Mortgage news

Mortgage News

01-23-2009
As reported by Bloomberg.com small banks move into mortgages as nationwide lenders are retreating.
Big lenders and investors, concerned about risk, no longer want to just get any business far away, which is real advantage for a smaller community banks. These banks and credit unions understand the local real estate market and know the neighborhoods which is something that is not included in the standard risk profiling
More and more people are comparing they options against giant lenders turning to a local banks instead.

01-25-2009

As reported by Associated Press, many congressional Democrats agree that the quickest way to save struggling homeowners from loosing they homes, is to let them declare bankruptcy and allow courts to order new mortgage terms.
This bankruptcy proposition would not cost taxpayers money but it certainly would harm the lenders and investors holding mortgages. Giving power to judges to adjust loan terms for primary residences seems like this is changing the rules during the game and will cause the lenders to lose control of any deals. No wonder that lobbyist representing the lending industry and other businesses are fighting back to stop the legislation.
The lending industry came up with they own voluntary loan modification programs based on expectation’s from proposed government's huge economic bailout package. In the long run, new homebuyers can end up paying higher interest and bigger down payments if lenders are saddled with the risk that a judge could change mortgage terms.

02-14- 2009

As of April 1, 2009 Fannie Mae and Freddie Mac are raising up their mandatory fees for all new loan applicants. Under their new guidelines tougher credit score and down-payment rules will also be implemented. In effect this will raise costs to borrowers immediately, so this news is not what home buyers and real estate professionals want to hear.
Both Fannie Mae and Freddie Mac say they are forced to charge these extra fees to defy higher risks associated with declining home values in many parts of the country and probability of higher losses. Since September of 2008 both organizations are operating under federal control and this decision may cause opposite effect on housing stimulus efforts from Congress and the Obama administration.

03-02-2009

According to Freddie Mac the average rate on a 30-year fixed mortgage dropped to 5.07 percent last week from 6.63 percent on July 24 of 2008. Meanwhile, the percentage of nationwide mortgage applications fell to 59 percent in the first half of 2008 from 66.3 percent in 2006, as the Mortgage Bankers Association reported. Long-term fixed-rate mortgages are now lower than adjustable-rate mortgages were a year ago.
People who have decided to take advantage of Obama’s economic stimulus package by refinancing at low rates are being blocked by the set of new rules and upfront fees. Too many people are being rejected due to rising default rates which make all lenders more
risk aware.
Under the new administration’s housing plan announced Feb. 18, as many as 4 million homeowners on the edge of foreclosure will be eligible to have their loans modified to decrease monthly payments. Another 5 million, whose homes are worth less than the principal of their mortgages, also may be able to refinance. This will cover only mortgages owned or insured by Fannie Mae or Freddie Mac. All other borrowers would have to deal with lenders directly if they want to have their mortgages modified.