Mortgage Rates Near Record Lows and Likely to Stay

Average rates on U.S. mortgage loans fell close to all-time lows in the first week of 2013 and analysts believe that will be a lasting trend for this new year. The 30-year fixed rate conventional mortgage loan rate slipped to 3.34 percent, excluding points, during the week ended January 3, down from 3.35 percent the previous week, according to Freddie Mac. The lowest rate on record is 3.31 percent, from the week of November 21. The average rate on a 15-year fixed rate mortgage dipped to 2.64 percent Read more [...]

New Rule May Loosen Mortgage Lending Standards

Here's the next moral dilemma in the housing market: keep lending standards high to prevent future crises or help more people qualify for home loans by loosening credit standards. It doesn't seem like both goals can be accomplished simultaneously at this point. And apparently, U.S. mortgage regulators are opting for looser standards. A new rule was released last week by the Federal Housing Finance Agency that would theoretically help banks make more loans. The rule says that if a mortgage borrower Read more [...]

Fannie, Freddie Regulator Says No To Principal Reductions

It has been a tug of war between the Obama administration and the director of the Federal Housing Finance Agency for months now - should Fannie Mae and Freddie Mac be allowed to write down the balances of troubled mortgage loans on their books? On Tuesday, FHFA head Edward DeMarco again put his foot down with a new statement; Fannie and Freddie will not use taxpayer dollars to reduce principal balances. The Obama administration put forth a plan several months ago, proposing that mortgage guarantors Read more [...]

Banks Continue to Face Fallout From Mortgage Crisis

Even though most signs from the housing market are positive these days, big banks are still dealing with the crippling aftermath of the mortgage meltdown. Back during the housing boom, banks like Well Fargo & Co. and Bank of America Corp. made and sold to investors lots of mortgage loans that eventually soured. Now investors like Fannie Mae and Freddie Mac are putting heavy pressure on banks to buy back those toxic loans. Bank of America may be the worst hit, as it bought subprime lender Read more [...]

Home Builder Confidence Holds at 5-Year High

In a sign that the U.S. housing market may truly be turning a corner, home builder confidence in March remained at it highest point since June 2007. The National Association of Home Builders/Wells Fargo index of builder confidence had a reading of 28 this month, the same as in February. While any reading below 50 means that more builders believe the housing market conditions are poor than good, a score of 28 is still great strides compared with the record low from January 2009 of 8. "While builders Read more [...]

Obama Administration Ramps Up Aid for Troubled Homeowners

In an attempt to help more underwater homeowners, the Obama administration announced on Friday its plans to expand its current refinance program by encouraging more participation from mortgage finance companies Fannie Mae and Freddie Mac. Under the Home Affordable Modification Program, or HAMP, banks have received incentives to lower principal on loans for borrowers who owe more than their homes are worth. Currently, about 20 percent of all American homeowners fit into that category. Fannie Read more [...]

Principal Write-downs Too Expensive for Fannie, Freddie

As lawmakers put pressure on mortgage finance companies Fannie Mae and Freddie Mac to make principal write-downs on underwater loans, the regulator for the two firms sent a letter to Washington on Friday making clear how expensive that plan would be. More than 20 percent of all U.S. homes have negative equity at this point, according to mortgage data company CoreLogic, for a combined equity deficit of $750 billion. Borrowers in this situation often choose to default, even when they could keep Read more [...]

Reuters Poll: Home Prices to Stabilize This Year

This year will finally be the end of five years of U.S. home price declines, according to a recent poll from Reuters. The panel of 23 economists and analysts believe the S&P/Case-Shiller home price index during 2012 will not change from it current position. While homeowners certainly would rather hear predictions of price gains, a bottoming-out is better than another year of price drops. This latest forecast is more upbeat than November's when economists though that prices would fall 0.3 percent Read more [...]

Fed Proposes Help for Housing Market

The Federal Reserve has actively tried to stimulate the housing market since the beginning of the recession, dropping interest rates to record lows and buying mortgage-backed bonds to free up market lending capital. Unfortunately, it seems that the Fed has essentially run out of options to help pull the mortgage market out of the doldrums and has now turned to Congress. Typically during a recession, the Fed has been able to stir up activity in the housing market by lowering interest rates, which Read more [...]

FHA to Become Next Government Bailout?

The Federal Housing Administration (FHA) is coming under fire for the shaky state of its finances and the chance that it may need government money to keep it afloat in the next year. The FHA, which now guarantees about a third of all new mortgages in the U.S., is required by law to hold 2 percent of its capital as reserves to protect the company against losses from soured loans. The housing crash took a heavy toll on those reserves and the FHA now only has 0.24 percent in reserves, down even from Read more [...]