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  1. Fannie Mae Survey Finds Surprising Attitudes About Home-Ownership

    By Michael Kraus on April 7, 2010

    Fannie Mae’s National Housing Survey came out yesterday, and contained some surprising information about America’s attitudes toward home-ownership.

    Two thirds of respondents believe that now is a good time to purchase a house (a message that we have been trumpeting in this space for some time), but also believe that it is harder to finance a home now than it was for their parents, and that it will be harder still for their children.  This is before the most recent news about mortgage rates came out; the average 30-year fixed rate mortgage closed last week at 5.31%, the highest rate for 8 months and significantly higher than the historical low point of 4.61%, about a year ago.  Home purchases rose by .2% last week.  Refinances slowed, falling to just 58.7 percent of all mortgage applications last week, the lowest share since August 2009.  If rates continue to climb refinances will likely continue to slow.

    Two thirds of those interviewed for the survey think that owning is preferable to renting, and 80% feel that home-ownership is important to the economy but a majority of those feel it is a growing challenge. Almost 70% of those interviewed said that a home is one of the safest investments. Only 27% of respondents feel that home values will decline further.  The most recent Case-Shiller Housing Price Index indicated that prices did increase slightly last month.

    Most borrowers tend to be satisfied with their mortgages, with satisfaction rates the highest for those with fixed rate mortgages (93% favorable), while only 68% of those with adjustable rate mortgages are satisfied.  This is somewhat surprising in light of the huge problems this country is having with foreclosures and delinquencies.  It also seems to fly in the face of the tens of billions of dollars the federal government is spending in efforts to modify or write-down mortgages.

    On the topic of foreclosure, 88% of those interviewed do not feel it is acceptable to cease making mortgage payments just because a home is underwater.  This attitude is largely dependent upon social pressure, however.  In areas where foreclosures and strategic defaults were more common, people were more likely to think it is acceptable to stop making payments.  

    With regard to the economy, most Americans (61%) are simultaneously pessimistic about the economy in general but optimistic (82%) about their own personal finances. Frankly this doesn’t make a lot of sense, and leads me to believe that many people are deluding themselves about their personal situation, or are misreading the general economic climate.

    What is your take on this most recent survey?  Do you think it gives an accurate assessment of the economy and the housing market?  Join our discussion below.

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    Category: Mortgage Rates, Purchase

  2. FHA Mortgage Loan Delinquencies Drop in February

    By Mike Battema on March 25, 2010
    February 2010 saw a drop in FHA mortgage delinquencies.

    February 2010 saw a drop in FHA mortgage delinquencies.

    For the first time since the Federal Housing Administration (FHA) began publishing monthly delinquency reports in September 2009, the number of loans backed by FHA that are seriously delinquent fell in February 2010. According to the agency, approximately 4.8% of FHA insured loans made in the two years ending February 28, 2010 were at least three-months late, down 20 basis points from the two-year period of 5% ending January 31, 2010.

    Default claims on FHA mortgages climbed throughout 2009 as the agency significantly increased its loan volume at the expense of depleting its reserves for the purposes of providing a much needed boost to the housing market. FHA agency officials maintain that FHA’s current problems are primarily rooted in the mortgages that it insured in 2007 and 2008, which are maturing into their worst years. Mortgage failures and defaults typically occur two to three years after they are obtained.

    With the housing market expected to improve and loans from 2007 and 2008 moving past the two to three year failure point, agency officials are expecting losses to taper off as the FHA is expected to have to pay fewer claims to the lenders it insures moving forward. The FHA also began applying stricter guidelines and banned 268 lenders from making FHA loans in 2009. These bans sent a message to other lenders to scrutinize their borrowers more diligently, which led to fewer high risk loans being backed by the FHA and an improvement in overall FHA performance. Furthermore, more creditworthy borrowers are taking advantage of low current mortgage rates and FHA insured loans, as evidenced by the fact that applications for FHA purchases jumped 37% in February 2010 from January.

    Total Mortgage Services is a fully approved FHA lender and offers some of the best current FHA mortgage rates available. Call us today with your FHA purchase or FHA refinance questions at 877-868-2503 to speak with one of our mortgage professionals.

    Category: FHA, Purchase, Refinance

  3. Existing Home Sales Fall in February

    1 By Mike Battema on March 24, 2010

    In addition to new home sales dropping in February, the National Association of Realtors reported that existing home sales fell in February 2010 to a seasonally adjusted annual rate of 5.02 million units, down 0.6% from the 5.05 million units that were sold in January 2010. Despite this drop in sales volume, sales in February were nevertheless up 7% from the 4.69 million units sold in February 2009.

    While the snow, sleet and ice are major reasons to blame for keeping potential home buyers indoors, the lack of any soon expiring homebuyer tax credit did not produce the surge in home sales that was seen in the fall and is expected before the April 30 deadline, as homebuyers take advantage of low current mortgage rates to purchase or refinance.

    Existing Home Sales Fell in February thanks to snowy conditions and an extended homebuyer tax credit

    Existing Home Sales Fell in February thanks to snowy conditions and an extended homebuyer tax credit

    The national median existing home price was $165,100 in February 2010, down 1.8% from the February 2009 price as a result of distressed homes accounting for 35% of last month’s total sales. The Federal Housing Finance Agency (FHFA) index, which tracks the prices of houses that are sold or guaranteed by Fannie Mae, Freddie Mac or the Federal Home Loan Banks over time, is 13.2% below its April 2007 peak, indicating that low current mortgage rates and depressed home prices make it a strong buyer’s market.

    Despite total home sales dropping for the month, existing home sales in the Northeast were up 2.4% and 2.8% in the Midwest, as buyers took advantage of current mortgage rates in states such as Connecticut and Illinois. Despite low mortgage rates in Georgia and Virginia, however, home sales in the South fell 1.1% and 4.7% in the West in February 2010.

    The housing recovery is still fragile at the moment, however, now is a great time to capitalize on near record low mortgage rates before they start to rise later in the year. Total Mortgage Services offers some of the best current mortgage rates in the Country. Whether you are looking to refinance your home with a Jumbo loan in New York state or require an FHA loan to purchase your new home in Pennsylvania, call 877-868-2503 today to speak with one of our mortgage professionals.

    Category: Current Mortgage Rates, FHA, Jumbo Mortgage, Mortgage Rates, Purchase, Refinance

  4. California Housing Market Shows Signs of Recovery

    By Mike Battema on March 19, 2010

    Finally, some good news for the California housing market – median home prices are on the rise. According to a report released by MDA DataQuick, a La Jolla, California housing-data provider, California’s median home price rose from $224,000 in February 2009 to $249,000 in February 2010, an increase of 11.2%. Thanks to record low current mortgage rates and a shift in home-buyer interests, the California housing market is showing signs of stabilization.

    Median Home Prices Rose 11.2% from February 2009 to February 2010

    Median Home Prices Rose 11.2% from February 2009 to February 2010

    The 11.2% boost in median sales prices represents the largest year-over-year jump in California home prices since March 2006. The driving force behind the current surge in prices is the fact that consumers have at last begun showing interest in costlier properties towards the California coast in lieu of foreclosed bank-owned homes and bargain-basement homes in more inland areas. According to DataQuick analyst Andrew LePage, “There has been a shift in what’s selling and what’s not selling. The high end has woken up, whereas it was comatose a year ago.” To put it in perspective, from February 2009 to February 2010 home prices in:
    ·    San Francisco Bay rose 20% to $354,000
    ·    Southern California rose 10% to $275,000 (thanks largely to home values in San Diego increasing by upwards of 13% from their February 2009 levels)
    ·    Santa Clara County rose 12.5% to $460,000

    Despite the increase in home values and indications of recovery, the California housing market and economy still have a long way to go to reach former peak conditions. In February 2010, while default notices were down 37.7% from February 2009, they still increased by 19.7% from January 2010. Unemployment in California still lingers around a high 12.5%. For the California economy to truly recover, these numbers need to decrease dramatically.

    Nevertheless, California home prices are still significantly below their peak levels and it is still very much a buyer’s market. Total Mortgage Services offers some of the best current mortgage rates in California for your refinance and purchasing needs. Whether you require an FHA loan in Los Angeles or are looking for a Jumbo loan in Orange County, call 877-868-2503 to speak with one of our mortgage experts today.

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    Category: Current Mortgage Rates, FHA, Jumbo Mortgage, Mortgage Rates, Purchase, Refinance

  5. Home Construction Increases by 2.8% Nationally

    By Robert Hyder on February 17, 2010

    Home Construction Increases by 2.8% Nationally

    While the number of new homes being constructed increased in January by 2.8%, analysts are cautiously optimistic that this gain will be sustained as the housing construction industry rebounds from a prolonged slump. The U.S. Department of Commerce revealed this morning that the annual rate of new home constructions increased to 591,000 during the month of January, up from 575,000 in December, and more than 21% from January 2009. The elevated optimism is a result of the better-than-expected figures.

    An overall positive outlook toward new home construction remains cloudy, however, as the number of building permits issued in January declined by 4.9% to an average annual rate of 621,000. The issuance of building permits is generally considered a reasonable indicator of impending home constructions. However, the decline in building permits also comes on the heels of two consecutive months of significant increases. And with snow on the ground in 49 states, severe winter weather across the nation certainly has hampered new home construction. But despite the unpredictable weather in the Northeast, new home construction increased by 10% in that area of the country. An 8.9% increase in new home construction in the West also served to strengthen the national figures. Therefore, the uptick in new home construction is even more inspiring for a sustained housing recovery. Bob Jones, the newly elected chairman of the Board of the National Association of Home Builders (NAHB) said builders are “lightly more optimistic that the housing recovery is finally beginning to take root.”

    Prospective homeowners, including existing homeowners considering purchasing a larger home, can still benefit from the unprecedented tax credits offered by the federal government. First-time homebuyers are eligible for up to $8,000, while move-up homebuyers are eligible for up to $6,500. The federal tax credits are available to eligible borrowers until June 30, 2010 (with a signed purchase agreement by April 30, 2010). Coupled with historically low current mortgage rates, the federal tax credits offer a unique opportunity that will soon be gone. When the Federal Reserve completes its commitment to purchase $1.25 million in mortgage-backed securities by March 31, housing analysts believe current mortgage rates will begin to increase to as much as 6%.

    –Robert Hyder

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    Category: General, Mortgage Rate Trends and Analysis, Purchase

  6. FHA 203(k) Mortgages Offer Value, Opportunity

    1 By Michael Kraus on February 16, 2010

    203k-mortgages

    While the economic crisis has had a detrimental effect on the lives of many Americans, it has also presented a golden opportunity to those with the means to purchase a home. The confluence of low current interest rates and an oversupply of homes on the market have made many homes available at a bargain rate.

    For those who have the wherewithal, purchasing a foreclosed home offers tremendous value and opportunity. However many foreclosed homes are in need of repair, and for a long time, securing financing through traditional channels for such a property was difficult.

    With a typical mortgage a lender requires that a house be in good enough condition to provide security for the loan. Generally this means that renovations must be finished before the lender issues a long term mortgage. Often this requires the home-buyer to get financing to purchase the home, financing for the renovations, and finally a permanent mortgage to pay off the previous loans.

    This financing arrangement is complicated and unwieldy, and often discourages people from pursuing such properties. In response, the FHA and HUD developed the 203(k) loan program in order to encourage community redevelopment and revitalization and expand home-ownership opportunities.

    With a 203(k) loan, a borrower in compliance with FHA guidelines only needs to get one permanent mortgage to finance acquisition and rehabilitation of the property.

    Recently Total Mortgage Services President John Walsh spoke with the New Haven Register about the increased demand for 203(k) loans “A lot of these home that are foreclosed, they are distressed to some level. It has to be fixed in order to get a loan. Banks just aren’t giving construction loans; this is really the only option for people who want to buy a home that is distressed”.

    Walsh went on to comment that 203(k) mortgages can be more complicated than standard mortgages, and that it is important to seek out advice from a mortgage experts that have experience with 203(k) loans.

    While credit standards have tightened on almost all loans in light of the economic downturn, credit qualifications through the FHA are more lenient than traditional lenders. Additionally, the FHA generally only requires a 3.5 percent down payment for the home.

    Total Mortgage services is a Full-Eagle, FHA approved lender. To explore your options under the 203(k) program, please call one of our mortgage experts at 877-868-2503.

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    Category: Credit Score, FHA, First Time Home Buyer, Purchase

  7. Fannie Mae Will Pay Your Closing Costs

    By Michael Kraus on February 9, 2010

    Closing Costs

    Despite the current economic climate, there are a myriad of reasons to become a homeowner right now.  Interest rates and mortgage rates are historically low.  Home values may have hit their low point, as St. Louis Federal Reserve President James Bullard recently noted housing prices have “by and large” stabilized.  There may never be a better opportunity to refinance or invest in a new home.

    In case you needed further motivation to explore the option of home-ownership, the government is offering many incentive programs to potential home buyers.  We have mentioned the $8000 First-Time Home Buyer Credit and the $6500 “move up” tax credits in this space before.

    One lesser known program is the Closing Cost Assistance and Appliance Incentive for Fannie Mae Homes.  Fannie Mae owns thousands of foreclosed and forfeited homes that are listed on Homepath.com.  In an effort to reduce their portfolio, any purchaser of a Homepath.com home is eligible to receive 3.5% of the final sales price to be applied to closing costs, the purchase of Whirlpool appliances through Fannie Mae, or a mix of closing costs and appliances.

    In order to be eligible for the program, the home buyer must be an owner-occupant, and the offer on the house must have been accepted after January 28, 2010, and closing on the house must occur prior to May 1, 2010.

    Fannie Mae also offers special financing for homes purchased from Homepath.com.  The required minimum down payment is only 3%.  Mortgages can be fixed or adjustable and typically no mortgage insurance is required.  Many people with imperfect credit will still be approved.

    If you are in the market for a fixer-upper or a house at a deep discount, now is a great time to take advantage of the many incentives Fannie Mae is offering.  Total Mortgage is a fully approved FHA lender and can handle all your mortgage needs.  Contact us today online or at 1-877-868-2503.

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    Category: Purchase, Stimulus

  8. Current Mortgage Rates Remain Low; Tax Credits Still Available

    By Robert Hyder on February 9, 2010

    Current Mortgage Rates Remain Low; Tax Credits Still Available

    Prior to the November 30, 2009 deadline, Congress not only extended the $8,000 first-time home buyer tax credit to June 30, 2010 – with a signed purchase agreement dated no later than April 30, 2010 – but they also implemented a new $6,500 move-up home buyer tax credit. However, it has been some time since I’ve read anything about either of the tax credits. It seems as if the enthusiasm and zeal for the programs have been lost, despite current mortgage rates remaining historically low for an unprecedented period of time.

    The vast majority of homeowners who are eligible to refinance their existing mortgage loans are either currently in the process now, or have already done so. Nevertheless, there are still many homeowners who can benefit from refinancing by taking advantage of today’s incredibly low current mortgage rates. In addition, it has been said time and time again that now is the time to buy a home if you’ve been considering homeownership. “The time is now” adage really can’t be overstated at this point as the clock ticks toward the expiration of the tax credits.

    Furthermore, analysts are predicting that current mortgage rates will spike to 6 percent even before the tax credits expire as the Federal Reserve completes its commitment to purchase $1.25 trillion in mortgage-backed securities by March 31, 2010. That’s three full months before the expiration of the tax credits. The tax credits will be of little benefit if rates increase that sharply. Therefore, locking in now will allow you to take advantage of both low current mortgage rates in addition to unparalleled tax credit opportunities.

    For answers to your tax credit questions, click here or call 877-868-2503 and speak to a licensed mortgage professional.

    –Robert Hyder

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    Category: Current Mortgage Rates, First Time Home Buyer, Mortgage Rate Trends and Analysis, Purchase

  9. Purchase Contracts Dramatically Increase

    By Robert Hyder on December 4, 2009

    approved

    Although they do not constitute closed deals, the impressive 3.7% increase in signed contracts to purchase homes in October certainly indicates the housing market is on the mend. If this increase is not enough proof the housing market is rebounding, then the National Association of Realtors’ report of a record nine consecutive months increases in signed contracts should.

    Coupled with today’s announcement that job losses were nearly 114,000 less than originally forecasted for November – and well below any job loss post over the last 23 months – the increase in purchase contracts is welcome news to the economy as a whole. Since the inception of the National Association of Realtors’ Pending Home Sales Index, the 3.7% increase of signed contracts in October also represents the largest gain ever in a single year. Today, the index stands at 114.1, while it was merely 86.6 just one year ago, a remarkable 31.8% increase. Furthermore, the good news continues with the number of available homes on the market declining, which removes the bloat from this sector of the industry that has caused low home values.

    The federal government’s extension to the $8,000 first-time homebuyer tax credit and implementation of the new $6,500 “move up” homebuyer tax credit will also begin to show positive effects in the index in the coming months. Additionally, the near-record-low current mortgage rates the industry has been experiencing will absolutely assist in increasing these numbers further.

    There’s little doubt the original expiration of the $8,000 first-time homebuyer tax credit pushed October buyers into signing on the dotted line to close by the November 30 deadline. Although, because the newly expanded tax credits have only become available for less than a month, November contracts may decline slightly due to the time it takes to close a loan once a contract is signed. Given the lag time, there will likely be another surge from December through the end of April, when the federal tax credits are due to expire again.

    Hindsight being 20/20, the extension of the original $8,000 first-time homebuyer tax credit was a no-brainer. The extension and implementation of the tax credits should help keep home sales on the upside until the economy stabilizes further and markets return to normal. Market analysts believe the housing market should return to more normal levels, with more firm home prices, by summer 2010.

    –Robert Hyder

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    Category: General, Mortgage Rate Trends and Analysis, Purchase

  10. Current Mortgage Rates Stimulating Home Sales

    By Robert Hyder on November 25, 2009

    Current Mortgage Rates Stimulating Home Sales

    For the fourth consecutive week, current mortgage rates on 30-year fixed-rate mortgages dipped. The current mortgage rate on a 30-year fixed-rate mortgage is currently 4.78%, matching a record low set in April, while the average mortgage rate on a 15-year fixed-rate mortgage is 4.29%. As the housing market remains in a somewhat tattered state, these low mortgage rates will likely continue to support the recent increase in sales.

    When mortgage applications for purchases slowed prior to the extension of the $8,000 first-time homebuyer tax credit, it was a sign that Congress had to move swiftly. Along with the extension of the first-time homebuyer tax credit came the implementation of the new $6,500 “move up” tax credit for existing homeowners who have lived in their current home for five consecutive years out of the past eight years, and wish to purchase a new home and “move up.” The tax credits, coupled with the already low mortgage rates, succeeded as anticipated in generating mortgage activity as purchase applications began to increase, however slightly.

    As the end of the month nears, and with the Thanksgiving holiday already upon us, these new historically low current mortgage rates will likely cause a dramatic increase in purchase applications during the first week of December and beyond. In addition, there are still millions of existing homeowners remaining nationwide who can benefit by refinancing their existing mortgage into a significantly lower current mortgage rate, ultimately saving thousands, if not tens of thousands, of dollars over the life of the loan.

    The combination of the federal tax credits and low current mortgage rates are facilitating the demand for home purchases. As a result, home sales are on pace to reach 6.1 million for 2009. As the housing market begins to slowly and steadily dig itself out from a substantial hole, it is vital it does so before the Federal Reserve stops purchasing the $1.25 trillion in mortgage-backed securities in the first quarter of 2010.

    –Robert Hyder

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    Category: Current Mortgage Rates, General, Mortgage Rate Trends and Analysis, Purchase, Stimulus, What's new at Total Mortgage
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