Jumbo Loans Are Back

For home buyers, 2012 was the year of the jumbo, jumbo mortgage.

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Private jumbo loans start after $417,000 in most parts of the country—or exceed $625,500 in pricey metro areas like New York and San Francisco. But lenders say they've been doling out loans that far exceed these amounts.

Overall, lenders distributed $148 billion of private jumbos over the first nine months of the year, up 23.3% from the same period a year ago, according to data compiled by Inside Mortgage Finance, a trade publication. Originations for the year are on pace to be the highest since 2007.

Here at HomeQuest Mortgage offer a full portfolio of loan programs with loan amounts up to $3,000,000. Call us direct at 949-460-7799 and ask to speak with Tom Drasler.

New Obama Refi Program in 2013

Wall Street Journal, December 25th, 2012

The Obama administration is considering expanding its mortgage-refinancing programs to include borrowers whose mortgages aren't backed by the government and who owe more than their homes are worth, according to people familiar with the discussions.

Such a move would benefit borrowers and provide a boost to the economy by unleashing cash that homeowners could spend elsewhere. But one proposal being considered would also transfer potentially riskier loans held by private investors into the taxpayer-supported mortgage giants Fannie MaeFNMA -1.54% and Freddie MacFMCC -3.91% .
About 22% of all homes with a mortgage, or around 10.8 million homes, were worth less than the outstanding balance at the end of June, according to CoreLogic. That number has fallen from 12.1 million at the end of last year as home prices have picked up, but around 10% of all homeowners with a mortgage are still deeply underwater.
Fannie and Freddie own or insure about half of all home loans, and most underwater borrowers with their backing can refinance to get a lower mortgage rate as long as they are current on their loans. That initiative has benefited holders of more than 330,000 underwater mortgages through October this year, up from around 60,000 in all of 2011. "It has been unbelievably successful," said Scott Simon, who heads the mortgage-backed securities group at Pacific Investment Management Co., or Pimco, a unit of Allianz SEALV.XE -0.99% .
Officials at the Treasury Department and the White House now would like to include borrowers who have been locked out because their loans aren't backed by the firms. Those loans are held by private lenders or investors, and some of them were issued by subprime lenders and bundled into securities by Wall Street firms.

Bank of America accounted for 27% of complaints

Accordiing to the newly formed (Dodd-Frank Act) Consumer Financial Protection Bureau (CFPB) between July 21, 2011 and September 30, 2012, U.S. consumers filed 36,403 mortgage-related complaints against various lenders, banks, servicers, and other mortgage companies. Bank of America accounted for 27% of complaints, the most out of any bank accounted for in CFPB's data - of the 9,930 mortgage complaints filed against Bank of America, 6,430 related to loan modifications, collections and foreclosures. Loan servicing, payments and escrow accounts recorded 2,044 complaints, while complaints regarding application, originator or mortgage broker issues tallied 542. BofA received nearly twice as many complaints as runner up Wells Fargo who recorded 5,051 mortgage-related complaints in the CFPB study's time frame.

Interest Rates End Year at Record Lows

Mortgage interest rates finished out the year near record lows, helping fuel the housing market’s modest recovery.

The average rate for a 30-year, fixed-rate mortgage was 3.35%, down slightly from 3.37%, Freddie Mac said in its weekly survey. This week’s rate is close to the 3.31% rate hit earlier this year, the lowest since records begin in 1971.

The 15-year fixed rate mortgage, popular with homeowners looking to refinance, averaged 2.65% this week, unchanged from last.

While it is expected that interest rates will remain low in the coming year, borrowers should still expect tough lendeing standards, offering low rates to only the best qualified borrowers. Call me today at 714-478-3153 to find out if you qualify for a record low rate.

Enough About "Shadow Inventory"

Is 'shadow' overhyped as a housing recorver threat?

It's been a hard year to be a housing bear.
U.S. housing markets finally came alive in 2012, with home sales and housing starts up strongly. And prices are on track to end the year in positive territory for the first time since the downturn began in 2006.

First, the shadow is shrinking. It has already fallen to 3.4 million units this year from a peak of 4.7 million in 2009, according to John Burns Real Estate Consulting. As well, inventories of new homes for sale are at 50-year lows, while listings of previously owned homes are at an 11-year low. Banks have also become better at approving short sales, where homes sell for less than the mortgage owed.
The danger in focusing so heavily on supply is that skeptics have overlooked demand, which revved up this past year. Sales of existing homes in November were up 14.5% year over year to a three-year high.

Short Sale or Foreclosures Mean Big Tax Penalty in '13

http://money.cnn.com/2012/12/24/real_estate/mortgage-debt-forgiveness/If the Mortgage Forgiveness Debt Relief Act of 2007 does not get extended by Congress by the end of the year, homeowners will have to start paying income taxes on the portion of their mortgage that is forgiven in a foreclosure, short sale or principal reduction. That means if someone owes $150,000 on their home and it sells for $100,000 in a foreclosure auction, they could owe taxes on the remaining $50,000. For someone in the 25% tax bracket, that would mean paying $12,500 in taxes on the foreclosure. Similar taxes would apply for amounts that were forgiven in short sales and principal reductions.

Home Prices Rise From Year Earlier

Compared with a year earlier, the 10-city index increased 3.4%. The 20-city index grew 4.3%, above recent expectations of economists surveyed by Dow Jones Newswires for 4.1% growth. Chicago and New York were the only two cities with year-to-year declines.

Home Builders Are Optomistic About 2013

And how about that housing market! Homebuilder sentiment increased for the eighth straight month with the index at its highest level since April 2006. Existing Home Sales in November increased nearly 6% to a better than expected 5.04 million with sales at their highest level since November 2009. In addition, the national median home price was up about 10% from a year ago while months' supply of 4.8-months was at its lowest since September 2005. And the FHFA house price index reported prices rose 0.5 percent in October and were up 5.6 percent year-over-year. And if housing prices continue to move higher, that increases the pool of potential refi's for 2013, right?

Baby Boomers Should Opt for a 15yr Fixed

The 15 year is the way to go for Baby Boomers. Call me to find out how much term reduction can save you in interest and principal pay down. 714-478-3153

The 15-year loan, long considered a fringe character in the mortgage scene, is riding a wave of popularity.
Thanks to low interest rates, many borrowers are opting for the deal that allows them to pay off their mortgages in half as much time as the traditional 30-year mortgage.

http://online.wsj.com/article_email/SB10001424127887324407504578185353260891258-lMyQjAxMTAyMDIwMDEyNDAyWj.html?mod=wsj_valettop_email

2013: How Rising Prices Could Boost Housing Demand

Wall Street Journal, Decemeber - 2013

Just as falling prices have frozen buyers and sellers in place in recent years, housing strength may be even stronger than current indicators show given the powerful shift in sentiment that price increase may bring.

http://blogs.wsj.com/developments/2012/12/18/2013-how-rising-prices-could-boost-housing-demand/?mod=WSJ_3Up_RealEstate&mod=wsj_valettop_email

New California Foerclosure Laws in 2013

Is anything going on in California with foreclosure law changes on January 1? Yes there will be changes, and what happens in that state often happens elsewhere. Here is a quick little summary: http://dirtblawg.com/.

First Time Buyers Expected To Come Out in 2013

FIRST TIME BUYERS ARE EXPECTED TO ONCE AGAIN FLOOD THE HOME BUYING MARKET IN 2013. Truila states 93% of renters between the ages of 18 and 34 plan to purchase a home someday:http://lnkd.in/KVBV-b

Mortgage Professional vs Big Bank

You got to love this video; it certainly illustrates what I've heard from folks who try to get a loan thru a big bank. Don't be dupped.

 

http://youtu.be/4rif6r0vwyE

What does it mean when the Fed says they will Keep interest rates low?

The Fed has stated that it will keep interest rates low for at least two more years. They will continue to be aggressive in support of the economic recovery. However, the Fed does not directly control long-term rates which determine the cost of home loans and even loans on automobiles. It can influence long-term rates through the purchases of government securities, and is indeed doing so. When the markets perceive that the recovery is picking up steam, it will react accordingly. The day of the release of positive employment figures, we saw long-term rates go up. That does not mean that the economy is out of the woods and that the increase was permanent. It was a reminder that when and if the economy gains strength all bets are off. The recent strength in the real estate market is one factor which can make that happen.

Property Values Expected to Rise in 2013

Mortgage rates are likely to remain near record lows for the first half of 2013, while property values are expected to strengthen, said mortgage-finance companyFreddie Mac FMCC +0.33%.
The company expects long-term mortgage rates to rise gradually in the second half of 2013, but to remain below 4%, according to its U.S. Economic and Housing Market Outlook.
http://blogs.wsj.com/economics/2012/12/10/freddie-mac-mortgage-rates-to-stay-low-property-values-to-rise-in-2013/?mod=wsj_valetbottom_email

Freddie Mac Expects Interest Rates to Rise in 2013

There is still

Freddie Mac Expects Rates to Rise in Q3 of 2013

Mon, 2012-12-10 17:13 — NationalMortgag...

Freddie Mac has released its U.S. Economic and Housing Market Outlook for December showing what some of the market features are expected to look like in 2013. Freddie Mac says to look for long-term mortgage rates to remain near their record lows for the first half of 2013, then rising gradually during the second half of the year, but remaining below four percent. Property values are also expected to continue to strengthen with most U.S. house price indexes likely rising by two to three percent in 2013. While the refinance boom will continue into early 2013, it will be less compared to 2012, so look for single-family mortgage originations to decline by 15 percent, conversely, expect multifamily lending to rise approximately five percent.

"The last few months have brought a spate of favorable news on the U.S. housing market with construction up, more home sales, and home-value growth turning positive," said Frank Nothaft, Freddie Mac's  vice president and chief economist. "This has been a big change from a year ago, when some analysts worried that the looming 'shadow inventory' would keep the housing sector mired in an economic depression. Instead, the housing market is healing, is contributing positively to GDP and is returning to its traditional role of supporting the economic recovery."

Should I Sell My Home During the Holidays?

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