Here is what they are saying on USATODAY:
U.S. mortgage rates surged this week, reaching their highest level in two years and threatening to slow the housing industry's steady recovery.
Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year fixed loan jumped to 4.46% this week, the highest level since June 2011. That's up from 3.93% from the previous week.
It was the largest weekly increase in the 30-year rate since April 1987, Freddie Mac said.
The average rate on the 15-year mortgage jumped to 3.50% from 3.04%. That's the highest since August 2011. A year ago, the rate on the 15-year mortgage was at 2.94%.
The increases follow rising yields on the 10-year Treasury bond in the wake of Federal Reserve Chairman Ben Bernanke's comments last week that the Fed could start trimming its stimulus policies later this year if the economy continues to improve. Mortgage rates track the 10-year Treasury rate, which is at a two-year high.
Higher rates caused mortgage applications to fall 3% from last week, according to the Mortgage Bankers Association. Refinancing applications also fell to their lowest level since late 2011. But the purchasing index increased 2% and is up 16% from a year ago, according to the MBA.
I believe they drop back down in 1 to 2 months
Thursday, June 27, 2013
Thursday, June 6, 2013
Rates are going above 4% . Will they stay up there?
WASHINGTON (AP) — The average U.S. rate on a 15-year fixed mortgage rose above 3% this week for the first time in a year, while the rate on the 30-year fixed loan approached 4%.
Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan jumped to 3.91% from 3.81% last week. That's the highest since March 2012.
The rate on the 15-year loan rose to 3.03% from 2.98%. That's the highest since last May.
Concerns that the Federal Reserve may scale back its bond purchases have pushed rates higher over the last month. Still, mortgage rates remain low by historical standards. The 30-year loan hit a record 3.31% rate in November. The 15-year loan fell to its low of 2.56% a month ago.
Mortgage rates are rising because they tend to follow the yield on the 10-year Treasury note. The yield on the 10-year note climbed as high as 2.2% last week, its highest level in more than two years. It has since slipped to 2.1% in early trading Thursday. That compares with 1.63% at the beginning of May.
The Fed's $85-billion-a-month in Treasury and mortgage bond purchases have pushed down long-term interest rates. As speculation has grown that the Fed will slow those purchases, interest rates have ticked up. That has decreased the value of bonds with lower yields.
The rise in mortgage rates has slowed mortgages applications. They dropped 11.5% in the week ended May 31 from the previous week, the Mortgage Bankers Association said Wednesday.
Still, cheaper mortgages have helped boost home sales and prices this year, strengthening a housing recovery that began in 2012.
Both home prices and sales increased throughout the country from April through late May, according to a Fed survey released Wednesday, and several regional districts noted that sellers were receiving multiple offers.
Data provider CoreLogic said Tuesday that home prices soared 12.1% in April from a year earlier, the biggest gain since February 2006.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1% of the loan amount.
The average fee for 30-year mortgages dipped to 0.7 point from 0.8 point last week. The fee for 15-year loans was unchanged at 0.7 point.
The average rate on a one-year adjustable-rate mortgage rose to 2.58% from 2.54%. The fee for one-year adjustable-rate loans declined to 0.4 point from 0.5.
The average rate on a five-year adjustable-rate mortgage jumped to 2.74% from 2.66%. The fee held steady at 0.5.
Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan jumped to 3.91% from 3.81% last week. That's the highest since March 2012.
The rate on the 15-year loan rose to 3.03% from 2.98%. That's the highest since last May.
Concerns that the Federal Reserve may scale back its bond purchases have pushed rates higher over the last month. Still, mortgage rates remain low by historical standards. The 30-year loan hit a record 3.31% rate in November. The 15-year loan fell to its low of 2.56% a month ago.
Mortgage rates are rising because they tend to follow the yield on the 10-year Treasury note. The yield on the 10-year note climbed as high as 2.2% last week, its highest level in more than two years. It has since slipped to 2.1% in early trading Thursday. That compares with 1.63% at the beginning of May.
The Fed's $85-billion-a-month in Treasury and mortgage bond purchases have pushed down long-term interest rates. As speculation has grown that the Fed will slow those purchases, interest rates have ticked up. That has decreased the value of bonds with lower yields.
The rise in mortgage rates has slowed mortgages applications. They dropped 11.5% in the week ended May 31 from the previous week, the Mortgage Bankers Association said Wednesday.
Still, cheaper mortgages have helped boost home sales and prices this year, strengthening a housing recovery that began in 2012.
Both home prices and sales increased throughout the country from April through late May, according to a Fed survey released Wednesday, and several regional districts noted that sellers were receiving multiple offers.
Data provider CoreLogic said Tuesday that home prices soared 12.1% in April from a year earlier, the biggest gain since February 2006.
To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday each week. The average doesn't include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1% of the loan amount.
The average fee for 30-year mortgages dipped to 0.7 point from 0.8 point last week. The fee for 15-year loans was unchanged at 0.7 point.
The average rate on a one-year adjustable-rate mortgage rose to 2.58% from 2.54%. The fee for one-year adjustable-rate loans declined to 0.4 point from 0.5.
The average rate on a five-year adjustable-rate mortgage jumped to 2.74% from 2.66%. The fee held steady at 0.5.
Thursday, April 25, 2013
Which fix rate hit a all-time low this week 4/25
The average rate on a 30-year fixed mortgage fell to 3.4% the week ended April 25, according to a Freddie Mac survey out Thursday. That's down from 3.41% the prior week and headed toward the record low of 3.31% hit in late November. The same week last year, 30-year fixed mortgage rates averaged 3.88%.
Even better, for those who qualify, the average rate on a 15-year fixed-rate mortgage hit a record low of 2.61% this week, down from 2.64% in the prior week. Freddie Mac began keeping nationwide average records in 1971.
"The housing market is getting a boost with mortgage rates hovering at or near record lows," said Frank Nothaft, a vice president and chief economist at Freddie Mac.
Nothaft cited:
• Existing home sales averaged an annualized pace of 4.9 million the first three months of the year, the most since the fourth quarter of 2009.
• New home sales topped 424,000 during the first quarter, the strongest showing since the third quarter of 2008.
• February marked the thirteenth consecutive month the Federal Housing Finance Agency has recorded an annual rise in its U.S. house price index, which rose by 7.1% in the twelve months through February, the most since May 2006.
MORE: Zillow says home values rising more slowly
However, despite the gains, Nothaft added, FIFA's home price index is still 13.6% below its peak set in April 2007.
In its weekly survey of mortgage lenders nationwide, Freddie Mac said a key adjustable rate mortgages also hit a record low this week. The average rate on the 5-year Treasury-indexed hybrid adjustable-rate mortgage fell to an all-time low of 2.58% from 2.6% a week earlier. That type of mortgage has been available nationwide since 2005.
And the 1-year Treasury-indexed ARM ticked down to 2.62% in the latest week from 2.63% a week earlier, Freddie Mac said.
Even better, for those who qualify, the average rate on a 15-year fixed-rate mortgage hit a record low of 2.61% this week, down from 2.64% in the prior week. Freddie Mac began keeping nationwide average records in 1971.
"The housing market is getting a boost with mortgage rates hovering at or near record lows," said Frank Nothaft, a vice president and chief economist at Freddie Mac.
Nothaft cited:
• Existing home sales averaged an annualized pace of 4.9 million the first three months of the year, the most since the fourth quarter of 2009.
• New home sales topped 424,000 during the first quarter, the strongest showing since the third quarter of 2008.
• February marked the thirteenth consecutive month the Federal Housing Finance Agency has recorded an annual rise in its U.S. house price index, which rose by 7.1% in the twelve months through February, the most since May 2006.
MORE: Zillow says home values rising more slowly
However, despite the gains, Nothaft added, FIFA's home price index is still 13.6% below its peak set in April 2007.
In its weekly survey of mortgage lenders nationwide, Freddie Mac said a key adjustable rate mortgages also hit a record low this week. The average rate on the 5-year Treasury-indexed hybrid adjustable-rate mortgage fell to an all-time low of 2.58% from 2.6% a week earlier. That type of mortgage has been available nationwide since 2005.
And the 1-year Treasury-indexed ARM ticked down to 2.62% in the latest week from 2.63% a week earlier, Freddie Mac said.
Wednesday, April 24, 2013
Is Wall Street setting up another housing crash?
"If I had a way of buying a couple-hundred-thousand single-family homes, I would load up on them," famed investor Warren Buffett said on CNBC last year. "It’s a very attractive asset class now. I could buy them at distressed prices and find renters."
Well, the market is apparently acting on the Oracle of Omaha's words.
The Washington Post reports that Wall Street investors and others are currently putting "unprecedented amounts of money" into real estate. And while that cascade of funds is apparently helping to revive the real estate sector, especially in states like Florida that were hardest hit from the recession, some analysts are concerned about deja vu -- the possibility of another unsustainable, speculation-fueled housing bubble.
"I don’t know whether things are as good as they seem to be," Scott Kranz, co-principal with Title Capital Management in Florida, told the newspaper.
"The end-user would need to see a great increase in jobs, availability of mortgage money and a loosening of the reins that have been holding them back," he noted. "But all the economic indicators ... are not at that point."
And while the Street, the well-to-do and some financial institutions are likely to benefit from this uptick, it will also push hopes of home ownership that much further away from financially struggling U.S. families.
"The investors are making it hard for a regular homeowner to buy a property," Robert Russotto, a broker with Better Homes and Gardens Real Estate in Fort Lauderdale, Fla., said in an interview with the Post. "They are getting outbid by people with cash."
Global investment management firm PIMCO is forecasting an 8% to 12% appreciation in housing over the next two years, as the economic recovery gathers momentum.
Meanwhile, low interest rates and depressed housing prices are creating a perfect storm of enthusiasm from investors. "Residential property is an on-fire asset class," said Kranz to the Washington Post. He also noted that his firm has put more than $100 million into residential real estate for investors in the past 12 months.
But all this movement is frightening some analysts. "At some point the music stops," Dean Baker, co-director of the Center for Economic and Policy Research told the Post. "The investors, if they get hurt, that is their problem. But invariably a lot of other people will get caught up in that."
Ty Laffoon
Thursday, March 28, 2013
New Mortgage Program: No Income Docs Required
New mortgage program offers lower payments
The federal government on Wednesday announced a new loan modification program designed to help many more struggling homeowners than previous initiatives by requiring no documentation of income or financial hardship.
Under the Streamlined Modification Initiative, borrowers with loans backed by mortgage finance giants Fannie Mae and Freddie Mac must be at least 90 days delinquent on their mortgages and and make three trial payments on time. The initiative is being launched by the Federal Housing Finance Agency, which regulates Fannie and Freddie.
"This new option gives delinquent borrowers another path to avoid foreclosure," says FHFA Acting Director Edward DeMarco.
Other programs to aid struggling homeowners, such as the Home Affordable Modification Program (HAMP), required borrowers to provide financial, income and hardship documentation. That created bureaucratic bottlenecks for many mortgage servicers, which limited the effectiveness of the programs.
The new initiative will begin July 1, 2013, and end Aug 1, 2015. By July 1, mortgage servicers must identify delinquent borrowers and send them a letter offering the modification.
To reduce their monthly payments, borrowers will get a new interest rate that's equal to or below their current rates, based on the average of 30-year fixed mortgages, and the term will be extended to 40 years. Also, borrowers who owe more than their homes are worth will pay no interest on up to 30% of their unpaid balance. Borrowers, on average, are expected to reduce their monthly payments by 30%.
FHFA notes that in most cases, borrowers who provide proof of income and financial hardship can receive a more affordable monthly payment through the HAMP program.
To be eligible for the new program, homeowners must be 90 days to 24 months delinquent on their loans. They also must have a first-lien mortgage that's at least 12 months old, and the amount they owe on their mortgages must be at least 80% of their home value.
FHFA says it has screening measures in place to ensure that the new program isn't exploited by strategic defaulters — people who stop paying their loans to get a modification.
FHFA officials have not estimated the number of borrowers they expect to participate. But in a pilot program, 70% of those offered the opportunity took part in the trial, and 50% of the latter group received a permanent loan modification.
Ira Rheingold, executive director of the National Association of Consumer Advocates, says the program "is not a bad idea" because it addresses mortgage servicers' paperwork snafus.
"It's a solution for some people who just want a roof over their head and don't want to lose their home," he says.
But it will not be the best option for homeowners who could save more money through other programs that require documentation, Rheingold says.
More critically, he says, the program doesn't lower the principal owed by borrowers to give them more equity in their homes. FHFA has been unwilling to do that.
About one in five homeowners owe more on their mortgages than their homes are worth. That's been an impediment to the revival of the housing market and the economy.
"Unless they address principal reduction, it's not good enough," Rheingold says.
Fannie and Freddie helped 130,000 homeowners avoid foreclosure in the fourth quarter, pushing their total such successes last year to 540,000, according to FHFA. Since 2008, they have helped 2.7 million borrowers avoid foreclosure, including 1.3 million through loan modifications and the remainder through repayment and forbearance plans, short sales and other strategies.
Wednesday, February 27, 2013
How to get a mortgage without a credit score
Most lenders require at least 2 tradelines
For many homebuyers, establishing credit came naturally once they began working, applied for a credit card, took out a car loan or paid back student loans. But what about potential homebuyers who don't have a credit score, either because they are averse to credit cards or have yet to build up a substantive credit history? Can they still apply for a mortgage?
The answer is yes, but "it's exceedingly difficult to obtain a mortgage without a credit score," says Tim Ross, president and CEO of Ross Mortgage Corp. in Royal Oak, Mich. "Lenders use automated underwriting systems that base a loan decision on certain criteria, including a credit score. But there are some nontraditional sources that can be used for credit verification."
Mortgage lenders typically require a credit score of at least 620 or 640 to even consider an applicant for a loan.
Whether you prefer not to use credit cards, are new to this country or are simply a younger borrower who hasn't built up enough credit history, there are some alternative sources that mortgage lenders can use to determine your credit risk.
While most lenders require three or more sources of credit, Clint , a senior mortgage banker with XXXX says, "I've worked with borrowers who have a slim credit file and been able to get them approved for a loan. The first thing we look for would be 12 to 24 months of canceled checks or verification from a landlord of on-time rent payments."
Alternative sources of credit
Here are several other items that can be used for nontraditional credit verification, Ross says:
For many homebuyers, establishing credit came naturally once they began working, applied for a credit card, took out a car loan or paid back student loans. But what about potential homebuyers who don't have a credit score, either because they are averse to credit cards or have yet to build up a substantive credit history? Can they still apply for a mortgage?
The answer is yes, but "it's exceedingly difficult to obtain a mortgage without a credit score," says Tim Ross, president and CEO of Ross Mortgage Corp. in Royal Oak, Mich. "Lenders use automated underwriting systems that base a loan decision on certain criteria, including a credit score. But there are some nontraditional sources that can be used for credit verification."
Mortgage lenders typically require a credit score of at least 620 or 640 to even consider an applicant for a loan.
While most lenders require three or more sources of credit, Clint , a senior mortgage banker with XXXX says, "I've worked with borrowers who have a slim credit file and been able to get them approved for a loan. The first thing we look for would be 12 to 24 months of canceled checks or verification from a landlord of on-time rent payments."
Alternative sources of credit
Here are several other items that can be used for nontraditional credit verification, Ross says:
- Utility bills for gas, electricity or water, as long as they are paid separately from your monthly rent.
- Phone and cable bills.
- Car insurance, renters insurance, life insurance or medical insurance payments, if they are not paid by payroll deduction.
- Child care or school tuition payments.
Tuesday, February 26, 2013
Bernanke told Congress "Easy Money to Stay "
Federal Reserve Chairman Ben Bernanke told Congress on Tuesday that the Fed intends to keep its Easy Money policies going until the job market improves significantly.
In his semi-annual report to Congress, Bernanke also said the Fed will carefully weigh the costs of its bond-buying program, such as inflation and excessive risk-taking by investors that could led to financial instability.
But Bernanke said he doesn't see the costs of risk-taking "as outweighing the benefits of promoting a stronger economic recovery and more-rapid job creation." Despite stronger job growth recently, he said "the job market remains generally weak."
Bernanke's remarks appeared intended in part to settle financial markets that have grown more concerned recently that the Fed will rein in its economic stimulus sooner than expected.
Worries that the Fed may soon end or reduce its $85 billion in monthly purchases of Treasury bonds and mortgage-backed securities—which are aimed at holding down long-term interest rates— arose last week after minutes of the Fed's Jan. 29-30 meeting were released.
The minutes showed that "many" Fed policymakers voiced concerns that the bond-buying posed risks, such as eventual inflation and financial instability. "A number" of officials said such hazards could prompt the Fed to "taper or end" the purchases before the job outlook gets substantially better, seemingly undercutting a roadmap the Fed has been emphasizing for months.
Stocks fell sharply last week after the minutes came out.
Bernanke also urged Congress and the White House to temper the $85 billion in automatic spending cuts slated to take effect March 1. He said such large cuts would put a "significant" near-term burden on the economy. Instead, he said Washington should devise a plan to address the nation's massive deficit by cutting the budget in a few years when the economy is stronger.
"Such an approach could lessen the near-term fiscal headwinds facing the recovery whle more effectively addressing the longer-term imbalances in the federal budget."
Ty Laffoon
In his semi-annual report to Congress, Bernanke also said the Fed will carefully weigh the costs of its bond-buying program, such as inflation and excessive risk-taking by investors that could led to financial instability.
But Bernanke said he doesn't see the costs of risk-taking "as outweighing the benefits of promoting a stronger economic recovery and more-rapid job creation." Despite stronger job growth recently, he said "the job market remains generally weak."
Bernanke's remarks appeared intended in part to settle financial markets that have grown more concerned recently that the Fed will rein in its economic stimulus sooner than expected.
Worries that the Fed may soon end or reduce its $85 billion in monthly purchases of Treasury bonds and mortgage-backed securities—which are aimed at holding down long-term interest rates— arose last week after minutes of the Fed's Jan. 29-30 meeting were released.
The minutes showed that "many" Fed policymakers voiced concerns that the bond-buying posed risks, such as eventual inflation and financial instability. "A number" of officials said such hazards could prompt the Fed to "taper or end" the purchases before the job outlook gets substantially better, seemingly undercutting a roadmap the Fed has been emphasizing for months.
Stocks fell sharply last week after the minutes came out.
Bernanke also urged Congress and the White House to temper the $85 billion in automatic spending cuts slated to take effect March 1. He said such large cuts would put a "significant" near-term burden on the economy. Instead, he said Washington should devise a plan to address the nation's massive deficit by cutting the budget in a few years when the economy is stronger.
"Such an approach could lessen the near-term fiscal headwinds facing the recovery whle more effectively addressing the longer-term imbalances in the federal budget."
Ty Laffoon
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