Home Mortgage Refinancing Unable to Control Rising Foreclosures

December 3rd, 2010

Despite the launch of various federal government-supported programs, like home mortgage refinancing efforts that are meant to prevent foreclosures, the number of foreclosed properties continues to rise in Montgomery County, Pennsylvania. According to local housing data, foreclosures have been increasing in the county for the past 10 years, with the recent economic recession becoming the strongest catalyst behind the crisis.

Housing market analysts are expecting around 2,600 foreclosures to be recorded in the county by the end of 2010. The projected number was based on latest housing figures which showed that as of September of this year, 1,893 properties have already fallen into foreclosure. As of the middle of November, the number has risen to 2,321.

Local housing data showed that about 10 foreclosures are being processed each day at the county. If the number continues to rise, the county is facing a record year in terms of foreclosures, although officials stated that this cannot be verified until early next year. They stated that there is still hope that troubled homeowners will be able to pay their delinquent loans or get home mortgage refinancing.

County officials have explained that before a foreclosed home can be sold at a Sheriff's sale, homeowners can explore other alternatives like paying part of the delayed loans, refinancing their loans or finding other ways to come up with the money necessary to cover past due payments. The rising number of delinquent homeowners is raising concerns that foreclosures will only get worse in the county before they get better.

Last year, a total of 2,498 foreclosures were recorded in the area. This is higher than the 2,079 posted in 2008 and higher still than the 1,660 recorded in 2007. Based on these figures, local officials stated that it is obvious that the numbers are following an upward trend and it seems that they will be even higher for this year.

Officials have stated that the rising number of foreclosures shows that options like home mortgage refinancing and other government-supported efforts are unable to stem the tide of foreclosure. They added that they expect foreclosures to continue to flood the area until the early part of next year.

Home Mortgage Loan Rates Rise, But Maintain Low Level

November 5th, 2010

Rates for 30-year fixed home mortgage loan rose during the week to 4.23% from 4.21% last week. Despite the increase, rates remain near the lowest level recorded in the U.S. since 1971. During the early part of October, rates recorded their lowest levels in almost four decades at 4.19%.

For 15-year fixed mortgages, the average rate is pegged at 3.66%. It also represents an increase from last week's 3.64% average. Base on mortgage industry data, loan rates have been declining steadily since April 2010. Analysts have explained that rates have remained low in October primarily because investors are buying up bonds from Treasury to prepare for the next move of the Federal Reserve.

According to analysts, investors are expecting the Fed to buy Treasury bonds in an effort to stimulate the U.S. economy. This expected action resulted in lower Treasury yields and in turn resulted in the rise of mortgage rates. Analysts further added that although lower home mortgage loan rates were unable to stimulate the housing industry, they did result in refinancing improvements.

Meanwhile, rates for adjustable five-year loans averaged 3.41%, representing a decline from the previous week's average of 3.45%. For adjustable one-year loans, rates remained the same for the second consecutive week at 3.3%. According to mortgage industry analysts, these rates are exclusive of points or add-on fees. They explained that one point has the equivalent of 1% of the total amount of mortgage loan.

A survey by Freddie Mac revealed that the loan fee average for 30-year mortgages is 0.8 per point. For 15-year and one-year loans, the average is 0.7 per point, while five-year loans have an average of 0.6 per point. To come up with the average loan rates, Freddie Mac gathers rates from banks and lenders all over the U.S. during the first three working days of each week. These rates though, can change significantly within a single day.

Home mortgage loan rates this week are still close to the lowest levels on record, but analysts declare that it is an increase just the same. However, they stated that the impact of the increase on the housing market will not be fully determined until the Federal Reserve has taken action.

Mortgage Interest Rates on the Rise Again

September 20th, 2010

After dipping to an almost three-decade low, mortgage interest rates are rising again, with rates for 30-year fixed mortgages pegged at 4.35% as of September 9. This represents the first weekly increase in rates since the middle of June. The figure is up from the previous week's average rate of 4.32%

Despite record declines in previous weeks, loan rates were not able to contribute much to the improvement of the country's housing market. And now that rates are climbing back up, most analysts have become even less confident of any significant recovery in the housing market. However, they stated that a rise in mortgage rates will also not cause a drastic crash in the property market.

Market analysts have stated that more than the rates of mortgages and bargain home financing, it will be the issue of unemployment that will decide whether the housing market will rebound or continue to sink. They explained that the residential property market is not being hurt by rates of mortgages, but by the lack of homebuyers and lack of confidence in the industry which are largely due to the high number of people who are unemployed and the continuous downturn in the national economy.

More than anything else, market observers believe that people's fear of losing their jobs is the greatest factor behind housing market performance. This is evident in the fact that even when mortgage interest rates are at their lowest, homebuyers and investors still stayed away from the market.

Rates have continuously declined since spring, mainly because investors are putting money into Treasury bonds, causing Treasury yields to decline and consequently leading to lower rates. Even during the period when the lowest rates were recorded, sales of homes were declining. The National Association of Realtors has reported that sales for July of previously occupied dwellings dipped by 27%, producing the worst month of performance for the category in 15 years.

Housing market analysts have stated that even if home prices continue to decline and mortgage interest rates return to record lows, the housing market will not be able to recover until buyers decide to pluck properties out of the market. And this will only happen if unemployment rates are cut into manageable levels.

Home Mortgage Giant Sought Less Financial Assistance

August 6th, 2010

Fannie Mae, one of the two government-sponsored home mortgage giants in the U.S., has reportedly cut down the amount of financial assistance it is asking from the government. Following this news, real estate market analysts declare that this could mean billions of dollars less from taxpayers' burdens.

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More Hurdles for Mortgage Brokers in Florida

July 10th, 2010

There are more hurdles for mortgage brokers in Florida to overcome when the state starts implementing the rules arising from the Secure and Fair Enforcement for Mortgage Licensing Act on October 1.

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Rates of Mortgage Loans Nearing Record Low

June 1st, 2010

Fluctuation in the stock market and the ongoing debt crisis in Europe have contributed to dragging the mortgage loans rates in the U.S. to an almost record low. For homeowners seeking refinancing, analysts are saying that now would be as good a time as any.

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Profits of Financial Companies Hit by Losses in Mortgage Loans

April 13th, 2010

Financial companies Bank of America, Wells Fargo and JPMorgan Chase are expected to record almost $30 billion of combined losses from home equity loans. The estimated loss amount is almost the same as the projected profits of the banks for 2010 as predicted by financial industry analysts.

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FHA and USDA Home Loans Have Changes You Need to Know

March 23rd, 2010

Government home loans are still relatively the most affordable loans in the country. There was even a time in the early months of the foreclosure meltdown that they were the only home loans being offered to borrowers by banks as these loans were guaranteed by the federal government.

Continue Reading: FHA and USDA Home Loans Have Changes You Need to Know

Financial Companies Choosing Foreclosures over Short Sales

February 12th, 2010

Financial companies are choosing foreclosures over short sales because of the difficulty and time in working out complex transactions in short sales, according to realtors and homebuyers.

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Upshot for Mortgage Company That Issues Defective Loans

December 16th, 2009

Any mortgage company found to have issued defective home loans is being forced by mortgage financiers Fannie Mae and Freddie Mac to repurchase the loans.

Continue Reading: Upshot for Mortgage Company That Issues Defective Loans