In early April, the Reuters news agency reported on the comeback of US enterprise, Fannie Mae. Its CEO, Timothy Mayopoulos, stated in a conference call to the media that, “2012 really marked a turning point for us.” Fannie Mae posted a whopping 17.2 billion in profit in 2012. Although this is certainly welcome news, it will take many more profitable months for the enterprise to repay its approximate $117 billion debt to the US Treasury. The sizable sum was accrued from the massive taxpayer rescue in the aftermath of the mortgage crisis. Four years ago, the US government had no choice but to step in and take over because of the considerable losses Fannie Mae suffered during the Great Recession. The recent announcement marks the first full year of reported profit for Fannie Mae since 2006. It also signified a giant leap from the dire $16.9 billion loss Fannie Mae posted for 2011. [Read more...]
Fannie Mae Posts Record Profit
Mortgage Rate Fluctuations Not Thought To Stall Recovery
Ever since the U.S. economy has slowly made improvements, both in the real estate sector and through steady job growth, the interest rates on mortgage loans have ticked upward, then downward, then back up again and then back down again. These fluctuations happen within weeks or even days, leaving many would-be borrowers wondering whether they should lock in a rate now or wait a little while to see if the rate falls again. Add in the recent reports about how rising interest rates could seriously harm economic recovery, and you’ve got a fear factor that could prevent consumers from stepping into the market.
In mid-March, the average 30-year fixed rate hit the highest level in more than six months at 3.63%; however, despite these increases, home sales have actually increased and more serious buyers are entering the market. And just a few days ago, Freddie Mac reported that the benchmark 30-year mortgage rate dropped to 3.31% – the lowest level in four months. So, what does this tell us? That within two months, mortgage rates hit a high AND a low – meaning that, while rates will likely bounce around frequently for a while, they are remaining very affordable. [Read more...]
Low Interest Rates Expected Through 2014
Mortgage rates may continue to linger at or near historical lows through the next two years, according to a recent article on HousingWire.com. According to the article, “the Federal Open Market Committee said it will keep interest rates low at least through 2014 but will not yet act on further stimulus to a slow-growing economy.”
The Federal Open Market Committee is a section of Federal Reserve Board that meets regularly to set monetary policy, including the interest rates that are charged to banks. According to the article published on Aug. 1, the Committee plans to closely monitor economic and financial information as it comes in while simultaneously providing support as needed to promote stronger economic recovery.
“The target rate of funds will remain between 0% and 0.25% for the next two years, unchanged since the Fed lowered it coming out of the financial crisis in 2008,” Housing Wire states.
Robo-Signing Victims to Get Money in April
Are beleaguered homeowners who were unjustly led into foreclosure by unscrupulous mortgage lenders finally getting their financial comeuppance? Although 10 banks are preparing to provide wronged borrowers with settlements ranging from a few hundred dollars to $125,000, many are crying foul. The reimbursement plan was approved after an extensive review period of over 4 million mortgages. The analysis revealed that the financial documentation used to foreclose on millions of loans was riddled with errors. [Read more...]
Homeowners with private mortgage insurance able to deduct their premiums again
Thanks to congressional efforts to reduce the nation’s deficit, tax breaks for mortgage insurance have been revived, along with several other housing provisions in the so-called “Fiscal Cliff” Deal.
According to a recent article from Bloomberg, these provisions could be a great help to the housing market, which has struggled to pull itself out of a five-year slump. Tax breaks are a major incentive to home buyers after all, and anything that attracts more buyers into the market is thought to be a good thing. [Read more...]
Record Number of Short Sales Approved By Fannie & Freddie in Third Quarter 2012
According to a report from the Federal Housing Finance Authority, loan servicing agents for mortgage giants Freddie Mac and Fannie Mae reported a record number of short sales in the third quarter of 2012. Short sales and deeds-in-lieu of foreclosure totaled nearly 38,000 for the three month period ending on September 30 2012. This change represents a four percent increase from the previous quarter and a 23 percent increase from the previous year. This occurred in part due to accelerated timelines for reviewing and approving short sale transactions which were adopted by Freddie and Fannie in June 2012.
While this may appear to be universally bad news, a closer look at the numbers reveals a more complex picture. During the first nine months of 2012, the mortgage leaders acquired nearly 197,507 homes through foreclosure, and simultaneously sold over 200,000 REOs and foreclosed homes. Fannie and Freddie had a total of 158,138 homes in their combined REO inventory as of the end of the third quarter, 2012. This represents an overall decrease of 13% from the previous year, and a drop of nearly 36% from September 30, 2010, when REO inventories reached a peak of 241,684. [Read more...]
Mortgage Rates Forecast to Change Little in 2013
Potential home buyers wishing to take advantage of current low mortgage rates may have a little more time, according to some recent data.
Mortgage giant Fannie Mae reports that current economic conditions may lead to restrained growth over 2013. A number of factors contributed to the sluggish recovery: fiscal cliff uncertainties, the ongoing recovery from Hurricane Sandy, the Euro-zone recession and debt crisis, and ongoing unrest in the Middle East. Fannie Mae’s Economic and Strategic Research Group projects that mortgage rates will remain roughly consistent through the first half of the year, with a modest increase in the third and fourth quarters. Fannie Mae’s chief economist, Doug Duncan, had this to say:
“With data pointing to soft economic conditions and the fiscal policy debate hanging in the balance, we expect growth in the current quarter to moderate from the pace seen last quarter. On the bright side, the housing market has stayed resilient and continues to show signs of a strong, sustained recovery. Mortgage rates remain close to historic lows and home sales and home prices are trending positively. For the first time since 2005, residential investment is poised to contribute to annual economic growth this year, albeit on a small scale.”
Source
“Despite unsteady macroeconomic conditions, we anticipate housing and mortgage activity to gain momentum in 2013,” Duncan continued, adding that in spite of a seasonally weak winter, year-over-year gains in home pricing have helped bolster the market. [Read more...]
Detroit Homes Selling for $1
Home buyers may be able to snag an amazing deal on distressed or neglected housing. Just be sure you do your homework before paying for a fixer upper – even if you’re only paying $1.00!
If you’ve got a dollar, you may be able to buy a home. Sounds crazy, right? Well, according to a recent article from the National Association of Realtors®, it’s just crazy enough to be true.
The city of Detroit, once famed for its thriving automotive industry, has, in recent years, become more well known for its real estate blight. Foreclosures and abandoned property came in waves, forcing many homeowners to sell at dramatically reduced prices while countless others lost their homes altogether. Now, it seems, Detroit is getting desperate for home sales, some being offered for as little as $1.
Realtor.org data recently revealed that in the Detroit metro area, nine homes sold for $1 and six properties were listed for $100. According to the NAR article, the one dollar properties were “fixer uppers,” but at 3 bedrooms and 1,300 square feet, these dollar-menu homes were surprisingly spacious. [Read more...]
The Return of Jumbo Lending
Real estate lending has been a touchy subject in the US for the last four or five years. The Subprime Lending Crisis of 2007-8 left a bad taste in the mouths of many consumers, beyond that which is normally associated with mortgages. But as the housing market moves toward recovery, lending is back in the spotlight. Interest rates are at near-record lows, and housing prices are expected to rise in the not-too-distant future. As a result mortgage activity is rising in the US, as more new homes come under contract. However, growth of so-called “jumbo” loans is growing rapidly, such that the term may take on a new meaning.
Private jumbo loans are typically defined as home loans exceeding $417,000 in most markets, or alternately $625,500 in regions with higher real estate prices, such as New York or San Francisco. Currently, sales of luxury homes are on the rise. A recent CNN Money article reported that sales volume for homes priced at $1 million or more have more than doubled since last year, according to the National Association of Realtors. Likewise, the need for jumbo loans has grown. Lenders reported dispensing over $148 billion in jumbo loans over the first nine months of 2012, an increase of 23.3% from the same period a year prior. Originations of jumbo loans in 2012 were the highest since 2007. [Read more...]
Mortgage Applications Decline Over the Holidays
The winter is usually a slower season for the housing industry. From real estate agents to loan officers, there just seems to be more of a lull during the months of December and January. The holidays are naturally a time when people tend to focus more on being with family and getting their gift shopping done rather than buying a home. Because of this, mortgage applications tend to drop off a bit during the holiday season. This past season was no exception, with mortgage applications falling more than 20 percent.
This figure comes from the Mortgage Bankers Association (MBA), who reported in early January that applications made a more dramatic fall than usual in its Weekly Mortgage Applications Survey for the two weekly reporting periods ending December 21 and December 28. The MBA’s Market Composite Index, a measure of mortgage application volume, declined 21.6 percent on a seasonally-adjusted basis from the pre-holiday period ending December 14. The MBA did not release any non-seasonally adjusted data. [Read more...]
