What's Pushing Mortgage Rates UP This Week?

The technical picture has changed to bearish, however with the recent volatility it is still too soon to believe that rates have finally bottomed and will continue to increase. This morning it isn’t the stock indexes that are driving rates higher, at 8:45 the DJIA up just 4 points. The push to higher rates is being driven by much better economic reports (retail sales, improvement in the housing market outlook) and relaxation over debt problems in the EU.

HARP Refi's Are Gaining Momentum

HARP accounted for nearly 24% of all refinances during the month, 50% of HARP applications came from the 80-105% LTV bucket, 27% of HARP applications came from greater than 125% LTV bucket, YTD HARP volume stands at 618k; Inception-to-date HARP volume stands at 1.6 million, and more than 70% of the HARP volume in Nevada, Arizona and Florida came from >105% LTV borrowers in August, versus 51% nationwide. Speaking of states, HARP volume as a percent of total refinances for Nevada, Arizona and Florida was at least 50% in August, versus 24% nationwide. Overall, HARP had a much higher market share both in July and August in states that have been particularly hard hit by the housing downturn including Nevada, Arizona, Florida, Utah, Idaho, Michigan, and Georgia. 

California Home Prices are RISING

Good news for many California homeowners, hundreds of thousands of whom have been underwater on their mortgages, prices are increasing. The statewide median price of an existing SFR was $345,000 in September compared to $343,820 in August. The September number was 19.5 percent above the median price of $288,700 in September 2011. This was the seventh consecutive month that median prices increased both year-over-year and month-over month and was the highest since August 2008 when the median price was $352,730

Should You Refinance Your Mortgage? - NASDAQ.com

Should You Refinance Your Mortgage? - NASDAQ.com

Boomerang Home Buyers Are Flooding the Market!

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When will Lending Standards Begin to Relax?

I get this question almost daily. When will residential mortgage lending standards loosen up so more American's can refinance their homes?

Very capable, qualified homeowners with Fico scores above 700, have steady jobs, strong income, and are never late on their mortgage payment and can't qualify for a new mortgage so they can lower their current interest rate and payment. When will the Fed's and proponents of Dodd-Frank realize how this bill has prevented credit worthy homeowners from taking advantage to current historically low mortgage interest rates? Can you imagine what a boost it would be to the economy if American families had an extra $400-$700 per month discretionary cash flow to buy more goods and services!?
As 30-year rates hit historic lows, some borrowers are hoping that lenders will be loosening their underwriting standards and that it will be easier to qualify for a mortgage.  They're hoping in vain: industry data shows that controls have gotten even tighter. I don't remember where I saw the stat, but the average credit score on new loans closed in August 2012 was 750, nine points higher than a year prior.  Fannie and Freddie borrowers' scores averaged 763 for that same period, and considering that fewer than 22% of Americans have credit scores over 749, there are a lot of people out there who are highly unlikely to qualify for a loan.  Lenders also appear to be requiring larger down payments, with the average Fannie and Freddie borrower putting down 21% (to put that in context, the median down payment in 2005 was 2%.) Originators hope that eventually lenders probably will relax about upcoming regulation, be less fearful about costly buyback demands from the GSEs, and strip away some of their extra credit-risk fees.  The key word here, though, is "eventually."

How About Home Ownership - Is It Now Stronger?

How about home ownership in general - is it now in "stronger hands"? The real homeownership rate, defined as the percentage of households who own a home and are not 90 days or more delinquent on their mortgage, has fallen to 62.1%, the lowest level in nearly 50 years. (The Census Bureau's 65.5% homeownership rate overstates the real level of homeownership in the country since it counts all 3.8 million homeowners who are 90-plus days delinquent on their mortgage as homeowners.) Historically, the spread between the published and real homeownership rates has been slightly below 1%, even in a strong economic environment there is always some level of delinquency. But as we all know, the spread has widened from 1% to 3% due to the economic downturn, and understaffing at the banks who cannot deal with the huge inventory of delinquent mortgages and the complications of loan modification or foreclosure with so many parties involved. We also have lenders treading very cautiously, fearing fees, sanctions and even jail time (in Nevada) for not properly documenting the foreclosure process, and still some confusion from dealing with many Federal government attempts to intervene in the process like HARP and HAMP.