Mortgage News

Rates for fixed mortgages escalate

2009-07-31T03:39:00.000-07:00

Fixed rate mortgages in US escalated and were recorded at an all time high since November 2008. This stalls the Fed’s plan to reduce cost of borrowing. The 30 year rate escalated from 5.29% to 5.59% a week ago. As far as rates for 15 year mortgages are concerned, they were 5.06%.

The increasing rate is the last thing that consumers wanted and this could make the housing market even more sluggish. It will reduce the number of people opting for refinancing or buying a new house. This is evident from the reduction in the number of mortgage applications that was lowest ever since February. Not only this, value of shares of reputed homebuilders has nosedived drastically as lenders anticipate that if home loan payments become expensive, it will turn away several prospective home buyers.

Due to rising rates, sale of homes will subside and so will refinancing. It will have a negative impact on consumer spending, making it more sluggish. The Federal Reserve had announced that it would buy mortgage backed securities from Freddie Mac and Fannie Mae that was worth USD$1.25 trillion. This program helped in pushing rates to as low as 4.78% in April.

Rising rates and drop in home prices are simultaneous. And this is what has been happening. Number of foreclosures are also increasing manifold. Market analysts are of the opinion that foreclosure filings in US exceeded the 300,000 for 3 months in a row in May and it is being expected that it may reach the 1.8 million mark during the first half of the current year.

Interesting facts about mortgage market in United States
• As many as 321,480 property owners received an auction notice or a default notice last month. Many had to lose their homes too. The number of repossessed property or defaulters was 18% more as compared to last year.

• Since March 2008, the S&P/Case-Shiller home-price index dropped by 18.7%.

• Due to increase in defaults, 20 major metropolitan areas witnessed a drop in home prices

• The week that ended June 5, the number of applications for mortgage refinancing or buying a home dropped by 7.2%. This information was provided by the Mortgage Bankers Association.

Economists Divided on Direction of Economy, Inflation

2008-07-11T13:03:00.000-07:00

With the second half of the year just beginning, economists are questioning if the worst of the U.S. downturn is already over, or whether uncertainty about rising prices spells more gloom and doom for the economy.

Thursday's BLS nonfarm payrolls report for June showed the sixth month of consecutive declines in the U.S. economy, totalling 438k net losses this year and indicating further deterioration is to come. However, economists say it is not job losses that are the major concern heading into the third quarter, but rising prices.

While there is pressure for the Fed to combat inflation, the central bank remains constrained not only by broad-based, anemic growth, but by the fact that soaring energy prices are caused by increased global demand rather than by U.S. consumers.

Charmaine Buskas, senior economics strategist at TD Securities, said the first half of 2008 "didn't see as much fallout as we would have expected," noting that the downswing in jobs was much weaker than in previous downturns. She noted job losses have yet to exceed 88k per month, whereas previous downturns have reported monthly declines of more than 100k and even as many as 200k, which "suggests recent deterioration has been tame."
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The Week Ahead

2008-07-10T13:02:00.000-07:00

This week will begin with a number of Federal Reserve speakers and see the release of housing data in both Canada and the U.S. on Wednesday. The relatively quiet week will culminate on Friday with Canada's employment report for June, which is expected to be a key market focus.

Whereas June's change in employment is anticipated to increase by 10k, following a previous increase of 8.4k, the unemployment rate is expected to hold steady at 6.1%.

Economists from Scotia Capital, however, are calling for an increase in the unemployment rate as well. "The impression that Canada's labour market is holding up better than in the U.S. is generally true. As markets look forward to next Friday's Canadian jobs report for June, however, it would be a mistake to ignore emerging pitfalls," they wrote in a research note to clients.

"Canada's buoyant housing market will continue to support construction employment, while public sector employment is expected to gain once again. Nonetheless, this will likely only lead to a gain of around 5,000 workers. As a result, we are expecting the unemployment rate to move up slightly to 6.2% in June."

In the U.S., meanwhile, June's University of Michigan consumer sentiment index is scheduled to be released. Economists are forecasting a preliminary reading of 55.5, down from May's 56.4.
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American Cities See Record Annual Foreclosure Rate Increases in Q2

2008-07-10T13:00:00.000-07:00

Record high foreclosure rates in the second quarter were reported in Los Angeles, Seattle, Miami and New York, according to a report issued by PropertyShark.com.

Los Angeles led the four cities with a 282.01% increase in the second quarter compared to last year's Q2. Los Angeles reported a record 14,505 new residential foreclosures according to the report issued by PropertyShark.com. The amount of newly scheduled trustee sales soared by 63% in comparison to the previous year.

"The foreclosure chart is unfortunately starting to look like a ski jump, with the current number of new trustee sales this quarter increasing at one of the highest rates we have seen over the last two years," said Property Shark Foreclosures Product team member, Adina Dumitru.

New York City reported 961 new household foreclosures in Q2 2008, a 49.22% increase from the Q2 2007. Single family homes located in Queens and Brooklyn made up the bulk of properties that were being auctioned, the report noted.
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U.S. June Nonfarm Payrolls Decline 62k, Unemployment Rate Remains at 5.5%

2008-07-09T13:58:00.000-07:00

U.S. nonfarm payrolls declined for the sixth straight month, falling in line with expectations by a total of 62k jobs in June, according to the Bureau of Labor Statistics on Thursday. May's jobs figure was revised to a loss of 62k jobs from an initially reported loss of 49k jobs.

The unemployment rate remained at 5.5% following the half-percentage point surge in the rate last month.

Nonfarm payrolls were expected to fall by 60k jobs in the month, with expectations ranging from -20k to -130k jobs. Also, economists expected the unemployment rate to have overshot last month and to come back down slightly to 5.4%.

So far this year, the U.S. economy has shed 438k jobs.

Average hourly earnings rose 0.3% from May, while the average weekly hours worked remained at 33.7.

Total private jobs lost 91k in the month, with the goods-producing sector losing 69k, construction falling by 43k, and manufacturing losing 33k. The business services sector lost 51k jobs, while the financial sector also saw a loss of 10k.
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Fed's Yellen Says Markets "May Get Worse Before They Get Better"

2008-07-08T04:54:00.000-07:00

Federal Reserve Bank of San Francisco President Janet Yellen said Monday market conditions "could get worse before they get better", but that she expects market functioning to "improve markedly" by 2009.

Speaking at the University of California in San Diego, Yellen said inflation risks have "definitely" increased and that the housing sector will likely face more "unpleasant changes."

She said policy is now at a crossroads as it faces competing risks between inflation and growth, though the Fed president said she is "somewhat reassured" by recent data showing no signs of general wage pressure.

"On balance, I still see inflation expectations as reasonably well anchored and I anticipate that consumer survey measures will come down once oil and food prices stop rising," she said. "But the risks to inflation are likely not symmetric and they have definitely increased. We cannot and will not allow a wage-price spiral to develop."
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Hundreds swept up in mortgage fraud arrests

2008-07-05T01:18:00.000-07:00

WASHINGTON - More than 400 real estate industry players have been indicted since March - including dozens over the last two days - in a Justice Department crackdown on incidents of mortgage fraud nationwide that have contributed to the country's housing crisis.

The FBI put the losses to homeowners and other borrowers who were victims in the schemes at over $1 billion.

"Mortgage fraud and related securities fraud pose a significant threat to our economy, to the stability of our nation's housing market and to the peace of mind to millions of Americans," Deputy Attorney General Mark Filip said in a statement Thursday. The Justice Department and FBI planed to announce the cases at an afternoon news conference in Washington.

Since March 1, 406 people have been arrested in the sting dubbed "Operation Malicious Mortgage" that saw 144 cases across the country. Sixty people were arrested on Wednesday alone, including in Chicago, Miami, Houston and a dozen other regions policed by the FBI.

In a separate sweep, two former Bear Stearns managers in New York were indicted Thursday, becoming the first executives to face criminal charges related to the collapse of the subprime mortgage market.

Across the country, reports of mortgage fraud have soared over the past year as the subprime mortgage market collapsed and defaults and foreclosures soared.

Rates on 30-year mortgages jump to 6.42 percent

2008-07-05T01:13:00.000-07:00

WASHINGTON - Rates on 30-year mortgages kept surging this week, rising to the highest level in nearly nine months, reflecting more concerns about what the Federal Reserve will do to combat a growing inflation threat.

Freddie Mac, the mortgage company, reported Thursday that 30-year fixed-rate mortgages averaged 6.42 percent this week. That was up sharply from 6.32 percent last week.

It was the highest level for 30-year mortgages since they averaged 6.42 percent for the week of Sept. 27 and marked the fourth straight week that they have been above 6 percent.

Frank Nothaft, chief economist at Freddie Mac, said the increased concerns about inflation were fueled by reports in the past week showing that both consumer prices and wholesale prices rose by significant amounts in May. This spurred further increases in the futures market where investors place bets on future Fed actions. That market is pointing to a Fed rate increase in September.

In a speech earlier this month, Federal Reserve Chairman Ben Bernanke signaled deepening worries about inflation and said the Fed would "strongly resist" any tendency for Americans' expectations about price increases to become unsettled.

From last September through April, the central bank aggressively cut rates to try to keep the economy from falling into a recession, but now the Fed's focus has shifted to worries about inflation.

Indictments mount in mortgage frauds

2008-07-03T05:23:00.001-07:00

WASHINGTON - More than 400 real-estate industry players have been indicted since March - including dozens over the past two days - in a Justice Department crackdown on incidents of mortgage fraud nationwide that stem from the country's housing crisis.

The FBI put the losses to homeowners and other borrowers who were victims in the schemes at more than $1billion.

"Mortgage fraud poses a significant threat to our economy, to the stability of our nation's housing markets and to the peace of mind of millions of American homeowners," Deputy Attorney General Mark Filip said at an afternoon news conference.

Starting in March, 406 people in 144 cases across the country have been arrested in the sting dubbed Operation Malicious Mortgage. Sixty people were arrested Wednesday alone, including in Chicago, Miami, Houston and a dozen other regions.

Law enforcement officials said their stepped-up focus on mortgage cases aims to combat problems that have grown out of the risky lending practices prevalent until the mortgage-market collapse began last year. Officials have identified 10 places they consider hot spots nationwide in California, Colorado, Texas, Minnesota, Michigan, Illinois, Ohio, New York, Georgia and Florida.

To people who have committed fraud or are contemplating doing so, FBI Director Robert Mueller said: "We will find you, you will be investigated, and you will be prosecuted."
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Losing a home attracts scams - mortgage news

2008-07-03T05:17:00.000-07:00

If you've been told that your house is going into foreclosure, that means your mortgage company plans to sell your home to pay off the loan it made to you.

In order to purchase your home, you borrowed a large sum of money and signed a promissory note to repay it. You also posted your home as collateral to ensure payment of the debt to the bank. This is done by signing a deed of trust which allows a third party to hold a security interest in the home until the loan is repaid.

If the note is not paid off, or the payments become delinquent, the third-party trustee is sent instructions to foreclose. However, most mortgages contain grace periods, and many lenders will wait until a mortgage is several months late before starting foreclosure proceedings.

The foreclosure procedure takes a minimum of 111 days. The first step is for the trustee to file a notice of default, which is recorded and remains in place for 90 days.

If the loan is not brought current or some resolution made, the trustee then files a notice of sale, setting a sale or auction date for the property at least 21 days in the future.

The sale is publicized and the public is invited to show up and bid on your property. If there are no successful bidders, the bank will then take the property back and own it at that time. The result is that you end up living in property you no longer own.
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Mortgage broker training courses

2008-07-01T01:17:00.000-07:00

"Free Online Mortgage Officer Training Course in Short Sales"

Becoming a mortgage broker is no longer a lucrative career option these days. It was possible to earn a six figure income easily by entering the mortgage sector as a mortgage broker. Because of the subprime mortgage meltdown, mortgage brokers are seeing their businesses disappear very quickly.

With the number of training institutes coming up these days, you can easily become a mortgage broker by taking a mortgage broker training class. The only thing that you need to worry about is that the institute that you choose should be a recognized and well established one, so that your degree is recognized in the market. These courses help you become a much more efficient mortgage broker if done from a well known institute as they teach well at such places.

Mortgage broker training courses at well-established and recognized institutes generally inculcate in you values like efficiency in decision making, time management, avoiding mistakes, getting and retaining customers and many more values that are necessary to become an efficiently trained mortgage broker. Individuals, who complete their training, get a 12 month license for practicing as a mortgage broker in the market and learn all the nooks and corners there thus obtaining a first hand experience before they actually opt for a license as a mortgage broker from the government. After all, as defaulted mortgages have become a concern, good knowledge of risk assessment is in very high demand.

The mortgage broker training courses are divided into short sections to make it easier for the user to understand them. These sections also give the user the efficiency to work without opening the other sections. The user should complete a specific part of his or her work in a scheduled period thus teaching the user proper time management. The sections are available for the user all the time as soon as they sign in on the specific site while they are taking an online mortgage broker training course. Mortgage broker training courses whether online or live include video sessions to make the candidates more clear with the ideas that they have about various parts of their curriculum.

Well known institutions for mortgage and financial training have now taken up new methodologies to teach their mortgage broker training candidates more efficiently than before. The new curriculum involves more practical knowledge than written knowledge. Due to these modifications, it has become much easier for the candidates to understand things and take the perfect decisions required. This in turn increases retention of the candidates thus increasing the efficiency.

Online mortgage broker training courses act as a best option for people who work but still want to learn. Thus they can easily learn while they earn. With the reduced mortgage broker training courses duration, it has become easier and faster to become a mortgage broker and start practicing as one as soon as possible.

A good mortgage broker also needs to know how to deal with mortgage foreclosure. This is possible only through good courses, which can also be used by already trained individuals in order to make their work more efficient and to increase their income.
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Mortgage Officer Training in Foreclosure Short Sales

2008-07-01T01:05:00.000-07:00

A career in the short sale mortgage industry these days has a very high demand in the market. You can take a mortgage officer training course and add some weight to your resume, especially if you’re in finance. This may help you to stand out while applying for jobs in the mortgage industry. Now-a-days, short sales is the best way to do mortgage business. The old way is cumbersome and limiting. Therefore, people must look for a training course that can offer them expertise on short sales as well as foreclosure and defaulting mortgages.

Many financial and mortgage training institutes offer these mortgage officer training courses which are available in a new pattern. The old pattern followed was considered inefficient by the experts and thus, theses days new and revised pattern of teaching is followed which includes imparting practical knowledge instead of theoretical knowledge. This is managed by showing the students video clips which helps them make their ideas clear about all the things and get to know the actions that they should take at precise conditions. Such video clips give a student the first hand experience of handling various situations. Thus, the revised pattern of these mortgage officer training courses is extremely efficient and to the point.

The mortgage officer training course involves subjects like loan origination, mortgage products, underwritings and appraisals and many such important subjects from the point of view of the mortgage industry. The course also allows the trainees to pick up values like time management, getting and retaining customers, solving problems efficiently and avoiding mistakes. These values are extremely important from the point of view of a mortgage industry career.
Mortgage officer training courses

Mortgage officer training courses are available live as well as online. The online courses can be used by people who work but wish to learn as well. The online course provides the user some specific time limit to complete a specific part of hi or her work thus teaching them to manage their time. The user may access the website any time he wishes to as they are kept accessible round the clock to their users. The online mortgage officer training program has been developed to match an average learner’s pace. This allows the people who have joined the mortgage officer training course at the speed a comfortable pace, and at the time they want. The online course too contains video clips to provide more practical expertise to the user along with mere theoretical knowledge.

The mortgage officer training course can also be taken by trained mortgage officers in order to brush up their existing knowledge and get some new knowledge. This may help the person in making his or her work more efficient and gain more income. The mortgage officer training course offers a 12 month valid license after the completion of the course. In these 12 months, the trainees may revise the mortgage officer training course by repeating the course.
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