This is amazing...
All Rates But 1-Year ARM Hit Record Lows In Freddie Mac Weekly Survey
For Immediate Release
June 24, 2010
Contact: corprel@freddiemac.com
or (703) 903-3933
McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 4.69 percent with an average 0.7 point for the week ending June 24, 2010, down from last week when it averaged 4.75 percent. Last year at this time, the 30-year FRM averaged 5.42 percent.
The 15-year FRM this week averaged 4.13 percent with an average 0.6 point, down from last week when it averaged 4.20 percent. A year ago at this time, the 15-year FRM averaged 4.87 percent.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.84 percent this week, with an average 0.7 point, down from last week when it averaged 3.89 percent. A year ago, the 5-year ARM averaged 4.99 percent.
The 1-year Treasury-indexed ARM averaged 3.77 percent this week with an average 0.7 point, down from last week when it averaged 3.82 percent. At this time last year, the 1-year ARM averaged 4.93 percent. This is the lowest the 1-year ARM has been since the week ending May 6, 2004 when it averaged 3.76 percent.
(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)
“Mortgage rates for all but traditional 1-year ARMs hit all-time record lows this week in our survey while activity in the housing market slowed in May following the expiration of the homebuyer tax credit,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Freddie Mac began collecting rates for 30-year fixed loans in April 1971, 15-year fixed mortgages in September 1991 and 5-year hybrid ARMs in January 2005. The record low for traditional 1-year ARMs of 3.36 percent occurred during the week of March 25, 2004.
“Both new and existing home sales showed unexpected declines in May. Existing sales fell 2.2 percent, compared to the market consensus forecast of a 6.0 percent gain, based on figures published by the National Association of Realtors® . Sales of new homes fell 32.7 percent to an annualized rate of 300,000 units, which was the largest monthly drop and slowest pace since records began in 1963, according to the Census Bureau .”
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation's residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.
http://www.freddiemac.com/pmms/release.html?week=25&year=2010
Showing posts with label mortgage. Show all posts
Showing posts with label mortgage. Show all posts
Tuesday, June 29, 2010
Sunday, December 06, 2009
I recently had a client with an existing VA loan receive a notice in the mail concerning refinancing their loans with a company called Mortgage Investors Corporation. The company claimed they could save them thousands of dollars with an easy re-finance – all they needed to do was listen to a 15 minute in-home presentation. Following a hard pitch session at the owners home that lasted 4-5 hours, my clients were asked (and consented) to give the MIC rep a "good faith deposit" of $1000. HUGE RED FLAG!
IF YOU RECEIVE ONE OF THESE NOTICES, PLEASE READ THE FINE PRINT AND DO YOUR OWN RESEARCH!
Initial investigation finds that homeowners will have their loan converted to a HYBRID loan, which has a fixed rate for approximately 38 months and then slowly rises over the next 5-7 years, with a cap of 8% (this was told to my clients). This is in addition to fees and other costs put on the back end of the loan.
I am not saying what MIC is doing is illegal or fraudulent. Basically, they are taking a loan guaranteed by the government (VA loan) and modifying the terms for the homeowner. It’s a win-win for MIC…should the owner default, the government will cover the loan. Should the seller not default, they will have had upfront savings but back-end costs and possibly an interest rate much higher than their original rate. There are risks with this hybrid loan and homeowners contemplating this refinance would be well-advised to work the numbers thoroughly.
My local Better Business Bureau (http://www.bbb.org/west-florida/business-reviews/mortgage-bankers/mortgage-investors-corporation-in-saint-petersburg-fl-52003613) has recorded 114 consumer complaints against MIC.
Please remember, nothing is free. If it sounds too good to be true, it probably is. CAVEAT EMPTOR!
IF YOU RECEIVE ONE OF THESE NOTICES, PLEASE READ THE FINE PRINT AND DO YOUR OWN RESEARCH!
Initial investigation finds that homeowners will have their loan converted to a HYBRID loan, which has a fixed rate for approximately 38 months and then slowly rises over the next 5-7 years, with a cap of 8% (this was told to my clients). This is in addition to fees and other costs put on the back end of the loan.
I am not saying what MIC is doing is illegal or fraudulent. Basically, they are taking a loan guaranteed by the government (VA loan) and modifying the terms for the homeowner. It’s a win-win for MIC…should the owner default, the government will cover the loan. Should the seller not default, they will have had upfront savings but back-end costs and possibly an interest rate much higher than their original rate. There are risks with this hybrid loan and homeowners contemplating this refinance would be well-advised to work the numbers thoroughly.
My local Better Business Bureau (http://www.bbb.org/west-florida/business-reviews/mortgage-bankers/mortgage-investors-corporation-in-saint-petersburg-fl-52003613) has recorded 114 consumer complaints against MIC.
Please remember, nothing is free. If it sounds too good to be true, it probably is. CAVEAT EMPTOR!
Tuesday, July 14, 2009
If there is anything I never discuss in real estate, it's religion and politics. Taboo, to say the least. I try to see both sides of the conflict and make my mind up from there. I will dip my toe into the politics side and share with you my opinion of the "stimulus" that has be lauded as a cure-all for our ailing economy.
Essentially, it was a 2-aspirin remedy for a severely broken leg.
The main thrust of the stimulus, through the TARP fund (Troubled Asset Relief Program), was to assist banks with clearing the "toxic assets" from their books...a worthy cause. Unlike the Resolution Trust Corp solution to the S & L debacle in the 80's/early 90's, this program "injected" funds directly into the banks to help balance their books and stay liquid.
A secondary result of the TARP funds was to have enabled lenders to continue making loans on good assets...thoroughly vetted home purchases, car loans, etc. I think it's safe to say that it is not happening as intended.
If you are a buyer who is wading throught the thick forect of "loan application" prepare to surrender a blood sample, family medical history, and quite possibly your first-born. All kidding aside, it has become quite a chore to qualify buyers in this marketplace, despite stable job histories, stable cash flow, good credit scores, etc. But that's only half the battle...
...Buyer and Sellers in a transaction can lose bigtime when these lenders take it upon THEMSELVES to determine the market value of the home being purchased. This is happening despite the fact the state-licensed appraisers are completing VERY THOROUGH appriasals on these homes and supplying additional comps, market synopsis, and what not. A little known fact is that some institutional lenders have "Appraisal Review Departments" that vet these certified residential appraisals and advise on what they believe is the true market value.
So not only are these lenders holding Buyers hostage for loans which are supposed to be more forthcoming, they are de facto "re-valuing" our homes and communities to best serve their interests and protect their books. I would better accept it if the lenders came right out and said we don't want to loan tto you because of X...instead they play games with the appraisal and take our transactions to the very day before closing and mark a big REJECTED stamp on them...
Be prepared and vigilant if you are in a transaction depending on a mortgage...
Essentially, it was a 2-aspirin remedy for a severely broken leg.
The main thrust of the stimulus, through the TARP fund (Troubled Asset Relief Program), was to assist banks with clearing the "toxic assets" from their books...a worthy cause. Unlike the Resolution Trust Corp solution to the S & L debacle in the 80's/early 90's, this program "injected" funds directly into the banks to help balance their books and stay liquid.
A secondary result of the TARP funds was to have enabled lenders to continue making loans on good assets...thoroughly vetted home purchases, car loans, etc. I think it's safe to say that it is not happening as intended.
If you are a buyer who is wading throught the thick forect of "loan application" prepare to surrender a blood sample, family medical history, and quite possibly your first-born. All kidding aside, it has become quite a chore to qualify buyers in this marketplace, despite stable job histories, stable cash flow, good credit scores, etc. But that's only half the battle...
...Buyer and Sellers in a transaction can lose bigtime when these lenders take it upon THEMSELVES to determine the market value of the home being purchased. This is happening despite the fact the state-licensed appraisers are completing VERY THOROUGH appriasals on these homes and supplying additional comps, market synopsis, and what not. A little known fact is that some institutional lenders have "Appraisal Review Departments" that vet these certified residential appraisals and advise on what they believe is the true market value.
So not only are these lenders holding Buyers hostage for loans which are supposed to be more forthcoming, they are de facto "re-valuing" our homes and communities to best serve their interests and protect their books. I would better accept it if the lenders came right out and said we don't want to loan tto you because of X...instead they play games with the appraisal and take our transactions to the very day before closing and mark a big REJECTED stamp on them...
Be prepared and vigilant if you are in a transaction depending on a mortgage...
Monday, June 22, 2009
SELLERS: FREQUENTLY ASKED TITLE COMPANY QUESTIONS
What Do I Do Before Closing?
1. Locate your prior title policy and survey, if possible.
2. Gather current loan information for each mortgage or line of credit so title company can order payoff:
a. Lender name & phone number
b. Loan number
3. Cancel homeowner’s insurance only after the closing.
4. Order final reading for all utilities effective the day of closing.
5. Bring your driver’s license or government issued photo ID (Military ID, Passport) and your social security number to closing.
6. If married, and the property you are selling is your residence, your spouse must also sign documents.
7. If you are bringing funds to closing in excess of $500, bring a cashier’s check made payable to Sunbelt Title Agency. (If you need wiring instructions, or want us to wire your proceeds to you after closing, please contact our office.)
8. Bring keys, garage door openers, and any special instructions for new owner to closing.
When and how do I get the escrow money back from my lender?
The lender is required to reimburse the money that is held in escrow within thirty days after it receives the payoff from the title insurance company. Escrow is almost never deducted from the payoff at the time of closing. If there are special circumstances that require this to be done or if you must receive your escrow sooner than normal, you should contact your lender well in advance of the closing to inquire about this possibility.
Why is my payoff so much higher than the balance shown on my last statement?
The primary reason is that the payoff statement includes interest due from the last payment you made up to the date of payoff. Mortgages are paid in arrears, i.e. January’s payment paid for the interest accrued in December. In some cases, if the payment for the month of closing isn’t made before closing, this could mean up to two months of interest will be included in the payoff. If the Per Diem Interest is $25, that could mean an additional $1,500 above the principal balance that is due. In addition, some lenders charge fees to obtain payoff statements.
Why am I paying for the buyer’s title policy and documentary stamps?
The Title Policy guarantees that clear title can be given on the property. It varies in different counties as to who pays for this, but in this region it is typically paid by the seller. Most contracts executed in the State of Florida require the seller to pay for the documentary stamps on the deed while the buyer pays intangible tax and doc stamps on the new mortgage.
How are title insurance costs calculated?
Title insurance rates are regulated by the State of Florida and therefore cannot vary greatly from company to company. Title insurance companies must also charge for what are known as related services. These services include the Title Search fee and the Closing fee.
The cost varies because it is based on the purchase price. It is a one-time fee and is paid at closing. Although you pay only once, the protection lasts as long as you or your heirs retain an interest in the property.
What is a prior policy and what is its importance now that I am selling or refinancing my property?
The purpose of a prior owner’s policy is to allow the seller to have re-issue credit. This grants the holder of the policy a greatly discounted title insurance rate if the following requirements are met:
· In the case of a sale, the Owner’s Policy must not be more than 3 years
old. Note: For refinancing the property and for vacant land, there is no
restriction regarding the age of the prior policy.
· The credit amount is based on the amount of the prior policy, not the
current sales price. The credit cannot be higher than the sales
price. If the prior sales price is higher than the current sales
price, the credit is based on the current, or lesser, amount.
· The insured names on the prior policy must be the same as those involved in the current transaction.
· The prior policy must be delivered to the title company before the closing.
· The prior policy does not need to be issued by the same title company that is issuing the new title policy.
· Florida law states that only a prior Owner’s Policy may be used in order to receive re-issue credit. A commitment or a Lender’s Policy does not qualify. When you refinance, you only purchase a Lender’s Policy which covers the new lender; your original owner’s policy is still in effect.
What Do I Do Before Closing?
1. Locate your prior title policy and survey, if possible.
2. Gather current loan information for each mortgage or line of credit so title company can order payoff:
a. Lender name & phone number
b. Loan number
3. Cancel homeowner’s insurance only after the closing.
4. Order final reading for all utilities effective the day of closing.
5. Bring your driver’s license or government issued photo ID (Military ID, Passport) and your social security number to closing.
6. If married, and the property you are selling is your residence, your spouse must also sign documents.
7. If you are bringing funds to closing in excess of $500, bring a cashier’s check made payable to Sunbelt Title Agency. (If you need wiring instructions, or want us to wire your proceeds to you after closing, please contact our office.)
8. Bring keys, garage door openers, and any special instructions for new owner to closing.
When and how do I get the escrow money back from my lender?
The lender is required to reimburse the money that is held in escrow within thirty days after it receives the payoff from the title insurance company. Escrow is almost never deducted from the payoff at the time of closing. If there are special circumstances that require this to be done or if you must receive your escrow sooner than normal, you should contact your lender well in advance of the closing to inquire about this possibility.
Why is my payoff so much higher than the balance shown on my last statement?
The primary reason is that the payoff statement includes interest due from the last payment you made up to the date of payoff. Mortgages are paid in arrears, i.e. January’s payment paid for the interest accrued in December. In some cases, if the payment for the month of closing isn’t made before closing, this could mean up to two months of interest will be included in the payoff. If the Per Diem Interest is $25, that could mean an additional $1,500 above the principal balance that is due. In addition, some lenders charge fees to obtain payoff statements.
Why am I paying for the buyer’s title policy and documentary stamps?
The Title Policy guarantees that clear title can be given on the property. It varies in different counties as to who pays for this, but in this region it is typically paid by the seller. Most contracts executed in the State of Florida require the seller to pay for the documentary stamps on the deed while the buyer pays intangible tax and doc stamps on the new mortgage.
How are title insurance costs calculated?
Title insurance rates are regulated by the State of Florida and therefore cannot vary greatly from company to company. Title insurance companies must also charge for what are known as related services. These services include the Title Search fee and the Closing fee.
The cost varies because it is based on the purchase price. It is a one-time fee and is paid at closing. Although you pay only once, the protection lasts as long as you or your heirs retain an interest in the property.
What is a prior policy and what is its importance now that I am selling or refinancing my property?
The purpose of a prior owner’s policy is to allow the seller to have re-issue credit. This grants the holder of the policy a greatly discounted title insurance rate if the following requirements are met:
· In the case of a sale, the Owner’s Policy must not be more than 3 years
old. Note: For refinancing the property and for vacant land, there is no
restriction regarding the age of the prior policy.
· The credit amount is based on the amount of the prior policy, not the
current sales price. The credit cannot be higher than the sales
price. If the prior sales price is higher than the current sales
price, the credit is based on the current, or lesser, amount.
· The insured names on the prior policy must be the same as those involved in the current transaction.
· The prior policy must be delivered to the title company before the closing.
· The prior policy does not need to be issued by the same title company that is issuing the new title policy.
· Florida law states that only a prior Owner’s Policy may be used in order to receive re-issue credit. A commitment or a Lender’s Policy does not qualify. When you refinance, you only purchase a Lender’s Policy which covers the new lender; your original owner’s policy is still in effect.
Sunday, May 03, 2009
So you wanted a deal and you put an offer in on a short sale, perhaps even against your realtor's advice. 1 month went by, then another, and finally you hear back. The documentation is in order, the bpo was completed, and the Seller is countering your offer price $40,000 HIGHER! Huh? You thought that offer, while low, was enough to snag this home that is on the edge of foreclosure. The banks need people like you to unload these homes, right?
WRONG.
Like any other negotiation, dealing with banks on short sales DEMANDS you know their bottom lines, procedures, and rules of play. The first fallacy is that they NEED YOU. That is incorrect. Every bank has procedures for divesting themselves of bad investments and they stick to them UNLESS it's in their favor to take the shortcut, i.e. your offer. Even if a lender's REO department is flooded with inventory, it does not mean they will accept $.50 on the dollar for that beat-up 3/2 in need of a little TLC. Banks and servicers see only numbers, not rotted wood or broken windows. If the numbers don't work for the bank, then it's a waste of your time.
Which leads us to BPO's (Broker Price Opinions) and appraisals. While we all know the real estate sector is beat down, it doesn't mean that old 3/2 isn't worth a plug nickel. Lender's use appraisals (sometimes multiple appraisals) to arrive at a proper market value for the home, in accordance with their procedures. One lender I deal with automatically takes 5% off the BPO price to account for delays, time, and condition. So do yourself a favor...comp out the property BEFORE making your offer, ask the listing realtor for comps to justify value, and if you lowball, expect a counter (or someone else to slide a higher offer in after the bank counters yours).
If much time has elapsed since the property was last appraised, consider requesting a new appraisal. Guaranteed it will come in lower and closer to market value.
Just remember - the bank doesn't care if it needs new windows, the tile job was done poorly, or the cabinets are older and need freshening up. Heck, they don't even care about the age of the roof, the a/c system(s) or even the paint. Your negotiator is OVERWHELMED, OVERWORKED, and EXHAUSTED...there is very little motivation for them to work outside the framework that is set up. If they can't sell the home via short sale, the file is simply shipped over to their legal dept for foreclosure, then onto the REO dept for re-sale. No agnst, no emotion, etc...just a simple numbers game. So do yourself a favor and offer the RIGHT number so you, too, can be a winner in this market.
WRONG.
Like any other negotiation, dealing with banks on short sales DEMANDS you know their bottom lines, procedures, and rules of play. The first fallacy is that they NEED YOU. That is incorrect. Every bank has procedures for divesting themselves of bad investments and they stick to them UNLESS it's in their favor to take the shortcut, i.e. your offer. Even if a lender's REO department is flooded with inventory, it does not mean they will accept $.50 on the dollar for that beat-up 3/2 in need of a little TLC. Banks and servicers see only numbers, not rotted wood or broken windows. If the numbers don't work for the bank, then it's a waste of your time.
Which leads us to BPO's (Broker Price Opinions) and appraisals. While we all know the real estate sector is beat down, it doesn't mean that old 3/2 isn't worth a plug nickel. Lender's use appraisals (sometimes multiple appraisals) to arrive at a proper market value for the home, in accordance with their procedures. One lender I deal with automatically takes 5% off the BPO price to account for delays, time, and condition. So do yourself a favor...comp out the property BEFORE making your offer, ask the listing realtor for comps to justify value, and if you lowball, expect a counter (or someone else to slide a higher offer in after the bank counters yours).
If much time has elapsed since the property was last appraised, consider requesting a new appraisal. Guaranteed it will come in lower and closer to market value.
Just remember - the bank doesn't care if it needs new windows, the tile job was done poorly, or the cabinets are older and need freshening up. Heck, they don't even care about the age of the roof, the a/c system(s) or even the paint. Your negotiator is OVERWHELMED, OVERWORKED, and EXHAUSTED...there is very little motivation for them to work outside the framework that is set up. If they can't sell the home via short sale, the file is simply shipped over to their legal dept for foreclosure, then onto the REO dept for re-sale. No agnst, no emotion, etc...just a simple numbers game. So do yourself a favor and offer the RIGHT number so you, too, can be a winner in this market.
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