California struck gold, receiving the biggest chunk of a special $1.5 billion federal fund pie for programs that target struggling homeowners in states hardest hit by the housing crash.
California Housing Finance Agency (CalHFA) recently announced the fat $700,000 slice would go toward four different programs ultimately assisting 40,000 homeowners.
Earlier this year President Obama announced the $1.5 billion infusion for state housing agencies in Arizona, California, Florida, Michigan and Nevada, where home values have fallen more than 20 percent from peak 2006 and 2007 markets.
The $1.5 billion will be withdrawn from funds set aside for housing under the Emergency Economic Stabilization Act of 2008 (EESA).
The money is earmarked for state agency programs that reduce so-called "preventable" foreclosures faced by unemployed home owners, so-called "underwater" home owners and home owners struggling with second mortgages.
In addition to California's $699.6 million stake, Florida gets $418 million; Michigan, $154.5 million, Arizona, $125.1 million and Nevada, $102.8 million.
"We are very grateful that the Obama Administration recognizes that California and several other states have been severely impacted by the twin problems of unemployment and home price depreciation," said Steven Spears, executive director of CalHFA
The details aren't finalized and homeowners, who needn't be CalHFA loan holders, must otherwise quality before approval. CalHFA's federally approved "Keep Your Home" programs are:
• Mortgage payment assistance for jobless. Up to six months of mortgage payment assistance, with a $1,500 cap for homeowners who have lost their jobs.
• Mortgage payment assistance for past-due homeowners. Up to $15,000 each, with a mandated match from the mortgage lender, the help those with past-due payments.
• Mortgage principal reduction. Underwater borrowers, who owe significantly more on their loans than their homes are worth, get a mortgage principal reduction to "market levels."
• Transition assistance. For those who can't afford to stay in their homes and are completing a short sale or handing over the deed in lieu of a foreclosure, financial assistance for the transition will be provided.
For more details contact CalHFA's Keep Your Home program online or by phone (916) 373-2585.
Sales Slow But Remain Above Last Year
With the scheduled closing deadline for the home buyer tax credits, existing-home sales slowed in June but remained at relatively elevated levels, according to the National Association of REALTORS®.
Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, fell 5.1 percent to a seasonally adjusted annual rate of 5.37 million units in June from 5.66 million in May, but are 9.8 percent higher than the 4.89 million-unit pace in June 2009.
Lawrence Yun, NAR chief economist, said the market shows uncharacteristic yet understandable swings as buyers responded to the tax credits. “June home sales still reflect a tax credit impact with some sales not closed due to delays, which will show up in the next two months,” he said. “Broadly speaking, sales closed after the home buyer tax credit will be significantly lower compared to the credit-induced spring surge. Only when jobs are created at a sufficient pace will home sales return to sustainable healthy levels.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 4.74 percent in June from 4.89 percent in May; the rate was 5.42 percent in June 2009.
The national median existing-home price for all housing types was $183,700 in June, which is 1.0 percent higher than a year ago. Distressed homes were at 32 percent of sales last month, compared with 31 percent in May; it was also 31 percent in June 2009.
NAR President Vicki Cox Golder said softer home sales expected this summer don’t tell the whole story. “Despite these market swings, total annual home sales are rising above 2009 and we’re looking for overall gains again this year as well as in 2011,” she said. “Conditions have become more balanced in much of the country, which is good for both buyers and sellers. However, consumers find it even more challenging to navigate the transaction process, especially for distressed properties, which only underscores the value REALTORS® bring to buyers and sellers in this market.”
A parallel NAR practitioner survey shows first-time buyers purchased 43 percent of homes in June, down from 46 percent in May. Investors accounted for 13 percent of sales in June, little changed from 14 percent in May; the remaining purchases were by repeat buyers. All-cash sales were at 24 percent in June compared with 25 percent in May.
Total housing inventory at the end of June rose 2.5 percent to 3.99 million existing homes available for sale, which represents an 8.9-month supply at the current sales pace, up from an 8.3-month supply in May.
“The supply of homes on the market is higher than we’d like to see. But home prices are still holding their ground because prices had already overcorrected in many local markets,” Yun said. Raw unsold inventory remains 12.7 percent below the record of 4.58 million in July 2008.
Single-family home sales fell 5.6 percent to a seasonally adjusted annual rate of 4.70 million in June from a level of 4.98 million in May, but are 8.5 percent above the 4.33 million pace in June 2009. The median existing single-family home price was $184,200 in June, up 1.3 percent from a year ago.
Single-family median existing-home prices were higher in 10 out of 19 metropolitan statistical areas reported in June in comparison with June 2009. In addition, existing single-family home sales rose in 12 of the 19 areas from a year ago while two were unchanged.
Existing condominium and co-op sales slipped 1.5 percent to a seasonally adjusted annual rate of 670,000 in June from 680,000 in May, but are 20.5 percent higher than the 556,000-unit pace in June 2009. The median existing condo price was $180,100 in June, which is 1.4 percent below a year ago.
Regionally, existing-home sales in the Northeast rose 7.9 percent to an annual level of 960,000 in June and are 17.1 percent above June 2009. The median price in the Northeast was $244,300, down 1.2 percent from a year ago.
Existing-home sales in the Midwest dropped 7.5 percent in June to a pace of 1.23 million but are 11.8 percent higher than a year ago. The median price in the Midwest was $155,900, down 0.1 percent from June 2009.
In the South, existing-home sales fell 6.5 percent to an annual level of 2.01 million in June but are 11.0 percent above June 2009. The median price in the South was $163,600, unchanged from a year ago.
Existing-home sales in the West dropped 9.3 percent to an annual pace of 1.17 million in June but are 0.9 percent higher than a year ago. The median price in the West was $221,800, up 1.5 percent from June 2009.
Source: NAR
Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, fell 5.1 percent to a seasonally adjusted annual rate of 5.37 million units in June from 5.66 million in May, but are 9.8 percent higher than the 4.89 million-unit pace in June 2009.
Lawrence Yun, NAR chief economist, said the market shows uncharacteristic yet understandable swings as buyers responded to the tax credits. “June home sales still reflect a tax credit impact with some sales not closed due to delays, which will show up in the next two months,” he said. “Broadly speaking, sales closed after the home buyer tax credit will be significantly lower compared to the credit-induced spring surge. Only when jobs are created at a sufficient pace will home sales return to sustainable healthy levels.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 4.74 percent in June from 4.89 percent in May; the rate was 5.42 percent in June 2009.
The national median existing-home price for all housing types was $183,700 in June, which is 1.0 percent higher than a year ago. Distressed homes were at 32 percent of sales last month, compared with 31 percent in May; it was also 31 percent in June 2009.
NAR President Vicki Cox Golder said softer home sales expected this summer don’t tell the whole story. “Despite these market swings, total annual home sales are rising above 2009 and we’re looking for overall gains again this year as well as in 2011,” she said. “Conditions have become more balanced in much of the country, which is good for both buyers and sellers. However, consumers find it even more challenging to navigate the transaction process, especially for distressed properties, which only underscores the value REALTORS® bring to buyers and sellers in this market.”
A parallel NAR practitioner survey shows first-time buyers purchased 43 percent of homes in June, down from 46 percent in May. Investors accounted for 13 percent of sales in June, little changed from 14 percent in May; the remaining purchases were by repeat buyers. All-cash sales were at 24 percent in June compared with 25 percent in May.
Total housing inventory at the end of June rose 2.5 percent to 3.99 million existing homes available for sale, which represents an 8.9-month supply at the current sales pace, up from an 8.3-month supply in May.
“The supply of homes on the market is higher than we’d like to see. But home prices are still holding their ground because prices had already overcorrected in many local markets,” Yun said. Raw unsold inventory remains 12.7 percent below the record of 4.58 million in July 2008.
Single-family home sales fell 5.6 percent to a seasonally adjusted annual rate of 4.70 million in June from a level of 4.98 million in May, but are 8.5 percent above the 4.33 million pace in June 2009. The median existing single-family home price was $184,200 in June, up 1.3 percent from a year ago.
Single-family median existing-home prices were higher in 10 out of 19 metropolitan statistical areas reported in June in comparison with June 2009. In addition, existing single-family home sales rose in 12 of the 19 areas from a year ago while two were unchanged.
Existing condominium and co-op sales slipped 1.5 percent to a seasonally adjusted annual rate of 670,000 in June from 680,000 in May, but are 20.5 percent higher than the 556,000-unit pace in June 2009. The median existing condo price was $180,100 in June, which is 1.4 percent below a year ago.
Regionally, existing-home sales in the Northeast rose 7.9 percent to an annual level of 960,000 in June and are 17.1 percent above June 2009. The median price in the Northeast was $244,300, down 1.2 percent from a year ago.
Existing-home sales in the Midwest dropped 7.5 percent in June to a pace of 1.23 million but are 11.8 percent higher than a year ago. The median price in the Midwest was $155,900, down 0.1 percent from June 2009.
In the South, existing-home sales fell 6.5 percent to an annual level of 2.01 million in June but are 11.0 percent above June 2009. The median price in the South was $163,600, unchanged from a year ago.
Existing-home sales in the West dropped 9.3 percent to an annual pace of 1.17 million in June but are 0.9 percent higher than a year ago. The median price in the West was $221,800, up 1.5 percent from June 2009.
Source: NAR
Wall Street Reform Encourages Safe Loans
The new financial overhaul law that President Obama signed into law is still being dissected, but some regulations that affect homebuying and mortgages have already been defined. Here are the key tenets:
• Lenders must prove that borrowers can afford their mortgages. Government guarantees will be voided if lenders don’t demonstrate that they have thoroughly investigated a borrowers’ ability to pay.
• Banks and other entities that pool mortgages and sell them to investors must keep at least 5 percent of the investments on their own books – an incentive to avoid poor quality loans.
• Low-risk mortgages, mostly 30-year fixed-rate loans, are exempt from many regulations. That should encourage lenders to put homebuyers into “plain vanilla” mortgages.
• Bonuses for brokers based on the cost of a mortgage are banned.
[Editor's note: For more, watch http://speakingofrealestate.blogs.realtor.org/2010/07/15/financia/ for an interview with a financial services analysts on the mortgage-related portions of the new law.]
Source: Associated Press, Daniel Wagner (07/21/2010)
• Lenders must prove that borrowers can afford their mortgages. Government guarantees will be voided if lenders don’t demonstrate that they have thoroughly investigated a borrowers’ ability to pay.
• Banks and other entities that pool mortgages and sell them to investors must keep at least 5 percent of the investments on their own books – an incentive to avoid poor quality loans.
• Low-risk mortgages, mostly 30-year fixed-rate loans, are exempt from many regulations. That should encourage lenders to put homebuyers into “plain vanilla” mortgages.
• Bonuses for brokers based on the cost of a mortgage are banned.
[Editor's note: For more, watch http://speakingofrealestate.blogs.realtor.org/2010/07/15/financia/ for an interview with a financial services analysts on the mortgage-related portions of the new law.]
Source: Associated Press, Daniel Wagner (07/21/2010)
Frugal Tips for Making a Home More Appealing
Homeowners who want to sell but don’t have a lot of cash to spruce up their properties might consider these tips from Bankrate.com for upgrading a property without spending a fortune.
Polish up the kitchen. Add new cabinet door handles, replace lighting and update the faucet set. Unless the cabinets are mica, give them a fresh coat of paint. Order new doors for kitchen appliances.
Tidy up the bath. Replace the toilet seat. Clean up the floor with vinyl tiles or sheet vinyl applied over the old floor. Re-grout the tub and, if the tub is dingy, add a new prefabricated tub and shower surround.
Paint the walls.
*Add closet systems to all the bedrooms, pantry, and entry closets.
*Hire a plumber and an electrician to fix anything that is loose or that leaks.
*Clean the carpets or, if they are worn, cover them with area rugs.
*Replace ceiling lights with inexpensive but attractive fixtures.
*Refinish or repaint the front door and replace the hardware.
*Mow the lawn, edge the sidewalks, mulch all the beds and put two big planters at either side of the front door.
Polish up the kitchen. Add new cabinet door handles, replace lighting and update the faucet set. Unless the cabinets are mica, give them a fresh coat of paint. Order new doors for kitchen appliances.
Tidy up the bath. Replace the toilet seat. Clean up the floor with vinyl tiles or sheet vinyl applied over the old floor. Re-grout the tub and, if the tub is dingy, add a new prefabricated tub and shower surround.
Paint the walls.
*Add closet systems to all the bedrooms, pantry, and entry closets.
*Hire a plumber and an electrician to fix anything that is loose or that leaks.
*Clean the carpets or, if they are worn, cover them with area rugs.
*Replace ceiling lights with inexpensive but attractive fixtures.
*Refinish or repaint the front door and replace the hardware.
*Mow the lawn, edge the sidewalks, mulch all the beds and put two big planters at either side of the front door.
A Wish List for a Dream Home
Your real estate agent may not be your fairy godmother, but they have powers to grant you many of your home buying wishes.
Your first step in finding your dream home? You must develop a strong image in your mind, and a sound list for your agent, of what you want of your dream home.
To make this process a little less daunting, consider these categories:
Location: It has been lauded for years as the most important factor when it comes to the saleability and pricing of home, and it's a good place to start when compiling your wish list. Do you want a short commute to work? Are you looking for a waterfront property? Do you want to be near family? Is there a particular neighborhood you want to make home? These are all important questions that will help your agent narrow their search for your dream home.
Neighborhood: If you are looking for a family home, then you need to research the local schools. Is there a particular school district you want to be in, or perhaps to stay in? Are you wanting a neighborhood within walking distance to shops and restaurants? Or perhaps you prefer something more quiet, or on a cul-de-sac.
Home Styles: Do you prefer large, open floorplans and Modern architecture? Or are you a fan of cozy and functional Country style plans? A Tudor style home is exemplified by tall, narrow windows with small panes and a reminiscence of Medieval looks. Or how about Victorian style homes, which feature elaborate details on the exterior and interior of the home?
Home Features: Not every buyer is seeking the same features. What is it that you desire most? Fireplaces, guest bathrooms, an open floor plan, formal dining, a media room, covered porches, a screened porch, a large finished garage, or a pool? The same concept goes for decorative features, including flooring preferences, crown molding, and exterior siding.
Condition: Are you on the lookout for a fixer-upper? Some buyers thrive on the challenge of restoring a former beauty to its original glory. Or are you the type that wishes for new construction, so you can put your own mark on the property? Also consider the idea of townhomes and condos, which can afford the homeowner even more freedom from maintenance.
Use these categories as a starting point for creating your own wish list. And then pass it on to your own fairy godmother!
Published: July 13, 2010
Your first step in finding your dream home? You must develop a strong image in your mind, and a sound list for your agent, of what you want of your dream home.
To make this process a little less daunting, consider these categories:
Location: It has been lauded for years as the most important factor when it comes to the saleability and pricing of home, and it's a good place to start when compiling your wish list. Do you want a short commute to work? Are you looking for a waterfront property? Do you want to be near family? Is there a particular neighborhood you want to make home? These are all important questions that will help your agent narrow their search for your dream home.
Neighborhood: If you are looking for a family home, then you need to research the local schools. Is there a particular school district you want to be in, or perhaps to stay in? Are you wanting a neighborhood within walking distance to shops and restaurants? Or perhaps you prefer something more quiet, or on a cul-de-sac.
Home Styles: Do you prefer large, open floorplans and Modern architecture? Or are you a fan of cozy and functional Country style plans? A Tudor style home is exemplified by tall, narrow windows with small panes and a reminiscence of Medieval looks. Or how about Victorian style homes, which feature elaborate details on the exterior and interior of the home?
Home Features: Not every buyer is seeking the same features. What is it that you desire most? Fireplaces, guest bathrooms, an open floor plan, formal dining, a media room, covered porches, a screened porch, a large finished garage, or a pool? The same concept goes for decorative features, including flooring preferences, crown molding, and exterior siding.
Condition: Are you on the lookout for a fixer-upper? Some buyers thrive on the challenge of restoring a former beauty to its original glory. Or are you the type that wishes for new construction, so you can put your own mark on the property? Also consider the idea of townhomes and condos, which can afford the homeowner even more freedom from maintenance.
Use these categories as a starting point for creating your own wish list. And then pass it on to your own fairy godmother!
Published: July 13, 2010
Home Owners Still Love Their Houses
Despite declining home prices, 90 percent of Americans don’t regret buying their current home, according to a survey for Bankrate.com.
Among the 9 percent who do regret the purchase, most say they are unhappy that they can’t sell their home and move elsewhere or they can’t afford their monthly mortgage.
Some 79 percent of those polled say they have a fixed-rate mortgage on their homes. Among those making over $75,000 per year, 90 percent say they have a fixed rate mortgage.
Source: Bankrate.com (07/12/2010)
Among the 9 percent who do regret the purchase, most say they are unhappy that they can’t sell their home and move elsewhere or they can’t afford their monthly mortgage.
Some 79 percent of those polled say they have a fixed-rate mortgage on their homes. Among those making over $75,000 per year, 90 percent say they have a fixed rate mortgage.
Source: Bankrate.com (07/12/2010)
Mortgage Rates Hit Another Record Low
The average interest on a 30-year fixed mortgage dipped to a new record low of 4.57 percent this week — down from 4.58 percent a week ago, according to Freddie Mac, which began tracking rates in 1971.
Still, the low rates may not provide much of a boost for the housing market because many people do not qualify for new mortgages or have already obtained loans at low rates this year.
Source: Indianapolis Star (07/09/10) © Copyright 2010 Information Inc.
Still, the low rates may not provide much of a boost for the housing market because many people do not qualify for new mortgages or have already obtained loans at low rates this year.
Source: Indianapolis Star (07/09/10) © Copyright 2010 Information Inc.
Relocation News Is Getting Better
Relocation News Is Getting Better The economy is normalizing with only 1 percent of those in a recent survey saying they were moving because they lost their home to foreclosure, according to Relocation.com, which has been tracking people who move for the last year using a series of surveys.
In February of this year, a survey found 5 percent of respondents saying that was the case.
Also in February, 13 percent of respondents said they were moving because of job loss, but in June only 4 percent moved for that reason.
In the June survey, 4 percent said they planned to purchase a first home when they moved, while 10 percent said they planned to move to a better home in a nicer neighborhood.
Some 18 percent of June movers were previous homeowners who moved and were purchasing a new home, up from 12 percent in February, while 12 percent were former renters who planned to purchase a home in the new locale.
Source: Relocation.com (07/07/2010)
In February of this year, a survey found 5 percent of respondents saying that was the case.
Also in February, 13 percent of respondents said they were moving because of job loss, but in June only 4 percent moved for that reason.
In the June survey, 4 percent said they planned to purchase a first home when they moved, while 10 percent said they planned to move to a better home in a nicer neighborhood.
Some 18 percent of June movers were previous homeowners who moved and were purchasing a new home, up from 12 percent in February, while 12 percent were former renters who planned to purchase a home in the new locale.
Source: Relocation.com (07/07/2010)
Underwater? Alternative to Walking Away..
Home owners who are "underwater" with their home loan and seek to come up for air by walking away from the debt, could still be gasping for relief years down the road.
There are occasions when walking away from your home -- and down the road to foreclosure -- is your only option, but seldom is it the best alternative.
Mortgages are "underwater" or "upside down" when the property experiences negative equity -- the mortgage is larger than the current value of the property. Negative equity is caused by a decline property value, an increase in mortgage debt or, most likely, both.
The consensus among experts is to consider the alternatives before abandoning your home, talk with your lender and seek counseling from a U.S. Department of Housing and Urban Affairs (HUD) certified counselor.
Don Bisenius, the head of Freddie Mac's home-loan guarantee business, recently asked borrowers to stick it out through the crisis.
Bisenius said foreclosures lead to degraded neighborhoods, more expensive mortgages and reduced home values.
"In the end, borrowers considering a strategic default should recognize the damaging impact their actions can have on others," he wrote.
The Obama Administration's frequently updated and strengthened multi-tiered MakingHomeAffordable.com program and other government efforts offer a good start with a host of options.
• Refinancing, turning in your existing mortgage for a new one, is perhaps the toughest option to accomplish. A refinance requires meeting stiff underwriting requirements -- an excellent credit report, a high credit score of 720 or more, documented career level income and little debt, for starters.
Federal programs, including the Federal Housing Administration's refinance effort, can be a good bet for those who haven't yet faced hardship and can qualify for a new loan.
• A mortgage modification reworks the terms of existing loans to get the payment down to a more affordable level. To add greater affordability, lenders lower the interest rate, lengthen the term of the loan or reduce the principal -- or do some combination of all three. Modifications can be used by qualified home owners who aren't yet struggling as well as those who are in a pinch.
• Short sales
Modifications and short sales can impact your credit, but not necessarily with the force of a foreclosure.
Bottom line, exploring all the options is a better first step than walking away.
I understand feeling financial pressure is difficult and embarrassing, but there is a point at which everyone has time to explore the options. In just about every case, that's much better than doing nothing at all. I strongly feel there is no reason for anyone to get a foreclosure" said Zdenka Mahan, a real estate agent with Intero Real Estate in Los Gatos.
There are occasions when walking away from your home -- and down the road to foreclosure -- is your only option, but seldom is it the best alternative.
Mortgages are "underwater" or "upside down" when the property experiences negative equity -- the mortgage is larger than the current value of the property. Negative equity is caused by a decline property value, an increase in mortgage debt or, most likely, both.
The consensus among experts is to consider the alternatives before abandoning your home, talk with your lender and seek counseling from a U.S. Department of Housing and Urban Affairs (HUD) certified counselor.
Don Bisenius, the head of Freddie Mac's home-loan guarantee business, recently asked borrowers to stick it out through the crisis.
Bisenius said foreclosures lead to degraded neighborhoods, more expensive mortgages and reduced home values.
"In the end, borrowers considering a strategic default should recognize the damaging impact their actions can have on others," he wrote.
The Obama Administration's frequently updated and strengthened multi-tiered MakingHomeAffordable.com program and other government efforts offer a good start with a host of options.
• Refinancing, turning in your existing mortgage for a new one, is perhaps the toughest option to accomplish. A refinance requires meeting stiff underwriting requirements -- an excellent credit report, a high credit score of 720 or more, documented career level income and little debt, for starters.
Federal programs, including the Federal Housing Administration's refinance effort, can be a good bet for those who haven't yet faced hardship and can qualify for a new loan.
• A mortgage modification reworks the terms of existing loans to get the payment down to a more affordable level. To add greater affordability, lenders lower the interest rate, lengthen the term of the loan or reduce the principal -- or do some combination of all three. Modifications can be used by qualified home owners who aren't yet struggling as well as those who are in a pinch.
• Short sales
Modifications and short sales can impact your credit, but not necessarily with the force of a foreclosure.
Bottom line, exploring all the options is a better first step than walking away.
I understand feeling financial pressure is difficult and embarrassing, but there is a point at which everyone has time to explore the options. In just about every case, that's much better than doing nothing at all. I strongly feel there is no reason for anyone to get a foreclosure" said Zdenka Mahan, a real estate agent with Intero Real Estate in Los Gatos.
Treasury Secretary Defends Recovery Efforts
U.S. Treasury Secretary Timothy Geithner in a PBS television interview on Tuesday defended government efforts to reduce foreclosures.
He said the federal programs helped millions of families stay in their homes because of reduced monthly payments, while tax credits allowed million of Americans to purchase property.
He said the programs aren’t helping “the most fortunate Americans who bought very, very expensive homes or a second home. … They’re not going to reach people who lied about their income, were unable to prove that they had income -- weren’t able to prove they were eligible.”
Source: Reuters News (07/06/2010)
He said the federal programs helped millions of families stay in their homes because of reduced monthly payments, while tax credits allowed million of Americans to purchase property.
He said the programs aren’t helping “the most fortunate Americans who bought very, very expensive homes or a second home. … They’re not going to reach people who lied about their income, were unable to prove that they had income -- weren’t able to prove they were eligible.”
Source: Reuters News (07/06/2010)
Treasury Secretary Defends Recovery Efforts
U.S. Treasury Secretary Timothy Geithner in a PBS television interview on Tuesday defended government efforts to reduce foreclosures.
He said the federal programs helped millions of families stay in their homes because of reduced monthly payments, while tax credits allowed million of Americans to purchase property.
He said the programs aren’t helping “the most fortunate Americans who bought very, very expensive homes or a second home. … They’re not going to reach people who lied about their income, were unable to prove that they had income -- weren’t able to prove they were eligible.”
Source: Reuters News (07/06/2010)
He said the federal programs helped millions of families stay in their homes because of reduced monthly payments, while tax credits allowed million of Americans to purchase property.
He said the programs aren’t helping “the most fortunate Americans who bought very, very expensive homes or a second home. … They’re not going to reach people who lied about their income, were unable to prove that they had income -- weren’t able to prove they were eligible.”
Source: Reuters News (07/06/2010)
What Causes Borrowers to Walk Away?
While borrowers with “super prime” credit scores accounted for just 5 percent of the mortgage delinquencies, about 28 percent of their defaults were calculated and strategic.
This relatively small actual number is nevertheless causing the credit industry to look at new ways to evaluate walk-away risk even among the very creditworthy.
Credit bureau Experian reports that borrowers in California, Florida, and other hard-hit states are more likely to walk away than people living in states with more stable markets. Also, residents of states where lenders have no recourse are more likely to toss in the towel.
People with small amounts of negative equity also are more likely to stay and pay.
Source: Washington Post (07/03/2010)
This relatively small actual number is nevertheless causing the credit industry to look at new ways to evaluate walk-away risk even among the very creditworthy.
Credit bureau Experian reports that borrowers in California, Florida, and other hard-hit states are more likely to walk away than people living in states with more stable markets. Also, residents of states where lenders have no recourse are more likely to toss in the towel.
People with small amounts of negative equity also are more likely to stay and pay.
Source: Washington Post (07/03/2010)
All Rates But 1-Year ARM Hit Record Lows In Freddie Mac Weekly Survey
McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 4.69 percent with an average 0.7 point for the week ending June 24, 2010, down from last week when it averaged 4.75 percent. Last year at this time, the 30-year FRM averaged 5.42 percent.
The 15-year FRM this week averaged 4.13 percent with an average 0.6 point, down from last week when it averaged 4.20 percent. A year ago at this time, the 15-year FRM averaged 4.87 percent.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.84 percent this week, with an average 0.7 point, down from last week when it averaged 3.89 percent. A year ago, the 5-year ARM averaged 4.99 percent.
The 1-year Treasury-indexed ARM averaged 3.77 percent this week with an average 0.7 point, down from last week when it averaged 3.82 percent. At this time last year, the 1-year ARM averaged 4.93 percent. This is the lowest the 1-year ARM has been since the week ending May 6, 2004 when it averaged 3.76 percent.
"Mortgage rates for all but traditional 1-year ARMs hit all-time record lows this week in our survey while activity in the housing market slowed in May following the expiration of the homebuyer tax credit," said Frank Nothaft, Freddie Mac vice president and chief economist. "Freddie Mac began collecting rates for 30-year fixed loans in April 1971, 15-year fixed mortgages in September 1991 and 5-year hybrid ARMs in January 2005. The record low for traditional 1-year ARMs of 3.36 percent occurred during the week of March 25, 2004."
"Both new and existing home sales showed unexpected declines in May. Existing sales fell 2.2 percent, compared to the market consensus forecast of a 6.0 percent gain, based on figures published by the National Association of Realtors®. Sales of new homes fell 32.7 percent to an annualized rate of 300,000 units, which was the largest monthly drop and slowest pace since records began in 1963, according to the Census Bureau."
The 15-year FRM this week averaged 4.13 percent with an average 0.6 point, down from last week when it averaged 4.20 percent. A year ago at this time, the 15-year FRM averaged 4.87 percent.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.84 percent this week, with an average 0.7 point, down from last week when it averaged 3.89 percent. A year ago, the 5-year ARM averaged 4.99 percent.
The 1-year Treasury-indexed ARM averaged 3.77 percent this week with an average 0.7 point, down from last week when it averaged 3.82 percent. At this time last year, the 1-year ARM averaged 4.93 percent. This is the lowest the 1-year ARM has been since the week ending May 6, 2004 when it averaged 3.76 percent.
"Mortgage rates for all but traditional 1-year ARMs hit all-time record lows this week in our survey while activity in the housing market slowed in May following the expiration of the homebuyer tax credit," said Frank Nothaft, Freddie Mac vice president and chief economist. "Freddie Mac began collecting rates for 30-year fixed loans in April 1971, 15-year fixed mortgages in September 1991 and 5-year hybrid ARMs in January 2005. The record low for traditional 1-year ARMs of 3.36 percent occurred during the week of March 25, 2004."
"Both new and existing home sales showed unexpected declines in May. Existing sales fell 2.2 percent, compared to the market consensus forecast of a 6.0 percent gain, based on figures published by the National Association of Realtors®. Sales of new homes fell 32.7 percent to an annualized rate of 300,000 units, which was the largest monthly drop and slowest pace since records began in 1963, according to the Census Bureau."
Subscribe to:
Posts (Atom)