All is Fair Game

12/28/2009
December 28th, 2009 2:16 PM

Bankrate: Mortgage Rates Rise for the Fourth Consecutive Week

The average conforming 30-year fixed mortgage increased this week to 5.24 percent, according to Bankrate.com's weekly national survey. The average 30-year fixed mortgage has an average of 0.45 discount and origination points.

The average 15-year fixed mortgage moved higher, to 4.62 percent while the larger jumbo 30-year fixed rate inched upward to 6.16 percent. Adjustable rate mortgages were mixed, with the average 1-year ARM falling to 5.10 percent and the 5-year ARM climbing to 4.70 percent.

Mortgage rates are lower than they were one year ago. This week last year, the average 30-year fixed mortgage rate was 5.64 percent, meaning a $200,000 loan would have carried a monthly payment of $1,153.21. With the average rate now 5.24 percent, the monthly payment for the same size loan would be $1,103.17, a savings of $50 per month for a homeowner refinancing now.

SURVEY RESULTS

30-year fixed: 5.24% -- up from 5.13% last week (avg. points: 0.45)

15-year fixed: 4.62% -- up from 4.53% last week (avg. points: 0.45)

5/1 ARM: 4.70% -- up from 4.60% last week (avg. points: 0.41)

Bankrate's national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

For a full analysis of this week's move in mortgage rates, go to http://www.bankrate.com/mortgagerates

The survey is complemented by Bankrate's weekly forward-looking Rate Trend Index, in which a panel of mortgage experts predicts which way the rates are headed over the next 30 to 45 days. It's almost evenly split among those predicting a rise and those forecasting a fall. This week, almost half of the panelists believe mortgage rates will rise over the next 35 to 45 days. A little more than half think rates will fall. No one predicted that rates will remain relatively unchanged (plus or minus 2 basis points).

For the full mortgage Rate Trend Index, go to http://www.bankrate.com/RTI

To see mortgage rates in your area, go to http://www.bankrate.com/funnel/mortgages/

About Bankrate, Inc.

The Bankrate network of companies includes Bankrate.com, Interest.com, Mortgage-calc.com, Nationwide Card Services, Savingforcollege.com, Fee Disclosure, InsureMe CreditCardGuide.com and Bankaholic. Each of these businesses helps consumers to make informed decisions about their personal finance matters. The company's flagship brand, Bankrate.com is a destination site of personal finance channels, including banking, investing, taxes, debt management and college finance. Bankrate.com is the leading aggregator of rates and other information on more than 300 financial products, including mortgages, credit cards, new and used auto loans, money market accounts and CDs, checking and ATM fees, home equity loans and online banking fees. Bankrate.com reviews more than 4,800 financial institutions in 575 markets in 50 states. In 2008, Bankrate.com had nearly 72 million unique visitors. Bankrate.com provides financial applications and information to a network of more than 75 partners, including Yahoo! (NASDAQ:YHOO) , America Online (NYSE: AOL) , The Wall Street Journal and The New York Times (NYSE:NYT) . Bankrate.com's information is also distributed through more than 500 newspapers. Bankrate, Inc. was acquired by Apax Partners, one of the world's leading private equity investment group, in September 2009. Apax operates across the United States, Europe and Asia and has more than 30 years of investing experience. For more information on Apax, visit: www.Apax.com.

For more information contact:

Kayleen Yates

Senior Director, Corporate Communications

kyates@bankrate.com

According to the latest housing data released by Florida Realtors, both existing home and condo sales increased in

 November. This marks the second month in a row that all of Florida’s metropolitan statistical areas (MSAs) reported growth in both home and condo sales, and for a majority of the state’s MSAs, November represents the 17th consecutive month of increased sales.

“The extended and expanded federal homebuyer tax credit will continue the positive momentum of the housing sector’s recovery, said Cynthia Shelton, 2009 Florida Realtors president. “People will want to take advantage of this incredible, not-to-be-missed opportunity to buy a home of their own in Florida.”

Marking 15 months of rising sales activity in the year-to-year comparison, Florida’s existing home sales rose again in November. With a total of 14,026 homes sold statewide, existing home sales jumped 61 percent compared to November 2008. An even more notable increase was seen

in condo sales this November. Compared to one year earlier, condo sales skyrocketed 111 percent.

“For 15 months now, statewide sales of existing single-family homes in Florida have increased each month compared to the year-ago figures,” Shelton said. “The continued, gradual absorption of housing inventory will help stabilize home prices. National research notes that housing affordability is at its peak and the highest on record. Along with still-low mortgage rates, it means that the buying power of a typical family has never been better.”

Florida’s median sales price for existing homes in November decreased 12 percent year-over-year to $139,000, the report said. However, housing industry analyst with the National Association of Realtors (NAR) said the sales of foreclosures and other distressed properties continue to downwardly distort the median price. The statewide existing condo median sales price was hit even harder last month. At $104,400, the median sales price for condos fell 21 percent.

According to Freddie Mac, interest rates also fell in November. For a 30-year fixed-rate mortgage, interest rates averaged 4.88 percent, a significant drop from the average rate of 6.09 percent in November 2008.

Lawrence Yun, NAR chief economist, said it is important to keep in mind that housing had been underperforming over most of the past year. He said the tax credit helped unleash pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future. If home values show consistent stabilization or even a modest increase, Yun said home sales could register normal healthy levels in the second half of 2010.

 

FHA Delays Appraisal Independence Implementation 45 Days

The Federal Housing Administration announced that it will delay until Feb. 15 the enactment of Mortgagee Letter 2009-28 and 2009-51 addressing appraiser independence and adoption of the appraisal update and/or completion report, respectively.

Originally planned for a Jan. 1 implementation, the 2009-28 guidance has two parts: the prohibition of mortgage brokers and commission-based lender staff from the appraisal process, and appraiser selection in FHA Connection.

In a Dec. 22 announcement, the FHA said the extension will provide the agency and lenders additional time to adjust systems to accommodate the changes to both ML 09-28 and 09-51. The agency said it would issue detailed instructions on changes to FHA Connection in a new mortgagee letter, but that the requirement for inputting the appraiser ID and the appraisal assignment date in the FHA Connection case number assignment screen will be removed. “Instead, lenders will be required to enter all appraisal data, including the appraiser ID, in the Appraisal Update Screen once the completed appraisal is received by the lender and prior to closing the loan,” according to the announcement.

All FHA Mortgagee Letters can be read online at www.hud.gov/offices/adm/hudclips/letters/mortgagee/ .

Hope for Homeowners’ Revamp Effective Jan. 1

Having faced industry criticism for the lack of new Federal Housing Administration loans closed, which would assist struggling homeowners, the Hope for Homeowners program is being revamped to increase lender participation and to help more families who are having difficulty paying their mortgages.

Initially enacted in October 2008, Hope for Homeowners (H4H) was created as a means to help more distressed borrowers refinance into affordable, government-back mortgages. Within the first month, then-Housing and Urban Development Secretary Steve Preston was already calling for modifications to the program. By November, according to HousingWire.com, the H4H Board of Directors implemented changes such as increasing the loan to value ratio from 90 to 96.5 percent for some H4H loans, simplifying the process to remove subordinate liens by permitting upfront payments to lienholders in exchange for releasing their liens, and allowing lenders to extend mortgage terms from 30 to 40 years. All this was done to increase participation in the H4H program.

Yet these changes were still not enough to jumpstart the program, and a new round of changes will now take effect Jan. 1, 2010. As detailed in HUD’s Mortgagee Letter 2009-43, the changes include:

  • The age of the appraisal now must follow standard FHA guidance in that it cannot be older than 120 days. (Prior to Dec, 31, 2009, the validity period remains 180 days.)
  • Lenders must submit five test cases for pre-closing review by FHA.
  • Borrowers must not have defaulted on any substantial debt in the last five years.
  • There are revised loan-to-value and debt-to-income ratios.

Furthermore, the guidance specifically clarifies which is the prevailing appraisal. “If an appraisal is ordered by the current lender or servicer and a new appraisal is ordered by a different lender that will originate the new loan under this Program, the value provided in the appraisal ordered by the new lender will prevail as the appraisal accepted for obtaining FHA insurance,” according to ML 2009-43.

The changes to the H4H program will be effective for any loans originated from Jan. 1, 2010, until Sept. 30, 2011, which was the original end-date for the H4H program.

To learn more about these changes, visit www.nls.gov/offices/adm/hudclips/letters/mortgagee .


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Posted by Greg Shelley Phd on December 28th, 2009 2:16 PMPost a Comment

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