From Realtor Magazine Online, Daily Real Estate News February 29, 2008
Freddie Mac has been tightening underwriting guidelines and says that the quality of mortgages sold into its bond program has improved since November, its Chief Business Officer Patti Cook said.
"While it's too early to claim victory, we have seen a meaningful improvement in the quality of our deliveries," Cook said on a conference call.
Freddie Mac’s share of the mortgage bond market has risen as other investment sources have dried up. That left Freddie facing record loses in the 4th quarter of 2007 and expecting to lose as much as $5.1 billion in 2008 and 2009.
Source: Reuters News (02/28/08)
Friday, February 29, 2008
Rates Rise for Third Week in Row
From Realtor Magazine Online, Daily Real Estate News February 29, 2008
Freddie Mac reports a jump in the 30-year fixed mortgage rate to a more than three-month high of 6.24 percent during the week ended Feb. 28. The previous week rates stood at 6.04 percent. The jump marked the third consecutive weekly increase.
Interest on 15-year fixed-rate mortgages climbed to 5.72 percent from 5.64 percent over the same period. Meanwhile, the five-year adjustable mortgage rate edged up to 5.43 percent from 5.37 percent. The one-year ARM shot up to 5.11 percent from 4.98 percent.
Source: San Diego Union-Tribune (02/29/08)
Freddie Mac reports a jump in the 30-year fixed mortgage rate to a more than three-month high of 6.24 percent during the week ended Feb. 28. The previous week rates stood at 6.04 percent. The jump marked the third consecutive weekly increase.
Interest on 15-year fixed-rate mortgages climbed to 5.72 percent from 5.64 percent over the same period. Meanwhile, the five-year adjustable mortgage rate edged up to 5.43 percent from 5.37 percent. The one-year ARM shot up to 5.11 percent from 4.98 percent.
Source: San Diego Union-Tribune (02/29/08)
Monday, February 25, 2008
Bills Offer Fixes to Home-Loan Crisis
From Realtor Magazine Online, Daily Real Estate News February 25, 2008
Congress is considering several proposals to improve prospects for the housing market.
A bill likely to be debated on the Senate floor Tuesday includes a proposed revision to the U.S. bankruptcy code that would allow judges to cut interest rates and reduce what is owed on troubled borrowers' mortgages. Lenders and many Republicans fiercely oppose the measure.
The proposal also includes $200 million for foreclosure-prevention counseling services and an allowance for states to issue more tax-exempt bonds so housing agencies can help home owners refinance.
Other bills under consideration include a proposal to create a federal corporation, funded with $20 billion, to buy distressed mortgages and help home owners refinance. Another measure would shield banks from lawsuits brought by investors whose holdings of mortgage securities are negatively affected by changes in loan terms or other measures intended to help at-risk borrowers.
The federal Office of Thrift Supervision has proposed a plan that would help 8 million home owners with “upside-down” mortgages to refinance into government-backed loans covering the home’s current value. To make up the difference, lenders would receive a special certificate equivalent to the remainder of the balance owed that they could redeem if the home is sold at a higher price.
Source: Dow Jones International News (02/25/08)
Congress is considering several proposals to improve prospects for the housing market.
A bill likely to be debated on the Senate floor Tuesday includes a proposed revision to the U.S. bankruptcy code that would allow judges to cut interest rates and reduce what is owed on troubled borrowers' mortgages. Lenders and many Republicans fiercely oppose the measure.
The proposal also includes $200 million for foreclosure-prevention counseling services and an allowance for states to issue more tax-exempt bonds so housing agencies can help home owners refinance.
Other bills under consideration include a proposal to create a federal corporation, funded with $20 billion, to buy distressed mortgages and help home owners refinance. Another measure would shield banks from lawsuits brought by investors whose holdings of mortgage securities are negatively affected by changes in loan terms or other measures intended to help at-risk borrowers.
The federal Office of Thrift Supervision has proposed a plan that would help 8 million home owners with “upside-down” mortgages to refinance into government-backed loans covering the home’s current value. To make up the difference, lenders would receive a special certificate equivalent to the remainder of the balance owed that they could redeem if the home is sold at a higher price.
Source: Dow Jones International News (02/25/08)
Friday, February 22, 2008
Don't Fear Falling Prices
From Realtor Magazine Online, Daily Real Estate News February 22, 2008
Yale Professor Robert Shiller, whose Case-Shiller 20-city home price index has become an industry standard, says people shouldn’t fear gradually falling home prices.
"There's nothing troubling about a gradual correction of home prices. If we keep our incomes at the current level and home prices go down we are richer, we can buy more housing," Shiller says.
But if home prices fall suddenly, Shiller says that could undermine housing as well as consumer confidence and the economy.
There has been a misperception that houses will constantly appreciate, Shiller says. "Sometimes people will try to imagine that we can have both high home prices and affordable housing. But I can tell you that doesn't add up," he says.
"You either have high home prices or lower home prices. And lower home prices are what we want, and people shouldn't be afraid of that," Shiller says. "Most of us care about our children and grandchildren, and these people have to buy houses so why would we want high home prices? We want economic growth, we don't want high home prices."
Source: Reuters News, Lynn Adler (02/21/08)
Yale Professor Robert Shiller, whose Case-Shiller 20-city home price index has become an industry standard, says people shouldn’t fear gradually falling home prices.
"There's nothing troubling about a gradual correction of home prices. If we keep our incomes at the current level and home prices go down we are richer, we can buy more housing," Shiller says.
But if home prices fall suddenly, Shiller says that could undermine housing as well as consumer confidence and the economy.
There has been a misperception that houses will constantly appreciate, Shiller says. "Sometimes people will try to imagine that we can have both high home prices and affordable housing. But I can tell you that doesn't add up," he says.
"You either have high home prices or lower home prices. And lower home prices are what we want, and people shouldn't be afraid of that," Shiller says. "Most of us care about our children and grandchildren, and these people have to buy houses so why would we want high home prices? We want economic growth, we don't want high home prices."
Source: Reuters News, Lynn Adler (02/21/08)
30-Year Rates Inch Above 6 Percent
From Realtor Magazine Online, Daily Real Estate News February 22, 2008
Fueled primarily by inflation concerns, interest on long-term mortgage rates moved higher for the week. Freddie Mac reported a rise to 6.04 percent from 5.72 percent last week on 30-year fixed loans, which broke the 6-percent threshold for the first time in seven weeks.
Rates on 15-year loans, which are popular in refinance deals, bumped up to 5.64 percent from 5.25 percent; while five-year adjustable-rate mortgages settled at 5.37 percent, up from 5.19 percent.
One-year ARMs, however, resisted the downward trend and slipped to 4.98 percent from 5.03 percent in the week-to-week survey.
Source: Baltimore Sun (02/22/08)
Fueled primarily by inflation concerns, interest on long-term mortgage rates moved higher for the week. Freddie Mac reported a rise to 6.04 percent from 5.72 percent last week on 30-year fixed loans, which broke the 6-percent threshold for the first time in seven weeks.
Rates on 15-year loans, which are popular in refinance deals, bumped up to 5.64 percent from 5.25 percent; while five-year adjustable-rate mortgages settled at 5.37 percent, up from 5.19 percent.
One-year ARMs, however, resisted the downward trend and slipped to 4.98 percent from 5.03 percent in the week-to-week survey.
Source: Baltimore Sun (02/22/08)
Thursday, February 21, 2008
Declining Dollar Hurts Expat Renters
From Realtor Magazine Online, Daily Real Estate News February 21, 2008
The declining dollar is making it more expensive for Americans to rent homes in the centers of world commerce. Rent for a two-bedroom, unfurnished apartment in a neighborhood that residents consider good, but not premium, has escalated about 3 percent to 6 percent in the last year while the dollar has declined a record amount, leaving many renters facing what feels like a 30 percent rental increase.
Here are the top-10 most expensive city housing markets in the world:
- Hong Kong, $6,398 a month
- Tokyo, Japan, $4,102
- Moscow, $4,000
- New York City, $4,000
- London, $3,889
- Seoul, $3,425
- Geneva, $2,840
- Beijing, $2,840
- Paris, $2,634
- Osaka, $2,564
Source: Forbes, Matt Woolsey (02/12/2008)
The declining dollar is making it more expensive for Americans to rent homes in the centers of world commerce. Rent for a two-bedroom, unfurnished apartment in a neighborhood that residents consider good, but not premium, has escalated about 3 percent to 6 percent in the last year while the dollar has declined a record amount, leaving many renters facing what feels like a 30 percent rental increase.
Here are the top-10 most expensive city housing markets in the world:
- Hong Kong, $6,398 a month
- Tokyo, Japan, $4,102
- Moscow, $4,000
- New York City, $4,000
- London, $3,889
- Seoul, $3,425
- Geneva, $2,840
- Beijing, $2,840
- Paris, $2,634
- Osaka, $2,564
Source: Forbes, Matt Woolsey (02/12/2008)
Calif.: More Can Afford to Buy Homes
From Realtor Magazine Online, Daily Real Estate News February 21, 2008
More people renting homes or apartments in the Golden State can afford to purchase an entry-level house, according to a study by the CALIFORNIA ASSOCIATION OF REALTORS ®.
About a third of households in the fourth quarter of 2007 would have been able to contribute a 10-percent down payment and be approved for an adjustable-rate loan at 6.21 percent on a starter property. In the same three months of 2006, just 25 percent of people met those guidelines for purchasing a home priced at 85 percent of the local median home price.
The downturn in California's housing market is cited as the main factor for the increase in affordability. The most affordable area of the state was in the desert north of Los Angeles, though Sacramento County was very close. By comparison, just 20 percent of households were able to afford to live in Monterey, where the price of an entry-level home is approaching $600,000.
Source: North County Times (CA) (02/19/08)
More people renting homes or apartments in the Golden State can afford to purchase an entry-level house, according to a study by the CALIFORNIA ASSOCIATION OF REALTORS ®.
About a third of households in the fourth quarter of 2007 would have been able to contribute a 10-percent down payment and be approved for an adjustable-rate loan at 6.21 percent on a starter property. In the same three months of 2006, just 25 percent of people met those guidelines for purchasing a home priced at 85 percent of the local median home price.
The downturn in California's housing market is cited as the main factor for the increase in affordability. The most affordable area of the state was in the desert north of Los Angeles, though Sacramento County was very close. By comparison, just 20 percent of households were able to afford to live in Monterey, where the price of an entry-level home is approaching $600,000.
Source: North County Times (CA) (02/19/08)
Wednesday, February 20, 2008
Builder Confidence Rises Slightly
From Realtor Magazine Online, Daily Real Estate News February 20, 2008
Builder confidence in the market rose in January, according to the National Association of Home Builders//Wells Fargo Housing Market Index.
The index, which gauges current sales conditions for single-family homes, rose one point to 20, while the index gauging sales expectations for the next six months declined one point to 27. Meanwhile, the index gauging traffic of prospective buyers rose five points to 19, its highest level since July of 2007.
The overall optimism was driven by increasing traffic of prospective buyers through model homes, the association reported.
"While builders remain very cautious about the outlook for new-home sales, given today's economic environment, the fact that more consumers appear to be checking out their options is a good sign," says Sandy Dunn, a home builder from Point Pleasant, W. Va., and the newly elected 2008 president of the National Association of Home Builders.
The builders' chief economist David Seiders says the membership was encouraged by the increasing interest but still cautious.
"Builders know there's a difference between people looking and people buying, and their current outlook remains quite subdued," Seiders says. "Additional stimulative measures on the legislative and policy side are definitely needed to bolster consumer confidence and help bring about a housing and economic recovery."
Source: National Association of Home Builders, Paul Lopez (02/20/08)
Builder confidence in the market rose in January, according to the National Association of Home Builders//Wells Fargo Housing Market Index.
The index, which gauges current sales conditions for single-family homes, rose one point to 20, while the index gauging sales expectations for the next six months declined one point to 27. Meanwhile, the index gauging traffic of prospective buyers rose five points to 19, its highest level since July of 2007.
The overall optimism was driven by increasing traffic of prospective buyers through model homes, the association reported.
"While builders remain very cautious about the outlook for new-home sales, given today's economic environment, the fact that more consumers appear to be checking out their options is a good sign," says Sandy Dunn, a home builder from Point Pleasant, W. Va., and the newly elected 2008 president of the National Association of Home Builders.
The builders' chief economist David Seiders says the membership was encouraged by the increasing interest but still cautious.
"Builders know there's a difference between people looking and people buying, and their current outlook remains quite subdued," Seiders says. "Additional stimulative measures on the legislative and policy side are definitely needed to bolster consumer confidence and help bring about a housing and economic recovery."
Source: National Association of Home Builders, Paul Lopez (02/20/08)
Foreign Buyers Look to U.S. Housing
From Realtor Magazine Online, Daily Real Estate News February 20, 2008
Foreign buyers are snapping up property in Florida.
The strength of the Canadian dollar, the euro, and other foreign currencies, on top of a slowdown in the U.S. real estate market, is making the United States an enticing place for foreigners to buy property.
In South Florida, real estate practitioners say that buyers are especially coming from continental Europe, Scandinavia, and Canada. Miami Beach's famous South Beach district is luring Italians, French, and German buyers, while many Russian buyers are flocking to Sunny Isles Beach to the north. And Venezuelan buyers are looking for housing deals in Doral, to the west.
Brigitte Benichay, who is president of Rich Homes in Miami, says her European customers don’t need mortgages. "Eighty percent of the ones I meet want to pay all cash. Business is very strong," she says.
Source: Reuters News, Jim Loney (02/19/08)
Foreign buyers are snapping up property in Florida.
The strength of the Canadian dollar, the euro, and other foreign currencies, on top of a slowdown in the U.S. real estate market, is making the United States an enticing place for foreigners to buy property.
In South Florida, real estate practitioners say that buyers are especially coming from continental Europe, Scandinavia, and Canada. Miami Beach's famous South Beach district is luring Italians, French, and German buyers, while many Russian buyers are flocking to Sunny Isles Beach to the north. And Venezuelan buyers are looking for housing deals in Doral, to the west.
Brigitte Benichay, who is president of Rich Homes in Miami, says her European customers don’t need mortgages. "Eighty percent of the ones I meet want to pay all cash. Business is very strong," she says.
Source: Reuters News, Jim Loney (02/19/08)
How New FHA, GSE Loan Limits Impact You
From Realtor Magazine Online, Daily Real Estate News February 20, 2008
Last week, President Bush signed into law a $152 billion economic stimulus bill that includes temporary increases in loan limits for the government sponsored enterprises (GSEs) — Fannie Mae and Freddie Mac — and the Federal Housing Administration until Dec. 31. But what does this mean for you and your clients?
The NATIONAL ASSOCIATION OF REALTORS® launched a new resource Web page, What Economic Stimulus Means for REALTORS®, devoted to educating you about the new loan limits, which loans are eligible, and the implementation of these temporary limit increases.
NAR has developed estimates of the FHA and GSE single-family loan limits by state and county so that you can get a sense of how the loan limits will rise in your markets.
"The importance of immediately implementing the new limits cannot be overstated," said NAR President Richard Gaylord last week in a public statement. (Listen and watch Gaylord's video podcast on the topic at REALTOR.org). "Mortgage markets throughout the country need liquidity. Our research indicates that the increased FHA loan limits will help an additional 138,000 Americans achieve the dream of homeownership and will allow nearly 200,000 homeowners to refinance and potentially keep their homes.”
The FHA limit will increase to as much as $729,750 in high cost areas (to 125 percent of local median home prices). The GSE limit will jump to $729,750 for loans; currently Fannie Mae and Freddie Mac loans are capped at $417,000.
Eligible loans from FHA include mortgages that were issued for credit approval on or before Dec. 31, 2008. GSE loans that are eligible include loans that originated after July 1, 2007 to Dec. 31, 2008.
The U.S. Department of Housing and Urban Development is required to publish the new mortgage limits by March 14; the limits will be effective for FHA immediately upon publication.
Visit REALTOR.org for more on the FHA and GSE changes so that you can educate yourself and, in turn, your clients about their options. "This will be a major stimulus for the housing industry and for people who want to own a home,” Gaylord said.
Last week, President Bush signed into law a $152 billion economic stimulus bill that includes temporary increases in loan limits for the government sponsored enterprises (GSEs) — Fannie Mae and Freddie Mac — and the Federal Housing Administration until Dec. 31. But what does this mean for you and your clients?
The NATIONAL ASSOCIATION OF REALTORS® launched a new resource Web page, What Economic Stimulus Means for REALTORS®, devoted to educating you about the new loan limits, which loans are eligible, and the implementation of these temporary limit increases.
NAR has developed estimates of the FHA and GSE single-family loan limits by state and county so that you can get a sense of how the loan limits will rise in your markets.
"The importance of immediately implementing the new limits cannot be overstated," said NAR President Richard Gaylord last week in a public statement. (Listen and watch Gaylord's video podcast on the topic at REALTOR.org). "Mortgage markets throughout the country need liquidity. Our research indicates that the increased FHA loan limits will help an additional 138,000 Americans achieve the dream of homeownership and will allow nearly 200,000 homeowners to refinance and potentially keep their homes.”
The FHA limit will increase to as much as $729,750 in high cost areas (to 125 percent of local median home prices). The GSE limit will jump to $729,750 for loans; currently Fannie Mae and Freddie Mac loans are capped at $417,000.
Eligible loans from FHA include mortgages that were issued for credit approval on or before Dec. 31, 2008. GSE loans that are eligible include loans that originated after July 1, 2007 to Dec. 31, 2008.
The U.S. Department of Housing and Urban Development is required to publish the new mortgage limits by March 14; the limits will be effective for FHA immediately upon publication.
Visit REALTOR.org for more on the FHA and GSE changes so that you can educate yourself and, in turn, your clients about their options. "This will be a major stimulus for the housing industry and for people who want to own a home,” Gaylord said.
Friday, February 15, 2008
Housing Stocks Become Hot Item
From Realtor Magazine Online, Daily Real Estate News February 15, 2008
Investors who bought housing stocks at the beginning of the year after two and a half years of steep declines are being rewarded for their prescience.
As the Federal Reserve started cutting interest rates, the stocks of home builders Toll Brothers, Lennar, and Hovnanian rose 40 percent, 52 percent, and 96 percent respectively.
Some analysts believe these increases portend sunnier days ahead for the entire housing industry.
"What took us into this malaise will be what takes us out," Bill Miller, portfolio manager for the Legg Mason Value Trust, wrote this week in a letter to the fund's shareholders. "Housing stocks peaked in the summer of 2005 and were the first group to start down. Now housing stocks are one of the few areas in the market that are up for the year."
"Stocks are predictive of the industry about six to nine months ahead of time," adds Justin Walters of Bespoke Investment Group in Harrison, N.Y. He says he is bullish on the sector, noting that house-price futures at the Chicago Mercantile Exchange have been forecasting a bottom in house prices in many U.S. markets toward the end of 2008.
Source: Fortune, Colin Barr (02/14/08)
Investors who bought housing stocks at the beginning of the year after two and a half years of steep declines are being rewarded for their prescience.
As the Federal Reserve started cutting interest rates, the stocks of home builders Toll Brothers, Lennar, and Hovnanian rose 40 percent, 52 percent, and 96 percent respectively.
Some analysts believe these increases portend sunnier days ahead for the entire housing industry.
"What took us into this malaise will be what takes us out," Bill Miller, portfolio manager for the Legg Mason Value Trust, wrote this week in a letter to the fund's shareholders. "Housing stocks peaked in the summer of 2005 and were the first group to start down. Now housing stocks are one of the few areas in the market that are up for the year."
"Stocks are predictive of the industry about six to nine months ahead of time," adds Justin Walters of Bespoke Investment Group in Harrison, N.Y. He says he is bullish on the sector, noting that house-price futures at the Chicago Mercantile Exchange have been forecasting a bottom in house prices in many U.S. markets toward the end of 2008.
Source: Fortune, Colin Barr (02/14/08)
Congress Moves to Boost Housing
From Realtor Magazine Online, Daily Real Estate News February 15, 2008
Congress is eyeing more incentives as ways to address problems in the housing market — a growing issue in this contentious election year.
Top Democrats, who successfully backed the just-passed economic-stimulus bill, say they will push through a second measure that — among other things — will allow bankruptcy judges to alter the terms of certain mortgages.
Another measure under consideration is a tax break allowing companies with operating losses this year or the two previous years to apply them to past years for a refund. This idea is popular with home builders.
A third proposal would allot an additional $10 billion in bonding authority so housing-finance agencies can give more help to people refinancing subprime loans or first-time buyers. President Bush recently backed this idea.
Lawmakers also are considering $4 billion in block grants so localities with high foreclosure rates can buy and rehabilitate unoccupied property and $200 million for pre-foreclosure housing counselors.
Source: The Wall Street Journal, Sarah Lueck (02/15/08)
Congress is eyeing more incentives as ways to address problems in the housing market — a growing issue in this contentious election year.
Top Democrats, who successfully backed the just-passed economic-stimulus bill, say they will push through a second measure that — among other things — will allow bankruptcy judges to alter the terms of certain mortgages.
Another measure under consideration is a tax break allowing companies with operating losses this year or the two previous years to apply them to past years for a refund. This idea is popular with home builders.
A third proposal would allot an additional $10 billion in bonding authority so housing-finance agencies can give more help to people refinancing subprime loans or first-time buyers. President Bush recently backed this idea.
Lawmakers also are considering $4 billion in block grants so localities with high foreclosure rates can buy and rehabilitate unoccupied property and $200 million for pre-foreclosure housing counselors.
Source: The Wall Street Journal, Sarah Lueck (02/15/08)
30-Year Mortgage Rates Climb
From Realtor Magazine Online, Daily Real Estate News February 15, 2008
Freddie Mac reports a jump in the 30-year fixed mortgage rate to 5.72 percent during the week ended Feb. 14, from 5.67 percent the prior week.
Interest on 15-year fixed loans, meanwhile, climbed to 5.25 percent from 5.15 percent over the same period.
Rates dropped, however, for five-year adjustable mortgages to 5.19 percent from 5.21 percent; while the one-year ARM held steady at 5.03 percent.
Freddie Mac chief economist Frank Nothaft says economic uncertainty is responsible for the movement in mortgage rates, noting that some borrowers are finding it difficult to obtain mortgages due to stricter credit standards.
Source: San Jose Mercury News, Martin Crutsinger (Calif.) (02/15/08)
Freddie Mac reports a jump in the 30-year fixed mortgage rate to 5.72 percent during the week ended Feb. 14, from 5.67 percent the prior week.
Interest on 15-year fixed loans, meanwhile, climbed to 5.25 percent from 5.15 percent over the same period.
Rates dropped, however, for five-year adjustable mortgages to 5.19 percent from 5.21 percent; while the one-year ARM held steady at 5.03 percent.
Freddie Mac chief economist Frank Nothaft says economic uncertainty is responsible for the movement in mortgage rates, noting that some borrowers are finding it difficult to obtain mortgages due to stricter credit standards.
Source: San Jose Mercury News, Martin Crutsinger (Calif.) (02/15/08)
Senate Considers Limit on 1031 Exchanges
From N.A.R. and Realtor.org
The Senate version of a major Farm Bill (H.R. 2419) included a limitation on some like-kind exchanges. This bill passed the House earlier in 2007. The proposed modification would disqualify exchanges of "improved real property" with "unimproved agriculture real property." Thus, the owner of a building could not use the 1031 exchange technique to acquire "unimproved agriculture real property." The provision would have the effect of imposing a "toll charge" on any person selling the affected property. The toll charge would take the form of either a reduction in the price that the seller could obtain on sale or the transaction would require a selling farmer/rancher to pay tax on the transaction.
NAR vigorously opposed this provision in the Farm bill. Other organizations followed NAR's lead. NAR is cautiously optimistic that this provision will not be included in any final version of the Farm Bill. Currently, a conference committee is scheduled to convene later in the spring to iron out the many differences in the legislation.
The Senate version of a major Farm Bill (H.R. 2419) included a limitation on some like-kind exchanges. This bill passed the House earlier in 2007. The proposed modification would disqualify exchanges of "improved real property" with "unimproved agriculture real property." Thus, the owner of a building could not use the 1031 exchange technique to acquire "unimproved agriculture real property." The provision would have the effect of imposing a "toll charge" on any person selling the affected property. The toll charge would take the form of either a reduction in the price that the seller could obtain on sale or the transaction would require a selling farmer/rancher to pay tax on the transaction.
NAR vigorously opposed this provision in the Farm bill. Other organizations followed NAR's lead. NAR is cautiously optimistic that this provision will not be included in any final version of the Farm Bill. Currently, a conference committee is scheduled to convene later in the spring to iron out the many differences in the legislation.
Wednesday, February 13, 2008
PRESIDENT SIGNS $168 BILLION ECONOMIC STIMULUS BILL
From C.A.R. Newsline, Wednesday, February 13, 2008
President Bush today signed off on the $168 billion stimulus package approved by Congress last week, which, in addition to tax rebates for millions of working Americans and business owners, includes a vital, but temporary increase in the conforming loan limit. The economic stimulus package will allow the Federal Housing Administration, as well as Fannie Mae and Freddie Mac to offer mortgages above the current conforming loan limit of $417,000 to as much as $729,750 in high-cost areas for loans originated between July 1, 2007 and Dec. 31, 2008.
"The actions of Congress and our president represent a significant victory for homeowners across the state and nationwide," said C.A.R. President William E. Brown. "C.A.R. has long fought for increases to the conforming loan limit in order to close the gap for would-be home buyers in high-cost areas, such as California, and, with the spotlight now fully shining on this important issue, will continue those efforts and push for permanent changes beyond Dec. 31."
President Bush today signed off on the $168 billion stimulus package approved by Congress last week, which, in addition to tax rebates for millions of working Americans and business owners, includes a vital, but temporary increase in the conforming loan limit. The economic stimulus package will allow the Federal Housing Administration, as well as Fannie Mae and Freddie Mac to offer mortgages above the current conforming loan limit of $417,000 to as much as $729,750 in high-cost areas for loans originated between July 1, 2007 and Dec. 31, 2008.
"The actions of Congress and our president represent a significant victory for homeowners across the state and nationwide," said C.A.R. President William E. Brown. "C.A.R. has long fought for increases to the conforming loan limit in order to close the gap for would-be home buyers in high-cost areas, such as California, and, with the spotlight now fully shining on this important issue, will continue those efforts and push for permanent changes beyond Dec. 31."
Mortgage Applications Slide Last Week (But Still Brisk)
From Realtor Magazine Online, Daily Real Estate News February 13, 2008
The number of mortgage applications declined last week compared with the previous week, but business was still brisk, according to the Mortgage Bankers Association weekly mortgage applications survey released Wednesday.
Loan volume was 1063.5, a decrease of 2.1 percent on a seasonally adjusted basis from 1086.6 a week ago. On an unadjusted basis, the index decreased 0.4 percent compared with the previous week, but was up 65 percent compared with the same week a year ago.
The refinance share of mortgage activity decreased to 67.4 percent of total applications from 69.2 percent last week.
Mortgage rates, which increased slightly, were probably behind the small decline:
- 30-year fixed-rate mortgages increased to 5.72 percent from 5.61 percent.
- 15-year fixed-rate mortgages increased to 5.18 percent from 5.09 percent.
- 1-year ARMs increased to 5.72 percent from 5.62 percent.
Source: Mortgage Bankers Association (02/13/2008)
The number of mortgage applications declined last week compared with the previous week, but business was still brisk, according to the Mortgage Bankers Association weekly mortgage applications survey released Wednesday.
Loan volume was 1063.5, a decrease of 2.1 percent on a seasonally adjusted basis from 1086.6 a week ago. On an unadjusted basis, the index decreased 0.4 percent compared with the previous week, but was up 65 percent compared with the same week a year ago.
The refinance share of mortgage activity decreased to 67.4 percent of total applications from 69.2 percent last week.
Mortgage rates, which increased slightly, were probably behind the small decline:
- 30-year fixed-rate mortgages increased to 5.72 percent from 5.61 percent.
- 15-year fixed-rate mortgages increased to 5.18 percent from 5.09 percent.
- 1-year ARMs increased to 5.72 percent from 5.62 percent.
Source: Mortgage Bankers Association (02/13/2008)
Cities Where Values Have Fallen the Most
From Realtor Magazine Online, Daily Real Estate News February 13, 2008
While resetting rates are causing some foreclosures, falling home prices are also playing a big part in the real estate malaise.
Home owners who owe thousands more on their homes than they are currently worth find themselves unable to refinance and unable to sell at a price that will come close to covering what they owe on the mortgage.
However, according to ZipRealty, a real estate tracking firm that aggregates multiple listing service data, the decline may be reaching bottom with inventories starting to decline nationwide. Even in Sacramento and Las Vegas, inventory numbers have started to fall, if only marginally, ZipRealty says.
The following are the top 10 cities where prices have fallen the most in the last year, according to ZipRealty.
1. Sacramento, Calif.: - 18.5 percent
2. Las Vegas: - 17.2 percent
3. San Diego: - 17.1 percent
4. Tampa, Fla.: - 11.7 percent
5. Los Angeles: - 10.7 percent
6. Miami: - 10.6 percent
7. Phoenix: - 9.5 percent
8. Jacksonville, Fla.: - 8.7 percent
9. Detroit: - 7.7 percent
10. Atlanta: - 7.1 percent
Source: Forbes, Matt Woolsey (02/12/08)
While resetting rates are causing some foreclosures, falling home prices are also playing a big part in the real estate malaise.
Home owners who owe thousands more on their homes than they are currently worth find themselves unable to refinance and unable to sell at a price that will come close to covering what they owe on the mortgage.
However, according to ZipRealty, a real estate tracking firm that aggregates multiple listing service data, the decline may be reaching bottom with inventories starting to decline nationwide. Even in Sacramento and Las Vegas, inventory numbers have started to fall, if only marginally, ZipRealty says.
The following are the top 10 cities where prices have fallen the most in the last year, according to ZipRealty.
1. Sacramento, Calif.: - 18.5 percent
2. Las Vegas: - 17.2 percent
3. San Diego: - 17.1 percent
4. Tampa, Fla.: - 11.7 percent
5. Los Angeles: - 10.7 percent
6. Miami: - 10.6 percent
7. Phoenix: - 9.5 percent
8. Jacksonville, Fla.: - 8.7 percent
9. Detroit: - 7.7 percent
10. Atlanta: - 7.1 percent
Source: Forbes, Matt Woolsey (02/12/08)
Bernanke: Housing Rebound Coming
From Realtor Magazine Online, Daily Real Estate News February 13, 2008
U.S. Sen. Pete Domenici (R-N.M.), after a private meeting with Federal Reserve Chairman Ben Bernanke, said the central bank chief anticipates signs of a rebound in the housing market by the end of 2008.
Concerns remain that the market downturn will cause an economic recession, which prompted the Fed to cut interest rates recently.
Meanwhile, despite an "unusually uncertain" economic outlook, San Francisco Fed President Janet Yellen says the country will avoid an "outright recession." A survey of economic forecasters by the Philadelphia Fed indicates slightly less than 50-50 odds of a recession.
Source: Investor's Business Daily (02/13/08)
U.S. Sen. Pete Domenici (R-N.M.), after a private meeting with Federal Reserve Chairman Ben Bernanke, said the central bank chief anticipates signs of a rebound in the housing market by the end of 2008.
Concerns remain that the market downturn will cause an economic recession, which prompted the Fed to cut interest rates recently.
Meanwhile, despite an "unusually uncertain" economic outlook, San Francisco Fed President Janet Yellen says the country will avoid an "outright recession." A survey of economic forecasters by the Philadelphia Fed indicates slightly less than 50-50 odds of a recession.
Source: Investor's Business Daily (02/13/08)
Tuesday, February 12, 2008
White House: No Recession Looming
From Realtor Magazine Online, Daily Real Estate News February 12, 2008
In the White House's annual report to Congress on the U.S. economy, White House Council of Economic Advisors Chairman Edward Lazear conceded that the slump in the residential property and mortgage finance sectors still has not hit bottom. And while economic growth is expected to be sluggish during the first six months of this year, the Bush administration believes the country will be spared a recession.
Officials are pinning their hopes for a recovery, as early as this summer, on the Federal Reserve's recent interest-rate cuts as well as a $168 billion economic stimulus plan just passed by Congress.
Source: The New York Times, Edmund L. Andrews (02/12/08)
In the White House's annual report to Congress on the U.S. economy, White House Council of Economic Advisors Chairman Edward Lazear conceded that the slump in the residential property and mortgage finance sectors still has not hit bottom. And while economic growth is expected to be sluggish during the first six months of this year, the Bush administration believes the country will be spared a recession.
Officials are pinning their hopes for a recovery, as early as this summer, on the Federal Reserve's recent interest-rate cuts as well as a $168 billion economic stimulus plan just passed by Congress.
Source: The New York Times, Edmund L. Andrews (02/12/08)
Lenders Team up to Curb Foreclosures
From Realtor Magazine Online, Daily Real Estate News February 12, 2008
Six major lenders have agreed to allow seriously overdue home owners to suspend foreclosures for 30 days, giving them time to work out affordable loans.
The plan called Project Lifeline is being announced today by the Department of Housing and Urban Development.
Initially, the pilot program will involve Bank of America Corp., Citigroup Inc., Countrywide Financial Corp., JPMorgan Chase & Co., Washington Mutual Inc., and Wells Fargo & Co.
All six lenders are currently involved in the Hope Now plan, the deal the Bush administration brokered last year to freeze rates on some high-cost subprime mortgages for five years to aid borrowers whose introductory rates had jumped.
The new plan applies to seriously delinquent home owners whose mortgages are 90 or more days past due.
Source: The Associated Press, Marcy Gordon (02/11/08)
Six major lenders have agreed to allow seriously overdue home owners to suspend foreclosures for 30 days, giving them time to work out affordable loans.
The plan called Project Lifeline is being announced today by the Department of Housing and Urban Development.
Initially, the pilot program will involve Bank of America Corp., Citigroup Inc., Countrywide Financial Corp., JPMorgan Chase & Co., Washington Mutual Inc., and Wells Fargo & Co.
All six lenders are currently involved in the Hope Now plan, the deal the Bush administration brokered last year to freeze rates on some high-cost subprime mortgages for five years to aid borrowers whose introductory rates had jumped.
The new plan applies to seriously delinquent home owners whose mortgages are 90 or more days past due.
Source: The Associated Press, Marcy Gordon (02/11/08)
Monday, February 11, 2008
When Sellers "Carry-Back" Financing
Seller financing is a loan made by the Seller to the Buyer as a part of the Buyer's purchase escrow. In simple terms, if you are a Seller who is "carrying" financing, you have agreed to loan the Buyer a portion of the cash you would otherwise receive from the sale. The Buyer signs a Note as well as a Deed of Trust in your favor that will secure the loan by placing a lien on the property. After closing, the relationship between Seller and Buyer becomes one of Lender and Borrower. In your new role as Lender, you will collect payments from the Borrower, including interest on your money, until the loan is fully repaid.
Seller "carry-back" financing can benefit both Seller and Buyer in a transaction. If you are a Seller who is willing to assist the Buyer with financing, this is a way to earn greater return (interest) on the equity in your property. If you are a Buyer who may be short of sufficient cash for a down payment, an opportunity to borrow money from the Seller may be attractive. Consult with your Realtor to determine if this option is suitable for you.
What Happens in Escrow?
Your purchase contract and escrow instructions describe the specific terms of the financing, such as the amount of the note, the interest rate, the payment schedule, and the maturity date. Your Escrow Officer will prepare the Note and the Deed of Trust based on your instructions, and all parties will be given an opportunity to review and approve the documents before closing.
At close of escrow, the original, signed Deed of Trust is recorded in the County Recorder's office and becomes a lien on the property. It will be mailed to the Seller within a few weeks of closing. The original, signed Note is handed to the Seller at closing. In addition, the Escrow Officer will instruct the Title Company to issue a title insurance policy, which protects the Seller's interest as "lender" by insuring the validity of the lien. The Seller should keep these three documents - the original note, the original deed of trust, and the title policy - in a safe place with other documents relating to the escrow transaction.
Managing the Payments
The Buyer will make payments to you based on the terms which are contained in the Note, typically once per month. You should maintain a record of the payments. For most loans, your Escrow Officer can provide an amortization schedule. This document lists the payment due dates from the loan start date until maturity. It will also calculate the amount of any "balloon payment" which may be required. Ask your Escrow Officer if this schedule can be furnished for your loan.
Another option is to hire a servicing agent to manage the payments. Some people prefer the convenience of having a professional service deal with the record keeping. In this case, the Buyer mails the payments directly to the agent. Always notify the Buyer in the event of any address change.
The Loan Payoff
The loan may be fully paid in one of two ways:
* The Buyer may sell the property and make the loan payoff to you, the Lender, through escrow. In this case, you will be contacted by an Escrow Officer who will collect the necessary documents, obtain payoff figures, and manage the loan payoff. During this process, the lien will be cleared from the property, as it is no longer needed as security for the loan.
* The Buyer may pay the loan in full over time in accordance with the terms of the Note. When this happens, you must surrender the Note and Deed of Trust to the appropriate party for release of the lien. Some people choose to arrange for the services of an escrow company or title insurance company to handle this process, and this can usually be done for a nominal fee.
Seller "carry-back" financing can benefit both Seller and Buyer in a transaction. If you are a Seller who is willing to assist the Buyer with financing, this is a way to earn greater return (interest) on the equity in your property. If you are a Buyer who may be short of sufficient cash for a down payment, an opportunity to borrow money from the Seller may be attractive. Consult with your Realtor to determine if this option is suitable for you.
What Happens in Escrow?
Your purchase contract and escrow instructions describe the specific terms of the financing, such as the amount of the note, the interest rate, the payment schedule, and the maturity date. Your Escrow Officer will prepare the Note and the Deed of Trust based on your instructions, and all parties will be given an opportunity to review and approve the documents before closing.
At close of escrow, the original, signed Deed of Trust is recorded in the County Recorder's office and becomes a lien on the property. It will be mailed to the Seller within a few weeks of closing. The original, signed Note is handed to the Seller at closing. In addition, the Escrow Officer will instruct the Title Company to issue a title insurance policy, which protects the Seller's interest as "lender" by insuring the validity of the lien. The Seller should keep these three documents - the original note, the original deed of trust, and the title policy - in a safe place with other documents relating to the escrow transaction.
Managing the Payments
The Buyer will make payments to you based on the terms which are contained in the Note, typically once per month. You should maintain a record of the payments. For most loans, your Escrow Officer can provide an amortization schedule. This document lists the payment due dates from the loan start date until maturity. It will also calculate the amount of any "balloon payment" which may be required. Ask your Escrow Officer if this schedule can be furnished for your loan.
Another option is to hire a servicing agent to manage the payments. Some people prefer the convenience of having a professional service deal with the record keeping. In this case, the Buyer mails the payments directly to the agent. Always notify the Buyer in the event of any address change.
The Loan Payoff
The loan may be fully paid in one of two ways:
* The Buyer may sell the property and make the loan payoff to you, the Lender, through escrow. In this case, you will be contacted by an Escrow Officer who will collect the necessary documents, obtain payoff figures, and manage the loan payoff. During this process, the lien will be cleared from the property, as it is no longer needed as security for the loan.
* The Buyer may pay the loan in full over time in accordance with the terms of the Note. When this happens, you must surrender the Note and Deed of Trust to the appropriate party for release of the lien. Some people choose to arrange for the services of an escrow company or title insurance company to handle this process, and this can usually be done for a nominal fee.
Summer Rental Demand Grows
From Realtor Magazine Online, Daily Real Estate News February 11, 2008
Choice summer vacation rentals are going fast all over the country, up 10 percent or more over last year, property managers say.
Demand is particularly high in the most expensive resorts like Aspen, Colo,. and Malibu, Calif. In Amagansett on Long Island’s east end, rentals are 50 percent filled, a month before the usual March rental season, says Rick Hoffman, regional vice president at Corcoran Group.
Demand for rentals on Cape Cod, Mass., is running 30 percent ahead of last year, but rates are flat, says Bett McCarthy, vice president of Kinlin Grover, which manages about 2,000 summer properties.
Housing experts say the health of this market is surprising considering the sagging economy. But Justin Halloran, vice president of U.S. operations for HomeAway, a classified Web site for private home rentals, is among those who say people are choosing rentals they can drive to as opposed to more exotic — and expensive — vacations.
Source: The New York Times, Christina S.N. Lewis and Ara Lin (02/08/2008)
Choice summer vacation rentals are going fast all over the country, up 10 percent or more over last year, property managers say.
Demand is particularly high in the most expensive resorts like Aspen, Colo,. and Malibu, Calif. In Amagansett on Long Island’s east end, rentals are 50 percent filled, a month before the usual March rental season, says Rick Hoffman, regional vice president at Corcoran Group.
Demand for rentals on Cape Cod, Mass., is running 30 percent ahead of last year, but rates are flat, says Bett McCarthy, vice president of Kinlin Grover, which manages about 2,000 summer properties.
Housing experts say the health of this market is surprising considering the sagging economy. But Justin Halloran, vice president of U.S. operations for HomeAway, a classified Web site for private home rentals, is among those who say people are choosing rentals they can drive to as opposed to more exotic — and expensive — vacations.
Source: The New York Times, Christina S.N. Lewis and Ara Lin (02/08/2008)
Friday, February 8, 2008
Housing Inventory Seen Stabilizing
From Realtor Magazine Online, Daily Real Estate News February 8, 2008
Housing inventory in most major metropolitan markets rose only slightly in January, a month when post-holiday for-sale signs usually sprout.
Total listings of homes in 29 major markets were up only 1.1 percent compared to December, according to figures compiled by ZipRealty Inc., a real estate firm based in California.
There are still plenty of homes on the market. Inventory was up 20 percent from January 2007 in 18 metro areas for which Zip has comparable year-earlier data.
Housing inventory usually rises about 5 percent compared with December, says housing economist Thomas Lawler. This year, people appear to be holding off because “conditions are so lousy,” Lawler says.
Source: The Wall Street Journal, James R. Hagerty (02/08/2008)
Housing inventory in most major metropolitan markets rose only slightly in January, a month when post-holiday for-sale signs usually sprout.
Total listings of homes in 29 major markets were up only 1.1 percent compared to December, according to figures compiled by ZipRealty Inc., a real estate firm based in California.
There are still plenty of homes on the market. Inventory was up 20 percent from January 2007 in 18 metro areas for which Zip has comparable year-earlier data.
Housing inventory usually rises about 5 percent compared with December, says housing economist Thomas Lawler. This year, people appear to be holding off because “conditions are so lousy,” Lawler says.
Source: The Wall Street Journal, James R. Hagerty (02/08/2008)
Stimulus to Benefit Jumbo Borrowers
From Realtor Magazine Online, Daily Real Estate News February 8, 2008
The biggest winners in the economic rescue plan that passed the U.S. Congress on Thursday and awaits President Bush’s signature are middle- to upper-income Americans who can refinance their jumbo home loans at cheaper rates.
The stimulus package temporarily raises the maximum size of mortgages that Fannie Mae and Freddie Mac can purchase and market as securities from $417,000 to as high as $729,750 in expensive parts of the country like New York City and California.
It makes a similar change for loans backed by the Federal Housing Administration, which insures loans to borrowers with weak credit.
Right now, borrowers in expensive areas are "really stuck between a rock and a hard place," says Mark Vitner, senior economist with Wachovia Corp. Raising the caps, he says, will result in a refinancing boom for those properties.
"We're more likely to see an immediate improvement at the upper end than we are at the lower end" of the housing market, he says.
Source: The Associated Press, Alan Zibel (02/08/2008)
The biggest winners in the economic rescue plan that passed the U.S. Congress on Thursday and awaits President Bush’s signature are middle- to upper-income Americans who can refinance their jumbo home loans at cheaper rates.
The stimulus package temporarily raises the maximum size of mortgages that Fannie Mae and Freddie Mac can purchase and market as securities from $417,000 to as high as $729,750 in expensive parts of the country like New York City and California.
It makes a similar change for loans backed by the Federal Housing Administration, which insures loans to borrowers with weak credit.
Right now, borrowers in expensive areas are "really stuck between a rock and a hard place," says Mark Vitner, senior economist with Wachovia Corp. Raising the caps, he says, will result in a refinancing boom for those properties.
"We're more likely to see an immediate improvement at the upper end than we are at the lower end" of the housing market, he says.
Source: The Associated Press, Alan Zibel (02/08/2008)
EURO FALLS ON ECB WILLINGNESS TO LOWER RATES
Two rate decisions were made in Europe this morning. The Brits lowered short-term rates by a quarter of a point for the second time in three months (as they were expected to do). That weakened the British Pound further, which has now fallen to the lowest level since last spring. The pound peaked in November in anticipation of that move (as markets usually do). The ECB held Euro rates unchanged at a six-year high of 4%. More importantly, its president signalled that he's open to cutting Euro rates for the first time in almost five years. Naturally, the Euro is starting to fall in anticipation of that inevitable easing. Today's 1% fall against the dollar puts the Euro even further below its 50-day average and in danger of forming a double (or even triple) top near 1.49. That raises the inevitable question about the fate of the U.S. dollar, and the implications of a possible rebound in the greenback.
DOLLAR COULD BE BOTTOMING ...
The daily chart of the U.S. Dollar Index is a mirror image of the Euro. The USD has bounced off support near its November low and has risen back over its 50-day moving average. That sets up a possible "double bottom" in the making. For that to actually happen, the USD still needs to clear its December peak just below 78. One of the reasons the dollar has been so weak has been the perception that the U.S. economy is weaker that the rest of the world. It was assumed that the Fed would have to start lowering short-term rates to prevent a U.S. recession (which they did last August). It was further assumed that foreign markets would be relatively immune to U.S. problems, and would be able to keep their rates steady and their currencies firm. The new realization of "economic recoupling" means that foreign central bankers will have to start lowering rates soon to combat their own economic problems. That process is being sped up by the recent fall in foreign stock markets. Since markets discount the future, the Euro (which has the biggest influence on the dollar), has already started falling. The Fed is at least six months ahead of the ECB in lowering rates. That means that foreign bankers will have to start playing catch-up to the Fed. That should work against foreign currencies and in favor of the dollar.
Stay tuned.
DOLLAR COULD BE BOTTOMING ...
The daily chart of the U.S. Dollar Index is a mirror image of the Euro. The USD has bounced off support near its November low and has risen back over its 50-day moving average. That sets up a possible "double bottom" in the making. For that to actually happen, the USD still needs to clear its December peak just below 78. One of the reasons the dollar has been so weak has been the perception that the U.S. economy is weaker that the rest of the world. It was assumed that the Fed would have to start lowering short-term rates to prevent a U.S. recession (which they did last August). It was further assumed that foreign markets would be relatively immune to U.S. problems, and would be able to keep their rates steady and their currencies firm. The new realization of "economic recoupling" means that foreign central bankers will have to start lowering rates soon to combat their own economic problems. That process is being sped up by the recent fall in foreign stock markets. Since markets discount the future, the Euro (which has the biggest influence on the dollar), has already started falling. The Fed is at least six months ahead of the ECB in lowering rates. That means that foreign bankers will have to start playing catch-up to the Fed. That should work against foreign currencies and in favor of the dollar.
Stay tuned.
Wednesday, February 6, 2008
Farmland Prices Setting Records
From Realtor Magazine Online, Daily Real Estate News February 6, 2008
Farm real estate prices have risen more than 20 percent in the last two years to a record average price of $2,160 an acre, according to Farm Credit Services of America, an agricultural lender.
Farmland prices were up as much as 23 percent in Iowa, Nebraska, South Dakota and Wyoming in 2007. That’s on top of a 14 percent increase nationwide in 2006.
Iowa State University Extension economist Michael Duffy says the price surge benefits owners of all sizes of farms, but they create a barrier for young farmers starting out.
Farmland is expected to appreciate 6 percent to 12 percent annually over the next three years, on top of average annual farm income of 4 percent to 5 percent.
Source: USA Today, Lynn Hicks, Jerry Perkins (02/05/2008)
Farm real estate prices have risen more than 20 percent in the last two years to a record average price of $2,160 an acre, according to Farm Credit Services of America, an agricultural lender.
Farmland prices were up as much as 23 percent in Iowa, Nebraska, South Dakota and Wyoming in 2007. That’s on top of a 14 percent increase nationwide in 2006.
Iowa State University Extension economist Michael Duffy says the price surge benefits owners of all sizes of farms, but they create a barrier for young farmers starting out.
Farmland is expected to appreciate 6 percent to 12 percent annually over the next three years, on top of average annual farm income of 4 percent to 5 percent.
Source: USA Today, Lynn Hicks, Jerry Perkins (02/05/2008)
Monday, February 4, 2008
Many unaware of mortgage help: Freddie Mac
From http://money.cnn.com/
Survey says more than half of delinquent mortgage borrowers still unaware of ways to avoid foreclosure.
NEW YORK (CNNMoney.com) -- More than half of borrowers who have missed mortgage payment deadlines are still in the dark about ways to avoid foreclosure, but that percentage is falling, said a survey released Thursday.
Research from government mortgage buyer Freddie Mac and marketing research firm Roper Public Affairs and Media said that 57% of late-paying borrowers are unaware of foreclosure alternatives offered by their lenders.
That percentage was down from the 61% reported in the first Freddie Mac/Roper survey in 2005.
"Efforts to get borrowers to call lenders and counselors are starting to work," said Ingrid Beckles, Freddie Mac's VP of Servicing and Asset Management.
But, she added, "Too many at-risk borrowers are still unaware their servicers routinely provide alternatives."
Both the percentage of delinquent borrowers who contacted their lenders and the percentage who said their lenders had contacted them have increased since 2005, Freddie Mac said. But while 59% said their communication was helpful, nearly a fourth said the contact was "intimidating" or "confusing."
Beckles pointed out that delinquent borrowers should proactively call their servicers, firms that collect payments for firms such as Freddie Mac (FRE, Fortune 500), to learn what they can do to avoid foreclosure.
The survey also found increased awareness of foreclosure avoidance strategies such as repayment plans, adjustable to fixed rate mortgage conversions, and lump sum payments.
Borrowers are less likely to turn to lenders and financial institutions for foreclosure information, and increasingly go to friends, family, and the Internet, said the report.
More than half of those surveyed still talk to their bank or mortgage lender first, a statistic unchanged since 2005, but a large percentage said those institutions are a pain to deal with.
Survey says more than half of delinquent mortgage borrowers still unaware of ways to avoid foreclosure.
NEW YORK (CNNMoney.com) -- More than half of borrowers who have missed mortgage payment deadlines are still in the dark about ways to avoid foreclosure, but that percentage is falling, said a survey released Thursday.
Research from government mortgage buyer Freddie Mac and marketing research firm Roper Public Affairs and Media said that 57% of late-paying borrowers are unaware of foreclosure alternatives offered by their lenders.
That percentage was down from the 61% reported in the first Freddie Mac/Roper survey in 2005.
"Efforts to get borrowers to call lenders and counselors are starting to work," said Ingrid Beckles, Freddie Mac's VP of Servicing and Asset Management.
But, she added, "Too many at-risk borrowers are still unaware their servicers routinely provide alternatives."
Both the percentage of delinquent borrowers who contacted their lenders and the percentage who said their lenders had contacted them have increased since 2005, Freddie Mac said. But while 59% said their communication was helpful, nearly a fourth said the contact was "intimidating" or "confusing."
Beckles pointed out that delinquent borrowers should proactively call their servicers, firms that collect payments for firms such as Freddie Mac (FRE, Fortune 500), to learn what they can do to avoid foreclosure.
The survey also found increased awareness of foreclosure avoidance strategies such as repayment plans, adjustable to fixed rate mortgage conversions, and lump sum payments.
Borrowers are less likely to turn to lenders and financial institutions for foreclosure information, and increasingly go to friends, family, and the Internet, said the report.
More than half of those surveyed still talk to their bank or mortgage lender first, a statistic unchanged since 2005, but a large percentage said those institutions are a pain to deal with.
Saturday, February 2, 2008
Wells Fargo Current Mortgage Rates
as of 02/02/2008 02:21 PM Eastern
Product Interest Rate/APR
Conforming – loan amount less than or equal to $417,000; $625,500 in AK and HI.
40-Year Fixed 6.250%/6.446%
30-Year Fixed 5.625%/5.846%
20-Year Fixed 5.500%/5.795%
15-Year Fixed 5.000%/5.368%
5-Year ARM 5.250%/5.388%
Jumbo – loan amount greater than $417,000; $625,500 in AK and HI.
40/30 Fixed-Rate Balloon 6.875%/7.015%
30-Year Fixed 6.625%/6.778%
15-Year Fixed 5.875%/6.120%
10-Year ARM 6.750%/6.355%
5-Year ARM 5.750%/5.506%
FHA – loan limits vary by county.
30-Year Fixed 6.000%/6.705%
Product Interest Rate/APR
Conforming – loan amount less than or equal to $417,000; $625,500 in AK and HI.
40-Year Fixed 6.250%/6.446%
30-Year Fixed 5.625%/5.846%
20-Year Fixed 5.500%/5.795%
15-Year Fixed 5.000%/5.368%
5-Year ARM 5.250%/5.388%
Jumbo – loan amount greater than $417,000; $625,500 in AK and HI.
40/30 Fixed-Rate Balloon 6.875%/7.015%
30-Year Fixed 6.625%/6.778%
15-Year Fixed 5.875%/6.120%
10-Year ARM 6.750%/6.355%
5-Year ARM 5.750%/5.506%
FHA – loan limits vary by county.
30-Year Fixed 6.000%/6.705%
Current Mortgage Rate Averages for Saturday
From BankRate.com
30 yr fixed mtg 5.47%
15 yr fixed mtg 4.95%
30 yr fixed jumbo mtg 6.57%
5/1 ARM 4.97%
5/1 jumbo ARM 5.62%
30 yr fixed mtg 5.47%
15 yr fixed mtg 4.95%
30 yr fixed jumbo mtg 6.57%
5/1 ARM 4.97%
5/1 jumbo ARM 5.62%
Mortgage rates end five-week descent
From Money.CNN.com, January 31 2008: 10:45 AM EST
NEW YORK (CNNMoney.com) -- Mortgage rates ended their five-week descent following the Fed's decision to cut its federal funds rate by half of a percentage point, Freddie Mac reported Thursday.
The government-sponsored loan buyer said the rate on a 30-year fixed-rate loan averaged 5.68% for the week ending Thursday, up from 5.48% last week, but still well below its historical average Freddie Mac noted.
At this time last year, the 30-year fixed-rate mortgage averaged 6.34%, Freddie Mac said.
"Reinforcing the Fed's resolution to thwart a recession, the Federal Open Market Committee announced another cut in the target federal funds rate by half of a percentage point in their most recent scheduled meeting," said Freddie Mac (FRE, Fortune 500) vice president and chief economist Frank Nothaft in statement Thursday.
"This came on the heels of the Fed's rate cut of three-quarters of a percentage point the previous week, and the shaping-up of a fiscal stimulus package by Congress and the White House. This cut was in line with market expectations." he added.
Fed delivers another rate cut
Freddie Mac said 15-year fixed-rate loans averaged 5.17%, up from 4.95% last week.
A year ago, the 15-year rate averaged 6.06%.
Rates on five-year adjustable-rate mortgages (ARMs) averaged 5.32%, up from 5.13% last week.
The 5-year rate averaged 6.04% at this time last year.
One-year Treasury-indexed ARMs averaged 5.05%, up from 4.99% last week.
At this time a year ago, the 1-year ARM averaged 5.54%.
NEW YORK (CNNMoney.com) -- Mortgage rates ended their five-week descent following the Fed's decision to cut its federal funds rate by half of a percentage point, Freddie Mac reported Thursday.
The government-sponsored loan buyer said the rate on a 30-year fixed-rate loan averaged 5.68% for the week ending Thursday, up from 5.48% last week, but still well below its historical average Freddie Mac noted.
At this time last year, the 30-year fixed-rate mortgage averaged 6.34%, Freddie Mac said.
"Reinforcing the Fed's resolution to thwart a recession, the Federal Open Market Committee announced another cut in the target federal funds rate by half of a percentage point in their most recent scheduled meeting," said Freddie Mac (FRE, Fortune 500) vice president and chief economist Frank Nothaft in statement Thursday.
"This came on the heels of the Fed's rate cut of three-quarters of a percentage point the previous week, and the shaping-up of a fiscal stimulus package by Congress and the White House. This cut was in line with market expectations." he added.
Fed delivers another rate cut
Freddie Mac said 15-year fixed-rate loans averaged 5.17%, up from 4.95% last week.
A year ago, the 15-year rate averaged 6.06%.
Rates on five-year adjustable-rate mortgages (ARMs) averaged 5.32%, up from 5.13% last week.
The 5-year rate averaged 6.04% at this time last year.
One-year Treasury-indexed ARMs averaged 5.05%, up from 4.99% last week.
At this time a year ago, the 1-year ARM averaged 5.54%.
Friday, February 1, 2008
Mortgage Rates Inch Up
From Realtor Magazine Online, Daily Real Estate News February 1, 2008
Following four consecutive weekly declines, Freddie Mac reports a jump in the 30-year fixed mortgage rate to 5.68 percent during the week ended Jan. 31 from 5.48 percent the prior week.
The 15-year fixed mortgage rate rose to 5.17 percent from 4.95 percent over the same time span.
Meanwhile, the five-year adjustable mortgage rate edged up to 5.32 percent from 5.13 percent; and the one-year ARM climbed to 5.05 percent from 4.99 percent.
Freddie Mac chief economist Frank Nothaft attributes the recent gains to an uptick in 10-year Treasury bonds.
Source: San Jose Mercury News (Calif.), Martin Crutsinger (02/01/08)
Following four consecutive weekly declines, Freddie Mac reports a jump in the 30-year fixed mortgage rate to 5.68 percent during the week ended Jan. 31 from 5.48 percent the prior week.
The 15-year fixed mortgage rate rose to 5.17 percent from 4.95 percent over the same time span.
Meanwhile, the five-year adjustable mortgage rate edged up to 5.32 percent from 5.13 percent; and the one-year ARM climbed to 5.05 percent from 4.99 percent.
Freddie Mac chief economist Frank Nothaft attributes the recent gains to an uptick in 10-year Treasury bonds.
Source: San Jose Mercury News (Calif.), Martin Crutsinger (02/01/08)
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