Housing Market Predictions for 2014

Good news! It is predicted that through 2014, existing-home sales are expected to stay on the up and up! 2013 has been a great year full of healthy gains and that momentum looks like it will continue.

According to the National Association of Realtors (NAR), existing-home sales have show a 20% cumulative increase over the past two years! Home prices have gained 18% too!

“We’ve come off of record high housing affordability conditions in the past year, and are now at a five-year low, but conditions are still the fifth best in the past 40 years,” said Lawrence Yun, chief economist for the NAR. “While the median-income family in many areas will still be well positioned to buy a home in 2014, income is barely budging given growth in consumer prices.”

Other issues include limited housing inventories that make it hard for homeowners to find an affordable place that they love. Once they do find the perfect home, they then have to face unnecessarily strict mortgage lending standards. These restrictive policies stem from Fannie Mae and Freddie Mac's rising fees, higher premiums from the FHA, and the Dodd-Frank banking regulations.  All of these have had a negative impact on community banks. Larger banks are said to be holding on to funds just in case they are sued by the Department of Justice. This takes away from available to mortgage borrowers, thus the tighter qualification requirements.

“Although home sales have recovered over the past two years, mortgage purchase applications have been flat for the past four years, even with rising sales,” Yun said.

2014 may see a dramatic decrease in refinancings because of higher mortgage rates. It may even hit the lowest levels we've seen in 15 years! To counterbalance this collapse, purchase applications will really need to rise.  “This is an incentive for banks to increase mortgage origination, especially considering the low default rates in recent years. But even with cheap mortgages for the past four years, all-cash buyers stayed high, accounting for over 30 percent of sales,” he said.

According to Yun, the only way that higher mortgage interest rates can be tolerated is if there is an increase in job creation as well as a relaxation of restrictive lending standards. And the only way to alleviate housing inventory shortages is to have an increase in housing starts. They need to rise 50% in order to meet the underlying demand!

Right now, the best thing we can do to help the housing market is to consider purchasing a home in 2014. Lock in the lowest rate possible and pay the mortgage every month. The more stability we can individually achieve, the better the whole economy can be in the long run.

If you are in the market for a new home, give us a call at 877-828-8851. We'd love to help you get through the mortgage process and into your dream home!

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Issues the Housing Market is Currently Facing

Recently, a group of realtors pinpointed the biggest issues that are currently impacting the housing market. These are issues that could have consequences for homeowners, realtors and mortgage professionals alike!

Right now, the biggest issue concerns interest rates. Historically, low interest rates have always driven the economy and in turn the real estate markets. Since the rates have increased recently, capitalization rates could also rise. That refers to the ratio between the income produced by an asset and the cost of it. This could lead to investors and homeowners becoming more and more wary of their purchases.

Another concern revolves around healthcare. As the population continues to age, there will eventually be a demand for more senior housing. This will have an affect on available housing inventories and the building industry for both medical facilities and senior housing.

Economists have even started accounting for a future housing boom! Between 1982 and 1995, there were 80 million Americans born. They are calling this an "echo boom".  Those that fall into this age range tend to prefer urban lifestyles that are flexible and active. However, there are also plenty who prefer the suburbs. This could lead to a future need for even more mass transit for those commuting between the suburbs and the city. There will be money pouring into bike paths and public transportation, as well as homes with great locations!

Right now, commercial real estate is doing well. There have been increases in transactions for these properties and plenty of credit is available. Also, the underwriting for commercial real estate is less restricted than in the past and plenty of debt options are in place.  However, the residential market is still seeing tough underwriting rules. But the rates are still relatively low and affordability in general is high!

Extreme weather and the changing climate are another issue. Areas that are continuously affected by storms and hurricanes, like those in the path of hurricanes Katrina and Sandy, are facing changes in code and zoning standards. They are also having to pay much higher insurance premiums. All of this has a strong impact on coastal homes.

An issue that is harder to calculate includes global events like terrorism, war and debt crisis. It is hard to anticipate what could happen but economists agree that the impact of major events can lead to drastic changes. But that goes without saying.

An issue that is a bit easier to analyze concerns the increased natural gas and oil production in the US. This is having an impact on the economy and the environment. On one hand, the increase of these productions have lead to more employment opportunities and reduced America's dependence on foreign oil supply, but climate changes and potential contamination have a big affect. If there are communities in nearby areas, it could really change the value of the homes.

Lastly, technology is changing the world as we know it. Many offices and corporations are choosing to employ people to work from home. This can cause some companies to downsize their office space which has an affect on commercial real estate. With less retail space needed, there will be fewer and smaller stores. Retail demand is down across the country due to an increase in internet sales.

All of these issues have a play at this game of tug-o-war that is balancing the housing market. While the market is recovering overall, trained economists are required to keep an eye on this delicate balance.

There will be many changes in the future. Right now, some of the best advice we can give is to lock in low mortgage rates while they are still low.

If you have any questions or would like more information about how all of these issues can impact your local housing market, give us a call at 877-828-8851.

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Tight Mortgage Requirements Rough on Singles and First-Time Buyers

According to a study by the National Association of Realtors (NAR), there are still some unnecessarily restrictive mortgage lending standards in place that are not allowing some singles and first-time buyers to financially qualify for a home. These tend to have to do with tight credit requirements. Since 1981, NAR has been evaluating the demographics, preferences, motivations and plans of those who have recently bought or sold a home. This data includes only owner-occupants, not investors or vacation homes.

“Single home buyers have been suppressed for the past three years by restrictive mortgage lending standards, which favor dual-income households who are more likely to have higher credit scores,” said Lawrence Yun, NAR chief economist. “Not seen in this survey is the elevated level of investors in recent years. The housing recovery would have been much weaker without investors, who often purchase with cash.”

According to the survey, 66% of buyers are married couples. In 2010 that number was 58%. The survey also saw that 16% of homebuyers are single women but only 9% are single men. Compared to 2010's 20% single women and 12% single men, the data shows that the overall market share of single buyers has declined from 32% in 2010 to 25% in both 2012 and 2013.

“Given that mortgage interest rates are expected to gradually rise, we need greater access to credit for a sounder housing recovery," said Yun. "Affordability conditions remain favorable in much of the country, but consumers need access to safe and sound financing, particularly the 30-year fixed-rate mortgage, and with low downpayment options for first-time buyers."

When looking at the averages that date back to 2981, it shows that 4 out of 10 purchases come from first-time buyers. In 2012, first-timers accounted for a 39% market share, but that number has slipped to 38% this year. This means that there are fewer first-time buyers in today's market than average. It is important to note that first-timers are very important for the housing market's recovery because they are the ones that help existing home owners to sell.

If you are in need of a home soon, we can help! If you are a single and/or first-time buyer, please don't hesitate to call us! We'd love to do everything we can to help you get into a home! Call Crosscountry Mortgage today at (877) 828-8851.

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Impact of the Shutdown on the Mortgage Industry

As the government shutdown is nearing its end and its employees have a chance to get their jobs back, many are wondering about the effects that the shutdown has had on the mortgage industry. Beyond those who were furloughed being unable to make money, many others were unable to purchase homes or get a mortgage due to the IRS being unable to process the 4506-T form. Additionally, USDA loans were on pause during the shutdown as well.

“Outside of the obvious process impacts of submissions, approvals and income there are immediate and lingering tangential impacts to housing and housing finance markets. With over a decade of shenanigans by members of Congress who are not doing their jobs, the consumer and investor uncertainty continues to restrain any meaningful recovery,” said Mark Dangelo, president, MPD Organizations. “Without the extraordinary impacts of the Federal Reserve, the economy would be at zero growth from its 2009 levels and joblessness would have remained at over 8.5 percent.”

Because of the shutdown, it has become a major problem that loans were not making their way to borrowers and that forms were delaying the sale of homes. Everyone who was in the process of buying or selling was essentially put on hold. Specifically, those who needed an IRS verification of income were stopped in their tracks. Mortgages that were beyond that stage and were scheduled to close during the shutdown may have been able to do so but the mortgages in the beginning stages definitely suffered.

Ultimately, even once the shutdown is completely over and everyone is back at work, there will no doubt still be a delay due to the amount of paperwork that has piled up.

“There may be a trickledown effect for anything that may have started the process during the two weeks of shutdown. My guess is now that the shutdown has been ended, they will get back to the way things have been, a relatively positive outlook for housing and lending ... especially purchase transactions,” said  Gregory Teal, president and CEO at Ernst Publishing Company.

Has your mortgage been effected by the shutdown?

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Freddie Mac on the Government Shutdown

Freddie Mac is allowing borrowers who are not being paid as a result of the government shutdown to still have their mortgages delivered to Freddie Mac as long as they meet all the usual requirements and the borrower is expected to return to work after the shutdown ends.

"We're issuing this guidance to help ensure the continued smooth operation of the mortgage market during the temporary shutdown of the federal government. Today's bulletin is intended to give lenders the certainty to continue approving and delivering new mortgages that meet Freddie Mac guidelines to eligible borrowers, such as federal employees and contractors," said Dave Lowman, executive vice president, Single-Family Business at Freddie Mac. "During the temporary shutdown. We are also reminding servicers of our forbearance options to assist qualified homeowners with Freddie Mac mortgages to minimize the shutdown's impact on our nation's families and communities."

Freddie Mac will continue monitoring the current situation and promise to provide guidance if the shutdown lasts for a prolonged period of time. Right now, they have relief policies available to both public and private sector employees who are affected by the shutdown. This allows servicers to provide forbearance to eligible borrowers that must not be reported to credit bureaus. The forbearance can range from 3 to 12 months.

Servicers can also accept a borrower's most recent signed federal tax return even though the IRS is unable to process forms right now. This is helpful when tax information is needed to evaluate a borrow for a loan through Freddie Mac.

As always, Quest Loans is here to answer any questions you may have regarding the mortgage industry during this shutdown. Call us at 888-883-5252 anytime!

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President of MBA Calls for End of Shutdown

The president and CEO of the Mortgage Bankers Association (MBA), David H. Stevens, has recently issued a statement regarding the government shutdown and the affect it is having on the housing market. "The federal government shutdown will have a growing impact on the housing market the longer it continues. If this shutdown is temporary, the ones affected most will be out of work federal employees," he says. "However, the longer it goes, the greater impact it will have on borrowers, the housing market and the national economy."

He continues, "lenders processing loans that need tax transcripts, social security number verification, or FHA home loans face longer delays and reduced functionality from HUD, IRS, and the Social Security Administration. Different loan programs have different requirements, and these disruptions impact lenders in different ways, leading to confusion and fear among borrowers about whether they will be able to close on a home purchase or refinance. There are significant impacts on multifamily lenders, as well. Rental housing properties awaiting FHA financing cannot move forward.

“The furloughs can disrupt time-sensitive mortgage transaction deals by interfering with borrower lock agreements and causing interest rate disparities from the time of closing to the time the loan is securitized.

“For these reasons there must be a resolution so that borrowers and lenders are able to return to business as usual.”

We don't know when the shutdown will end but so far there have already been damaging affects on the housing market. If you have any questions about it, give us a call! 888-883-5252.

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What The Shutdown Means For The Housing Market

Since Tuesday morning, many government services were shut down or cut back. Congress is battling back and forth trying to resolve their issues. This is the first government shutdown in 17 years. "Essential employees" are still allowed to work but as many as 800,000 "non-essentials" are not allowed in government buildings and they don't know when they'll be paid again.

As you may know, the central issue being debated is Obamacare.  According to House Speaker John Boehner (R-OH), "The House has voted to keep the government open, but we also want basic fairness for all Americans under Obamacare."

While 800,000+ employees are on the sidelines, the members of Congress are still working and because of the 27th Amendment, all 533 of them are still being paid.

President Barack Obama has said "the idea of putting the American people's hard-earned progress at risk is the height of irresponsibility, and it doesn't have to happen. Let me repeat this. It does not have to happen."

Congress and the President continue to disagree and have yet to reach a resolution. What does this mean for the housing industry? According to the president of NAMB- The Association of Mortgage Professionals, Don Frommeyer, "the shutdown isn't going to help the U.S. economy continue to grow and interest rates across the board could very well increase, depending on what the bond market does during this time."

As of September 27th, The U.S. Department of Housing & Urban Development (HUD) has indicated that the FHA will continue to endorse single-family loans during the shutdown. Of their 8,709 staff members, only 349 of them are "essential" and continue to work. However, an even more limited number of FHA staff is allowed to do their underwriting and approve new loans. So right now, anyone in the process of purchasing a home may see delays since the shutdown will cause these processes to take much longer than usual.

Those facing foreclosure right now will still have loss mitigations continue but the FHA will not approve any lender applications right now.

If you have any questions about how the shutdown could be affecting your mortgage process, feel free to call your loan officer or give us a call at 888-883-5252 and we will try our best to answer your questions!

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Average Mortgage Rates Eased Lower + Home Prices UP!

Here is the gist of it: Freddie Mac says that for the second week in a row, the average fixed mortgage rates have eased up.  What does that mean? Well, the 30-year FRM averaged 4.31% as of July 25th, which is down from 4.37% the week before.

Even though we were looking much better this time last year with a cool 3.49% for the 30-year, the current 4.31% isn't that bad!

Yes, the economists have been concerned about the recovery of the housing  market slowing down after its been rapidly improving over the past year. However, sales for existing homes in June reached the second-highest level that its been at since November 2009, and new home sales are now as strong as they've been since May 2008.

What does that mean? People are still buying and selling houses.

There is currently a low inventory of homes available to purchase which causes housing prices to rise.  This is good if you're trying to sell a house because your home is a hot commodity and you'll get a prettier penny for it than you would have a year ago.

If you're looking to buy, you'll need to be very careful and do your research. Hunting for the perfect home is hard in and of itself, but now you've got to be quick since homes are in hot demand, and the prices are higher than they were previously.

Yes, the mortgage rates are also higher than they were but you know what? If you look at the history of mortgage rates, you'll see that they have always averaged a bit higher than 4.31%.  You could always refinance again in the future if the rates decide to drop to the mid-3% again.

Bottom line: If you need a new home, don't hesitate to buy one just because the rates are a teeny bit higher than they were before. Remember, they just dropped a bit since last week! They could drop again next week! Even if they go back up, don't put your life on hold because of statistics and numbers.

Call us if you need help applying for a mortgage for your new home! We work quickly! :)
888-883-5252

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Foreclosure Market Report

According to RealtyTrac's Midyear 2013 Foreclosure Market Report, there were a total of 801,359 properties across the U.S. that have foreclosure filings in the first half of 2013. That signifies a 19% decrease from the previous six months. It is also down by 23% from the first half of 2012.

While there are so many programs today geared toward helping Americans avoid foreclosure, the report shows that 0.61% of all housing units in the country has had at least one foreclosure filing between January and June 2013, which accounts for 1 in 164 homes.

“Halfway through 2013 it is becoming increasingly evident that while foreclosures are no longer a problem nationally they continue to be a thorn in the side of several state and local markets, particularly where a backlog of delayed distress has built up thanks to a lengthy foreclosure process,” said Daren Blomquist, vice president at RealtyTrac. “The increases in judicial foreclosure auctions demonstrate that these delayed foreclosure cases are now being moved more quickly through to foreclosure completion."

There were 127,790 properties with foreclosure filings in June. This is down by 14% from May and down 35% from June 2012 which is the lowest monthly level we've seen in six and a half years.

If you are facing foreclosure, contact us! We'd love to help you refinance your home. Perhaps all you need is a lower monthly mortgage payment. Or we can help you sell your home and get into a smaller, less-expensive place! There's always a way! 888-883-5252

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How Are The Mortgage Rates Doing?

Two weeks ago, the average fixed mortgage rates saw their highest levels since mid-2011. This has made homebuyers weary of making their move. However, there is some good news. Last week, Freddie Mac's Primary Mortgage Market Survey said that the 30-year rates have dropped back down to 4.29 percent (from 4.46 two weeks ago.)  We realize these aren't ideal considering last year they were at 3.62 percent.

Over the Fourth of July weekend,,the rates fell due to an ease of market concerns about the Federal Reserve's pullback in bond purchases.  It is important to remember that even though rates are higher now than they have been in the past year, these rates are still low by historical standards. Even in the 4th percentile, we should continue to see people benefiting from housing affordability and the housing market will continue to recover.

Despite the rates being a bit higher, pending home sales have gone up by 6.7% in May, which is the strongest pace we've seen in over six years.

If you are in the market for a house and have questions, please call us at 888-883-5252 or 877-828-8851. We'd love to help ease your concerns and get your application started!

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Housing Starts, Home Prices, and Talk of an Impending Bubble?

In May, housing starts rose nationwide by 6.8 percent due to an increase in the production of multifamily homes. That equals roughly 914,000 units on a seasonally adjusted annual basis.

Much of the country received wet weather in May which slowed the building of single-family homes, however despite the setback, there was an increase in permits issued for single-family units. This goes to show that housing is slowly but surely recovering.  Single-family housings starts remained at a steady pace of roughly 599,000 units in May.

Builders across the country are able to respond to this demand for construction of new homes as well as rental apartments. The only problem that is keeping the new housing industry from booming is that lack of available building materials, lots and willing laborers.

Despite great figures in housing starts, the actual issuance of new building permits has declined in May by 3.1 percent, which relates to 974,000 units. This is because of a spike in multifamily permits in April that led to a 10 percent decline of units. However, the single-family side of the coin has seen their best pace in five years with permits increasing by 1.3 percent to 622,000 units in May.

The country has also been seeing an rise in home prices and this has caused many to worry that we may be entering into another "bubble" that will eventually burst and cause another recession. The prices have climbed more than 10 percent nationally in March and April, and these double-digit gains in prices are unsustainable, but many economists believe it may be too early to say we are currently in a bubble.

The current average home prices are relatively low today when compared to historical values. They are still 28 percent below what they were during July 2006's price peak.

So while many fear that we are heading for a bubble, others argue that it is premature to assume such. Yes, the market is recovering steadily but we still have a long way to go to catch up to the levels we were once at before the recession. Home prices will continue to rise and, for now, it should be perfectly fine. We will continue to monitor the situation.

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Home.com's Rebound Report for Top 100 Markets

We all know that the overall housing market is recovering well, but which markets are doing the best?

Homes.com has released a "Rebound Report." It is a new housing study that details the recovery in the top 100 U.S. Markets. It provides a deeper analysis of data from their Local Market Index. It shows how far these markets have rebounded from its deepest decline in index value to its current status.

According to the report, nine of the top 100 markets have completely rebounded back to the peak price levels that they were experiencing before the housing crisis. Some of the markets even increased as much as 200 percent of the decline amount!

While every market was hurt during the recession, every one of those markets are now also seeing some kind of recovery. The report really highlights how individual areas are doing. Some are thriving while others are struggling to get back on their feet.

The top 3 thriving metro areas include:
San Antonio, TX  (Rebounded 219.16%)
Houston, TX (Rebounded 210.50%)
Austin, TX (Rebounded 207.11%)

Looks like it is a good year for Texas!

The bottom three metros are:
Providence, RI (Rebounded 5.25%)
New Haven, CT (Rebounded 6.27%)
Las Vegas, NV (Rebounded 9.01%)

Click here if you would like to view the full Homes.com Rebound Report.

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Home Prices Continue to Increase!

We recently took at look at CoreLogic's HPI report for April. It showed that Home Prices nationwide, including distressed sales, have increased by 12.1 percent! This is on a year-over-year basis, comparing April 2013 to April 2012.  This is the biggest year-over-year increase since February 2006!

April was the 14th consecutive month to see an increase in home prices.  Over the past few years, because of the recession, home prices have dropped significantly. This is one of the reasons why so many have faced foreclosure. Their homes were suddenly worth much less than they owed on them and they were unable to sell them. Once the unemployment rates went up as well, people struggled!

We are thankful now that everything is stabilizing once again. We've helped so many people to refinance their mortgages which gives them better rates and a lower monthly mortgage payment. Many have avoided foreclosure because of this. Now that home prices are increasing, fewer people find themselves "underwater" and can sell their homes for a decent price.

If you find yourself struggling to make your payments, consider refinancing! Visit us at CrossCountryMortgages.com  or call 888-883-5252. We can help!

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Making Home Affordable Program is now Extended Through 2015!

Good news to start off your week: the Obama Administration's Making Home Affordable program has now been extended through December 31, 2015!  This was just announced by the Department of the Treasury and the Department of Housing and Urban Development (HUD) in association with the Federal Housing Finance Agency (FHFA). The goal was to align the deadline with that of the Home Affordable Refinance Program (HARP) as well as the Streamlined Modification Initiative for those with loans with Fannie Mae and Freddie Mac.

The Obama Administration has been working hard to provide relief to families on the brink of foreclosure. The Making Home Affordable Program has been an integral part of the housing market recovery. This two year extension of the deadline should further aid those affected by the housing crisis.

“The housing market is gaining steam, but many homeowners are still struggling,” said Treasury Secretary Jacob J. Lew. “Helping responsible homeowners avoid foreclosure is part of our wide-ranging efforts to strengthen the middle class, and Making Home Affordable offers homeowners some of the deepest and most dependable assistance available to prevent foreclosure. Extending the program for two years will benefit many additional families while maintaining clear standards and accountability for an important part of the mortgage industry.”

Originally launched in March 2009, this program has been able to help nearly 1.3 million homeowners. Another part of the Making Home Affordable Program is the Home Affordable Modification Program (HAMP) which works much like a refinance. Homeowners are able to modify the terms of their current mortgage and reduce their monthly payment in the hopes of avoiding foreclosure. More than 1.1 million homeowners have taken advantage of HAMP. Because of these modifications, the median savings is $546 per month! Would you like to save 38% of your previous payment?

“The Making Home Affordable Program has provided help and hope to America’s homeowners," said HUD Secretary Shaun Donovan. "Families across the country have used its tools to reduce their principal, modify their mortgages, fight off foreclosure and stay in their homes - helping further stimulate our housing market recovery. And with this extension, we ensure that the program keeps supporting communities for years to come.”

In addition to saving money, there are also new standards set in motion for the mortgage servicing industry that protect homeowners. Better communication, more efficient timing, and superior assistance are now expected to be norm for all lenders.  With the recent crack down on mortgage fraud, qualifications for a loan are more strict and monitored, but this is good for the borrower.

Now that the deadline for this great program is extended, struggling borrowers will find it easier to pay their mortgage payments and the number of foreclosures should decrease over time. If you feel like you are unable to pay your mortgage, please learn more about these assistance programs! There is no need for anyone to lose their home!

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No Changes for "Jumbo" Loan Limits

The Federal Housing Finance Agency (FHFA) recently announced that there will be no changes for the maximum conventional loan limits in 2013. This is referring to base and high-cost or "jumbo" conforming loans, whether it is a first-lien or a second-lien.

Keep in mind that these loan limits apply to the original loan amount of the mortgage loan, not the balance at the time of purchase by Fannie Mae or Freddie Mac.  Read more about these loans directly from Fannie Mae's Lender Letter.

If you are wondering what the high-cost limits are, we've compiled a basic list. These are the applicable loan limits in 2013 for a one-unit property. The following states and counties will remain as is:

California:  $417,000 (all counties except as follows)

•  $463,450: Alpine
•  $474,950: El Dorado, Placer, Sacramento, Yolo
•  $477,250: Nevada
•  $483,000: Monterey
•  $520,950: Sonoma
•  $529,000: Mono
•  $546,250: San Diego
•  $561,200: San Luis Obispo
•  $592,250: Napa
•  $598,000: Ventura
•  $625,500: Alameda, Contra Costa, Los Angeles, Marin, Orange, San Benito, San Francisco, San Mateo, Santa Barbara, Santa Clara, Santa Cruz

Dist. of Columbia: $625,500

Georgia:  $417,000 (all counties except Greene County—conforming jumbo loan limit is $515,200)

Indiana:   $417,000 (all counties)

Maine:    $417,000 (all counties)

New Mexico:  $417,000 (all counties)

New York:  $417,000 (all counties except as follows)

•  $625,500: Bronx, Kings, Nassau, New York, Putnam, Queens, Richmond, Rockland, Suffolk, Westchester

South Carolina:  $417,000 (all counties)

Texas:  $417,000 (all counties)

We apologize if your state is not listed. If you do have any questions, feel free to call 888-883-5252 or take advantage of the live chat feature here.

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Mortgage Default Rates Drop as Economy Improves

As the economy continues to improve, consumer debt continues to decline. Because Americans now have less debt overall, consumer default rates have decreased for mortgages and automobiles alike! This means that the financial condition for consumers is getting better as the economy stabilizes.

The national default rate for mortgages fell to 1.31 percent in the month of April, which is down from 1.41 percent in March.  This data is according to S&P Dow Jones and Experian Consumer Credit. They've worked together to build a comprehensive measure of the changes in consumer credit defaults. Mortgages are doing well, but bank cards saw a small increase in default rates.

Unemployment rates are still somewhat high, but the good news regarding the decline in default rates indicates that the recession is truly behind us. Some cities have reached new post-recession lows in regard to default rates.

If you feel you are in danger of defaulting on your mortgage, seek financial help! Perhaps refinancing could save you from your situation. View the links to the right for information on a couple companies that we'd recommend!

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Rates Rising: Lock It In While You Can!

After weeks of falling, the mortgage rates have recently rose to their highest point in six weeks. Previously pressing to set record-lows, the current mortgage rates for a 30-year mortgage are averaging 3.51 percent.  The average 15-year rate also increased to 2.69 percent.

Earlier this month, the 15-year rate set a record-low at 2.56 percent. Last November saw the lowest rate for a 30-year mortgage with an average of 3.31 percent. Most recently, we saw 3.35 percent.

With the rates steadily climbing again, we tend to encourage borrowers to lock in these somewhat low rates while they can. There is no guarantee that they will drop again since the housing market is recovering and home prices are increasing. There is an increased demand for homes due to a tight inventory. The whole market seems to be growing more and more competitive. Home buying season has been strong and moderately priced homes are selling fast!

California currently holds 8 out of 10 spots on the list of markets with the largest increase in median list price throughout the country. This means that these markets were hit the hardest by the crisis and are in turn rebounding the highest now that the housing recovering is gaining momentum.

Visit the links on the right side of this page to find the right company for you.

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HUD Will Sell Thousands of Delinquent Mortgage Loans

Although the economy is improving, there are still many severely delinquent mortgage loans. HUD plans to sell 20,000 distressed loans that are insured by the FHA in an effort to deepen the inventory and bring relief to areas hit hard by foreclosure.  Its Distressed Asset Stabilization Program (DASP) will help with the sale of these loans and help to stabilize the nation's communities.

HUD has sold delinquent loans before, and previously did so by conducting note sales. There are two auctions planned, one for June 26th that will handle the sale of 15,000 notes through "national pools" and another auction on July 10th that will offer 5,000 notes through Neighborhood Stabilization Outcome (NSO) pools. The NSO pools allow qualified bidders notes located in Southern California, Chicago, Southern Ohio, and North Carolina. In addition, HUD is expanding the use of single-family loan sales by including a competitive bidding process in which loan pools are sold to the highest bidder.

“We’ve seen a tremendous response to our note sales which allow us to support particular areas of our country hard-hit by foreclosures while improving outcomes for FHA,” said FHA Commissioner Carol Galante. “These auctions allow us to continue stabilizing hard-hit housing markets and to improve FHA’s overall financial position at the same time.”

HUD expects to sell more than 40,000 distressed loans this year. These sales will help to reduce the FHA's total claims costs and increase recovery on any loses the FHA may have experienced regarding their Mutual Mortgage Insurance Fund.  The severely delinquent FHA-insured loans will be sold competitively at a market-determined price. Generally, the price will be well below the outstanding principal balance. When the loan is purchased, foreclosure is delayed for six months and the new servicer has time to help the borrower find an affordable solution to avoid foreclosure.

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Record or Near-Record Low Mortgage Rates!

The economy is still gradually improving day by day, and that may mean that you are making more money now. Or maybe not. If you are in need of lower monthly mortgage payments, now would be an excellent time to refinance!

Just this week, the fixed mortgage rates have once again dropped! In fact, the 15-year average rate hit a new record low of 2.56%!!  The 30-year record low mortgage rate is 3.31% and the current rate has dropped down to 3.35% which is almost as low as it could be!

As mortgage professionals, we want to take the time to encourage you to seek more information about refinancing your home. Right now is a great time to take advantage of the low rates! The economy is strengthening and the rates continue to fall for the 5th consecutive week.

"Mortgage rates eased somewhat following the release of the advance estimate of real GDP growth for the first quarter of the year, which rose 2.5 percent but fell short of the market consensus forecast. The latest GDP report confirmed that the housing sector has become an important contributor to the economic recovery,” said Frank Nothaft, vice president and chief economist of Freddie Mac. “Residential fixed investment added to overall economic growth over the past eight consecutive quarters and contributed more than 0.3 percentage points in growth over the first three months of this year. Moreover, near record low mortgage rates should further drive the housing market recovery over the near term."

Take a look at this mortgage rate chart (brought to you by Freddie Mac).

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Housing Market Outlook for 2013

After a rough few years, the housing market and the economy are finally on an upward trend! Housing starts, prices and confidence are showing better figures everyday. Of course there are always ups and downs, and while some investors are still being cautious about jumping into the market, 2013 is promising to bring a more competitive market for homebuyers.  With the housing inventory as low as it is, experts wouldn't be surprised if bidding wars break out among investors and homebuyers. It is expected that homes will sell fast in 2013 as long as they are priced right. It is a homesellers market!

When the market was experiencing buying dry spells during the recession, the Federal Reserve dropped interest rates to record-lows in order to lure buyers. Now that things are steadily improving, the rates may begin to slowly climb upward, however experts are not expecting significant jumps. Some banks have already vowed not to touch the interest rates until the unemployment rate drops.  Even if mortgage rates do inch upward, they are expected to remain around 4% which is still remarkably low compared to years past.

Mortgage rules are always being amended in order to prevent fraud and reckless lending to the underqualified. The Consumer Financial Protection Bureau recently issued new mortgage standards with new criteria for qualifying for a loan. Some of the new rules state that a qualified mortgage cannot include risky features like interest-only payments or negative-amortization payments. Loans cannot have fees and points above 3% of the total mortgage, and the total debt-to-income ratio must be limited to 43%. Some experts are concerned that these tighter rules may restrict credit and discourage lower-income homebuyers. Additionally, there are new rules designed to stop over-borrowing. Some fear that this could make the process longer for potential homebuyers or even prevent some from qualifying. Those looking to purchase a home should begin the mortgage lending process at least three months in advance since some of the new lending standards may cause time delays.

The new rules aside, 2013 is expected to remain in this upward trajectory. Home pricing indexes started to rise last year and promise that home prices will continue to increase. This will encourage homeowners to want to sell again, and cause homebuyers to jump in quickly before the prices rise too high. It is expected that home prices will jump 6% this year.

We already mentioned that housing inventories are low. They've been steadily falling since 2007. If the inventory remains at a below-normal level, some fear that this will hold back home sales and impede the market's recovery. However, rising home prices should help to increase inventories. Housing construction is up 60% in the last two years as well, however it is still far from where it should be. It is estimated that roughly 1.5 million units need to be built every year to keep up with housing demands. Last year, only 600,000 were built, and experts are expecting 750,000 to be constructed in 2013. With high building-material costs and a lack of skilled laborers, builders confidence is moderate, but there is potential for this to all improve this year.

As far as foreclosures go, there are still more than a million homes in the process but the overall crisis is nearly at an end. As the market improves, more and more people are taking advantage of foreclosures and short sales. Some investors are even buying homes at 50 cents on the dollar, renovating them, and putting them back out there which helps to stimulate the market.

2012 saw a refinancing boom because of low interest rates, but 2013 is expected to slow. Refinancing helps to boost the economy by reducing payments so homeowners have more money to throw toward consumerism. Refinancing will only continue booming as it did in 2012 if eligibility requirements expand or if rates drop further. However, borrowers looking to refinance should start the process now!

Overall, the complexities of the housing market are very reliant on a tug and pull system. Something increases and causes something else to decrease, but the balance is improving and 2013 is expected to be a strong year for all involved.

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Aid for California's Foreclosed Homeowners

If you are one of the many Californians who were affected by the state's foreclosure crisis, help may be on the way! California Attorney General Kamala D. Harris has awarded $9.4 million to 21 different organizations that will assist homeowners through California's National Mortgage Settlement Grant Program. These grants will benefit the neediest homeowners by providing better access to free legal assistance and representation. Homeowners will also have access to foreclosure intervention aid, education and financial literacy clinics, employment support and more.

“The foreclosure crisis has inflicted wide-ranging and deep harm to California homeowners and communities,” said Attorney General Harris. “These grants will give homeowners and families the financial and legal tools they need to recover.”

Organizations that receive this grant will begin implementing programs immediately in more than a dozen languages that will focus on the under-served and disproportionately impacted populations.

As of March, Attorney General Harris also announced that there will be an additional $1 million grant implemented into the National Housing Law Project called the California Homeowner Bill of Rights. All these funds are secured through the National Mortgage Settlement.  It is believed that these grants and programs will greatly benefit hard-working families who need that extra push to get back on track financially.

We previously blogged about the Homeowner Bill of Rights here.

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Mortgage Rates Drop in April

According to Freddie Mac's most recent Primary Mortgage Market Survey, the average fixed mortgage rate has moved lower for the 3rd consecutive week. The 30-year fixed-rate mortgage averaged 3.41 percent with an average 0.7 point, which is down from 3.90 percent this time last year. As the housing market continued to recover, many people are taking advantage of these low rates by refinancing their current mortgages.

Some people opt to refinance their long-term mortgage to a shorter-term mortgage. The 15-year fixed-rate mortgage averaged at 2.64 percent with an average 0.7 point, down from 3.13 percent last year.

The Survey also reported that consumer spending was weaker during the week ending April 18th. Some economists believe that this weakness in retail sales lead to the mortgage rates dropping lower this week. This is the second time in three months that retail sales have taken a hit. Also, the Consumer Sentiment Index dropped by 6.3 points in April. It is now sitting at 72.3 which is the lowest it has been since July 2012.

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Rising Costs Put Pressure on Builders

So far, the month of April has brought about increasing costs for building materials. Home builders have already been facing a shortage of developed lots and skilled laborers, which  has caused builders' confidence to register lower that usual in the market for newly built, single-family homes. The Housing Market Index has suffered a two-point drop to 42.

This index measures the perceptions of builders regarding home sales and sales expectations for the next six months. They rate it as either "good," "fair," or "poor." Builders also rate the traffic of potential buyers as "high to very high," "average," or "low to very low." As long as the tallied scores for each of these categories are calculated anywhere above 50, more builders view conditions as good than poor.

"Many builders are expressing frustration over being unable to respond to the rising demand for new homes due to difficulties in obtaining construction credit, overly restrictive mortgage lending rules and construction costs that are increasing at a faster pace than appraised values," said Rick Judson, NAHB chairman and a home builder from Charlotte, N.C. "While sales conditions are generally improving, these challenges are holding back new building and job creation."

Currently, the score of 42 is not very promising, but there continues to be a high demand for new homes, as well as skilled laborers to build them. If the high cost of materials could go down soon, builders' confidence would likely rise. Perhaps May will be a better month!

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HARP Benefits Underwater Borrowers

Since HARP began in April 2009, more than 2.2 million homeowners have refinanced. In January 2013, there were roughly 97,600 HARP refinances, which shows that HARP continues to be a benefit to underwater borrowers. 25% of the loans refinanced through HARP had a loan-to-value ratio greater than 125%. Also, 18% of HARP refinances for underwater borrowers were for shorter-term mortgages such as 15 or 20 years, which would help build equity faster than a traditional 30-year mortgage.

This information comes from the FHFA's January 2013 Refinance Report which suggests a high refinance volume with nearly 470,000 refinances completed in January, including the HARP ones.

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Payout to 4.2 Million Borrowers Beginning April 12th

There was an agreement between the Office of the Comptroller of the Currency (OCC),  the Federal Reserve Board, and 13 mortgage servicers that will make payments to 4.2 million borrowers starting April 12th. This agreement will provide $3.6 billion in cash payments to homeowners that have found themselves in any stage of foreclosure in 2009 or 2010. Those defaulted loans must have been serviced by by one of the following companies or their subsidiaries  Aurora, Bank of America, Citibank, Goldman Sachs, HSBC, JPMorgan Chase, MetLife Bank, Morgan Stanley, PNC, Sovereign, SunTrust, U.S. Bank, and Wells Fargo.

The checks will be sent in several waves starting with 1.4 million checks being sent out on April 12th, and ending sometime in mid-July 2013.  The payments are expected to range from $300 to $125,000. There will be a bit of a delay for borrowers whose mortgages were serviced by Goldman Sachs and Morgan Stanley, but information regarding this is not yet available.

Borrowers who qualify to receive this servicing settlement payout can expect a letter with an enclosed check sent by the paying agent, Rust Consulting, Inc. Rust previously sent postcards to the 4.2 million borrowers to notify them about their eligibility. If you received a postcard but need to update your contact information, call Rust at (888) 952-9105. Any information that you provide to Rust will only be used in regards to the agreement, at the direction of the OCC and the Federal Reserve.  However, you should beware of scams. If anyone asks you to call a different phone number or to pay a fee in order to receive your payment, do not do so. Stop and call the number above. Remember, servicers are not permitted to ask borrowers to sign a waiver of any legal claims they may have against their servicer in connection with accepting a payment.

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California Homeowner Bill of Rights

Homeowners in California have been dancing on the edge of foreclosure, but now help is in sight. Attorney General Kamala D. Harris has recently announced a $1 million California Homeowner Bill of Rights (HBOR) grant to be implemented into The National Housing Law Project. This bill is a set of laws that will extend key mortgage and foreclosure protections to California homeowners and borrowers.

“Californians were hit hard by the mortgage crisis and many people are still struggling to stay in their homes,” Attorney General Harris said. “The California Homeowner Bill of Rights gives borrowers more opportunities to stay in their homes, and this grant will help make sure the law is applied across the state and that everyone gets the protection they are entitled to.”

The laws took effect at the start of 2013 and will restrict dual-track foreclosures, guarantee struggling homeowners a reliable point of contact at their lender, impose civil penalties on fraudulently signed mortgage documents, and require loan servicers to document their right to foreclose.

The goal of this grant is to maximize consumer benefits from the HBOR and minimize abuses of the law by training consumer and housing attorneys in both private and non-profit firms.

The grant will be implemented by the National Housing Law Project and its partners, the "Western Center on Law and Poverty", and the "National Consumer Law Center" and "Tenants Together."  They will be using the grant to provide training to more than 800 lawyers on how to maximize the HBOR's protections. They will be reporting the HBOR's statewide impact as time progresses.

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Impact of Labor Shortages on Housing Recovery

Lately, home prices have been increasing. Part of the reason for this is that there is a shortage of housing laborers. In a recent survey by the National Association of Home Builders, more than half of the builders reported that these labor shortages have lead to paying higher wages or bids in order to secure a project, thus the increase in home prices. This lack of laborers in all facets of residential construction has been impeding the housing and economic recovery.

"The survey of our members shows that since June of 2012, residential construction firms are reporting an increasing number of shortages in all aspects of the industry - from carpenters, excavators, framers, roofers and plumbers, to bricklayers, HVAC, building maintenance managers and weatherization workers. The same holds true for subcontractors," said NAHB Chief Economist David Crowe.

This lack of laborers can be attributed to the fact that many skilled residential construction workers were forced to find other types of jobs during the recession and they are no longer available now.  As a result, many current homes are experiencing delays in completion. Some projects are even being turned down and cancelled altogether because there aren't enough workers to complete the task.

"What used to be high-paying, skilled jobs vanished as builders across the nation went out of business or were forced to let workers go," said NAHB Chairman Rick Judson, a home builder from Charlotte, N.C.

Other problems consist of a lack of buildable lots, and an increase in the cost for materials and labor.  To help meet the growing demand for skilled labor , the Home Builders Institute (HBI) along with NAHB, are working to provide career training and job placement opportunities in the building industry. HBI offers many pre-apprenticeship training programs in a variety of skilled trades that can hopefully help meet the needs of communities across the nation. They have a success rate of 80% of their students being placed into jobs after graduation.

"We are ramping up our efforts to train diverse populations and place them in jobs to meet the growing demand of the building sector," said HBI President and CEO John Courson.

"Even in a period of relatively high unemployment, we still need to complement our job training efforts by bringing in foreign workers to meet the needs of home builders and home buyers," added Judson.

All of this training is very important for the economy. Currently, the labor shortages are slowing down the housing recovery and hurting job and economic growth overall. However, as the economy heals and grows, the demand for housing will continue to grow. This is will also be good for the mortgage industry as more and more people will need to fund their new homes.

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Expired Payroll Tax-Cut Barely Noticed by Workers

In January, the payroll tax cut expired, meaning that paychecks are now 2% less than they were before. Many economists predicted that consumer confidence and spending would suffer as a result, but it turns out that retail sales actually rose higher than expected, and consumer confidence rebounded. In fact, Bankrate.com surveyed workers and found that 48% of respondents didn't even notice that they were being paid less. 7% said that the loss has not had an affect on their finances.

“It’s very encouraging. It means other things going on are helping,” said Mark Zandi, chief economist at Moody’s Analytics. "We are weathering the storm well, at least so far, better than I would have thought."

However, Zandi also cautioned that the impact could take longer to become evident and that the results of the survey may not be accurate since it is only based on consumer perceptions. He said that there is a "wealth effect" currently taking place because of record highs in the stock market and a rebounding real estate market. These two things themselves do not put more money into American's pockets, but people seem to be willing to save less and spend more.

“The job creation numbers were sufficient to make consumers believe that their economic situation was improving,” said Richard Curtin, director of Surveys of Consumers at the University of Michigan’s Survey Research Center, which publishes a monthly survey of consumer confidence. In February, consumer sentiment rose nearly  5% over January’s figure.  “Hours increased and employment increased, so more people had more money in their income even if taxes were higher,” Curtin said.   42 percent of the workers surveyed said that they cut their spending. These respondents were middle class with household incomes between $50,000 and $75,000.

It isn't really surprising that so many people did not notice the disappearance of the tax cut. It was created to give Americans a few more bucks on their checks in hopes that they would turn around and feed that money back into the economy without realizing it. It was a stealthy boost that consumers weren't meant to even notice.

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News: Bailout Deal in Cyprus

If you have been watching the news, no doubt you've heard about the bailout crisis in Cyprus. Today it was reported that a solution to this problem may be possible. The European Union has set some guidelines for the bailout to which Cyprus must adhere. It is expected that they will reach an agreement today so that parliament can approve of specific measures that will fall within these guidelines.

This news came a couple hours after the Cypriot finance minister left Moscow empty-handed due to Russia turning down their appeals for aid. This left the island without any other option than to make a bailout deal with the EU. An agreement must be reached before Tuesday or Cyprus will face the collapse of its financial system.

Now Cyprus is left with a short deadline to find 5.8 billion euros which were demanded by the EU in return for a 10 billion euro ($12.93 billion) bailout. Without it, Cyprus's emergency funds would be cut off by the European Central Bank and the result could quite possibly push Cyprus out of Europe's single currency.

One of the proposed plans involved luring Russian investors to cut-price Cypriot banks and gas reserves since wealthy Russians have billions of euros at stake in Cyprus's crippled banking sector. However, after intense talks regarding the crisis, Russia has officially ended the talks without any results. It turns out Russian investors are not interested in Cypriot gas.

Lawmakers are still debating measures proposed by the government to raise the 5.8 billion euros in order to receive the bailout. They considered a "solidarity fund" that bundled state assets, including future gas revenues and nationalized pension funds, as the basis for an emergency bond issue.

Another idea involved a restructuring bill that would split Cyprus Popular Bank into good and bad assets. The government would also call for the power to impose capital controls to stem a flood of funds leaving Cyprus when the banks reopen on Tuesday after being shutdown for a week.

Unfortunately, Cyprus's partners in the 17-nation currency bloc are becoming increasingly unimpressed. Even the citizens are growing angry. On Thursday, there were long lines at ATMS full of Cypriots who were outraged that the deal would involve a levy on bank deposits.  Hundreds of demonstrators also gathered outside of parliament after hearing rumors that Popular Bank would be closed down and its staff laid off.

Right now, the only hope Cyprus seems to have is to receive that bailout. We will know more regarding the situation later in the day.

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Most Economists Agree: Recovery Gaining Momentum

Last week, nearly every article and report in the news claimed or suggested that the pace of the U.S. economic recovery is gaining momentum. Economic Forecasters are considering reassessing their previous thoughts as we see positive statistics like a rise in Retail Sales by 1.1%, and the Consumer Price Index's increase of 0.7%.  However, some argue that these were mostly due to higher gasoline prices and building material prices.

Despite mostly positive claims, it appears as though the economy has felt the effects of the expiration of the 2% Social Security tax holiday, sequestration, and higher gas prices. These issues have fallen squarely on the shoulders of middle- and lower-income households who already have a limited amount of ways to cut spending in the short term.

Aside from these particular struggles, the overall opinion is that the recent economic data has indeed been strong. The most significant data includes housing reports such as Housing Starts & Building Permits, and Existing Home Sales.  Investors are interested in how the Fed will react to it and they wonder whether it will have an affect on monetary policy.

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Two Nebraska Bills Amend Mortgage Requirements

As of March 7th, some new amendments to lender licensing rules were enacted thanks to two bills that were passed in Nebraska. They are intended to clarify the requirements for installment loan brokers, payday lenders, mortgage bankers, and mortgage loan originators. The first one is called the LB 279, (short for Legislative Bill.) It makes non-substantive clarifications to how a "loan broker" is defined. It also narrows down the exemption for accountants to certified public accountants only. Additionally, this bill gives the Nebraska Department of Banking and Finance authorization to share examination reports and other confidential information with the Consumer Financial Protection Bureau and any other relevant state regulators.

The second bill is known as LB 290 and it was designed to remove many of the mortgage licensing requirements that were previously applicable to individuals. It also identifies the duties of mortgage loan originators, including providing notification to the department within 10 days of events such as bankruptcy, criminal indictments, and suspension proceedings.  They must also notify the department within 30 days of other changes, such as changing employer and address. This bill also allows firms to submit reports electronically. It also states that the 120-day period for calculating abandonment of a license application must begin from the date that the department sends the applicant an electronic notice of deficient items.

Both of these bills are set to take effect three months after the end of Nebraska's legislative session, which falls on May 30, 2013.

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Report: HUD Taking Steps to Enforce Fair Housing Act

Compared to previous administrations, the Obama Administration's efforts have proven to be more vigorous in enforcing state and local governments to comply with fair housing obligations through the Department of Housing & Urban Development (HUD). There was a recent report by three different national civil rights organizations that find Obama to be doing superior work toward improving housing conditions across the country. However, despite these high marks, the report also noted that there is plenty of "unfinished business" for HUD to attend to, including finalizing a regulation codifying its grantees' obligation to further fair housing.

“This report indicates that HUD has, for the first time, taken significant actions to enforce the Fair Housing Act’s requirement that recipients of federal housing assistance affirmatively further fair housing,” said Joe Rich, director of the Fair Housing and Fair Lending Project at the Lawyers’ Committee for Civil Rights Under Law. “Such action is important in achieving the goal of the Act to provide fair housing throughout the country. But, it is also important that HUD release its long awaited regulation addressing this requirement.”

There are plenty of things that HUD has done already, including their participation in increased enforcement in federal court cases. They've processed and investigated private fair housing complaints, and adopted a "disparate impact" rule that codifies existing court interpretation of the Fair Housing Act. HUD has also increased its review and rejection of state and local "Analyses of Impediments" to Fair Housing, which is a requirement of federal housing. Additionally, HUD has undertaken compliance reviews that have resulted in voluntary compliance agreements addressing fair housing requirements.

All in all, the civil rights groups are pleased with HUD's leadership. In the past, many of these enforcement actions were completely avoided, but today's HUD is determined to reform its own programs to improve fair housing for all.

In one case, HUD helped to persuade a suburb of New Orleans to repeal a discriminatory zoning ordinance that had previously excluded African American families from the area. HUD promotes racial integration in housing, even though it has been moving at a slow pace. If HUD can pick up the pace in the areas that are still lacking, residential integration can be reached.

“Our families, our communities, our economy and our country are all enriched and strengthened when we have open access to healthy, diverse neighborhoods,” said Shanna L. Smith, president and CEO of the National Fair Housing Alliance. “HUD has a critical role to play in making sure that state and local governments are doing all they can to create diverse communities and make sure they are open to everyone. The rule to affirmatively further fair housing is needed to provide jurisdictions with clarity about their obligations and guidance about how to achieve this important goal.”

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Number of Mortgage Apps Increase

The Mortgage Bankers Association's (MBA) most recently Weekly Mortgage Applications Survey has compiled data for the week ending March 1, 2013.  According to this information, the number of mortgage applications filed has increased by 14.8% compared to a week earlier. The volume of mortgage loan applications is determined by the Market Composite Index. It tallied the current data on a seasonally adjusted basis. On an unadjusted basis, the Index increased 15% compared to last week.

The number of refinance applications remains the same as last week, sitting at 77% of total applications.

These statistics are good for the mortgage industry. The increase of applications proves that more and more people are continuing to leap into the world of homeownership. This hints that the economy is recovering and jobs are stable.

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The Importance of the FHA

Here at Quest Loans, we specialize in FHA Loans. Many people don't realize that the Federal Housing Administration (FHA) has a very important role in the mortgage industry. When the private mortgage market collapsed, the FHA stepped up to help make mortgage insurance available to millions of qualified home buyers across the nation. 80 years ago, Congress actually designed the mortgage insurance fund to do just that.

To prove how crucial the FHA is, the National Association of Realtors put together a testimony before the Senate Banking Committee praising the administration. According to NAR President Gary Thomas, without the FHA the housing downturn and economic recession would most likely have been far worse for the nation.

“FHA continues to play a significant role in the housing market and recovery. We applaud them for their leadership and strength during the housing crisis, and for continuing to serve the needs of hardworking American families who wish to purchase a home,” said Thomas, who is also the broker-owner of Evergreen Realty, in Villa Park, Calif.

He also noted that the FHA has always provided access to mortgage financing and it has never offered risky mortgage products, used predatory lending practices, or engaged in exotic underwriting. However, the FHA incurred great financial losses as a result of overall market conditions that led to increased foreclosures.

Despite this, Thomas said that the NAR is confident that the FHA is moving closer to helping to stabilize the mortgage insurance fund, and they've also made many administrative changes to minimize risk. Those changes include five increases to mortgage insurance premiums since 2009, implementing credit score floors, hiring a credit risk officer, requiring higher down-payments for those who have lower credit scores, and putting a series of measures in place to increase their lender responsibility and enforcement.

“FHA currently has one of the strongest books on record and the quality of borrowers has skyrocketed; continued market improvements and rising home prices will also help improve the fund’s future financial condition,” said Thomas. “Had FHA not stepped in to fill the market gap, many families would have been unable to purchase homes, current homeowners would have experienced far greater drops in equity and their home’s value, and our nation’s economy would be much further from a recovery.”

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FHFA's 2013 Conservatorship Scorecard for the GSEs

Edward J. Demarco, the Acting Director of the Federal Housing Finance Agency (FHFA), has recently released the 2013 Conservatorship Scorecard for Fannie Mae and Freddie Mac.  This "Scorecard" is literally rating their performances on things like "the quality, thoroughness, creativity, effectiveness, and timeliness of their work products." They are also graded on how well they cooperate and collaborate with FHFA, each other, and the industry.

The three keywords that they must focus on are "Build, Contract, and Maintain." These were brought up in 2012 as the three goals of the FHFA's Strategic Plan for the GSEs.

"Build" refers to their goal to "build a new securitization infrastructure platform for the secondary mortgage market."

They must also "Contract the Enterprises dominant presence in the marketplace while simplifying and shrinking certain operations by lines of business."

And finally, they must "Maintain foreclosure prevention activities and credit availability for new and refinanced mortgages."

"Despite some signs of normalization in the housing market, our nation finds itself in the uncomfortable position of having over 90 percent of new mortgage originations supported by the federal government," said DeMarco. "That support is provided directly through government loan programs like the Federal Housing Administration (FHA), and through the financial support that the Treasury Department provides to maintain the solvency of Fannie Mae and Freddie Mac."

In the works is a new "joint company" headed up by the FHFA to focus on securitizing home loans. This is hoped to lead to decreased government involvement in the mortgage market. It would also mean that the FHFA is forcing Fannie Mae and Freddie Mac to abandon their current separate systems and construct a single infrastructure to support the mortgage market. This new entity will be the previously mentioned "joint company". It will be more structured and it will be owned by Fannie Mae and Freddie Mac.

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30-Year Fixed-Rate Has Dropped!

According to Freddie Mac's recent Primary Mortgage Market Survey (PMMS), the average fixed-rate mortgage (FRM) for a 30-year term has been lowered! After not changing much in the past month, the rate has now clocked in at an average of 3.51 percent, which is down from 3.56 percent last week. This means good news for those seeking to purchase a home or refinance. This time last year, the 30-year FRM was averaging 3.90 percent.

"Mortgage rates eased somewhat as the consumer price index in February held steady for the second month in a row," said Frank Nothaft, vice president and chief economist for Freddie Mac. "House price indicators, however, showed gains in 2012. The S&P/Case-Shiller national home price index rose 7.3 percent last year, reflecting the largest four-quarter growth since the third quarter of 2006. This, in part, was a driving force that pushed up the number of existing and new home sales in February to the highest levels since July 2007 and July 2008, respectively."

The housing market is progressively becoming stronger as time passes. With these low interest rates, more and more people are able to save money every year on their mortgages. If your mortgage rate is currently higher than 4%, we'd recommend calling us and asking about refinancing.

It is also possible to switch from a 30-year FRM to a 15-year FRM as well, which may further reduce your overall mortgage balance. The 15-year FRM is averaging at 2.76 percent.  Ask us if this option may be right for you!

Call Quest Loans at 888-883-5252 with any and all questions you may have! We are interested in helping you save money!

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2 Million Homeowners Freed from Negative Equity in 2012

At the end of 2011, the percentage of homeowners with negative equity, or an underwater mortgage, sat at 31.1%.  Q4 of 2012 saw that percentage fall to 27.5%. This means that nearly two million homeowners were freed from negative equity in 2012.

To spell out just how many homeowners those percentages point to, in 2011, 15.7 million people owed more on their mortgages than their homes were worth. That number now rests at 13.8 million homeowners as of Q4 2012. On top of those statistics, it is evaluated that those 13.8 million homeowners were collectively underwater by more than $1 trillion.

This information comes from Zillow's Negative Equity Report. They further predict that by Q4 of 2013, the negative equity rate will fall to at least 25.5%. That figure would mean that more than 999,000 additional homeowners nationwide would be freed.  This is all determined by Zillow's method of applying anticipated appreciation or depreciation rates to a home, assuming all other factors remain constant.

"As home values continue to rise and more homeowners are pulled out of negative equity in 2013, the positive effects on the housing market will be numerous. Freed from negative equity, homeowners will have more flexibility, and some will likely choose to list their home for sale, helping to ease inventory constraints and moderating sometimes dramatic, demand-driven price increases in some markets," said Zillow Chief Economist Dr. Stan Humphries. "But negative equity is still very high, and millions of homeowners have a very long way to go to get back above water, even with current robust levels of home value appreciation in most areas. As a result, negative equity will remain a major factor in the market for the foreseeable future."

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Housing Starts take a dip in January

According to HUD and the Census Bureau, housing starts took a nationwide dip in January with a decline of 8.5% which is 890,000 units. This was based on a seasonally adjusted annual rate.

Specifically, single-family housing starts were little changed, registering a 0.8% gain to 613,000 units.  The pace of these starts have been improving; this was the strongest production pace for single-family housing since July 2008.

However, multi-family housing starts were the biggest contributor to the nationwide decline. These tend to have significant month-to-month volatility. In January, they declined 24.1% to a mere 277,000 units.

Bad news for housing starts doesn't necessarily mean bad news in the rest of the market.

Issuance of permits for new-home construction has increased by 1.8% to 925,000 units which is the quickest pace since mid-2008.

"Steady demand for new homes is prompting builders to put more construction crews back to work in order to replenish thin supplies of completed product," said Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder from Charlotte, N.C. "We expect this progress to continue through the spring buying season and beyond, with credit availability and poor appraisals being the primary limiting factors."

Permit issuance can be an indicator of future building activity. Single-family permits rose 1.9% to a seasonally adjusted annual pace of 584,000 units. The multi-family permits increased by 1.5% which is a 341,000 unit pace. Both of these are at their strongest paces since 2008.

"Today's report is quite positive in that it shows continued upward movement in single-family housing production and permitting activity for both single- and multi-family units," noted NAHB Chief Economist David Crowe. "Meanwhile, the decline in multifamily starts reflects an adjustment from an unsustainably large gain in December, and is consistent with the up-and-down swings that are often associated with that sector."

As always, the housing market has its ups and downs, but overall, the economy is recovering. As these reports continue to come out, we receive more and more data that points to overall improvement!

If you are ready to purchase a home, call us at 888-883-5252. We can answer all your questions.

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Home Prices Increase at Strongest Level in 7 Years!

According to the latest quarterly report from the National Association of Realtors (NAR), several metropolitan areas had higher median home prices in Q4 of 2012. In fact, 2012 proved to have the strongest year-over-year increase that we've seen in the past 7 years. On top of that, housing affordability in metro areas has reached record high conditions.

“Home sales are on a sustained uptrend, mortgage interest rates are hovering near record lows and unsold inventory is at the lowest level in 12 years,” said Lawrence Yun, NAR chief economist. “Home sales are being fueled by a pent-up demand and job creation, along with still favorable affordability conditions and rents rising at faster rates. Our population has been growing faster than overall housing stock, so supply and demand dynamics are very much at play.”

He also said that in order to relieve some of the pressure in the market, there needs to be more housing construction. This will help to keep home prices from overheating.

There are always many factors that could contribute to skewing the price growth percentages. Data is taken from across the nation to create these statistics. Sometimes you will see average prices, but medians are more typical than average prices. Taking the median price is where half of the homes sold for more and half sold for less.

In Q4, the national median existing single-family home price was $178,900. This figure is an increase of 10% from $162,600 in Q4 of 2011.

According to Freddie Mac, the average 30-year fixed-rate mortgage hit a record low 3.36% in Q4 of 2012, which is down from 3.54% in Q3, and 4.01% in Q4 of 2011.

“In reality, home prices over-corrected on the downside and homes in most of the country were selling for less than replacement construction costs, which means they were undervalued,” said NAR President Gary Thomas, broker-owner of Evergreen Realty in Villa Park, CA. “At the same time we've had record low mortgage interest rates and slow but steady improvements in median family income. Combined, these factors boosted housing affordability conditions to the highest on record in 2012.”

If you are familiar with how the Housing Affordability Index works, you'll know that it is calculated based on the relationship between the median home price, the median family income, and the average effective mortgage interest rate. A high index means a strong household purchasing power; the higher the better. Therefore, an index of 100 is defined as the middle ground. At this point, a median-income household has exactly enough income to qualify for a median-priced home, (with a 20% down-payment and 25% of their gross income being devoted to their mortgage payment). The affordability levels are lower for first-time buyers who make small down-payments.

That said, the NAR's annual Housing Affordability Index rose to a record high 193.5 in 2012, which is up from 186.4 in 2011.

“The housing affordability index shows that the national median income of families was almost double the income needed to buy a median-priced home in 2012, so most buyers are able to stay well within their means,” Yun said. “Even with rising home prices, conditions are expected to stay very favorable with the index averaging 161 in 2013, which would be the third best on record.”

If you are seeking to purchase a home in 2013, give Quest Loans a call! We can help you start the qualification process right away! 888-883-5252

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Mortgage Delinquency Rate Declines 14% in 2012

The national mortgage delinquency rate is defined as the rate of borrowers who are 60 or more days past due on their monthly mortgage payments. The amount of people who fall in this category has declined for the fourth consecutive quarter. Q4 of 2012 saw a mortgage delinquency rate of 5.19% which was down from 5.41% in Q3, and 6.01% in Q4 of 2011. Statistics aside, delinquency is decreasing. This means that as the economy continues to recover with time, more and more people are able to continue paying their monthly payments.

This was the largest yearly decline that the delinquency rate has seen since the recession officially ended, but we still have a long way to go to radically improve life for homeowners. In 2007, delinquencies rose 54%. They rose 53% in 2008 and 50% in 2009. Since then, the decline has been much more gradual than the rise was. It dropped 7% in 2010, 6% in 2011 and now 14% in 2012. We are on the right track but the overall levels are still high compared to where they sat before the recession hit.

If more borrowers can qualify for refinancing, they can obtain lower interest rates that will ultimately lead to lower monthly mortgage payments. This lends to fewer foreclosures and fewer delinquencies. If you are having difficulty paying your mortgage, Quest Loans can help you apply for refinancing. Call us at 888-883-5252 for more information, or visit QuestLoans.com!

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"The Responsible Homeowner Refinancing Act of 2013"

How would you like to be among the millions of responsible homeowners who can refinance their mortgages at a lower rate in order to save thousands of dollars each year? It's within your reach! Especially now that U.S. Senators Robert Menendez (D-NJ) and Barbara Boxer (D-CA) have introduced this legislation in the 112th Congress. It is called "The Responsible Homeowner Refinancing Act of 2013" and it plans to remove the barriers that are currently preventing borrowers from obtaining the lowest rate possible.

This bill would streamline refinancing as we know it for all of Fannie Mae and Freddie Mac's borrowers whether they are underwater or not. Up-front fees would be reduced, appraisal costs for borrowers would be eliminated, and the HARP program would be extended by one year to allow eligible borrowers to take advantage of it.

"We need to bring much-needed relief now to hard working, responsible homeowners who are struggling to keep up with their high interest rate loans" said Sen. Menendez. “We need to do this before interest rates go up again. It’s time that Congress finally put families first and give homeowners who have played by the rules a fair chance to refinance at today’s low rates."

He also adds that this will be done at no cost to taxpayers and that it is intended to stimulate the economy. It has been referred to as a "No-Brainer".

According to Senator Boxer, "this bill is a win-win!" She goes on to say, “Homeowners will have more money in their pockets, Fannie and Freddie will see fewer foreclosures, and the housing market and economy will continue building momentum. That’s why the Menendez-Boxer bill has such broad support from industry and consumer groups. We should take action on this common-sense plan immediately while interest rates remain low so American families can realize major savings.”

With the recent record-low rates for a 30-year mortgage averaging around 3.53%, you could be one of the nearly 12 million homeowners guaranteed by Fannie Mae and Freddie Mac who could refinance! There are many who are not currently able to refinance because of policies and high fees, but if the Menendez-Boxer bill goes into effect, all that red tape would be gone!  In fact, through HARP, the average homeowner saves $2,500 per year as it currently is. The bill plans on increasing that amount by expanding refinancing opportunities for all those who are eligible.

If you are ready to take advantage of the current low rates, find out if you are qualified for a loan now! Call Quest Loans at 888-883-5252 to find out when it is the right time for you to refinance! We will answer all your questions!

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Refinancing Your Mortgage Can Save You Money!

Freddie Mac has released more information that only further proves the benefits of refinancing. The results of its Q4 refinance analysis shows that 84% of homeowners who have refinanced their first-lien home mortgage either remained at the same loan amount, or managed to lower their principal balance. This helps to strengthen their fiscal house. On average, those who have refinanced were able to reduce their interest rate by 1.8 percentage points.

In December, Fixed-Rate mortgages averaged low percentages. 30-year loans were around 3.4% and 15-year loans averaged 2.7%. Because of these low rates, refinancing can help you save money on your overall mortgage. For example, when a loan for $200,000 is refinanced using these average statistics and percentages would translate to a saving of roughly $3,600 in interest for the following 12 months.

Through the HARP program, borrowers have been able to refinance when they traditionally would not have had access to it. They've obtained low rates that have significantly reduced their monthly payments. As a result, the risk of foreclosure is decreased for these borrowers since they are able to continue paying affordably.

Quest Loans specializes in HARP loans, and in refinancing.  We would like to help you qualify for an HARP loan if you have low income needs. If you already have a HARP loan, or any other type of loan, ask us about refinancing! It is never too late to start saving money on your monthly mortgage payment! 888-883-5252

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Home Sales to Rise in 2013 Despite Low Inventory

In some areas of the country, there is a shortage of homes available for sale. This low inventory is the main factor limiting the signing of contracts. Because of this, pending home sales has declined overall in December.

Despite that, the levels of home sales is still higher now than in the previous year when compared per month on a year-over-year basis. Contract activity has actually risen for 20 straight months and buyer interest remains strong too. The low inventory consists mainly of homes that cost less than $100,000 and are greatly located in the West, which means that first-time home buyers have fewer options to choose from.

Experts say that a seasonal rise of inventory may occur in the spring of 2013, however it may not bring about a seller's market. Much of the West is already a seller's market, though, for homes that cost under a million dollars, and conditions are even more balanced in the Northeast.  Existing-home sales are expected to increase 9% in 2013 which mirrors the rise of 2012.

All of this indicates that the housing market is steadily becoming stronger. If you are interested in purchasing a home this year, call Quest Loans to get the best rates and best service around! 888-883-5252.

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Increase in Purchase Applications

According to the Mortgage Banker's Association's Weekly Mortgage Applications Survey, the week ending January 18, 2013 brought about a 7% increase in mortgage applications. This is being counted on a seasonally adjusted basis. Unadjusted statistics show that the number of mortgage applications being filed increased by 8% from the previous week. Refinancing also increased by 8% for the week. This shows that the economy is recovering well despite the recent expiration of the homebuyer tax credit. The interest rates are still low, which is a huge benefit to those looking to purchase a home in the coming months. If you are among those people, give Quest Loans a call. We'll help you get the application process going! 888-883-5252.

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Overview of Housing 2012

The housing market had a good 2012! We saw great improvements in housing construction, so much so that home building is once again aiding the economy. Housing starts jumped 21.1%. This increase coincides with the higher levels of builder confidence over the past few months. However, there was a pause in the rise of builder confidence in January which is most likely caused by the fiscal cliff debate and all of the huge, impending decisions that face the housing and mortgage industries in 2013. Despite the improvements for housing, there has not been a huge increase in employment for residential construction. Job openings for construction are elevated which shows a demand for construction workers and suggests future growth potential. On a positive note, home prices have jumped to their highest annual increase levels in over six years. All of the pending index statistics suggest that home prices will remain strong in 2013.

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Changes and New Mortgage Regulations 2013

Over the next six months, many decisions will be made regarding the future of the real estate finance industry. These rules will determine what kind of housing market we leave for future generations.  The Dodd-Frank rules are upon us and will be dramatically transforming the industry. The first of these new rules that were mandated under Dodd-Frank and the Consumer Financial Protection Bureau (CFPB) show that the housing market appears to be in a broad recovery. These new regulations will shape how mortgage lending operates.

Recently, the Qualified Mortgage (QM) rule was released by CFPB and it will bring about significant changes to homeownership. Since 90% of mortgages are currently going through GSE and FHA underwriting, the new rule will most likely not have much impact on the credit rules. However, lenders will have more confidence and certainty about lending right up to the edges of the intended QM credit box. This broad credit box should help to serve a larger number of qualified borrowers by allowing for 43% DTI.

Many regulations are being released today and there will continue to be more rules and regulations released this year. Many policies will address a range of issues that effect the housing market. These changes and regulations are necessary, however they can go one of two ways. If these rules are done right, we'll have a coordinated and balanced system that doesn't tighten credit and ensures that more qualified borrowers have access to affordable loans.  If the rules are done wrong, though, they'd make lending too restrictive. Credit rules would be even tighter which would have a huge impact on first-time homebuyers and both low-income and middle-income families. This market would be cutting out the consumer.

Clearly, a balanced housing policy is crucial. We cannot have a system that over-corrects and prevents qualified borrowers from purchasing a home. Distinct rules, policies, and regulations need to be set in place with forethought to the downstream effects of overlapping policies also in mind. Right now, the FHFA, Fannie Mae, and Freddie Mac are all willing to work together transparently so that these policies can be set in place fairly.

If you have questions or concerns about how this effects you and your mortgage situation, do not hesitate to call Quest Loans. We have experienced professionals that can help to answer all of your questions. 888-883-5252

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Benefit by Working with a Smaller Lender

Here at Quest Loans we pride ourselves on having the professional standards and expertise of a large bank while still giving you the friendly feeling of a smaller community bank--and now there's even more perks for stopping by our office or giving us a call!

Just last Thursday, a new mortgage rule has been introduced denying consumers a "qualified" mortgage if they have debt exceeding 43% of their income. However, the Consumer Financial Protection Bureau proposed that smaller creditors be given an exemption to that new standard thereby giving the smaller guys an advantage over the larger banks, especially when they operate with low and moderate income communities.

Now, some consumer advocates may claim that this new standard could shut out first-time home buyers or those with low income. While this may be the case for those who step through the doors of larger banks, the new exemption provides small lenders like Quest Loans a formidable piece of the mortgage market.

Not sure where you stand in relation to this new mortgage rule? Have questions on what other special programs or offers you may be eligible for? Give us a call at 888-883-5252 and let Quest Loans look at your specific mortgage needs and get you the very best deal out there!

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The Mortgage Relief Act Extended One Year!

We are happy to report some good news on the mortgage front! The Mortgage Forgiveness Debt Relief Act has been extended through December 31, 2013. Congress recently passed a bill called The American Taxpayer Relief Act of 2012 that extends dozens of tax cuts. What does this mean for you?

If you've found yourself drowning in mortgage debt, you still have a chance to do something about it. This Act allows homeowners to have their debt forgiven through a short sale or a loan modification without being taxed as income.

For a full list of all the tax extensions, visit this website.

If you are worried that your mortgage is becoming too burdensome, you can take other measures to relieve your household. Call Quest Loans for information on refinancing your current mortgage. The mortgage rates are low! 888-883-5252

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