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Consumer Financial Protection Bureau Releases New Mortgage Rule Resources for Consumers

1/8/2014

WASHINGTON, D.C. — On Tuesday, Jan. 7, 2014, the Consumer Financial Protection Bureau (CFPB) released additional resources for consumers as part of its campaign to educate the public about the new protections provided by the Bureau’s mortgage rules. These new materials include sample letters that consumers can send to their mortgage servicers. The Bureau is publishing these educational materials in anticipation of the January 10, 2014 effective dates for its mortgage rules.

“Taking out a mortgage to buy a home is one of the biggest decisions a consumer can make,” said CFPB Director Richard Cordray. “We want to make sure that people are aware of their new protections so they have the knowledge to make sound decisions about their financial futures.”

The CFPB’s mortgage rules protect consumers by requiring that mortgage lenders evaluate whether borrowers can afford to pay back the mortgage before signing them up. The rules also establish new, strong protections for struggling homeowners, including those facing foreclosure. Under the rules, mortgage borrowers will be protected from costly surprises and runarounds by their servicers.

The Bureau is working with industry, housing counselors, and consumer groups to promote a smooth implementation of these rules. The Bureau has released many different educational materials to improve the public’s understanding of the new rules and their protections. These materials include:

Read more: http://www.huntingtonnews.net/79688
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Mortgage Rate Swings May Mean “Bumpy” 2014 Housing Market

12/30/2013

Climbing mortgage rates in 2013 corresponded with declines in home buying, a trend that could to some extent continue in coming months as interest rates adjust to shifts in the Federal Reserve’s monetary stimulus effort.

The average of 30-year fixed-rate mortgage interest rates so far this year compared against new-home sales illustrates that inversely proportional relationship: When interest rates go up, demand from would-be homeowners drops.

When rates as measured by Freddie Mac started rising in May and averaged 3.54% for the month, the seasonally adjusted annual rate of new home sales dropped by 4% from the prior month, according to the most recent housing data from the Commerce Department. Meanwhile, in October, mortgage rates dropped by three-tenths of a percentage point just as new home sales surged 18%.

The trend could continue in 2014, experts said, especially if rates change significantly.

“Particularly if we see a pretty quick rise – maybe a half a percentage point to percentage point rise — it’ll make for some bumpy demand in 2014,” said Ellen Haberle, an economist at Redfin, an online real-estate firm.

Mortgage rates first spiked in May after the Fed signaled it was considering pulling back its bond-buying program meant to keep a lid on long-term interest rates. The housing market initially stumbled, but started to recover once the central bank decided against any changes to the stimulus effort throughout the summer and into the fall.

Mortgage rates are still at historical lows, but they are already starting to creep upward once again. Freddie Mac said Thursday the average 30-year fixed rate mortgage was at 4.48%, its highest level since mid-September.

The interest rate on U.S. Treasurys is also going up. On Thursday, the yield on 10-year notes hit 3%, its highest level since September and the second time this year it has reached that mark. That threshold could signal higher interest rates ahead because it is used as a reference point for the cost of borrowed money for U.S. consumers and businesses. A higher yield can push up mortgage rates.

While rising interest rates could continue to drag on the housing market, it could also encourage those people waiting on the fence to make a decision to buy.

Even with rising rates, homes data is starting to show underlying strength in the market. The Commerce Department’s new-home sales reports for October and November marked the two strongest months of new-home sales since mid-2008, and sales in November alone were up nearly 17% from a year earlier, the report said.

New home sales data are a leading indicator in housing trends because sales are tallied at the signing of a contract rather than the closing. But they are an imperfect gauge because homebuilders are sometimes willing to buy down interest rate for buyers.

Data for pending-home sales in November, which is a similar measure for previously owned homes, will be released on Monday by the National Association of Realtors

source: http://blogs.wsj.com/economics/2013/12/27/mortgage-rate-swings-may-mean-bumpy-2014-housing-market/
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Money Minute: Waiting for the Fed's Decision; Mortgages to Get Pricier

12/18/2013

It's all about the Fed.

You may have heard this song before, but after months of speculation, we could find out Wednesday afternoon when the Federal Reserve will begin to cut back on its massive bond-buying program.

Now it's important to understand that even if the Fed does begin the long-awaited taper, it won't end the stimulus program. It has been pumping 85 billion dollars a month into the economy. When the taper does begin, it will "only" buy $70 billion or $75 billion a month.

Despite the Fed's pledge to keep interest rates low, mortgage rates are likely to rise. Fannie Mae and Freddie Mac will soon begin to charge more to borrowers who don't make a large down payment and have a high credit score. The effective mortgage rate on new loans could increase by as much as half a point.

An important court win for Philip Morris. The New York Court of Appeals said long-term smokers who don't show signs of disease can't sue the Altria (MO) unit to set up a program to monitor their health. The court upheld an earlier decision that there was no legal basis for such a claim.

On Wall Street, the Dow Jones industrial average (^DJI), edged 9 points lower Tuesday, the Nasdaq composite (^IXIC) fell 6 and the Standard & Poor's 500 index (^GPSC) lost 5 points.

Another well-known company makes its Wall Street debut today. Movie theater owner AMC Entertainment priced its stock at $18 a share, which is at the low end of expectations. And there's an interesting twist to this initial public offering. The company offered shares at the IPO price to its most loyal movie customers. AMC is owned by a Chinese conglomerate.

Finally, the number of students enrolling in law school continues to decline. The American Bar Association says there were 11 percent fewer first year students this year, and the total number is the lowest it's been since 1977. One reason: the high level of student debt for many recent college grads.

Source: http://www.dailyfinance.com/on/federal-reserve-decision-stimulus-mortgages-get-pricier/

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Fannie Mae Mortgage-Guarantee Fees Increased by U.S. Overseer

12/11/2013

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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5 Great Reasons Why You Should Think About Refinancing Your Mortgage

12/5/2013

The option of refinancing your mortgage offers advantages.

Once you have a mortgage you’re not locked into it until your home is completely paid off. You always have the option of refinancing the loan and in some cases it might be in your best interests because of the perks involved. It’s definitely something to keep in mind and if you’ve not even thought about it yet we can look at some of the reasons why you should. If you think your life will improve for the better you should go and speak to someone about it after reading this.

Shorten the term of your loan

When most people take out a mortgage they are young and they aren’t making a lot of money. Fast forward a few years and they’re making a little more plus the interest rates could have dropped a considerable amount. If you enter your details into a mortgage calculator you might find because of the lower interest rates you could easily reduce the term of your mortgage and it wouldn’t cost you much more per month. It’s definitely worth considering if you can afford it because life is better when your mortgage has been paid off.

Lower your interest rate

Sometimes it’s not nice looking at the money coming out of your bank account every month because you know deep down you should be paying a lot less. Always be open to the possibility of refinancing your mortgage if you can get a lower interest rate because over the life of your mortgage it could save you tens of thousands of dollars. It’s better in your pocket than the bank’s especially when you realize you can save all that money by simply filling out a few forms.

Reduce your monthly payment

You know you’re in trouble when the ground opens up and starts swallowing you. That is how some people feel when they can’t afford their mortgage payments no matter what they do. Maybe your interest rate shot up or you had your hours cut back at work, but no matter the reason it might be a good idea to refinance your mortgage in order to reduce your monthly repayments. When less money is coming out of your account each month it means you have more of a safety net.

Switch to a different loan

If you signed up to the wrong type mortgage in the first place it might be a good idea to find out how to claw yourself out of the hole you find yourself in. Some people decide to take out an adjustable-rate mortgage because fixed-rate ones didn’t look so good at the time, but as soon as things change for the worst it might be time to refinance your mortgage to jump onto something else. Fixed-rate mortgages are a lot better when the interest rate is low because you’ll find it much easier to juggle your finances.

In order to treat yourself

The last reason you might want to refinance your mortgage is because you want to treat yourself to an expensive gift. If your home is getting old it might need major renovations carried out and refinancing could be the only way you can get that sort of money together. You could take some money to start your own business or you could put a deposit down on a rental home. If you decide to take any money out of your home it must be for a good reason or it’s not worth it.What are you thinking?

Do you think now is a good time to look more deeply at your refinancing options? If you don’t do something about it now you could be losing money each and every month. It’s not actually too hard to sort out and you’ll not lose your hair because of the stress involved, so just do something before you forget.

Source: http://wallstreetsectorselector.com/2013/12/5-great-reasons-think-refinancing-mortgage/
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Mortgage rates up a bit, but still near record lows

12/2/2013

WASHINGTON — Average U.S. mortgage rates rose modestly this week, a move that makes home-buying a bit less affordable. Still, rates remain near historically low levels.

Mortgage buyer Freddie Mac said Wednesday that the average rate on the 30-year loan increased to 4.29 percent from 4.22 percent last week.

The average on the 15-year fixed-rate loan ticked up to 3.3 percent from 3.27 percent.

Rates have risen nearly a full percentage point since May after the Federal Reserve signaled it might slow its bond purchases by the end of the year.

Rates peaked at nearly 4.6 percent in August. But the Fed held off in September and most analysts expect it won’t move until next year.

The increase in mortgage rates has contributed to a slowdown in home sales over the past two months.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week.

The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged at 0.7 point. The fee for a 15-year loan also was unchanged at 0.7 point.

The average rate on a one-year adjustable-rate mortgage edged down to 2.6 percent, from 2.61 percent last week. The fee was unchanged at 0.4 point.

The average rate on a five-year adjustable mortgage edged down to 2.94 percent this week, from 2.95 percent last week.

The fee was unchanged at 0.5 point.

Source: http://www.poughkeepsiejournal.com/viewart/20131201/LIFE/312010047/Mortgage-rates-up-bit-still-near-record-lows
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Average mortgage rates rise modestly

11/28/2013

WASHINGTON – Average U.S. mortgage rates rose modestly this week, a move that makes home-buying a bit less affordable. Still, rates remain near historically low levels.

Mortgage buyer Freddie Mac said Wednesday that the average rate on the 30-year loan increased to 4.29 percent from 4.22 percent last week. The average on the 15-year fixed ticked up to 3.3 percent from 3.27 percent.

Rates have risen nearly a full percentage point since May after the Federal Reserve signaled it might slow its bond purchases by the end of the year. Rates peaked at nearly 4.6 percent in August. But the Fed held off in September and most analysts expect it won’t move until next year.

The increase in mortgage rates has contributed to a slowdown in home sales over the past two months.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country at the beginning of each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged at 0.7 point. The fee for a 15-year loan also was unchanged at 0.7 point.

The average rate on a one-year adjustable-rate mortgage edged down to 2.60 percent, from 2.61 percent last week. The fee was unchanged at 0.4 point.

The average rate on a five-year adjustable mortgage edged down to 2.94 percent this week, from 2.95 percent last week. The fee was unchanged at 0.5 point.

Source: http://www.buffalonews.com/business/average-mortgage-rates-rise-modestly-20131127

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Mortgage Rate Analysis And Predictions : How Will U.S. Mortgage Rates Move This Week?

11/26/2013

Mortgage markets worsened last week, moving U.S. mortgage rates higher on the whole.

Like prior weeks, market action was sharp. Rates climbed 0.25 percentage points Wednesday afternoon, which shocked thousands of unprepared mortgage rate shoppers. Markets made small improvements over the remainder of the week, but couldn't undo the damage.

Mortgage rates have been volatile since last quarter. So, what can buyers and refinancing households expect to see this week. What will mortgage rates do next?

Freddie Mac : 30-Year Fixed Rate At 4.22%

According to government-backed Freddie Mac, last week, the average 30-year fixed rate mortgage rate slipped 13 basis points to 4.22% nationwide; with the rate available to prime borrowers willing to pay 0.7 discount points at closing.

0.7 discount points carries a cost equal to 0.7% of your loan size.

A borrower in Boston, Massachusetts, therefore, whose loan size is equal to the local Freddie Mac mortgage loan limit of $417,000 would pay $2,919 at closing in order to lock a 4.22% mortgage rate. A borrower in Orange County, California with a loan size at the local limit of $625,500 would pay $4,379.

Borrowers opting out of discount points will pay slightly higher rates.

Freddie Mac reported rates for 15-year fixed rate mortgages lower, too. The group's survey of more than 100 mortgage lenders showed the average 15-year fixed rate mortgage rate down eight basis points to 3.27% nationwide.

Like its 30-year counterpart, the 15-year rate requires 0.7 points to be paid at closing.

There is now a 0.95 percentage point difference between the published rates of a 30-year and 15-year fixed rate mortgage -- among the largest spreads in recorded mortgage history. Borrowers using a 15-year mortgage now pay close to 70% less to own their own home than via a 30-year loan.

Read more: http://themortgagereports.com/14022/mortgage-rate-analysis-and-prediction-how-will-u-s-mortgage-rates-move-this-week
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Mortgages could go ‘green’ with energy-rewards lending

11/25/2013

WASHINGTON — For the growing numbers of home purchasers who care about energy efficiency, it’s the ultimate “green” goal: Lenders should recognize the net savings that energy improvements provide to property owners and take them into account when they underwrite and set the fees for mortgages.

Appraisers should also recognize the added value.

The rationale: Owners of homes that reduce energy use pay lower utility bills than owners of energy guzzlers, so why not factor these out-of-pocket savings into household debt-to-income ratios and appraised valuations?

This might permit larger mortgage amounts for energy-efficient homes and help qualify more first-time buyers for loans.

Bipartisan legislation is pending in the Senate — the Sensible Accounting to Value Energy (SAVE) Act — that would require Fannie Mae, Freddie Mac, the Federal Housing Administration and other federal mortgage players to revise their rules to better recognize and reward energy savings.

More than 125 local Realtor multiple-listing services across the country are helping out by including so-called “green fields” in their online listing information.

The green fields allow sellers, buyers, realty agents and appraisers to describe energy improvements or special certifications that a property offers, such as Energy Star appliances.

Thousands of appraisers are undergoing “green valuation” training, and the country’s largest association in that field, the Appraisal Institute, has created a comprehensive “green addendum” that can be used to translate energy-conservation improvements into higher property valuations.

But there’s just been another milestone on the way to seeing green in real estate: A major American private mortgage-insurance company plans to jump into green lending and is gearing up to offer a version of what it already provides to buyers in Canada — cost savings to energy conservers.

Adam Johnston, chief appraiser for Genworth Mortgage Insurance, says his company is determined to incorporate energy savings and green valuations into its underwriting.

This is becoming more feasible, he said, because of advances such as the green appraisal addendum, more accurate MLS listing data, and growing acceptance of energy-efficiency standards for homes.

In Canada, Genworth offers buyers a 10 percent “energy-efficient refund” of their mortgage insurance premiums, a break on debt-to-income ratio calculations in underwriting, and online access to discounts on a wide variety of commonly purchased household items.

Here’s an example. On a $300,000 mortgage with a 5 percent down payment, the insurance premium comes to $8,250. You pay that if you’re buying a house that doesn’t qualify on energy-conservation standards.

But if the home you’re buying meets national or provincial energy-efficiency guidelines, you may qualify for an $825 refund and have your monthly savings on heating factored into your debt-service ratios.

Your lender might also approve you for a larger mortgage amount if you need it.

To get the benefits on an existing property, the house must be certified as either 20 percent more efficient than Canada’s Model National Energy Code for Buildings, or 5 percent more efficient than any applicable provincial standards, whichever is greater.

In an interview, Johnston said that while there’s no specific starting date yet for Genworth to begin offering mortgage-insurance breaks on green-certified homes, it’s coming.

By necessity, insurers such as Genworth are highly sensitive to a variety of borrower risk factors, and now they have statistical evidence that people who buy homes with significant energy-saving components present lower risks for lenders and insurers.

A national study tracking payments on 71,000 home loans found that mortgages on energy-efficient properties are 32 percent less likely to default.

Funded by the Institute for Market Transformation and conducted by researchers at the University of North Carolina, the study controlled for other factors that might explain payment performance, including income, home values, credit scores and local utility costs.

Other, subtler factors could be at work — for example, are buyers who care about energy conservation and utility payments inherently more likely to care about keeping current on their mortgage? Who knows?

Bottom line: Though this country is years behind Canada in recognizing and valuing home-energy efficiency, there are now determined efforts under way in the appraisal, lending, building and realty brokerage industries — even in Congress — to catch up, sooner rather than later.

Source: http://seattletimes.com/html/businesstechnology/2022288284_bizharney24xml.html?prmid=4917

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