Foreclosures Fall To 5-Year Low

May 30th, 2012 by Michael Metz

Foreclosures April 2012

Fore­clo­sures fil­ings fell 5 per­cent between March and April of this year, and by 11 per­cent as com­pared to one year ago. The data comes from Real­ty­Trac. The foreclosure-tracking firm tal­lied fewer than 189,000 foreclosure-related actions last month — the fewest num­ber since July 2007.

Rapidly-declining fore­clo­sure fig­ures are another sig­nal that the U.S. hous­ing mar­ket may already be in recovery.

Accord­ing to RealtyTrac’s method­ol­ogy, a “fore­clo­sure fil­ing” is any one of the fol­low­ing foreclosure-related events : (1) A default notice on a home; (2) A sched­uled auc­tion for a home; or, (3) A bank repos­ses­sion of a home.

All three showed improve­ment in April :

  • Default Notices were down 4% from March 2012
  • Sched­uled Auc­tions were down 4% from March 2012
  • Bank Repos­ses­sions were down 7% from March 2012

Fur­ther­more, April’s bank repos­ses­sions fig­ure is notable. With just 51,415 homes reclaimed by banks, last month’s total rep­re­sents a 26 per­cent drop from April 2011, and is the 18th con­sec­u­tive month dur­ing which bank repos­ses­sions fell. This fig­ure sug­gests that banks are seek­ing alter­na­tives to fore­clo­sure, includ­ing loan mod­i­fi­ca­tions and short sales, when appropriate.

Indeed, the National Asso­ci­a­tion of REALTORS® reports that 11 per­cent of April’s home resales were short sales.

Whether you’re a first-time home buyer or an expe­ri­enced one, homes in var­i­ous stages of fore­clo­sure can be allur­ing. They’re read­ily avail­able and often come cheap as com­pared to non-distressed prop­er­ties. How­ever, make sure to look beyond just the “list price”. Fore­closed homes are often sold as-is. This means that the prop­erty could be run-down or rife with defects that ren­der it unin­hab­it­able and/or un-lendable.  

If you plan to buy a fore­closed prop­erty , there­fore, engage an expe­ri­enced real estate pro­fes­sional. You can learn a lot about how fore­clo­sures work by doing research on the inter­net, but when it comes to writ­ing con­tracts and check­ing homes for defects, you’ll want an expe­ri­enced agent on your side.

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What’s Ahead For Mortgage Rates : Week Of May 29, 2012

May 29th, 2012 by Michael Metz

Jobs in focus this weekMort­gage mar­kets wors­ened slightly last week as demand for mortgage-backed bonds slacked. There was lit­tle sur­prise in U.S. eco­nomic data and the unfold­ing story lines of the Euro­zone con­tin­ued unabated.

Mort­gage rates wors­ened slightly on the news, climb­ing for the first time in two weeks.

The change was a small one, how­ever, and rates only eased higher Wednes­day through Friday. As such, Fred­die Mac’s weekly mort­gage rate sur­vey failed to cap­ture the change – Fred­die Mac’s sur­vey is con­ducted Mon­day and Tuesday. 

Accord­ing to the Pri­mary Mort­gage Mar­ket Sur­vey, the aver­age 30-year fixed rate mort­gage rate slipped to 3.78% last week, on aver­age, down from 3.79% dur­ing the week prior. At the same time, the num­ber of dis­count points charged by banks increased to 0.8 from 0.7.

Stated dif­fer­ently, 30-year fixed rates mort­gage rates dropped but mort­gage appli­cants paid higher fees to get access to them. 1 dis­count point is equal to $1,000 per $100,000 borrowed.

Fred­die Mac also reported no change in the 15-year fixed rate and the 5-year adjustable rate mort­gage rates. Aver­age mort­gage rates for the twp bench­mark prod­ucts remained at 3.04% and 2.83%, respec­tively, with no change in dis­count points.

This week, mort­gage rates fig­ure to show a bit more move­ment. It’s a 4-day week because mar­kets were closed for Memo­r­ial Day, and there is a glut of new data set for release. Most notably, the May Non-Farm Pay­rolls report hits Fri­day morning.

The jobs report affects mort­gage rates because mort­gage rates are linked to U.S. eco­nomic strength. Wall Street is expect­ing to see 164,000 net new jobs cre­ated in May. If the actual results fall short of that esti­mate, mort­gage rates should fall. If the actual num­ber exceeds esti­mates, mort­gage rates should rise.

Other releases include the Case-Shiller Index, Con­sumer Con­fi­dence, the Pend­ing Home Sales Index, and Per­sonal Income and Outlays. 

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30-Year Fixed Rate Mortgage Rates Fall To 3.78% Nationwide

May 25th, 2012 by Michael Metz

Freddie Mac mortgage rates

For the fifth con­sec­u­tive week, con­form­ing 30-year fixed rate mort­gage rates have dropped to new all-time lows.

Accord­ing to this week’s Pri­mary Mort­gage Mar­ket Sur­vey from Fred­die Mac, “prime” mort­gage appli­cants will­ing to pay 0.8 dis­count points plus clos­ing costs can secure a mort­gage rate of 3.78%, on average.

This is a small improve­ment in rate over last week when the aver­age 30-year fixed rate mort­gage rate was 3.79% with 0.7 dis­count points.

1 dis­count point is equal to 1 per­cent of your loan size.

Like every­thing in real estate, though, mort­gage rates are local. Fred­die Mac reports that the mort­gage rates avail­able to con­sumers var­ied by region.

  • North­east Region : 3.78% with 0.7 dis­count points 
  • West Region : 3.74% with 0.9 dis­count points
  • South­east Region : 3.79% with 0.7 dis­count points
  • North Cen­tral Region : 3.83% with 0.6 dis­count points
  • South­west Region : 3.81% with 0.7 dis­count points

North Cen­tral Region res­i­dents cur­rently pay the low­est fees and get the high­est rates. For res­i­dents of the West, it’s the oppo­site. Every­where, however,mortgage rates are down. As com­pared to one year ago, today’s monthly car­ry­ing cost for a con­form­ing, 30-year fixed rate mort­gage is lower by $50 per $100,000 mort­gaged, or $600 per year.

A $300,000 mort­gage would save $1,800 annually.

Mort­gage rates have been drop­ping because Wall Street remains con­cerned for the futures of Greece, Spain, Italy and the Euro­pean Union. Sev­eral Euro­pean nations are at-risk for a sov­er­eign debt default and Greece remains a threat to leave the EU. To pro­tect against poten­tial loss, investors have been mov­ing money away from risky hold­ings toward safer ones — a class that includes U.S. mortgage-backed bonds.

As demand for the bonds rise, prices do, too. This leads mort­gage rates lower and so long as eco­nomic uncer­tainty remains, mort­gage rates are expected to stay low.

Low mort­gage rates make this a good time to buy or refi­nance a home. Talk to your loan offi­cer to review your mort­gage options.

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