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White House proposes aid for underwater homeowners

Kathleen Pender
Thursday, February 2, 2012

The Obama administration on Wednesday detailed its new proposal to let some homeowners with mortgages not owned by Fannie Mae or Freddie Mac refinance into a new loan backed by the Federal Housing Administration, even if they are underwater and have low credit scores.

The proposal, if approved by Congress, would slap a government guarantee on a lot of risky mortgages that are not government-guaranteed today. The White House says it would impose a “small” fee on large financial institutions to cover the cost of the program, which it estimates at $5 billon to $10 billion. Continue reading “White House proposes aid for underwater homeowners”

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Housing Crisis to End in 2012 as Banks Loosen Credit Standards

BY: KRISTA FRANKS BROCK

Capital Economics expects the housing crisis to end this year, according to a report released Tuesday. One of the reasons: loosening credit.

The analytics firm notes the average credit score required to attain a mortgage loan is 700. While this is higher than scores required prior to the crisis, it is constant with requirements one year ago.
Additionally, a Fed Senior Loan Officer Survey found credit requirements in the fourth quarter were consistent with the past three quarters.
However, other market indicators point not just to a stabilization of mortgage lending standards, but also a loosening of credit availability.
Banks are now lending amounts up to 3.5 times borrower earnings. This is up from a low during the crisis of 3.2 times borrower earnings.
Banks are also loosening loan-to-value ratios (LTV), which Capital Economics denotes “the clearest sign yet of an improvement in mortgage credit conditions.”
In contrast to a low of 74 percent reached in mid-2010, banks are now lending at 82 percent LTV.
While credit conditions may have loosened slightly, some potential homebuyers are still struggling with credit requirements. In fact, Capital Economics points out that in November 8 percent of contract cancellations were the result of a potential buyer not qualifying for a loan.
Additionally, Capital Economics says “any improvement in credit conditions won’t be significant enough to generate actual house price gains,” and potential ramifications from the euro-zone pose a threat to future credit availability.

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Fannie Mae sees 2012 home sales up 3.5% to 4.74 million

by ANDREW SCOGGIN

The housing sector will likely take incremental steps forward in 2012, though total originations will fall on fewer refinances, according to economists at Fannie Mae.

The second half of the year should outpace the first six months in terms of growth, though fiscal policy and political uncertainty in Washington will likely drive consumer and business activity, the mortgage giant said.

Chief Economist Doug Duncan said positive consumer activity and challenges in housing and the global economy will equate to moderate growth for the year.

“We’re entering 2012 with decent momentum, especially on the employment side, which is fostering positive household and consumer behavior,” Duncan said in a release. “Unfortunately, we expect this momentum to slow as we move through the first half of the year.”

The report released Friday forecast total home sales to increase 3.5% to about 4.74 million in 2012 from 2011 with another 5% gain in 2013 to nearly 5 million. New home sales could jump 10.4% for 2012. Continue reading “Fannie Mae sees 2012 home sales up 3.5% to 4.74 million”

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Can you refinance your inherited property without mortgage?

By S. Smith - http://www.mortgagefit.com/refinance.html

Have you inherited a house from your grand parents? I’m sure there are many people who have inherited property from their family members or from their close relatives. Sometimes this property is shared among the siblings or an individual is the sole owner of the property. There are many people who want to refinance their inherited property but they are not sure whether they can do it. You can apply for a loan on the inherited property but here a few things that you should know. Continue reading “Can you refinance your inherited property without mortgage?”

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Home Lending Revamp Planned

BY NICK TIMIRAOS

Federal regulators on Monday unveiled a major overhaul of an underused mortgage-refinance program designed to help millions of Americans whose home values have tumbled.

The plan is the latest White House effort to deal with one of the most critical impediments to economic recovery—a stagnant housing market caused in part by a surfeit of homeowners who are unable to refinance. Continue reading “Home Lending Revamp Planned”

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Obama administration ramps up mortgage refinancing effort

From McClatchy News Service

WASHINGTON — The Obama administration, worried that the housing crisis is strangling the economic recovery, is stepping up efforts to aid the battered market as another wave of home foreclosures threatens to drive values down further and rattle consumer confidence again.

But the administration’s piecemeal approach — giving temporary reprieves to the jobless, converting empty homes into rental properties, allowing more people to refinance mortgages — isn’t going to help much, said industry leaders and even some lawmakers in the president’s own party. Continue reading “Obama administration ramps up mortgage refinancing effort”

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Mortgage rates at all-time lows, but few qualify

Carolyn Said, Chronicle Staff Writer
Friday, October 7, 2011
Steven Senne / AP
A home with a for sale sign in front, in Newton, Mass. The average rate on the 30-year fixed mortgage fell to 3.94 percent this week, the lowest rate ever. For those who can qualify, it’s an extraordinary opportunity to buy or refinance.

Mortgage rates hit historic lows on Thursday, falling below 4 percent for the first time since Freddie Mac started keeping track in 1971.

The average rate for a 30-year fixed was 3.94 percent for the week ended Thursday, it said. The average 15-year rate was 3.26 percent.

The bad news is that only a small pool of borrowers can qualify to take advantage of those cheap mortgages – and many of them have already done so during the past months of falling rates.

“It’s certainly a historic and psychological barrier to go below 4 percent,” said Guy Cecala of Inside Mortgage Finance. “But I don’t think it will have a huge impact because people are not buying homes for other reasons than the interest rate. We tend to be refinancing the same group of qualified borrowers, not really opening up the market to other people.”

Mitchell Chernock, president of Sky Valley Financial, a mortgage broker in Benicia, put it more bluntly. Continue reading “Mortgage rates at all-time lows, but few qualify”