The 10-year T-note is again falling toward 5 percent, and has taken low-fee mortgage rates to 6.75 percent. Newspapers today say that “mortgage rates rose” this week, but this factoid is based on Freddie Mac’s bone-headed method of early-week survey and delayed (Thursday) release. Rates had risen in nervous anticipation of Federal Reserve Chair Ben Bernanke’s Wednesday testimony to Congress, but fell instantly — before he began to speak — on release of his prepared remarks.

Bernanke’s communication skills are improving: the testimony was as bland and even-handed as could be. However, the heart of his testimony, and the strong reaction in the bond and stock market, were odd. Bernanke, now repeatedly referring to a “moderating” economy, offered a forecast of GDP growth to decline from “3.5-3.25 percent in 2006 to 3.25-3 percent in 2007,” and core inflation to decline from “2.5-2.25 percent in 2006 to 2.25-2 percent in 2007.” (more…)

search for : T-note, mortgage rates, Freddie Mac, Ben Bernanke

Freddie Mac today released the results of its Primary Mortgage Market Survey in which the 30-year fixed-rate mortgage (FRM) averaged 6.80 percent, with an average 0.5 point, for the week ending July 20, 2006, up from last week’s average of 6.74 percent. Last year at this time, the 30-year FRM averaged 5.73 percent. The last time the 30-year FRM was higher was the week ending May 24, 2002, when it averaged 6.81 percent.

“Financial markets were a bit jittery after core Consumer Price Index (CPI) figures for June were released that indicated inflation might still be a potential threat,” said Frank Nothaft, Freddie Mac vice president and chief economist. “If this were the case, the Fed would be more inclined to continue to raise rates this year. Mortgage rates reflected that thinking and rose accordingly.” (more…)

search for : Freddie Mac, Primary Mortgage Market Survey

There are a lot of factors that have contributed to this growth in women buying and owning homes. Increased wages have boosted female homeownership as the gender gap in pay continues to slowly narrow. Another major factor is the increased availability of financing for women. Not so many years ago a woman seeking to buy a house faced formidable obstacles to obtaining a mortgage - or any kind of credit for that matter. Young women in today’s workforce would be appalled at stories their mothers, if they were at all financially proactive, could tell about trying to even obtain a charge account from Filenes or Sears as late as the 1970s. (more…)

search for : Single women, National Association of Realtors, financing, mortgage, credit, charge account

The equity you build up in your home is not a retirement-savings account, although many Americans are tempted to think that it is. But the smartest way to think about home equity, financial planners say, is as a cushion, a spare tire in reserve just in case savings calculations are off or liquid assets run out.Shelter is a necessity, and so many planners classify the home as a “use asset”.

A recent Securities Industry Association retirement study identified a “wealth effect” that surfaced as homeowners amassed equity in their properties and perceived they had less of a need to save. Factors such as rising interest payments and higher energy prices also pushed Americans to slack off when it came to lining their retirement nest egg, the study concluded. For many American homeowners, nearly half of their net worth is based on the value of their home, the study found. At the same time, the number and percentage of households holding a retirement account such a 401(k) or an individual retirement account have fallen since 2001, and nearly half of American households are not saving at all. The study also estimated that half of the next wave of retirees — the baby boomers — will be unable to maintain their standard of living in retirement, even if they postpone it. (more…)

search for : retirement-savings account, home equity, Securities Industry Association, retirement, homeowners

According to the Federal Reserve, in 2004, 46% of American families were strapped with credit card debt. How much debt? $5,100 on average, as our Foolish colleague Nathan Alderman pointed out. And that’s just credit cards. Factor in student loans, car loans, home-equity lines of credit, mortgages, second mortgages, vacation-home mortgages … yup, our nation is in debt’s unforgiving clenches.

However, if you are in credit card debt, it’s absolutely crucial that you develop a plan now to pay it off and get your bank account going in the right direction (up). And beyond that, it’s important to make sure you save — and eventually invest — for the future. (more…)

search for : credit card debt, student loans, car loans, home-equity lines of credit, mortgages, second mortgages, vacation-home mortgages

Threre have been recent studies of lending practices, including one by the Center for Responsible Lending (CRL). While most of the studies leave out important differences between the groups, including credit scores, the CRL study takes into account credit and other relevant factors, and its findings are the same. They find that minorities generally pay more, which rings true to me. To understand how and why it happens, it is necessary to understand how mortgages prices are determined. In more than 90 percent of the transactions, it is a two-stage process. Stage 1 is the development of posted prices that are delivered to loan officers and mortgage brokers. Stage 2 is the determination of final prices paid by the borrower.

Posted prices are either retail or wholesale. Wholesale prices are posted by wholesale lenders to mortgage brokers and correspondent lenders (CLs). (Unlike brokers, CLs fund loans, but they deliver them to the same wholesale lenders as brokers. Henceforth, I use the term “brokers” to include CLs). Retail prices are posted by retail lenders to their loan officer employees. Mortgage prices are delivered by fax or (increasingly) over the Internet in the form of “price sheets.” These sheets are voluminous because each loan program must be priced separately and because pricing has become so complex. Prices vary with the borrower’s credit, purpose of loan, type of property, type of documentation, state location of property, and other factors. (more…)

search for : Center for Responsible Lending, credit score, minorities, loan officer, mortgage brokers, borrower, correspondent lenders, Mortgage prices

Homeowners with adjustable-rate mortgages or who bought more house than they could afford — made worse by stagnating wages or a job loss — are especially feeling the squeeze. This is hardly the time to stick your head in the sand and pretend any problems you face will somehow disappear.

The fact is, good options exist for a good many late-payers, said Wayne Ferguson, a Freddie Mac customer-care official who helped conduct the Kansas City event. He said the message is simple: “We want you to call the lender early, call the lender often.” He summarized three main alternatives to foreclosure often available to those holding Freddie Mac-backed loans. But they can be broadened to apply to a variety of other home mortgages: (more…)

search for : adjustable-rate mortgage, Freddie Mac, lender, home mortgage

The Federal Housing Administration has undertaken “several significant changes” during the past 12 months. Among a bevy of improvements, the FHA has raised its loan limits, albeit not as much as the agency and lenders would have liked; moved away from onerous repair and inspection requirements; and generally retooled the lending process to make it less cumbersome for borrowers and their lenders.

FHA Commissioner Brian Montgomery is convinced these changes will “bring FHA into the 21st century and make us a real player in the mortgage market again.” At the same time, though, the agency hasn’t been sitting around waiting for something to happen. Here’s a brief recap: In January, it raised its maximum loan limit by nearly $50,000, to $362,790, in the nation’s most-expensive markets. The ceiling was bumped to $220,160 practically everywhere else — but somewhere between the two extremes in 468 counties. The FHA is asking lawmakers to raise the lid in high-cost markets to $417,000 this year and possibly even higher in subsequent years. But $362,790 isn’t exactly pocket change. With 3 percent down, it’s enough to buy a house priced at $374,010. (more…)

search for : Federal Housing Administration, FHA