 am

The FHA Loan Blog, posted an interesting article the reveals some inght about the popular FHA loan programs.

  1.  You do not have to have a government job to qualify for an FHA mortgage.
  2.  FHA rates are not higher than conventional interest rates.
  3.  FHA home loans are not just for 1st time homebuyers.
  4.  Mortgage insurance is not required with FHA loans on 15–year terms at or below 90% LTV.
  5.  No cash out is allowed on the FHA Streamline.

 Read the original article, 10 Myths about FHA Loans.

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February 9, 2011

Many States Have Underwater Mortgages

Category: Mortgage News,Uncategorized – admin – 5:00 pm

Lenders continue to report that a high percentage of applicants seeking a mortgage refinance are underwater.  With mortgage refinance rates on the rise it is important to consider that many of these states will continue to have borrowers underwater until the housing sector recovers and the refinance guidelines loosen up a bit.  Below is a state-by-state comparison of home loan data from the Lending Tree.

   
State by State Home Loan Data Analysis  
STATE Lowest Rates Loan to Value % with Negative Equity  
Alabama 4.75% (4.90% APR) 67.1% 10.5%  
Alaska 4.88% (5.08% APR) 67% 8.9%  
Arizona 4.88% (5.02% APR) 92.4% 48.6%  
Arkansas 4.88% (5.00% APR) 73.6% 11.6%  
California 4.88% (5.01% APR) 70.1% 31.6%  
Colorado 4.88% (5.05% APR) 72.1% 19.6%  
Connecticut 4.75% (4.86% APR) 58.2% 11.9%  
Delaware 4.75% (4.86% APR) 67.9% 13.3%  
DC 4.75% (4.99% APR) 58.6% 15.2%  
Florida 4.75% (4.86% APR) 88.7% 45.5%  
Georgia 4.88% (5.02% APR) 79.8% 28%  
Hawaii 4.88% (5.08% APR) 55.5% 10.7%  
Idaho 4.88% (5.02% APR) 74.1% 25.3%  
Illinois 4.88% (5.02% APR) 70.6% 19.4%  
Indiana 4.88% (5.07% APR) 70% 11.3%  
Iowa 4.88% (5.08% APR) 66.9% 8.7%  
Kansas 4.88% (5.08% APR) 70.6% 11.1%  
Kentucky 4.75% (4.90% APR) 68% 8.9%  
Louisiana 4.88% (5.08% APR) N/A 22.5%  
Maine 4.88% (5.08% APR) N/A 22.5%  
Maryland 4.75% (4.99% APR) 68.8% 22%  
Massachusetts 4.88% (5.00% APR) 60.3% 14.9%  
Michigan 4.88% (5.00% APR) 85.5% 37.6%  
Minnesota 4.75% (4.86% APR) 65.5% 16.2%  
Mississippi 4.88% (5.08% APR) N/A 22.5%  
Missouri 4.88% (5.02% APR) 71.5% 15.7%  
Montana 4.88% (4.96% APR) 60.1% 7.7%  
Nebraska 4.88% (5.08% APR) 73.1% 9.6%  
Nevada 4.88% (5.02% APR) 118.7% 66.5%  
New Hampshire 4.75% (4.87% APR) 69% 17.7%  
New Jersey 4.75% (4.84% APR) 61.3% 15.2%  
New Mexico 4.88% (5.03% APR) 66.4% 12.6%  
New York 4.88% (4.98% APR) 49.8% 7%  
North Carolina 4.88% (5.02% APR) 70.3% 10.5%  
North Dakota 4.88% (5.08% APR) 59.9% 7.4%  
Ohio 4.88% (5.08% APR) 74.7% 20%  
Oklahoma 4.75% (4.87% APR) 70.7% 6.0%  
Oregon 4.88% (5.04% APR) 68.7% 15.6%  
Pennsylvania 4.75% (4.84% APR) 62.1% 7.4%  
Rhode Island 4.88% (5.08% APR) 61.6% 20%  
South Carolina 4.88% (5.01% APR) 70.4% 14.2%  
South Dakota 4.88% (5.00% APR) N/A 22.5%  
Tennessee 4.88% (5.01% APR) 70.9% 13.9%  
Texas 4.75% (4.87% APR) 69.5% 11.2%  
Utah 4.88% (5.12% APR) 73.6% 20.7%  
Vermont 4.88% (5.08% APR) N/A 22.5%  
Virginia 4.75% (4.86% APR) 70.5% 22.1%  
Washington 4.88% (5.02% APR) 66.2% 14.9%  
West Virginia 4.88% (5.08% APR) N/A 22.5%  
Wisconsin 4.88% (5.08% APR) 67.2% 13.1%  
Wyoming 4.88% (5.02% APR) N/A 22.5%  
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February 8, 2011

Cash Refinancing and Freddie Mac

Category: Published Articles – admin – 4:45 pm

Freddie Mac noted that 2010 saw the highest “cash-in” share since began keeping records on home refinancing patterns in 1985. Cash-out refinance activity in recent years has been harder due to tighter loan guidelines and tougher underwriting standards.  When you factor in the declining in property values, it’s easy to see that cash out refinance transactions are very difficult to achieve because lenders are not as aggressive. Among the refinances in Freddie Mac’s analysis, the median appreciation of the collateral property was a negative percent over the median prior loan life of 4.1 years.  Read the complete article online > Mortgage Refinancing and Debt Consolidation.

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Underwater Mortgage Crisis

Category: Published Articles – admin – 12:43 am

The term underwater mortgage refers to borrowers that have a home with a mortgage balance that is greater than their property’s appraised value.  Unfortunately most of these homeowners do not qualify for traditional mortgage refinancing. Nearly 1 in every 4 U.S. homeowners with a home loan owes more on their house than it is actually worth. Once a month, those 10.8 million borrowers are faced with a question that cuts to the core of the American Dream and offers a confusing collision between a deep-seated sense of personal obligation and a cold, simple business calculation: Should I continue to make my mortgage payment?   For decades, there was only one answer for most people: Of course I should keep paying, it’s the right thing to do. Besides, the argument went, a home is a great investment. Today, in the wake of the most seismic housing collapse in the nation’s history, that logic has increasingly been challenged by homeowners despondent about their lack of options.

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Although researchers find that some underwater borrowers who could continue paying their home loans strategically default anyway, the vast majority continue to pay. Many homeowners, out of a combined sense of fear, shame, courage and morality, resist making what is otherwise a logical financial decision.

Walking away from a house, however, is more than the sum of a few business decisions. For many homeowners, it’s either an act of civic defiance against a system they no longer buy into or the end result of being shuffled around by institutions that don’t help them solve their financial problems. While walking away is a frightening and dangerous step into the unknown, millions have beaten the path in the past few years. To find out what it’s like to walk away, The Huffington Post asked readers who were considering making the move, or who had already done so, to write in and share their stories. That was in January 2010. A year later, we followed up with them to see how they reflected on the experience.

We initially heard from 58 people from all over the country who fit the criteria. Ten of them have become unreachable over the past year, but the remaining 48 were eager to share their stories. A year later, only eight of them are still paying their home mortgage loan. Some requested anonymity because of the shame associated with foreclosure; others requested it because they don’t want to draw retribution from the banks. But there were those who were happy to share their tales on the record. Almost universally, the homeowners we spoke with took personal responsibility for their situations, declining to blame the banks or politicians. Yet nearly all of them faced similar struggles in their attempts to work with their banks: lost paperwork and little interest in finding a financial compromise.

The hostility people felt from their banks made the decision to walk away easier for many, and some now even revel in it, celebrating a break from a system they see as rigged against them. “We get daily calls from creditors and banks that threaten this and that, and I just laugh knowing I am helping to bring down the system that has brought us all down and continues to reap giant profits at the expense of the little guy,” said one. Others are still haunted with shame by the decision. Most said they felt a mix of both.  Read the complete Huffington Post Article written by Ryan Grim.

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February 4, 2011

Mortgage Companies Eliminate 600 Jobs in December

Category: Published Articles – admin – 3:16 pm

Mortgage lending shops finished the year with 260,600 full-time employees on their payrolls, down slightly from 261,400 in December 2009.  However, the U.S. Bureau of Labor Statistics adjusted upward its count of the industry’s workforce by approximately 15,000 jobs. For example, BLS originally estimated that total employment in the mortgage banker/broker sector was 245,300 full-time positions as of November 30.  But the jobs report released Friday morning shows the mortgage industry had 261,200 full-time employees in November.

The new BLS report shows lending organizations cut 600 workers in December. During the end of the month, mortgage loan refinancing activity began to slow as interest rates climbed. Since then, applications for home purchase loans have soared because new home buyers are taking advantage of the discounted home prices nationally.

As of Friday morning, the yield on the benchmark 10-year Treasury was at 3.6%, an indication that the days of a 4% 30-year fixed rate mortgage may be long gone. Meanwhile, Friday’s overall job report was another disappointment with the U.S. economy generating only 36,000 net new jobs in January.  However, BLS revised upwards the increase in November jobs from 71,000 to 93,000, and the December jobs numbers from 103,000 to 121,000.

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