Network Capital Mortgage Finance Industry News

Inc. Magazine Unveils 30th Annual List of America’s Fastest-Growing Private Companies—the Inc. 500

noreply@blogger.com (Network Capital) — Fri, 06 Jan 2012 23:41:00 +0000

Inc. Magazine Unveils 30th Annual List of

America’s Fastest-Growing Private Companies—the Inc. 500

NETWORK CAPITAL Ranks No. 47 in Financial Services on the 2011 Inc. 500

with Three-Year Sales Growth of 322%

NEW YORK, August 23, 2011 -- Inc. magazine today ranked NETWORK CAPITAL NO. 47 on its 30th annual Inc. 500, an exclusive ranking of the nation's fastest-growing private companies. The list represents the most comprehensive look at the most important segment of the economy—America’s independent entrepreneurs. Companies such as Microsoft, Zappos, Intuit, Jamba Juice, Zipcar, Clif Bar, Vizio, Oracle, and many other well-known names gained early exposure as members of the Inc. 500.

The 2011 Inc. 500, unveiled in the September issue of Inc. (available on newsstands August 23 to November 15 and on Inc.com), is a group of companies that are smaller but much faster-growing than last year’s crop. Aggregate revenue is $10.5 billion, with a median three-year growth of 1,275 percent. The companies on this year's list employ more than 46,000 people and generated over 35,000 jobs in the past three years. Complete results of the Inc. 500, including company profiles and an interactive database that can be sorted by industry, region, and other criteria, can be found on Inc.com/500.

"Now, more than ever, we depend on Inc. 500/5000 companies to spur innovation, provide jobs, and drive the economy forward. Growth companies, not large corporations, are where the action is,” says Inc. magazine Editor Jane Berentson.

Methodology

The 2011 Inc. 500 is ranked according to percentage revenue growth when comparing 2007 to 2010. To qualify, companies must have been founded and generating revenue by March 31, 2007. Additionally, they had to be U.S.-based, privately held, for profit, and independent—not subsidiaries or divisions of other companies—as of December 31, 2010. (Since then, a number of companies on the list have gone public or been acquired.) The minimum revenue required for 2007 is $100,000; the minimum for 2010 is $2 million. As always, Inc. reserves the right to decline applicants for subjective reasons. Companies on the Inc. 500 are featured in Inc.’s September issue. They represent the top tier of the Inc. 5000, which can be found at www.inc.com/500.

About Inc. Magazine

Founded in 1979 and acquired in 2005 by Mansueto Ventures LLC, Inc. (www.inc.com) is the only major business magazine dedicated exclusively to owners and managers of growing private companies that delivers real solutions for today’s innovative company builders. With a total paid circulation of 710,106, Inc. provides hands-on tools and market-tested strategies for managing people, finances, sales, marketing, and technology. Visit us online at www.inc.com.

About the Inc. 500|5000 Conference

Each year, Inc. and Inc.com celebrate the remarkable achievements of today’s entrepreneurial superstars—the privately held small businesses that drive our economy. The Inc. 500|5000 Conference & Awards Ceremony brings together members of the Inc. community, both a new class of Inc. 500|5000 honorees and the list’s alumni, for three days of powerful networking, inspired learning, and momentous celebration. Please join us September 22–24, 2011, at the Gaylord National Resort and Convention Center in National Harbor, Maryland, located minutes from downtown Washington, D.C. For more information about the 2011 Inc. 500|5000 Conference & Awards Ceremony and to register, visit www.inc500conference.com or call 866-901-3205.

Mortgage Rates Hold Near Lows

noreply@blogger.com (Network Capital) — Fri, 06 Jan 2012 00:51:00 +0000

By MIA LAMAR

Average fixed mortgage rates in the U.S. over the past week kicked off the new year at or near record lows, according to Freddie Mac's weekly survey of mortgage rates.

The firm noted the rate for a 30-year fixed-rate mortgage during the period matched its all-time low, making it the fifth straight week the rate has averaged below 4%.

The 30-year fixed-rate mortgage averaged 3.91% for the week ended Thursday, down from 3.95% the previous week and 4.77% a year ago. Rates on 15-year fixed-rate mortgages averaged 3.23%, down from 3.24% last week and 4.13% a year earlier.

The five-year Treasury-indexed hybrid adjustable-rate mortgage, or ARM, averaged 2.86%, down from 2.88% last week and 3.75% a year ago. One-year Treasury-indexed ARM rates averaged 2.8%, up from 2.78% the prior week, though below 3.24% last year.

To obtain the rates, 30-year and 15-year fixed-rate mortgages required an average payment of 0.8 percentage point. Five-year and one-year adjustable-rate mortgages required an average 0.7 percentage point and 0.6 percentage point payment, respectively. A point is 1% of the mortgage amount, charged as prepaid interest

source: http://online.wsj.com/article/SB10001424052970203513604577142901622715874.html?mod=googlenews_wsj

Mortgage Rates Set New Record Low

noreply@blogger.com (Network Capital) — Thu, 05 Jan 2012 16:29:00 +0000

Mortgage rates set a new record low hitting an average of 3.91% on a fixed 30-year loan, according to Freddie Mac. Rates on the shorter term 15-year fixed mortgage remained at the same record level as last week.
Rates on the benchmark 30-year mortgage have been at or below 4.00% for eight straight weeks, providing the lowest rates for home buying and refinancing in the history of the Freddie Mac survey. The move, however, by lenders to keep mortgage rates low hasn’t energized the home buying market as consumers worry about the economy and growing doubts linger over the stability of the U.S. housing market.
The fixed 15-year loan averaged 3.21% this week with 0.8 point in closing costs, matching last week. The 5-year Treasury indexed hybrid adjustable rate mortgage averaged 2.85% for the week, down a single basis point from a week ago.
“New construction of one family homes also showed a back to back monthly gain in November to the largest increase since June,” said Freddie Mac chief economist Frank Nothaft, which gave the stock market a single day boost on Wednesday.
However, the majority of gains in the new home builders’ survey was attributed to the growth of multiple family starts or apartment units, which have taken off since the foreclosure crisis has thrown more than 4-million homeowners out of their homes, and they need a place to live.
Refinancing mortgages were expected to see a major increase after the introduction of new guidelines eliminating loan to value limits on refinances through Freddie Mac and Fannie Mae for underwater homeowners. But the new program may lack the incentives homeowners see as worthwhile to refinance.
New guidelines allow homeowners who have obtained a mortgage through Freddie Mac or Fannie Mae to refinance at lower rates, but do not provide for any principal reductions. The program may either be taking longer to produce an increase in refinances or lacks the advantages homeowners need to refinance mortgages.

Published December 22, 2011

source: http://www.housingpredictor.com/2011/mortgage-rates-set-new-record-low.html

Freddie Mac: Record low mortgage rates haven't rescued housing

noreply@blogger.com (Network Capital) — Thu, 29 Dec 2011 23:33:00 +0000

Source: http://latimesblogs.latimes.com/money_co/2011/12/-e-scott-reckard-photo-culver-city-home-for-sale-november-2011-credit-genaro-molina-los-angeles-times.html

http://onlywire.com/r/64556773

Freddie Mac: Record low mortgage rates haven't rescued housing

noreply@blogger.com (Network Capital) — Thu, 29 Dec 2011 23:33:00 +0000

Freddie Mac: Record low mortgage rates haven't rescued housing

noreply@blogger.com (Network Capital) — Thu, 29 Dec 2011 23:12:00 +0000

Lenders were offering 30-year fixed-rate mortgages to solid borrowers at an average of 3.95% this week, according to Freddie Mac, the ninth consecutive week of rates at or below 4%.
That wrapped up a year of record lows for the survey, which dates back to 1971. In 1981 and 1982, the average 30-year mortgage carried an interest rate of more than 16%, and the typical rate was above 8% as recently as 2000, Freddie Mac said. This past year, the average was 4.45%.
Despite the record low rates, applications for mortgages to buy homes dropped as the year ended, even after seasonal adjustments, the latest Mortgage Bankers Assn. survey found. Even the demand for refinance mortgages, which accounted for more than 80% of all applications, fell slightly.
“Remarkably low rates are not enough," said Mortgage Bankers Assn. economist Michael Fratantoni, noting that many homeowners have difficulty refinancing because of "lack of equity in their properties, poor credit and a weak job market.”
With loans hard to get and demand for home loans waning, Morgan Stanley analysts titled their housing outlook for 2012 "The Year of the Landlord."
"While we had forecast lower prices [for 2011], we did hold out some hope that at the very least transactions would pick up slightly from 2010 levels," said the report from a team led by analyst Oliver Chang.
"However," the report said, "it proved to be too optimistic a prediction. Not only did total home sales fail to rise, but also mortgage applications for purchase continued to fall -- indicating that not only is tight mortgage credit limiting demand, but even the desire to buy a home continued to wane."
The recent bottom in rates stems from anxiety over the European debt crisis, which has increased demand for U.S. Treasury securities. That has depressed the yield on Treasuries, which act as a benchmark for mortgages.
This week's typical offering rate of 3.95% on the 30-year loan was up slightly from an all-time record low of 3.91% set a week earlier. The 15-year fixed loan, popular with refinancers, averaged 3.24%, up from 3.21%. Start rates on adjustable loans also were up very slightly from record lows, Freddie Mac said.
Borrowers would have paid about 0.75% of the loan amount upfront to obtain the fixed rates, Freddie Mac said. Its survey asks lenders across the nation what rates they are offering to borrowers with 20% down payments or home equity, good credit and income sufficient to repay the mortgages.

Source: http://latimesblogs.latimes.com/money_co/2011/12/-e-scott-reckard-photo-culver-city-home-for-sale-november-2011-credit-genaro-molina-los-angeles-times.html

Freddie Mac Blog - Low Rates for 2012!

noreply@blogger.com (Network Capital) — Thu, 29 Dec 2011 16:22:00 +0000

Peering into 2012

With the New Year fast approaching, ‘tis the season to assess the 2012 outlook for the macroeconomy and housing market. Here are five items from our crystal ball.

Economic growth will likely strengthen to about 2.5 percent in 2012.
U.S. economic growth appears to have accelerated in the waning months of 2011, with fourth-quarter growth expected to come in around 2.5 to 3.0 percent, annualized, by most forecasters. Evidence to support the pick-up was stronger retail sales, low inventory levels, and a 477,000 three-month gain in private non-farm payroll employment from August through November. Given the anemic 1.2 percent annualized growth over the first three quarters of the year, the final quarter could provide some needed momentum as we head into 2012.

Residential fixed investment, which has been lackluster over the past couple of years, will likely contribute modestly to 2012 growth. New construction, including additions and alterations to the existing housing stock, is the main component of residential investment, and there are signs it may (finally) be turning up, albeit gradually. Single-family housing starts will likely remain weak, but new multifamily starts have already gained and will help drive residential investment expenditures in the New Year.

The U.S. unemployment rate will decline but will likely remain above 8 percent.
The drop in the unemployment rate from 9.0 percent to 8.6 percent in November was welcome news, although roughly half the decline appears to have been discouraged workers who quit the labor force. Broader measures of labor underutilization, which include discouraged workers and part-timers who want full-time work, also moved lower in November but remain very high, at 15.6 percent. Over the 12 months ending in November, the unemployment rate dropped 1.2 percentage points--more of a drop than would have been inferred from payroll job gains that averaged only 130,000 per month.

Part of the reason that relatively modest payroll job gains have, nonetheless, pushed the unemployment rate lower has to do with sluggish labor force growth. Discouraged workers are one part of this equation, and they will likely come back into the labor market if economic growth strengthens and firms hire at a more brisk pace. This scenario means stronger job growth in 2012, which appears likely, though it may not put much of a dent in the nation's unemployment rate. The path over the year may have a couple of upticks in the reported unemployment rate before modest declines bring it lower in the latter half of next year, ending 2012 below November 2011's level but still stubbornly above 8.0 percent.

Mortgage rates will likely remain very low, at least through mid-2012.
Thirty-year fixed-rate conforming mortgages have hovered around 4.0 percent (or lower) during the fourth quarter to-date thanks in large part to the Federal Reserve's Maturity Extension Program and its stated intent to push and keep long-term rates low. The Program (a.k.a. "Operation Twist" by the popular press) is expected to last until mid-2012. This should keep fixed rates for 15- through 30-year product relatively low during the first half of the year, with rates edging up during the second half. Further, the Federal Reserve's August announcement that it was likely to maintain its current federal funds target through mid-2013 ensures that initial-period interest rates for one-year and various hybrid adjustable-rate mortgages (ARMs) will remain extraordinarily low throughout 2012.

Housing activity will be better in 2012, but not robust.
A full-fledged recovery in the housing sector will likely elude the U.S. in 2012, but new construction and home sales are expected to be greater than in 2011. The rental market appears to be leading the housing recovery, as rents have risen in most markets, vacancies are down, and property values for professionally managed complexes are up in most neighborhoods. Good rental market fundamentals and a dearth of new apartment completions should translate into more starts of rental buildings with five or more units, pushing total housing starts up slightly more than 10 percent in 2012. Single-family starts may inch higher too, but no significant bounce-back in single-family construction is likely in coming quarters.

A strong headwind holding back new home sales is the very affordable competition from existing homes. Low mortgage rates and existing house prices could lead to a bump-up in sales by 3 to 5 percent in 2012 over the 2011 level. While encouraging, sales volume is still low, given the strong current affordability of housing. And ample distressed sales and sluggish home-buying demand will continue to keep prices soft in many markets: We expect U.S. house-price indexes to move lower before bottoming out in 2012, with modest appreciation forestalled until 2013. Still, these national indexes mask the sizable variation in local house-price performance. Some markets have appreciated over the past year and are likely to gain further in 2012, while those markets with higher vacancy rates and relatively large distressed sales will continue to see downward price pressure over the next year.

Expect less single-family originations but more multifamily lending in 2012.
While single-family refinance volume is currently strong, many borrowers have already locked in relatively low rates or are constrained because of being underwater or having late payments, thus reducing refinance activity over time. Further, somewhat higher mortgage rates in the second half of 2012 (after the expiration of Operation Twist) will reduce financial incentives to refinance. Enhancements to the Home Affordable Refinance Program (HARP) are expected to add more than $100 billion to 2012 refinance originations, but overall refinance volume will likely be less than in 2011 – so much so that it will more than offset a small incremental amount of purchase-money lending, leaving overall single-family originations lower in 2012. Finally, the better fundamentals in the rental market and pent-up demand for refinance of multifamily loans should translate into higher lending volumes in that portion of the market, driven by both more refinance and more sales transactions.

Best wishes for a healthy 2012.

source: http://www.freddiemac.com/news/blog/frank_nothaft/20111219_peering_into_2012.html?intcmp=FM12049EPB

Will you be hit by the mortgage crackdown? Few will escape tough new rules on home loans

noreply@blogger.com (Network Capital) — Wed, 21 Dec 2011 19:42:00 +0000

By Lauren Thompson
Last updated at 10:26 AM on 21st December 2011

The City watchdog wants tough rules to stop excessive mortgage lending.
There are 17 million homeowners in Britain. Of these, eight million people own their homes outright, while nine million are still paying for it with a mortgage.
But the way mortgages are approved has changed hugely since the housing boom, which began in 2002 and ended with the collapse of Northern Rock in September 2007. Lauren Thompson explains how the changes will affect you.

Changes: The FSA has unveiled plans for new mortgage rules for banks and building societies

The mortgage boom
Before the banking crisis, homebuyers could buy a house with a small, or even no, deposit.
Those on lower incomes were allowed to borrow many times more than they earned, and banks regularly approved loans where homeowners had no idea how they would pay off their property.

Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-2076703/Will-hit-FSA-mortgage-crackdown.html#ixzz1hCSbL4Ez

Mortgage Rates Officially Hit All Time Lows (Again)

noreply@blogger.com (Network Capital) — Mon, 19 Dec 2011 18:24:00 +0000

by Matthew Graham

Mortgage Rates Officially Hit All Time Lows (Again)

Dec 14 2011, 3:59PM

Another strong Treasury auction, among other things, helped Mortgage Rates in lower again today. Although Best-Execution rates still haven't moved any lower (currently at all-time lows), the borrowing costs involved to obtain them are now at least as low as they were in late September, the last time we had 3.875% Best-Execution rates.
Even though the response to yesterday's 10yr Note Auction sent most longer term interest rates steadily lower (lower rates are less enticing for investors bidding at auction), today's 30yr bond auction was still much stronger than expected, both in terms of the amount of bids as well as the aggressively low yields offered by bidders. That helped the overall fixed-income rally and the Mortgage-Backed-Securities (MBS) that drive mortgage rates were able to get on that bandwagon, moving to their best levels since early October.
While it's abundantly true that mortgage rates are not based on US Treasuries, the Mortgage-Backed-Securities (MBS) that DO influence rates are similar to Treasuries and tend to trade in the same direction, even if it's by different amounts. We wrote about this extensively in a previous post: Why Aren't Mortgage Rates Getting Lower as Fast as Treasuries?
Today's BEST-EXECUTION Rates

30YR FIXED - 3.875%
FHA/VA -Back firmly to 3.75%
15 YEAR FIXED - 3.375%, Approaching 3.25%
5 YEAR ARMS - 2.625-3.25% depending on the lender

Lock/Float Considerations
Keep in mind that a huge factor in how low mortgage rates can go is the underlying Mortgage-Backed-Securities market. A vast majority of loan products offered by lenders end up as part of MBS pools. Even many of the loans that don't end up as MBS are originated at interest rates and guidelines that would allow them to be pooled into MBS "buckets" later in life.
Without MBS, rates wouldn't be as low as they are and funding for mortgage loans would not be as plentiful. The reasons for this are complicated and numerous, but the important concept to understand is that there has to be AN ACTIVE ENOUGH MARKET in a particular mortgage-backed-security in order for lenders to be able to offer rates at levels that coincide with that particular MBS. Think of these like "buckets."
For a long time, the 4.0 bucket was the lowest MBS coupon for Conventional 30yr Fixed mortgages. We spent a good deal of time writing about the gradual shift to 3.5 MBS, the next bucket down, over the past 5 months. The average interest rate of loans in the 3.5 bucket is around 4%, with a range from 3.75% to 4.25%.
If lenders are to offer rates below 3.75% that make any sort of sense (lower rates are already technically available, but the closing costs required to buy those rates usually doesn't make much sense from a "break-even" standpoint. In other words, "cost to buy rate down" > "sum of monthly savings over the period of time you plan to have the loan") it would mean that an entirely new bucket of MBS (3.0's) would have to gain enough of a market share for lenders to safely be able to offer such rates. This has never happened before, and although it COULD happen in the future, it's not happening now.
We feel that a pick up in the activity in 3.0 MBS would be the first sign of a potential shift lower in rates from current levels. Until then, 3.875% and 3.75% at best, are sort of the new "wall" in 30yr Fixed rates.

Source: http://www.mortgagenewsdaily.com/consumer_rates/239687.aspx

Why are rock-bottom mortgage rates so hard to get?

noreply@blogger.com (Network Capital) — Fri, 16 Dec 2011 18:42:00 +0000

The sign on a property for sale in Somerville, Massachusetts reads, ''Buy This Home I'll Buy Yours For Cash'' October 25, 2010.

Credit: Reuters/Brian Snyder

By John Wasik

Fri Dec 16, 2011 12:45pm EST

(Reuters) - With home mortgage rates still hovering around record lows - and they may fall further still - this should be the perfect time to lower your borrowing costs. Yet with tough standards and more people in a home-equity hole due to the housing slump, it's difficult to get the best rates. There are some ways to improve your odds and a revamped government program might help, but you'll have to jump through some hoops to sweeten your loan application.
Mortgage applications are surging, largely due to refinancings. Weekly applications climbed 4.1 percent through December 14, according to the Mortgage Bankers Association. The share of refinancing loans was the highest recorded rate this year.
Since there aren't too many home buyers around, some 80 percent of mortgage activity is refinancing, according to the Mortgage Banker Association. But up to half of those applying for refis may not qualify, according to LendingTree.com, an online lending exchange.
If you're looking for a loan and have a low credit score or are buying anything but a single-family home, the odds are you'll pay higher rates, not the phenomenally low average rate of 3.9 percent for a 30-year, fixed-rate mortgage as of December 15.
How do you get the best deal? Here are some guidelines based on what mortgage brokers are telling me.
- Understand How Loan Underwriting Works.
Since banks and brokers are likely to sell your mortgage to a government-sponsored enterprise like Fannie Mae or Freddie Mac, they have to abide by their tight standards. You need to ask about their "loan level price adjustments" and "adverse market delivery charges." These are surcharges, expressed in a higher loan rate, for a number of variables. Have less than 15% equity in your home? Then the lender must tack on 0.5 percentage points.
- Credit Scores Are Critical.
If your credit score is 740 or above, you shouldn't face any surcharges if everything else looks okay and your home equity is 40 percent or better. The lower you go on the FICO scale and home equity stake, the higher the rate. Have less than 20 percent equity with a FICO credit score of less than 620? The lender will add 3 percentage points. It's hard to find a lender who will give a loan if your credit score is this low.
- What Kind of Property Are You Buying?
Depending again on your equity stake, you can pay as much as 0.75 percentage points more for a condo, 1 point more for a multifamily unit. 0.5 point for a manufactured home and up to 3.75 points for an investment property.
- Are You Getting an Adjustable Loan or Cash-Out Refinance?
The surcharges range from 0.75 to 1 point. Fannie and Freddie are trying to play it safe in their standards and avoid another bubble.
None of these roadblocks should stop you from getting a loan, if you're pro-active. You can improve your credit record by pulling your credit report and see what you can do to improve your score and put more money down if you have it. You need to see if your credit record is correct. Do you have outstanding loans that have been paid off? Sometimes just fixing errors that would lower your score can help.
In terms of a good benchmark, Doug Lebda, CEO of LendingTree.com, says that a FICO score of 720 and above is a good place to start: "You can take steps to get it there."
What do you do if you're underwater on your loan and still want to refinance?
In the interim, Fannie and Freddie recently announced a HARP II program that will allow some underwater homeowners to refinance. But the loans must be owned by the agencies and underwritten before May, 2009. You also may not qualify unless you're current on your mortgage payments. While it's too soon to tell if this program is going to be effective, it's worth a look if you qualify.
"The vast majority of people who want to refinance and are turned down are because of lack of equity," said Dick Lepre of RPM Mortgage in San Francisco. "HARP 2.0 should help that."
None of these measures, though, will do much to heal the housing market. There are still far too many foreclosures coming on the market, which will depress prices for years.
Those facing default should either be able to rent to own or be allowed to write down mortgage principal in bankruptcy. Low mortgage rates mean nothing to those who can afford the payments on a home that keeps declining in value.
---
The author is a Reuters columnist. The opinions expressed are his own.

source: http://www.reuters.com/article/2011/12/16/us-usa-mortgage-lowrates-idUSTRE7BF1HH20111216

New HARP 2.0 Refinance Loan Program is Expected to Help Thousands of Underwater Homeowners in Atlanta

noreply@blogger.com (Network Capital) — Fri, 16 Dec 2011 18:25:00 +0000

HARP 2.0 Refinance Program

Obama Plan Set to Help Underwater Homeowners in Georgia

Unveiled just a few short weeks ago, President’s Obama’s revamped Home Affordable Refinance Program (HARP) is expected to help hundreds of thousands of homeowners nationwide take advantage of today’s low interest rates says Freddie Mac.
The original HARP refinance, started in April 2009, was semi-successful, but had it’s limitations and was needing a re-haul to continue to provide assistance and hopefully a spark to the Atlanta economy.
With a projected 300,000 homeowners in Metro Atlanta the news that HARP 2.0 would be lifting some of the loan to value and pricing restrictions came as welcome news to Georgia homeowners.
The goal behind the Obama refinance program is clear, allow Georgia homeowners to reduce their monthly mortgage rate. These savings will then be, hopefully, plowed back into the local economy which will add jobs and make a dent in the 10%+ Metro Atlanta unemployment rate.

Which Atlanta Homeowners Will Qualify for HARP 2.0?

The HARP Refinance is mainly targeted at rewarding homeowners who have been making their payments on time, but can’t qualify for a traditional refi due to their high loan to value, (the fact that they owe more than 125% of what their property may sell for).
Here are a few of the new HARP Program qualifying guidelines:

Mortgage Payment History – You must have been ON-TIME with your mortgage payments for the prior 6 months and have had no more than one 30 day late in the past 12 months.
Minimum Credit Score – Most lenders will require a 620 middle credit score to participate
Prior HARP Refinances – If you have used the HARP in the past you are not eligible to use it again
Mortgages with Lender Paid MI – Mortgages that have Lender Paid Mortgage Insurance (LPMI) are ineligible

There may be additional guidelines and individual mortgage lender overlays in place. Make sure you are using a qualified HARP 2.0 trained mortgage professional (LIKE US!) to ensure you benefit from the savings with a limited amount of headaches.

Short Sale, Refinance or Foreclosure?
Compared to all of the government refinance programs, HARP 2.0 has the potential to work the best at stopping the massive title wave of foreclosures and short sales that are flooding the (city) and (state) real estate markets.
There are many benefits to refinancing and shaving $300 – $1500 off of your monthly mortgage payment, provided you are committed to staying in your home for the next 15,20 or 30 years.
School Zones, family nearby, area, a home that you’ve invested in…. and the list goes on for reasons why a homeowner would choose to live in a house that is worth less than they owe on the mortgage.
However, if you are not strongly attached to your property, it may be a better idea to consider a short sale now in order to give your credit enough time to heal before property values go back up.

HARP 2.0 Demand Will Be Strong – Get in the Front of the Line

With the details of the program slowly rolling out and lenders still interpreting and revising guidelines, it will likely be MARCH 2012 before HARP 2.0 refinance applications will be accepted.
Savvy homeowners are not waiting for the official roll-out to get a jump on the savings though. So, how can you get a headstart?
If you are underwater on your mortgage, regardless of whether or not you think you qualify for any of the available options, give us a ring to schedule a strategy session as soon as possible so that we can sit down with you and really explore the best decision that meets your needs

source: http://mortgagedaily.tv/2011/12/07/new-harp-2-0-refinance-loan-atlanta/

Mortgage Rates Hit Record Lows

noreply@blogger.com (Network Capital) — Fri, 16 Dec 2011 17:53:00 +0000

It’s now more affordable than ever to take out a home loan. Freddie Mac reported Thursday that interest rates for fixed mortgages as well as the 5-year adjustable-rate mortgage are all at record lows.

According to the GSE’s nationwide market study, the 30-year fixed-rate mortgage averaged 3.94 percent (0.8 point) for the week ending December 15th, matching its all-time record low previously set on October 6, 2011.
The 30-year rate slipped 5 basis points from last week’s average of 3.99 percent. A year ago at this time, the 30-year rate was at 4.83 percent.
The 15-year fixed-rate mortgage came in a 3.21 percent (0.8 point) this week. That marks a new record low, besting the previous low of 3.26 percent recorded on October 6, 2011.
Last week Freddie’s survey put the 15-year rate at 3.27 percent. Turn back the clock 12 months, and the 15-year rate was averaging 4.17 percent.
The 5-year adjustable-rate mortgage (ARM) also set a new all-time record low this week at 2.86 percent (0.6 point), down from 2.93 percent last week and 3.77 percent a year

ago. Its previous low was set December 1, 2011 at 2.90 percent.
The 1-year ARM was the only loan product in Freddie’s survey to buck the downward trend this week, and it nudged only slightly higher.
Freddie pegged the average rate for a 1-year ARM at 2.81 percent (0.6 point), up from 2.80 percent last week. At this time last year, the 1-year ARM averaged 3.35 percent. Its all-time low in the GSEs survey also came on December 1, 2011, at 2.78 percent.
Commenting on Thursday’s report, Frank Nothaft, Freddie Mac’s chief economist, noted that rates came in at or near their historic lows amid a rough environment for housing.
“In its December 13th monetary policy announcement, the Federal Reserve reiterated the housing market remains depressed. Over the first nine months of 2012, households lost almost $400 billion in property values which contributed to a $1.4 trillion reduction in overall net worth,” Nothaft said.
He also pointed to recent data from the Mortgage Bankers Association, which showed that serious delinquency rates – 90 or more days delinquent plus foreclosures – increased slightly between June 30 and September 30 of the year, breaking a six-quarter consecutive decline, according to the Mortgage Bankers Association.”
Included in Freddie Mac’s report this week is a breakdown by region of the average mortgage rates for the various loan products covered in the GSE’s survey.
Rates are lowest in the West, which includes the states of California, Arizona, Nevada, Oregon, Washington, Utah, Idaho, Montana, Hawaii, Alaska, as well as the U.S. territory of Guam.
Freddie Mac’s survey results by region are available online.

Source: http://www.dsnews.com/articles/mortgage-rates-hit-record-lows-2011-12-15

Freddie Mac: 30-year mortgage rate ties record low

noreply@blogger.com (Network Capital) — Thu, 15 Dec 2011 21:05:00 +0000

The average interest rate on a 30-year fixed-rate mortgage dropped again this week to 3.94%, tying a record low set in October, according to housing finance giant Freddie Mac.
Freddie Mac's weekly survey pegged the rate for a 15-year fixed-rate mortgage at a record low of 3.21%. Loans fixed for five years before becoming adjustable also set a new record, with an average start rate of 2.86%
The survey, released each Thursday, asks lenders to report rates they are offering to well-qualified borrowers who pay about 0.75 of a percentage point in upfront lender fees and discount points. The rates are for loans of up to $417,000.
Freddie has conducted the survey of 30-year loans since 1971, 15-year loans since 1991, and five-year adjustable hybrids since 2005.
The record lows have touched off the latest surge in home refinancing. But while sales of homes increased slightly in California last month, scheduled foreclosure sales have risen sharply and the environment for housing remains rough overall, as Freddie Mac's chief economist, Frank Nothaft, pointed out in announcing the latest survey results.
"In its Dec. 13 monetary policy announcement, the Federal Reserve reiterated the housing market remains depressed," Nothaft wrote. "Over the first nine months of 2012, households lost almost $400 billion in property values, which contributed to a $1.4 trillion reduction in overall net worth.
"In addition, serious delinquency rates (90 or more days delinquent plus foreclosures) on mortgages increased slightly between June 30 and Sept. 30 of the year, breaking a six-quarter consecutive decline, according to the Mortgage Bankers Association.”
RELATED:
Scheduled foreclosure auctions soar in California
California small businesses can't get loans

California's home sales up 4% in November

-- E. Scott Reckard

Photo: Freddie Mac's headquarters in Virginia. Credit: Pablo Martinez Monsivais / Associated Press

Source: http://latimesblogs.latimes.com/money_co/2011/12/freddie-mac-30-year-mortgage-rate.html

Does Congress Want to Supersize the FHA?.

noreply@blogger.com (Network Capital) — Wed, 14 Dec 2011 17:30:00 +0000

By Nick Timiraos

: Click for full size

Two recent obscure but important moves could end up sending more business to the Federal Housing Administration at a time when that agency is straining to avoid insolvency.
The first was restoring higher mortgage caps last month. The other was the proposal last week by Democrats and Republicans to raise the fees that Fannie Mae and Freddie Mac charge lenders, which are passed on to borrowers in the form of higher rates, in order to pay for an extension of the payroll-tax cut. The provision would send those fees straight to the Treasury and explicitly forbids them being used to offset the cost of the firms’ $151 billion taxpayer tab.
How would that work? Both parties still have significant differences over how to pay for the tax-cut extension, but this provision appears to share strong bipartisan support. Lawmakers say that very modest increases in those fees could raise $38 billion to pay for the tax-cut extensions. There’s a catch: it would require Fannie and Freddie to remain in business for another 10 years for those savings to materialize.
What does that mean for Fannie and Freddie? Fannie and Freddie were taken over by the government three years ago through a legal process called conservatorship. They buy mortgages from lenders and bundle them into investments that are resold to investors, with promises that investors will be made whole if the mortgages default. To pay for defaults, Fannie and Freddie charge “guarantee” fees to lenders when they buy the loans.
Normally, they keep those fees. Under the current proposal, those fees would go to the Treasury and wouldn’t be allowed to cover the Treasury’s costs of keeping Fannie and Freddie afloat.
If this is just nitty-gritty federal accounting, why would anyone object to that? “It is exceedingly bad policy,” says Joshua Rosner, managing director at investment firm Graham Fisher & Co. “The approach makes it much more difficult to ever get [Fannie and Freddie] out of conservatorship…. It ultimately ties the government’s hands in reforming or unwinding” Fannie and Freddie.
If Congress, for example, decides that it wants to shut down the firms in five years, “the government would now have to find money” to pay for the other five years of revenue it had already spent, says Mr. Rosner.
But shouldn’t those loan-guarantee fees rise anyway? Probably. There’s widespread agreement in Washington that the fees must go up in order to make it more attractive for private sources of capital—those that don’t benefit from the ultralow borrowing costs afforded to government-backed companies—to become competitive.
Indeed, the bill’s supporters in Congress say that raising the guarantee fees is worthwhile because in addition to providing a revenue source for the tax cut extension, it also will encourage private capital to return to the mortgage market.
So why is the proposal drawing heat from the industry? Mortgage finance isn’t necessarily a field of dreams where if you build it, they will come. If you raise borrowing costs, private investors won’t automatically flock back to mortgage markets. Instead, a more likely outcome—at least for now—is that higher fees simply encourage more borrowers to take out loans backed by the Federal Housing Administration.
That view is shared by the head of the Mortgage Bankers Association, who headed the FHA for two years until April. “With no appetite for private investment in mortgages, this action will simply drive more business to FHA, at a time when everyone agrees that the FHA should be shrinking its market share, not increasing it,” says MBA Chief Executive David Stevens.
And don’t forget: Congress had the opportunity to let private capital return to mortgage markets in October after the maximum loan amounts for government-backed mortgages declined in hundreds of housing markets. The Senate voted to restore the higher loan limits last month, and the House agreed to a compromise that raised only the limits for—wait for it—the FHA.
Because the loan limit increase applied only to the FHA and not to Fannie and Freddie, Congress and the Obama administration for the first time ever have allowed the FHA to guarantee loans that are larger than Fannie and Freddie’s limits in around 100 counties. This sends even more business to the FHA.
So does Congress want to supersize the FHA? Probably not. But minor details that seem unimportant can have an impact, particularly in an arena as interconnected as housing finance.

source: http://blogs.wsj.com/developments/2011/12/13/does-congress-want-to-supersize-the-fha/

Housing Affordability At Record High; Does This Counter The Economic Stagnation Narrative?

noreply@blogger.com (Network Capital) — Wed, 14 Dec 2011 17:27:00 +0000

The chart above (click to enlarge) shows the National Association of Realtors' monthly housing affordability index back to January of 1981 (data here). The historical trend over the last 30 years is pretty striking for several reasons:

1. In the 1981-1982 period when the 30-year mortgage rate was peaking at record highs of 16-18%, the housing affordability index was about 65, meaning that the typical American family was only earning 65% of the income necessary to qualify for a 30-year mortgage to purchase a median-price home (with 20% down payment).

2. As interest rates fell through the 1980s, housing became more affordable and the index rose above 100 by the mid-1980s, and has remained above 100 since then.

3. From the early 1990s through about 2005, the affordability index was pretty stable in the 120-140 range, until the housing bubble came along and inflated home prices, which lowered the affordability index down to 101 by July 2006.

4. Over the last five years or so, the housing affordability index has nearly doubled to 197.8 in October of this year, reaching the highest level in the history of the index, and maybe the highest level ever. Amazingly, the typical American family in October had almost twice the amount of income necessary to purchase the median-priced home.

What, if any, are the implications of housing affordability being at the highest level in history? It's true that not everybody will benefit from this historic affordability, but many Americans will, especially first-time home buyers. Here are some thoughts:

1. We keep hearing about stagnating income, rapacious income inequality, the disappearance or difficulties of the struggling middle-class, and how younger generations today will be worse off economically than their parents, how a household today needs to have both parents working full-time to survive financially, etc.

2. For CPI calculations, the BLS weights shelter as about one-third of consumer expenditures (32%), which is the category with the highest weight, and much higher than food (15%), clothing (3.6%), transportation (17%), medical care (6.6%), recreation (6.3%), and education (6.4%), etc.

3. Given the facts that: a) housing/shelter is the greatest single expense for American households by far, and b) housing affordability is at an all-time historical high, doesn't that have to transfer into a huge increase in the standard of living for many Americans, especially younger, first-time, middle-class home buyers?

For example, doesn't the fact that the typical household now has almost twice the income necessary to qualify to buy a median-priced home contradict the common narrative that it takes two adults working full-time today to support a household, whereas in the past it only took one full-time earner? Making the two-earner case would have been much easier 30 years ago when housing affordability was below 100.

Further, when a household's main monthly expense is now the most affordable in history, doesn't that translate into a huge increase in household purchasing power, even if wages are stagnant? Of course, one could argue that current homeowners don't necessarily benefit from record-high affordability, but there are still millions of young Americans who have been benefiting and will continue to benefit if affordability remains high.

Bottom Line: Doesn't historically high housing affordability at least partially offset some of the narrative of stagnating income, the shrinking middle-class, and how younger generations today will be worse off economically than their parents, and how struggling household today needs to have both parents working full-time to survive financially, etc.?

There may not have been any generation in history that has faced such incredibly affordable home ownership, especially when a young couple is buying a first home to get started in life, invest in a home, and raise a family. At least in terms of housing affordability, young, middle-class Americans have never had it this good.

Update 1: One of the most popular forms of mortgage financing for homes are FHA loans that are still being offered with only 3-5% down payments. In markets like Las Vegas, FHA-financing represents 38.4% for all home purchase loans, so there does appear to be lots of financing available for first-time home buyers, with very low down payments, to take advantage of the record high affordability.

Update 2: The chart below is from ADS Analytics and provides an alternative measure of housing affordability - the median mortgage payment as a share of income - which is at the lowest level (most affordable) level in the history of this series. Therefore, the current median mortgage payment as a share of income, at about 14%, is less than half of the peaks close to 30% in 1988 and 2007, and maybe about 10% lower than what looks to be the historical average of about 24% (using an "eyeball" estimate). This measure of housing affordability seems to support my case above, which is that the increased affordability of housing (for at least some Americans, especially first-time home buyers) has offset some of the income stagnation over the last several decades, as the lower housing costs act like an increase in household income. Click to enlarge:

source: http://seekingalpha.com/article/313711-housing-affordability-at-record-high-does-this-counter-the-economic-stagnation-narrative

Fed Leaves Rates Steady as 'Significant Risks' Linger

noreply@blogger.com (Network Capital) — Wed, 14 Dec 2011 17:18:00 +0000

Tuesday, 13 Dec 2011 02:30 PM

By Forrest Jones

The Federal Reserve on Tuesday held its key benchmark lending target, the federal-funds rate, at 0.25 percent.

The Federal Reserve Open Market Committee said in a statement that while the economy may be growing, and while inflation remains stable, "significant downside risks" do remain.

"While indicators point to some improvement in overall labor market conditions, the unemployment rate remains elevated," the Fed said in a statement. "Household spending has continued to advance, but business fixed investment appears to be increasing less rapidly and the housing sector remains depressed. Inflation has moderated since earlier in the year, and longer-term inflation expectations have remained stable," the Fed said in the statement.
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Events outside of the United States continue to pose threats to price stability and unemployment rates.

"Strains in global financial markets continue to pose significant downside risks to the economic outlook," the statement said.

"The Committee also anticipates that inflation will settle, over coming quarters, at levels at or below those consistent with the Committee’s dual mandate. However, the Committee will continue to pay close attention to the evolution of inflation and inflation expectations."

While the U.S. economy improves, the European debt crisis and swings in commodity prices from global events such as rising demand or natural disasters have threatened the fragile recovery here.

The Fed added it was sticking with its views that interest rates will stay low through 2013 and that it would continue to take measures to extend the average maturity of its holdings to ensure long-term interest rates in the market follow suit.

The latter measure, often referred to as Operation Twist, sees the Fed selling its short-term Treasury holdings and buying longer-term Treasury instruments in the market in such a way to keep rates on loans such as mortgages low.

While the Fed did not mention rolling out further extraordinary monetary policy tools directly, language suggesting "strains" on global markets or inflation settling over coming quarters "at levels at or below those consistent" with the committee’s mandate to keep prices stable could mean markets should not rule out a third round of quantitative easing next year.

Under quantitative easing, the Federal Reserve buys assets from banks, such as mortgage-backed securities or Treasurys.

The idea is that such a move pumps liquidity into the financial system to steer the economy away from deflation, a crippling cycle of falling prices and shrinking economic output, and closer towards stock-market gains and eventually, hiring.

The Fed rolled a first round, known widely as QE1, which saw the central bank snap up $1.7 trillion in mortgage-backed securities from banks, while a second round, or QE2, saw the Fed buy $600 billion in Treasury bonds.

The Federal Reserve said Tuesday that Charles Evans, head of the Fed's Chicago branch, went against the committee because he opted for fresh easing now.

Charles Evans
(Fed Reserve file photo)

Quantitative easing draws praise from supporters, who say it keeps the economy from falling into deflation and pumps up stocks prices, while critics charge it threatens to push up inflation pressures, cheapens the dollar and arguably doesn't resuscitate the economy enough to offset the risks that come with it.

Prior to today's decision, many experts had already been expecting the Federal Open Market Committee to put off making the decision of whether or not to roll out QE3.

"Recent economic data takes away some of the urgency for the need to engage in a new round of quantitative easing,” Michael Feroli, a former Fed economist who is now chief U.S. economist at JPMorgan Chase & Co. in New York, told Bloomberg prior to the Fed's announcement.

The Federal Open Market Committee "can say, 'Let’s wait and see if this is going to build on itself.'"

Other have said they don't want to see it all, pointing out in the end, it just adds to the Fed's balance sheet, thus keeping the country mired in debt and constantly under threat of rising inflation rates.

On top of that, critics say, Federal Reserve officials tend to make such decisions based on the behavior of core inflations rates, which are stripped of the effect of volatile food and energy prices.

Officially, the consumer price index rose 3.5 percent on year in October, according to the Bureau of Labor Statistics, although inflation stripped of volatile food and energy prices came to an annualized increase of 2.1 percent.

Take that with a grain of salt, says noted commodities investor Jim Rogers.

"Anybody who buys, who goes shopping knows that prices are going up. Buy food, education, insurance, just about everything that we buy, prices are going higher and the government tells us there's no inflation," Rogers recently told Moneynews.

"Some independent measures say it's over 6 percent already ... it's going to go much higher because they keep printing money, and as long as they keep printing money, it's going to get worse. So prepare yourself for much higher inflation."

The U.S. economy grew by 2.0 percent in the third quarter of this year, and although that's well above recessionary thresholds, it's not exactly robust and not near enough bring unemployment levels down from their current rates of 8.6 percent to pre-recession levels of below 5 percent.

Furthermore, unemployment rates have been falling not due to any major surges in hiring but rather, due to a growing number of people quitting looking for work, thus taking themselves out of the labor pool and lower the percentage of those that can used to tally unemployment rates.

Economists have said they'll keep a close eye on Europe, as signs the crisis is spreading can hamper U.S. recovery.

"Our global growth baseline now includes a sharp slowdown in China, a recession in Europe and the risk of a mild downturn in the U.S. We forecast global growth of just 2.8 percent in 2012, moderating further to 2.7 percent in 2013," according to the research firm, headed by New York University economist Nouriel Roubini.

That puts the chance of a U.S. recession at 50-50, the firm said earlier on Monday.

Compared with the eurozone, "the U.S. looks more resilient (even the U.S. of 2008-09 would look more resilient…), but there are extensive downside risks to our baseline of 1.4-1.5 percent growth in 2012-13; thus we still see a 50 percent chance of an outright recession in the next year."
© Moneynews. All rights reserved.

Source: http://www.newsmax.com/StreetTalk/Federal-Reserve-Interest-Rate/2011/12/13/id/420855

Refinance Applications in U.S. Surge as Rates Drop in December

noreply@blogger.com (Network Capital) — Wed, 14 Dec 2011 16:46:00 +0000

Refinance Applications in U.S. Surge as Rates Drop in December

Posted by David Barley 12/14/11 8:10 AM EST
Author Bio | Archives
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According to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending December 9, mortgage applications increased 4.1 percent from one week earlier, driven by a surge in refinance applications.

The Market Composite Index, a measure of mortgage loan application volume, increased 4.1 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 4.2 percent compared with the previous week. The Refinance Index increased 9.3 percent from the previous week to its highest level since November 4, 2011. The seasonally adjusted Purchase Index decreased 8.2 percent from one week earlier. The unadjusted Purchase Index decreased 11.8 percent compared with the previous week and was 4.3 percent lower than the same week one year ago.

The four week moving average for the seasonally adjusted Market Index is up 0.65 percent. The four week moving average is up 1.55 percent for the seasonally adjusted Purchase Index, while this average is up 0.69 percent for the Refinance Index.

The refinance share of mortgage activity increased to 79.7 percent of total applications from 76.0 percent the previous week. This is the highest refinance share since this year. The adjustable-rate mortgage (ARM) share of activity decreased to 5.6 percent from 5.7 percent of total applications from the previous week.

For the month of November, purchase applications decreased in all loan categories except for loan amounts greater than $729,000 which saw a 1.9 percent increase in applications from last month. Loans that were $150,000 or less had 10.7 percent fewer applications over the month, while applications for loans between $150,000 and $300,000 decreased 8.9 percent, and applications for loans between $300,000 and $417,000 decreased 8.6 percent. Of the higher balance loans, the category for loans between $417,000 and $625,000 had a 6.0 percent decrease in applications and the number of applications for loans between $625,000 and $729,000 decreased 5.2 percent over the month.

However, compared to the same month last year, the largest decrease in applications was for the $625,000 and $729,000 loan category, which fell 20.2 percent. Applications for loans between $150,000 and $300,000 and those between $300,000 to $417,000 dropped by 1.2 percent and 9.8 percent, respectively. Gaining the most from last year were applications for loan amounts $150,000 or less, which rose 9.8 percent, while applications for loans greater than $729,000 increased by 5.1 percent. The $417,000 to $625,000 category grew 0.6 percent.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased to 4.12 percent, the lowest rate this year, from 4.18 percent, with points decreasing to 0.45 from 0.48 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500)decreased to 4.47 percent, the lowest rate this year, from 4.52 percent, with points decreasing to 0.45 from 0.47 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.94 percent, the lowest rate this year, from 3.98 percent, with points increasing to 0.68 from 0.52 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.44 percent, the lowest rate this year, from 3.53 percent, with points increasing to 0.52 from 0.45 (including the origination fee) for 80 percent LTV loans. The effective rate also decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 2.93 percent, the lowest rate this year, from 3.01 percent, with points decreasing to 0.53 from 0.54 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. The effective rate also decreased from last week.

Source: http://www.worldpropertychannel.com/north-america-residential-news/mortgage-bankers-association-weekly-mortgage-applications-survey-refinance-activity-lowest-mortgage-rates-market-composite-index-refi-index-5084.php