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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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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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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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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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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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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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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Rate Update: Near Record Lows

According to Freddie Mac's latest Primary Mortgage Market Survey (PMMS), the mortgage rates remain "little changed and near record lows this week amid indicators of stronger economic growth and signs of tame inflation," said Frank Nothaft, vice president of Freddie Mac.

The 30-year fixed-rate mortgage averaged at 3.34% for the week ending December 6, 2012. Because the mortgage rates have remained steady, the economy is getting a chance to recover.  There has been growth in fixed residential investment, residential construction, and pending home sales. "The housing market is aiding in this recovery," said Nothaft.

If you are interested in buying a house or refinancing your home, the near record-low mortgage rates are still attractive! Home affordability is high and it is a good time to buy! Call Quest Loans to get started with your new loan or refinancing! We also specialize in FHA loans and HARP loans. 888-883-5252.

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Rates Keep Falling!

According to Freddie Mac's Primary Mortgage Market Survey, the average fixed mortgage rates have fallen to new all-time record lows again! These rates have been falling due to the Federal Reserve purchasing mortgage securities.  If you are looking to buy a house soon, we'd recommend taking advantage of these great rates! The 30-year fixed-rate mortgage is currently averaging 3.36%! Give us a call today if you are interesting in finding out more information! Quest Loans would love to help! 888-883-5252

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FHFA's New Guidelines for Short Sales

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

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Local Governments to Seize Underwater Mortgages?

If you consider the state of the housing market with all of the homes that are still underwater on their mortgages, you may come to the conclusion that the federal programs that promised to help homeowners have not been very successful. True, they have helped many, but overall their assistance is limited.

A new idea has come up that has struck a nerve with mortgage financers: eminent domain. Local governments could write down mortgages in the same way that a piece of land is condemned. The town or county would get the court's approval to pay a "fair market" price to the lendor or investor that is holding a homeowner's underwater mortgage. This would be similar to credit companies selling debt to collectors in that the amount would be substantially less than the unpaid balance. Once approved, the local government would sell the smaller mortgage back to the homeowner who would refinance that amount with a new loan and basically get a second chance on paying their mortgage.

This idea has drawn a lot of controversy. The FHFA has threatened unspecified action against local governments if they opt to seize underwater homes through eminent domain. The FHFA regulates the government-sponsored enterprises Fannie Mae and Freddie Mae hold nearly half of the outstanding mortgages in the US.

In the past, eminent domain has been used in small cases to claim property for new roads for facilities that would somewhat benefit the community. Critics say that seizing individual properties would only benefit homeowners by giving them a break on their loan balance. It is argued that these seizures would serve the public by boosting local housing markets and helping to speed up economic recovery. Despite this, the FHFA is understandably opposed to the idea since they would lose money on every case.

Many opponents of the eminent domain idea claim that this would raise an issue of "moral hazard". If homeowners were given these second chances by having their underwater mortgages cut, they would be encouraged in the future to take on debts that cannot be paid back. It would bring about a whole slew of irresponsible homebuyers who think they can just get bailed out later.

What do you think? Is eminent domain a good idea or would it hurt the economy?

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BofA and GSE's Ongoing Battle

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

Earlier this week a proposal to reduce the mortgages of underwater homes in the U.S. was rejected. FHFA denied the request to allow the GSE's to lower the principal on mortgages where homeowners owe more than the house is actually worth.

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Weekly Average Mortgage Rate is at 3.66%

The Primary Mortgage Market Survey (PMMS) from Freddie Mac has been released. This states that the average mortgage rates are continuing to fall despite other economic factors worsening. The 30-year fixed mortgage rate averaged at 3.66% which is down from 3.71% last week; and it has an average of 0.7 point. The 15-year FRM averaged at 2.95%, down from 2.98% last week; a year ago, it was at 3.69%. It has an average 0.6 point. Treasury bond yields have also eased.

The Federal Reserve has noted that growth in employment rates has been slow in recent months, which leads to household spending also being slower. On a positive note though, construction on one-family homes has been rising for the past three months. The confidence of homebuilders is at its highest reading in 5 years.

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FHFA's 2012 Foreclosure Prevention Report

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

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Rates Are Still Falling

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

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Housing Market Slowly Recovering

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

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Mortgage Rates Rise Above 4%

According to Freddie Mac, the 30-year fixed-rate mortgage has risen above 4% for the first time since October. Last year, the rate was averaging 4.81%; right now it is at 4.08%. The rates are thought to be rising as a sign of economic growth. It was the Federal Reserve that helped to push the rates down to record-low levels in the recent past.

U.S. Treasury bond yields have been increasing lately. However, consumers have been able to reduce their debt burdens quite a bit overall. The economy is finally beginning to stabilize.

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FHFA's Foreclosure Prevention and Refinance Report

According to the FHFA's Q4 2011 Foreclosure Prevention and Refinance Report, Fannie Mae and Freddie Mac have completed more than 2.1 million foreclosure prevention actions to help keep borrowers in their homes. This includes 1.1 million permanent loan modifications. Additionally, fewer than 20% of these loans that were modified in the four quarts ended March 31, 2011 had missed two or more payments which is an improvement from previous years.

The FHFA has also released an interactive Fannie Mae and Freddie Mac State Borrower Assistance Map that allows you to see how many loans are owned or guaranteed by the GSEs, and how many of which are delinquent, in foreclosure or refinanced per state. There are more statistics involved as well in this report. Click here to view more.

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Fannie Mae Requests More Bailout Money

We have discussed Fannie Mae several times. You know that it is a GSE that is under the conservatorship of the FHFA. You know that it is constantly in the news for various reasons. Today, Fannie Mae is in the news because it has requested a large sum of money. Reportedly, Fannie has lost $2.4 billion during the fourth quarter of 2011. Its revenue is sitting at $4.5 billion. Because of its deficit, Fannie Mae is seeking aid from the government in the form of $4.6 billion.

We also reported that there are many efforts underway regarding shutting down Fannie Mae and Freddie Mac. The government no longer wants to support them, but rather have them be a more privately-owned enterprise. As of now, taxpayers have spent $150 billion trying to maintain the GSEs. A new estimate is saying that figure could be upwards of $260 billion by the end of 2014 just to keep the companies afloat. You can see why the government wants to bail on them: Fannie alone is proving to be one of the most expensive single-company bailouts in history. So far Fannie has taken a whopping $116 billion from the U.S. Department of Treasury.

Fannie isn't the only one, though. Freddie Mac has requested its fair share of bailout money. In November, a request was made for $6 billion in financial assistance after it reportedly lost that much during the third quarter of 2011.

What do you think is the best solution? Is the government doing the right thing by bailing them out so often despite it coming straight from the taxpayers' pocket? Should the government just tell them to take their losses?  Leave your thoughts below!

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