The Top Ten Places to Live…According to Zillow

(LoanRateUpdate)

We know, we know…not another top ten list, but we have to on this one, only because it’s Zillow. Besides, we have to fun every once in a while! When asked their thoughts on the best places for prospective homeowners to buy in the next year, they thought about what makes a local market an attractive place to buy. They looked at this question from the standpoint of people who live and work in these cities and if 2011 would be a good year for them to take the plunge into home ownership.

The survey was conducted with 4 main criteria and each was given equal weight:

1. Affordability
2. Unemployment
3. Foreclosure Rate
4. Price Appreciation

Without getting into all the messy stuff about how they determined the criteria, the survey said:

1. Utica, NY
Utica, NY scored well in all four categories. The median home price ($104,000) is roughly the equivalent of 2.3 years of median household income . Unemployment in Utica is 7.0%, and is nearly flat, down 0.2% year over year. Utica has the lowest foreclosure rate of any city we looked at for this list with 0.07% of homes being liquidated in foreclosure in the past 12 months. Home values are up nearly 4% quarter over quarter, and up 5.2% year over year–contrast that to national home values down 1.8% quarter over quarter and down 5% year over year.

2. Oklahoma City, OK
Oklahoma City boasts a very strong job market and one that’s improving. It has the lowest unemployment out of the top 5 Best Cities at 6%. The real estate market is healthy as well, with home values up 2.6% year over year and a low foreclosure rate (ranked #3 out of 124 metros).

3. Rochester, NY
Rochester offers buyers an affordable market (median home value is $121,000, the equivalent of 2.4 years of median income) and an improving local economy. Unemployment is down 0.5% this past year. Additionally, the local real estate market is solid: 91% of homes sold for a gain in October 2010 (compared to 70% nationwide).

4. Pittsburgh, PA
Similar to the other featured markets, Pittsburgh is seeing increasing home values on a quarterly and yearly basis. Values are up both quarter over quarter and year over year with 50% of homes seeing an increase in value (compared to 28% of homes nationwide).

5. Tulsa, OK
Tulsa is the most affordable city in the top 10 list: 2.1 years of median income equals the value of a median home ($112,300). Also, the Tulsa market offers home buyers a good bang for their buck with a median value per square foot of $73 (compared with $108 nationally).

Rounding out the top 10:

Albany, NY
Lancaster, PA
Madison, WI
Green Bay, WI
Lincoln, Nebraska

If you’d really like to read the whole survey, click here.

Tags: zillow, top ten places to live, affordability, unemployment, foreclosure, rate, unemployment

R.I. Judge Upholds Foreclosure Mediation Program

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U.S. Bankruptcy Court Judge Arthur N. Votolato upheld the court’s right to establish a mediation program for homeowners facing foreclosure. The ruling was in response to objections filed by creditors in two bankruptcy cases. The creditors are PHH Mortgage Corp., doing business as PHH Mortgage Service Center, and Ocwen Loan Serving LLC as servicer of Deutsche Bank National Trust Co.

Votolato implemented the program, called the loss mitigation program, in November 2009 “in response to the home mortgage and foreclosure crisis generally,” and also because the court “repeatedly had to postpone hearings” due to delays that debtors were experiencing in seeking out-of-court mortgage-loan modifications.

“This practice of parties repeatedly seeking more time simply because they had not yet connected was counterproductive, it was a huge waste of time for the parties and the Court, and was forcing needless litigation ...” the order stated. “...We decided to break the log jam” by introducing a process that would open “communications between debtors and the lenders’ decision-makers.”

Rhode Island Senator Sheldon Whitehouse (D) issued the following statement today regarding the decision by Judge Votolato:

“Today’s decision by Judge Votolato is a win for Rhode Island homeowners. The Rhode Island bankruptcy court’s foreclosure mediation program helps distressed families to cut through the red tape of our broken mortgage modification process and has already saved at least 100 homes in our state. I hope today’s decision will encourage other bankruptcy districts to follow Rhode Island’s lead and adopt similar programs.”

Last week, Whitehouse introduced the Limiting Investor and Homeowner Loss in Foreclosure Act (S. 222) to support these successful programs. Last year he held a field hearing of his Judiciary Subcommittee on Administrative Oversight and the Courts to examine the effectiveness of mediation programs. This Tuesday he will chair a hearing of the full Judiciary Committee entitled “Foreclosure Mediation Programs: Can Bankruptcy Courts Limit Homeowner and Investor Losses?”

At a hearing in October, Whitehouse praised Votolato’s program, saying it is especially needed because of the documented failures of the federal government’s flagship foreclosure-prevention program, the Home Affordable Modification Program (HAMP).

For the most part, the mortgage industry has been against forced mediation programs on the grounds that the states and the mortgage companies are ill-equipped for the amount of mediations that would be necessary to work through the current level of foreclosed properties, thus prolonging the housing slump for years.

John Mechem, a spokesman for the Mortgage Bankers Association which represents the largest mortgage lenders, said the group is opposed to both mandatory and voluntary mediation programs. He argued that the programs are expensive and are often used by borrowers as a tactic to stall foreclosure.

Mechem said the industry on its own has done almost 1.5 million mortgage modifications this year outside of mediation programs. If such programs must be implemented, he said, the MBA favors a voluntary system over mandatory meetings.

Tags: foreclosure mediation program, homeowners, mortgage borrowers, loan modifications, debtors, lenders, bankruptcy, housing slump, HAMP

Got HAMP? Maybe Not For Long

(LoanRateUpdate)

Rep. Darrell Issa (R-Calif) and Rep. Jim Jordan (R-Ohio) introduced legislation to end the Home Affordable Modification Program (HAMP). Issa, the chairman of the Oversight and Government Reform Committee, and his colleagues said the Treasury Department's program to help troubled borrowers avoid foreclosure has been a bust. This comes on the heels of a report recently released by the Special Investigator General for the Troubled Asset Relief Program (TARP), who was unsparing in its criticism of HAMP.

The Inspector Generals report said HAMP “continues to fall dramatically short of any meaningful standard of success.” It said that while HAMP has been a boon for those fortunate enough to obtain a loan modification, it described its achievements as “remarkably modest” and said any hope for achieving its original goals are slipping away.

Originally predicted to assist 3-4 million homeowners, the program has resulted in only half a million permanent modifications to date, the report noted. The Congressional Oversight Panel has estimated that number will only rise to 700,000-800,000 if current trends hold.

According to the Treasury Department, about 522,000 homeowners were enrolled in HAMP loan modifications and were making payments on time as of the end of last month. Meanwhile, about 793,000 homeowners have dropped out of the program. That is about 54% of the nearly 1.5 million who have enrolled since spring 2009.

The move by Republicans highlights a mounting political problem for the Obama administration’s’ troubled efforts to attack the foreclosure crisis. The administration has been criticized from both sides of the political spectrum with Republicans calling it a waste of effort.

"HAMP is a colossal failure," Jordan said in a press release issued by the committee. "In many cases, it has hurt the very people it promised to help. It's one more example of why government interference in the private sector doesn't work and that's why it should be repealed."

Tim Massad, the Treasury Department’s acting assistant secretary for financial stability said, “I think this program can still help a lot of people. It’s constructed so that we only use taxpayer funds prudently and wisely. To the extent that we do help people, I think it’s helping the right people.”

However, Issa had a different view of the program.

"It's unacceptable that Treasury continues this misguided effort that appears more focused on saving face than helping troubled homeowners," Issa said in a press release.

Tags: HAMP, treasury department, loan modification, mortgage assistance, issa, foreclosure crisis, homeowners, permanent modifications, private sector, government interference

FHA Approves Anti-Flipping Proposal

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The Federal Housing Authority (FHA) has followed through on its recent proposal of extending the suspension of its “anti-flipping” rule through the remainder of 2011. Since the waiver originally went into effect the FHA has insured more than 21,000 mortgages worth over $3.6 billion on properties resold with 90 days.

FHA regulations typically prohibit insuring a mortgage on a home owned by the seller for less than 90 days, but in February of last year the FHA temporarily waived this regulation as their research had shown that acquiring, rehabilitating, and reselling distressed properties often takes less than 90 days.

By prohibiting the use of FHA mortgage insurance for a subsequent resale within 90 days of acquisition, investors were reluctant to purchase foreclosures due to the higher costs incurred of holding on to the property, especially at a time when nearly half of all homes sold have FHA mortgages.

“As I noted when we first announced this policy change early last year, because of the tightened credit market, FHA-insured mortgage financing is often the only means of financing available to potential homebuyers,” FHA Commissioner David Stevens said. “Today I can report that this policy change has been effective.”

Bruce McBarnette, Esq., president of Summit Connection LLC, said, "Anti-flip rules are useful to protect buyers in an appreciating market where people are more likely to be deceived by a grossly inflated appraisal. In this market, however, with prices still falling in many areas, people are not as likely to be fooled by fraudulent appraisals. Anti-flip rules make it more difficult for investors to buy and renovate homes. This puts a drag on the real estate market at a time when there is a glut of foreclosure homes that have to be bought and fixed up, if we want a rapid economic recovery. There were over 2.8 million foreclosure filings last year, which is an incredibly high number."

Some of the rules, however, still remain in place to protect FHA mortgage borrowers against some of the other past predatory practices associated with “flipping:”

- All transactions must be arms-length, with no identity of interest between the buyer and seller or other parties participating in the sales transaction.
- In cases in which the sales price of the property is 20 percent or more above the seller’s acquisition cost, the waiver will only apply if the lender meets specific conditions.
- The waiver is limited to forward mortgages, and does not apply to the Home Equity Conversion Mortgage (HECM) for purchase program.

Tags: FHA, flipping, anti-flipping, mortgages, investor, mortgage fraud, appraisals, renovate homes, FHA mortgages, predatory practices

Housing Industry Readies Fight for Mortgage Interest Deduction

(LoanRateUpdate)

The housing industry has lined up all its aces and is preparing to do battle with a deficit cutting Congress that has declared that there are no sacred cows in its search for ways to cut the budget deficit. The first shot across the bow came in November when the President’s Deficit Reduction Commission leaked out an early draft of their report calling for a modification of the Mortgage Interest Deduction (MID).


First to react to this announcement was the National Association of Realtors (NAR), which on November 19, 2010, released a letter to the commission chairs detailing early consumer reactions to proposed changes to the mortgage interest deduction, and their potential to damage home values and the housing market.

In the letter, NAR President Ron Phipps stated, “Some consumers already believe that the MID will not be available to them. Your recommendation has sown the seeds of uncertainty as even current owners fear that they will not be able to claim the MID and that their homes will lose even more value.”

Phipps also said in the letter REALTORS ® would reject any tax law changes, including modifications to MID that would impair Americans’ ability to own their homes and to invest in real estate. “The federal policy choice to support home ownership has been in the Internal Revenue Code since its inception,” he said. “We see no valid reason to undermine that basic decision. Indeed, we believe that the only viable tax system is one that would continue to nurture home ownership.”

On December 1, NAR followed with a statement that the MID must not be targeted for change. The statement also claimed that according to their research, any changes to the MID could critically erode home prices and the value of homes by as much as 15 percent.

“Any further downward pressure on home prices will hamper the economic recovery, raise foreclosures and hurt banks’ abilities to lend and likely tip the economy into another recession resulting in further job losses for the country. It will effectively close the door on the American dream."

On that same day, the Mortgage Bankers Association (MBA) joined the fight by releasing a statement in support of NARs stance:

“A rollback of the mortgage interest deduction as proposed by the commission would have a devastating impact on both present and future homeowners in this country. It would immediately stop in its tracks any stabilization we are seeing in the housing market and would effectively increase the cost of homeownership for millions upon millions of people.”

And now the National Association of Home Builders has joined forces with NAR and the MBA creating a powerful lobby to save the MID.

“There are a couple of sacred cows in the tax code, and the mortgage interest deduction is one of those. Politicians take it on at their own risk,” said J. P. Delmore, the senior federal legislative director for the home builders’ group.

But times have changed since November 2nd and the new Republican House is determined to leave no stone unturned in their push to find ways to trim down the federal deficit.

Delmore believes some sort of tax legislation is likely to advance in Congress either this year or next as lawmakers contend with mounting deficits, the presidential commission’s recommendations for reform and the 2012 expiration of tax breaks that Congress merely extended late last year.

Though the commissions proposal didn’t garner enough backing to pass during the lame-duck session and previous efforts over the years have also failed, many believe that a modification of the MID is an idea whose time has finally come. Proposals range from a straight 12 percent deduction to limiting the amount that can be written off to cutting the MID altogether.

Spurred into action, NAHB has set up a website, savemymortgageinterestdeduction.com, and filled it with data and fact sheets on the benefits of such deductions and NAR, meanwhile, has aired ads saying the elimination would hurt hardworking families.

Expect a bloody battle over this one…

Tags: mortgage interest deduction, nar, nahb, deficit reduction commission, housing industry, mba, congress, real estate, home ownership, home prices, economic downturn

Buying Now Less Expensive Than Renting in Most Cities

(LoanRateUpdate)

The tables have finally turned on the buying versus renting debate. During the housing boom as home prices became insanely high, it was far cheaper to rent than to buy a home, unless of course you got one of those great one percent teaser loans, but that didn’t work out well for most people.

It’s now cheaper to buy a home rather than rent one in 72 percent of the 50 largest U.S. cities, according to Trulia’s rent vs. buy index, which compares the total cost of home ownership to the cost of renting.

"Since the start of the 'Great Recession,' many former home owners have flooded the rental market,” Pete Flint, CEO of Trulia, said in a news release about the index. “Following the principles of supply and demand, renting has become relatively more expensive than buying in most markets.”

Trulia compared the median list price of a two-bedroom home with the median price paid for rent in 50 cities. The company then assigned a price-to-rent ratio to each city, with any number below 15 signifying a homebuyer's market and any number above 21 signifying a renter's market. Any market between those two numbers has more balanced rent versus buy costs.

The cities where buying was deemed more affordable than renting tended to be those with high levels of foreclosures and unemployment, factors which also reduce the pool of qualified buyers. The two cities where buying was deemed most affordable were Miami and Las Vegas, both of which have regularly ranked among the nation’s hardest-hit housing markets since the economic downturn began. In both cities, median home prices were only six times the median annual rent for a two-bedroom home.

Rounding out the top ten were Arlington, TX, Mesa, AZ, Phoenix, AZ, Jacksonville, FL, Sacramento, CA, San Antonio, TX, Fresno, CA, and El Paso, TX.

According to the report, the top 10 cities deemed more affordable to rent over buying were New York, NY, Seattle, WA, Kansas City, MO, San Francisco, CA, Memphis, TN, Los Angeles, CA, Fort Worth, TX, Oakland, CA, Portland, OR, and Albuquerque, NM.

“Although owning a home is relatively more affordable in most cities, market conditions have caused an interesting demographic swap between traditional renters and buyers,” said Tara-Nicholle Nelson, a Trulia spokeperson. “For example, lifelong renters are seizing the opportunity to become homeowners while affordability is high. At the same time, a growing number of long-time homeowners are finding themselves tenants – some by choice and others by necessity.”

To read the full report and see the total list of cities, click here.

Tags: rent vs buying, home prices, cost of home homeownership, great recession, median list price, affordable, market conditions, price-to-rent ratio

Future Home Sales Looking a Little Brighter

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Future home sales look a little brighter according to the National Association of Realtors (NAR) whose Pending Home Sales Index (PHSI) for December rose 2 percent from the previous month and is the fifth gain in the last six months.

NAR said its pending home sales index, which is based on contracts signed as opposed to closings, increased to 93.7 last month up from a downwardly revised 91.9 for November and down from 97.8 for December 2009. NAR says this forward-looking indicator typically signals where existing-home sales levels should be within one or two months.

Lawrence Yun, NAR’s chief economist, credits high affordability conditions and overall economic improvement for the steady increases.

“Modest gains in the labor market and the improving economy are creating a more favorable backdrop for buyers, allowing them to take advantage of excellent housing affordability conditions,” Yun said.

The PHSI in the Northeast increased 1.8 percent to 73.9 in December but is 5.3 percent below December 2009. In the Midwest the index rose 8.0 percent in December to 84.6 but is 5.1 percent below a year ago. Pending home sales in the South jumped 11.5 percent to an index of 101.9 and are 1.7 percent above December 2009. In the West the index fell 13.2 percent to 105.8 and is 10.7 percent below a year ago.

According to Yun, mortgage rates should rise only modestly in the months ahead, so conditions should remain favorable for buyers with good credit. He also says stable home prices should continue into 2011 as long as there is sufficient demand to absorb inventory.

“The latest pending sales gain suggests activity is very close to a sustainable, healthy volume of a mid-5 million total annual home sales,” Yun said. “However, sales above 6 million, as occurred during the bubble years, is highly unlikely this year.”

Tags: NAR, pending home sales, homesales index, economic recovery, labor market, mortgage rates, housing affordability, improving economy

Freddie Mac: Strengthening Economy Raising Mortgage Rates

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Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®) which shows long and short term rates rising this week primarily due to improving economic conditions.

• 30-year fixed-rate mortgage (FRM) averaged 4.80 percent with an average 0.7 point for the week ending January 27, 2011, up from last week when it averaged 4.74 percent. Last year at this time, the 30-year FRM averaged 4.98 percent.
• 15-year FRM this week averaged 4.09 percent with an average 0.7 point, up from last week when it averaged 4.05 percent. A year ago at this time, the 15-year FRM averaged 4.39 percent.
• 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.70 percent this week, with an average 0.7 point, up from last week when it averaged 3.69 percent. A year ago, the 5-year ARM averaged 4.25 percent.
• 1-year Treasury-indexed ARM averaged 3.26 percent this week with an average 0.6 point, up from last week when it averaged 3.25 percent. At this time last year, the 1-year ARM averaged 4.29 percent.

Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.

Frank Nothaft, vice president and chief economist, Freddie Mac stated, "Mortgage rates followed bond yields a little higher this week amid positive data reports from The Conference Board that suggest the economy is strengthening. The index of leading indicators rose 1.0 percent in December, nearly twice that of the market consensus forecast and represented the sixth consecutive monthly increase, according to the Board. They also reported a stronger gain in consumer confidence for January, rising to an eight-month high. In addition, the share of households who said jobs were plentiful rose to the highest level since May 2009.

And…

"Consumer demand in the housing market is also showing some positive gains. Sales of existing homes rose in December to the strongest pace since May and sales of new homes jumped to the highest since April. At their current sales rate, the expected time on the market fell from 9.5 to 8.l months for existing houses and fell from 8.4 to 6.9 months for new homes."

30-Year Fixed Rate Mortgages
	US	NE	SE	NC	SW	W
Average	4.80	4.83	4.76	4.85	4.78	4.75
Fees & Points	0.7	0.6	0.8	0.6	0.7	0.8

15-Year Fixed Rate Mortgages
	US	NE	SE	NC	SW	W
Average	4.09	4.16	4.03	4.13	4.13	4.03
Fees & Points	0.7	0.6	0.9	0.5	0.7	0.9

5/1-Year Adjustable Rate Mortgages
	US	NE	SE	NC	SW	W
Average	3.70	3.82	3.46	3.93	3.66	3.59
Fees & Points	0.7	0.6	0.8	0.4	0.7	0.9
Margin	2.74	2.76	2.75	2.72	2.77	2.73

1-Year Adjustable Rate Mortgages
	US	NE	SE	NC	SW	W
Average	3.26	3.50	3.08	3.47	3.43	2.94
Fees & Points	0.6	0.7	0.7	0.3	0.7	0.6
Margin	2.77	2.80	2.75	2.73	2.80	2.75

The National Mortgage Rate Snapshot
	One Year Ago				One Week Ago
	30-YR	15-YR	5/1-YR	1-YR ARM	30-YR	15-YR	5/1-YR	1-YR ARM
Average	4.98	4.39	4.25	4.29	4.74	4.05	3.69	3.25
Fees & Points	0.6	0.6	0.6	0.5	0.8	0.8	0.7	0.6
Margin	N/A	N/A	2.74	2.75	N/A	N/A	2.75	2.76

Nearly Half of Home Sales are Distressed Properties

(LoanRateUpdate)

According to the latest Campbell/Inside Mortgage Finance survey, nearly half of the homes sold in December were distressed properties. The firm's HousingPulse survey reveals distressed property sales surged to 47.2% of the market in December, up from 44.5% in November and nearly matching the 47.5% peak reached in September.

The last time sales of distressed properties hit similar highs were in September, just before robo-signing allegations came to light as large mortgage servicers suspended foreclosure proceedings to investigate reports of improprieties in foreclosure paperwork.

Distressed property sales now makeup a large portion of several state's housing market. The state with the dubious position of having the largest share was the Golden State, California as almost two-thirds of all residential property transactions tracked in December involved distressed properties. In Arizona and Nevada, 62% of transactions concerned distressed properties.

The states with the smallest share of distressed property sales were Texas, Oklahoma, and Louisiana with only 29 percent of all properties distressed.

The survey also revealed that sales to first-time homebuyers continued at the high level of 37.7% of all transactions tracked in December, a strong increase from the 34.4% in September and October. It is believed that fear of mortgage rate hikes prompted the demand.

The report said investors shied away from buying due to concerns home prices would further decline.

Tags: finance survey, distressed properties, mortgage servicers, housing market, first-time homebuyers, mortgage rates, investors, home prices

Sen. Paul Introduces Bill to De-fund HUD

(LoanRateUpdate)

Newly installed Kentucky Senator Rand Paul had the distinction of giving the Republican response to President Obama’s State of the Union Address and wasted no time in keeping his promise that the Republicans would cut government spending by introducing a bill cutting all funding for the U.S Department of Housing and Urban Development (HUD).

According to the language in the bill, once ratified, all accounts and programs for HUD would be immediately de-funded. It would also transfer all housing programs for veterans away from HUD and into the Department of Veteran's Affairs.

“I am proud to introduce my own solution to the mounting debt our spendthrift, oversized government has accrued. By rolling back to 2008 levels and eliminating the most wasteful programs, we can still keep 85 percent of our government funding in place,” said Sen. Paul.

The Republicans have apparently decided to take a completely different approach than that of the current administrations policy of bailing out the banks, Wall Street, and complicit government agencies for what many perceive as their bad behavior that lead to the housing crisis. The bill is the latest in a Republican surge against spending on housing policy and Wall Street reform. Days after the new Congress convened, Rep. Michele Bachmann (R-Minn.) introduced a bill that would repeal the Dodd-Frank Act.

According to Sen. Paul's overview of the bill: "Policies perpetuated by HUD and its related agencies played a key role fostering sub-prime lending that brought the financial system to its knees in 2008. By implementing policies that expanded risky mortgages to under qualified borrowers, HUD is directly implicated in the loss of over one million homes in 2008."

But housing alone is not the only cut in the bill. Paul proposes reductions in costs from the Environmental Protection Agency, the Department of Agriculture, the Departments of Energy and Education, and even defense. The bill cuts $14 billion in payments made to military personnel among other operations.

"By removing programs that are beyond the constitutional role of the federal government, such as education and housing, we are cutting nearly 40% of our projected deficit and removing the big-government bureaucrats who stand in the way of efficiency in our federal government," Paul said in a statement released Tuesday.

This is going to be a very interesting two years.

Tags: HUD, rand paul, VA, oversizaed government, wasteful programs, federal government, risky mortgages, housing policy

HUD Announces More Loan Originator Terminations

(LoanRateUpdate)
The Department of Housing and Urban Development (HUD) announced that it is terminating Origination Agreements with 15 lenders due to higher than normal default rates on loans endorsed by the Mortgagees. Reinstatement is possible if the affected branch or branches have been terminated for at least six months and the lender continues to be an approved mortgagee.



Under the Agreement, the mortgagee is authorized to originate single-family mortgage loans and submit them to FHA for insurance endorsement. The Agreement may be terminated on the basis of poor performance of FHA-insured mortgage loans originated by the mortgagee.

Regulations under the agreement permit HUD to terminate the Agreement with any mortgagee having a default and claim rate for loans endorsed within the preceding 24 months that exceeds 200 percent of the default and claim rate within the geographic area served by a HUD field office, and also exceeds the national default and claim rate.

Below is a list of the affected mortgagees:

Mortgagee Name	Mortgagee Branch Office
Access Mortgage Services Inc	Woodbridge, NJ
Anchor Mortgage	Las Vegas, NV
Benefit Funding Corp	Beltsville, MD
Birmingham Bancorp Mortgage Corp	West Bloomfield, MI
Dedicated Mortgage Associates LLC	Hudson, NH
Equitable Trust Mortgage Corp	Baltimore, MD
Equity Source Home Loans LLC	Lakewood, NJ and Morganville, NJ
First Performance Mortgage Corp	Bessemer, AL
Freedom Mortgage Corp	Fishers, IN
Homeland Lending Inc	Plant City, FL
Metro Finance Corp	Aurora, IL
Moncor Inc	Wheat Ridge, CO
MVB Mortgage Corp	Southfield, MI
Signature One Mortgage Inc	Las Vegas, NV
Valor Financial Services LLC	Rolling Meadows, IL

Tags: HUD, mortgage originators, mortgages, single-family mortgage loans, FHA insured mortgage loans, loan defaults

HUD Awards $1.4 Billion for Homeless Programs

(LoanRateUpdate)
U.S. Housing and Urban Development (HUD) Secretary Shaun Donovan announced $1.41 billion in funding to keep nearly 7,000 local homeless assistance programs operating in the coming year. The grants form a critical foundation for the Obama Administration’s Opening Doors strategy, the nation’s first comprehensive plan to prevent and end homelessness.



The announcement comes just as thousands of volunteers in nearly every city and county conduct a national one-night count of homeless persons and families. HUD’s “Let’s Make Everybody Count!” campaign is intended to document trends in homelessness that are crucial to local planners’ efforts to prevent and end homelessness in their areas.

“There is a tremendous need on our streets and in our shelters among those experiencing both long-term homelessness as well as families confronting a sudden economic crisis,” said Donovan. “These grants are the life blood for thousands of local housing and service programs that are doing the heavy lifting to meet President Obama’s goal of ending homelessness.”

Barbara Poppe, Executive Director of the U.S. Interagency Council on Homelessness Executive Director, added, “Across federal agencies, we are aligning mainstream programs towards a goal to prevent and end homelessness. While we continue to strengthen public-private partnerships in Washington and across the country to meet this goal, today's grants provide essential support to continue the progress and meet critical needs of those who experience the crisis of homelessness.”

The 12 month grants are part of the Obama Administration's Opening Doors strategy for ending homelessness and represent an increase of $40 million over awards made last year. The Continuum of Care grants, as they are known, are designed to support a variety of services to get the homeless off the street, into transitional and ultimately permanent housing with the support needed to keep them housed.

The bi-annual Let's Make Everyone Count campaign during which volunteers conduct a national one-night count of the homeless is scheduled for tonight, January 26.

During the last count in January 2009 643,000 persons were found living on the streets or in shelters. A follow-up found that over 2 million Americans were homeless at some point during the year and that they had the following characteristics:
• 78 percent of all sheltered homeless persons are adults;
• 61 percent are male;
• 62 percent are members of a minority group;
• 38 percent are 31-to-50 years old;
• 64 percent are in one-person households, and
• 38 percent have a disability.

Tags: HUD, homeless, shelters, homeless assistance, let’s make everybody count, local housing service programs, grants

MBA: Purchase Applications/Refi’s Decrease, Rates Remain Stable

(LoanRteUpdate)
The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending January 21, 2011. The Market Composite Index, a measure of mortgage loan application volume, decreased 12.9 percent on a seasonally adjusted basis from last week. The results do not include any adjustments for the Martin Luther King holiday.



On an unadjusted basis, the Index decreased 12.0 percent compared with the previous week. The four week moving average for the seasonally adjusted Market Index is down 1.0 percent.

The seasonally adjusted Purchase Index decreased 8.7 percent from one week earlier, the lowest level since last October. The four week moving average is down 3.7 percent for the seasonally adjusted Purchase Index. The unadjusted Purchase Index decreased 3.1 percent compared with the previous week and was 20.8 percent lower than the same week one year ago.

The Refinance Index decreased 15.3 percent from the previous week, which is the lowest level for the index in a year. The four week moving average is down 0.1 percent.

The refinance share of mortgage activity decreased to 70.3 percent of total applications from 73.0 percent the previous week.

The adjustable-rate mortgage (ARM) share of activity increased to 5.2 percent from 5.0 percent of total applications from the previous week.

The average contract interest rate for 30-year fixed-rate mortgages increased to 4.80 percent from 4.77 percent, with points decreasing to 1.19 from 1.20 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate decreased to 4.12 percent from 4.16 percent last week, with points increasing to 1.26 from 0.90 (including the origination fee) for 80 percent LTV loans.

Tags: MBA, home purchase applications, mortgage rates, fixed rate mortgage, adjustable rate mortgage, refinance, interest rate

New Home Sales Lowest in 47 Years

(LoanRateUpdate)
Despite a jump in new home sales of 17.5 percent from November to December, total sales for all of 2010 totaled 321,000 units, the fewest number of new homes sold in 47 years. It was the fifth consecutive year that sales have declined after hitting record highs for the five previous years when the housing market was booming according to data released by the Commerce Department.



The year ended on a stronger note. Buyers purchased new homes at a seasonally adjusted annual rate of 329,000 units in December, a 17.5 percent increase from the November pace.

Still, economists say it could be years before sales rise to a healthy rate of 600,000 units a year. David Crowe, chief economist for the National Association of Home Builders (NAHB) predicts that new home sales will increase 25 percent in 2011 to 405,000.

Crowe sees several factors as contributing to a budding recovery, including a rebound in consumer confidence that has seen rising sales in big-ticket items like autos and furniture, suggesting consumers are becoming less worried about job security. The recently enacted 2 percent cut in Social Security taxes for one year should also boost consumer spending to around the 3.5-3.8 percent level, up from 2.5 percent in 2010.

But builders of new homes are struggling to compete in markets saturated with foreclosures. High unemployment and uncertainty over home prices have kept many potential buyers from making purchases.

With over six million homes in some stage of foreclosure and a predicted 1.5 to 1.8 million homes expected to join that amount this year, home builders might find the competition for home buyers a lot tougher this year than last.

The effects of the foreclosure crisis was certainly felt this year, as NAHB predicted in January 2010 that housing starts would rise to 610,000 units but only about 475,000 homes were actually built.

But builders still see a reason to be optimistic. Demographic factors also figure to help boost the housing market in 2010. Crowe said multifamily housing should get a significant boost from a disproportionate number of Generation Y members moving into the housing market. He predicted they would help produce a 16 percent boost in multifamily housing starts this year and a 53 percent increase in 2012, to an annual level of 203,000 units.

Frank Northaft, Freddie Mac chief economist agrees, noting that research from the Harvard Joint Center for Housing Studies predicts that U.S. households will increase at a rate of 1.2 million – 1.5 million over the next 5-10 years, driving a need for new housing.

The median price of a new home rose to $241,500 in December, up from a November median of $215,500. For all of 2010, the median sales price was $221,900, up 2.4 percent from the 2009, however, economists expect overall home prices will continue to fall until at least midyear as foreclosures continue to saturate the market.

For December, sales rose in all parts of the country except the Northeast, which saw a 5 percent decline. Sales surged 71.9 percent in the West and were up 3.2 percent in the Midwest and 1.8 percent in the South.

Tags: new home sales, housing starts, median price, foreclosure crisis, demographics, low mortgage rates, consumer confidence, budding recovery

LendingTree Weekly Mortgage Rate Pulse: Rates Rise Slightly

(LoanRateUpdate)
According to the data collected on January 25th for LendingTree’s Weekly Mortgage Rate Pulse, average home loan rates offered by network lenders were 5.05 percent (5.33% APR) for 30-year fixed mortgages, up slightly from 5.03 percent the week before, 4.29 percent (4.75% APR) for 15-year fixed mortgages, which was down slightly from 4.33 the week before, and 3.72 percent (3.99% APR) for 5/1 adjustable rate mortgages (ARM), which was down from 3.77 percent from the previous week.



The lowest mortgage rates offered on the same day by lenders on the LendingTree network were 4.75 percent (4.89% APR) for a 30-year fixed mortgage, up from 4.5 percent the previous week, 3.88 percent (4.12% APR) for a 15-year fixed mortgage, up from 3.75 percent the week before, and 3.13 percent (3.25% APR) for a 5/1 ARM, up from 3.00 percent the week before.

"By late April, federal banking agencies will define what is considered a Qualified Residential Mortgage," said Cameron Findlay, LendingTree chief economist. "A defined mortgage will be set by parameters like the borrower's loan-to-value ratio, debt-to-income ratio and FICO score. Basically what this means to borrowers is that any loan that falls outside the new QRM parameters will incur a large premium. This has the potential to equate to higher costs for thousands of borrowers. For consumers thinking about purchasing or refinancing, time is of the essence."

The LendingTree Weekly Mortgage Rate Pulse is a snapshot of the lowest and average home loan rates available within the LendingTree network of lenders and is compiled every Wednesday from data that is gathered from the previous day to reflect the most up to date information on current mortgage rates.

See how your state compares below by comparing mortgage data including a snapshot of the lowest 30-year fixed rates offered by lenders on the LendingTree network, average loan-to-value ratio and percentage of consumers with negative equity:

STATE-BY-STATE MORTGAGE DATA 1/25/10 *Updated Quarterly
STATE	LOWEST MORTGAGE RATE	LOAN-TO-VALUE RATIO*	% WITH NEGATIVE EQUITY*
Alabama	4.63% (4.77% APR)	67.1%	10.5%
Alaska	4.75% (4.95% APR)	67%	8.9%
Arizona	4.63% (4.74% APR)	92.4%	48.6%
Arkansas	4.75% (4.87% APR)	73.6%	11.6%
California	4.75% (4.88% APR)	70.1%	31.6%
Colorado	4.75% (4.89% APR)	72.1%	19.6%
Connecticut	4.75% (4.88% APR)	58.2%	11.9%
Delaware	4.50% (4.61% APR)	67.9%	13.3%
District of Columbia	4.63% (4.86% APR)	58.6%	15.2%
Florida	4.50% (4.61% APR)	88.7%	45.5%
Georgia	4.63% (4.77% APR)	79.8%	28%
Hawaii	4.75% (4.84% APR)	55.5%	10.7%
Idaho	4.75% (4.89% APR)	74.1%	25.3%
Illinois	4.75% (4.89% APR)	70.6%	19.4%
Indiana	4.75% (4.88% APR)	70%	11.3%
Iowa	4.75% (4.95% APR)	66.9%	8.7%
Kansas	4.75% (4.95% APR)	70.6%	11.1%
Kentucky	4.63% (4.77% APR)	68%	8.9%
Louisiana	4.75% (4.95% APR)	N/A	22.5%
Maine	4.75% (4.95% APR)	N/A	22.5%
Maryland	4.63% (4.72% APR)	68.8%	22%
Massachusetts	4.75% (4.87% APR)	60.3%	14.9%
Michigan	4.75% (4.90% APR)	85.5%	37.6%
Minnesota	4.75% (4.88% APR)	65.5%	16.2%
Mississippi	4.75% (4.95% APR)	N/A	22.5%
Missouri	4.63% (4.77% APR)	71.5%	15.7%
Montana	4.75% (4.84% APR)	60.1%	7.7%
Nebraska	4.75% (4.95% APR)	73.1%	9.6%
Nevada	4.75% (4.89% APR)	118.7%	66.5%
New Hampshire	4.75% (4.87% APR)	69%	17.7%
New Jersey	4.50% (4.59% APR)	61.3%	15.2%
New Mexico	4.75% (4.89% APR)	66.4%	12.6%
New York	4.75% (4.86% APR)	49.8%	7%
North Carolina	4.75% (4.89% APR)	70.3%	10.5%
North Dakota	4.75% (4.95% APR)	59.9%	7.4%
Ohio	4.75% (4.95% APR)	74.7%	20%
Oklahoma	4.75% (4.87% APR)	70.7%	6.0%
Oregon	4.75% (4.92% APR)	68.7%	15.6%
Pennsylvania	4.63% (4.73% APR)	62.1%	7.4%
Rhode Island	4.75% (4.95% APR)	61.6%	20%
South Carolina	4.75% (4.88% APR)	70.4%	14.2%
South Dakota	4.75% (4.87% APR)	N/A	22.5%
Tennessee	4.63% (4.77% APR)	70.9%	13.9%
Texas	4.63% (4.76% APR)	69.5%	11.2%
Utah	4.75% (5.00% APR)	73.6%	20.7%
Vermont	4.75% (4.95% APR)	N/A	22.5%
Virginia	4.63% (4.77% APR)	70.5%	22.1%
Washington	4.75% (4.86% APR)	66.2%	14.9%
West Virginia	4.75% (4.95% APR)	N/A	22.5%
Wisconsin	4.75% (4.95% APR)	67.2%	13.1%
Wyoming	4.75% (4.89% APR)	N/A	22.5%

Home loan rates above are reflective of actual rates offered to borrowers by lenders on the LendingTree network. Lowest rates shown reflect the payment of one discount point. Rates will vary based on the borrower's loan details and credit profile.

More information is available here:

Tags: lendingtree, mortgage rates, mortgage loans, average home rates, 30 year fixed, 15 year fixed, 5/1 arm, adjustable rate mortgage, fixed mortgage, freddie mac, lenders

Fed Beige Book: Housing Dragging Economy

(LoanRateUpdate)

The Beige Book released by the twelve banks of the Federal Reserve every six weeks reports that economic activity continued to expand moderately from November through December, however, activity in residential real estate and new home construction remained slow across all Districts.

A majority of the Districts, including Boston, New York, Cleveland, Atlanta, Chicago, Minneapolis, Dallas, and San Francisco characterized local housing markets as weak and sluggish with little change from the previous reporting period.

Kansas City noted further weakening, while Richmond received reports of both flat activity and further declines. The St. Louis District saw additional declines in existing home sales, but also cited increased new home construction permits.

All Districts attributed slumping activity to concerns about the pace of economic recovery, especially in employment, while the Philadelphia, Atlanta, and Chicago Districts mentioned difficulty obtaining credit as another constraint on demand.

High levels of existing home inventories continued to damp the pace of new home construction in most Districts reporting on construction, although Boston, Richmond, Dallas, and San Francisco mentioned pick-ups in multifamily construction within their Districts.

Home prices generally declined or held steady in the New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, Kansas City, Minneapolis, and San Francisco Districts; the New York, Atlanta, Chicago, and San Francisco.

Districts mentioned distressed properties placing downward pressure on prices. Boston reported rising median home prices across most states in the District, but contacts attributed those increases to relatively higher sales of more expensive properties rather than a general upward movement in home prices.

Outlooks for residential real estate in the coming year were mixed, with contacts in most Districts described as expecting continued weak conditions.

Demand for residential real estate loans eased in New York and Kansas City, remained weak in Cleveland and Dallas, but increased in the Richmond District. Real estate lending declined in the St. Louis District.

Most Districts reporting on credit quality described it as improving, while bankers in the Cleveland District said that quality remained stable or edged up slightly.

Reports on credit standards were mixed in New York, while standards were said to have eased somewhat in Atlanta, remained restrictive in San Francisco, and held steady in Kansas City.

Tags: beige book, federal reserve, real estate loans, credit quality, housing market, existing home inventories, new home construction, distressed properties, residential real estate

New Home Construction Remains Weak

(LoanRateUpdate)

The latest new home construction data released by the U.S. Census Bureau and the Department of Housing and Urban Development (HUD) reveals new home construction dropped in December to its lowest level in more than a year as the feeble housing sector ended 2010 on a weak note. Private building of new homes dropped 4.3% in December from a month earlier to a seasonally adjusted annual rate of 529,000, the lowest level of housing starts since October 2009.

The weak economic data surprised many experts who had expected housing starts to be closer to 550,000 units. Housing starts ended the year 8.2% below December 2009.

The construction weakness was the result of single-family housing starts which were at a rate of 417,000; 9.0 percent below the revised November figure of 458,000. It was the lowest level of single-family home construction since May 2009. The December rate for units in multi-family buildings with five units or more was 102,000.

"From what we've heard from builders, they're not very hopeful for recovery in 2011," said Mark Vitner, a Wells Fargo Securities economist. "The first half of the year, it looks like housing's going to be dead in the water."

Builders have been battered by a recession that has included tighter lending standards and competition from an excessive supply of previously owned homes partly fueled by the flood of foreclosures coming on the market.

As fewer Americans opt for home ownership, demand for apartments has been strengthening. Construction of multifamily housing, which includes more than five units, was up 25.9% in December from the prior month. Monthly changes in multifamily housing tend to be volatile. Still, building for new multifamily housing was up 30.8% from the same time a year ago.

One bright spot on the report, building permits for all types of residential housing were up 16.7% in December, however, that was attributed to a rush by builders to apply for approval before new building codes came into effect in California, Pennsylvania, and New York in 2011.

Tags: HUD, census bureau, housing starts, single family homes, multi-family homes, housing construction, tight lending standards, building permits, builders

FHA Loan Volume Strong in December; Short Refi's Weak

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The Federal Housing Administration (FHA) Mortgage funded $28.1 billion to mortgage bankers for FHA backed single-family mortgage loans in December, a slight gain from the previous month. Included in that figure is $1.7 billion of FHA guaranteed reverse mortgages. FHA also reported an uptick in seriously delinquent mortgage loans during the month.

The percentage of government insured mortgage loans that are 90 days or more past due jumped to 8.8 percent, compared to 8.3 percent in November. (FHA originally reported an 8.7 percent serious delinquency rate for November but later revised it down to 8.34 percent.)

In December, nearly 50 percent of FHA endorsements involved purchase money loans. First-time homebuyers accounted for 73 percent of all approved borrowers.

During the month, FHA approved just 21 FHA 'Short Refinance' loans with lenders submitting another 30 short refinance applications for endorsement.

The FHA launched the program on September 7, 2010, to offer certain 'underwater' non-FHA borrowers who are current on their existing mortgage and whose lenders agree to write off at least ten percent of the unpaid principal balance of the first mortgage, the opportunity to qualify for a new FHA-insured mortgage.

The program was designed to allow borrowers with underwater conventional loans to refinance into new FHA-insured loans, after the investor writes down the principal amount of the mortgage to a 97.75 percent loan-to-value ratio. The combined LTV cannot exceed 115 percent.

Critics of the program have taken a dim view of the program since the start citing lender requirements such as reducing the loan balance and the FHA’s program restrictions as a deterrent to their participation. With the very low volume of short refinances, they’ve been proven to be right.

Tags: FHA, mortgage bankers, mortgage volume, mortgage loans, loans, purchase loans, first mortgage, second mortgage liens, FHA-insured loans, short refinances

Existing Home Sales Up; Foreclosures Pressure Prices

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Existing homes sales shot up 12.3% in December, coming in well above most analysts' estimates and marking growth in five of the final six months of 2010, but there was still an 800 pound gorilla in the room…distressed properties.

The National Association of Realtors (NAR) said seasonally adjusted sales rose to an annualized rate of 5.28 million last month from 4.7 million for November, which was upwardly revised a few thousand. The monthly rate is down 2.9% from the 5.44 million units in December 2009.

Single-family home sales jumped 11.8 percent to a seasonally adjusted annual rate of 4.64 million in December from 4.15 million in November, but are 2.5 percent below the 4.76 million levels in December 2009. Existing condominium and co-op sales surged 16.4 percent to a seasonally adjusted annual rate of 640,000 in December from 550,000 in November, but remain 5.2 percent below the 675,000-unit pace one year ago.

"December was a good finish to 2010, when sales fluctuate more than normal," NAR Chief Economist Lawrence Yun said. "The pattern over the past six months is clearly showing a recovery. The December pace is near the volume we’re expecting for 2011, so the market is getting much closer to an adequate, sustainable level. The recovery will likely continue as job growth gains momentum and rising rents encourage more renters into ownership while exceptional affordability conditions remain."

NAR said the median existing-home price in December was $168,000, down 1% from a year earlier, which was attributed to the number of distressed properties sold during the month. The level of distressed-home sales last month rose to 36% of the existing-home market, up from 33% in November and 32% a year earlier.

“The modest rise in distressed sales, which typically are discounted 10 to 15 percent relative to traditional homes, dampened the median price in December, “ Yun explained.

Total housing inventory at the end of December fell 4.2 percent to 3.56 million existing homes available for sale (not including the “shadow” inventory), which represents an 8.1-month supply at the current sales pace, down from a 9.5-month supply in November.

Regionally, existing-home sales in the Northeast jumped 13.0 percent to an annual pace of 870,000 in December but are 5.4 percent below December 2009. The median price in the Northeast was $237,300, which is 1.4 percent below a year ago.

Existing-home sales in the Midwest rose 11.0 percent in December to a level of 1.11 million but are 4.3 percent below a year ago. The median price in the Midwest was $139,700, up 3.3 percent from December 2009.

In the South, existing-home sales increased 10.1 percent to an annual pace of 1.97 million in December but are 2.5 percent below December 2009. The median price in the South was $148,400, unchanged from a year ago.

Existing-home sales in the West surged 16.7 percent to an annual level of 1.33 million in December but remain 1.5 percent below December 2009. The median price in the West was $204,000, down 5.6 percent from a year ago.

"Historically low mortgage interest rates, stable home prices, and pent-up demand are drawing home buyers into the market," said NAR President Ron Phipps. "Recent home buyers have been successful with very low default rates, given the outstanding performance for loans originated in 2009 and 2010."

Tags: NAR, existing home sales, single-family homes, distressed properties, median home price, housing inventory, low mortgage rates

HUD Extends Foreclosure Anti-Flipping Rule

(LoanRateUpdate)

The Department of Housing and Urban Development (HUD) announced that it is in the process of approving another one-year suspension of its anti-flipping rule on foreclosed properties bought with FHA loans. The suspension was first initiated on February 1st of last year to allow investors to quickly renovate foreclosed homes and selling them to first time buyers as a means to further sales of foreclosed properties.



In 2003, HUD issued a rule that prohibits the FHA from insuring a mortgage on a home that was owned by the seller for less than 90 days. HUD initiated the anti-flipping rule early last decade because the Federal Housing Authority (FHA) discovered that too many of these quick sales were made at grossly inflated prices and involved fraudulent activities.

"HUD believes that short re-sales executed within 90 days imply pre-arranged transactions that often prove to be among the most egregious examples of predatory lending practices," the final rule said.

In suspending the anti-flipping rule last February, HUD required that all sales must be "arms length" transactions, meaning there cannot be a shared interest between the buyer and the seller. And the lender has to meet specific conditions if the price of the property is 20% or more above the seller's acquisition cost.

"FHA borrowers, because of the restrictions, have often been shut out from buying affordable properties," HUD Secretary Shaun Donovan said last January.

As foreclosure inventory started piling up in 2009, investors claimed the 90-day restriction prevented them from quickly renovating foreclosed homes and selling them to first-time homebuyers. Donovan agreed and initiated the suspension.

The HUD spokesman said the rule was currently in the clearance process. When the FHA first lifted the ban, HUD announced $2 billion in Neighborhood Stabilization Program grants to local communities and nonprofits looking to clear out vacant and abandoned homes.

Tags: HUD, FHA, FHA loans, foreclosed properties, mortgage, fraud, anti-flipping rule, predatory lending practices, borrowers

Didn’t Like Your Real Estate Agent? Get Revenge!

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Zillow.com has announced a tool for home buyers and sellers to search for and find local real estate agent based on ratings and reviews from former clients, so if you really think that last real estate agent didn’t “pull out all the stops” to get your home sold…now you can stand up and be heard!

The service was launched back in December and already thousands of consumers have rated and reviewed agents. Zillow.com has made these ratings public enabling consumers to search for local agents in the Zillow Directory and compare rating and reviews between agents.

Zillow receives more than 13 million visitors a month and should be able to rapidly expand its database to allow consumers to share their experiences with a particular agent.

"Zillow was created to help people make smarter real estate decisions, and choosing an agent is one of the most important decisions a buyer or seller can make," said Zillow Chief Executive Officer Spencer Rascoff. "Agent Reviews are another huge step towards transparency for buyers and sellers. For good agents, it's a terrific way to stand out from the crowd – the next best thing to a referral."

Current and former clients can also rate and review their agents who have profiles on Zillow by searching for the agent in the Zillow Directory. Ratings and reviews can be accessed everywhere they interact with agents on Zillow.com, such as for sale listings or when agents answer questions in Zillow Advice, since reviews are connected to an agent's Zillow profile.

Overall ratings are based on a consumer's likelihood to recommend, running on scale of one to five, with five being "very likely" and one "very unlikely." Results are sorted by local agents with the highest overall ratings and greatest number of reviews. You can compare an agents overall rating as well as ratings covering several categories of service as well as view qualitative reviews to help further understand a former (or current) client’s experience with a particular agent.

Although there have always been alternatives like Angie’s List and Yelp, Zillow’s is the first “real estate only” service to provide comprehensive information on just real estate agents only.

Tags: real estate agents, zillow, consumers, ratings and reviews, consumer recommendations

Hardest Hit Fund Foreclosures Delayed 45 Days

(LoanRateUpdate)

Fannie Mae announced that it is directing its mortgage servicers to delay scheduled foreclosure sales for 45 days. The moratorium applies to borrowers that been approved assistance through the Hardest Hit Fund. The Hardest Hit Fund was part of a series of housing programs announced in February 2010 to help families hardest hit by the housing crisis.

The purpose of the Hardest-Hit Fund is to support new and innovative foreclosure prevention initiatives in the areas hardest hit by housing price declines and high unemployment rates and originally included Nevada, California, Florida, Arizona, and Michigan. Each state created a Housing Finance Agency (HFA) to administer $1.5 billion in government funds, originally distributed in June of 2010.

The Obama Administration approved the participation of five additional states in March 2010 with aid totaling $600 million. The five states are North Carolina, Ohio, Oregon, Rhode Island, and South Carolina. The funding for these states took place in August 2010.

However, lenders were really quite slow to begin issuing loan modifications. This was due to several factors, including inadequate manpower. Some states were also slow in starting their programs, like California, who just recently started taking applications.

The initiatives range from providing options for struggling, unemployed borrowers, as well as programs to address first and second liens, facilitate short sales and deeds-in-lieu of foreclosure, and assist in past-due payments.

Fannie Mae released guidance Wednesday detailing how its mortgage servicers should handle those loans that qualify for the state assistance, and notified them that they should be ready to receive funds from the HFAs within 60 days after a program is launched. Also addressed was how the Hardest Hit Fund would affect loans permanently modified under the Home Affordable Modification Program.

"If a mortgage loan has been permanently modified under HAMP, a borrower who subsequently becomes unemployed may use an HHF Unemployment Program to make monthly mortgage payments," Fannie said in its guidance.

Borrowers can receive unemployment assistance through one of the state level HFAs to help make their mortgage payments. Mortgage servicers are required to accept funds through a reinstatement program, if a HFA has one, which provides aid to borrowers for bringing the mortgage current or reduce the period of delinquency.

If the borrower remains unemployed after leaving the program, mortgage servicers must determine if the borrower can qualify for another one of Fannie's foreclosure prevention alternatives such as forbearance.

If the borrower was not in a permanent HAMP modification and found a job, the mortgage servicers were directed to consider the borrower for HAMP. But if a borrower re-defaults out of a HAMP modification while unemployed, Fannie told its mortgage servicers to only evaluate them for Fannie's own program if the borrower finds a job.

Tags: fannie mae, hsa, loan modification, unemployed, mortgage servicers, short sales, foreclosures, HAMP, mortgage borrowers

HUD Rolls Out New Discrimination Proposals

(LoanRateUpdate)

The U.S. Department of Housing and Urban Development (HUD) announced proposals for new regulations intended to ensure that its core housing programs are open to all eligible persons, regardless of sexual orientation or gender identity. HUD Secretary Shaun Donovan stressed HUD's new proposal reaffirms the White House’s commitment to LGBT Americans.

As the Nation’s housing agency, HUD administers programs designed to meet the goal of ensuring decent housing and suitable living environment for all. In pursuit of this goal, it is HUD’s responsibility to ensure that all who are otherwise eligible to participate in HUD’s programs have equal access to these programs and have the opportunity to compete fairly for HUD funds without being subject to arbitrary exclusion.

The new proposals are in reaction to evidence that lesbian, gay, bisexual, and transgender (LGBT) individuals and families are being arbitrarily excluded from some housing opportunities in the private sector. Through this proposed rule, HUD strives to ensure that its core programs are open to all eligible individuals and families regardless of sexual orientation or gender identity.

“This is a fundamental issue of fairness,” said HUD Secretary Shaun Donovan. “We have a responsibility to make certain that public programs are open to all Americans. With this proposed rule, we will make clear that a person’s eligibility for federal housing programs is, and should be, based on their need and not on their sexual orientation or gender identity.”

Under the proposed measures, lenders would be banned from using a borrower’s sexual orientation or gender identity to determine their eligibility to receive Federal Housing Authority-backed mortgages. The proposal would also clarify the definition of families eligible to enroll in HUD programs. And HUD-supported housing initiatives would not be allowed to inquire about an applicant’s sexual orientation or gender identity.

HUD will formally announce the proposed regulations on Monday, Jan. 24, and they will undergo a 60 day public comment period that will end on March 25.

If you’d like to view the proposal or get information on how to participate during the comment period, go here.

Tags: HUD, LGBT, housing programs, sexual orientation, gender identity, housing discrimination

Renters Finally Get Credit for Good Payment History

(LoanRateUpdate)

Renters who have for years faithfully made payments to their apartment landlords can finally now get credit for their responsible payment history. Credit giant Experian has announced that it will be the first major credit reporting agency to include rental payment history in its credit reports. It’s not going to help your FICO score yet, but it could help you get another apartment and maybe even buy that first home.



According to the National Multi-Housing Council, there are nearly 96 million individuals currently renting who are not getting the "credit" they deserve based on their credit reports with as many as 50 million of them living in multifamily properties.

In the past, on-time rental payments did nothing to boost a credit score. Only negative rental activity made it on reports, not positive. But now Experian will be able to incorporate positive rental data into a traditional credit file.

Rental data is sent to Experian through its RentBureau Division into the traditional credit file. Experian acquired RentBureau's multifamily division in June 2010. RentBureau is the largest and most widely used credit bureau for the multifamily industry. RentBureau's database receives rental payment histories every 24 hours from its national network of property management companies who primarily service apartment complexes.

"Given that one-third of the U.S. population rents, we felt it was imperative to reflect the true creditworthiness of those individuals who responsibly pay their rent," said Brannan Johnston, vice president and managing director, Experian RentBureau. "Our research shows that over one in three consumers in the highest risk VantageScore score band will improve to at least the next score band with the addition of positive rental data from RentBureau. We are thrilled to be industry leaders in this initiative, and look forward to providing this credit-building avenue to residents."

Although the information will be available on your credit report, it will not affect your FICO score…unless it’s negative. FICO spokesman Craig Watts says whether the information will be incorporated in the widely used FICO score is yet to be determined. Once Experian shares this rental payment data, FICO scientists will evaluate whether the information can predict credit risk and should be added to the scoring model, he says.

However, positive rental payment data can help you qualify for other credit products, like purchasing a home. Lenders can now update their underwriting procedures to automatically capture a consumer's rental payment obligations from their credit report, giving them a more timely and comprehensive understanding of a consumer’s monthly obligations and payment history.

"For more than 20 years Experian has been a strong supporter of comprehensive data reporting for the benefit of lenders and consumers," said Steven Wagner, president of Experian Consumer Information Services. "Including rental payment data in the credit file is a groundbreaking win for consumers and our vision of full-file reporting. Many consumers feel that building credit is an uphill battle, but this approach gives renters credit for managing the payments for the place they call home."

So if you’re looking around for a new apartment, ask them if they use Experian’s RentBureau software and get credit for your responsible payment history.

Tags: experian, rentbureau, credit, credit history, rental payments, lenders, consumers, FICO, credit reporting agency, multi-family properties

December Home Sales Rise 13.2% in December

(LoanRateUpdate)

According to the RE/MAX National Housing Report, after five consecutive months of declines, homes sales rose 13.2 percent in December compared to November. However, compared to the year earlier, December home sales fell 5 percent. Although, RE/MAX said that is the lowest year-over-year drop in five months.

There was good news for areas such as Arizona and Florida which produced yearly gains in home sales. In Phoenix, home sales jumped 12.8 percent in December from the year ago. In Tampa, Fla., sales rose 7.4 percent and in Miami, home sales climbed 9.9 percent. Both areas have been two of the worse hit areas during the housing slump.

"It’s nice to see that sales were much higher than in November, with a year-over-year difference better than we’ve seen in months, and it’s encouraging that prices appear to be remaining stable," Kelly said. "These positive trends should build as we enter the traditionally strong home-buying months in the spring and summer.”

Overall home prices continued to lag as prices were still down 2.2 percent from the year early and down 0.9 percent from November with the median sales price of $192, 941.

Out of the 54 major metropolitan areas that RE/MAX tracks, 28 areas experienced year over year home price appreciation, while 23 metro areas experienced home price decreases, and three areas remained flat.

Other areas that experienced hefty price appreciation were Cleveland (up 12%), Indianapolis (up 9.6%), Pittsburgh (up 8.6%), Dallas-Fort Worth (up 8.4%) and New Orleans (up 6.8%).

Homes sold in December were also on the market slightly longer than last year with last month averaging 96 days before they were sold, which is higher than the average of 93 days for sales closed in November and 92 days in December 2009.

According to RE/MAX, the months it would take to move inventory off the market increased to 10.2 months, but housing inventory was down 8.8 percent month over month and down 2.9 percent from December 2009.

A healthy market is considered to have a six month supply of inventory.

Tags: RE/MAX, national housing report, home sales, housing inventory, price appreciation, healthy market

Freddie Mac: Streamline Refinancing to End April 30

(LoanRateUpdate)

Government mortgage giant Freddie Mac has announced that is will eliminate its streamlined mortgage refinancing option this spring, but borrowers will still have a simplified option for refinancing mortgages held or backed by the government-supported enterprise. The streamline refinance option will be discontinued as of April 30, however, another option, the newer Relief Refinance– Same Servicer, will continue to offer borrowers most of the same benefits.

Both the streamline refinance and Relief Refinance– Same Servicer options allow homeowners with a Freddie Mac mortgage to refinance without providing proof of income or employment. A big plus for homeowners who have seen their incomes decline and want to refinance at a lower interest rate.

Homeowners may still need to need to obtain an appraisal, although that is not specifically required under the Relief Finance– Same Servicer and the streamline refinance, but both programs require the seller of the new loan to verify that the property has maintained its value since the original appraisal which would eliminate homeowners whose property values are less than what they owe.

FHA and VA streamline-type mortgages do not require a new appraisal, allowing homeowners to refinance their mortgages despite declines in property values that have left them owing more than the property is worth.

Besides the advantage of not having to prove income or employment, the Relief Refinance– Same Servicer option does allow refinancing of mortgages at up to 125 percent of a home’s current value, providing a refinance option for underwater homeowners, although an appraisal is still required.

Freddie Mac also offers a Relief Refinance – Open Access option that allows a homeowner to refinance through any lender, although that route does require fully qualifying the new loan and after May 1, all other Freddie Mac mortgage programs except the Relief Refinance – Same Servicer option will require verification of funds.

Tags: freddie mac, mortgage refinancing, streamline finance, relief finance, homeowners, lower interest rate, underwater homes, mortgage servicers

LPS “First Look” Mortgage Report: Foreclosures Up, Delinquencies Down

(LoanRateUpdate)

Lender Processing Service (LPS) released its monthly “First Look” Mortgage Report for December 2010 yesterday which is derived from its loan-level database of nearly 40 million loans. The month-end data shows a rise in foreclosure inventories with a slight decrease in the delinquency rate.

The “First Look” report contains highlights of the company’s forthcoming Mortgage Monitor report which will provide a more in-depth review including an analysis of data supplemented by in-depth charts and graphs that reflect trend and point-in-time observations.

Early highlights of the report include:

Total U.S. loan delinquency rate (loans 30 or more days past due, but not in foreclosure): 8.83%

Month-over-month change in delinquency rate: -2.1%

Year-over-year change in delinquency rate: -17.9%

Total U.S foreclosure pre-sale inventory rate: 4.15%

Month-over-month change in foreclosure presale inventory rate: 1.7%

Year-over-year change in foreclosure presale inventory rate: 9.3%

Number of properties that are 30 or more days past due, but not in foreclosure: (A) 4,674,000

Number of properties that are 90 or more days delinquent, but not in foreclosure: 2,117,845

Number of properties in foreclosure pre-sale inventory: (B) 2,196,000

Number of properties that are 30 or more days delinquent or in foreclosure: (A+B) 6,870,000

States with highest percentage of non-current* loans: FL, NV, MS, GA, NJ

States with the lowest percentage of non-current* loans: MT, WY, AK, SD, ND

*Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state.

Notes:
(1) Totals are extrapolated based on LPS Applied Analytics' loan-level database of mortgage assets
(2) All whole numbers are rounded to the nearest thousand

Tags: LPS, mortgage delinquency rate, foreclosure inventory, non-current loans

LendingTree Weekly Mortgage Rate Pulse: Rates Up Slightly

(LoanRateUpdate)

According to the data collected on January 18th for LendingTree’s Weekly Mortgage Rate Pulse, average home loan rates offered by network lenders were 5.03 percent (5.26% APR) for 30-year fixed mortgages, up slightly from 4.97 percent the week before, 4.33 percent (4.69% APR) for 15-year fixed mortgages, which was also up slightly from 4.31 the week before, and 3.77 percent (4.02% APR) for 5/1 adjustable rate mortgages (ARM), which was down from 3.78 percent from the previous week.

The lowest mortgage rates offered on the same day by lenders on the LendingTree network were 4.5 percent (4.64% APR) for a 30-year fixed mortgage, up from 4.375 percent the previous week, 3.75 percent (3.99% APR) for a 15-year fixed mortgage, which the same as the week before, and 3.000 percent (3.21% APR) for a 5/1 ARM, which was also the same as the previous week.

"Market conditions have continually been improving for borrowers over the past month with rates back down to early December levels," said Cameron Findlay, LendingTree chief economist. "However, given the impending rise in agency loan level pricing adjustments scheduled to take effect in the next two weeks and increased tension in the market surrounding what is considered a 'Qualified Residential Mortgage' there is a lot of risk waiting to lock your mortgage rate in this environment."

The LendingTree Weekly Mortgage Rate Pulse is a snapshot of the lowest and average home loan rates available within the LendingTree network of lenders and is compiled every Wednesday from data that is gathered from the previous day to reflect the most up to date information on current mortgage rates.

See how your state compares below by comparing mortgage data including a snapshot of the lowest 30-year fixed rates offered by lenders on the LendingTree network, average loan-to-value ratio and percentage of consumers with negative equity:

STATE-BY-STATE MORTGAGE DATA 1/19/10*Updated Quarterly
STATE	LOWEST MORTGAGE RATE	LOAN-TO-VALUE RATIO*	% WITH NEGATIVE EQUITY*
Alabama	4.50% (4.65% APR)	67.1%	10.5%
Alaska	4.75% (4.95% APR)	67%	8.9%
Arizona	4.63% (4.82% APR)	92.4%	48.6%
Arkansas	4.63% (4.74% APR)	73.6%	11.6%
California	4.50% (4.64% APR)	70.1%	31.6%
Colorado	4.50% (4.70% APR)	72.1%	19.6%
Connecticut	4.38% (4.48% APR)	58.2%	11.9%
Delaware	4.50% (4.59% APR)	67.9%	13.3%
District of Columbia	4.63% (4.76% APR)	58.6%	15.2%
Florida	4.50% (4.63% APR)	88.7%	45.5%
Georgia	4.50% (4.64% APR)	79.8%	28%
Hawaii	4.63% (4.71% APR)	55.5%	10.7%
Idaho	4.63% (4.82% APR)	74.1%	25.3%
Illinois	4.50% (4.59% APR)	70.6%	19.4%
Indiana	4.63% (4.76% APR)	70%	11.3%
Iowa	4.63% (4.82% APR)	66.9%	8.7%
Kansas	4.50% (4.70% APR)	70.6%	11.1%
Kentucky	4.50% (4.65% APR)	68%	8.9%
Louisiana	4.63% (4.82% APR)	N/A	22.5%
Maine	4.63% (4.83% APR)	N/A	22.5%
Maryland	4.50% (4.70% APR)	68.8%	22%
Massachusetts	4.63% (4.75% APR)	60.3%	14.9%
Michigan	4.63% (4.75% APR)	85.5%	37.6%
Minnesota	4.63% (4.75% APR)	65.5%	16.2%
Mississippi	4.63% (4.83% APR)	N/A	22.5%
Missouri	4.50% (4.70% APR)	71.5%	15.7%
Montana	4.63% (4.71% APR)	60.1%	7.7%
Nebraska	4.63% (4.82% APR)	73.1%	9.6%
Nevada	4.63% (4.76% APR)	118.7%	66.5%
New Hampshire	4.63% (4.75% APR)	69%	17.7%
New Jersey	4.50% (4.64% APR)	61.3%	15.2%
New Mexico	4.63% (4.76% APR)	66.4%	12.6%
New York	4.50% (4.61% APR)	49.8%	7%
North Carolina	4.50% (4.64% APR)	70.3%	10.5%
North Dakota	4.63% (4.82% APR)	59.9%	7.4%
Ohio	4.63% (4.75% APR)	74.7%	20%
Oklahoma	4.63% (4.74% APR)	70.7%	6.0%
Oregon	4.50% (4.70% APR)	68.7%	15.6%
Pennsylvania	4.50% (4.63% APR)	62.1%	7.4%
Rhode Island	4.63% (4.82% APR)	61.6%	20%
South Carolina	4.63% (4.75% APR)	70.4%	14.2%
South Dakota	4.63% (4.74% APR)	N/A	22.5%
Tennessee	4.50% (4.70% APR)	70.9%	13.9%
Texas	4.50% (4.63% APR)	69.5%	11.2%
Utah	4.63% (4.87% APR)	73.6%	20.7%
Vermont	4.63% (4.82% APR)	N/A	22.5%
Virginia	4.50% (4.74% APR)	70.5%	22.1%
Washington	4.50% (4.70% APR)	66.2%	14.9%
West Virginia	4.75% (4.95% APR)	N/A	22.5%
Wisconsin	4.75% (4.95% APR)	67.2%	13.1%
Wyoming	4.63% (4.74% APR)	N/A	22.5%

Home loan rates above are reflective of actual rates offered to borrowers by lenders on the LendingTree network. Lowest rates shown reflect the payment of one discount point. Rates will vary based on the borrower's loan details and credit profile.

More information is available here:

Tags: lendingtree, mortgage rates, mortgage loans, average home rates, 30 year fixed, 15 year fixed, 5/1 arm, adjustable rate mortgage, fixed mortgage, freddie mac, lenders