Are Appraisals coming in to low?

Complaints that home appraisers are ignoring home appreciation and coming in too "low" on their assessments have become common. So common that it was the topic of a recent column by nationally syndicated writer Ken Harney. In that piece, those in the real estate business say the issue has led to sunken deals and could hurt the market's recovery.

Late last week, I hung out briefly at the Loews Coronado Bay Resort, where trade group the Appraisal Institute got together for its annual meeting. There, I sat down with the group's vice president, Ken Wilson, to discuss his take on the issues raised in Harney's column.

Question: I'm hearing from Realtors the same thing that was expressed in the Harney article. What's going on?

Answer: In terms of the word "low appraisal," that's a very interesting phrase because what does low appraisal mean? It basically just means that the appraised value came in less than a list price or a contract price, and it's not the goal or the intent of the appraiser to just tattoo a contract price. It's their intent to be an independent third party, to be objective and to present a document that is fully supportable to a client, which in the context that we're talking about now, is a residential lender. They're not interested in making a transaction close, to see that a deal succeeds for a Realtor; They're engaged, or hired, to represent the interest of the lender. They're making a sound business decision in a decision regarding a l

Rates hit another all-time low

Mortgage buyer Freddie Mac says the average rate on 30-year loans fell to 3.56%. That's down from 3.62% last week and the lowest since long-term mortgages began in the 1950s.

The average rate on 15-year mortgages, a popular refinancing option, dipped to 2.86%, below last week's previous record of 2.89%.

The rate on 30-year loans has fallen to or matched record lows 11 of the past 12 weeks.

Cheaper mortgages have contributed to a modest housing recovery this year.

Wells Fargo shuts down Wholesale Division

PRESS RELEASE:

Wells Fargo & Company (NYSE:WFC) announced today a definitive settlement agreement between Wells Fargo Bank, N.A. and the U.S. Department of Justice (DOJ) that resolves the DOJ's previously disclosed claims that some Wells Fargo mortgages may have had a disparate impact on some African-American and Hispanic borrowers. The DOJ claims are based on a statistical survey of Wells Fargo Home Mortgage loans between 2004 and 2009, and the claims primarily relate to mortgages priced and sold to consumers by independent mortgage brokers. While Wells Fargo denies the claims, the company has agreed to pay $125 million to borrowers that the DOJ believes were adversely impacted by mortgages priced and sold by independent mortgage brokers through its Wholesale channel.

Wells Fargo is settling this matter solely for the purpose of avoiding contested litigation with the DOJ, and to instead devote its resources to continuing to provide fair credit services and choices to eligible consumers, and important and meaningful assistance to borrowers in distressed U.S. real estate markets.

This settlement also resolves pending litigation filed in 2009 by the State of Illinois on behalf of borrowers there, and resolves an investigative complaint filed in 2010 by the Pennsylvania Human Relations Commission.

While not part of the DOJ settlement, Wells Fargo, on its own volition, also announced today that on July 13 it will discontinue funding mortgages that are originated, priced and sold by independent mortgage brokers through its mortgage Wholesale channel. Mortgages sold by independent brokers in this manner currently represent five percent of the Company's home mortgage funded volume. Mortgage brokers operate as independent businesses and are not employed by Wells Fargo. Therefore, Wells Fargo cannot set loan prices for independent mortgage brokers nor control the combined effect of the negotiations that thousands of these independent mortgage brokers conduct with their customers. After July 13, 2012, the Company will no longer accept new applications for loans originated by independent mortgage brokers through its Wholesale channel, but will work to ensure existing applications are processed and closed.

"Wells Fargo is settling this matter because we believe it is in the best interest of our team members, customers, communities and investors to avoid a long and costly legal fight, and to instead devote our resources to continuing to contribute to the country's housing recovery," said Mike Heid, president of Wells Fargo Home Mortgage. "Wells Fargo takes pride in serving the home ownership needs of all of our customers, and we are fully committed to fair and responsible lending. Through our separate decision to no longer fund mortgages through independent mortgage brokers, we can control how that commitment is met on every mortgage that Wells Fargo makes."

The Company stopped making subprime loans through independent mortgage brokers in 2007 and stopped all subprime home lending in 2008. During the period in which Wells Fargo originated subprime loans, the Company implemented industry-leading procedures to identify applicants who might be eligible for a prime-rate product. In keeping with Wells Fargo's commitment to strong fair and responsible lending controls, the Company has agreed with the DOJ to undertake an internal lending compliance review of a small percentage of subprime mortgages delivered through its Retail channel during the period of 2004 to 2008 and will rebate as appropriate.

Working with the DOJ, the Company also will provide a total of $50 million to community improvement programs in the City of Baltimore and in certain areas within seven metropolitan statistical areas identified by the DOJ as being most in need of support to recover from the housing crisis: Washington-Arlington-Alexandria, DC-VA-MD-WV; Chicago-Naperville-Joliet, IL-IN-WI; Philadelphia-Camden-Wilmington, PA-NJ-DE-MD; San Francisco-Oakland-Fremont, CA; New York-Northern New Jersey-Long Island, NY-NJ-PA; Cleveland-Elyria-Mentor, OH; and Riverside-San Bernardino-Ontario, CA. This program will be modeled after Wells Fargo's successful NeighborhoodLIFT^SM program, launched earlier this year.

The Company separately is entering into a collaborative agreement with the City of Baltimore in which the city will dismiss the lawsuit it initially filed against Wells Fargo in January 2008. In keeping with the Company's commitment to continue lending in Baltimore and to supporting the area's financial recovery, Wells Fargo will provide $4.5 million of the $50 million for community improvement programs to the City of Baltimore, and will grant the City of Baltimore $3 million in additional funds for local priority housing and foreclosure-related initiatives. Wells Fargo also has set a five-year home-mortgage lending goal for the Baltimore area.

"Our commitment to our customers and to turning the housing market around is stronger than ever," Heid added. "We will continue to offer education and meaningful choices through our Retail and Correspondent mortgage lending operations, including an important emphasis on providing assistance to communities affected most by the economic downturn."

ugh its mortgage Wholesale channel. Mortgages sold by independent brokers in this manner currently represent five percent of the Company's home mortgage funded volume. Mortgage brokers operate as independent businesses and are not employed by Wells Fargo. Therefore, Wells Fargo cannot set loan prices for independent mortgage brokers nor control the combined effect of the negotiations that thousands of these independent mortgage brokers conduct with their customers. After July 13, 2012, the Company will no longer accept new applications for loans originated by independent mortgage brokers through its Wholesale channel, but will work to ensure existing applications are processed and closed.

"Wells Fargo is settling this matter because we believe it is in the best interest of our team members, customers, communities and investors to avoid a long and costly legal fight, and to instead devote our resources to continuing to contribute to the country's housing recovery," said Mike Heid, president of Wells Fargo Home Mortgage. "Wells Fargo takes pride in serving the home ownership needs of all of our customers, and we are fully committed to fair and responsible lending. Through our separate decision to no longer fund mortgages through independent mortgage brokers, we can control how that commitment is met on every mortgage that Wells Fargo makes."

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Foreclosures made up 26% of U.S. home sales in first quarter

Homes in some stage of foreclosure accounted for more than one in four home sales during the first three months of the year, according to a report released Thursday.

Distressed properties that were either in default, scheduled for auction or bank-owned accounted for 26% of all residential sales during the first quarter, up from 22% in the previous quarter and 25% a year earlier, RealtyTrac said.

Foreclosure filings in May spiked 9%

Foreclosure filings in May spiked 9% compared with a month earlier, according to an industry group.
RealtyTrac reported that 205,990 U.S. properties received filings last month, including default notices, scheduled auctions and bank repossessions, marking the first monthly increase since January.

Bank repossessions climbed steeply, up 7% to 54,844, after hitting a four-year low in April.
The industry had anticipated that there would be a new wave of foreclosures once the industry resolved the "robo-signing" issues, which came to light in late 2010. A settlement was finalized last April.

Homebuying at most affordable level in decades

Robo-signing put the methods used by the banks to repossess homes under intense scrutiny. That forced lenders to slow the foreclosure process to make sure their paperwork was legal and proper.

Once the banks reached a massive $26 billion settlement with state attorneys general over processing abuses, it was expected that they would step up their foreclosure efforts.

"With the settlement, it makes sense that the lenders would feel more confident pushing delinquencies through to foreclosure in May," said Daren Blomquist, a spokesman for RealtyTrac.
There was also a 12% jump in foreclosure starts. "The jump in May foreclosure starts shows that it's going to be a bumpy ride down to the bottom of this foreclosure cycle," said Brandon Moore, CEO of RealtyTrac.

Bank of America offering up to $30,000 for short sales

Georgia had the highest foreclosure rate, the first month since February 2006 that the state led all others. Arizona was second, Nevada third and California fourth.

Riverside, Calif. had the highest rate of any of the 20 largest U.S. metro areas, followed by Atlanta, Phoenix and Chicago.

There has been a gradual change in how foreclosures are ultimately disposed of: Homes with delinquent loans are now more likely to exit the foreclosure process as a short sale than in the past, according to Blomquist.

Mortgage rates smash old record

NEW YORK Mortgage rates fell again this week, smashing previous record lows, according to a regular weekly release from mortgage giant Freddie Mac.
The rate for a 30-year, fixed-rate loan, the most popular mortgage product, dropped to 3.62% from 3.66% last week. The rate has matched or hit a new low for 10 of the past 11 weeks, Freddie Mac said. Meanwhile, the 15-year fixed rate fell to 2.89%, down from 2.94%.

• "Recent economic data releases of less consumer spending and a contraction in the manufacturing industry drove long-term Treasury bond yields lower over the week, and allowed fixed mortgage rates to hit new all-time record lows," said Frank Nothaft, Freddie Mac's chief economist.

The 15-year fixed-rate mortgage is popular among homeowners who are seeking to refinance or to trade-up and minimize their total interest payments. At the current rate, a borrower financing $200,000 would pay $1,370 a month and spend a total of just under $47,000 in interest over the 15-year span of the mortgage.

30 Year Fixed 3.5% with funds to help with closing cost

Rates are so good today.

 30 yr fixed the rates can get to 3.5%

 15 yr fixed the rates can get to 2.875%

FHA 30 yr fixed as low as 3.25%

www.primemortgageloans.net