Most Americans thumbs down on 'strategic defaults'

New postal rates could boost your income tax bill

Even if you are "underwater" -- owing more on your mortgage than your home is worth -- there's rarely a good reason to stop paying your mortgage, according to a majority of Americans.

by Broderick Perkins
© 2010 DeadlineNews.Com

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

Deadline Newsroom - The fallout you can expect from walking away from home ownership could include the ire of your neighbors.

Even if you are 'underwater' -- owing more on your mortgage than your home is worth -- there's rarely a good reason to stop paying your mortgage, according to a majority of Americans.

A new FindLaw.com survey says 60 percent of Americans believe that it is "never OK" for homeowners to simply stop making payments on their mortgages.

Another 34 percent said walking away, called a "strategic default," is OK for homeowners, but only if they aren't able to make the monthly payments.

Only 3 percent said home owners should be able to walk away from mortgages anytime they want.

Tossing the door keys in the circular file and stopping mortgage payments will eventually lead to foreclosure, but that's not all. Unanticipated consequences could include tax problems, contractual issues, damage to your credit and credit scores, damage to your ability to borrow in the future, even a lawsuit.

"Many homeowners are currently facing very difficult and complicated situations involving their home mortgage, in some cases even including the threat of foreclosure," said Stephanie Rahlfs, an attorney and editor for FindLaw.com.

"But before making any major decisions, homeowners should consult with financial and legal professionals, including accountants, real estate attorneys and financial advisers," Rahlfs added.

She also said, "Various government programs and tax changes involving mortgages have been enacted since the beginning of the housing crisis. Combined with private programs and variations in state laws, it creates a complicated web of potential actions available to homeowners."

FindLaw.com advises consumers not to play Ostrich, but, at the first signs of financial trouble, to seek help from counselors, community and social organizations and your lender or servicer. Examine all the alternatives before bailing on homeownership.

They include:

• Refinance. If you qualify, turn your existing mortgage for a new one. If you have a mortgage that is underwater, this could be the toughest option to accomplish. However, federal programs, including the Federal Housing Administration's refinance effort, can be a good bet for those who haven't yet faced hardship and can qualify for a new loan.

• Mortgage modification. A mortgage modification reworks the terms of your existing loan to get the payment down to a more affordable level. To add greater affordability, lenders lower the interest rate, lengthen the term of the loan or reduce the principal -- or do some combination of all three.

• Short sale. A short sale occurs when the bank allows the sale of your home for less than the existing mortgage balance, typically, provided there's a qualified buyer in the wings.

• Deed-in-lieu-of-foreclosure. With this option, you hand over the property to the bank for resale. Some short sales and deed-in-lieu of deals qualify for the government sponsored Home Affordable Foreclosure Alternatives (HAFA) deal -- the lender or servicers can't request any cash from the home owner, require a promissory note or pursue any deficiency judgments.

• Bankruptcy. Bankruptcy is a court-based process that can give you a financial "fresh start" by getting you out from under burdensome debts. Once the bankruptcy process is complete, you typically are released from personal liability for most debts.

• Reinstatement, repayment plans and forbearance plans. These plans help you get current on their mortgage when you have temporary financial problems. Talk with your lender or loan servicer for details.

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Savvy, equity-saving home owners push 'cash-in' refinances to record levels

Fishzilla invading Down Under?

One in three home owners who refinanced their loan in the fourth quarter of 2009, lowered their principal balance -- the highest "cash-in" refinance share since Freddie Mac began tracking the data.

by Broderick Perkins
© 2010 DeadlineNews.Com



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


Deadline Newsroom - Refinancing home owners are putting money back into their home at record levels to help plug their equity drain.

One in three home owners who refinanced their loan in the fourth quarter of 2009, lowered their principal balance. That's the highest "cash-in" refinance share since Freddie Mac's quarterly Refinance Report began tracking the data.

On par with the cash-in share, the report showed that the share of "cash-out" borrowers who, to the contrary, increased their loan balance by 5 percent or more represented a record low, 27 percent share.

The last record low cash-out share was 33 percent, during the second quarter of 2003, just before the last housing boom began.

The data is the latest available from the refinance report, but home owners are expected to continue the trend in the soft economy.

"The cash-out loan has been steadily heading towards extinction as funding for this once popular consumer-spending-friendly loan has fallen to the lowest level since 1985 as consumers struggle to restore their household balance sheets," said Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.

When a home owner completes a cash-in refinance, he or she takes a check to the closing. That can help a home owner surface an underwater mortgage -- a mortgage balance that's larger than the home is worth.

It can also free up more equity for a rainy day, make the home easier to sell and, in some cases, give a boost to the credit score, due to the smaller mortgage balance.

Once market home value appreciation resumes sufficiently, the cash-in deal can also be considered an investment, perhaps with a better return than other investments.

It's a smart move in tough economic times.

In a cash-out refinance, on the other hand, the home owner walks away with a check and that drains equity.

"This transformation from a cash-out refinance market to a cash-in refinance market is consistent with other data we've seen on households reducing their overall debt burdens, particularly revolving credit like credit cards," said Frank Nothaft, Freddie Mac vice president and chief economist.

All refinancing borrowers are also enjoying near record low interest rates, which helps make a refinance cheaper and easier to land.

During the last quarter of 2009, mortgage interest rates dropped to a record low of 4.71 percent for conforming, fixed-rate, 30 year mortgages and averaged 4.9 percent. During the first quarter this year, rates averaged 5 percent, according to Freddie Mac.

"One-half of borrowers who refinanced their conventional loan during the last quarter of 2009 lowered their annual mortgage interest rate by at least 0.9 percentage points below the old rate. For families that paid down their mortgage balances when they refinanced, the monthly payment savings are even greater," said Nothaft.

In addition to boosting equity, some refinancing home owners also bring money to the table to avoid mortgage insurance (required on loans with a loan-to-value greater than 80 percent) and to avoid higher jumbo loan rates.

The trend shift from cash-out to cash-in loans isn't always due to financial foresight.

"Falling home prices as well as the virtual disappearance of no-cost loans (no point-no fee loans) have contributed greatly to the cash-in trend," Osborne added.

Home owners attempting a refinance for a lower rate, find their home doesn't appraise as high as they thought. The extra cash is necessary to qualify for the refinance.

"The main causes of the decline in cash-out refinance are declining home prices in many areas of the country that have eliminated equity that could have been extracted and tighter underwriting standards for loan-to-value ratios. Among the refinanced loans in our database, the median appreciation of the collateral property was a negative 2 percent over the median life of the prior loan of 3.6 years," explained Amy Crews Cutts, Freddie Mac deputy chief economist.

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Struggling home owners awarded another $14 billion

New Making Home Affordable enhancements include refinancing for underwater loans, reduced mortgage payments for unemployed homeowners, and pressure to get more lenders to consider reducing the principal of certain mortgages, among others.

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


Deadline Newsroom - With the federal government's year-old housing relief efforts under fire, the Obama Administration recently announced a new $14 billion round of enhancements to reach a larger share of millions of struggling home owners.

The enhancements under the administration's Making Home Affordable initiative, include refinancing for underwater loans, reduced mortgage payments for unemployed homeowners, and pressure to get more lenders to consider reducing the principal of certain mortgages, among other provisions.

Some critics, however, say the enhancements don't go far enough and actually reward lenders for making bad loans that helped bring down the housing market and the economy.

Since its inception early in 2009, Making Home Affordable's mortgage modification segment, the Home Affordable Modification Program (HAMP) has managed mortgage modifications (including trials and permanent modifications) for only 262,000 home owners out of a potential 3 to 4 million eligible home owners.

A mortgage modification, used to make mortgage payments more affordable for struggling homeowners, typically occurs when the lender reworks the terms of an existing home loan by lowering the interest rate and exchanging an adjustable rate for a fixed rate, or extending the term of the loan, or both. Rarely do lenders also reduce the principal to get the payment down, but, thanks to the enhancements, that could be changing.

The refinance segment, the Home Affordable Refinance Program, has reached fewer than 200,000 of the up to 5 million borrowers federal regulators hoped it would help. A refinance, unlike a modification, pays off the old loan with a brand new loan.

Given the small share of needy homeowners actually helped, the Center For Responsible Lending, a critic of results thus far, welcomed the news of the governments enhanced efforts to help home owners.

"We welcome the Administration’s stronger actions to stabilize the housing market, particularly doing more to lower loan balances on homes worth less than the mortgage. Foreclosures dragged us into the recession, and until we stop them, the economy will not recover and most homeowners will watch their hard-earned home equity drain away," the Center announced.

Under the $14 billion enhancement, using funds already available from the Troubled Asset Relief Program (TARP) , provisions include:

• More pressure and financial incentives for lenders doing HAMP modifications to offer reduced-principal mortgage modifications and workouts, for homeowners who owe more than their home is worth.

The Bank of America announced a similar plan just days before the Obama Administration announced enhanced relief efforts.

"The core reason principal reductions have suddenly gained traction is the growing recognition that many of the loans in such programs would have represented even larger losses had the properties gone to foreclosure," said Peter Miller, Silver Spring, MD mortgage expert and author of the new eBook "The Quick & Dirty Guide To Mortgage Modifications" (Silver Spring Press, $2.99).

First American Core Logic says more than 11.3 million homeowners are underwater on their mortgages.

Reducing the principal is crucial to both making a home more affordable and giving home owners incentive to stay in a home that's no longer worth less than the mortgage.

Miller said, "These new programs should be applauded because they save homes and homeowners. First, they're keeping homes out of foreclosure and that's hugely important for families. Second, they're holding down foreclosure inventories. Home prices will not rise until the supply of distressed properties is reduced by 80 or 90 percent in the hard-hit foreclosure areas such as California, Nevada, Florida and Michigan."

• Likewise financial support to lenders who reduce the principal on first and second mortgages, when first mortgages are refinanced through the Federal Housing Administration (FHA). The support includes the additional incentive of insurance coverage to cover lenders' losses on such principal reductions.

• For unemployed home owners, mortgage payments reduced to 31 percent of their previous household income for up to six months while they look for another job. Once employed, homeowners facing a regular payment that's greater than 31 percent will be consider for a permanent HAMP loan modification.

• Up to $3,000 in moving expense paid to home owners entering short sale -- transaction where the lender accepts less than the loan amount to move the loan off the books. That doubles a previous amount offered. Many homeowners who agree to short sales are stuck with bill for the difference between the selling price and the old loan.

Dean Baker, co-director of the Center for Economic and Policy Research in Washington, DC. says the cash incentives approach benefits lenders more than home owners because the incentives are more than the first mortgage holder would collect if the loan went through a foreclosure process.

"By substantially reducing the required payment on the first mortgage, the program will be creating a situation in which the second mortgage-- which would be worth little or nothing in foreclosure-- will suddenly again hold considerable value. This will be a huge windfall for second mortgage holders. It is worth noting that the major banks have vast portfolios of second mortgages," Baker said.


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Home equity till empty for many homeowners

Read: Coupons in vogue

Gone is the practice of using home equity like an ATM. Lost home values and job uncertainty is forcing homeowners to lower their mortgage bill and leave in place what little home equity they have left.

by Broderick Perkins
© 2010 DeadlineNews.Com



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


Deadline Newsroom - Lost home values and job uncertainty is forcing homeowners to lower their mortgage bill and leave in place what little home equity they have left.

In the fourth quarter 2009, the share of "cash-out" refinancing dropped to the lowest level since Freddie Mac started tracking the statistic -- 27 percent.

Likewise the number of borrowers who refinanced their mortgage to lower their principal balance -- on a "cash-in" basis -- also hit a record 33 percent.

That's in stark contrast to the heyday of skyrocketing home equity levels during 2006 and 2007 when as many as 88 percent of homeowners refinancing took cash out and as few as 4 percent refinanced on a cash-in basis to lower their principal or payment.

Since then, home values have crashed by as much as 50 percent or more in some areas and many of those cash-out homeowners are living with upside down mortgages -- loans larger than their home is worth.

In the fourth quarter of 2009, the median appreciation of refinanced property was a negative two percent.

Other homeowners are among the millions suffering foreclosure, short sales or other types of financially transmitted distress.

Freddie Mac says the cash-in share of refinancings is the highest it's been since 1985. The cash-out share is the lowest it's been since 2003 when the record was 33 percent.

"One half of borrowers who refinanced their conventional loan during the (fourth) quarter (2009) lowered their annual mortgage interest rate by at least 0.9 percentage points below the old rate. In aggregate, the lower interest rate translates into about $2 billion in payment savings for these homeowners over the first 12 months of the new loan. For families that paid down their mortgage balances when they refinanced, the monthly payment savings are even greater," said Frank Nothaft, Freddie Mac vice president and chief economist.

A 1 percentage point reduction in a mortgage rate would mean a savings of about $300 a month on a $500,000 mortgage initially financed at 6 percent.

"This transformation from a cash-out refi market to a cash-in refi market is consistent with other data we've seen on households reducing their overall debt burdens, particularly revolving credit like credit cards. From September of 2008 to November of 2009, consumers cut $100 billion dollars in revolving debt from their obligations, according to the Federal Reserve Board," Nothaft said.

Financial experts have always advised tapping home equity through a refinance or home equity loan, is by it's very nature, an equity-depleting loan. Use it and lose it.

The best home equity use is to reinvest it.

The best investments include certain home improvements, education for the kids, new business finances, a second home and other financial moves that provide an equal or better return on your money than the cost of the loan.

"Home equity use has been the equivalent of home equity abuse over the past several decades," says Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.

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Mortgage interest rates down on the FRM side, ARMs up and down

This school has gone to pot

Fixed mortgage interest rates on 30- and 15-year loans are down, adjustable mortgage rates mixed, low rates overall are fueling a hot refinance market.

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) came in at 5.06 percent, the week ending Jan. 14, with an average 0.7 point, down a few ticks from 5.09 percent last week, according to Freddie Mac's weekly Primary Mortgage Market Survey (PMMS).

Last year, at this time, the 30-year FRM average was 4.96 percent.

The 15-year FRM this week was also down, averaging 4.45 percent with 0.6 point, down from 4.50 percent last week. A year ago the 15-year FRM averaged 5.25 percent.

The lower rates continued to fuel refinance activity in the housing market. For the past several months, 75 percent of conventional mortgage applications were for refinance transactions, according the Mortgage Bankers Association.

"Refinance applications continue to rule the day as rates dipped … and consumers jumped on them," said Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.

"Interest rates will not remain at historic lows forever, so borrowers better grab them and take advantage while they can," she added.

Meanwhile, ARMs were mixed.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.32 percent the week ending Jan. 14, with an average 0.6 point, down from last week's 4.44 percent average.

The 1-year Treasury-indexed ARM came in at an average 4.39 percent this week with an average 0.5 point, up from last week's 4.31 percent average, according to Freddie Mac.

A year ago the 5-year ARM averaged 5.25 percent. The 1-year ARM averaged 4.89 percent this time last year.

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Mortgage interest rates dip near 18-year lows

Church marketing like a Hoover

The 15-year FRM's average is as low as it's been in 18 years, averaging 4.32 percent this week and down from an average 4.40 percent last week. The average 15-year rate was 5.73 percent a year ago, said Freddie Mac.

by Broderick Perkins
© 2009 DeadlineNews.Com

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

Deadline Newsroom - Like a limber limbo dancer dropping ever lower, mortgage interest rates on the 30-year fixed rate mortgage (FRM) dipped to 4.83 percent the week ending November 19.

Last week, the 30-year FRM rate was 4.91 percent, compared to 6.04 percent a year ago, according to Freddie Mac's weekly Primary Mortgage Market Survey.

How low can they go?

The 15-year FRM's average is as low as it's been in 18 years, averaging 4.32 percent this week and down from an average 4.40 percent last week. The average 15-year rate was 5.73 percent a year ago, said Freddie Mac.

"Interest rates on 30-year fixed rate mortgage loans fell for the third consecutive week to the lowest since the week ending May 21st, while 15-year fixed rates were the lowest since our records began in 1991," said Frank Nothaft, Freddie Mac vice president and chief economist.

Lower rates are music to the ears of refinancing homeowners who are switching to less risky fixed rates.

Low home prices, combined with lower rates, are sending more renters to rent-vs-buy calculators.

"For the fourth consecutive quarter, more than 95 percent of prime borrowers who originally had an ARM selected a conventional fixed rate mortgage in the third quarter of this year," Nothaft said.

The five-year Treasury-indexed hybrid adjustable rate mortgage (ARM) interest rate averaged 4.25 percent this week, down from 4.35 percent last week and 5.87 percent a year ago.

The one-year Treasury-indexed ARM came in at an average 4.35 percent, down from 4.47 percent last week and 5.29 percent a year ago.


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Mortgage interest rates dip lower still

Banks gouge on checking fees

The average fixed rate has fallen for three consecutive weeks, on news of continued high unemployment and general economic malaise. But that's good news for buyers and homeowners who want to refinance.

by Broderick Perkins
© 2008 DeadlineNews.Com

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

Deadline Newsroom - Mortgage interest rates dipped as low as 4.32 percent, on conforming 30-year loans this week.

On Nov. 17, the average was 5.08 percent for fixed-rate mortgages (FRMS), while the high was 6.96 percent for the same loans.

The average 5.08 percent was well off the 6.15 percent average a year ago, according to the weekly Interest Rate Review by Calabasas, CA-based Informa Research Services a market research, analysis, and intelligence gathering service for the financial industry.

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

The average fixed rate has fallen for three consecutive weeks, on news of continued high unemployment and general economic malaise.

But that's good news for buyers and homeowners who want to refinance.

The average 15-year FRM was 4.51 percent compared to 5.92 percent a year ago.

The average interest rate for the 5/1adjustable rate mortgage (ARM), was 3.55 percent, down from 4.91 percent a year ago, Informa reported.

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 also reports an average 6.07 percent fixed rate for 30-year, non-conforming jumbo loans, way down from 7.63 percent a year ago. 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 a home equity lines of credit (HELOC) of $50,000 with an 80 percent loan to value note, the variable rate came in at an average 4.97 percent, up slightly from 4.8 percent a year ago.

Fixed rates on 15-year home equity loans of $50,000, with an 80 percent loan-to-value note, averaged 7.64 percent, compared to 8.01 percent a year ago, according to Informa's survey.

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Lower rates opens doors for refinancing homeowners, home buyers

Credit card squeeze continues

If you purchased a home a year ago, take a look at how much you can save by refinancing. If you are renting, take a look at how much less you can pay per month to own a home. The American Dream is alive and well.

by Broderick Perkins
© 2008 DeadlineNews.Com

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

Deadline Newsroom - If you purchased a home a year ago and have the equity and creditworthiness to swing it, a refinance today could save you hundreds of dollars a month, thanks to lower interest rates.

Or, if you are in the market to buy a home, lower interest rates and more affordable prices could give you a mortgage that's hundreds of dollars lower than your rent.

Freddie Mac's Primary Mortgage Market Survey last week put the average fixed interest rate for 30-year conforming mortgages at 4.91 percent. In California it was 4.88 percent.

Last year at this time, the 30-year fixed rate mortgage (FRM) nationwide averaged 6.14 percent.

On a $500,000 mortgage, considered a "jumbo conforming loan," expect to pay about a quarter percent more, says Michael D. Rodriguez broker owner of Platinum Capital Mortgage And Real Estate in Salinas, CA.

So at 6.39 percent a year ago, the mortgage (principal and interest) payment on that $500,000 loan would be about $3,124 compared to about $2,733 now for the cheaper 5.16 percent mortgage, a hefty monthly savings of nearly $400, according to Erate.com mortgage calculators.

Put another way, $4,800 a year, is just about enough to cover property taxes, make almost two mortgage payments or perform some equity-boosting home improvements.

Rodriguez says for conforming level loans at or below $417,000, he's seen fixed rates as low as 4.25 percent, with a point thrown in. Each point equals one percent of the financed amount. Riskier loans that come with a fixed rate for five years are as low as 3.875 percent, but they could adjust up drastically after the fifth year.

Freddie Mac also said the 15-year FRM averaged 4.36 percent, down from 5.81 percent a year ago.

The five-year Treasury-indexed hybrid adjustable rate mortgage (ARM) averaged 4.29 percent this week, down from 5.98 percent a year ago. The one-year Treasury-indexed ARM averaged 4.46 percent, down from 5.33 percent in 2009 at this time.

"These are the lowest rates I've seen in 18 years. There are 25 percent more eligible buyers than last year because of lower rates and lower home prices," Rodriguez said.

He also said because rents have risen in the past year, some buyers could land a monthly mortgage on a low-end priced home that's as much as $350 to $500 cheaper than rent.

"And then they get the $8,000 tax credit. That's quite a deal," he added.

Both home buyers and owners who want to refinance also could have some time-based wiggle room to shop around and dicker for the best interest rate deal.

"Keeping rates at historically low levels for a sustained period of time has to remain a cornerstone of Fed policy until the economy gets back on track," said Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA based interest rate tracker and financial information publisher.

"I don't suspect rates will begin to rise until we see at least three consecutive months of solid employment growth," she added.

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30-year mortgage interest rates down 1.25 percentage points from 2009

Speeding up credit card reform

On a $300,000 mortgage, the principle and interest payment, at today's average rate, would be about $1,594, compared to $1,825 a year ago, according to Erate's calculators.

by Broderick Perkins
© 2008 DeadlineNews.Com

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

Deadline Newsroom - If you purchased a home a year ago and have the equity and creditworthiness to swing it, a refinance today could save you hundreds of dollars a month.

Or, if you are in the market to buy a home, interest rates will make for a more affordable deal.

Freddie Mac's Primary Mortgage Market Survey today put the average fixed interest rate for 30-year conforming mortgages at 4.91 percent.

Last year at this time, the 30-year fixed rate mortgage (FRM) averaged 6.14 percent.

"Keeping rates at historically low levels for a sustained period of time has to remain a cornerstone of Fed policy until the economy gets back on track," said Nancy Osborne, chief operating officer of Erate.com.

On a $300,000 mortgage the principle and interest payment at today's average rate would be about $1,594, compared to $1,825 a year ago, according to Erate's calculators.

That's a monthly savings of $231. Put another way, a year's worth of the savings -- $2,772 -- amounts to almost two mortgage payments on a $300,000 mortgage at today's average rate.

Both home buyers and owners who want to refinance may have some time yet to shop around and dicker for the best interest rate deal.

"I don't suspect rates will begin to rise until we see at least three consecutive months of solid employment growth," Osborne said.

Freddie Mac also said the 15-year FRM averaged 4.36 percent, down from 5.81 percent a year ago.

Adjustable rate mortgages (ARMs)

The five-year Treasury-indexed hybrid adjustable rate mortgage (ARM) averaged 4.29 percent this week, down from 5.98 percent a year ago. The one-year Treasury-indexed ARM averaged 4.46 percent, down from 5.33 percent in 2009 at this time.

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Have you overlooked refinancing?

iPhone app translates baby bawling

Federal mortgage refinance programs have given more than 2 million homeowners a better shot at holding on and the economy a much needed shot in the arm. And interest rates are below 5 percent.

by Broderick Perkins
© 2008 DeadlineNews.Com

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

Deadline Newsroom - If you haven't looked into refinancing your mortgage under federal programs, you could be missing an opportunity to save money, keep your home and give the economy a little juice.

Federal mortgage refinance programs have given more than 2 million homeowners a better shot at holding on and the economy a much needed shot in the arm.

What's more, fixed interest rates are down and averaged 4.976 percent yesterday (with an annual percentage rate APR of 5.058 percent) for 30-year conforming mortgages, according to Erate.com.

Fifteen year mortgages were 4.373 percent with a 4.512 APR.

First American CoreLogic's "How the U.S. Consumer Has Benefited from Mortgage Finance Programs in 2009," reveals a group of 2.2 million homeowners have saved an average $120 a month on their mortgage payment -- a 10.5 percent reduction from the previous mortgage payment.

The study says the refinance activity will result in $2.3 billion in mortgage payment savings for borrowers who refinanced in the first six months of 2009. Over the next five years, the total benefit to homeowners who refinanced in 2009 will grow to $11.5 billion.

The study analyzed residential mortgage refinances that occurred between October 2008 and June 2009 to test the impact of Federal Reserve efforts to lower interest rates and to measure effect of the Making Home Affordable's Home Affordable Refinance Program (HARP).

This summer, HARP gave a hand up to more homeowners suffering mortgages larger than the value of their home.

Borrowers current on payments with Fannie Mae or Freddie Mac guaranteed loans could be eligible for refinancing into new loans even if they owe as much as 125 percent of the home's current value. The previous HARP loan-to-value limit was 105 percent.

Also, if the existing mortgage was written without mortgage insurance, the new loan won't be burdened with the extra cost. Fannie Mae and Freddie Mac loans typically require mortgage insurance when the loan is more than 80 percent of the home's value.

Of course, if the current mortgage has mortgage insurance and the new loan is 80 percent or more of the home's value, mortgage insurance comes with the deal.

The new 125 percent limit also may not apply if a second mortgage combined with the first exceeds the limit. The new deal also doesn't allow homeowners to take cash out.

Another plus from the program: The higher loan-to-value ratios were first available only to qualified borrowers who applied through their existing servicer.

That's changed.

Since Oct. 1, 2009, homeowners got the option to shop around and refinance through any Fannie or Freddie lender.

In addition to lowering your monthly payment, a refinanced mortgage can move you to a fixed or adjustable rate, shorten the term of your home loan, or let you tap home equity -- with a lender's approval.

"The quantitative easing policies of the Federal Reserve and refinance activity made possible by the Home Affordable Refinance Program (HARP) have allowed more than 2 million consumers to reduce their monthly mortgage debt obligations and put more money in their pockets," said study author, Mark Fleming, Ph.D. and First American's chief economist.

"This permanent increase in monthly income is likely to, in part, be used to increase consumption and help to drive growth as the economy rebounds. The combination of lower payments and fixed-rate terms should also reduce the risk of future foreclosure," he added.

Perhaps, but some say the economy needs more than lower rates.

"Low fixed rates are only part of the solution to our economic problems," says Nancy Osborne, chief operating officer at Erate.com.

"Home buyers can enjoy record low rates to help them qualify for more home, and this in conjunction with the government's home-buyer tax credit work to stimulate the purchase market, yet the rising unemployment rate may make purchasing a home somewhat risky for all but the most securely employed," she added.

To check your eligibility for a refinance under the new provision, go to Making Home Affordable.

To compare rates, costs and other factors by state, go to Erate.com.

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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.

Perkins is also the first Examiner to cover three beats for the Examiner.com news service:
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2.2 million refinanced mortgages saving homes, economy

ID theft can bring you to fears

More than 2 million homeowners have saved an average $120 a month on their mortgage payment -- a 10.5 percent reduction from the previous mortgage payment thanks to federal programs that have helped save homes and the economy.

by Broderick Perkins
© 2008 DeadlineNews.Com

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

Deadline Newsroom - If you haven't looked into refinancing your mortgage under federal programs, you could be missing an opportunity to save money, keep your home and give the economy a little juice.

Federal mortgage refinance programs have given more than 2 million homeowners a better shot at holding on and the economy a much needed shot in the arm.

First American CoreLogic's "How the U.S. Consumer Has Benefited from Mortgage Finance Programs in 2009," reveals a group of 2.2 million homeowners have saved an average $120 a month on their mortgage payment -- a 10.5 percent reduction from the previous mortgage payment.

The study says the refinance activity will result in $2.3 billion in mortgage payment savings for borrowers who refinanced in the first six months of 2009. Over the next five years, the total benefit to homeowners who refinanced in 2009 will grow to $11.5 billion.

The study analyzed residential mortgage refinances that occurred between October 2008 and June 2009 to test the impact of Federal Reserve efforts to lower interest rates and to measure effect of the Making Home Affordable's Home Affordable Refinance Program (HARP).

This summer, HARP gave a hand up to more homeowners suffering mortgages larger than the value of their home.

Borrowers current on payments with Fannie Mae or Freddie Mac guaranteed loans could be eligible for refinancing into new loans even if they owe as much as 125 percent of the home's current value. The previous HARP loan-to-value limit was 105 percent.

Also, if the existing mortgage was written without mortgage insurance, the new loan won't be burdened with the extra cost. Fannie Mae and Freddie Mac loans typically require mortgage insurance when the loan is more than 80 percent of the home's value.

Of course, if the current mortgage has mortgage insurance and the new loan is 80 percent or more of the home's value, mortgage insurance comes with the deal.

The new 125 percent limit also may not apply if a second mortgage combined with the first exceeds the limit. The new deal also doesn't allow homeowners to take cash out.

Another plus from the program: The higher loan-to-value ratios were first available only to qualified borrowers who applied through their existing servicer.

Since Oct. 1, 2009, homeowners got the option to shop around and refinance through any Fannie or Freddie lender.

"The quantitative easing policies of the Federal Reserve and refinance activity made possible by the Home Affordable Refinance Program (HARP) have allowed more than 2 million consumers to reduce their monthly mortgage debt obligations and put more money in their pockets," said study author, Mark Fleming, Ph.D. and First American's chief economist.

"This permanent increase in monthly income is likely to, in part, be used to increase consumption and help to drive growth as the economy rebounds. The combination of lower payments and fixed-rate terms should also reduce the risk of future foreclosure," he added.

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© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.

Perkins is also the first Examiner to cover three beats for the Examiner.com news service:
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Sell short, get $1,500 in closing costs

Credit card sharks circling

To help move more distressed properties through the clogged pipeline, the U.S. Treasury is expected to soon announce a $1,500 closing cost incentive for those who agree to short sales or deed-in-lieu deals. Lenders can net as much as $2,000.

(Be careful. What happens to your mortgage also happens to your credit score.)

by Broderick Perkins
© 2008 DeadlineNews.Com

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

Deadline Newsroom - The U.S. Treasury is poised to announce a finalized plan to expand mortgage relief efforts to include short sales.

A short sale occurs when the bank allows the sale of a home for less than the existing mortgage balance.

It's a strategy to avoid foreclosure, but banks have been more likely to let a home go into foreclosure, rather than short sell it, even if it means holding the property during moratoriums set by some jurisdictions.

That's because short sale bids often come in well below the last appraisal, real estate agents don't want the extra work involved and buyers fear a four-to-five month transaction period that could end in a no-deal scenario.

To help move more distressed properties through the clogged pipeline, the Treasury, under the Making Home Affordable's Home Affordable Modification Program (HAMP) is expected to announce a $1,500 closing cost incentive for those who agree to short sales or deed-in-lieu deals (the deed is transferred to the lender, avoiding the more costly foreclosure proceeding).

The Treasury will also pay the lender $1,000 for accepting a short sale or deed-in-lieu deal.

Earlier this year when the plan was first announced, there was also a provision to pay second lien holders up to $1,000 to relinquish their claim in such transactions.

(Be careful. What happens to your mortgage also happens to your credit score.)

Thus far, refinancing Fannie Mae or Freddie Mac mortgages under the Home Affordable Refinance Program (HARP) and HAMP mortgage modifications have been the "go-to" foreclosure options among federal mortgage relief programs.

Some 260,000 homeowners have refinanced under the HARP program since January, according to the Federal Housing Finance Agency.

FHFA also said during the second quarter this year there were 11,700 short sales and 202,200 trial loan modifications under government programs.

Get more news about short sales.


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© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.

Perkins is also the first Examiner to cover three beats for the Examiner.com news service:
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More mortgage refinance relief

Going 'butt cold' is a 'green' thing

Certain borrowers current on mortgage payments are now eligible for refinancing into new loans even if they owe as much as 125 percent of the home's current value. That's up from the previous 105 percent.

by Broderick Perkins
© 2008 DeadlineNews.Com

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

Deadline Newsroom - More homeowners suffering mortgages larger than the value of their home can now trade in their mortgage for a more affordable home loan, under a broader Making Home Affordable refinance provision.

Borrowers current on payments with Fannie Mae or Freddie Mac guaranteed loans could be eligible for refinancing into new loans even if they owe as much as 125 percent of the home's current value.

Previously, the Home Affordable Refinance Program's loan-to-value limit was 105 percent.

It's the latest Obama Administration effort to help more homeowners refinance their mortgage at a lower rate and reduce their monthly payments. A refinance can help owners buck up and keep homes that are worth less than they owe.

Also, if the existing mortgage was written without mortgage insurance, the new loan won't be burdened with the extra cost.

Fannie Mae and Freddie Mac loans typically require mortgage insurance when the loan is more than 80 percent of the home's value.

Of course, if the current mortgage has mortgage insurance and the new loan is 80 percent or more of the home's value, mortgage insurance comes with the deal.

As usual, high-coast areas including many in California, New England, New York and most resort and second home areas won't see much relief. Until the Fannie Mae Freddie Mac conforming loan limit was raised in high-priced areas last year, high-cost area homes were too expensive to be purchased under Fannie and Freddie guidelines.

The new 125 percent limit also may not apply if a second mortgage combined with the first exceeds the limit. The new deal also doesn't allow homeowners to take cash out.

The higher loan-to-value ratios are available now to qualified borrowers who apply through their existing servicer. After Oct. 1 a homeowner can shop around and refinance through any Fannie or Freddie lender.

To check your eligibility for a refinance under the new provision, go to Making Home Affordable.

• Click on the keywords below for more stories on this subject.

© 2008 DeadlineNews.Com

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Get "News that really hits home!" for your Web site or blog from the DeadlineNewsGroup.Com.

You are reading a sample of "News that really hits home!", now available from several beats and published in a growing number of locations.

Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop.

Perkins is also the first Examiner to cover three beats for the Examiner.com news service:
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• National Real Estate Examiner

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Ask foreclosing lender 'produce the note,' buy some time

Tell the lender, "Produce the note!'

Some struggling homeowners facing foreclosure and looking to get an aloof lender's attention, are using a little guerilla "gotcha" tactic to at least delay the procedure.
by Broderick Perkins
© 2008 DeadlineNews.Com


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

Deadline Newsroom - Some struggling homeowners facing foreclosure and looking to get an aloof lender's attention, are using a little guerilla "gotcha" tactic to at least delay the procedure.

A delay could give a homeowner time to financially rescue their home from repossession or put pressure on the lender to negotiate for a refinance or mortgage modification.

Hundreds of thousands of original mortgage notes are stored away in some distant warehouse or, perhaps, even destroyed.

Asking the lender directly to produce the original note or filing a legal request can shake things up, consumer advocates say.



Critics dismiss the tactic as only a stalling strategy. The original note is electronically retained and will eventually be found.

Judges are likely to accept the digital documents, or even other lender rendered documents as evidence.

But that could also take time.

"This process is not intended to help you get your house for free. The primary goal is to delay the foreclosure and put pressure on the lender to negotiate. Despite all the hype about lenders wanting to help homeowners avoid foreclosure, most borrowers know that’s not the reality, says Chris Hoyer, a Tampa lawyer and publisher of the Consumer Warning Network Web site.

The network is promoting the produce-the-note tactic and offers free court filing documents and other step-by-step information to help homeowners use the strategy.

Hoyer says an attorney in Rhode Island is successfully using the tactic to delay foreclosure proceedings.

He also reports as many as 14 foreclosure cases in Ohio brought by investors were dismissed after lenders failed to produce proof they owned properties they were trying to seize.



"Everybody should use it. Everybody should put the lender to the task of establishing that it owns the debt that it claims you owe it," says Hoyer.

Don't become a foreclosure victim. Read more foreclosure news that really hits home.

© 2008 DeadlineNews.Com

Need a break from doom and gloom in the housing market? Get off the beaten news track and stop by the DeadlineNews Group's Offbeat News Examiner outlet for a few laughs.

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Broderick Perkins, an award-winning consumer journalist, parlayed 30 years of old-school journalism into a digital real estate news service, the San Jose, CA-based DeadlineNews Group, including DeadlineNews.Com, a real estate news and consulting service and Web site, and the Deadline Newsroom, DeadlineNews.Com's news back shop. Perkins is also a National Real Estate Examiner. All the news that really hits home from three locations -- that's location, location, location!

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