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More evidence is out on Wednesday that the pool of homeowners who can refinance under today’s more stringent lending standards has been exhausted: Mortgage rates have hovered close to their lowest levels in decades, and yet refinance demand fell last week from the previous week.
Demand for home-purchase mortgages also continued to fall last week, according to the weekly application survey from the Mortgage Bankers Association. That means there have now been five straight weeks of declining demand for purchase mortgages, which have fallen to their lowest level since February 1997.
“Home buyers have not yet returned to the market following the expiration of the home-buyer tax credit at the end of April,” said Michael Fratantoni, the MBA’s vice president of research and economics.
Early indications show that home sales activity plunged in May, the first month after the tax credit’s expiration. Sales in markets including Minneapolis, Denver, Seattle, Phoenix and New Jersey were down by around 25% in May from one year earlier.
Most analysts expected housing demand to fall after the tax credit expired, but few had predicted that mortgage rates would tumble to such low levels after the Federal Reserve ended its purchases of mortgage-backed securities in March. Average rates on 30-year fixed-rate loans fell to 4.81% last week from 4.83% at the end of May.
Mortgage rates tracked by Zillow’s Mortgage Marketplace index reached their lowest level of the current cycle on Tuesday, with participating brokers quoting an average 4.58% rate for 30-year fixed-rate loans. Read the rest of this entry »
The stock market trouble and the European debt crisis are things easier for American homebuyers and families looking to refinance. This is due to mortgage rates inching closer to a record low.
However, this window of opportunity may close soon due to rising home loan rates. This will occur if investors grow more confident and shift money out of the safety of government bonds. These bonds are what influence mortgage rates.
Despite the threat of the window closing soon, rates are tantalizingly low at the moment. The average 30-year fixed-rate loan sank to 4.78 percent this week. That is the lowest this year and barely above the record of 4.71 percent, which was set in December. In addition, 15-year loans are at their lowest rates in two decades. Read the rest of this entry »
Mortgage refinance rates are lower again this week in our latest refinance mortgage rates survey. 30 year mortgage refinance rates are averaging 4.95 percent this week, down from the previous week’s average 30 year refinance mortgage rate of 5.03 percent.
Refinance rates have been slowly going lower since mid April. Lower mortgage refinance rates drove demand for refinancing higher in the latest Refinance Index survey released by the Mortgage Bankers Association. The Refinance Index, which is a measure of mortgage applications for refinancing jumped 14.8 percent.
10 year U.S. Treasury yields were also lower last week as investors fled the Euro and bought Treasuries. The European Union and the IMF finally put together a rescue package for Greece.
15 year refinance mortgage rates were also lower this week over last. The current average 15 year mortgage refinance rate is averaging 4.35 percent, down from last week’s average 15 year mortgage rate of 4.42 percent.
Houston-Refinance.com would like to welcome our newest partner; Roger Young with Peyton Financial Mortgage, Inc.
Roger Young’s clientele includes people with many different backgrounds. His schedule is flexible to accommodate the demanding lives of people today. Roger loves helping first-time buyers, easing their worries and fears and helping them get a foot in the door to home ownership. He takes pride in his/her reputation as an honest, straightforward professional and he knows that you need to hear the truth about your loan—not a lot of hype. With Roger, your questions are listened to and you get straight answers.
Roger’s clients know that with him they get a loan officer who generates more than business—Roger generates results. That’s why so many come back for his help again and again, and refer their friends and family to him. Roger not only strives to do the best for his clients, but also goes the extra mile to make sure they get the service.
Repeat business is solid evidence of doing things right. Many of Roger’s clients have been clients for a long time, and they return to Roger for all their loan needs. When all is said and done, you’ll look back on your experience with Roger knowing that he gave you the whole picture with none of the details left out.
If you’re considering a refinance, your first thought should be about home values! Many times a refinance is makes sense following a high loan-to-value purchase loan such as an 80/20 or financing with mortgage insurance. In both cases, the home’s current value–as determined by an appraisal–is the biggest hurdle in the road to a new low–interest mortgage loan.
So how do you know what your home is worth? The easiest way is to ask your Realtor! If you’re in The Woodlands, check out this 2009 market report for a head start:
In this report, we break down The Woodlands by village, offering detailed statistics, charts, graphs, and analysis. If you find it useful, please send us comments or suggestions!
Outside The Woodlands? Head over to our Houston market snapshot request, and register for your neighborhood market report (sent to you via monthly email).
About the author
Johnny Schiro is a Houston Realtor and co-owner of Icon Real Estate — an elite brokerage in The Woodlands, Texas. Johnny writes mostly about local market trends, buying & selling strategies, and industry insight. Comments and feedback encouraged.
FSA to look into the UK activities of the embattled Wall Street bank which the US regulator has accused of a $1bn fraud
Embattled Wall Street firm Goldman Sachs is now facing an investigation by the City watchdog, the Financial Services Authority, following the $1bn (£650m) fraud allegations brought by the US regulators.
Goldman Sachs insisted its actions were “entirely appropriate” and that it would “vigorously contest” the charges brought by the US Securities and Exchange Commission (SEC).
Goldman stressed that it had lost $90m on the transaction, known as Abacus 2007-AC1, and tried to argue that its clients had been professional investors highly experienced in the complex financial instruments they were buying.
The statement comes ahead of the bank’s first-quarter results tomorrow, which are expected to show it has been able to earmark $5bn for staff pay and bonuses.
As Fabrice Tourre, the bank’s 31-year-old vice-president named in the case brought by the SEC stayed away from his desk in the London headquarters of the firm, calls were mounting for the City’s watchdog, the FSA, to launch its own inquiry into the affair which dates back three years.
The FSA confirmed today that it was investigating the events. “As you would expect the FSA is investigating the circumstances of this case and whether there are any implications for the UK-regulated entities of Goldman Sachs. If there are, we will take appropriate action. We are working closely with overseas regulators and will co-operate fully with the SEC investigation” the FSA said.
In a detailed statement today, Goldman stepped up its defence. It said: “Based on all that we have learned, we believe that the firm’s actions were entirely appropriate, and will take all steps necessary to defend the firm and its reputation by making the true facts known.”
The SEC’s 22-page suit charges Goldman with working with US hedge fund, Paulson & Co, to structure and sell a complex package of mortgages to clients while Paulson took a “short” position betting that the same mortgages would fail. The mortgages were packaged into a collateralised debt obligation (CDO) – the instruments at the heart of the 2007 credit crisis – and lost investors more than $1bn in just nine months. During the same period, Paulson made a similar amount in profit. The SEC asserts that Goldman did not disclose Paulson was on the other side the transaction.
Goldman believes the charges are politically motivated and come at a time when President Barack Obama is trying to force through legislative changes to clean up the US banking industry.
The firm said the two professional investors which bought the Abacus instrument – Germany’s IKB and ACA Capital Management of the US – were experienced investors. ACA has managed 26 CDOs and “independently approved” the 90 residential mortgage-backed securities used in the Abacus deal.
Royal Bank of Scotland lost up to $800m on the transaction as a result of its takeover of Dutch bank ABN Amro which had intermediated a credit default swap between Goldman and ACA to help them insure against potential losses.
The Goldman Sachs statement said: “The core of the SEC’s case is based on the view that one of our employees misled these two professional investors by failing to disclose the role of another market participant in the transaction, namely Paulson & Co, and that the employee thereby orchestrated the creation of materially defective offering materials for which the firm bears responsibility.
“Goldman Sachs would never condone one of its employees misleading anyone, certainly not investors, counterparties or clients. We take our responsibilities as a financial intermediary very seriously and believe that integrity is at the heart of everything we do.”Were there ever to emerge credible evidence that such behaviour indeed occurred here, we would be the first to condemn it and take all appropriate actions.”.
It is expected that the SEC case against Goldman could open the floodgates for other suits after Dutch bank Rabobank accused Merrill Lynch of embarking on a similar practice when selling it a CDO.
Goldman reckoned the action it was facing would not have an effect on the wider CDO market. “The SEC complaint is related to a single transaction in 2007 and involves a highly particularised set of alleged facts. It would not appear to have broad ramifications for the CDO market generally,” the bank said.
Freddie Mac on Thursday states the mortgage rate average for a 30-year fixed-rate remains the same at 4.96%. The increase was from 4.95% compared to last period. Frank Nothaft, Freddie Mac chief economist stated, “Mortgage rates for fixed-rate mortgages were virtually unchanged this week as the effects of storms emerged in recent housing data. New construction slowed by 5.9% in February to 575,000 homes.”
Bankrate Press Release:
SOURCE Bankrate, Inc.
NEW YORK, March 4 /PRNewswire-FirstCall/ — Mortgage rates moved lower this week, with the average conforming 30-year fixed mortgage dipping to 5.12 percent, according to Bankrate.com’s weekly national survey. The average 30-year fixed mortgage has an average of 0.39 discount and origination points. Read the rest of this entry »
WASHINGTON (AP) — Did the stimulus work or not? A year after Congress passed President Barack Obama’s huge economic revival plan, the results are mixed – and hardly final.
Despite Obama’s bold promises, unemployment remains stubbornly high. But job losses have slowed dramatically.
And the nation’s recent economic growth is real, even though the government has spent just one-third of the massive stimulus plan. The program- originally estimated at $787 billion but now priced at $862 billion – is to continue pumping federal money into the economy into 2011. Read the rest of this entry »