Lower Rates Boost Mortgage Applications
Mortgage applications rose 14.6 percent last week on a seasonally adjusted basis compared with the previous week. They were up 15.5 percent on an unadjusted basis.
Much of the increase was in refinances as rates dropped below 5 percent, although the purchase index increased 11.7 percent compared with the previous week and was just 9.8 percent lower than the same week one year ago.
“Purchase activity remains subdued, with application volumes remaining within the narrow range seen in the last few months,” said Michael Fratantoni, MBA’s vice president of research and economics.
Both 30- and 15-year fixed-rate mortgages were below 5 percent:
• 30-year fixed-rate mortgages decreased to 4.95 percent from 5.03 percent.
• 15-year fixed-rate mortgages decreased to 4.27 percent from 4.35 percent.
• 1-year ARMs decreased to 6.77 percent from 6.80 percent.
Source: Mortgage Bankers Association (03/03/2010)
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Fannie, Freddie Go After Bad Loans
Accountants at Fannie Mae and Freddie Mac are auditing mortgage files to uncover loans with improper documentation about a borrower’s income, and then forcing banks and savings and loans to buy the loans back.
Freddie required lenders to buy back $2.7 billion of loans in the first nine months of 2009. Fannie Mae won’t disclose its figures, but the mortgage trade publication Inside Mortgage Finance said Fannie made $4.3 billion in loan-repurchase requests in the first nine months of 2009.
One result is that banks are underwriting mortgage loans even more carefully than they were last year, which can further slow the lending process.
“If you’re being hit with a lot of repurchases very suddenly, the easiest thing to do is to tighten your standards rapidly,” said Glenn Boyd, a Barclays analyst.
Source: The Wall Street Journal, Nick Timiraos (01/30/2010)
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30-Year Mortgage Rate Dips Slightly
Long-term mortgage interest fell for the second-straight week as the 30-year fixed rate settled at an average of 5.06 percent compared to 5.09 percent a week ago, according to Freddie Mac.
Other rates decreased as well: Fifteen-year fixed loans dipped from 4.50 to 4.45 percent, and five-year ARMs sank from 4.44 percent to 4.32 percent. However, rates for one-year ARMs rose to 4.39 percent from 4.31 percent
Source: Chicago Sun-Times (01/15/2010)
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5 Recommendations for Navigating Today’s Mortgage and Housing Markets
RISMEDIA, May 9, 2009-”There are five distinct strategies that can help home owners, buyers, and sellers successfully navigate today’s turbulent mortgage and housing markets,” said Gibran Nicholas, chairman of the CMPS Institute, an organization that certifies mortgage bankers and brokers.
1. Understand and Utilize the New Tax Credits
2. Consider Paying Points for Your Mortgage Transaction
3. Carefully Structure Your Real Estate Short Sale Transaction
4. Utilize the Special Options Available for Seniors Age 62 or Older.
5. Carefully Interview Your Mortgage Professional.
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3 Good Places to Hunt for a Mortgage
Getting a mortgage isn’t easy these days, particularly since many banks have tightened crediting, which is ultimately keeping some buyers out.
More borrowers are turning online to shop for a mortgage, in which they can shop anonymously and still get accurate rates.
According to a recent article on CNNMoney.com, here are three Web sites that will get mortgage-shoppers started (these sites act as a referral source and borrowers will still need to close with a bank or mortgage broker).
* Zillow.com: The best thing about this site is the ability to read reports of other people’s experiences with a lender.
* MortgageMarvel.com: This site updates mortgage rates in real time, so it’s a good place to find deals.
* LendingTree.com: This site matches a potential borrower with four lenders who will offer their best rates. The downside is that lenders will pull credit scores, which could hurt a borrower’s credit.
Regardless on what bank or mortgage broker borrowers use for their mortgage, they should expect to pay an average of $3,118 in fees, according to the article.
Source: CNNMoney.com, Beth Braverman (06/09/2009)
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Freddie Mac’s refinance policy drawing fire.
Brokers, small lenders say they are being cut out of Obama’s plan
WASHINGTON – Mortgage brokers and small lenders say they’ve been left out of a big part of the Obama administration’s plan to help borrowers refinance their home loans and take advantage of near record-low interest rates.
The new guidelines released earlier this month are different for Fannie Mae and Freddie Mac, the government-controlled companies that own or guarantee almost 31 million mortgages — more than half of all U.S home loans. Most strikingly, mortgage loans held by Freddie Mac can only be refinanced by the company that currently collects payments on the loan, known as the mortgage servicer. Full Article.
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Finding the Best Mortgage Deal Takes Work.
Home buyers who investigate mortgage options themselves as opposed to using a broker are likelier to get a better deal, according to a study for the Department of Housing and Urban Development published last year.
The study found that borrowers paid about $300 to $425 more in fees when they worked with a broker as opposed to working directly with a lender.
But comparison shopping can be tricky. Home buyers should try to devote a whole day to comparison shopping and include at least one credit union, a community bank, multiple national banks and an investment firms.
They should compare one type of loan at a time–for instance, a 30-year, fixed rate with no points. Their research should include a request for a guarantee that both the rate and the good-faith estimate will be exactly as initially presented. This standard could be difficult for a buyer to find, but it’s worth trying to find it, experts say.
Source: The New York Times, Ron Lieber (04/04/2009)
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Homeowners opt to refinance and save.
The reasons to refinance your home, or buy a new one, just keep getting better.
This week, the Federal Reserve announced it will spend up to $300 billion over the next six months to buy long-term government bonds, a new step aimed at lifting the country out of recession by lowering rates on mortgages and other consumer debt. It also left the short-term bank lending rate at a record low of between zero and 0.25 percent.
Those announcements have the phones ringing at local banks with people now locking into rates.
“If you can save a point on your mortgage, it’s time to do it,” said Andrew Siders, president of Vista Bank. “Things are moving.”
The anticipation of lower interest rates, coupled with a better week on the stock market, is raising optimism, Siders said. “As government gets more positive, the consumer is going to get more positive.” Full Story.
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