The Breakdown of the Fiscal Cliff

Source: cfr.org Was the Mayan Apocalypse predicting the “Fiscal Cliff” all along? Either way, there’s been a lot of head scratching these past few days since the latest buzz word on the street has emerged as something that we should be worried about. But what exactly is this “fiscal cliff” and why is everyone talking about it? A definition found on cfr.org put it this way: "The "fiscal cliff" is a term used to describe a bundle of momentous U.S. federal tax increases and spending cuts that are due to take effect at the end of 2012 and early 2013. In total, the measures are set to automatically slash the federal budget deficit...

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Unemployment Rate Dropped; Economy Recovering

According to the Labor Department, businesses around the nation have added 146,000 new jobs! As a result, the unemployment rate has dropped from 7.9% to 7.7%. This rate is the lowest that it has been since December 2008 when President Obama took office. There was concern initially that businesses would slow down their hiring out of fear of the federal budget's "fiscal cliff" and what it might do to next year's economy, but this appears to not be an issue. Also, Hurricane Sandy did not have as big of an effect on the job market as originally anticipated. The holiday season seems to be keeping moods high as Christmas sales are booming. As a result, most of November's job gains were in clothing, electronics and general merchandise stores.  However, there were declines in employment for...

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Rate Update: Near Record Lows

According to Freddie Mac's latest Primary Mortgage Market Survey (PMMS), the mortgage rates remain "little changed and near record lows this week amid indicators of stronger economic growth and signs of tame inflation," said Frank Nothaft, vice president of Freddie Mac. The 30-year fixed-rate mortgage averaged at 3.34% for the week ending December 6, 2012. Because the mortgage rates have remained steady, the economy is getting a chance to recover.  There has been growth in fixed residential investment, residential construction, and pending home sales. "The housing market is aiding in this recovery," said Nothaft. If you are interested in buying a house or refinancing your home, the near record-low mortgage rates are still attractive! Home affordability is high and...

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HUD Set to Sell Nearly 40,000 Distressed Loans in 2013

In an effort to support hard-hit communities and to increase recovery on losses to the FHA's Mutual Mortgage Insurance Fund, HUD will sell roughly 40,000 distressed loans over the next year. Working with HUD, the Distressed Asset Stabilization Program (DASP) has been instrumental for selling loans of severely delinquent mortgages that are insured by the FHA. There is a competitive bidding process involved that sells loan pools to the highest bidder. The results of these sales from September's auction shows that investors and communities alike are eager for this program to continue. The sales were strong and had a record number of participating bidders. The FHA saw $1 billion in economic value added to their MMI fund due to the decrease of losses that were expected on FHA loans. The first sale...

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HARP Loans Make Up 25% of Loans in Q3

Did you know that Quest Loans specializes in Home Affordable Refinance Program (HARP) loans? And did you know that in the 3rd quarter of 2012 that nearly one-quarter of all refinances were through HARP? That's right! More than 90,000 homeowners have refinanced their current mortgages with HARP in that time period. The high amount of HARP refinances is largely because of the record low mortgage rates! Did you know: Since HARP began in 2009, Fannie Mae and Freddie Mac have financed more than 1.7 million loans! Half of all HARP loans in September 2012 had loan-to-value (LTV) ratios greater than 105% and one-fourth had LTVs greater than 125% 19% of HARP refinances for underwater borrowers were for sorter-term mortgages which builds equity faster If you are thinking about refinancing your...

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Number of Home Sales Rises in October

Compared to last year, the month of October saw a 17.8% rise in home sales. This means that more people are buying homes and taking advantage of the low interest rates! Also, the Median Home Price has gone up, meaning that you could potentially sell your home for a higher amount than you could in previous months. If you are looking to buy a home, the overall inventory of available houses is declining so it may be harder to find the perfect home for your family. However, if you do find a suitable candidate, the low interest rates are in your favor! If you find that these statistics are pleasing to your pocketbook, don't hesitate! We'd love to help you start the loan application right away. Keep in mind that Quest Loans specializes in HARP and FHA loans, as well as refinancing! Give us...

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Decreased Housing Inventory in California

Quest Loans is based right here in sunny California! Recently, we heard that our lovely state has been hit hard by a low inventory situation. We all know that California can be pricey, but for first-time home buyers seeking lower-priced homes for sale, the stakes have just gone up! According to Zillow's latest analysis that keeps track of the number of homes for sale across the country, California's numbers are low. As a lending company, we are definitely on the homeowner's side! So we'd like to recommend that you begin your house search soon in case these numbers continue to dwindle. The blame for a decrease in the number of available homes for sale partially falls on investors who are snatching them up to rent out to you. However, we know that not everyone wants to rent. If...

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Home Data Index Market Report Summary

According to Clear Capital's Home Data Index Market Report from September 2012, the uncertainty of the fiscal cliff is threatening to slow the rate at which the housing market has been recovering. (The fiscal cliff is a term describing the issues the U.S. Government will face at the end of 2012 when the Budget Control Act of 2011 takes effect.) The report also states that the national yearly price of homes has increased by 3.6% and it is predicted that it will increase another 2.2% over the next six months. If we can avoid the fiscal cliff, there is still a risk that confidences will be damaged which is essential for the recovery. Overall, though, most markets are improving rather than declining and it looks good that recovery will survive the winter. It is possible that the fear of a potential...

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Unemployment Rate Falls

Typically when there is good news regarding employment, it has a positive effect on the mortgage industry as well. The economy has created 114,000 new jobs which caused the unemployment rate to fall to 7.8% as of September! More jobs means more money and, hopefully, fewer foreclosures! However, a lot of businesses are currently not hiring because they are waiting to see how the election plays out in November. Despite this, economy is slowly continuing to bounce back!  If you are reaping the benefits and are thinking about purchasing a home in the near future, Quest Loans would like to help! Call us at 888-883-5252 for assistance...

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Rates Keep Falling!

According to Freddie Mac's Primary Mortgage Market Survey, the average fixed mortgage rates have fallen to new all-time record lows again! These rates have been falling due to the Federal Reserve purchasing mortgage securities.  If you are looking to buy a house soon, we'd recommend taking advantage of these great rates! The 30-year fixed-rate mortgage is currently averaging 3.36%! Give us a call today if you are interesting in finding out more information! Quest Loans would love to help! 888-883-525...

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Further Proof of Economic Recovery

For the first time since November 2007, home equity installment balances rose 0.3%. This may indicate a new chapter for the mortgage industry. According to Equifax's latest National Consumer Credit Trends Report the total number of loans fell by 43% over the past four years and home equity installment balances fell by 49%. However, residential real estate is beginning to stabilize and mortgage debts and delinquencies are declining in number. Mortgage rates themselves are setting new record lows nearly every week! All of these individual pieces are combining to create a new and improved economy; one that is working hard to recover...

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Economic Improvement

Quest Loans is feeling pretty optimistic about the current status of the housing market. Sure, there is always room for improvement, but most things are pointing in the right direction. For instance, the price of single-family homes has risen once again in July for the sixth straight month. It was not a huge increase, but more economists would agree that the market is definitely heading down the road of recovery. As of August, home resales and new home construction has been improving as well. Because of all this good data, the stock market has even seen some gain. Quest Loans would like to help you take advantage of this progress. If you are looking for a great lending company, look no further! We would love to help you get started on your home loan today! 888-883-5252...

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New Act to Protect Taxpayers?

We reported about the possibility of the government doing an eminent domain procedure regarding underwater mortgages. Now, California Representative John Campbell has announced "The Defending American Taxpayers from Abusive Government Takings Act". This Act is meant to stop the local governments from using federal tax dollars to seize underwater homes, and turn that money toward profiteering schemes. This act is meant to uphold the law and protect taxpayers.  We can all agree that underwater mortgages are slowing down the recovery of the housing market, but there has to be a better solution than eminent domain. It is supposedly going to protect taxpayers' investments, defend retirement savings, and preserve the rule of law. What do you think about this new Act? ...

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Builder Confidence Continues to Rise!

At Quest Loans, we love to report good news in the housing market! Once again, Builder Confidence has risen for the 5th month straight! Newly built, single-family homes are selling well and this helps move the housing market in a positive direction. Current sales conditions are making builders around the country smile! Future sales prospects and the amount of traffic they are getting in the model homes has increased tremendously. However, the cost of building materials is rising which could potentially cause an issue for builders in this fragile economy. If they can afford to purchase these materials and put together crews for work, jobs can be made and the economy can keep improving...

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23% of Homes Sold in Q2 were Foreclosures

According to RealtyTrac's latest Foreclosure Sales Report for the second quarter of 2012, nearly a fourth of the homes sold in that period of time were foreclosures. This means that there is now a limited supply of foreclosed homes available for sale in some markets. However, the past three months have seen an increase in foreclosure starts which may help to ease the shortage in the coming months. Also, the average price for these foreclosure sales increased in Q2, bu they were sold at a price that is 32% lower than the average price of a non-foreclosed home. Some of these foreclosure starts are translating to short sales. The number of properties that are under short sale status are increasing because lenders are opting for that instead of entering the complicated foreclosure process. These...

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FHFA's New Guidelines for Short Sales

The FHFA has announced that all existing short sale programs will now be consolidated into one standard program. This short sale program is being issued by Fannie Mae and Freddie Mac in hopes of providing clear guidelines for mortgage servicers that will allow them to quickly and easily qualify eligible borrowers for a short sale. These new guildlines are going into effect on November 1, 2012. Any homeowner who has a mortgage through one of the GSE's will be allowed to sell their home in a short sale if they experience an eligible hardship such as the death of a borrower, divorce or loss of job. These reasons will not require further approval from Fannie Mae or Freddie Mac which helps to prove their commitment to streamlining these types of programs that help homeowners avoid foreclosure....

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Home Sales on Rise for 13 Straight Months!

According to the July RE/MAX National Housing Report, home sales have been on the rise for the past 13 consecutive months! The home sales in July 2012 were 10.3% higher than they were in July 2011. It shows that the housing market is finally improving. Median home prices are now higher than they were last year, and have been for 6 months in a row. The only challenge that this recovering market is seeing now has to do with housing inventory. The amount of homes that are available for sale has decreased by 26.8% compared to last year. In fact, if there was a greater inventory available to homebuyers, home sales would most definitely be higher. There is an increased demand but a shrinking inventory. The only things that are lacking now would be lower unemployment rates and better availability...

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4.5% Drop in Mortgage Applications

According to the Mortgage Bankers Association's Weekly Mortgage Applications Survey for the week ending August 10, 2012, the number of mortgage applications has dropped by 4.5% just since the week before. Many lenders have been left puzzled over the sudden drop. According to the Market Composite Index which measures mortgage loan application volume, this decrease was based on seasonally adjusted figures. Had it been unadjusted, the decrease would have actually been closer to 4.7%. In this slowly re-stabilizing economy, we cannot afford to see statistical drops like this. Hopefully the number of loan applications submitted will rise again soon, which would indicate an improvement for the U.S. housing market...

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Local Governments to Seize Underwater Mortgages?

If you consider the state of the housing market with all of the homes that are still underwater on their mortgages, you may come to the conclusion that the federal programs that promised to help homeowners have not been very successful. True, they have helped many, but overall their assistance is limited. A new idea has come up that has struck a nerve with mortgage financers: eminent domain. Local governments could write down mortgages in the same way that a piece of land is condemned. The town or county would get the court's approval to pay a "fair market" price to the lendor or investor that is holding a homeowner's underwater mortgage. This would be similar to credit companies selling debt to collectors in that the amount would be substantially less than the unpaid balance. Once...

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80 Metros Show Economic Improvement

According to the National Association of Home Builders and the First American Improving Markets Index (IMI) for August, there have been vast improvements in the housing markets of 80 metropolitan areas. Statistics are taken in these cities across 32 states plus the District of Columbia. The index identifies metropolitan areas that improved in areas such as housing permits, employment, and housing prices for at least six consecutive months. 75 of the metros remained in their respective places on the list from the previous report. There were five new ones that were added and nine that fell from the list because of changes in housing prices. Keep in mind that all of these different metro areas have different characteristics in terms of the condition of their economy and their employment situations....

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BofA and GSE's Ongoing Battle

Bank of America has been in the news for quite some time now. They were accused of selling mortgages to people who did not actually qualify. The government sponsored entities, Fannie Mae and Freddie Mac, want BofA to buy back all of the mortgages. This has been a debate for a while and it hasn't made much progress. A settlement would be good news for shareholders as it would alleviate some of the pressure from BofA's stocks. The GSE's have been more strict regarding the bank's policies for mortgages now since the bank accounts for 58% of the GSE's total mortgage repurchase requests. Our sources say that the bank and the GSE's talks have become more productive in the past few weeks and are closing in on an agreement.Earlier this week a proposal to reduce the mortgages of underwater homes in...

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Sales for New Homes Slowed

According to HUD and the U.S Census Bureau, the sales figures for newly built, single-family homes has slowed down 8.4%. It is now sitting at a seasonally adjusted annual rate of 350,000 units for the month of June. This comes off of a steady increase that the previous months have had. Despite slowing, the sales numbers are indeed up on a quarterly and yearly basis. Builders are gaining more serious buyers too, so the news is positive overall. However, builders are still facing issues with tight inventory of new homes for sale. Having a larger selection of new homes for sale would make things easier for them, but they also face issues with obtaining credit to build new homes. The figures for Pending Home Sales has declined in June as well. The steady decline of housing inventory proves...

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Mid-Year 2012 Foreclosure Market Report

According to RealtyTrac's Mid-Year 2012 Foreclosure Market Report, the number of foreclosures in the US has risen by 2% from January to June as compared to the previous six months. Compared to the first half of 2011, foreclosures were down 11%. This report indicates that a total of 1,045,801 properties that have foreclosure filings, which means that one in every 126 units have had at least one filing in the first six months of 2012. The federal government has been very focused on fixing the foreclosure problem by introducing aggressive foreclosure prevention programs. Lenders and servicers have also been pressed to be more strict about their policies and procedures...

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Prudential Real Estate Outlook Survey

According to the newly released Prudential Real Estate Outlook Survey for the past quarter, Americans have shown an increase in confidence in homeownership. Residential real estate is recovering which leads to people being more optimistic about buying a home. Many are taking advantage of the record low mortgage rates and the record high housing affordability. The survey shows that 69% of respondents believe that real estate is still a good investment despite what the last new years have brought. 64% have a favorable perception of the U.S. housing market, and 72% believe that the market will continue to recover. Since 78% of people said that owning a home is very important to them, normalcy is starting to return to the market. These people are indeed buying homes, usually for more traditional...

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Take Advantage of a Foreclosure Review

The Federal Reserve has offered homeowners a chance to have a foreclosure review. This basically investigates whether or not you were treated fairly if you had a foreclosure. It is a deal from the Fed and the Office of the Comptroller of the Currency that has been extended until September 30th. Many homeowners, though, are not taking advantage of this review: only 196,000 have. The participating mortgage servicers are expected to choose more cases to review on their own for a total of 338,400 reviews. However, that only accounts for 7.5% of the 4.5 million borrowers who are covered by this enforcement action. In order to qualify for a review, a borrower must have a loan that was serviced by a participating lender, and the house's loan must have been active in the foreclosure process between...

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Jobs Report Chart

According to the Labor Department, 80,000 U.S. jobs were created in June as employment data continues to falter. The jobs data for May was revised up from 69,000 to 77,000, though the report for April was revised down to 68,000. As shown in this chart, jobs growth was strong in early 2012 but has been soft over the last several months.The Labor Department also reported that the unemployment rate remained unchanged from last month at 8.2%. ...

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New Home Sales Increase in May

According to HUD and the Census Bureau, the month of May saw an increase in the sales of newly built homes. The sales rose by 7.6% which amounts to a seasonally adjusted annual rate of 369.000 homes. While there was an increase overall throughout the country, these sales were very regional. The Northeast had new home sales increase by 36.7% while the Midwest actually declined by 10.6%. This all indicates that more potential home buyers are being drawn to the housing market because of the current low mortgage rates. The steadying and slowly recovering economy is lending more confidence to home builders and home buyers alike. Despite the increase in new home sales, however, the inventory of new homes for sale remains at a low 145,000 units in May. Compared to March and April, though the month...

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Weekly Average Mortgage Rate is at 3.66%

The Primary Mortgage Market Survey (PMMS) from Freddie Mac has been released. This states that the average mortgage rates are continuing to fall despite other economic factors worsening. The 30-year fixed mortgage rate averaged at 3.66% which is down from 3.71% last week; and it has an average of 0.7 point. The 15-year FRM averaged at 2.95%, down from 2.98% last week; a year ago, it was at 3.69%. It has an average 0.6 point. Treasury bond yields have also eased.The Federal Reserve has noted that growth in employment rates has been slow in recent months, which leads to household spending also being slower. On a positive note though, construction on one-family homes has been rising for the past three months. The confidence of homebuilders is at its highest reading in 5 years...

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FHFA's 2012 Foreclosure Prevention Report

Since 2008, Fannie Mae and Freddie Mac have completed more than 2.3 million foreclosure prevention actions. This includes 1.1 million permanent loan modifications. All of their activities have been detailed in the FHFA's first quarter 2012 Foreclosure Prevention Report. It is known as the Federal Property Manager's Report and we'd like to share that with you. The report shows information about states with the biggest 5-year decline in house prices, as well as the states with the highest number of delinquent loans. Take a look at it for even more statistics and information...

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Vote in Greece buys Eurozone More Time

The Greek vote has been cast. However, the most that it has done is buy more time for the eurozone to figure out what to do next in their 2-year long financial struggle. The Greeks also agreed to remain under Berlin's harsh terms in order to continue collecting bailout money. For now, Greece will stay attached to the eurozone in hopes of sparking economic growth. There is hope that Athens will form a government that will negotiate with Berlin over the financial situation. Berlin and its allies are what is keeping Greece from hitting rock bottom into economic chaos and leaving the euro behind. Many agree that leaving the euro would only bring financial collapse at an accelerated rate. As part of the deal, Berlin has forced austerity measures upon the Greek citizens that has lowered their standard...

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Spain's Aid Package Impacts Market

The stock market was impacted this morning in light of Spain's aid package and Greece's upcoming election. Spain has received 100 billion euros ($125 billion) in an aid deal to help their struggling banks. Since this aid package was larger than expected, it gives the financial markets a bit of breathing room for now. The size of this aid package points to a big commitment from the euro zone to stabilize the economy. However, this also suggests that the EU is nervous about the Greek election since the vote could potentially lead to Greece leaving the euro zone. All of this uncertainty in Europe is causing U.S. companies more difficulties in growing their revenue. Overall, there remain worries concerning the global growth outlook in light of the European debt crisis, but things have taken a...

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Obama Adminstration's May Housing Scorecard

The May Housing Scorecard has been released, courtesy of HUD, the Department of the Treasury and the Obama Administration. It is a comprehensive report on the status of the nation's housing market. All indicators point to signs of stability. There's been an overall increase in the sale of existing homes across the nation. The inventory of newly constructed homes has also increased. The only slight hindrance right now comes in the form of delinquencies and underwater mortgages. However, the economy is continuing to recover. More than 180,000 borrowers have taken advantage of the Home Affordable Refinance Program to secure mortgage relief. This has helped foreclosure starts to decline.The Obama Administration has many programs in place to aid homeowners with the woes of the housing market. So...

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Shorter-Term Refinancing to Prep for Mortgage-Free Retirement

The newest trend in the home-buying game is refinancing into 15-year loans. More homeowners than ever are going down this route due to mortgage rates consistently falling to record lows. According to Freddie Mac's most recent mortgage rate survey, the 30-year fixed-rate loan averaged at 3.75% which is down from 3.78% last week. On that note, the 15-year fixed loan's average is currently at 2.97%, down from 3.04% a week ago. Unfortunately, most of the homeowners who are able to benefit from the low refinancing rates in this troubled housing market are those who have significant home equity. Many homeowners are considering shorter-term loans so they can have the payoff coincide with their retirement plans. Despite having to pay more per month for these shorter-term loans, having their homes...

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U.S. Job Market Staggers

The U.S. economic recovery has had a bit of a slowdown in May. According to the Labor Department's Job Report for May, only 69,000 jobs were created. This is a much lower number than experts had expected for the month. With that said, the unemployment rate has also climbed up to 8.2%, which is the first time it has increased in the past 11 months. This all comes at a time when Americans are worried about the European crisis, higher gas prices and the constant problems that the housing market faces. It is important, therefore, that the U.S. economy continues to grow, especially since Europe is declining. If the U.S. has frequent slowdowns like the one in May, it could bring about a global slowdown. It had enough of an impact on the economy for the Obama administration to comment that this jobs...

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Homes are More Affordable than Ever!

The affordability of the Nation's houses has hit a record high. 77.5% of all homes that were sold in the first quarter this year were considered affordable to the families who purchased them. These families earned the national median income of $65,000 per year. However, lenders are continuing to tighten their procedures and policies, making homebuying a greater obstacle than in the past. The good news is that if you can qualify for the loan, the homes are at the most affordable prices than they have been in the past 20 years. Unfortunately, many are unable to take advantage of these prices because of new strict lending practices. We at Quest Loans want to help everyone find the right loan for them and get into the house of their dreams. We work hard to match potential homebuyers up with...

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Existing-Home Sales Prices Increased 3.4%

According to the National Association of Realtors, existing-home sales have increased in the month of April, and home prices are continuing to climb. These sales rose 3.4% compared to March throughout the country. This is a good indication that the housing market is finally recovering. It is not just the investors who are buying these homes anymore, we are seeing an increase in homes being sold to actual occupants again. This is helping home sales of all prices, causing the market to become more balanced. Housing inventory rose 9.5% at the end of April, totaling out at 2.54 million existing homes that are for sale. The national median price for an existing home is $177,400, which is up 10.1% from last April. It is expected that 2013 will bring further increase in sale prices...

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Sneak Peak at the April Mortgage Monitor Report

We have a sneak peak of the "April Mortgage Monitor" report from Lender Processing Services, Inc (LPS). The report is scheduled to be released in full at the end of the month, and takes its data from more than 40 million loans. According to our sources, the report states that the total U.S. delinquency rate (loans 30 or more days past due but not yet in foreclosure) is at 7.12%. That figure is up 0.4% from March but it is down by 10.6% compared to last year. Currently, there are 3,522,000 delinquent mortgages on residential homes, including 1,595,000 that are more than 90 days late.We reported on the foreclosure pre-sale in the past. Its inventory is now made up of 2,048,000 properties. Combining that with the past-due mortgages gives us a total of 5,570,000 properties that are either delinquent...

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BofA's Mortgage Principal Reduction

Bank of America has announced that they will be offering mortgage principal reduction to a certain 200,000 customers. The catch is, however, that if the customers do not reply to these letters that they will receive in the mail, they will not be eligible. The borrowers who qualify could get up to $150,000 deducted from the balance of their mortgages. This is part of the $25 billion settlement between federal and state agencies and the five largest mortgage lenders in the nation. These lenders were caught up in a scandal involving fradulent foreclosure document processing that qualified homebuyers that were not actually qualified. We reported on this a couple months ago. Bank of America, state attorneys general and the U.S. Department of Justice have committed $11 billion towards this mortgage...

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US Weekly Jobless Claims Fall 1K to 367K

This week, the number of requests for unemployment benefits decreased by 1,000 applications filed. According to the US Labor Department, there are 367,000 Americans who have filed a claim. About 6.4 million people have received benefits from either the state or the federal government in the week ended April 21. As a result of these figures, stocks will open higher...

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Rates Are Still Falling

Freddie Mac reports that the average rate on a 30-year fixed rate conventional mortgage fell to another record low of 3.83% and the 15-year fixed rate conventional mortgage fell to 3.05% in the latest week and can be obtained when paying a 0.7 point...

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New Record Low Rates

New Record Low Rates! The average fixed mortgage rate found new record lows, as the 30-year fixed rate mortgage averaged 3.84 percent, down from last week when it averaged 3.88 percent. Last year at this time, the 30-year fixed rate averaged 4.71 percent. The 15-year fixed rate mortgage this week averaged 3.07 percent, down from last week when it averaged 3.12 percent. A year ago around this time, the 15 year fixed rate mortgage averaged 3.89 percent. "Signs of slowing economic growth and inflation remaining subdued allowed yields on Treasury bonds to ease somewhat and brought most mortgage rates to new all-time record lows this week," said Frank Nothaft, the vice president and chief economist of Freddie Mac. "Real Gross Domestic Product rose at an annualized rate of...

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ADP Employment Report

Employment Change according to ADP declined substantially the past month. This mornings ADP reported that private employment rose by 119k from March to April. Market expectation was that it would be over 183k. ADP employment doesn’t mirror NFP very closely, so this report should have a limited impact on the markets. But this is a weak number. Tomorrow’s economic data includes weekly initial jobless claims as well as the ISM Non-manufacturing index. We still don’t expect to see a lot of market movement until Friday’s employment report is out. In the meantime, rates will continue to sit around all time lows.....

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Banks Tighten Lending Standards

We have been reporting about the economic recovery of the nation. Things are continuing to look up as time goes on. However, the banks are being very strict and cautious about their lending practices. They are not giving out loans to just anyone anymore. Overall, the banks have been tightening their lending standards for residential mortgages for prime borrowers. These borrowers are those with very good credit history, high credit scores and a low debt-to-income ratio. This tightening happened mostly between January and March, putting a strain on the housing market. These days, getting a loan is much more difficult than it used to be. Banks are demanding higher credit scores and larger downpayments. However, many people are taking advantage of various mortgage options such as the FHA's...

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March Saw Increase in Home Sales

The National Association of Realtors (NAR) says that the housing market is definitely recovering. Pending home sales have increased in the month of March, putting them well above where they were a year ago. Since there is an overall national increase in sales, the inventory is slowly being lowered which helps to bring a balance to the housing market. This indicates that home prices will also be rising through 2012. In fact, first quarter sales closings were at higher levels this year than they have been in the past 5 years. According to the lastest contract signing activities, we should also see great data for the 2nd quarter...

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Lack of Job Growth leads to Lower Mortgage Rates

The recent release of the Employment Situation Report showed that the labor market only created 120,000 new jobs, a number that falls short of the expected 200,000 new jobs. Because this report was much weaker than expected, the mortgage interest rates have fallen a bit lower. Typically, whenever there is a blow to job growth, or any other negative economic news occurs, it tends to be good news for mortgage rates which will go down in response. A strong economy usually leads to higher interest rates. Right now, most lenders are seeing the best and lowest interest rates of the month. That indicates rates being lower than 4.0% in most areas, averaging around 3.75%...

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Housing Market Slowly Recovering

Freddie Mac has brought us a bit of good news recently. According to their U.S. Economic and Housing Market Outlook for March, the housing market appears to be recovering from its depression. The report stated that a stronger economic growth this year will help to reduce the nation's unemployment rate below 8.3%. This also means that home sales will increase, and 30-year fixed-rate mortgages will average around 4.5% through the rest of the year. There is also the hope that home values will be stabilizing around the country...

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Update on the Housing Market

The economy is working hard to recover. The housing market in particular needs the most help. Unfortunately, new home sales fell in February. However, there was an increase in the prices of these homes, putting it at the highest levels we've seen in 8 months. Despite this, new home sales were actually up 11.4% compared to February of last year. This does indeed confirm a boost to the economic recovery efforts. The housing market is only being hindered right now by an oversupply of used homes on the market. And of course there still is the issue of foreclosures that are selling below their market value. The government is still putting forth efforts to contain and control the amount of foreclosures and hopefully help prevent many of them in the future so the economy can continue to heal...

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Mortgage Rates Rise Above 4%

According to Freddie Mac, the 30-year fixed-rate mortgage has risen above 4% for the first time since October. Last year, the rate was averaging 4.81%; right now it is at 4.08%. The rates are thought to be rising as a sign of economic growth. It was the Federal Reserve that helped to push the rates down to record-low levels in the recent past. U.S. Treasury bond yields have been increasing lately. However, consumers have been able to reduce their debt burdens quite a bit overall. The economy is finally beginning to stabilize...

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FHFA's Foreclosure Prevention and Refinance Report

According to the FHFA's Q4 2011 Foreclosure Prevention and Refinance Report, Fannie Mae and Freddie Mac have completed more than 2.1 million foreclosure prevention actions to help keep borrowers in their homes. This includes 1.1 million permanent loan modifications. Additionally, fewer than 20% of these loans that were modified in the four quarts ended March 31, 2011 had missed two or more payments which is an improvement from previous years. The FHFA has also released an interactive Fannie Mae and Freddie Mac State Borrower Assistance Map that allows you to see how many loans are owned or guaranteed by the GSEs, and how many of which are delinquent, in foreclosure or refinanced per state. There are more statistics involved as well in this report. Click here to view more...

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Bonds, Inflation, Stocks and Interest Rate News

According to the Federal Statement from yesterday, the economy is slowly but surely improving in most areas. Housing, however, is still struggling. If everything can continue to improve and grow stronger, it may cause interest rates to slowly climb. They also mentioned that inflation may increase because of higher energy prices, which is not good news for bonds. The Fed is putting pressure on selling Bonds still, especially now that most of the banks passed their strict financial stress tests. In the aftermath of this test, JP Morgan Chase actually decided to do a stock repurchasing program to boost its dividend. This had an effect on the overall stocks. Because of all this, we would recommend floating on new transactions as long as prices are above the 100-day moving average. If the bond...

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China's Large Trade Deficit causes European Stocks to Fall

China recently had their biggest trade deficit in 12 years. This sparked concerns from miners and oil firms that commodity prices would drop and there'd be slower demand in China, which is the world's second largest economy. The country did indeed report a $31.48 billion deficit for February after they had a $27.28 billion surplus in January. This signals an economic slowdown in China which could potentially lead to a global slowdown. In London, miners and energy firms also took a hit in the stock market this week. Banks were also down due to continued focus on the developments in Greece's debt restructuring. Immediately after Greece's success with its debt restructuring, new Greek government bonds that were issued surged to the highest levels in the eurozone. This indicates that many are...

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FHA Cuts Prices on Streamline Refinancing

The FHA has recently announced price cuts for their Streamline Refinance Program that could benefit anyone with a mortgage insured by the FHA. As of June 11, 2012, the FHA will lower its Upfront Mortgage Insurance Premium (UFMIP) to .01% and it will also reduce its annual premium to .55% for qualified borrowers. In order to qualify, a borrower must be current on their existing mortgage that was endorsed on or before May 31, 2009. This accounts for nearly 3.4 million households. These households pay more than a 5% annual interest rate. If they were to refinance, they could potentially save as much as $3,000 a year. By helping homeowners to reduce their monthly costs, the FHA hopes to help people stay in their homes...

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ISDA: Greece Escapes Default For Now

The International Swaps & Derivatives Association (ISDA) has met in the last hour to decide whether or not Greece will default on their debt. Greece has used what is known as "collective action clauses" (CACs) in order to force investors and private creditors to take a loss. Their debt restructuring has caused payouts on $3 billion of default insurance. Using these CACs makes the restructuring considered a "credit event". This credit event indicates that a maximum of $3.16 billion of net outstanding Greek credit default swap contracts can be paid out. Greece averted the immediate threat of an uncontrolled default, winning strong acceptance from its private creditors for a bond swap deal which will eat into its mountainous public debt and clear the way for a new bailout. The Greek...

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Mortgage Update

The debt issue in Greece is still not completely resolved, but it is nearing the end. In the meantime, Stocks are benefiting at the expense of Mortgage Bonds which are trading at lower levels now. Greece's problems are far from over, however. This debt deal is only giving them a small boost in the now, but it will bring up new problems down the road. Germany has imposed tighter fiscal union guidelines on the country, and they also have to contend with the austerity measures that we've mentioned before. Switching back to America, a new Jobs Report is expected soon that will detail how we're doing with our economic recovery. A recent count of Jobless Claims is at 362,000 which is higher than last week's 354,000. This puts the Unemployment Rate at 8.3% right now. The Jobs Report will have...

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Claims for Unemployment Benefits Decline

According to the U.S. Labor Department, there have been fewer claims filed for unemployment benefits lately. This drops the level down to the lowest it has been in four years.  New applications for jobless benefits have declined, meaning there has been some great employment gains throughout the country. The government will be releasing February's employment report on March 9th. While the country still has a long way to go for economic recovery, this report is expected to have favorable data that shows job growth accelerating...

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Getting Familiar with the 203(k) Loan

The FHA has a loan program that does a really great thing for homebuyers. It allows them to actually purchase the home that they want. Many homes on the market right now are not selling well because they drastically need repairs and updates. People who are house shopping want to find something affordable, but with great new features rather than old dated, worn down features. Nobody wants to find the seemingly-perfect-on-the-outside house, and then walk into a kitchen straight out of the 70s. To help with this, the FHA's 203(k) loan program allows homeowners to choose the house, choose the neighborhood, and choose their own upgrades. They are given the ability to pick out the new carpet, paint, cabinets and appliances that would go into the house. This helps to make the properties much more...

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Fannie Mae Requests More Bailout Money

We have discussed Fannie Mae several times. You know that it is a GSE that is under the conservatorship of the FHFA. You know that it is constantly in the news for various reasons. Today, Fannie Mae is in the news because it has requested a large sum of money. Reportedly, Fannie has lost $2.4 billion during the fourth quarter of 2011. Its revenue is sitting at $4.5 billion. Because of its deficit, Fannie Mae is seeking aid from the government in the form of $4.6 billion. We also reported that there are many efforts underway regarding shutting down Fannie Mae and Freddie Mac. The government no longer wants to support them, but rather have them be a more privately-owned enterprise. As of now, taxpayers have spent $150 billion trying to maintain the GSEs. A new estimate is saying that figure...

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Government Seeks to Shut Down Fannie and Freddie

The FHFA, who oversees GSEs Fannie Mae and Freddie Mac as a conservator, has a plan to shrink their involvement in the housing market over time. They want to create a new market for mortgage-backed securities; something more privately-owned rather than government-backed. Fannie and Freddie have had a major part in keeping the housing finance market going during the country's recession and economic hardship. They currently represent 75% of all new home loans, which equals to nearly $100 billion a month in mortgages. However, President Obama and Congress seek to shut down Fannie and Freddie so they can ultimately reduce the role that the government plays in the mortgage market. There is not yet an official plan on how to squeeze out the GSEs without causing further damage to the housing market,...

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Greece Stable For Now; Impact on U.S.?

Europe's Finance ministers have officially given Greece 130 billion euros. As we reported last, Greece was given enough debt relief to help them not default on their bond repayment due in March. Greece is holding steady for the moment, but this in no way fixes their long-term problems. Additionally, the bailout has certainly had an impact on the overall European market. The euro has fluctuated since a whopping 386 billion euros have been spent to rescue not only Greece, but also Ireland and Portugal. Greece is now forced to abide to these strict austerity measures and economic reforms that come with the deal. Adhering to these rules, however, might prove to be too rigorous for the Greek citizens which could ultimately lead to social unrest and more rioting, something that the Greek politicians...

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FHFA's Next Step Regarding GSE Conservatorship

In February 2010, the FHFA's Acting Director Edward J. DeMarco wrote a letter to Congress regarding conservatorships of the GSEs Fannie Mae and Freddie Mac. Recently, he has also released the next phase of his plan that builds on what he wrote in that letter 2 years ago. It is meant to update and extend the goals of these conservatorships. First of all, what is a conservatorship? The FHFA is the conservator, or an organization that has legal control over another entity, which would in this case be the GSEs. Fannie Mae and Freddie Mac have received $180 billion in taxpayer support since they have been placed into conservatorship in September 2008. DeMarco's plan will establish objectives that the FHFA is to take in order to meet its obligations as a conservator. It consists of three strategic...

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Retirement Growing Increasingly Difficult for Americans

In this rough economy, most people cannot afford to be unemployed. This is especially the case when these people have mortgages to pay. However, money woes do not discriminate against age. More and more, people are finding themselves unable to retire at the traditional age of 55. In fact, surveys have shown that just over 40% of Americans 55 and older are still working. Comparatively, this figure was below 30% in the early 1990s. Granted, there are people in this age range that choose to work. But overall, people don't have much of a choice otherwise. The economy can take the blame for that. Fortunately, there are more jobs today that are not physically demanding as compared with past decades, so those who are forced to work are at least able to do so relatively well. Those who have held...

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Greece Bailout Update

For months, citizens of Greece have been protesting against the possibility of very strict austerity measures being placed upon them. There have been riots that have occurred because of these measures as well as the potential bailout that Greece had requested. Now, a deal has finally been reached. The eurozone and the International Monetary Fund (IMF) have agreed to supply Greece with €130 billion ($170 billion) in additional bailout loans. The fear was that Greece would default in March without these additional funds. According to the terms of this new program, private bondholders have agreed to take greater losses on their end, while Athens is forced to commit to these very severe but ambitious austerity measures that the citizens have long been against. These austerity measures including...

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Obama's Optimistic Economic Recovery Budget Plan

We have reported about Obama's Economic Recovery plan in the past. Here is a breakdown of what it entails. Basically, he wants to start decreasing debt by spending more money. It goes without saying that many people have a problem with this theory. Congressional Republicans in particular have been tearing this plan to pieces claiming that spending money we don't have is not the way to help the economy recover. First of all, the President has very optimistic hopes for the economy. In a proposed budget plan, he expects to cut $4 trillion out of the country's deficit over the next ten years. The deficit would fall to $901 billion in 2013 and then $575 billion by 2018. However, in order to achieve this lofty goal, the administration wants to raise spending on programs that will supposedly kick-start...

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FHA Saved from Needing a Bailout

Several months ago, the Federal Housing Administration (FHA) asked for a bailout. The White House Office of Management and Budget (OMB) crunched the numbers and found that the FHA needed $688 million. This would mark the first time in the FHA's 78-year history that a bailout was ever needed. However, some good news has surfaced for the FHA. We previously reported about the $25 billion settlement between attorneys general and the nation's five largest banks over fraudulent foreclosure agreements. We also mentioned the problem with Bank of America and Countrywide handing out mortgages to unqualified homeowners which brought about a $1 billion settlement. Because of these, and increased insurance premiums, the estimate that the OMB gave to the FHA regarding their bailout request is no longer...

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HUD's Plan to Improve Public Housing

The U.S. Department of Housing and Urban Development (HUD) has recently given $1.8 billion to public housing authorities that will allow these agencies to improve their public housing units. This will have an effect on all 50 states, the District of Columbia, Guam, Puerto Rico and the U.S. Virgin Islands. These grants are supplied through HUD's Capital Fund Program which annually provides funds for public housing communities to be able to build, repair, renovate and upgrade features such as roofs, plumbing and electrical systems to enhance efficiency. HUD's budget for 2012 will ultimately help to preserve and enhance America's affordable housing, which includes public housing. They have been given the go-ahead by Congress to test a comprehensive demonstration tool to begin this preservation...

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Economy Impacting News from Around the World

Here on our own turf, President Obama is proposing a new "Seven Step" budget plan to Congress in hopes of cutting the country's deficit by $4 trillion over the next 10 years. He will do this by raising taxes and cutting expenditures. However, this plan is likely to cause a larger deficit first before it reduces it. The expectation is $1.33 trillion in 2012 and $1 trillion in 2013. This is mostly due to the government trying to pull the struggling economy out of the gutter, such as helping homeowners to refinance at lower rates across the board to clear up much of the underwater housing market. Here's to hoping this plan really will help the citizens and in turn reduce the deficit which is currently at a staggering $15 trillion. Moving on to Greece. As you may know, its outraged citizens have...

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$1 billion False Claims Settlement Against Bank of America

The government has been investigating the lending practices of Bank of America since 2009. The bank, and Countrywide Financial Corporation which it acquired in 2008, had knowingly been giving FHA-insured loans out to unqualified home-buyers. This has resulted in hundreds of millions of dollars in damages to the FHA. The investigation also looked into whether or not BofA and Countrywide had been defrauding the FHA insurance fund with mortgage loans that were based on inflated appraisals. Finally a settlement has been reached. Bank of America will have to pay $1 billion to correct this wrongdoing. They must pay $500 million upfront to provide a recovery fund for the damages done to the FHA. The second $500 million will be used to fund a loan modification program for Countrywide borrowers...

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Obama's Foreclosure Prevention Plan

How would you like to save $3,000 per year on your mortgage? That's exactly what President Obama is working to do for American Homeowners. He announced on February 1st that he has a plan to help homeowners like you to refinance your mortgage. Why? The goal is to help stabilize and boost the housing market again. Although, this plan is expected to cost between $5 billion and $10 billion to put into effect. Obama plans to get the funds for this by putting a fee on large banks. The programs associated with this plan will give lenders and other stakeholders the tools they need to help borrowers with their mortgage woes and to ultimately increase the country's confidence in the real estate finance system. The Obama Administration, Congress and the National Association of Home Builders will continue...

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Mortgage Rates Reach NEW Record Lows

According to Freddie Mac's Primary Mortgage Market Survey, mortgage rates have dropped even more! They are now at NEW all-time record lows. This includes all rates except for the 1-year ARM which didn't reach a new low. 30-year fixed-rate mortgages (FRM) are averaging at 3.87 percent. This time last year it was at 4.81 percent. The 15-year FRM averaged 3.14 percent which is down from 4.08 percent last year. The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.80 this week and was at 3.69 last year. These new record lows make it a great time to get a mortgage. However, economic growth has fallen short of market projections which is why these rates have eased. Although, both residential construction spending and fixed residential investment have increased...

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FHFA's "Pilot Phase" for REO Initiative

Here is some more information about the Federal Housing Finance Agency's new REO Initiative regarding turning REO's into rentals. They are starting off simple with a "pilot phase" that is excepted to include 500 to 1000 homes provided by Fannie Mae. The GSEs have more than one million foreclosure properties in their possession. The purpose of this pilot phase is to examine:Investor interest in various types of assets How investors can maximize the participation of experienced local firms and organizations that can provide the types of services and support needed for stabilization in the community The types of structures and financing that would improve returns to the sellers as well as the value of the homes The process that qualifies these investors and how they participate in sales transactions There...

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REO Initiative to Rent Out Foreclosed Properties

The FHFA has announced the first step of an REO initiative that will aim to help the cities that got hit the hardest nationwide. Investors can pre-qualify to establish eligibility so they can bid on transactions during this initial phase. Qualified investors will be allowed to purchase foreclosed properties but they are required to rent these out for a specified number of years. The hope is that this rental period will provide relief for depressed housing markets that are overwhelmed by foreclosed properties, and will also provide more rental options. This should put the country one step closer to stabilizing communities and maximizing the value of homes. This REO Initiative is partnered with the U.S. Department of the Treasury, the HUD, the FDIC, the Federal Reserve, Fannie Mae and Freddie...

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Is Freddie Mac Betting Against You?

The Government-Owned Mortgage Company, Freddie Mac who specializes in helping homeowners get affordable mortgages, has reportedly been "betting" against homeowners. The "bet" comes in the form of investing in securities called "inverse floaters" that will receive all the interest payments from specified mortgage-backed securities. Basically, the bet will pay off if people cannot refinance. The shocking thing is that these investments are actually legal. If people were to pre-pay their old loans and refinance them to receive cheaper new loans, Freddie Mac would lose money. However, the more people that cannot refinance, the more money Freddie makes because it will receive money from these older loans with higher interest payments. The thing that is causing such an outrage among Americans...

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Economic Struggle: Underwater Mortgages Hindering Job Search

Many American homeowners are finding it increasingly difficult to apply for jobs because of their housing situation. Homeowners who are strapped to the mortgage of an underwater home seem to be having difficulty leaving it. This means that job relocation rates are suffering.  The number of people who are willing to relocation during this recession is at 13.2%, but the average relocation rate since 2009 has been around 7.9%. Despite needing jobs in this rough economy, many are forced to stay where they are and pass up far-away employment opportunities because of their mortgages and financial burdens. This in turn effects employer's long-range growth. Once they run out of local options, they will need to rely on those willing to relocate  in order to prevent their company's expansion...

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Outlook for the Housing Market in 2012

As of December 2011, unemployment rates fell to their lowest level in three years with the addition of 200,000 jobs. This means good news overall for the real estate market since the country's economy is beginning to improve. This recovery is essential for the housing market and it is expected to continue throughout 2012. As we reported earlier, the Fed has announced that interest rates will not be raised until 2014 in the hopes of continuing in this economy recovery. The interest rates are currently at historic lows and are expected to stay that way to ensure a slow but steady rise by the end of the year. Therefore, taking out a mortgage is a very affordable thing at this time. Predictions for the 2012 housing market include these continued low interest rates as well as the stabilization...

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Federal Reserve: No Rate Hikes until 2014

According to the U.S. Federal Reserve, interest rates will not be raised until at least late 2014. This is even later than investors were expecting. They are doing this in an effort to support the economy's recovery. The Central Bank says that the unemployment rate is still elevated throughout the country, however inflation is expected to remain somewhat consistent with stable prices. If economic conditions change, the Fed could actually adjust this time frame, but it is expected that the Fed will not change its record-low rate for nearly three years. So this is good news! We should have low rates for quite a while to come. While the unemployment rate stands at 8.5%, meaning that some 13 million Americans are still unable to find work, the Fed is optimistic about the unemployment rate for...

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Current U.S. Unemployment Rates

Because Housing and Jobs are so closely related, it is important to watch for changing trends in the Unemployment level. The chart below displays current levels of Unemployment by state. ...

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Reported $25 Billion Deal Reached between Banks and AGs

As we mentioned yesterday, this $25 billion deal between the five largest banks in American and U.S. State Attorneys General nationwide will make it easier for those facing foreclosure to restructure their loans. The final draft of this agreement has been submitted for review. This settlement would apply to privately-held mortgages that were issued between 2008-2011. It does not, however, apply to loans held by GSEs Fannie Mae or Freddie Mac. This means that nearly 750,000 homeowners could get the principal amount of their mortgages written down by $20,000. Under the terms of this deal, $17 billion would be used toward reducing the principal that homeowners owe on their mortgages. Also, $5 billion would be placed in a reserve account for various state and federal programs. Part of that money...

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