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Consumers Are Back to Paying Mortgages Ahead of Credit Cards

5/27/2014

Americans are putting their mortgages ahead of their credit cards when they pay the bills, reversing an unusual pattern that had developed after the housing bust.

As home values plunged during the downturn, consumers began to default on their mortgages while continuing to make credit card payments, according to research from TransUnion, reversing a long-standing hierarchy in which lenders expected mortgages to be paid first.

New data from the credit-reporting firm reveal that the normal payment hierarchy returned at the end of last year, following around two years of rising home values. “People are paying their mortgages again ahead of their bank card,” said Steven Chaouki, a financial-services executive at TransUnion, though the payment relationship hasn’t returned entirely to pre-crisis levels.

The data also show that before, during and after the crisis, Americans are most likely to make their car payments first.

read more: http://blogs.wsj.com/economics/2014/05/27/consumers-are-back-to-paying-mortgages-ahead-of-credit-cards/

Home loans hit 14-year low as rates rise

4/25/2014

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How Canada is not like the United States: Home mortgage edition

1/20/2014

New mortgage rules shouldn’t affect most seeking a home loan in 2014

1/17/2014

Kurgan-Bergen Realtors in Rutherford provides the following information.

You may have heard about recent changes to mortgage lending rules that could make obtaining financing more difficult. Well, breathe easier potential homeowners, because these changes really shouldn't affect you much.

The new rules aren't really new. Lenders have known of and prepared for them for some time now. Most have already adjusted their policies accordingly so that you won't see much change at all going into the new year. In fact, Richard Cordray, the director of the Consumer Financial Protection Bureau who is making the rule changes, said approximately 95 percent of the loans currently being made would fit the new criteria.

The change that would have had the most direct impact on a borrowers ability to qualify is the imposition of a maximum 43 percent "debt to income" ratio.

This limits the percentage of a borrowers monthly gross income that can be used towards the payment of mortgage principal and interest, real estate taxes, homeowners insurance, mortgage insurance and consumer debt to 43 percent.

Existing policy varies from lender to lender but is generally capped at 45 percent on a "conventional" loan and can go as high as 50 percent on an FHA/HUD insured loan. However, this particular rule change isn't scheduled to go into effect until 2021.

source: http://www.northjersey.com/community/announcements/240412501_New_mortgage_rules_shouldn_t_affect_most_seeking_a_home_loan_in_2014.html
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Why Credit Scores Dropped on New Mortgages in 2013

1/16/2014

30 and 15 year mortgage interest rates rise up; Freddie Mac data and pending home sales review today

1/6/2014

With the New Year, New Consumer Protections on Mortgages

1/3/2014

New rules for consumers seeking home loans are arriving in the new year. And if you already have a mortgage, new borrower protections take effect for you, too.

The rules, issued by the federal Consumer Financial Protection Bureau, were issued in early 2013 but begin next week.

Beginning Jan. 10, lenders must take steps to make sure you, as a borrower, can afford to repay the loan you are seeking, based on your income, debts and credit history. That may sound like common sense, but during the housing crisis many borrowers ended up with loans — sometimes called “no-documentation” loans — that they couldn’t afford. Often, borrowers took out adjustable rate loans with payments that were affordable to them at an initially low “teaser” interest rate, but that became unaffordable once the interest rate increased.

read more: http://www.nytimes.com/2014/01/04/your-money/with-the-new-year-new-consumer-protections-on-mortgages.html?_r=0

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U.S. mortgage applications fall as refinance hits five-year low: MBA

12/27/2013

(Reuters) - Applications for U.S. home mortgages fell for a second week and hit a 13-year low as mortgage rates rose due to a bond market sell-off following the Federal Reserve's decision to pare its bond purchase stimulus in January, an industry group said on Tuesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, fell 6.3 percent to the lowest level since December 2000.

Mortgage applications have fallen sharply since this summer on a jump in home finance costs as benchmark Treasuries yields eventually rose to a two-year high.

Last Wednesday, Fed policy-makers opted to make their tapering move, which will begin in January with a $10 billion monthly reduction evenly split between Treasuries and mortgage-backed securities to $75 billion.

"Following the Federal Reserve's taper announcement, mortgage application volume dropped again last week, with rates increasing and refinance application volume falling to its lowest level since November 2008," Mike Fratantoni, MBA's vice president of research and economics, said in a statement.

The rate on fixed 30-year mortgages averaged 4.64 percent last week, up 2 basis points from the prior week. It fell short of the two-plus year high of 4.80 percent set in September.

The MBA's seasonally adjusted index of refinancing applications fell 7.7 percent.

The gauge of loan requests for home purchases, a leading indicator of home sales, fell 3.5 percent to its lowest level since February 2012.

The refinance share of total mortgage activity slipped to 65 percent from 66 percent the previous week, while adjustable-rate mortgages rose 8.3 percent last week to the biggest share since July 2008.

The MBA typically reports its weekly application data on Wednesday, but released the data a day early due to the Christmas holiday. It said it will suspend release of the data next week. It will resume the release of the data on January 8 with results of the two prior weeks.

The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.

Source: http://www.reuters.com/article/2013/12/24/us-usa-economy-mortgages-idUSBRE9BH0IK20131224

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Job growth drives mortgage rate jump

12/9/2013

Mortgage rates jumped this week on stronger-than-expected economic reports, according to Freddie Mac's weekly survey.

The 30-year, fixed-rate loan, the most popular product for homebuyers, rose to 4.46% from 4.29% last week. The average rate on a 15-year, fixed-rate mortgage, typically used for refinancing higher interest mortgages, also jumped 0.17 percentage point to 3.47%.

This week's rate approached a high for the year. Rates on the 30-year have ranged from a low of 3.34% in the first week of January to a high of 4.58% in August.

Frank Nothaft, Freddie's chief economist, cited job creation as a prime reason for the rate spike.

"Private companies added 215,000 new jobs in November according to the ADP employment report, well above the consensus," he said. "In addition, revisions added 54,000 jobs in the prior month."

Read more: http://money.cnn.com/2013/12/05/real_estate/mortgage-rate-rise/
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Fixed Mortgage Rates Move Higher

12/6/2013

Average interest rates on fixed-rate mortgages jumped higher this week according to Freddie Mac’s Primary Mortgage Market Survey® (PMMS) for the week ending December 5th, 2013.

Fixed Rate Mortgages:

Interest rates on fixed rate mortgages pushed higher this week with the 30-year fixed rate mortgage increasing by seventeen basis points to an average of 4.46 percent with an average of 0.5 points. Last week the average rate increased by seven basis points. A year ago, the 30-year fixed rate mortgage averaged 3.34 percent.

Average 30-year fixed rates were generally the lowest in the Southeastern portion of the United States where mortgage rates averaged 4.43 percent while the highest rates were reported in the North Central area of the country where interest rates averaged 4.50 percent.

The average rate for a 15-year fixed mortgage was 3.47 percent this week with an average of 0.4 points, up from an average of 3.30 percent last week. At this time last year, the 15-year fixed rate mortgage averaged 2.67 percent.

Adjustable Rate Mortgages:

Interest rates for adjustable-rate mortgages were mixed this week with the 5-year Treasury-indexed hybrid ARM averaging 2.99 percent, with an average of 0.4 points, up from an average of 2.94 percent last week. The 5-year adjustable rate mortgage averaged 2.69 percent a year earlier.

The 1-year Treasury-indexed adjustable rate mortgage averaged 2.59 percent with an average of 0.4 points, down slightly from an average of 2.60 percent last week. A year ago, the 1-year adjustable rate mortgage averaged 2.55 percent.

Source: http://loanrateupdate.com/mortgages/fixed-mortgage-rates-move-higher

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