Smart Borrower Blog

Archive for the ‘Mortgage Rates’ Category

How Low Can You Go, U.S. Home Sales?

News on the home sales front this week was not good. July sales of existing homes dropped 27.2 percent from the previous month to 3.83 million units and new home sales fell to a 47-year low of 276,000, down 12.4 percent from June. New home sales were also off 32.4 percent from July 2009 figures, and existing home sales drooped 25.5 percent form the year before. Prices for both new and existing homes decreased in July, with the median new home price across the nation falling to $253,300, the lowest price since 2003. Existing homes slouched down to $182,600 from... more »

Low Rates Finally Make Mortgage Loans Palatable

Even though long-term mortgage interest rates have been at all-time record lows for weeks, very few borrowers were taking the bait. At least until this past week, according to the Mortgage Bankers Association. Last week, home loan applications rose by 7.6 percent based on the MBA’s seasonally adjusted index. Home purchase applications rose for the first time in five weeks, after dropping to a 13-week low the previous week, and refinance applications jumped to their highest level in over a year. Mortgage giant Freddie Mac reported last week that the average rate on a 30-year fixed rate loan sunk to... more »

Fed Rate Kept Near Zero – Low Rates Available Online

Yesterday, the Federal Reserve Board (the Fed) announced that it would keep its key interest rate near zero despite its optimistic outlook on the labor market and the economy overall.  Informa Research Services, a subsidiary of Informa plc (LSE: INF), suggests consumers use online rate tables and national averages to monitor rates while awaiting the Fed’s next move. Many speculated the Fed would indicate a rate increase in the coming months in their statement today.  Instead, they maintained that “economic conditions… warrant exceptionally low levels of the federal funds rate for an extended period” (Source: www.federalreserve.gov). Since it is nearly... more »

Mortgage Delinquencies Hit a New High

While the economy is showing few signs of recovery and the national unemployment rate is staying steady at around ten percent, more and more people are struggling every day to make ends meet. Each month the number of homeowners across the country who must make the decision to purchase food for their family or to make their mortgage payment rises. New data shows that more homeowners than ever before are at risk of foreclosure. Once again, TransUnion, one of the national credit data providers, is reporting a rise in the number of homeowners who are at least 60 days... more »

Obama Has New Housing Plan to Combat High Foreclosure Rates

The national foreclosure rate actually declined in the last quarter of 2009 to 9.47 percent, down from 9.64 percent in the third quarter, according to the latest data from the Mortgage Bankers Association. If you’re feeling optimistic, this may be a sign that things in the housing market are slowly starting to turn around. Yet a foreclosure rate close to 10 percent is hardly something to celebrate. Also, if you combine loans in foreclosure and those that are delinquent by at least one payment, that percentage shoots up to roughly 15 percent. And let’s not forget that another wave of... more »

New MDIA Law Spells Danger for Home Buyers

If you read an article in your local newspaper that said the new Mortgage Disclosure Improvement Act (MDIA) helps protect home buyers, you’ve been misled. This new law that went into affect July 30, 2009 is a wolf in sheep’s clothing. I’ll explain. What Sounds Good: Lenders must provide you with the Truth in Lending (TIL) form at least seven business days before closing. This form shows the Annual Percentage Rate for your loan. Receiving this information in advance sounds great. But wait. There is a big catch. The Potential Deception: The Annual Percentage Rate is not the interest rate... more »

Mortgage Interest Rates May Have Hit Bottom

Many market analysts are predicting that mortgage interest rates will not fall much lower than 5 percent  in the next few years, as plummeting rates have caused a flood of homeowners to start refinancing again. The average rate on a traditional 30-year fixed rate mortgage has fallen from around 6 percent in November 2008 to the current historic low of about 5 percent. January rates were the lowest on record in the past 30 years of the Freddie Mac mortgage rate survey. Economists are forecasting rates in the 5 percent to 5.25 percent range for the next quarter or two.... more »

Greenspan: Fed Actions Did Not Cause Recession

Although admitting that “we are in the midst of a global crisis that will unquestionably rank as the most virulent since the 1930s,” former Federal Reserve Chairman Alan Greenspan contended Tuesday that the interest rate actions of the Fed were not to blame for the current recession. In an opinion article on the Wall Street Journal’s web site, Greenspan argued that the true cause of the trouble was in the mortgage lending industry itself.   “The interest rate that mattered was not the federal-funds rate, but the rate on long-term, fixed-rate mortgages,” he wrote. “Between 2002 and 2005, home mortgage... more »

Obama Announces Details of New Housing Plan

President Barack Obama announced the details of his $75 billion plan Wednesday to help roughly 9 million struggling homeowners avoid foreclosure. “The plan I’m announcing focuses on rescuing families who have played by the rules and acted responsibly, by refinancing loans for millions of families in traditional mortgages who are underwater or close to it,” he said in a speech at an Arizona high school. The funding for the Obama plan will come from the $275 billion stimulus package announced last month. It focuses on two major objectives. The first is to aid homeowners in refinancing into new, affordable mortgages,... more »

Top Dem Says Two-Thirds of Lenders Are On Board with Treasury Plan

According to Senate Democrat Charles Schumer Wednesday, two-thirds of the country’s mortgage servicers are willing to cooperate with the terms of the recently-released Treasury Department plans to prevent foreclosures nationwide. “Two-thirds of servicers are the large banks that are part of the [Troubled Asset Relief Program],” Schumer said. “They’ve already agreed they are going to refinance now that they are no longer worried about getting sued.” Schumer, a member of the Senate Banking Committee, reportedly got the two-thirds statistic from Housing and Urban Department (HUD) Secretary Shaun Donovan. The largest mortgage servicers in the country like Bank of America Corp.,... more »