Mortgage interest rates reverse course

Auto loan defaults on the rise

Procrastinating home loan borrowers got a reprieve this week as interest rates inched down after rising all through December.

by Broderick Perkins
© 2009 DeadlineNews.Com



Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - Procrastinating home buyers and home owners seeking a refinance got a reprieve this week as mortgage interest rates inched down after rising weekly through December last year.

For the week ending Jan. 7, 2010 the average interest rate on a 30-year, fixed-rate mortgage (FRM) came in at 5.09 percent, with an average 0.7 point, down from 5.14 percent last week, according to Freddie Mac's weekly Primary Mortgage Market Survey (PMMS).

One point is one percent of the total amount financed.

The current average 30-year FRM, is up from 5.01 percent a year ago, Freddie said.

The 15-year FRM this week averaged 4.50 percent with an average 0.7 point, also down slightly from last week when it averaged 4.54 percent. A year ago at this time, the 15-year FRM averaged 4.62 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.44 percent this week, with an average 0.6 point, unchanged from last week, but well off the 5.49 percent average a year ago.

Expect the year-to-year gap to narrow for ARM rates, but not before the second half of 2010, when the economy is expected to improve enough for Federal Reserve action.

"Current interest rates for fixed-rate mortgages are just about at their annual average for 2009, while ARM rates are considerably below their averages for last year," said Frank Nothaft, Freddie Mac vice president and chief economist.

He added, "As the economy strengthens further and the Federal Reserve decides to raise its overnight target rate, ARM rates will follow suit because they are typically tied to shorter-term interest rates."

Freddie Mac also reported the 1-year Treasury-indexed ARM averaged 4.31 percent this week, with an average 0.6 point, down from 4.33 percent last week and 4.95 percent a year ago.


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Mortgage interest rates flat in New Year

Infomercials juice your brain
to induce buying behavior

Informa reports mortgage interest rates stabilized this week and remained unchanged from a week ago. Rates are, however, up slightly from this time last year.

by Broderick Perkins
© 2009 DeadlineNews.Com



Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - Mortgage interest rates came in at 5.33 percent this week, the first of the New Year, remaining unchanged from the last report in 2009.

Calabasas, CA-based Informa Research Services' Interest Rate Review said for the week ending Jan. 5, 2009, the average fixed-rate mortgage (FRMs) on conforming 30-year loans, after rising all through December, was up from 5.26 percent a year ago.

For the week ending Jan. 5, Informa found the lowest FRM rate at 4.60 percent and the high average FRM interest rate at nearly 7 percent -- 6.96 percent. They were also unchanged from a week ago.

The average 15-year FRM was up to 4.75 percent, from 4.73 percent a week ago and down from 4.96 percent this time last year, according to Informa, a market research, analyses, and intelligence gathering service for the financial industry since 1983.

The average interest rate for the 5/1 adjustable rate mortgage (ARM) was also up slightly to 3.63 percent compared to 3.60 percent last week and well off the 4.28 percent last year at this time.

The FRM rates for 15- and 30-year mortgages and the 5/1 ARM rates are all based on a $200,000 purchase loan, with an 80 percent loan-to-value ratio, for an owner-occupied, single-family residence.

Informa's National APR (annual percentage rates) numbers are tallied from the interest rates of some 200 mortgage originators.

Informa also reported the average rate for 30-year, non-conforming jumbo loans dropped from 6.35 percent last week to 6.25 percent this week and 7.02 percent a year ago.

Jumbo average rates averaged from a low of 5.10 percent to a high of 10.46 percent -- a shopping-around spread of more than 5 percentage points.

The jumbo averages are based on a $450,000 purchase loan with an 80 percent loan-to-value ratio for an owner-occupied, single-family residence.

Rates were little changed for home equity lines of credit (HELOCs) of $50,000, with an 80 percent loan-to-value note. On Jan. 5, the variable rate came in at an average 4.99 percent, compared to 5 percent a week ago and 4.48 percent this time last year.

The average FRM rates on 15-year home equity loans of $50,000, with an 80 percent loan-to-value note came in at 7.48 percent, up from 7.45 percent late last year, but down from 7.88 percent a year ago.

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Mortgage modifying moratorium gives homeowners more time

Separate car loans, negotiations

The U.S. Treasury late last year banned mortgage lenders from canceling trial modifications that are due to expire before Jan. 31, 2010, giving homeowners more time to convert.

by Broderick Perkins
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Deadline Newsroom - If your trial mortgage modification was set to expire this month, sending you back to the limbo of a less affordable mortgage, you just got a reprieve.

The U.S. Treasury late last year banned mortgage lenders from canceling trial modifications that are due to expire before Jan. 31, 2010, giving homeowners more time to convert.

As part of the ban, federal regulators will keep tabs on lenders' efforts to make trial modifications permanent during an open-ended review period that could last until the Obama Administration's Home Affordable Modification Program (HAMP) expires later this year.

The ban on axing trial modifications is part of the "Mortgage Modification Conversion Drive," which offers other provisions designed to take some of the sludge out of the slow-moving HAMP program and give homeowners a better shot at a permanent mortgage modification.

A mortgage modification occurs when the lender reworks the terms of your existing home loan, typically to lower payments and make the home more affordable. Lenders lower the interest rate, extend the loan term, reduce the principle or use any combination of those approaches to get the payment down.

While it might stain your credit, a modification is a better deal than a foreclosure or short sale.

Under HAMP, you may qualify for a mortgage modification if your home is your primary residence; your first mortgage's balance is no more than $729,750; you can prove you face financial hardship that is affecting or will affect your ability to make mortgage payments; you signed for your current mortgage on or before January 1, 2009 and your payment on your first mortgage (including principal, interest, taxes, insurance and homeowner's association dues, if applicable) is more than 31 percent of your current gross income.

HAMP borrowers who sign up for mortgage modifications begin with a trial modification period of up to five months. During the trial, borrowers must provide required documentation to make their case for a permanent modification and determine if the trial modified monthly mortgage payment is affordable.

Borrowers who meet the documentation requirements during the trial period, including making all the modified payments on time, get a permanent modification. Borrowers who fail are rejected for a permanent modification and must resume paying the original mortgage.

Before federal intervention, many borrowers were coming up short on the required documentation. Approximately 60 percent of the 375,000 borrowers with trial modifications that were scheduled to go permanent by the end of 2009 had not completed the paperwork in November, according a federal audit.

HAMP's conversion drive first streamlined the application process and ordered lenders to reach out to borrowers who may be late and give them more time to catch up and file paperwork.

Feds also beefed up the MakingHomeAffordable.gov web site with updated, detailed information about the mortgage modification application process and added user-friendly videos, checklists and FAQs about all of the required documents, the initial trial period and homeowner responsibilities to convert to a permanent modification.

Later, along with banning lenders from ending trial modifications, the Feds initiated a review period, during which time lenders must confirm the payment status of trial modification borrowers and confirm which, if any, documents borrowers are missing.

The review period also calls for servicers to correspond with borrowers as necessary and inform them that they are at risk of losing eligibility for a permanent HAMP modification if the borrower has

• Failed to make all required trial period payments.

• Failed to submit all required documentation.

• Failed or both to make all required trial period payments and to submit all required documentation.

The notice has to give the borrower 30-days to correct errors and submit any missing documents or payments.

If the borrower complies or provides evidence of lender error, the lender must consider the new information and determine if the borrower is can continue onto a permanent modification.

More resources for borrowers seeking mortgage modifications:

• Making Home Affordable's HAMP videos on YouTube

• PMI Mortgage Insurance Co.'s "Navigating the Home Affordable Modification Part I & Part II"

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Year ends with mortgage interest rates on the rise

We've gone offbeat!
Quick! Click my head!

The current average 30-year FRM, at 5.14 percent, is up from 5.05 percent last week, and up from 5.10 percent a year ago.

by Broderick Perkins
© 2009 DeadlineNews.Com



Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - The average interest rate on a 30-year, fixed-rate mortgage (FRM) rose further above the 5 percent market to 5.14 percent this week, according to Freddie Mac's weekly Primary Mortgage Market Survey (PMMS).

For the week ending New Year's Eve, the rate comes with a 0.7 percent point. One point is one percent of the total amount financed.

"Although long-term mortgage rates rose for the fourth week in a row, they still remain affordable by historical standards," said Frank Nothaft, Freddie Mac vice president and chief economist.

"Based on today's median loan amount of $138,000, monthly principal and interest payments for a 30-year fixed-rate mortgage are close to one-third less than a decade ago when rates peaked at 8.6 percent in May 2000. This translates into almost 50 percent less in interest payments over the full 30-year term.

The current average 30-year FRM, at 5.14 percent, is up from 5.05 percent last week, and up from 5.10 percent a year ago, Freddie said.

The 15-year FRM this week averaged 4.54 percent with an average 0.7 point, also up from last week when it averaged 4.45 percent, but down from year ago at this time, when the 15-year FRM averaged 4.83 percent.

The 5-year Treasury-indexed hybrid ARM (adjustable rate mortgage) averaged 4.44 percent this week, with an average 0.6 point, nearly unchanged from the 4.40 percent average last week, but more than a full percentage point below 5.57 percent from a year ago.

The week ending Dec. 31, the 1-year Treasury-indexed ARM averaged 4.33 percent, plus an average 0.6 point. Last week the rate was 4.38 percent. Last year, the 1-year ARM averaged 4.85 percent.

Nothaft said, "Nationally, the housing market is slowly improving. House prices rose for the fifth consecutive month in October to the highest level since the beginning of 2009, according to the S&P/Case-Shiller® 20-city composite index. Eleven of the cities experienced positive growth."

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New, improved home buyer tax credit boosts economy

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The vast majority of current home owners say they would use the expanded version of the home buyer tax credit for "smart spending" on things that could ultimately increase income available for more spending -- the fuel that really powers the economy.

by Broderick Perkins
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Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - A new survey reveals that savvy consumers are cashing in on the new and improved home buyer tax credit and that behavior bodes well for the economy.

The vast majority of current homeowners say they would spend the expanded version of the homebuyer tax credit on repaying existing debts, home improvements, savings and investments and household expenses, according to a Coldwell Banker survey of 1,000 homeowners.

Improved Home Buyer Tax Credit

The new law extends the existing credit for first-time homebuyers, worth up to $8,000, through April 30, 2010.

A new credit of up to $6,500 is available to qualifying existing homeowners who buy a new primary residence (or have one built) by April 30, 2010, if they owned their existing home for five consecutive years over the last eight years. Second homes don't qualify.

Home buyers have to repay the credit if they live in their primary residence less than 36 months and are not members of the military.

The new rule also raises the qualifying income limits to $125,000 for single taxpayers and $225,000 for joint taxpayers, from the current $75,000 and $150,000.

The maximum allowed home purchase price is $800,000.

Both first-time home buyers and others must close escrow by June 30, 2010.

Military personnel, deployed overseas for a minimum of 90 days in 2008 or 2009, would have until April 30, 2011 to claim the tax credit.

Buyers can claim the credit on their 2009 taxes, even if the purchase is made in 2010 by filing an amended return. Buyers who don't owe taxes can have the credit refunded to them.

More information is available from the Internal Revenue Service (IRS), including its question and answer page.

Paying off debts affords consumers more spending power, home improvements likewise put more equity money in their pockets and savings and investments generate income.

Consumer spending, of course, is the real fuel for the economy's engine. And much consumer spending is fueled by the housing market -- provided the housing market is energized.

Helping to energize the housing market and the economy is the idea behind the homebuyer tax credit and it's recent extension and expansion.

By October 2009, before President Obama signed the latest extension and expansion, more than 1.2 million tax returns had claimed about $8.5 billion in the refundable tax credit, for both new and resale homes - according to the Treasury Inspector General for Tax Administration (TIGTA).

As a tangible asset with a host of other tax breaks and the potential for equity gain, a home is often a consumer's most valuable asset.

As the economic theory goes, when more consumers buy homes, the economy gets a boost.

Coldwell Banker's survey appears to confirm the theory.

Among those surveyed, 83 percent said if they purchased a home and qualified for the tax credit they would engage in "smart spending" on things that could ultimately increase income available for spending.

Only 6 percent said they would squander the money on luxury items such as vacation or shopping spree.

According to the survey most consumers would spend their tax credit:

• To pay off debts (34 percent). Paying off debts leaves more money to spend or save and invest for returns that again generate spending money.

• To make home improvements and potentially increase the value of their home and home equity (29 percent). Home equity, can be a way to consolidate other, more expensive debt or spend further on capital improvements that generate more returns on the money.

• To put into savings and investments (28 percent). Saving and investing for returns is a much better personal financial approach than using credit for purchases.

Coldwell Banker also found, after learning about the tax credit expansion, 20 percent of those surveyed said they were more likely to consider purchasing a home than they were six months ago.

Of course, what will happen when the tax credit expires in 2010, without another extension, is anyone's guess.


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Year-end mortgage interest rates rising faster, trend to continue

Don't rush auto financing to
cash in on tax credit

Single-digit jumps in mortgage rates for several weeks, gave way this week to larger increases in the cost of financing a home. One economist said rates will rise to more than 7 percent next year.

by Broderick Perkins
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Deadline Newsroom - Year end mortgage interest rates rising faster, more hikes expected

Single-digit jumps in mortgage rates for several weeks, gave way this week to larger increases in the cost of financing a home.

Mortgage interest rates jumped to an average 5.33 percent the week ending Dec. 29, up by 0.12 of a percent from 5.21 percent a week ago.

Compare that increase to those of recent weeks when rates rose only from 0.05 to 0.08 of a percent for fixed-rate mortgages (FRMs) on conforming 30-year loans, according to Calabasas, CA-based Informa Research Services' Interest Rate Review.

As the cost of home loans increases, the spread between current rates and rates a year ago is narrowing

A year ago the rate was 5.43 percent, little different from 5.33 percent this week.

If you've been sitting on the fence waiting for rates to fall more, you may have missed the boat.

Higher rates may be on the horizon, according to David Greenlaw, a Morgan Stanley economist. He says the 10 year Treasury yield will rise 40 percent to 5.5 next year -- unlike any increase since 1999. Tied to those yields, 30-year FRMs' interest rates will rise at least to 7.5 percent, Greenlaw told Bloomberg.

In the Dec. 29 report, Informa said the highest 30-year FRM, with an average annual percentage rate (APR) of 6.96 percent was unchanged from last week. The lowest average, 4.60 percent dropped from 4.85 percent a week ago, according to Informa, a market research, analyses, and intelligence gathering service for the financial industry since 1983.

The average 15-year FRM came in Dec. 29 at 4.73 percent, up from 4.63 percent a week ago, was down from 5.10 percent this time last year.

The average interest rate for the 5/1 adjustable rate mortgage (ARM) was also up to 3.60 percent this week from 3.57 percent a week ago, but down from 4.42 percent last year at this time.

The FRM rates for 15- and 30-year mortgages and the 5/1 ARM rates are all based on a $200,000 purchase loan, with an 80 percent loan-to-value ratio, for an owner-occupied, single-family residence.

Informa's National APR (annual percentage rates) numbers are tallied from the interest rates of some 200 mortgage originators.

Informa also reported the average rate for 30-year, non-conforming jumbo loans, 6.35 percent, rose from 6.27 percent a week ago. The jumbo rate remained well off the average 7.13 percent rate this time last year, but that gap is narrowing too.

The jumbo averages are based on a $450,000 purchase loan with an 80 percent loan-to-value ratio for an owner-occupied, single-family residence.

Rates were unchanged for home equity lines of credit (HELOCs) of $50,000, with an 80 percent loan-to-value note. Dec. 29, the variable rate came in at an average 5 percent, unchanged for several weeks, but up from 4.48 percent a year ago.

The average FRM rates on 15-year home equity loans of $50,000, with an 80 percent loan-to-value note came in at 7.45 percent about the same as 7.44 percent a week ago. This loan rate averaged 7.94 percent a year ago.

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Housing market mixed as new, existing home sales hit fork in the road

Top 2009 Offbeat News Stories

New home sales tank as resales surge. Experts say reliance upon federal programs reveals underlying weakness in the housing market.

by Broderick Perkins
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Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - At year's end, the nation's housing market has become a mixed bag of ups and downs, revealing continued weakness and uncertainty.

Sales of newly built, single-family homes declined 9 percent in November, compared to a year ago, according to the Commerce Department.

On the other hand, existing home sales rose for the tenth straight month in November, and were more than 42 percent above sales a year ago, according to the National Association of Realtors (NAR).

Experts say the home buyer tax credit is partially to blame for the market's wall-eyed behavior.

New-home sales are recorded when a contract is signed. Sales tanked in November when the tax credit was supposed to expire as buyers gave up, figuring they couldn't sign in time to meet the deadline and cash in.

Existing-home sales, which are recorded when a sale closes, leaped because folks had been scrambling for months to finish their deals before the Nov. 30 expiration.

The home buyer tax credit was extended and expanded to include move up buyers, but the damage had already been done, leaving concerns about what's really fueling the housing market.

Experts question how well the housing market will fare after the new home buyer tax credit's expiration next year, particularly if one month's new home sales numbers were so dependent on the tax credit's status.

Other government stimuli, including the Federal Reserve spending $1.25 trillion in mortgage-backed securities to help keep mortgage interest rates low, can't last forever.

"They (sales numbers) also show just how important it was that Congress moved when it did to help spur housing demand by extending and expanding the home buyer tax credit beyond its November deadline. We hope to start seeing the intended effects of that move on buyer demand in early 2010 as families determine their purchasing plans following the holidays," said Tulsa, OK home builder Joe Robson, also chairman of the National Association of Home Builders (NAHB).

But it's not just the tax credit.

"The emerging housing recovery is on a bumpy path that is strewn with obstacles, including the extreme difficulties that builders are encountering in obtaining financing for new projects and inaccurate appraisals that are now scuttling a third of new-home sales. Today’s report reinforces just how fragile the housing recovery remains and the potential damage that any further retardants could cause," said Robson.


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Mortgage interest rates inch above 5 percent

SUV maker pulls back hard on
whale foreskin interior option

The average interest rate on a 30-year, fixed-rate mortgage (FRM) surpassed the 5 percent mark for the first time since October.

by Broderick Perkins
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Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - The average interest rate on a 30-year, fixed-rate mortgage (FRM) rose another notch to 5.05 percent, surpassing the 5 percent mark for the first time since October, according to Freddie Mac's weekly Primary Mortgage Market Survey (PMMS).

For the week ending Christmas Eve, the rate comes with a 0.7 percent point. One point is one percent of the total amount financed.

Interest rates have been rising for several weeks now, following a five-week fall that left rates at a record low of 4.71 percent three weeks ago.

The current average 30-year FRM, at 5.05 percent, is up from 4.94 percent last week, but down from 5.14 percent a year ago, Freddie said.

The 15-year FRM this week averaged 4.45 percent with an average 0.6 point, also up from last week when it averaged 4.38 percent. A year ago at this time, the 15-year FRM averaged 4.91 percent.

"ARM (adjustable rate mortgage) rates increased by a lesser amount as the market consensus calls for no rate hikes by the Federal Reserve in the immediate future," said Freddie Mac's vice president and chief economist Frank Nothaft, in a prepared statement.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.40 percent this week, with an average 0.6 point, up from last week's 4.37 percent average, but way down from 5.49 percent a year ago.

The week ending Dec. 24, 1-year Treasury-indexed ARM averaged 4.38 percent, plus an average 0.6 point. Last week the rate was 4.34 percent. Last year, the 1-year ARM averaged 4.95 percent.

Nothaft said, "Meanwhile, the housing market continues to show improvement. Total existing home sales jumped 7.4 percent in November to an annualized pace of 6.54 million units, which was the most since February 2007."

He also said the number of unsold existing homes was the lowest since December 2006 and the number of unsold new homes was the least since April 1971, potentially leaving room in the near future for more new construction.

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Rebounding California housing market a leading indicator for US

Surviving cold winter blackouts

California's housing market is rebounding, perhaps leading the way for the nation and year-to-year numbers shows Santa Cruz and Silicon Valley are leading the way in California.

by Broderick Perkins
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Deadline Newsroom - California's housing market is often a bellwether for the nation and if the Golden State's housing market trends continue, conditions could bode well for the rest of the nation.

Both home prices and home sales are on the upswing in California, previously one of the hardest hit states in the nation during the recession.

The California Association of Realtors (CAR) reported this week, the state's median home price rose to $304,520, a 5.8 percent increase from the $287,880 median for November 2008.

A smaller supply is helping push up prices. CAR's Unsold Inventory Index fell to 4.5 months in November, compared with 7.1 months in November 2008, according to the association.

"The median price for most regions hit bottom during the first half of the year, and the statewide median home price now is nearly $60,000 higher than its lowest point in the current cycle," said CAR President Steve Goddard.

"First-time buyers continued to drive the market in November, as many opened escrow to take advantage of the federal tax credit prior to its original Nov. 30 expiration," said Goddard, who expects further price boosts due to sales generated by the extension of the first-time home buyer tax credit and an expansion of the credit to include qualified move-up buyers.

Meanwhile sales statewide were up 4.7 percent from a year ago.

"With sales bottoming out more than two years ago, and the median home price reaching its trough in February 2009, California remains ahead of the nation in market recovery," said CAR's Vice President and Chief Economist Leslie-Appleton-Young.

The condo segment is, by far, both the price and sales leader, with prices are up 12.1 percent from a year ago and sales jumping by a whopping 26.3 percent, according to CAR.

Statewide, the cities with the greatest median home price increases in November 2009 compared with the same period a year ago were: Cupertino, 37.8 percent; Poway, 35.8 percent; Morgan Hill, 33.2 percent; Lake Forest, 25.6 percent; Atwater, 24.4 percent; San Rafael, 23.8 percent; Atascadero, 22 percent; Vista, 21.2 percent; Tulare, 19.8 percent; Fountain Valley, 18 percent.

Year-to-year regional sales leaders were Santa Barbara South Coast, up 115 percent; Santa Cruz County, up 50 percent; Santa Clara County (Silicon Valley), up by 45.5 percent; San Luis Obispo, 40 percent and Orange County, where sales were up 28 percent from last year.

Prices and sales appear well on their way in the Golden State to live up to CAR's projections for 2010.

In October, CAR said California's median single family home price in California will rise 3.3 percent to $280,000 in 2010, up from the projected median of $271,000 this year.

Sales for 2010 were expected to decline 2.3 percent to 527,500 units, compared with 540,000 units (projected) in 2009.

During the current boom-bust cycle, California's median price for single family homes peaked in 2007 at $560,300 and sales rose to 625,000 units in 2005.

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Mortgage interest rates creeping up

On The Pill? You like this face.

Mortgage interest rates have been notching up every week for the past three weeks, moving steadily into the 5-percent-and-higher range, according to a recent rate report.

by Broderick Perkins
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Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - Mortgage interest rates moved up another notch for the third week in a row to an average 5.21 percent for fixd-rate mortgages (FRMs) on conforming 30-year loans, according to Calabasas, CA-based Informa Research Services' Interest Rate Review.

A year ago the rate was 5.51 percent.

In the Dec. 22 report, Informa said the highest 30-year FRM, with an average annual percentage rate (APR) of 6.96 percent was unchanged from last week. The lowest average, 4.85 percent, was up from 4.45 percent a week ago, according to Informa, a market research, analyses, and intelligence gathering service for the financial industry since 1983.

The average 15-year FRM came in Dec. 20 at 4.63 percent, down from 4.56 percent a week ago and down from 5.24 percent last year at this time.

The average interest rate for the 5/1 adjustable rate mortgage (ARM) was 3.57 percent compared to 3.55 percent a week ago. Last year at this time the rate was 4.45 percent.

The FRM rates for 15- and 30-year mortgages and the 5/1 ARM rates are all based on a $200,000 purchase loan, with an 80 percent loan-to-value ratio, for an owner-occupied, single-family residence.

Informa's National APR (annual percentage rates) numbers are tallied from the interest rates of some 200 mortgage originators.

Informa also reported the average rate for 30-year, non-conforming jumbo loans, 6.27 percent rose slightly from 6.16 percent a week ago. The jumbo rate remained well off the average 7.22 percent rate this time last year.

The jumbo averages are based on a $450,000 purchase loan with an 80 percent loan-to-value ratio for an owner-occupied, single-family residence.

For home equity lines of credit (HELOCs) of $50,000, with an 80 percent loan-to-value note, the variable rate came in at an average 5 percent, virtually unchanged for the past four weeks but up from 4.66 percent a year ago.

The average FRM rates on 15-year home equity loans of $50,000, with an 80 percent loan-to-value note came in at 7.44 percent, down from 7.45 percent a week ago and 7.94 percent last year.


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Improved 'housing affordability' only relative

We've gone offbeat!
Quick! Click my head!

Improved housing affordability in recent years, due to lower home prices, cheaper mortgage rates and tax credits doesn't amount to a hill of beans when it comes to higher utility costs, interest rate adjustments and unemployment that's impacting tens of millions of Americans.

by Broderick Perkins
© 2009 DeadlineNews.Com



Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - Forget years of falling prices, recent record low mortgage rates and tax credits that help offset the cost of buying a home.

What may appear to be favorable market conditions for putting a roof over your head hasn't been enough to offset the high cost of housing for tens of millions of Americans.

From 2005 to 2008, more households have been added to the ranks of those that spend more than 30 percent or more of their income on housing and households that can least afford the extra cost suffer most, according to "Housing Affordability Trends for Working Households" a new report from the Center for Housing Policy.

Between 2005 and 2008:

• The share of all U.S. households with a "severe housing cost burden" rose from 14 to 15 percent. Households with a severe housing cost burden are those that spend more than 50 percent of their income on housing costs, including utilities.

• The share of all U.S. households with a "moderate housing cost burden" rose from 18 to 19 percent. Households with a moderate housing cost burdens spend 31 percent to 50 percent of their income on housing.

• The share of all "working households" with a severe housing cost burden increased from 20 to 21 percent over the three year period. A working household is one in which members combined to work at least 20 hours per week and on average have a total income at or below 120 percent of their area's median income. Working households account for more than 47 million households and 40 percent of the nation's population.

• The share of working home owners with a severe housing cost burden rose the most, from 18 to 20 percent, while working renters' numbers remained at 22 percent.

Working households often provide essential services the nation relies upon, including work in schools, public safety, retail sales and food service, among other blue and pink collar service industries.

The report said the increase in the number of housing cost burdened households was due largely to higher utility costs which rose by nearly 23 percent, or more than double the rate of inflation.

That's tended to offset even record low mortgage rates.

Also, most homeowners have not moved since the housing crisis started so they have not benefited from lower prices, but many have suffered interest rate adjustments that have resulted in higher mortgage payments.

Reduced employment and unemployment has also taken a toll.

Now, rising home prices could further take a toll on affordability.

Download Housing Affordability Trends for Working Households




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Mortgage interest rates inch up for second week

Saving money back in vogue

Mortgage interest rates continued their upward trend this week, rising to 5.14 percent from 5.06 percent last week for fixed-rate mortgages (FRMs) on conforming 30-year loans. However, both the highest 30-year FRM, with an average annual percentage rate (APR) of 6.96 percent, and the lowest, at 4.45 percent, remained little changed.

by Broderick Perkins
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Deadline Newsroom - Mortgage interest rates continued their upward trend this week, for the second week in a row, rising to 5.14 percent from 5.06 percent last week for fixed-rate mortgages (FRMs) on conforming 30-year loans.

Calabasas, CA-based Informa Research Services' Interest Rate Review revealed both the highest 30-year FRM, with an annual percentage rate (APR) of 6.96 percent, and the lowest, at 4.45 percent, likewise, remained little changed the week ending Dec. 15, compared to the previous week.

Informa, a market research, analyses, and intelligence gathering service for the financial industry since 1983, revealed the gap between the average 5.14 FRM now and a year ago, 5.47 percent, has narrowed.

The average 15-year FRM came in Dec. 15 at 4.56 percent, up a couple of notches from 4.53 a week ago, but down from 5.24 percent a year ago.

The average interest rate for the 5/1 adjustable rate mortgage (ARM), was 3.55 percent, virtually unchanged from last week, but down almost a full percentage point a year ago when it was 4.55 percent.

The FRM rates for 15- and 30-year mortgages and the 5/1 ARM rates are all based on a $200,000 purchase loan, with an 80 percent loan-to-value ratio, for an owner-occupied, single-family residence.

Informa's National APR (annual percentage rates) numbers are tallied from the interest rates of some 200 mortgage originators.

Informa also reported the average rate for 30-year, non-conforming jumbo loans, 6.16 percent rose slightly from 6.13 percent a week ago. The jumbo rate remained well off the average 7.20 percent rate this time last year.

The jumbo averages are based on a $450,000 purchase loan with an 80 percent loan-to-value ratio for an owner-occupied, single-family residence.

For home equity lines of credit (HELOCs) of $50,000, with an 80 percent loan-to-value note, the variable rate came in at an average 4.99 percent, unchanged for the past two weeks but up noticeably from 4.70 percent a year ago.

The average FRM rates on 15-year home equity loans of $50,000, with an 80 percent loan-to-value note came in at 7.45 percent, down from 7.60 percent a week ago and down from 8 percent a year ago, according to Informa's survey.

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Loan modifications cut mortgage bills by $550 a month

Brace for blustery winter storms

Mortgage Modification Update: Home owners with modified mortgages save an average $550 a month, but there has been some difficulty converting trial modifications into permanent modifications.

by Broderick Perkins
© 2009 DeadlineNews.Com



Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - The Obama Administration is saving home owners an average $550 a month with loan modifications, but only 31,382 of a potential 4 million qualified homeowners are actually enjoying the savings.

In its November Making Home Affordable Servicer Performance Report, the U.S. Treasury reported the Home Affordable Modification Program (HAMP) also has more than 697,000 trial modifications underway.

However, there has been some difficulty converting trial modifications into permanent modifications.

A mortgage modification occurs when the lender reworks the terms of an existing home loan, typically to lower payments and make the home more affordable. Lower payments can result from a lower interest rate, extended loan term, reduced principal or any combination of those approaches.

"Modifications are the ideal and most economically viable method by which homeowner's can retain their homes. Previously, homeowner's were left to fend for themselves in terms of innocently contacting somewhat shady sources who often collected an upfront fee of between $4,000 to $5,000 and promised to contact the lender directly on their behalf in order to modify their loans and reduce their monthly payment," said Michael D. Rodriguez, broker/owner of Platinum Capital Mortgage & Real Estate in Salinas, CA

Under the HAMP plan, borrowers who sign up for mortgage modifications begin with a trial modification of up to five months.

That gives them time to submit a stack of paperwork, including proof of income, assets, debts, hardship affidavit and other documents, to make the modification stick. The trial period also gives them time to determine if the modified monthly payment is sustainable, according to the Treasury.

The majority of approximately 375,000 borrowers who have begun trial modifications nationwide and are scheduled to convert to permanent modifications by the end of the year, have not completed the paperwork, according to the Feds.

Some delays have also been caused by servicers switching gears with each new federal update or adjustment to the program.

The Feds recently added pressure to help both homeowners and lenders speed up the process.

"I am very pleased that the government has taken a more aggressive hands on approach towards implementing programs such as HAMP to provide an alternative to homeowner's who would otherwise lose their homes to foreclosures," Rodriguez said.

GMAC Mortgage Inc. completed 7,111 permanent modifications, more than any other servicer, followed by JPMorgan Chase & Co., with 4,302 modifications; Ocwen Financial Corp., with 4,252; Aurora Loan Services, 3,622 and Wells Fargo, 3,537.

The trial modification leader was Bank of America with 156,864, followed by JPMorgan, 136,686; CitiMortgage, Inc., 100,126; Wells Fargo, 96,137 and Saxon Mortgage Services, Inc., with 35,565.

"As this report illustrates, struggling homeowners across the country continue to receive immediate relief in the form of reduced monthly payments and a second chance to stay in their homes," said Phyllis Caldwell, Chief of Treasury's Homeownership Preservation Office (HPO).

"Our focus now is on working with servicers, borrowers and organizations to get as many of those eligible homeowners as possible into permanent modifications," she added.

• Mortgage Modification Updates


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Home prices buoyed by favorable market conditions

Banks charging fees for
NOT using credit card

Investors are back. Home prices are lower. Interest rates are at record lows. Foreclosure abatement is up. It all adds up to rising home prices.

by Broderick Perkins
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Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - If home prices were up all year as much as they've risen in the past two quarters, the housing market would be enjoying home price increases in the 6 percent neighborhood this year, thanks to a host of favorable factors.

Lower home prices, tax incentives, record low mortgage rates, foreclosure abatement measures and returning investors are coming together to send more buyers to market.

Home prices were up in the third quarter at an annualized rate of 3.8 percent and 8.2 percent in the second quarter, according to Freddie Mac's Conventional Mortgage Home Price Index (CMHPI) Purchase-Only Series.

The index registered an actual 0.9 percent quarterly gain, during the third quarter 2009 following a 2.0 percent gain in the second quarter. Together the two-quarter increase erased two-fifths of the home price declines registered during the final quarter of 2008 and the first quarter of 2009.

Happy days aren't quite hear again, however.

U.S. home sale prices remain down 3.9 percent from a year ago, according to the index.

Also, over the past five years, home prices remain down by double digits in some regions including the West South Central Division, by 20.5 percent; Middle Atlantic Division, by 16.2 percent and East South Central Division, by 15.4 percent, Freddie Mac Reported.

But even California's new home market is showing signs of recovery.

The pace of new home sales in the Golden State rose above year-ago levels for the first time since December of 2006, according to the California Building Industry Association (CBIA).

The October 20009 CBIA/Hanley Wood Market Intelligence (HWMI) New-Home Sales and Pricing Report showed that sales in new-home communities of 10 units or more, were 25 percent above October 2008, the first notable increase since the start of the housing downturn.

"While this month's figures are encouraging, we must keep in mind that we're comparing the figures to October of 2008, which was the second lowest month of nominal sales we've seen during the downturn," said Jonathan Dienhart for HWMI.

"Examining the data in a rolling twelve months, tells a more realistic increase, with a 1.5 percent rise from last month," he added.

The same is true nationwide.

"Prices are still down relative to their peaks in most markets. For example, as measured by the CMHPI, values in the New England, East North Central and Pacific divisions are at 2004 levels, on average, and the South Atlantic, West North Central, and Mountain states' home values are at 2005 levels. In contrast, average values in the West South Central area have tied their previous peak from the third quarter of 2008, while average home values in the Middle Atlantic and East South Central states have reached 2006 and 2007 levels, respectively," said Frank Nothaft, Freddie Mac vice president and chief economist.

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Mortgage interest rate upward trend confirmed

Largest floating Christmas tree

Slightly higher interest rates for home mortgages reflect higher long-term bond yields and improved employment outlook. Rates remain nearly three quarters of a percentage point below last year's.

by Broderick Perkins
© 2009 DeadlineNews.Com



Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - The average interest rate on a 30-year fixed-rate mortgage (FRM) inched up to 4.81 percent for the week ending December 10, 2009, compared to the record low 4.71 percent last week, according to Freddie Mac's weekly Primary Mortgage Market Survey (PMMS).

The average rate includes an average 0.7 point. Each point is one percent of the financed amount.

The lowest rates were in the West where they averaged 4.78 percent.

Earlier this week, Calabasas, CA-based Informa Research Services reported a similar reverse course in the cost of borrowing home financing money.

Frank Nothaft, Freddie Mac vice president and chief economist said the up tick was due to easing unemployment conditions and higher long-term bond yields.

"Notwithstanding, rates on 30-year fixed mortgages are almost 0.7 percentage points below those at the same time last year. This translates into an $81 lower monthly payment on a $200,000 conventional mortgage," Nothaft said in a prepared statement.

Freddie's PMMS also reported the 15-year FRM, this week averaged 4.32 percent with an average 0.6 point, also up from 4.27 percent last week but down from 5.20 percent a year ago.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.26 percent this week, with an average 0.5 point. Last week it averaged 4.19 percent; a year ago, 5.82 percent.

The 1-year Treasury-indexed ARM averaged 4.24 percent this week with an average 0.7 point, down slightly from last week's 4.25 percent average and 5.09 percent a year ago.

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More mortgage modification relief

Mortgage Modification Update: The Obama Administration is trying to clear some of the slow-moving sludge out of the Home Affordable Modification Program (HAMP) program, which is designed to stave off foreclosures for millions of American homeowners.



The Feds are using more MakingHomeAffordable.gov-produced YouTube videos to reach out to frustrated homeowners.

by Broderick Perkins
© 2009 DeadlineNews.Com



Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - It's not easy turning a potential foreclosure into a successful affordable mortgage modification -- from either side of the table.

Homeowners, facing confusing documentation requirements and conflicting advice from both honest and dishonest corners, become intimidated and drag their heels or bury their heads.

Lenders grapple with voluntary provisions, ever-evolving regulations, skilled worker shortages and disoriented homeowners. It's not surprising they develop some ambivalence.

To help clear some of the sludge out of the Obama Administration's Home Affordable Modification Program (HAMP) the U.S. Treasury Department and Department of Housing and Urban Development (HUD) recently announced plans to speed up trial mortgage modification conversions to help homeowners obtain a permanent mortgage modification.

A mortgage modification occurs when the lender reworks the terms of your existing home loan, typically to lower payments and make the home more affordable for you. Lower payments can result from a lower interest rate, extended loan term, reduced principal or any combination of those approaches.

Under the HAMP plan, borrowers who sign up for mortgage modifications begin with a trial modification of up to five months. That gives them time to submit a stack of paperwork, including proof of income, assets, debts, hardship affidavit and other documents, to make the modification stick. The trial period also gives them time to determine if the modified monthly payment is sustainable, according to the Treasury.

"Property owners we represent who are attempting to get mortgage modifications are frustrated by the amount of time it is taking to get the modification. Two owners have been at it since early June, with little progress," says Jan Leasure, managing broker of Monterey Bay Property Management in Monterey, CA.

Approximately 60 percent of the 375,000 borrowers who have begun trial modifications nationwide are scheduled to convert to permanent modifications by the end of the year, but have not completed the paperwork, according to the Feds.

On the other hand some delays are caused by servicers switch gears with each new federal update or adjustment to the program.

"The owners have also been frustrated by the fact that, as the programs offered by the federal government change, the lender changes the criteria for modification and the way their files are handled. Hopefully, the more options that are offered, the more property owners will be eligible for modification," Leasure said.

The mortgage modification conversion effort includes provisions that have already:

• Extended the period for trial modifications started on or before September 1, 2009 to give homeowners more time to submit the required information.

• Streamlined the application process to minimize paperwork and simplify the submission process.

• Ordered federal officials to meet regularly with servicers (banks and lenders) to identify necessary improvements to borrower outreach. Servicers failing to meet certain obligations could be subject to monetary penalties and sanctions.

• Developed operational metrics to hold servicers accountable for their performance, which will soon be reported publicly.

• Enhanced borrower resources on the MakingHomeAffordable.gov website and the Homeowner's HOPE Hotline (888-995-HOPE) to provide direct access to mortgage modification tools and housing counselors.

New resources on MakingHomeAffordable.gov include:

• Links to all of the required documents and an income verification checklist to help borrowers request a modification in four easy steps.

• Information about how the trial phase works, what borrower responsibilities are to convert to a permanent modification, and new instructional videos which provide step-by-step instructions.

Watch more MakingHomeAffordable.gov YouTube videos.

Also see the two-part PMI video: "Navigating the Home Affordable Modification Program."

Stay up todate with Deadline Newsrooms' Mortgage Modification Updates.


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Mortgage interest rates reverse course

Porn study quickly goes flaccid

One mortgage rate monitor reports, after rising for weeks, some mortgage interest rates, but not all, took an about face. Interest rates for home loans and second mortgages, however, remain near historic lows.

by Broderick Perkins
© 2009 DeadlineNews.Com



Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - After falling for several weeks, mortgage interest rates turned around this week, rising to 5.06 percent, from 5.01 percent a week ago for fixed-rate mortgages (FRMs) on conforming 30-year loans, according to Calabasas, CA-based Informa Research Services' Interest Rate Review.

However, both the highest 30-year FRM, with an annual percentage rate (APR) of 6.96 percent, and the lowest, at 4.32 percent, remained unchangedfor the past two weeks, according to Informa, a market research, analyses, and intelligence gathering service for the financial industry since 1983.

The average 30-year conforming FRM of 5.06 percent was down from a year ago when it was three-quarters of a percentage point higher at 5.58 percent.

The average 15-year FRM came in Dec. 8 at 4.53 percent, up from 4.51 a week ago, but down from 5.36 percent a year ago.

The average interest rate for the 5/1 adjustable rate mortgage (ARM), was 3.54 percent, also up from last week, but down from 4.62 percent a year ago.

The FRM rates for 15- and 30-year mortgages and the 5/1 ARM rates are all based on a $200,000 purchase loan, with an 80 percent loan-to-value ratio, for an owner-occupied, single-family residence.

Informa's National APR (annual percentage rates) numbers are tallied from the interest rates of some 200 mortgage originators.

Informa also reported the average rate for 30-year, non-conforming jumbo loans, 6.13 percent rose from 6.05 percent a week ago, for the second week in a row. Still it remained well off the 7.23 percent rate this time last year.

The jumbo averages are based on a $450,000 purchase loan with an 80 percent loan-to-value ratio for an owner-occupied, single-family residence.

For home equity lines of credit (HELOCs) of $50,000, with an 80 percent loan-to-value note, the variable rate came in at an average 4.99 percent, virtually unchanged from a week ago and up slightly from 4.97 percent a year ago.

Also relatively unchanged were average FRM rates on 15-year home equity loans of $50,000, with an 80 percent loan-to-value note. They came in at 7.60 percent, down just a tad from 7.61 percent last week and down from 8.09 percent a year ago, according to Informa's survey.

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Real estate resolutions for 2010

Man fails to lactate. This is news?

Look to low mortgage interest rates, bargain home prices and other favorable market conditions to give you the resolve to consider home sweet home in your list of must-dos next year.

by Broderick Perkins
© 2009 DeadlineNews.Com



Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - Sure you can loose weight, get in shape, launch a business or find a new job.

But haven't you also procrastinated long enough about buying a home?

How long has it been since you upgraded your home with a new roof, spiffed up landscaping or pulled some other home improvement?

And that post-World War II ranch home of yours could certainly use a few energy efficient do-overs.

Look to low mortgage interest rates, bargain home prices and other favorable market conditions to give you the resolve to consider home sweet home in your list of must-dos next year.

• Join the nearly 18 percent of Americans who say they've resolved to become a first-time homebuyer in 2010, according to a new Move.com survey. That's both a smart move and a timely one. Mortgage rates are at record lows, prices are down and the $8,000 first-time home buyer tax credit has been extended until April 30, 2010. It's also been expanded to include a $6,500 tax credit to move-up buyers.

• More than 15 percent of those who responded to the survey said saving money to purchase a new home is their top real estate resolution for the New Year. Resolve with them to learn the best way to budget, plan ahead and save money.

• Nearly 40 percent say No. 1 on their list of resolutions is starting a home improvement. Cheap home equity money should help them not only start, but also complete the job. Calabasas, CA-based Informa Research Services found home equity lines of credit (HELOCs) for $50,000, with an 80 percent loan-to-value note, were available in early December at an average variable rate of 4.98 percent. Some rates were as low as 2.74 percent.

• The Move.com survey also found 9.1 percent most wanted to fix their credit so they can buy a home next year. To get started all you need to do is take a look at your next credit card statement for a toll free number directing you to counseling help. That's part of the new, but little-known mandated disclosure provisions in the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act).

• Nearly 16 percent are wisely considering buying an investment property as their top resolution. The couldn't have picked a better time in the last half decade. Another Move.com survey recently found more than 12 percent of homebuyers today plan to purchase a home as an investment, compared to less than half, only 5.6 percent, just seven months ago, thanks to more attractive investment conditions.

"If you anticipate inflationary conditions in the future, investment property could be a good bet to hedge against it," said Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.


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California home buyer tax credit extension dead

Crib recall CPSC's largest ever

California's $10,000 tax credit on new home purchases only, combined with the new and improved federal $8,000 tax credit to give thousands of Californians a Mother Lode of a tax credit. It was also a boon to home sales in high-priced California. Now, it's gone.

by Broderick Perkins
© 2009 DeadlineNews.Com



Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - California won't renew its home buyer tax credit any time soon, if at all.

The California Building Industry Association's Allison Barnett told the Sacramento (CA) Bee, plans to extend the quickly depleted funds for the $10,000 tax credit for new home buyers in the Golden State died in both houses of the state's legislature.

An Assembly bill to extend the credit failed to get the vote in the Senate and a similar Senate bill likewise failed in the state's Assembly.

"We were disappointed neither of those bills panned out this year," she told Bee writer Jim Wasserman.

"We're looking for options next year," Barnett said, according to Wasserman's story.

The news comes during hard times for California's new home building industry.

New home permits for 2009 are on track to be, by far, the lowest on record, according to the nonprofit Construction Industry Research Board (CIRB), which predicts permits for just 36,000 total units this year.

Compare that to the nearly 213,000 housing starts in 2004 and the more than 322,000 starts in 1963, according to the California Building Industry Association's (CBIA) own data.

Last year, housing starts numbered about 65,000, CBIA statistics show.

CIRB said builders pulled just 29,901 permits during the first 10 months this year, a 46 percent drop from the 55,632 permits pulled in the same period in 2008.

Thus far this year, permits for single-family units are down 30 percent, while permits for multifamily units are down 64 percent.

California's $10,000 tax credit on new home purchases only, combined with the new and improved federal $8,000 tax credit to give thousands of Californians a Mother Lode of a tax credit.

It was also a boon to home sales in high-priced California.

According to California's Franchise Tax Board, more than 10,600 household benefited from a portion of the $100 million plan to subsidize new home purchases with a tax break.

The board is no longer accepting applications.

Last week CBIA called on state legislators to reconsider the tax credit, given the home building industry's potentially positive impact on the state's economy.

And as is often said, as goes California, so goes the nation.

"The state tax credit generated much positive momentum earlier this year by way of helping to generate new-home sales, and in turn, job-generating new-home construction. California lawmakers should reexamine these benefits and work to implement a new tax credit in hopes of continuing that positive momentum and encourage a broader economic recovery in the coming year," said Liz Snow, CBIA's President and CEO.

"Bolstering the housing sector would only help to foster a broader economic recovery," she added.

California home buyers, like others nationwide, are left with a federal tax credit of up to $8,000.

The extension and expansion of the popular federal home buyers tax credit gives both new and move-up buyers a tax incentive to buy a home until at least April 30, 2010, longer for military personnel.

The new law extends the existing credit for first-time homebuyers, worth up to $8,000, through April 30, 2010.

A new credit of up to $6,500 is available to qualifying existing homeowners who buy a new primary residence (or have one built) by April 30, 2010, if they owned their existing home for five consecutive years over the last eight years.

Home buyers have to repay the federal tax credit if they live in their primary residence less than 36 months and are not members of the military.

The new rule also raises the qualifying income limits to $125,000 for single taxpayers and $225,000 for joint taxpayers, from the current $75,000 and $150,000.

The maximum allowed home purchase price is $800,000.

Both first-time home buyers and others must close escrow by June 30, 2010.

Military personnel, deployed overseas for a minimum of 90 days in 2008 or 2009, would have until April 30, 2011 to claim the tax credit.

By October 9, 2009, more than 1.2 million tax returns had claimed about $8.5 billion in the refundable federal tax credit, for both new and resale homes, according to the Treasury Inspector General for Tax Administration (TIGTA).

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Mortgage rates set new record lows

CARD Act comes with
counseling disclosure mandate

Freddie Mac says fixed interest rate mortgages (FRMs) on 30-year conforming loans haven't been this low since Freddie Mac began its weekly survey in 1971. Fifteen-year FRMs are as low as they've been since 1991.

by Broderick Perkins
© 2009 DeadlineNews.Com



Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - Averaging 4.71 percent this week, fixed interest rate mortgages (FRMs) on 30-year conforming loans haven't been this low since Freddie Mac began its weekly survey in 1971.

Freddie's Mortgage Market Survey for the week ending Dec. 3 posted another record when the 15-year FRM averaged 4.27 percent, breaking last week's record low. This week's 15-year FRM average interest rate has never been this low since Freddie first included the 15-year FRM in its survey in 1991.

Frank Nothaft, Freddie Mac's chief economist said it's the fifth consecutive week the two rates have fallen. The rates also averaged one full percent point below averages at this time last year.

The 5-year Treasury-indexed hybrid adjustable rate mortgage (ARM) averaged 4.19 percent, rising from 4.18 percent last week and 5.77 percent one year ago.

The 1-year Treasury-indexed ARM averaged 4.25 percent this week with an average 0.6 point, compared to 4.35 percent last week and 5.02 percent a year ago. The last time the 1-year ARM was this low was the week ending June 30, 2005, when it averaged 4.24 percent.

"Low mortgage rates and the cumulative decline in house prices have contributed to an extremely affordable housing market and helped spur home sales this year," said Nothaft.

New and existing home sales in October were 36 percent higher than their January low on a seasonally adjusted, annualized rate, according to the National Association of Realtors (NAR). Pending existing home sales also rose for the ninth straight month in October, representing the longest consecutive gain since the series began in 2001, NAR Reported.


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Mortgage interest rates inch lower

Great power doesn't always
come with great responsibility

Freddie Mac reported last week, the average rate for a fixed rate mortgage (FRM) on 30-year conforming loans fell even lower to 4.78 percent, matching their record low set in the week ending April 30 earlier this year. Informa's average 30-year conforming FRM of 5.01 percent this week was down from a year ago, when it was three-quarters of a percentage point higher at 5.76 percent.

by Broderick Perkins
© 2009 DeadlineNews.Com



Unauthorized use of this story is a copyright violation -- a federal crime



Deadline Newsroom - Mortgage interest rates slipped further still this week, down to 5.01 percent, from 5.07 percent a week ago for fixed-rate mortgages (FRMs) on conforming 30-year loans, according to December's first weekly Interest Rate Review by Calabasas, CA-based Informa Research Services , a market research, analyses, and intelligence gathering service for the financial industry since 1983.

Freddie Mac reported last week, the average rate for a fixed rate mortgage (FRM) on 30-year conforming loans fell even lower to 4.78 percent, matching their record low set in the week ending April 30 earlier this year.

Yesterday, Informa's average 30-year conforming FRM of 5.01 percent was down from a year ago when it was three-quarters of a percentage point higher at 5.76 percent.

The Dec. 1 Informa survey also said both the highest 30-year FRM with an annual percentage rate (APR) of 6.96 percent, and the lowest, at 4.34 percent, were virtually unchanged from last week's survey.

National Average Mortgage Rates

The average 15-year FRM came in Dec. 1 at 4.51 percent, down from 4.53 a week ago, was also down from 5.55 percent a year ago.

The average interest rate for the 5/1 adjustable rate mortgage (ARM), was 3.49 percent, down more than a full percentage point from 4.79 percent a year ago.

The FRM rates for 15- and 30-year mortgages and the 5/1 ARM rates are all based on a $200,000 purchase loan, with an 80 percent loan-to-value ratio, for an owner-occupied, single-family residence.

Informa's National APR (annual percentage rates) numbers are tallied from a survey of 200 mortgage originators.

Informa also reported an average 6.05 percent fixed rate for 30-year, non-conforming jumbo loans, up a tad from 6.02 percent a week ago, but well off the 7.38 percent rate this time last year.

The jumbo averages are based on a $450,000 purchase loan with an 80 percent loan-to-value ratio for an owner-occupied, single-family residence.

For home equity lines of credit (HELOCs) of $50,000, with an 80 percent loan-to-value note, the variable rate came in at an average 4.98 percent, identical to the rate a week ago, but up slightly from 4.88 percent a year ago.

Also relatively unchanged were average FRM rates on 15-year home equity loans of $50,000, with an 80 percent loan-to-value note. They came in at 7.61 percent, down from 7.63 percent last week and down from 8.06 percent a year ago, according to Informa's survey.


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Mortgage modification video a valuable tool for distressed homeowners

Video teaches that a mortgage modification occurs when the lender reworks the terms of your existing home loan, typically to lower payments and make the home more affordable for you. Lower payments can result from a lower interest rate, extended loan term, reduced principal or any combination of those approaches.

by Broderick Perkins
© 2009 DeadlineNews.Com



Unauthorized use of this story is a copyright violation -- a federal crime



Deadline Newsroom - A new video helps struggling homeowners navigate the federal mortgage modification program.

Offered for free to anyone by mortgage insurer and risk management company PMI Mortgage Insurance Co., the two-part video "Navigating the Home Affordable Modification Program" is a helpful adjunct to existing information about the federal Home Affordable Modification Program (HAMP) on the MakingHomeAffordable.gov Web site.

A mortgage modification occurs when the lender reworks the terms of your existing home loan, typically to lower payments and make the home more affordable for you. Lower payments can result from a lower interest rate, extended loan term, reduced principal or any combination of those approaches.

A mortgage modification is not a refinanced mortgage, which replaces the old mortgage with a new loan.

Part I of the "Navigating HAMP" video provides basic orientation for homeowners who may not have heard of HAMP, it covers the objectives of the program, and helps you determine if you qualify for a HAMP modification.

Under HAMP, you may qualify for a mortgage modification if your home is your primary residence; your first mortgage's balance is no more than $729,750; you face financial hardship that is affecting or will affect your ability to make mortgage payments; you signed for your current mortgage on or before January 1, 2009 and your payment on your first mortgage (including principal, interest, taxes, insurance and homeowner's association dues, if applicable) is more than 31 percent of your current gross income.

"Distressed homeowners who are facing the prospect of losing their home need to know that help is available for those truly interested in saving their homes. This instructional video leverages the growing popularity of internet-based video to give homeowners an overview of how HAMP works and their important role in the process," said John Jelavich, head of PMI’s Homeownership Preservation Initiatives group.

Part II of the "Navigating HAMP" video uses examples to demonstrate how affordability is achieved with a loan modification, it walks homeowners through the steps necessary to obtain a modification and discusses the information homeowners need to provide their mortgage servicer, including:

• Pay stubs or other verification of your monthly before-tax (gross) income.
• Your most recent income tax return.
• Statements for savings and other assets.
• Your first and second mortgage (if any), home equity loan or line of credit statements
• Account balances and minimum monthly payments due on all of your credit cards, car loans, student loans and other debts.
• A completed Hardship Affidavit describing any circumstances that caused your income to be reduced or expenses to be increased.

"The jury is still out on the success of the HAMP program. Progress has been slow in materializing but may finally be gaining steam as many of the trial loan modifications are finally beginning to transition into permanent ones," said Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.

Osborne added, "A large part of the problem has been getting the loan servicers ramped up with the staff and technology to handle the massive wave of modifications, something they had no real experience with previously."

To learn more about loan modifications visit "Mortgage Modification Madness", "Mortgage Modification Updates" and watch "Navigating the Home Affordable Modification Program."

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Unexpected home sales spurt, affordability, reasons to give thanks

Holy waffles! Eggo shortage!

Tax credits, other government incentives, low mortgage rates and low home prices, send both new and resale home sales zooming in October. But can it last?

by Broderick Perkins
© 2009 DeadlineNews.Com


Unauthorized use of this story is a copyright violation -- a federal crime


Deadline Newsroom - Driven by tax credits, other government incentives, low mortgage rates and low home prices, both new and resale home sales took an unseasonable leap in October.

Existing home sales nationwide, including single-family, townhomes, condominiums and co-ops in October surged 23.5 percent ahead of October 2008's weak sales, according to the National Association of Realtors (NAR).

The sales pace, up 10.1 percent from September, is the highest its been since February 2007.

Also bucking the seasonal norm of slower fall sales, new single-family homes, in October, were 5.1 percent more than a year ago and up 6.2 percent from the previous month, according to the U.S. Commerce Department.

"The rise in new home sales is encouraging. Sales have risen substantially above their low in January, and the inventory of unsold homes has fallen sharply. Low mortgage rates and the extension and expansion of the tax incentive should support continuing sales growth in the coming months," said Commerce Under Secretary Rebecca Blank, in a prepared statement.

Freddie Mac reported November 25, the average rate for a fixed rate mortgage (FRM) on 30-year conforming loans fell to 4.78 percent this week, matching a record low set in the week ending April 30 earlier this year.

Both the 15-year FRM (4.29 percent) and the 5-year adjustable rate mortgage (ARM, 4.18 percent) were at their lowest levels, at least since 1991, when Freddie Mac first starting tracking rates.

The median sales price of new houses sold in October 2009 was $212,200, down from $213,200 a year ago. The average price was $261,100, down from $274,000 a year ago, according to the Commerce Department.

NAR put the median price for existing single-family homes at $173,000 in October, down 6.8 percent from a year ago. Sales were 21.4 percent above those from a year ago.

With condo sales soaring 40.8 percent above last year's, the median price, $172,900 was nearly the same as single-family homes.

NAR said distressed properties accounted for 30 percent of sales in October and put distorted downward pressure on median prices because they sell at a discount compared to traditional listings.

The small boom in home sales could end soon, concedes NAR officials.

Surprised by the big sales gains, Lawrence Yun, NAR chief economist, surmised "Many buyers have been rushing to beat the deadline for the first-time buyer tax credit that was scheduled to expire (but was extended and expanded) at the end of this month, and similarly robust sales may be occurring in November."

He also cautioned, "With such a sale spike, a measurable decline should be anticipated in December and early next year before another surge in spring and early summer."

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Prime, fixed-rate mortgage foreclosures undercutting housing recovery

Black Friday Report: Regifting becoming endangered

Higher foreclosure rates among homeowners with prime, fixed-rate home loans are replacing sub-prime loan failures at an alarming rate, and unemployment is the primary culprit.

Prime fixed-rate loans, those held by homeowners with the best credit, accounted for nearly 33 percent of new foreclosures in the third quarter, compared to only 21 percent a year ago.

An unknown number of foreclosed homes yet to enter the pipeline.

by Broderick Perkins
© 2009 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - Rising unemployment is undoing home ownership, unraveling the housing rebound and extending the foreclosure crisis at least until very late next year.

Higher foreclosure rates among homeowners with prime, fixed-rate mortgages (FRMs) are replacing sub-prime loan failures at an alarming rate, according to a third quarter mortgage delinquency survey.

Nationwide, 14.41 percent of mortgage paying homeowners were either behind on payments or in foreclosure at the end of September, with unemployment as the primary culprit, according to the Mortgage Bankers Association's (MBA) latest National Delinquency Survey.

The 14.41 percent was another record high for the ninth consecutive quarter, even as home prices began to show increases amid demand spurred by tax credits and low interest rates.

Prime fixed-rate loans, those held by homeowners with the best credit, accounted for nearly 33 percent of new foreclosures in the third quarter, compared to only 21 percent a year ago.

Those prime FRM failures also accounted for 44 percent of the quarterly increase in foreclosures and that number is due to grow. Prime fixed-rate loans represented 54 percent of the quarterly increase in loans 90 days or more past due, but not yet in foreclosure, according to the MBA.

"Job losses continue to increase and drive up delinquencies and foreclosures because mortgages are paid with paychecks, not percentage point increases in the GDP (gross domestic product)," said Jay Brinkmann, MBA's chief economist.

In October, the unemployment rate rose to 10.2 percent, the highest since April 1983, with the largest job losses in construction, manufacturing, and retail trade, according to the U.S. Labor Department.

In October alone, the number of unemployed people increased by 558,000 to 15.7
million. Since the start of the recession in December 2007, the number of jobless people has risen by 8.2 million, and the unemployment rate has grown by 5.3 percentage points.

"Over the last year, we have seen the ranks of the unemployed increase by about 5.5 million people, increasing the number of seriously delinquent loans by almost 2 million loans and increasing the rate of new foreclosures from 1.07 percent to 1.42 percent," Brinkmann added.

The housing market received some welcomed jolts from the first-time home buyer tax credit, the tax credit's extension and expansion this year, other government programs and mortgage rates sliding below 5 percent.

The S&P/Case-Shiller Home Price Index today said home prices rose for the second consecutive quarter, but remained nearly 9 percent lower than a year earlier.

Prices nationwide rose 3.1 percent in the three months ending on September 30, following a similar rise during the second quarter of the year.

Unfortunately, experts say there is an unknown number of foreclosed homes yet to enter the pipeline -- strategic defaults and foreclosure forbearances.

Those problematic properties will keep prices from returning to anything near boom time levels and may even cause prices to plunge.

Strategic defaults occur when homeowners refuse to pay mortgages that exceed the value of their home. Foreclosure forbearance stems from lenders delaying foreclosure proceedings on mortgages that 90 days or more late.

"I see growing anecdotal evidence of forbearance of lenders. The logic for it is if they can't sell it anyway, the lender is better off with the original homeowner still in place and caring for the asset in most cases, than forcing them out and having some of them tear the place up on the way out," said Bruce Hahn, president of the American Homeowners Foundation.


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Short sale transaction a tall order

Jesus image hitches pick-up ride

While recent cash incentives for you and your lender make short sales more enticing these days, incentives alone won't get the job done.

by Broderick Perkins
© 2009 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - A short sale could be a better deal than bankruptcy or foreclosure, but it can also sap your time, wither your credit score and well, cost you money.

To produce a down and dirty primer on short sales, we went to Intero Real Estate Services in Silicon Valley and checked in with other real estate and consumer professionals to get the experts to show us -- and you -- the ropes.

A short sale occurs when your lender agrees to accept a lower price on your home than the current mortgage balance, provided you meet the lender's requirements and have a qualified buyer.

"Search for a buyer, especially those who have expressed an interest in buying short sale properties. The buyer must be willing to deal with extended deadlines and additional demands made by your lender," said Julie Larsen Wyss, a RealtyU graduate and holder of its new Certified Short-Sale Professional (CSP) designation.

"Your lender is the key to a successful short sale transaction and it will need to feel confident in the new buyer," added Wyss, also a real estate broker associate with Intero Real Estate Services in San Jose, CA. She's also founder/broker of Vista Mortgage Solutions.

While recent cash incentives for you and your lender make short sales more enticing these days, incentives alone won't get the job done.

To go the distance on a short sale, you must document you are a hardship case -- but not because you falsified the original loan documents.

It can be a win-win scenario -- the bank reduces a portion of "bad debt," avoids foreclosure costs and keeps the home occupied, while you shed a housing payment you can't afford.

"If done right, the short sale is a winning proposition for all, including the lender because the costs involved are certainly lower than that of foreclosing," said Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.

Don't come up short, prove your case

To prove your case, you'll need to spend some time on a cover letter explaining your hardship and provide full financial disclosure; the original purchase contract; a balance sheet of your income and expenses; asset statements, proof of income; bank statements; two years of tax returns; and a professional who knows the ropes.

"Simply stating, 'My house is worth less than the loan and I don’t want to pay any more,' will not be acceptable. Lenders would rather foreclose than develop a reputation as an easy target," said Zdenka Mahan, a real estate agent with Intero in Saratoga, CA.

Along with the required documentation, you stand the best chance of getting through the two- to seven-month short sale ordeal if the home is marketable; the second mortgage holder (if there is one) gets a cut or otherwise goes along with the deal; the same lender holds all mortgages; and there is enough time before foreclosure (at least about 4 months).

"A major reason why a short sale fails is the length of time it takes to get the lender’s approval. Long delays frequently cause the buyer to drop out of escrow and buy another home," said Mahan, a short-sale experienced "Downtown San Jose (CA) Specialist."

Buyers can also suffer lost opportunity.

"Buyers risk the opportunity cost of losing out on another property if they are tied up in a long, protracted short sale negotiation which could potentially go on for months," said Osborne.

"The burden to make the deal work falls largely on the seller's shoulders and their ability to do their homework up front, making things as easy as possible for a potential buyer," Osborne added.

A short sale works in your favor if your mortgage debt is secured by your home and was used to acquire, construct or substantially improve your home.

Short sales that stop short

Wyss says don't count on a short sale if you can't prove hardship; you are current on your mortgage; are in bankruptcy; have recently completed a cash-out refinance or have a lien with a third party.

Because a short sale forgives a portion of the debt owed, that portion could be considered as taxable income and you should seek the advice of a tax attorney, certified public accountant, enrolled agent or other person fully schooled in the tax ramifications of a short sale.

According to FICO, the leading credit scoring system provider, there also may be some credit score implications.

While a short sale won't be as damaging as a foreclosure or bankruptcy, expect some negative impact. Variables include how the lender reports the deal and what's already on your credit report. Negatives compound.

Consumer Reports' Money Advisor suggests that before you enter a mortgage modification or short sale, ask how the lender will report it so you can weigh your priorities.

If you need the break, take the deal sooner rather than later, even if it will hurt your credit score. Negatives on your credit file are removed after seven years. The sooner you get the clock ticking, the better.

Get a short sale team for the long haul

Wyss says the best approach to a short sale is by contracting with a real estate professional familiar with the transaction. As well as RealtyU's CSP designation the National Association of Realtors offers a Short Sales and Foreclosure Certification Program (SFR).

However, the designations aren't a guarantee you've found the most experienced short sale agent. Some agents without the designation are just as experience, if not more so. Others are less experienced. Get referrals from friends, family members, co-workers and others you trust who have worked with an agent experienced in short sales or have a close friend with a satisfactory experience.

"A real estate agent needs to put together the most comprehensive short sale proposal possible to minimize the back-and-forth delays," said Mahan.

You may also need legal and tax counsel. A solid professional team is best for determining the viability of the sale, assembling the package and pricing and listing the property to find a buyer.

Wyss says determine your home's marketing position from comparative market analyses (CMA) used to price your home.

"If your home's value is significantly less than debt tied to the property, you are a candidate for a short sale. Position your home so that it sells quickly, but at a high enough price so the lender will agree to the terms," says Wyss.

Keep in mind, you don't control the final decision.

You aren't selling a home on the open market so much as you are selling your case to the lender.

"Lenders are under no obligation to accept a short sale and the terms will be examined closely by the lender," Wyss added.


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