WASHINGTON – Nov. 18, 2010 – Although the recent trend of rising long-term borrowing rates may mean higher mortgages for consumers in the coming months, the greater obstacles to housing market recovery are job creation and availability of credit, according to a National Association of Realtors® (NAR) analysis.
“Modest changes in mortgage rates are less important to a housing market recovery than the number of people who are able to obtain mortgages,” says NAR Chief Economist Lawrence Yun.
Last week, NAR’s Board of Directors approved a credit policy to urge the mortgage lending industry to reassess and amend their policies so more qualified homebuyers can become homeowners.
“Currently, the overly tight underwriting standards are holding back the pace of housing market recovery,” says Yun. “In particular, creditworthy small business owners and those who want to purchase investor properties have encountered extreme difficulties in obtaining a mortgage. In contrast, all indications are that recently originated mortgages with Fannie Mae, Freddie Mac and the Federal Housing Administration have solid loan performance, implying that credit is only going to the most well-qualified borrowers. Additional creditworthy borrowers who are willing to stay well within budget and meet reasonable underwriting criteria should be able to obtain a loan to help speed the housing and economic recovery.”
To qualify for a loan, most buyers also must be gainfully employed. As Congress reconvenes this week and considers an extension of the Bush tax cuts, their decision could impact job creation.
If the Bush tax cuts are extended for those earning less than $250,000 but taxes are increased for higher earners, Yun expects about 1.5 million net new jobs to be added to the economy in 2011. Mortgage rates are expected to rise to 5.4 percent by the end of 2011 from the current 4.2 percent average rate, provided the inflation rate stays manageable at near 2 percent. Total home sales, both existing and new combined, would rise to 5.5 million in 2011 from 5.1 million in 2010. If the Consumer Price Index inflation rate was to reach 3 percent, then mortgage rates could rise to 6 percent by the end of 2011, cutting home sales to 5.2 million.
“If the Bush tax cuts were extended for everyone across the board, an additional 400,000 additional jobs could be created in 2011, with home sales rising by an additional 60,000 to 80,000,” says Yun. “Of course, there are many factors that could influence job creation, and we also need to be mindful of the very high current budget deficits.”
© 2010 Florida Realtors®
http://www.oreinternationalrealty.com
Friday, November 19, 2010
Florida leads U.S. in serious mortgage delinquencies
BY JEFF OSTROWSKI
PALM BEACH POST
Florida still leads the nation in the percentage of homeowners who are ``seriously delinquent'' on their loans, the Mortgage Bankers Association said Thursday.
In the state, 19.52 percent of borrowers were either 90 days past due or in foreclosure in the third quarter. Add in borrowers who are 30 and 60 days late, and nearly one in four Floridians are behind on their loans.
The good news is that Florida's seriously delinquent rate is down from 20.13 percent in the second quarter. But no other state met Florida's lofty level of late payers. Nevada was No. 2 at 17.83 percent, while Illinois' 10.77 percent ranked third.
With Florida's job market still weak and home prices way down from a few years ago, it's no surprise that the state's delinquency rates are so high, said Jack McCabe, a real estate analyst in Deerfield Beach.
``With 48 percent of the state's homeowners underwater, we're going to continue to see delinquencies go up,'' McCabe said. ``The truth is a lot of people have given up and have stopped paying their mortgages.''
Part of the blame lies with the way foreclosures are handled in Florida, said Michael Fratantoni, the Mortgage Bankers' vice president of research and economics. Florida and other states where foreclosures go through the courts have foreclosure inventories that are twice as high as so-called non-judicial states, he said.
Of course, the court system is only partly to blame for Florida's delinquency problem. The bigger culprits are a withering collapse in prices and an 11.9 percent jobless rate that's well above the national unemployment rate of 9.6 percent.
Nationally, the delinquency rate fell, too, which the Mortgage Bankers Association attributed to modest improvements in the job market. The foreclosure freeze at some lenders hasn't played a role in falling delinquencies.
``The foreclosure paperwork issues announced by several large servicers in late September and early October are unlikely to have had a large impact on the third-quarter numbers,'' Fratantoni said.
http://www.oreinternationalrealty.com
PALM BEACH POST
Florida still leads the nation in the percentage of homeowners who are ``seriously delinquent'' on their loans, the Mortgage Bankers Association said Thursday.
In the state, 19.52 percent of borrowers were either 90 days past due or in foreclosure in the third quarter. Add in borrowers who are 30 and 60 days late, and nearly one in four Floridians are behind on their loans.
The good news is that Florida's seriously delinquent rate is down from 20.13 percent in the second quarter. But no other state met Florida's lofty level of late payers. Nevada was No. 2 at 17.83 percent, while Illinois' 10.77 percent ranked third.
With Florida's job market still weak and home prices way down from a few years ago, it's no surprise that the state's delinquency rates are so high, said Jack McCabe, a real estate analyst in Deerfield Beach.
``With 48 percent of the state's homeowners underwater, we're going to continue to see delinquencies go up,'' McCabe said. ``The truth is a lot of people have given up and have stopped paying their mortgages.''
Part of the blame lies with the way foreclosures are handled in Florida, said Michael Fratantoni, the Mortgage Bankers' vice president of research and economics. Florida and other states where foreclosures go through the courts have foreclosure inventories that are twice as high as so-called non-judicial states, he said.
Of course, the court system is only partly to blame for Florida's delinquency problem. The bigger culprits are a withering collapse in prices and an 11.9 percent jobless rate that's well above the national unemployment rate of 9.6 percent.
Nationally, the delinquency rate fell, too, which the Mortgage Bankers Association attributed to modest improvements in the job market. The foreclosure freeze at some lenders hasn't played a role in falling delinquencies.
``The foreclosure paperwork issues announced by several large servicers in late September and early October are unlikely to have had a large impact on the third-quarter numbers,'' Fratantoni said.
http://www.oreinternationalrealty.com
Wednesday, November 10, 2010
Report: September Data Shows Foreclosure Timelines Extending; Extreme Delinquencies on the Rise
RISMEDIA, November 10, 2010-- The September Mortgage Monitor report released by Lender Processing Services, Inc. (NYSE: LPS) shows that foreclosure timelines continue to increase, with the average number of days delinquent in five judicial foreclosure states (New York, Florida, New Jersey, Hawaii and Maine) exceeding 500 days. At the same time, the foreclosure timeline extension has been significantly more pronounced in non-judicial states.
Approximately 275,000 loans started foreclosure during the month and, while delinquencies in September dropped 7.8 percent as compared to a year ago, in the context of "normal market conditions," delinquencies remain at historically high levels and foreclosure inventories are only slightly below all-time highs. More than 4.3 million loans are 90 or more days delinquent or in foreclosure.
Timelines in the 90-days-or-greater delinquency category have continued to increase even as inventories have declined. As of the end of September, 32 percent of 90-days-or-greater delinquencies could be categorized as "extremely delinquent," with borrowers not having made payments for 12 months or more. The average days delinquent for loans in the 90-days-or-greater delinquency category is 316 days, and the average loan in foreclosure has not had a payment made in 484 days, or roughly 16 months.
This month's report also shows that approximately 1.13 million loans that were current at the beginning of January 2010 are at least 60 days delinquent or in foreclosure as of the end of September 2010 – a month-over-month increase of approximately 120,000 loans. The last two months have seen an increasing trend in this new problem loan category – 1.84 percent of loans that were current six months ago are 60 or more days delinquent today.
http:www.oreinternationalrealty.com
Approximately 275,000 loans started foreclosure during the month and, while delinquencies in September dropped 7.8 percent as compared to a year ago, in the context of "normal market conditions," delinquencies remain at historically high levels and foreclosure inventories are only slightly below all-time highs. More than 4.3 million loans are 90 or more days delinquent or in foreclosure.
Timelines in the 90-days-or-greater delinquency category have continued to increase even as inventories have declined. As of the end of September, 32 percent of 90-days-or-greater delinquencies could be categorized as "extremely delinquent," with borrowers not having made payments for 12 months or more. The average days delinquent for loans in the 90-days-or-greater delinquency category is 316 days, and the average loan in foreclosure has not had a payment made in 484 days, or roughly 16 months.
This month's report also shows that approximately 1.13 million loans that were current at the beginning of January 2010 are at least 60 days delinquent or in foreclosure as of the end of September 2010 – a month-over-month increase of approximately 120,000 loans. The last two months have seen an increasing trend in this new problem loan category – 1.84 percent of loans that were current six months ago are 60 or more days delinquent today.
http:www.oreinternationalrealty.com
Bankrate: Mortgage Rates Return to Record Low Territory
RISMEDIA, November 9, 2010--Mortgage rates revisited record lows this week, with the average rate on the benchmark conforming 30-year fixed mortgage rate returning to 4.42 percent, according to Bankrate.com's weekly national survey. The average 30-year fixed mortgage has an average of 0.37 discount and origination points.
To see mortgage rates in your area, go tohttp://www.bankrate.com/funnel/mortgages/.
The average 15-year fixed mortgage hit a new low of 3.81 percent, and the larger jumbo 30-year fixed rate did as well, sinking to 5.04 percent. Adjustable rate mortgages were mostly lower, with the average 5-year ARM falling to 3.57 percent and the average 7-year ARM retreating to 3.87 percent.
Mortgage rates fell back into record low territory this week. The Federal Reserve has announced another injection of $600 billion over the next 8 months, but it remains to be seen if this is enough to push Treasury yields and mortgage rates lower, and if so, by how much. Even if the Fed is successful in pushing rates lower, it doesn't alter the fact that many would-be borrowers are upside-down, living on a reduced income, or concerned about a lack of job security.
The last time mortgage rates were above 6 percent was Nov. 2008. At that time, the average rate was 6.33 percent, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 4.42 percent, the monthly payment for the same size loan would be $1,003.89, a savings of $238 per month for a homeowner refinancing now.
SURVEY RESULTS
30-year fixed: 4.42% -- down from 4.51% last week (avg. points: 0.37)
15-year fixed: 3.81% -- down from 3.90% last week (avg. points: 0.28)
5/1 ARM: 3.57% -- down from 3.67% last week (avg. points: 0.34)
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.
http://www.oreinternationalrealty.com
To see mortgage rates in your area, go tohttp://www.bankrate.com/funnel/mortgages/.
The average 15-year fixed mortgage hit a new low of 3.81 percent, and the larger jumbo 30-year fixed rate did as well, sinking to 5.04 percent. Adjustable rate mortgages were mostly lower, with the average 5-year ARM falling to 3.57 percent and the average 7-year ARM retreating to 3.87 percent.
Mortgage rates fell back into record low territory this week. The Federal Reserve has announced another injection of $600 billion over the next 8 months, but it remains to be seen if this is enough to push Treasury yields and mortgage rates lower, and if so, by how much. Even if the Fed is successful in pushing rates lower, it doesn't alter the fact that many would-be borrowers are upside-down, living on a reduced income, or concerned about a lack of job security.
The last time mortgage rates were above 6 percent was Nov. 2008. At that time, the average rate was 6.33 percent, meaning a $200,000 loan would have carried a monthly payment of $1,241.86. With the average rate now 4.42 percent, the monthly payment for the same size loan would be $1,003.89, a savings of $238 per month for a homeowner refinancing now.
SURVEY RESULTS
30-year fixed: 4.42% -- down from 4.51% last week (avg. points: 0.37)
15-year fixed: 3.81% -- down from 3.90% last week (avg. points: 0.28)
5/1 ARM: 3.57% -- down from 3.67% last week (avg. points: 0.34)
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.
http://www.oreinternationalrealty.com
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