Smart Borrower Blog

Archive for the ‘Mortgages’ Category

Lenders Struggle with Mortgage Refinancing Boom

Mortgage rates have reached historically low levels, with the average 30 year fixed loan interest rate coming in at 4.15% – and has resulted in large volumes of homeowners looking to refinance their mortgages to secure a lower interest rate. Lenders are struggling to keep up with the number of refinance applications coming in. The Mortgage Bankers Association shows the number of mortgage refinance applications have increased 83% since February. Some lenders are holding their mortgage rates higher than the average simply to slow down the number of people applying for mortgage refinances. During the housing market bust, many lenders... more »

Lending Standards Eased Slightly Again in Latest Quarter

Banks loosened their lending standards on several types of loans during the past three months, according to the Federal Reserve’s survey of senior loan officers . Those finding the easiest access to loan capital are large and medium-sized businesses, as well as car buyers. In the survey, which polled 55 domestic and 22 foreign banks, 21.8 percent of all banks said that they eased their lending standards for large companies in the third quarter from the second. And 20 percent said they had made it easier for auto loan applicants to get approved. “In spite of the equity market volatility,... more »

Refinances Fuel Spike in Mortgage Activity

Even as more bad news on the economy came pouring in, mortgage loan applications continued to grow in number. According to the Mortgage Bankers Association, its market composite index, its measure of total loan application volume, increased 21.7 percent during the week ended August 10, from the previous week. Broken down into parts, a 30.4 percent increase in refinance loan applications was off-set slightly by a 0.9 percent decline in home purchase applications. “Amid substantial market turmoil last week, mortgage rates dropped to their lowest levels of the year, and refinance applications jumped more than 30% to their highest levels... more »

Mortgage Applications Continue to Fall Despite Low Rates

Even though mortgage interest rates keep falling, it has not been enough to increase U.S. mortgage applications. Total applications for refinance loans and home purchase loans dropped 5.1 percent in the past week, according to the Mortgage Bankers Association, marking the fourth consecutive weekly decrease. The number of home purchase requests, often a sign of future home sales, fell 2.6 percent in the past week. The unemployment outlook and tightened loan standards continue to be significant issues for many potential homebuyers. Says Celia Chen, a housing economist at Moody’s Analytics Inc as quoted in a Bloomberg article “Without stronger job... more »

Mortgage Fraud Rises During First Quarter

According to a new report releases by the Financial Crimes Enforcement Network (FinCEN) during the first quarter this year reports of mortgage fraud rose sharply, up a total of 31%. During the first three months of the year there were 25,485 new cases reported where last year during the same time period the number was much lower at 19,420. Why the increase? With Fannie, Freddie and other mortgage investors putting pressure on banks to buy back loan losses related to fraudulent activity, banks are being forced to open their books and relook at loan documents and practices. Most of the... more »

Fannie Mae Offers Incentives to Buy Foreclosed Homes

In an attempt to knock down its rising stockpile of foreclosed properties, mortgage finance company Fannie Mae is now offering incentives to both buyers and real estate agents who take these homes off the market. For eligible properties, the government-run entity will give homebuyers up to 3.5 percent of the purchase price for closing costs, as long as they plan to live in the home, not rent it or flip it. What’s more, buyers could be eligible for mortgage and renovation financing, which gives them the opportunity to pay just a 3 percent down payment. The agents representing these buyers... more »

Second Mortgage Holders Much More Likely To Have Underwater Mortgages

According to an article on the Wall Street Journal website, a recent study released by the real estate data firm CoreLogic Inc. shows that if you have a second mortgage on your home, you are much more likely to be an underwater borrower. Nearly 40% of all underwater mortgaged homes are those that carry more than one loan. This is yet another catastrophe adding to the devastated housing market. In contrast, home owners with just one mortgage are much less likely to be underwater. Only about 18% of homeowners who only have only one loan are underwater. Additionally, the data... more »

Small Business Lending Surges in April

The latest survey from PayNet Inc shows that small business loans increased significantly in April over the past year, a hopeful sign for the economy in an otherwise dismal news week. The Thomson Reuters/PayNet Small Business Lending Index, a measure of total loan volume to small businesses, jumped up 17 percent compared with April 2010, making nine consecutive yearly double-digit gains. However, borrowing by small businesses was down 1 percent from March of this year. “The fact that small businesses are hanging in there is a good sign for the economy,” said William Phelan. PayNet president in an interview as... more »

Will We See Higher Interest Rates This Year?

The minutes from the Federal Open Market Committee April 26 – 27 meeting were released today, revealing that Federal Reserve officials have started talking about an exit policy for its aggressive market support measures. That means interest rates are bound to rise, but how soon can we expect a jump in rates? “While the Fed said they’re tussling internally, they’re certainly not ready to step on the accelerator,” with regards to raising interest rates, said Jim Meyer, chief investment officer at Tower Bridge Advisors in a Wall Street Journal article. “They didn’t really accelerate any timetable. When the Fed says... more »

Big Banks Say $5 Billion Should Be Punishment Enough

After seven months of trying to work out a settlement for their “robo-signing” foreclosure scandals, the nation’s big banks are now offering $5 billion to the state attorneys general to close the matter. Last fall it was discovered that many banks were trying to fast-track the foreclosure process by skipping some of the necessary legal protocol and paperwork. This has led in some cases to wrongful evictions and all 50 states banded together to go after these banks, including Bank of American, JPMorgan Chase, Wells Fargo, and Citigroup. The states joined up with several government oversight agencies, among whom are... more »