Mortgage Rates & Trends: Mortgage Blog

Current Mortgage Rates for Wednesday, February 8, 2012

Michael Kraus — Wed, 08 Feb 2012 18:05:01 +0000

I think we are all tired of talking about Greece, and hearing about Greece, but the news is that some sort of Greek debt deal is impending. Or maybe it’s not, nobody really seems to have a good handle on what is going on. The ECB now seems willing to work with Greece, but there are a lot of details yet to work out, and the Greeks need to do some serious budget cutting and probably adopt some particularly onerous austerity measures to come to a final agreement in order to secure more bailout money to avoid a disorderly default. Meanwhile, Greece is more or less in the midst of a depression, and youth unemployment is running close to 50%. I can’t imagine a lot of Greek politicians want to make this situation worse by imposing even more austerity measures.

In any case, the situation in Greece is very much in flux, and depending upon how this plays out, we may see similar issues crop up in Ireland, Portugal, Italy, and perhaps Spain, and if the contagion spreads to Spain, Greece will look minuscule in comparison.

There is a dearth of other news today, so I suspect that if the markets move at all, it will be because of the situation in Europe. I don’t expect that much will happen today, and my gut tells me that Greece is not close to any sort of significant deal. Even if a deal is reached, it will be a stopgap measure, which will limit how much mortgage rates could potentially rise. I think mortgage rates will continue to linger close to all time lows.

Some of Our Most Popular Rates and Products*:

Mortgage Product	Mortgage Rates	APR
30 Year Fixed Conventional Mortgage	3.625%	3.702%
20 Year Fixed Conventional Mortgage	3.625%	3.780%
15 Year Fixed Conventional Mortgage	3.125%	3.322%
30 Year Fixed FHA Mortgage	3.625%	4.975%
15 Year Fixed Conforming Jumbo	3.500%	3.670%
30 Year Fixed Conforming Jumbo	4.375%	4.474%
5/1 Adjustable Rate Mortgage	2.375%	2.437%
5/1 Adjustable Rate Conforming Jumbo Mortgage	2.750%	2.711%

***Mortgage rates change often. The above rates were quoted at 1:05 P.M., on February 8, 2012. Call 877-868-2503 for more details.***

Today’s News and Links:

Felix Salmon: The ECB starts getting helpful with Greece. I suspect this is too little, too late.

CNBC: Greeks burn German flags: do they have a point? Yeah, this is going swimmingly.

Bloomberg: Germany considers vote on Greek aid next week. And I’m sure they’ll be in a real giving mood, what with the whole flag burning thing.

Naked Capitalism: Mortgage settlement wrangling continues, banks balking at Schneiderman MERS suit. I hold out hope that this deal gets the kibosh.

Washington Post: Proposed settlement with banks over foreclosure practices dealt a setback. This is a family blog, so I can’t really use the language that would appropriately describe this deal. It is a BAD DEAL.

Credit Writedowns: The elephant in the room is Spain, not Italy. “Turning states like Spain into sundrenched economic wastelands within the Eurozone, and forcing the rest of the currency area into a debt-deflationary spiral, is a most efficient way of blowing up the whole system and possibly threatening the very existence of Spanish liberal democracy itself”.

Bloomberg: Bernanke says 8.3% unemployment understates weakness in the U.S. labor market. Long-term unemployment is still high, U-6 is still high, labor force participation rate is still low. Yes, there were 243k jobs created last month, but that glosses over some of the bad stuff.

Housing Wire: Refinancing activity surges 7.5% on low interest rates. I don’t know that the week-to-week fluctuations are that significant compared to the overall trend. Refinancing should spike soon given the impending HARP 2.0.

BBC: Syria: Homs under “heaviest” shelling yet. This is despicable.

ProPublica: Meet the obscure federal regulator who’s not helping homeowners. ProPublica had a gigantic swing and a miss on the story about Freddie’s inverse floaters last week, but generally speaking they do excellent work.

FT: Short sellers target social network stocks. Interesting. I’m not exactly sure if this is tech bubble 2.0, but it sure seems like some of these tech stocks are overvalued.

* All rates shown are for 30 day rate locks. Longer locks are available. The APR for conventional loan amounts is calculated using a loan amount of $417,000, 1 point, a $495 application fee, $400 appraisal fee, $799 underwriting fee and a $16 flood certification fee. The APR for jumbo loan amounts is calculated using a loan amount of $500,000, two points, a $495 application fee, $400 appraisal fee, $799 underwriting fee and a $16 flood certification fee. The APR for FHA loan amounts is calculated using a loan amount of $295,000, two points, a $495 application fee, $450 appraisal fee, $715 underwriting fee and a $16 flood certification fee. Some rates and fees may vary by state. All interest rates listed are for qualified applicants with 720 or higher FICO and 80 LTV and are subject to mortgage approval with full documentation of income. All rates are subject to change without notice. All rates shown are for 30 day rate locks with 1 point unless otherwise noted.

Total Mortgage consistently offers some of the lowest current mortgage rates, jumbo mortgage rates, and fha mortgage rates in the country.

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Mortgage Rates: Perhaps the Slowest Day Ever

David Coster — Wed, 08 Feb 2012 14:22:28 +0000

Financial markets in the US today have virtually nothing new to guide them…no economic data, no major breaking news, nothing. The lead article on CNBC’s website this morning– “What the New 401k Rules Mean for Your Savings.” I am sure that the article contains interesting and even important information relative to retirement planning, but for a media outlet that is predicated on covering the financial markets, that is a sure sign that things are slow. For mortgage rates today it means more of the same. Sitting just above all-time lows, I see no reason to expect a change today. Unless…Unless we finally see a deal among the three political parties in Greece to accept the bailout deal that has been offered.

With supposed deadlines being missed related to the Greek situation everyday there is no reason to expect that today will be the day a deal is finally agreed to or, dare we say, rejected. Representatives of Greece’s three primary political parties the conservative New Democracy, PASOK socialist and far-right LAOS are reviewing a 15 page summary of the proposed deal. Among the most difficult terms to accept are a roughly 20% further cut in the minimum wage and a 15% cut in supplemental pension benefits. As you might imagine, these reforms are very unpopular in Greece.

What we do know is that a week from today, February 15, 2012 is a hard deadline according to the Euro zone. They have stated that the deal must be approved by Greece, the ECB and the IMF by next Wednesday if the funding is to be put in place in time to avoid a default. A prominent Greek economist is calling for exactly that—a default by Greece as the best outcome for his nation. He has stated this week that the bailout is damaging the country and will not allow it to recover, while a default will enable Greece to unload a tremendous financial burden and be in a better position to care for its people.

If Greece decides to take the deal…mortgage rates may rise slightly as what is believed to be a risk to the global economy is removed. If Greece decides to default…mortgage rates may drop slightly as risks to the global economy may increase.

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Some Lenders Paying Borrowers Thousands to Short Sell Their Homes

Michael Kraus — Tue, 07 Feb 2012 19:39:49 +0000

According to a new article on Bloomberg by Prashant Gopal, banks have begun to incentivize troubled homeowners to short sell their homes by offering them sizeable checks:

“Banks, accelerating efforts to move troubled mortgages off their books, are offering as much as $35,000 or more in cash to delinquent homeowners to sell their properties for less than they owe.

Lenders have routinely delayed or blocked such transactions, known as short sales, in which they accept less from a buyer than the seller’s outstanding loan. Now banks have decided the deals are faster and less costly than foreclosures, which have slowed in response to regulatory probes of abusive practices. Banks are nudging potential sellers by pre-approving deals, streamlining the closing process, forgoing their right to pursue unpaid debt and in some case providing large cash incentives, said Bill Fricke, senior credit officer for Moody’s Investors Service in New York”.

A short sale is when a homeowner sells their house for less than they owe on the mortgage, and the lender forgives the outstanding balance on the loan. For instance, a homeowner may have a home that is worth 200,000 but has a 250,000 mortgage due to declining home values. The homeowner might be able to petition the bank to do a short sale, and sell the house for $200,000. The bank would then forgive the $50,000 remaining on the mortgage (although the homeowner may be liable for taxes on the forgiven debt). The reason a bank would approve a short sale is because it is a way to mitigate losses. Often a short sale costs a bank less than a foreclosure, according to the Bloomberg article, losses are 15 percent lower on short sales than on foreclosures.

One of the problems with short sales is that in the past, they have taken a very long time. Back in early 2011, it was discovered that 4 out of every 10 short sales in California under contract ended up falling through because it could often take several months for a lender to allow or deny a short sale request.

I think that speeding the short sale process is a smart move for banks, especially since the foreclosure process has been made much slower and much more difficult due to judicial and regulatory scrutiny. Part of me wonders if the banks are scared that they will be unable to prove that they actually own these mortgage due to MERS shenanigans. Frankly, it would not shock me. The same loss mitigation that short sales offer now was available three years ago. I am not sure what else has changed other than the huge amount of scrutiny on the foreclosure system. Perhaps banks are now willing to come to grips with the need to write off bad l0ans – but I doubt it. Maybe I’m being cynical, but the events of the past decade make me suspect there is an ulterior motive here.

Nevertheless, at the end of the day, there is $700-750 billion in negative equity in the housing market, and the faster we clear it, the quicker the housing market can recover. Not only is foreclosure an incredibly inefficient and destructive way to clear negative equity, but the banks already have far more REO property than they know what to do with. At the very least, short sales keep homes occupied and maintained, something that is often not the case with foreclosures. Short sales do not add to the already massive excess inventory of unsold homes, which is actively depressing home values.

Do you think this program is a good idea? Let me know in the comments section below.

Current Mortgage Rates for Tuesday, February 7, 2012

Michael Kraus — Tue, 07 Feb 2012 18:05:02 +0000

After a busy week of economic data, this week is extremely slow, with relatively few reports being published. As a result, moves in mortgage rates will likely be dictated by news and rumors out of Europe, trading momentum in the markets, and whatever else may crop up over the course of the week.

Greece has now missed several deadlines for getting a debt deal done, and they don’t appear to be any closer to coming to some sort of agreement. The Greeks are having difficulty reaching a debt deal with their investors, the IMF, the EU, and ECB. This is really not new at all, and a Greek default is more or less fait accompli, it is simply a matter of how messy the default ends up being. Greece is in the midst of a depression, and its politicians are not keen to impose austerity measures that will exacerbate the problem. The Germans, and some other European nations want to set the Greeks on a more sustainable course, but it could also be inferred that they are looking to punish the Greeks for their perceived profligate ways. I don’t envision a good outcome here.

There are further fears that other European nations will follow in Greece’s footsteps, which makes sense to me. If I’m Portugal, and I having a crushing debt load, why don’t I give my bondholders a 70%+ haircut just like Greece? I bet this route will also look very appealing to Ireland and Italy, and who knows which other European countries will feel similarly.

I think we will probably see mortgage rates more or less hold steady today. There’s not a lot of other economic news on the horizon today (or this week, for that matter), so Euro-zone rumors and whispers will most likely dominate the news this week, and mortgage rates will move accordingly.

Some of Our Most Popular Rates and Products*:

Mortgage Product	Mortgage Rates	APR
30 Year Fixed Conventional Mortgage	3.625%	3.657%
20 Year Fixed Conventional Mortgage	3.625%	3.780%
15 Year Fixed Conventional Mortgage	3.125%	3.322%
30 Year Fixed FHA Mortgage	3.625%	4.975%
15 Year Fixed Conforming Jumbo	3.500%	3.670%
30 Year Fixed Conforming Jumbo	4.375%	4.474%
5/1 Adjustable Rate Mortgage	2.375%	2.437%
5/1 Adjustable Rate Conforming Jumbo Mortgage	2.750%	2.711%

***Mortgage rates change often. The above rates were quoted at 1:05 P.M., on February 7, 2012. Call 877-868-2503 for more details.***

Today’s News and Links:

Calculated Risk: Existing home inventory declines 21% year-over-year in early February.

Naked Capitalism: Mirabile Dictu! Missouri Attorney General files criminal lawsuit on robosigning. 136 Count indictment for forgeries and false declarations.

Bloomberg: Banks pay homeowners to avoid foreclosures. Banks are incentivizing people to do short sales. This is a good idea, short sales are less costly than foreclosures for banks, better for neighbors, better for homeowners, better for everybody.

Naked Capitalism: Is the mortgage settlement deal starting to unravel? Let’s hope.

Bloomberg: California, N.Y. are among fewer than 10 mortgage deal holdouts. This deal stinks, but sadly, I think the holdouts will buckle at some point.

Dave Dayen: The failure to prosecute bank crimes creates a disease at the heart of our politics. Sure does, business as usual.

Washington Post: Foreclosure deal doesn’t go far enough, some groups say. No it is a slap on the wrist.

LA Times: California not among states that OK bank settlement.

Boston Globe: Massachusetts, California, and New York considering joining settlement with banks.

Felix Salmon: Greek talks descend into finger-pointing. This was bound to happen. The Greeks are in the midst of a depression, and their politicians do not want more austerity. The Germans appear to want to punish the Greeks. The EU/ECB/IMF cannot seem to broker a deal. March 20 approaches.

Housing Wire: Dataquick: New HARP 2.0 could help 6.7 million borrowers. We shall see. The previous track record for these programs is not good. I imagine this program will start to be rolled out in late February/Early March.

Total Mortgage consistently offers some of the lowest current mortgage rates, jumbo mortgage rates, and fha mortgage rates in the country.

Mortgage Rates: Holding Pattern Awaiting Greece

David Coster — Tue, 07 Feb 2012 15:05:41 +0000

Mortgage pricing this morning is in a holding pattern awaiting news from Greece on the fate of the bailout that will keep the nation from defaulting on its debts. With no other economic data in the US today or tomorrow, that holding pattern could last for a while.

Greece has seven conditions it must meet in order to receive the bailout funds it needs. Creditor nations, through the International Monetary Fund established a three-person review committee, known as “the troika” to establish conditions for Greece and to certify their adherence. The deadline for Greece to meet these seven conditions has already passed—it was yesterday. As of that point Greece had only met one of the seven conditions. Greek officials were coy when asked about not meeting the deadline, suggesting that they were unaware that a deadline existed.

Throughout this ordeal in Greece over the past year deadlines have come and gone, deals have been rumored only to never materialize and actual agreements have been largely ignored. So reports today suggesting: “The Greek government is working on the final document that will be discussed at the political leaders’ meeting later in the day”, from an unnamed government official, carry little weight with market traders. Still it has been enough so far today to keep mortgage-backed securities pricing down and the pressure on rates to move higher.

The trouble for Greece agreeing to this deal was explained by one analyst this way. “Imagine the US needed a loan to avoid default a couple of months before a Presidential election. Imagine further that the creditors were demanding that both the Democrats and the Republicans sign-off on a deal that is not supported by over 70% of their party’s voters prior to the creditors agreeing to lend the money. That is what Greece is facing now.”

In the US today there will be an auction of US Treasury debt at 1 PM. The only reason to keep an eye on the auction is that it is the first auction following the Fed’s statement regarding its intention to hold interest rates at current levels through “late 2014”, but it is also after the blowout Non-Farm Payrolls report. I expect a calm auction with no surprises.

I strongly advise consumers who want to refinance their existing mortgage or purchase a home to lock mortgage rates as quickly as possible before any other potential “good news” can push rates higher.

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Missouri AG Files Criminal Charges Over Alleged Mortgage/Foreclosure Fraud

Michael Kraus — Tue, 07 Feb 2012 15:05:04 +0000

This morning I learned that Chris Koster, the Missouri Attorney General, is pursuing criminal charges against DocX over alleged robo-signing. I learned of this action as a result of a post by Yves Smith on her blog NakedCapitalism, as well as a report by Gretchen Morgenson of the New York Times. In a press release, Missouri AG Chris Koster commented:

“Today’s indictment reflects our firm conviction that when you sign your name to a legal document, it matters. Mass-producing fraudulent signatures on millions of real estate documents across America constitutes forget. When you file those documents in our state, you are committing a crime under Missouri law”.

We’ve talked about robo-signing ad infinitum on this blog, but in the event you are totally unfamiliar with it, it is alleged that banks had employees sign hundreds or even thousands of affidavits without actually verifying the information therein or possibly even reading them. The paperwork was then used in the foreclosure process. 60 Minutes had a pretty good feature on robo-signing here.

This is, to my knowledge, only the second attorney general to pursue criminal charges over robo-signing. The first to do so was Nevada Attorney General Catherine Cortez Masto back in November. It is curious to me that more attorneys general have not filed criminal charges over what appears to be an open and shut case.

This could be interesting, we shall see where it goes.

Mortgage Rates to Maintain Lows as Greek Credit Crisis Continues

Staff — Mon, 06 Feb 2012 19:24:29 +0000

David Coster joins us for his view on the direction that mortgage rates may take in light of this week’s economic data as well as the ongoing European debt crisis.

FHA Mortgage Rates Approaching All-Time Lows

Staff — Mon, 06 Feb 2012 15:33:26 +0000

Last week Freddie Mac saw mortgage rates hit record lows, according to their Primary Mortgage Market Survey. Although rates bounced up a little toward the end of the week on positive employment data, rates are still near historic levels.

If you have been renting for a long time, now may be a great time to make the move to homeownership, locking in these historically low rates for years to come. If you would like to buy a house but lack a lot of money for a downpayment, you may want to think about getting an FHA loan.

Many people feel that homeownership is out of reach because they lack the 20% down payment that is often required by traditional lenders. The good news is that FHA-insured mortgages are available with down payments starting at 3.5% of the purchase price of the home. If you have a good credit history and a solid job, you might qualify for an FHA mortgage.

Right now we are offering qualified borrowers 30-year fixed rate FHA mortgages at a rate of 3.625% with an APR of 4.975%*. If you are interested in speaking with one of our fully licensed mortgage professionals, call us today at 877-868-2503.

If you have an FHA mortgage with an above market rate, we may be able to help you refinance. The FHA’s streamline refinancing program enables FHA borrowers to refinance quickly and easily, frequently without a new appraisal. Don’t pay too much for you FHA loan, we may be able to help you save hundreds of dollars per month on your home payments.

Don’t let the lack of a down payment stop you from becoming a homeowner. Call us now and see if we can help.

*All rates shown are for 30 day rate locks. Longer locks available. The APR for conventional loan amounts is calculated using a loan amount of $417,000, 1 points, a $495 application fee, $500 loan processing fee, $715 underwriting fee and a $16 flood certification fee. The APR for jumbo loan amounts is calculated using a loan amount of $500,000, one points, a $495 application fee, $500 loan processing fee, $715 underwriting fee and a $16 flood certification fee. The APR for FHA loan amounts is calculated using a loan amount of $295,000, two points, a $495 application fee, $500 loan processing fee, $715 underwriting fee and a $16 flood certification fee. Some rates and fees may vary by state. All interest rates listed are for qualified applicants and are subject to mortgage approval. All rates are subject to change without notice.

Mortgage Rates: Upward Pressure, But No Fuel

David Coster — Mon, 06 Feb 2012 14:25:07 +0000

This week is devoid of much in the way of fuel to keep the upward momentum going for mortgage rates. Last week appeared to be moving toward a new string of perpetually lower mortgage rates based on economic data that was good but not quite as good as expected. Then came the blowout results from Friday’s Non-Farm Payrolls report and mortgage rates reversed course. Now the pressure definitely seems to be on mortgage rates increasing from this point—but they have little impetus to get them started.

After one of the busiest weeks for US economic data last week, this week is one of the slowest of the year. Not until Thursday’s Weekly Jobless Claims report is there any new US data to impact the markets. On Friday, Trade Balance and Consumer Sentiment reports will be released. Of the three reports, the Weekly Jobless Claims is probably the most significant as it offers the potential of confirmation of the trends seen in the Non-Farm Payrolls report.

This week’s biggest market moving news will come from Europe. At this time on Monday morning, there is still no deal among the various political groups within Greece to accept additional reforms that will reduce costs for the government to a level that is acceptable to their European benefactors. Without those cost reductions, the Eurozone will not provide the bailout loans that Greece needs to avoid default. The original deadline for internal agreement in Greece—12 noon—has passed.

Mortgage rates are going to have a difficult time finding clear direction this week. For consumers needing a refinance loan or a purchase loan, this will afford another opportunity to get in on “near record” low rates. Should the US economy continue to show strength over the coming weeks, this opportunity will begin to wane.

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Current Mortgage Rates | Mortgage Rates | Friday, February 3, 2012

Michael Kraus — Fri, 03 Feb 2012 18:15:44 +0000

Yesterday Freddie Mac’s Primary Mortgage Market Survey saw hit new record lows, with the average rate on a 30 year fixed rate mortgage hitting 3.87%. Based on the events of this morning, I do not think we will see a new record next week.

Mortgage rates are rising on the basis of a relatively strong jobs report this morning. Unemployment dropped to 8.3% in January, and we added 243,000 jobs. Employment in November was adjusted upward from +100k to +157k, while December’s numbers were revised upward from +200k to +203k. While this looks good on its face, when you look a little deeper, there are some problems here. The labor force participation rate fell to 63.7, which is a 30 year low, and the number of people that dropped out of the labor force fell by 1.2 million, which is a record. So unemployment is falling, due at least in part to the fact that the number of unemployed people being counted is reduced.

Still, stocks are rallying early, while mortgage backed securities and treasury bonds are getting crushed. While rates will rise today, I expect that we will see them adjust back downward next week, as soon as people remember that Europe is a mess, and there still appears to be a ways to go before a Greek debt settlement is reached. Further, it seems likely that Portugal, and maybe other European nations with unmanageable debt loads will follow Greece’s example and ask their bondholders to take significant haircuts. I think the European situation will keep rates from really spiking in the near future.

Some of Our Most Popular Rates and Products*:

Mortgage Product	Mortgage Rates	APR
30 Year Fixed Conventional Mortgage	3.625%	3.657%
20 Year Fixed Conventional Mortgage	3.625%	3.780%
15 Year Fixed Conventional Mortgage	3.125%	3.322%
30 Year Fixed FHA Mortgage	3.625%	4.975%
15 Year Fixed Conforming Jumbo	3.500%	3.670%
30 Year Fixed Conforming Jumbo	4.375%	4.474%
5/1 Adjustable Rate Mortgage	2.375%	2.437%
5/1 Adjustable Rate Conforming Jumbo Mortgage	2.750%	2.711%

***Mortgage rates change often. The above rates were quoted at 1:15 P.M., on February 3, 2012. Call 877-868-2503 for more details.***

Today’s News and Links:

BLS: NFP jumped 243,000 in January, unemployment fell to 8.3 percent. November was adjusted from +100k to +157k, and December was revised upward from +200k to +203k. Positive report, right? But then check this out:

ZeroHedge: Record 1.2 million people fall out of labor force in one month, labor force participation rate tumbles to fresh 30 year low. Smells fishy.

Naked Capitalism: Investors (and others) realizing their ox is about to be gored in mortgage settlement. This settlement is a raw deal.

Dave Dayen: Enforcement process for foreclosure fraud settlement process outlined. “At least somebody should pause and look at this settlement and what is actually happening to absolve one of the biggest consumer frauds in US history”.

Housing Wire: Vegas default notices down substantially following tough lender law. NODs down 82% from December 2010-December 2011. When you make it a felony to foreclose on a property without proving you hold the mortgage, foreclosures plummet. What does this say about all the foreclosures that occurred before this law passed?

Bloomberg: Nationwide title clearing sued by Illinois over foreclosure documents.

RortyBomb: Dissecting Romney’s statement: what are problems the middle-class has that the poor don’t?

Washington Post: Obama administration to move forward with closing Fannie Mae, Freddie Mac. I’ll believe this when I see it.

NYT/Dealbook: Lax oversight blamed in demise of MF Global. You don’t say?

BBC: Treasure hunter claims $3bn WWII-era find off US coast.

Slate: Colbert v. the Court. Colbert takes on Citizens United.

Total Mortgage consistently offers some of the lowest current mortgage rates, jumbo mortgage rates, and fha mortgage rates in the country.

Mortgage Rates & Trends: Mortgage Blog

Current Mortgage Rates for Wednesday, February 8, 2012

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Mortgage Rates: Perhaps the Slowest Day Ever

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Some Lenders Paying Borrowers Thousands to Short Sell Their Homes

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Current Mortgage Rates for Tuesday, February 7, 2012

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Mortgage Rates: Holding Pattern Awaiting Greece

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Missouri AG Files Criminal Charges Over Alleged Mortgage/Foreclosure Fraud

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Mortgage Rates to Maintain Lows as Greek Credit Crisis Continues

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FHA Mortgage Rates Approaching All-Time Lows

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Mortgage Rates: Upward Pressure, But No Fuel

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Current Mortgage Rates | Mortgage Rates | Friday, February 3, 2012

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