The idea behind the new rules is to eliminate the sort of reckless lending that partly fueled the housing bubble – the type of lending that led some unscrupulous lenders to offer “no document” loans, where no proof of income or assets were required to obtain huge home mortgages. But well-intended rules often have unintended consequences.

“This requirement has caused many home loan delays recently as Fannie Mae and Freddie Mac are cracking down on every aspect of the loan documentation in order to reduce loan defaults,” our CEO, Kevin C. Miller, said on the TexasLending.com Mortgage Hour radio show (airing Saturdays on AM 570 KLIF from 1:00 p.m. to 2:00 p.m.).

For example, The Mortgage Bankers Association is forecasting a 32 percent drop this year in the number of refinances, despite the fact that home interest rates are historically low.

Bloomberg gives a helpful anecdote demonstrating how this affects everyday people:

Anthony Andrade was forced to rent the San Antonio, Texas home he planned to buy after Bank of America Corp. approved a mortgage and then scuttled three closings over two months with last-minute document requests.

“It was crazy,” said the 54-year-old Army veteran whose travails ended Jan. 10 after he switched to a local mortgage broker who got the loan backed by the Department of Veterans Affairs approved. “My wife was in tears because I had to sign the same things over and over. If we were superstitious people, we would have thought this house was not meant to be ours.”

“It suppresses a recovery,” said Anthony B. Sanders, a professor of real-estate finance at George Mason University in Fairfax, Virginia and former head of mortgage bond research at Deutsche Bank AG. “The pendulum has swung from one direction to another. We’ve gone to outrageous red tape.

For his part, Obama acknowledged the problem, and said earlier this month that he will ask Congress to pass legislation clearing out some of the red tape and help homeowners who have limited documentation refinance (and potentially lower annual home loan payments by $3,000).

Regardless, it’s frustration for folks in need of home purchase loans and home refinance loans in Austin, Dallas and Houston. Here at TexasLending.com, we’re committed to make the home loan process as simple and affordable as possible. So if you’re considering either buying a new home or refinancing your existing mortgage, it’s a good idea to allow extra time to deal with these sorts of snags. Give us a call soon to get the process started.

According to CNN Money:

“A new special task force to investigate and prosecute those responsible for bad mortgages during the housing boom will be part of President Obama’s 2012 agenda.

Obama announced Tuesday that he’s asked the Justice Department to create a special unit of prosecutors and state attorneys general to investigate abusive lending and packaging of risky mortgages that led to the housing crisis. And he’s tapped an avowed Wall Street enemy, New York Attorney General Eric Schneiderman, to help run the crime unit, according to a White House official.

“This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans,” Obama said in his State of the Union speech.

The new unit’s goal will be to investigate banks, financial firms and mortgage originators that broke the law, and to compensate victims and provide relief for homeowners, the White House official said.”

Here’s the “recklessness” that the task force will be designed to address:

Home loans are the key ingredients for those notorious mortgage-backed securities and collateralized debt obligations (CDOs) that helped sink the economy in 2008. Prior to the bubble burst, as profitability soared for those holding these financial tools (and, eventually, credit default swaps), more and more mortgages were needed to keep the bubble inflating. To meet this demand, loan standards plummeted among some unscrupulous lenders. It simply quit mattering whether or not people could actually afford some of the loans that were being doled out — all that mattered (for everyone besides the homeowner) was that homes got built and loans got made. This is how ridiculously irresponsible mortgages such as the “NINA” (no income, no assets) loans came to be.

But the government deserves a big share of the blame as well.

We’ve talked a little bit recently about the central role Freddie Mac seems to play every time there’s trouble. During the bubble, Fannie and Freddie were playing the same securitization game as the banks, but they were backed by the government, which gave them a sort of toxic impunity that fueled its reckless lending. The companies were also bound by federal initiatives mandating that a specific number of home loans must be given to low-income buyers each year — further increasing the flow of mortgages to folks who were unable to pay them.

Recently, our CEO Kevin Miller discussed the task force as a guest on Credit Talk Live USA — a radio show broadcast across the world from Russia to Indonesia to Africa (listen to the whole thing here):

“I don’t know how they are going to arrest themselves. The federal government created Fannie Mae and Freddie Mac and were in charge of regulating it,” he said. “When they were told that the company was in trouble, Congress — the people overseeing it — looked the other way and said ‘don’t touch it.’”

In other words, the people who were supposed to be looking out for you were in on the same game. So what do you do?

Here at Texas Lending, you can expect honesty, integrity, and transparency. We’re fighting to do our part to get the U.S. housing market — and by extension, the broader economy — back on track and restore in homeowners around Dallas, Austin, Houston and beyond confidence in the American dream. You can expect a higher standard when it comes to, for example, our Dallas home purchase loans, Austin home refinance loans, and Houston home equity loans.

Buying a home is simply an amazing experience for families — and one that should be protected by both lenders and the government. You can expect a reliable, trustworthy partnership from TexasLending.com.

Non-profit investigative journalism outfit ProPublica teamed up with NPR to blow the lid off of what might be the latest scandal the exasperating folks at Freddie Mac — one that might be making such cheap home refinance loans more difficult to get.

According to the report:

Freddie Mac, the taxpayer-owned mortgage giant, has placed multibillion-dollar bets that pay off if homeowners stay trapped in expensive mortgages with interest rates well above current rates.

Freddie began increasing these bets dramatically in late 2010, the same time that the company was making it harder for homeowners to get out of such high-interest mortgages.

[...] But the trades, uncovered for the first time in an investigation by ProPublica and NPR, give Freddie a powerful incentive to do the opposite, highlighting a conflict of interest at the heart of the company. In addition to being an instrument of government policy dedicated to making home loans more accessible, Freddie also has giant investment portfolios and could lose substantial amounts of money if too many borrowers refinance.

“We were actually shocked they did this,” says Scott Simon, who as the head of the giant bond fund PIMCO’s mortgage-backed securities team is one of the world’s biggest mortgage bond traders. “It seemed so out of line with their mission.” The trades “put them squarely against the homeowner,” he says.

In other words, Freddie Mac is supposed to be helping homeowners refinance their mortgages to take advantage of today’s rock-bottom interest rates like a government agency. But they’re also supposed to make money like a company, and we’ve essentially placed bets against those homeowners ever paying off their loans (similar to millions of “bets” placed by Wall St. on subprime mortgage securities). This meant that helping homeowners refinance would run directly counter to their own financial interests.

To understand this, it’s important to understand how Fannie and Freddie work.

As we described last week, the federal government has been using Fannie and Freddie to make it vastly easier for Americans to get home loans. The reason is pretty straightforward:

Consider a standard 30-year fixed-rate loan. If a bank or lender had to wait three decades to recoup the entire loan amount, it would be difficult to have more than a handful of outstanding loans at any one time. Interest rates would need to be much, much higher if the lenders wanted to be profitable at all. To address this problem and make the American dream possible for more Americans, the government has basically began the vast majority of all outstanding loans from lenders and banks through Fannie and Freddie, which allows lenders to keep lending.

But Fannie and Freddie are also designed as corporations that, like all companies, need to be profitable. So their dual missions often clash.

As government-backed companies, Fannie and Freddie make up an unusual private/public mix — and in many ways, they embody some of the worst characteristics of both private industry and government agencies. The companies combine private industry’s drive for profits and willingness to take risks with government impunity, inefficiency, and vulnerability to political decision-making. (Check out the excellent podcast Planet Money did explaining how Fannie and Freddie get bipartisan protection in congress).

So in this case, Fannie and Freddie have both loan officers who are tasked with helping Americans refinance and traders tasked with making the company profitable. The company claims that traders and loan officers are “walled off” from each other, but it seems implausible that the company’s financial needs wouldn’t hold significant sway on other parts of the company — especially since the bets made by traders coincided with new rules that made refinancing more difficult.

Defenders of Freddie suggest that the agency says the criticisms don’t add up and Freddie might have just been absorbing refinancing risk (read more about them here). It’s plausible. But we don’t know at this point. Regardless, it’s made it difficult for homeowners to refinance their homes and use that cash somewhere else.

Here at TexasLending.com, we’re proud to make Dallas home refinances, Austin home refinances, and Houston home refinances accessible and affordable. Our mission is you and you alone. No tricks. No politics.

As we’ve discussed recently, the two-month payroll extension passed late last year included a new fee that lenders must pay to the government each time Fannie Mae or Freddie Mac buy a loan from them. Already, we’re seeing interest rates increase anywhere from .125 percent to .25 percent on home purchase loans and home refinance loans that are eventually sold to Fannie Mae or Freddie Mac.

How, you might ask, are interest rates and mortgage costs related? It’s actually pretty simple: Fannie and Freddie buy the bulk of home mortgages sold in America. They do this in order to allow lenders to dole out a far higher number of loans than they would if their books were weighed down with a bunch of 30-year-long loans. If a home lender had to wait 15 or 30 years to recoup the money lent out on each loan, they wouldn’t have the capital resources necessary to keep more than a handful of loans open at any one time. By using Fannie and Freddie to buy outstanding loans from lenders and relieving that decades-long burden from their books, the federal government supplies the capital needed to keep home loans available and affordable.

For the most part, this is good for the Texas housing market. But there can be lots of complications, such as this new fee. For the most part, lenders are simply passing the bulk of new cost on to consumers through higher interest rates.

On his weekly radio show, The TexasLending.com Mortgage Hour, (Saturdays on AM 570 KLIF from 1:00 p.m. to 2:00 p.m. across Dallas-Ft. Worth), our CEO Kevin C. Miller put it this way:

“The impact of the Obama Mortgage Tax has been large for those who thought they would get the lowest home loan rates on record only to be surprised by the increase in rates.”

Here at Texas Lending, we’re proud to offer the lowest home interest rates in Texas and just about anywhere, but these increases will still hurt potential home-buyers everywhere.

However, there is a bit of good news on the interest rate front: Fed Chairman Ben Bernanke said in an interview this week that his agency will keep federal interest rates at about the same historic low we’ve seen over the past couple years.

According to Bloomberg:

“Policy makers are “prepared to provide further monetary accommodation if employment is not making sufficient progress towards our assessment of its maximum level, or if inflation shows signs of moving further below its mandate-consistent rate,” Bernanke said at a news conference today after a Federal Open Market Committee meeting in Washington. Bond buying is “an option that’s certainly on the table.”

Stocks and Treasuries rose after the Fed extended its previous pledge to keep borrowing costs low at least until the middle of 2013. Fed officials lowered their forecasts for economic growth and price increases this year and in 2013 and set a long-term goal of 2 percent inflation.

We hope to convey to the market the extent to which there is support on the committee for maintaining rates at a low level for a significant time,” he said.”

Home interest rates in the 4 percent range still qualify the current housing market as a solid buyer’s market when you consider all the other factors such as home prices and unsold inventories. In other words, this is an excellent time for a home interest loan, a home refinance loan, or a home equity loan. But when the massive glut of unsold homes begins to finally sell off and when unemployment drops, this historic buying window of opportunity might just close.

If 2012 is the year for your family to buy a home, apply for a home loan online now to get the process started. The tax cut-related interest rate jump shows just how unpredictable housing can be.

Existing Home Sales

For example, according to the National Association of Realtors, sales of existing homes across America rose approximately 1.7 percent in 2011, from 4.19 million to 4.26 million.  This stat is extra positive considering the fact that existing home sales in 2010 actually fell 3.5 percent from the year before, showing that we avoided another prolonged slide.

It’s also good news because sales of existing homes are needed perhaps as much as anything else in order to see a sustained housing recovery.  While sales of newly constructed homes are important (home-building adds much-needed construction jobs and other ancillary benefits), there’s still a massive glut of unsold houses available on the market. This “shadow inventory” needs to be sold off before we can get back to normal.

Still, as the statistics note, we’re a long, long way from normal. The year before the housing bubble popped, 5.04 million homes sold — approximately 15.5 percent more than last year.

New Home Construction

On the flip side, according to the Commerce Department, 2011 was the worst year for new home construction since the economy crashed. Construction began on just 428,600 single-family homes in 2011, just half of what’s standard in a normal U.S. economy

On the bright side, even housing starts ended the otherwise dismal year on a positive note: housing starts increased for the third consecutive month in December. So maybe 2012 will show more signs of a recovery across the board.

The Takeaway

All these stats show two things: 1. Better times are likely ahead (so long as, you know, Europe’s problems don’t spread, or China doesn’t crash, or our debt problems finally catch up to us, or Wall St. flips out again). 2. We’re not there yet.

So it’s still a historic buyer-friendly housing market  in Texas. And here at TexasLending.com, we’re proud to offer a full range of affordable Texas home loans if these stats tell you it’s time to buy.

But there are a few positive indicators out there that show some promise for 2012 — especially if you’re a potential home-buyer here in Texas. Here are the two biggest areas to watch as the new year unfolds:

1. (Slowly) Recovering Home Prices

When you can’t sell your home, you can’t move to a more affordable home, nor can you move to a better job. You could sell the home for a loss, but you’d end up carrying a hefty chunk of debt with you into the next home and basically be paying for part of a home in which you don’t even live.

Housing is central to our struggling economy. So here’s a bit of good housing news in Texas. According to Texas A&M’s Texas Real Estate Center:

Sales of existing single-family Texas homes in November were up 9 percent from a year ago, according to the most recent Multiple Listing Services (MLS) data compiled by the Real Estate Center at Texas A&M University.

More than 15,000 homes were sold, data showed. The median home price was $147,600, up 1 percent from a year ago, and the state’s overall inventory was at 6.6 months.

For families who’ve been stuck underwater on a home they can’t sell for anything near the price they need to, better times might just be ahead.

2. Low Interest Rates

Week after week, we continue to marvel at how extraordinarily low Texas home interest rates remain. Combine this with still-affordable home prices and slowly recovering unemployment (at least here in the Lone Star State), and we’re still in thick of a historic buyer’s market.

The implications of  for the broader economy are, like most things, mixed at best. Eventually, the Fed will start letting interest rates rise again. But in an election year, with unemployment still relatively high, this seems pretty unlikely.  2012 will be a great year to buy.

At TexasLending.com, we’ve got a full slate of Texas home loans available at rock-bottom rates. These rates are ideal for an Austin home refinance loan, Dallas home refinance loan, or Houston home refinance loan as well.

The combination of high unemployment, huge federal deficits, a still-messy housing market and an uncertain regulatory environment in Washington forecasts a pretty unstable few years ahead for the housing market. In other words, expect unexpected costs, confusing rules, and frustrating delays.

Here at TexasLending.com, we’ll do everything we can to keep the home loan experience simple and affordable. Here’s how:

We Keep Rates Low

Even if taxes increase, 2012 will still be a historic year to buy a home. Simply put, home interest rates are unbelievably low, and we’re not afraid to brag about the fact that we’ve got the lowest Dallas home interest rates, Austin home interest rates, and Houston home interest rates you’ll find.

We Keep Customers Informed

Knowledge is power, and we’re determined to help make our customers the most well-informed group of homeowners anywhere. So check back here at Texas Lending Today each week to learn what’s new in Texas cities local housing markets, how what’s happening in Washington effects homeowners in the Lone Star State, and how the Texas mortgages services provided here at TexasLending.com can help. Or tune in each Saturday to our CEO’s radio show on 570 KLIF — The TexasLending.com Mortage Hour With Kevin Miller — to hear more.

Similarly, to learn more about our Texas home loans services such as, say, home refinance loans in Dallas, Houston home equity loans, or Austin home purchase loans, take a look at our website. In our mortgage resources section, you can use such nifty tools as our mortgage calculators, peruse the mortgage glossary, and learn more about our loan process.

We Keep Communication Lines Open

Contact us — our unparalleled team of Texas home loan specialists would love to answer any questions, listen to any frustrations, and ease any concerns we can. Or apply online to get the process started today.

This surge in spending is promising news for the economy. Shops, restaurants and other businesses of all shapes and sizes need customers to spend just a bit more. But, of course, for families still struggling from unemployment or high credit card debt, the holidays can make for a tight squeeze come January.

We can help homeowners in two ways. As we mentioned last week, interest rates are currently holding at an unprecedented sustained low, which means that homeowners can get much-needed access to cash in a financially sound way. And here at TexasLending.com, we’re always proud to offer among the lowest home interest rates anywhere in the Lone Star State and beyond (currently as low as 3.75 percent).

Texas Home Equity Loans

Make your most valuable asset — your home — work for you. Our Austin home equity loans, Houston home equity loans and Dallas home equity loans can give you much-needed flexibility in terms of how you manage your finances. For every $10,000 of credit card debt you’re currently carrying, a home equity loan can help you reduce interest payments by as much as $400 per month. What could you do with that cash?

Texas Home Refinance Loans

If you originally took out your home loan at a time when home interest rates were much, much higher, it’s probably a good idea to consider one of our Austin home refinance loans, Dallas home refinance loans, or Houston home refinance loans. For example, refinancing a $120,000 loan could save you $100 per month and more than $3,000 over three years. Larger loans will give you even higher savings. Again — what could you do with that extra bit of freed up cash?

For the two additional months of payroll tax break they threw in this long term bomb to the housing market.

1. The administration will impose a tax on all new loans for the next 10 YEARS that are bought by Fannie Mae and Freddie Mac. This increase in fees will increase will be passed on to those refinancing and buying homes with the cost to homeowners of about $180 per year for a $200,000 home. This equates to over $1,500 in interest charges over the next 10 years to get a $180 break over the next two months. It will increase the interest rate on mortgages by about 0.1% which will kill some refinances and lower home values by making them less affordable. Making this kind of deal with the government is like selling your soul for a lollipop.

Since the government doesn’t like you to do the math I will do it for you. It will cost over 700% more out of pocket to the homeowner over 10 years than they will get in a 2 month payroll tax cut. And you thought it was the banks who were screwing the consumer. This is what I call predatory tax breaks and predatory government.

The government will come back in January to then extend the tax break for the rest of the year. This additional extension will undoubtedly throw more tax burdens on the middle class and working man and further subdue the economy.

Hopefully if it will be a further drag on the economy this will lead to lower mortgage rates. So in that case, I take it all back.

No hyperbole. This year truly was a record one for Dallas home interest rates, Houston home interest rates, and Austin home interest rates.

According to The Dallas Morning News:

Mortgage rates remain near decades-low levels, and even the most pessimistic forecasts don’t foretell a big run-up in rates. That’s good news, because there are enough obstacles these days to buying a house — from tougher mortgage qualification standards to home appraisals that miss the mark.

The average long-term, fixed-rate mortgage is still going for less than 4.5 percent. Not too long ago, anything under 7 percent was considered a steal.

Current mortgage rates are so low that some housing economists worry that recent homebuyers or refinancers will be reluctant to move a few years from now because they won’t want to give up their absurdly cheap interest rates.

Home interest rates like these make life easy for both potential home-buyers and current homeowners in a couple of ways:

First, they make housing more affordable, which makes it both easier to buy a home and, therefore, easier to sell as well. In a sluggish market like the one we’ve been stuck in for the past few years, this is excellent news. And here at Texas Lending, we’re proud to continually offer just about the lowest rates you’ll find anywhere in the Lone Star State on Austin home loans, Dallas home loans and Houston home loans.

Similarly, low interest rates also lower the cost of refinancing your home. As we’ve mentioned in the past, refinancing can give homeowners an enormous amount of much-needed flexibility during an economically uncertain time. And again, you won’t find more affordable Austin refinance rates, Dallas refinance rates or Houston refinance rates than you will at Texas Lending.

Rates will continue to stay low well into 2012, but this historic buyer’s window can’t last much longer. Contact us if the time is right for you to buy or refinance before rates begin to rise.