Homes are more affordable across the nation as the housing market emerges from a slow winter season with mortgage rates still near 5 percent. Soft housing and low rates are an excellent combination for home buyers but whereas home values rise with a gradual pace, mortgage rates change in an instant.  It's something worth watching. Each 0.25% increase to conventional or FHA rates adds approximately $16 per month for each $100,000 borrowed. Mortgage rate volatility can change your household budget. If you're trying to gauge whether rates will be rising or falling, one keyword for which to listen is "inflation". Mortgage rates are highly responsive to inflation. By definition, inflation is when a currency loses its value; when what used to cost $2.00 now costs $2.15. As consumers, we perce... 03/20/2010

Wednesday, March 17th, 2010, 9:51 am, from HousingWire.com HOPE NOW, an alliance between mortgage service professionals and non-profit counselors, reported 99,499 modifications in January, compared to 50,364 new permanent modifications under the Home Affordable Modification Program (HAMP). January HOPE NOW modification numbers dropped only slightly from 104,423 non-HAMP modifications in December, compared to roughly 35,000 permanent modifications under HAMP in that same month. The US Treasury Department launched HAMP in March 2009 to provide incentives to servicers for the modification of loans on the verge of foreclosure. Through February 2010, the 113 participating servicers provided 170,000 permanent modifications. HOPE NOW reported 74% of its January modifications involved interest ... 03/18/2010

Friday, March 12th, 2010, 1:01 pm  -  From HousingWire.com A year into the Home Affordable Modification Program (HAMP), servicers converted 170,207 permanent modifications through February, up from 116,297 in January, according to the US Treasury Department. The Treasury launched HAMP in March 2009 to provide capped incentives to servicers for the modification of loans on the verge of foreclosure. To address critics that claim HAMP isn’t having the effect of reaching its target 3m to 4m borrowers, a House Committee on Oversight and Government Reform in February began an investigation of HAMP on concerns of the “effectiveness and efficiency” of the program. According to the latest Troubled Asset Relief Program (TARP) transaction report, the 113 participating servicers under HAMP can earn... 03/17/2010

The Federal Open Market Committee adjourns from a scheduled 1-day meeting today, its second of the year.  The FOMC has held the Fed Funds Rate in a target range of 0.000-0.250 percent since December 16, 2008, and the voting members of the Fed are expected to vote "no change" again today. However, no change in the Fed Funds Rate doesn't necessarily mean no change in mortgage rates.  This is because the Fed Funds Rate is a different interest rate from the rates home buyers get from a loan officer.  Fed Funds Rate : Short-term rate at which banks borrow from each other Mortgage Rate : Long-term rate of interest a homeowner pays on a mortgage Mortgage rates are more responsive to what the Fed says as compared to what the Fed does.  After each FOMC meeting, Fed Chairman Ben Bernanke & Co iss... 03/16/2010

Mortgage markets worsened last week with little economic news to push markets in either direction. Momentum trading and rebalancing of portfolios drove mortgage rates higher, on average. FHA and conventional mortgage rates rose last week, marking the first time that's happened this month. Mortgage rates have been on impressive run lately and mortgages are priced far better than what most experts predicted. Weaker-than-expected economic data is one reason why. Lack of economic data may be another. This week, however, data returns. Monday : Industrial Production and Home Builder Index Tuesday : Housing Starts and Building Permits Wednesday: Consumer Confidence Thursday : Producer Price Index and Initial Jobless Claims Friday : Consumer Price Index and Continuing Jobless Claims And, as if ... 03/15/2010

The Federal Housing Finance Agency has extended the government's Home Affordable Refinance Program by 12 months. HARP's new end date is June 30, 2011. Originally known as Making Home Affordable, HARP aims to help homeowners refinance their mortgage who may otherwise be ineligible because of falling home values. There are 4 basic HARP criteria every borrower must meet: The existing home loan must be guaranteed by Fannie Mae or Freddie Mac. Your home must be a 1- to 4-unit property You must have a perfect mortgage payment history going back 12 months. No 30-day lates allowed. Your first mortgage balance must be 125% or less of your home's market value If you're not sure whether Fannie Mae or Freddie Mac back your mortgage, you can look it up. Fannie's website is http://www.fanniemae.com/l... 03/12/2010

According to foreclosure-tracking firm RealtyTrac, foreclosure filings topped 300,000 for the 12th straight month last month as 1 in every 418 U.S. homes received a foreclosure filing. It's a small improvement from January and a just 6 percent increase over February 2009. On a per-capita basis, foreclosure density varied by state: Nevada : 1 foreclosure filing per 102 homes Florida : 1 foreclosure filing per 163 homes Arizona : 1 foreclosure filing per 163 homes California : 1 foreclosure filing per 195 homes Also, as in January 2010, foreclosures across the country were concentrated. 10 states beat the national Foreclosure Per Capita average; 40 states fell below. Like everything else is real estate, it seems, foreclosures are local. For today's home buyers, foreclosures represent an ... 03/11/2010

If your mortgage is set to adjust this year, the smart move may be to let it. Today's conforming mortgages are adjusting lower than ever before -- as low as 3 percent. It may not be what you expected when you signed for your ARM several years ago. The reason why ARMs are adjusting lower is because of how they're made. When conforming adjustable-rate mortgages adjust, they adjust according to a pre-determined formula. The formula is the sum of a constant and a variable. The constant is usually 2.25 percent and the variable is a daily-changing interest rate called LIBOR. The formula looks like this: New Mortgage Rate = LIBOR + 2.250 percent LIBOR is an acronym for London Interbank Offered Rate. It's an interest rate at which banks borrow money from each other. In Fall 2008, when Lehman B... 03/10/2010

Mortgage markets improved last week in low-volume trading. Between Monday to Thursday, Wall Street focused on the upcoming jobs reports and mortgage markets gained while traders jockeyed for position. Mortgage rates drifted lower through Thursday afternoon. But, then, after a better-than-expected Non-Farm Payrolls report Friday morning, mortgage markets -- and mortgage rates -- reversed. Overall, mortgage rates dropped last week, but only by a small margin. Rates were best Thursday afternoon. It was the second consecutive week in which mortgage rates fell. Last week was also interesting in that both stock markets and bond markets improved, proving that rates don't always rise when stock prices do. 455 of the S&P 500 companies posted gains last week. If you're shopping for a home or a re... 03/08/2010

According to the the National Association of Realtors®, "distressed homes" represented nearly 2 of every fifth home sold in January 2010.  Clearly, real estate investors are taking advantage of good deals on cheap property.  But there's risk involved. This NBC Today Show interview first ran in March 2009, featuring real estate expert Barbara Corcoran. Despite its age, the message remains relevant. Today may be a terrific time to buy a bank-owned home -- just make sure you do your research first.  There's plenty of ways for investors to get burned. Some of the tips in the video include: Buy in your own backyard Start small, then build to a bigger portfolio Watch receipts -- rent rolls don't matter if tenants aren't paying rent Corcoran also gives pointers on how to evaluate a prospectiv... 03/05/2010

The Home Affordable Refinance Program (HARP) has been extended until June 30, 2011, according to the Federal Housing Finance Agency (FHFA). “FHFA has reviewed the current market situation and the state of mortgage insurance availability and has determined that the market conditions that necessitated the actions taken last year have not materially changed,” said FHFA Acting Director Ed DeMarco, in a statement on its website. “Accordingly, to support and promote market stability, and to encourage lenders and other mortgage market participants to fully adopt the HARP program, including the implementation of the October 2009 expansion of loan-to-value ratios (LTVs) to 125 percent, FHFA is authorizing the extension of HARP until June 30, 2011.” The program is one portion of the government’s ... 03/01/2010

Mortgage markets improved last week as economic reports painted a less-than-stellar portrait of the U.S. economy and concerns of a looming monetary policy change eased. Mortgage pricing improved dramatically, despite a late-Friday retreat. Mortgage rates are now at their lowest levels since early-February. Last week was heavy on negative data: Consumer Confidence posted 16% short of expectations New Home Sales posted 13% short of expectations Initial Jobless Claims were higher than expected In addition, both the Case-Shiller and Home Price Indices showed a slight pullback in the housing sector. The impact of these statistics was muted, however. This is because Fed Chairman Ben Bernanke gave his semi-annual outlook to Congress and markets focused more on the chairman verbiage than hard d... 03/01/2010

This, from Jon Lansner, in today’s Orange County Register: For the 22 business days ending February 5 – freshest numbers from DataQuick — our region-by-region analysis of homebuying shows Orange County slices up geographically speaking this way … * DataQuick identified 570 homes selling in Orange County’s north-inland ZIP codes in this most recent period, +12% from a year ago. Median selling price? $450,000 in these 23 ZIPs. This most recent median price change was +8.4% vs. a year ago. * Mid-county ZIPs — median selling price $352,500 – had 630 sales, -12% from a year ago. In these 24 ZIPs, the freshets median price change was +4.9% vs. a year ago. * Combined, total homes sales in ZIPs in the north and mid-section of Orange County were -2.2% vs. a year ago as homebuying in the rest of ... 02/28/2010

Earlier this week, the private-sector Case-Shiller Index showed home prices slightly lower between November and December. Thursday, the public-sector Home Price Index showed the same. Publishing on a 2-month lag, the Federal Home Finance Agency said home prices fell by 1.6 percent nationally in December. And that's an average, of course. Some regions performed well in December as compared to November, others didn't. Values in the Middle Atlantic states improved slightlyValues in New England were essentially unchangedValues in the Mountain states sagged, down 3.5% These aren't just footnotes. They're an important piece toward understanding what national real estate statistics really mean. In short, "national statistics" are just a compilation of a bunch of local statistics. For example,... 02/26/2010

Saving Face, If Not the House   ( From Tuesday’s American Banker Internet.) After years of talking about "preserving homeownership," the mortgage servicing industry has a new buzzword: finding a "graceful exit" for seriously delinquent homeowners who do not qualify for loan modifications.   To move these borrowers out of their homes with a minimum of delay, friction or embarrassment, Fannie Mae and Freddie Mac are telling servicers to increase the use of alternatives to foreclosure such as short sales and deeds-in-lieu. "Some people just are unwilling or unable to be helped," Eric Schuppenhauer, a Fannie senior vice president, said Wednesday at a Mortgage Bankers Association servicing conference in San Diego. "They now must go to some form of liquidation and hopefully a graceful exit fr... 02/25/2010

The housing recovery showed particular weakness in the New Homes Sales category last month -- good news for homebuyers around the country. A "new home" is a home for which there's no previous owner. New Home Sales fell 11 percent from the month prior and posted the fewest units sold in a month since 1963 -- the year the government first started tracking New Home Sales data. Right now, there are roughly 234,000 new homes for sale nationwide and, at the current sales pace, it would take 9.1 months to sell them all. This is nearly 2 months longer than at October 2009's pace. The reasons for the spike in supply are varied: The original home buyer tax credit expired in NovemberWeather conditions were awful in most of the country in JanuaryWeak employment and consumer confidence continue to ... 02/25/2010

I learned something interesting from my preferred lender this morning. About a year ago, enterprising people started a new phenomenon which later became known as a “Buy and Bail”. Some, who were increasingly upside down in their present home, saw how low prices were getting on a bigger or better house, ( maybe even across the street.) and so they made an offer on the new house, stating to the lender that they would be renting out their former house – a common, and valid tactic - until last year. After closing escrow on the new house, however, they simply stopped making the payments on the old one, making that lender foreclose on the property. Hence buy, ( new.) then bail.( from the old property.)  After about 6 months of this situation, lenders wised up and instituted new tougher guidel... 02/24/2010

Using data compiled in December, Standard & Poors released its Case-Shiller Index Tuesday. The report shows home prices down just 2.5% on an annual basis, a figure much lower than the 8.7% annual drop reported after Q3. According to Case-Shiller representatives, the housing market is "in better shape than it was this time last year", but some of the summer's momentum has been lost. 15 of 20 tracked markets declined in value between November and December 2009. Meanwhile, it's interesting to note the 5 markets that didn't decline -- Detroit, Los Angeles/Orange County, Las Vegas, Phoenix and San Diego. Each of these metro regions were among the hardest hit nationwide when home prices first broke. Now, they're leading the pack in price recovery. For some real estate investors, that's a pos... 02/24/2010

You can't get your mortgage rates from the newspaper. Last week proved it. Again. Friday morning, headlines and around the country read that mortgage rates were down 0.04 percent, on average, since the week prior. A sampling of said headlines includes: US Mortgage Rates Drop For 2nd Straight Week (Reuters)Mortgage Rates On 30-year US Loans Fall To 4.93% (Business Week)30-Year Fixed Mortgage Rate Falls Farther Below 5% (Marketwatch) The story behind the headline was sourced from the Freddie Mac Primary Mortgage Market Survey, am industry-wide mortgage rate poll of more than 100 lenders. The PMMS has reported mortgage rate data to markets since 1971 and is the largest of its kind. Unfortunately, rate shoppers can't rely on it. See, unlike governments and private-sector firms, when consum... 02/23/2010

Mortgage markets had a terrible, holiday-shortened week last week as Wall Street responded to worse-than-expected inflation data and action from the Federal Reserve. Mortgage bonds sold off with force, causing mortgage rates to rise for the second week in a row. Last week was a bad week to float a mortgage, to say the least. Rates rose by the largest margin in any week since late-2009. The two biggest stories from last week both came from the Federal Reserve. The first was the release of the FOMC January meeting minutes which showed more confidence in the U.S. economy than Wall Street expected, and the second was the Fed's surprise announcement to raise the nation's Discount Rate to 0.75%. Both sparked risk-taking on Wall Street and bonds sold-off as a result. Now, the Fed Funds Rate wo... 02/22/2010