Mortgage Rates Inch Up from Record Lows

30 yr at 4.23% with 15 yr at 3.66%

Mortgage rates were up slightly this week but still near record lows.

Rates have been on a steady decline since April as investors have been pouring money into treasury bonds. The demand on the bonds lowers their yield and mortgage rates tend to following the yield down.

The low mortgage rates have helped the refinance market but have done little to spark the purchase market.

Rates on five-year adjustable-rate mortgages averaged 3.41%, up from 3.45% a week earlier. Rates on one-year adjustable-rate mortgages remained at an average of 3.3%.

Home Prices are Weaker Around The Country. NY Shows Small Increase

Home Prices Fall .2% according to S&P/Case Schiller Index

With tons of new foreclosures expected to hit the market over the next several years, many expect prices to come down even further. This will hurt some areas that may have seen some sort of recovery.

This week S&P/Case Schiller released it's index for home prices for 20 major cities. 15 of those 20 cities posted declining home prices.

New York, Washington and Chicago have shown consistent price increases since the spring time. Although these increases are small and have faded over the summer, New York has had less foreclosures than these other cities.

However, the foreclosure mess is far from over with 2.4 million homeowners behind at least 90 days on their mortgage. These folks represent the "shadow inventory" as there are already 2 million loans in foreclosure.

FBI Now Looking into Foreclosure Mess

Big Brother Checking to See if Any Laws Were Broken

This may get ugly everyone.

A foreclosure document crisis is the newest mess to hit the housing / lending industries. Now the FBI is in the beginning stages of checking in to see if any laws were broken or if violations have occured.

In the banking industry, things were so overwhelming when it came to foreclosures that some may have acted with criminal intent whether they knew it or not.

Althought most of the Bigger Banks feel their documents are now in order and accurate, they can't just say that the mess is over. The still face opposition in the following ways....


•Attorneys general in all 50 states are jointly investigating whether lenders violated state laws.
•Lawyers for evicted homeowners are preparing lawsuits against major lenders.
•State judges have signaled they will review the banks' foreclosure documents with skepticism.
•Lawmakers on Capitol Hill plan to hold hearings.

So long story short....this is not over

How Low Do Mortgage Rates Go?

30 year at 4.19% with 15 year at 3.62%

As attractive as rates have become over the last 3 months, home purchasing has not followed. We can blame this on the average buyer being flushed out of the market with all the tightening around lending conditions.

The Refinance Market has seen a great spike in activity and why not. In some cases depending on current loan amounts and current rates, someone who refis from a 6% loan to a 4% loan could save anywhere from $200 - $1000 a month.

The demand on treasury bonds lowers their yields and mortgage rates tend to track those yields. So with Investors putting money into these bonds since the spring, mortgage rates have followed.

At the beginning of April, 30 year rates were at 5.08% with 15 year at 4.39%. That means a $400,000 loan is now roughly $350 less a month than it was 6 months ago.

This could make the difference between not being able to buy then, and being able to get into that same property now.

How low will rates go? 4%? 3.75%? 3.50%
We may get there, but nothing is guaranteed.

So if you can buy the same house for $350 less a month now than you could have in the Spring, now is the time to make your move.

Foreclosure and REO Update

As you may be aware, on October 9, Bank of America extended its foreclosure process review to all fifty states. Consequently, the bank is halting foreclosure sales until this assessment has been satisfactorily completed.

Since BofA announced this review, there has been considerable confusion about the meaning of “foreclosure sale.” This term refers to the final step of the foreclosure process, upon which a delinquent borrower’s property becomes “Real Estate Owned” by the bank. Foreclosure sales are not transactions of REO property.

It’s important to recognize that at this time BofA does not anticipate taking actions to impede the sale or marketing of its current REO inventory. Barring other factors, current transactions may proceed normally. Moreover, any transactions where BofA is involved in financing the purchase of an REO property may continue as scheduled.

While the foreclosure process freeze does not directly impact current BofA REO listings and transactions, some banks are taking steps to suspend REO sales until corrective measures are taken. Agents and buyers should proceed with caution in any REO transaction by taking the following actions:

· Immediately contact the listing agent to obtain further information as to the status of the transaction.

· Confirm the intended lender will finance the sale. Banks have adopted various policies about foreclosures and REOs, and not all properties under affected lenders are impacted.

· Check with the title carrier to obtain a definitive understanding of whether title will continue to be issued. A few title insurers have noted they will not provide title insurance for REOs sold by some banks until these matters are corrected.

· Keep up to date about state-specific developments through your local DRE and Attorney General websites. Particularly in judicial review states, courts may determine that curtailing REO transactions is warranted given the alleged foreclosure process deficiencies.

This guidance is based on our best understanding of the situation as it stands of today, as reported to us by BofA and other sources. Keep in mind things can change quickly. We will keep you posted.

New Foreclosure Mess Could Last for Years

A lot of Investigations and Lawsuits will Follow Paperwork Mess.

Several companies were using robo-signers, so now some Banks have delayed the foreclosure process for some homeowners. The sale of Bank Owned properties has also been delayed. These banks include Bank of America, JP Morgan Chase and Ally's GMAC.

A GMAC employee said in a deposition in December 2009, that his team of 13 people signed about 10,000 documents a month without verifying accuracy. That's just one team for one bank.

The lawsuits that have been brought on by homeowners claim that lenders used falsified documents to foreclose on homes. In some cases the banks didn't even hold title to the property.

This is just the beginning of a very big mess. Stay Tuned

Mortgage Rates Continue to Dive to Historic Lows

30 yr hits 4.27% with 15 yr at 3.72%

Rates on a 30 year loan fell for the 9th time in 12 weeks, hitting 4.27%. That is the lowest level on record dating back to 1971. Rates on a 15 year loan dropped to 3.72%, the lowest level for a 15 year since 1991.

Many investors have been shifting their money into the safety of treasury bonds lowering their yield and mortgage rates track those yields.

This proves a huge difference for buyers. For example, if you were taking a $400,000 loan at 6% your payment was upward of $3,000 with taxes and insurance. That same loan now at 4.3% is roughly $600 less a month with taxes and insurance.

It's a great time to buy with lower home prices and low rates. It is a rare combination in housing, take advantage!

New Agency Disclosure Law Goes into Effect on January 1, 2011

August 30, 2010, Gov. David Paterson signed a bill into law amending Real Property Law §443 to add two new components to the agency disclosure law relating to advanced consent to dual agency and agency disclosure for condominiums and cooperative apartments/units.

The new law and required forms do not take effect until January 1, 2011.

Under the new law, sellers, landlords, buyers and tenants are permitted to consent to dual agency or dual agency with designated sales agents in advance by indicating the same on a new revised agency disclosure form.

click here for the rest of the law
http://www.cnyrealtor.com/news/2010/sep/new-agency-disclosure-law-goes-effect-january-1-2011

Senate Passes One-Year Extension on Higher GSE Loan Limits

Congress has voted to extend higher loan limits for the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac. Approved by the U.S. House of Representatives and Senate, President Barack Obama is expected to sign the initiative into law that would keep a ceiling of $729,750 for single-family home mortgages in high-cost areas other than Hawaii and Alaska in place until October 2011

The Senate approved the measure by a vote of 69-30 on Wednesday. The bill, HR 3081: Department of State, Foreign Operations, and Related Programs Appropriations Act of 2010, would extend the current conforming loan limits through the new fiscal year and provide the Federal Housing Administration’s (FHA) multifamily programs with additional commitment authority by providing $20 billion in loan commitment authority for FHA’s General and Special Risk Insurance Funds.

“Extending the existing limits is essential to helping borrowers continue to have access to affordable long-term, fixed-rate mortgage credit in today’s struggling economy," said Robert E. Story Jr., CMB, chairman of the Mortgage Bankers Association (MBA) "The current limits have been a key component of keeping the mortgage market functioning, helping keep mortgage interest rates low for consumers who want to purchase a home or refinance an existing mortgage."

The loan limit cap was set to drop to $625,500 at the start of fiscal year 2011. The passage of HR 3081 will further prolong the higher limit and keep interest rates low in order to boost the homebuying market.

“Likewise, providing the FHA with additional multifamily commitment authority will help ensure funding for the continued development, renovation and mortgage refinancing necessary to preserve affordable rental housing in this country," said Story. "This sector has been crucial during the recent housing downturn and credit crisis, and FHA needs the additional authority in order to ensure the market remains liquid."