US 30-year mortgage rates rise

Inflation fears pushed U.S. 30-year mortgage rates up after being unchanged for three weeks according to Freddie Mac. 30-year fixed-rate mortgages averaged 6.03 percent this week after three straight weeks at 5.88 percent. Rates on 30-year mortgages were last above 6 percent the week of March 16 when they averaged 6.13 percent. One-year adjustable rate mortgages, or ARMs, climbed to an average of 5.29 percent from 5.10 percent. The 15-year fixed-rate mortgage averaged 5.62% this week, up from last week's 5.40% average. The mortgage averaged 5.87% a year ago. And one-year Treasury-indexed ARMs averaged 5.29% this week, up from last week's 5.10% average. The ARM averaged 5.43% a year ago. A separate survey released Wednesday by the Mortgage Bankers Association showed that the volume of mortgage applications filed last week fell 14.2% compared with the week before. Lenders charged an average of 0.3 percent in fees and points on 30- and 15-year mortgages, down from 0.4 percent and 0.5 percent last week, respectively.

Mortgage Application Volume Down

US Mortgage applications plunged last week, largely reflecting a drop in demand for home refinancing loans. Mortgage application volume tumbled 28.7 percent during the week ending March 28, according to the Mortgage Bankers Association's weekly survey. Mortgages to purchase homes dropped a seasonally adjusted 11.8% last week, compared with the previous week. Refinancing applications took a 38.1% dive on a week-to-week basis, according to the MBA's latest survey. The U.S. real estate market is currently suffering one of the worst downturns in its history. Last week's drop in demand may indicate what is in store for the hard-hit sector this spring, which is the peak home-buying season. Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 5.75 percent, up 0.01 percentage point from the previous week.

US Govt. To Forgive Some Mortgage Loans?

USA is planning to aid borrowers whose mortgages are greater than the value of their homes. The govt. may call on lenders to forgive part of the loans according to the Washington Post, citing unidentified government officials. The Bush administration is finalizing a plan to rescue thousands of homeowners facing foreclosure by helping them refinance into more affordable loans, the Washington Post reported in its Saturday edition. The Department of Housing and Urban Development wrote a plan to expand the Federal Housing Administration and sent it to Bush officials about a week ago, but it has not yet won an endorsement. With foreclosure signs prevalent and a Wall Street rescue reverberating, majority Democrats want the government to step in and back up to $400 billion in troubled loans. The goal is to help strapped borrowers and thaw a credit market plagued by uncertainty about the value of subprime mortgages made to people with spotty credit or low incomes. The concept is similar to elements in legislation proposed earlier this month by U.S. Representative Barney Frank. Will you qualify under this new "forgiveness plan"?

US Federal Reserve Cuts Rates By 0.75%

The U.S. Federal Reserve Board cut interest rates by three-quarters of a percentage point Tuesday and left the door open to more cuts in the near future in efforts to ward off a recession or worse, But it was less than the full percentage point investors had come to expect. With today's move, the central bank has now lowered interest rates by a full three percentage points since September, bringing it to the lowest point since late 2004. It marked the second back-to-back cuts of three-fourths of a percentage point. The Fed's policy-making Federal Open Market Committee voted 8-2 to cut its short-term interest rate target to 2.25% from 3%, bringing cumulative declines in less than two months to two percentage points, the most rapid pace of easing in years. The Fed also on Tuesday lowered the discount rate it charges banks and brokers that borrow directly from the Fed by 0.75 percentage point to 2.5%, leaving the spread over fed funds at a quarter point. In the statement accompanying the decision, the Fed said that the outlook for economic activity has weakened further, consumer spending has slowed and labour markets have softened. Financial markets remain under considerable stress, and the tightening of credit conditions and the deepening of the housing contraction are likely to weigh on economic growth over the next few quarters.

U.S. mortgage rates rise. Again!

Rates on 30-year mortgages increased this week for the fourth time in the past five weeks. Freddie Mac, the mortgage company, reported Thursday that U.S. 30-year mortgage rates averaged 6.13 percent compared with 6.03 percent a week earlier, while 15-year mortgages rose to an average of 5.60 percent from 5.47 percent. One-year adjustable rate mortgages (ARM) also jumped to 5.14 percent in the week from 4.94 percent a week earlier. Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 5.58% for the week, up from last week's 5.34% average. The ARM averaged 5.90% a year ago. The mortgage rates do not include add-on fees known as points. For 30-year and 15-year mortgages, the nationwide average fee was 0.5 point, while five-year mortgages carried a 0.6 point average fee and one-year mortgages had a 0.7 point average.

real estate foreclosures, which shot up to a record high in the final quarter of last year, are expected to keep rising even with industry and government efforts under way to help people at risk of losing their homes.

Tougher Rules For US Mortgage Industry?

US financial regulators are recommending a series of tougher new regulations for mortgage brokers and financial institutions as part of their efforts to minimize the risk of repeating the mortgage and credit crisis. Treasury Secretary Henry Paulson outlined policy recommendations from the President's Working Group on Financial Markets (PWG) with the aim of creating more transparent, better-functioning and better-managed markets. The report recommends higher capital requirements and better disclosure of risky investments. It also outlines new consumer protections for the mortgage lending industry. Implementing national licensing standards at the state level for mortgage originators and encouraging credit ratings agencies to differentiate between ratings on structured products and traditional bond ratings are also among the recommendations.

Record mortgage Mess

Almost 6% of all mortgages were delinquent nationwide in the 4th quarter and foreclosure starts were at the highest levels ever, according to a report issued by the Mortgage Bankers Association. After surging in popularity during the U.S. housing boom, the risky subprime loans now are contributing to a record number of home foreclosures across the country, as many borrowers find themselves unable to pay the exorbitantly high interest rates that are starting to kick in after a few years of paying super-low "teaser" rates. The figures are expected to increase pressure on policy makers and the mortgage industry to move faster to contain losses and help homeowners. In recent days, regulators and lawmakers have begun suggesting that the federal government might need to take a bigger role in the mortgage business. This mortgage crisis is behind a nationwide drop in home values and a crisis in confidence that is impeding all types of lending. People who did not choose to take risks are also suffering, and more and more experts now say some sort of government response is necessary to avert a deep and prolonged recession. Though defaults increased across the country, much of the rise came from a handful of large states like California and Florida. Those two states account for about 21 percent of all mortgages but 30 percent of the new foreclosures. Nevada, Arizona, Michigan and Ohio also had high default rates.

U.S. Mortgage Foreclosures Hit Record High

U.S. Mortgage Foreclosures rose to an all-time high at the end of 2007 as borrowers with adjustable-rate loans walked away from properties. The Mortgage Bankers Association, in a quarterly report of the mortgage market released Thursday, said that the proportion of all mortgages nationwide that fell into foreclosure shot up to a record high of 0.83 percent in the last quarter of 2007. That surpassed the previous high of 0.78 percent set in the prior quarter. More home owners than ever are losing the battle to make their monthly mortgage payments. Over 900,000 households are in the foreclosure process, up 71% from a year ago. Another 381,000 households, or 0.83% of borrowers, saw the foreclosure process started during the quarter. The number of mortgage borrowers who were over 30 days late on a payment in the last three months of 2007 is at its highest rate since 1985. Homeowners with tarnished credit who have subprime adjustable-rate loans were the hardest hit. The worsening foreclosure and late payment figures come as fears grow that the country is teetering on the edge of a recession or in one already. Freddie Mac and Fannie Mae, the biggest U.S. mortgage finance companies, have posted their largest-ever losses as rising defaults boosted credit costs. Fannie Mae had a $3.55 billion loss in the fourth quarter, the Washington-based company said Feb. 27. Freddie Mac reported $2.45 billion fourth-quarter loss the following day.

US Govt. wants mortgage data

The Office of the Comptroller of the Currency says that nine large banks must provide detailed information on mortgage delinquencies and foreclosures every month to a federal regulator. Citigroup Inc., Bank of America Corp., Wells Fargo & Co., JPMorgan Chase & Co., US Bancorp, National City Corp. HSBC Plc and First Horizon National Corp. are among the banks required to hand over this data. The OCC wants data including delinquencies, foreclosures and efforts to modify mortgages and hopes to better supervise the major banks and the loans they service in the future. The OCC is looking for information on all loans, not just subprime loans made to borrowers with poor credit. Three weeks ago, a group of state attorneys general blamed the OCC for hampering a study on foreclosures, that they said were wreaking havoc on local economies. The OCC is also planning to collect data on home equity loans later this year.