Semi-Vacation : Catch Me On Twitter

I will be on semi-hiatus from blogging until January 5, 2009. Mostly, it's to work on my clients' refinance and purchase loans, but it's also to catch a little break with my family. If you miss me, get your fix from my Twitter feed: http://twitter.com/mortgagereports. On Twitter, I give a...



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[Source: The Mortgage Reports Blog]

9 Ways That "Waiting For Mortgage Rates To Fall" Can Come Back To Haunt You

In late-November, as mortgage rates fell into the fives, homeowners helped to start a mini-Refi Boom. This week, however, self-doubt crept in. Rest easy, friends. You're not missing out. See, it's well-known that 0-point mortgage rates touched 4.500 percent Wednesday. But it's a little less...



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[Source: The Mortgage Reports Blog]

9 Ways That "Waiting For Mortgage Rates To Fall" Can Come Back To Haunt You

In late-November, as mortgage rates fell into the fives, homeowners around the country helped to start a mini-Refi Boom. This week, they've all had second thoughts. Rest easy, friends. You're not missing out. See, it's well-known that 0-point mortgage rates touched 4.500 percent Wednesday. But it's...



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[Source: The Mortgage Reports Blog]

Bankrate.com Mortgage Trend Index (December 18, 2008)

I am a regular participant in the Bankrate.com Mortgage Rate Trend survey and this week's survey is now available. The Bankrate.com survey is for conforming mortgages. It does not apply to FHA mortgages, VA mortgages, or jumbo mortgages. For rate quotes, email me directly. Here are the group's...



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[Source: The Mortgage Reports Blog]

What To Expect From The FOMC's December 16, 2008 Meeting

The Federal Open Market Committee adjourns from its two-day meeting this afternoon. The voting members are widely expected to lower the Fed Funds Rate by a half-percent to 0.500 percent, the lowest Fed Funds Rate in recorded history. Mortgage rates should rise in response. This is a...



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[Source: The Mortgage Reports Blog]

Explaining What Happened At The Fed (December 16, 2008)

The Federal Open Market Committee voted to lower the Fed Funds Rate by at least three-quarters percent today. The benchmark rate now rests in a range of 0.000-0.250 percent, the lowest Fed Funds Rate recorded levels in history. And while the rate cut matters to Americans, it was more just...



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[Source: The Mortgage Reports Blog]

Mortgage Market Brain Dump : December 15, 2008

The Witching Hour: In November, the 3:00 P.M. hour generated 26 percent of the total S&P 500 volume for the month; the last 30 minutes accounted for 17 percent. Markets are closing out the day in spastic fashion and mortgage rate shoppers often pay the price. When markets move towards...



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[Source: The Mortgage Reports Blog]

Bring the Blog : Ready-To-Publish Blog Content For Loan Officers And Real Estate Agents

Author's note: This is an advertisement/awareness piece for Bring the Blog. Dan Green is an owner of the company. Bring the Blog is a blog-for-you service for loan officers and real estate agents. Starting Monday, December 15, 2008, monthly subscriptions increase from $39 to $57 monthly for new...



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[Source: The Mortgage Reports Blog]

The 3 O'Clock Hour Matters To Mortgage Rate Shoppers

The Wall Street Journal ran a terrific story Thursday, deep under the C section. The piece talks about Wall Street's 3 o'clock hour and how it's increasingly defining market performance. Because we're in a down market and investors are highly levered, with each day comes a new batch of forced...



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[Source: The Mortgage Reports Blog]

Bankrate.com Mortgage Trend Index (December 11, 2008)

I am a regular participant in the Bankrate.com Mortgage Rate Trend survey and this week's survey is now available. The Bankrate.com survey is for conforming mortgages. It does not apply to FHA mortgages, VA mortgages, or jumbo mortgages. However, I do lend on all of these loan types in all...



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[Source: The Mortgage Reports Blog]

Recent Trends in Loan Modifications

A loan modification is an agreement between a lender and a borrower to change the original terms of a loan in order to make payments more affordable. This can be accomplished by temporarily or permanently reducing the interest rate on a loan or changing an adjustable interest rate to a fixed interest rate. Another method of loan modification is to increase the term of a loan from the standard 30 years to 40 years or longer. In some cases, the lender may also reduce the principal balance due on a loan. All of these changes result in a lower monthly payment for the borrower.

Loan modifications are becoming increasingly common as the declining housing market and struggling economy take their toll on homeowners. Furthermore, the reduced standards for lending which contributed to the real estate boom are now causing problems as some borrowers are unable to afford payments on their loans. The reduced lending standards of the recent past included many programs where the borrower was approved for a mortgage either without disclosing income or based on unverified stated income. In these cases, the lender is not able to offer a realistic loan modification to a customer without currently verifying the income.

Recently, there has been political pressure for lenders to implement systematic programs to modify loans which are in default or facing a threat of default. The FDIC, the federal agency which insures most bank deposits, recently proposed a plan which would provide incentives for loan servicers to implement a systematic and sustainable process of loan modifications for loans at risk of default. The program guidelines specify that this is not a "social program" and that a loan modification will only be done in circumstances where the borrower can successfully document the income necessary to successfully maintain the modified loan payment. Estimates are that this program may save from foreclosure as many as 50% of those currently unable to maintain their pre modified mortgage payments.

The FDIC has been aggressively doing loan modifications for customers of Indy Mac bank which they recently took over. Many of the customers offered loan modifications by the FDIC have accepted the offer of lower payments. If the results of these initial modifications are successful over time, it is likely that loan modification will be offered more freely by other banking institutions. The success of the loan modification effort will likely be gauged by determining how many borrowers remain current with their new lower payment. Initial results for loan modifications are encouraging but the ultimate success cannot be judged until data is compiled on the payment history over a period of years.

When successful, a loan modification provides benefits for both the lender and the borrower. The lender will avoid potentially greater losses on the loan by modifying the payment. If a loan defaults and the lender must foreclose, the costs of the legal work and losses on the homes sale would usually outweigh the costs of a modification. The borrower receives the benefit of a lower monthly payment, which should help him retain ownership of the home.

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[Source: Loan Mortgages]

Predicting Mortgage Rate Volatility Using The VIX

Mortgage rates are a by-product of the mortgage bond market and, like everything else on Wall Street, they are subject to speculation. In general, when the economy is expected to expand in an orderly fashion, money often chases risk. It flows from the bond market to the stock market. By...



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[Source: The Mortgage Reports Blog]

Mortgage Rates At 4.500 Percent? Maybe. But Stop Waiting For It.

Maybe you've heard about this 4.5 percent mortgage rate thing, sponsored by the government? Just to be sure, here's the background: Wednesday: A story "leaks" about the U.S. Treasury lowering mortgage rates to 4.5% Thursday: "4.5% rates" leads the news Friday: 50 million Americans homeowners sit...



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[Source: The Mortgage Reports Blog]

Bankrate.com Mortgage Trend Index (December 4, 2008)

I am a regular participant in the Bankrate.com Mortgage Rate Trend survey and this week's survey is now available. The Bankrate.com survey is for conforming mortgages only. It does not apply to FHA mortgages, VA mortgages, or jumbo mortgages. However, I do lend on all of these loan types in...



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[Source: The Mortgage Reports Blog]

Locked A New, Low Mortgage Rate? Learn From Lucille Ball.

Americans refinancing into today's low mortgage rates would do well to watch this I Love Lucy video. It's an (imperfect) metaphor for what's about to happen in mortgage underwriting offices all around the country. While you're watching the video, think of: Lucy and Ethel as mortgage underwriters...



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[Source: The Mortgage Reports Blog]

2008 Reader Survey : Who Reads The Mortgage Reports?

Please take less than 60 seconds to complete my annual reader survey. It's less than 6 questions It's completely anonymous It would be a huge help for me If The Mortgage Reports helps you, please help me back. The survey is super-short. Thanks!



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[Source: The Mortgage Reports Blog]

How Newton's First Law Relates To Mortgage Rates

People ask me where mortgage rates are headed. I don't know the answer to that question. And, for a lot of reasons, really. None, however, more apparent than what happened yesterday. Shortly before the market open, the government pledged $500 billion to buy mortgage-backed debt. The move came as...



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[Source: The Mortgage Reports Blog]

Bankrate.com Mortgage Trend Index (November 6, 2008)

I am a regular participant in the Bankrate.com Mortgage Rate Trend survey and this week's survey is now available. As a reminder, the Bankrate.com survey is for conforming mortgages only and does not apply to FHA, VA, or jumbo mortgages. You can email me anytime for a personal rate quote....



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[Source: The Mortgage Reports Blog]

Going Off The Beaten Path To Find Low Mortgage Rates On "Jumbo" Mortgages

How do you avoid paying jumbo mortgage rates on a jumbo-sized mortgage? You go off the beaten path to find a lender, that's how. It's pretty simple when we break it down. The word "jumbo" is a Wall Street-specific term for home loans larger than $417,000. In certain "high-cost" areas,...



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[Source: The Mortgage Reports Blog]

How Cutting The Fed Funds Rate Helps The U.S. Economy

The Federal Open Market Committee adjourns from its 2-day meeting today after which the FOMC will issue its customary press release. The majority of Wall Street expects a Fed Funds Rate cut to 1.000 percent -- the lowest level since June 2004. Plus, it's worth noting that some are calling...



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[Source: The Mortgage Reports Blog]

2009 FHA Loan Limits Published To PDF For All 3,141 U.S. Counties

The government published the 2009 FHA Loan Limits for all 3,141 counties in the United States. As expected, loan limits will recede from their temporary levels of 2008. As in 2008, the 2009 FHA loan limits are based on the number of units in the property -- from 1-unit to...



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[Source: The Mortgage Reports Blog]

Bankrate.com Mortgage Trend Index (October 30, 2008)

I am a regular participant in the Bankrate.com Mortgage Rate Trend survey and this week's survey is now available. As a reminder: The survey is for conforming mortgages only. Send me an email for an actual rate quote. I send 140-character market updates on Twitter a few times daily. Anyway,...



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[Source: The Mortgage Reports Blog]

Parsing The Fed (October 29, 2008 Edition)

The Federal Open Market Committee voted to cut the Fed Funds Rate by one-half percent today. The benchmark interest rate now stands at 1.000 percent. Many people assume that because the Fed Funds Rate fell, mortgage rates fell, too. They have not. The connection between these two interest rates...



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[Source: The Mortgage Reports Blog]

Bankrate.com Mortgage Trend Index (November 27, 2008)

I am a regular participant in the Bankrate.com Mortgage Rate Trend survey and this week's survey is now available. The Bankrate.com survey is for conforming mortgages only. It does not apply to FHA mortgages, VA mortgages, or jumbo mortgages. However, I do lend on all of these loan types in...



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[Source: The Mortgage Reports Blog]

Set Your Mortgage Rate Alarm Clock For 3 Hours and 35 Minutes

November 2008 was another record-breaking month for Mortgage Rate Volatility. While market players drove themselves crazy, rapidly alternating between economic optimism, pessimism and cynicism, Americans looking for new home loans were forced to ride shotgun. Related to Wall Street's uncertainty,...



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[Source: The Mortgage Reports Blog]