The housing market in America has been tipped upside down because of uncertain economic times and trouble in the mortgage markets. Mortgage rates news is not encouraging and trends are not behaving the way the professionals predicted and while they are at their lowest rates since the 1950s, nobody is buying anything. Why? The answer partially lies in these seven disturbing mortgage trends.
1. Mortgage rates are going?
The Federal Reserve plowed billions of dollars into mortgage backed securities which drove interest rates down. That spending binge ended in April and virtually every mortgage expert expected the rates to rise in the Spring and Summer of 2010 however the rates have stabilized and show no signs of increasing. The reason most offered to explain this is that demand for mortgages is low because of the uncertain economy. More details please visit:-playboicartinetworth.com canabisnews.com tavereviews.com ecomagorareviews.com stanfordinterview.com smallwritingdesk.com thecommercecasino.com
2. Is demand low or are we all just too poor
With the average existing mortgage at 5.9% and new mortgages going for 4.75% it would seem like people would be scrambling to refinance their home to get a lower monthly payment. In normal times they would but these are not normal times. The housing market has taken a huge hit thanks to the enormous number of bank owned sales that has driven the value of most properties down. Today it is not uncommon to find a homeowner, even a long term homeowner, whose mortgage is greater than the value of his home. No equity means no refinancing.
3. HARP program a complete flop
The federal government presented the Homeowners Affordable Refinance Plan that was designed to make it possible for homeowners to get refinancing even if they were upside down on their mortgage. The administration predicted this plan would help refinance 2 million homes in 18 months. Unfortunately, this is not a mandated program and banks, even the ones who got all the TARP money don’t have to participate. Eleven months into the program fewer than 300,000 refinance loans have been approved.
4. FHA tightens up requirements
Typically conventional loans will allow the seller to help the buyer out by taking back up to 3% of the sales price. The FHA had a more liberal allowance of 6% and that’s what made their loans so attractive. Unfortunately the FHA has decided to conform with the other lenders and limit that assistance to 3% knocking even more people out of the house buying market.
5. Jumbo loans now more available
While banks are tightening requirements for conventional loans they are easing requirements for jumbo loans. Where before banks required a 25% down on a jumbo, lenders have relaxed that threshold to 20%. So if you are wealthy you can get a loan for your mansion for less down than you could before.
6. Does SAFE really make us safe
Firmly slamming the barn door after the cow had already left, the federal government came up with the SAFE Mortgage License Act as a way to insure that lenders and brokers understood the market place and to protect consumers from the sharks that swim in the mortgage waters. However it appears that this act does not apply to everyone. If you are a lending company or a broker you need to pass a test. If you work for a bank you don’t.
7. FHA still the most attractive new home mortgage
While most of the concerns are about refinancing, those that qualify for a new home mortgage but are short on the down payment will find the FHA loan very attractive. Without doubt, the down payment requirement of just 3.5% of the sale price is the lowest a consumer can find anywhere.
On the one hand if you have great credit and a bunch of cash this is a fantastic time to take advantage of super values in the housing market. On the other hand, if your upside down don’t expect to get right side up anytime soon. Mortgage rate trends are now totally unpredictable and will remain so until this economic crisis is over.