Mortgage Applications Move Higher

From CNNMoney.com - "Mortgage applications rise":

U.S. mortgage applications rose in the last week of January, reflecting a jump in demand for home refinancing loans even as interest rates rose to their highest levels since early December, data from an industry group showed Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended Jan. 30 increased 8.6% to 795.4 after slumping 38.8% during the previous week.

Inside the MBA's purchase and refinance index:

The MBA's seasonally adjusted purchase index fell 11.2% to 261.4 in the latest week. The four-week moving average of mortgage applications, which smooths the volatile weekly figures, was down 9.2%.

The Mortgage Bankers seasonally adjusted index of refinancing applications, meanwhile, jumped 15.8% to 3,906.3.

Inside the mortgage rates:

Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 5.28%, up 0.06 percentage point from the previous week. Three weeks earlier, mortgage rates were 4.89%, the lowest level recorded since the MBA survey began in 1990.

...

The adjustable-rate mortgage share of activity decreased to 2.1% in the latest week, down from 2.4% the previous week.

Fixed 15-year mortgage rates averaged 5.15%, up from 4.98% the previous week. Rates on one-year ARMs increased to 6.09% from 5.96%.

The long and the short is that mortgage rates have been inching up but still remain incredibly cheap.

Mortgage Rates Continue to Drop

As reported by CNNMoney.com - "Mortgage rates hit 4 1/2 year low":

Mortgage rates fell again this week, following the government's efforts to assist the troubled housing market.

Government sponsored mortgage lender Freddie Mac said Thursday that fixed rates on 30-year mortgages averaged 5.47% for the week ending Dec. 11. That's down from 5.53% last week and well below 6.11%, which is where the rate stood at this time last year.

We have to go back quite some time to find equally low rates:

The 30-year rate has not been this low since March 25th, 2004 when it averaged 5.40%.

....

The 15-year fixed rate mortgage this week averaged 5.20%, which is down from 5.33% last week. A year ago at this time, a 15-year fixed rate loan averaged 5.78%.

The 15-year rate has not been this low since February 7, 2008, when it averaged 5.15%.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.82% this week, up from last week when it averaged 5.77%. At this time a year ago, the 5-year ARM averaged 5.89%.

And the one-year Treasury-indexed ARM averaged 5.09% this week, up from last week when it averaged 5.02%. Last year, the 1-year ARM averaged 5.50 percent.

Wow. Let's see. You're looking to buy your first home. You can get a loan. You have money for the down payment and you're still on the sidelines? Why?

Could prices drop more? Most likely they will. Would it be a surprise in consideration of the overall economic market conditions? However, many markets have already seen huge drops, there's still lackluster demand, and rates are back to better than bargain basement levels.

Remember, if you're planning to stay in your home for the next 5-7 years, stop worrying about the market falling another 10%. It's really unimportant since you can negotiate more than 10% off of current market values due to existing conditions in most housing markets. Add phenomenal rates to the cocktail .... stop being greedy. Greed got us here. Get why the gettin' is good.

Or, perhaps you're just that good. Your crystal ball will be able to pinpoint the actual hour when housing officially bottoms. When it does, do us a favor and drop us a line.

Mortgage Rates Going to 4.5%?

As reported by CNNMoney.com - "Lower mortgage rates no silver bullet":

While Treasury officials are keeping mum about the latest proposal, lobbyists said Thursday it is aimed at reducing rates to 4.5% only for people buying homes. Those looking to refinance would not qualify.

How will dropping rates put a dent in our housing crisis?

Lowering rates to 4.5% -- about a percentage point below today's rate -- would spur 500,000 home sales over the next year, he said. That would put a big dent in the supply of 4.6 million homes on the market. Right now, there is a 10-month supply of homes for sale, three to four months more than in normal conditions.

A 4.5% mortgage rate would prompt many people to buy, even if they fear home prices will continue to fall and the economy to weaken, he said. Rates have not fallen below 5.37% for 45 years.

A wave of purchases should stabilize home values, which, in turn, will help the economy to turn around.

Will dropping the rates to 4.5% do the trick?

What's keeping many home buyers out of the market are stringent lending standards, not interest rates, experts said. As long as credit remains tight and banks require 20% downpayments, many buyers will remain on the sidelines.

Instead, banks should make mortgages available with a 5% or 10% downpayment, Rosen said. And while he doesn't advocate a return to the "mirror standard" (when borrowers could get money if they simply could fog a mirror), banks should allow more people to qualify for fixed-rate mortgages if they show sufficient income.

Our thoughts. Sure, some of this is going to help. In the near term, it can't hurt. In the long term, another story.

Program after program. Dollars chasing more dollars. Bailout and incentives after bailout and incentives. Sooner or later some of this will ultimately make a mark. Throw enough against the wall, something will stick.

Unfortunately, all of these measures seem to be nothing more than haphazard attempts at applying band-aids to a severed artery.

"If at first you don't succeed, Try, try again." There's a lot of trying going on and not much of anything else.

Mortgage Rates Drop

As reported by CNNMoney.com - "Mortgage rates plummet":

Mortgage rates fell sharply yesterday after the administration announced that it will pump another $800 billion into credit markets to free up frozen consumer and mortgage lending.

That number dwarfed previous government actions aimed at bolstering the mortgage lending market.

"The feds agreed to spend a half a trillion dollars to buy up mortgage backed securities and another $100 billion to fund lending for Fannie and Freddie; we're not talking chump change anymore," said Keith Gumbinger of HSH Associates, a publisher of mortgage information.

30-Year fixed rate and what it means to you:

Rates averaged 5.77% for the day on a 30-year, fixed rate loan, down from 6.06% Monday, according to Gumbinger. They fell as far as 0.75 percentage points during the day, according to Orawin Velz, Associate Vice President for Economic Forecasting at the Mortgage Bankers Association.

That could save a typical homebuyer more than $90 a month on a $200,000 mortgage.

Massive amounts of inventory, historically low interest rates moving lower, the slower home buying Holiday season upon us ... perhaps a good time to negotiate a strong deal for a home?

Mortgage Rates Down Again

As reported by CNNMoney.com - "Mortgage rates down for 2nd week":

Mortgage rates fell for the second week in a row, finance firm Freddie Mac said Thursday, as the weakening economy resulted in the slowest pace of home purchase applications in nearly eight years.

Freddie Mac said 30-year fixed-rate mortgages averaged 6.14% this week. That's down from 6.20% last week and below the 6.24% rate at this time last year.

Rates for 30-year fixed-rate mortgages have been at 6% or higher for five consecutive weeks. Between the week of Oct. 9 and Oct. 16, the 30-year fixed-rate mortgage posted its biggest weekly jump since April 1987, rising from 5.94% to 6.46%

"Long-term mortgage rates fell slightly this week as signs the overall economy is weakening brought interest rates down market-wide," according to a statement by Frank Nothaft, Freddie Mac vice president and chief economist.

Rates on 15-year fixed-rate mortgages fell to 5.81% from 5.88% last week. A year ago, the rate was 5.88%.

The five-year adjustable-rate mortgage fell to 5.98%, from 6.19% last week. A year ago, the rate was 5.96%.

The rate on a one-year adjustable-rate mortgage rose to 5.33% from 5.25% last week. At this time last year, the rate was 5.50%.

The bad mortgage news:

Mortgage applications for home purchase loans fell during the last week in October to the slowest pace since the week of Dec. 29, 2000, according to data from the Mortgage Bankers Association.

Lending standards are tight and seem to be getting tighter:

A recent survey of senior loan officers from the Federal Reserve found that about 70% of banks raised their lending standards for prime mortgages, and about 90% of banks that offer nontraditional mortgages did so as well.

Can we give another round of applause and thanks to our government?

Banks are failing to use public funds to make credit more available and to help troubled homeowners, said Sen. Christopher Dodd, D-Conn.

Outside of the mortgage rates making a small move in the right direction, is anything else here what the doctor order? Perhaps our politicians should go back to naming streets and investigating steroids in baseball ... obviously areas which fall more into their comfort zone. If we sound cynical, we are and for good reason! Aren't you?



Learn more about the government bailout plan gone amuck:

1. Government Bailout Plan - Devalued Mortgage Loan Assets No More

Interested in the recent "Loan Modification" buzz? Check out one of our recent articles:

1. Citigroup`s Loan Modification Program
2. Fannie Mae and Freddie Mac - New Loan Modification Program
3. Loan Modification Specialist - Don`t Miss Your Calling!
4. Loan Modification Programs - Officially in Vogue?
5. Loan Modification Programs - IndyMac and B of A Lead the Way
6. JPMorgan Chase Loan Modification - Mortgage Program Expanded
7. JPMorgan Chase Loan Modification - Moratorium on Foreclosures

Mortgage Rates Ease

As reported by Inman News - "Mortgage rates pull back from surge":

Rates on both fixed-rate and adjustable-rate mortgages retreated this week from a recent surge, but lenders continue to tighten standards as a pullback in consumer spending and weaker job market provide new indications of a slowing economy.

Rates for 30-year fixed-rate mortgages (FRM) averaged 6.2 percent with an average 0.7 point or the week ending Nov. 6, down from 6.46 percent last week and 6.24 percent a year ago, according to Freddie Mac's latest Primary Mortgage Market Survey.

The 15-year FRM this week averaged 5.88 percent with an average 0.7 point, down from 6.19 percent last week and 5.9 percent a year ago, Freddie Mac said.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.19 percent with an average 0.6 point, down from 6.36 percent last week but up from 5.89 percent a year ago.

One-year Treasury-indexed ARMs averaged 5.25 percent with an average 0.4 point, down from 5.38 percent last week and 5.50 percent a year ago.

Mortgage rates continue to ebb and flow up and down. In short, mortgage rates have been and continue to remain extremely attractive. Qualifying for one of these loans with one of these great rates, good luck. Bring your docs, some cash, and a good luck charm.

Mortgage Rates Popped Higher This Past Week

Freddie Mac reported in it's "Primary Mortgage Market Survey (PMMS)" that mortgage rates pushed significantly higher during this past week:

"... 30-year fixed-rate mortgage (FRM) averaged 6.46 percent with an average 0.6 point for the week ending October 16, 2008, up from last week when it averaged 5.94 percent. Last year at this time, the 30-year FRM averaged 6.40 percent. This week's increase of 52 basis points was the largest weekly increase since the week ending April 17, 1987, when the 30-year FRM rose 84 basis points.

The 15-year FRM this week averaged 6.14 percent with an average 0.6 point, up from last week when it averaged 5.63 percent. A year ago at this time, the 15-year FRM averaged 6.08 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.14 percent this week, with an average 0.6 point, up from last week when it averaged 5.90 percent. A year ago, the 5-year ARM averaged 6.11 percent.

One-year Treasury-indexed ARMs averaged 5.16 percent this week with an average 0.6 point, up from last week when it averaged 5.15 percent. At this time last year, the 1-year ARM averaged 5.76 percent."

Mortgage rate averages as noted by region:


Will we continue to see rising rates?