Housing Wire is reporting that mortgage applications jumped 10% last week as interest rates remain low. Much of this jump is due to refinancing. Until we see a jump like this for new purchases, the housing market will not turn.
Many home buyers can do a little better than the record low average mortgage rate today at 4.12% according to Fannie Mae. We are effectively at 4% home mortgages for anyone with pretty good credit.
For more on all things having to do with mortgages, check out my friend, Alex Stenback and his blog at Behind the Mortgage.
- Who is responsible for Fannie Mae and Freddie Mac losses? (hsh.com)
- Fannie Mae and Freddie Mac Massive Refinancing Program to Be Proposed – Will This Fix the Housing Market? (johnmurphyreports.com)
- Fannie Mae Regulator Sues the World (blogs.wsj.com)
- Mortgage Rates in U.S. Fall to Record Low, Freddie Mac Says (businessweek.com)
There’s lot of speculation around Bank of America right now. While the markets seemed to have recovered somewhat today, Bank of America was down another 8% after being up early in the day. The stock sold off hard in the afternoon.
Bank of America is one of America’s biggest banks that has continued to struggle after the purchase of Countrywide Mortgage. (They also had purchase Merrill Lynch in a fire sale in 2008/2009).
Since the stock is trading at $6.5, and at about half of book value, isn’t it a bit surprising someone hasn’t swooped in and purchased BofA? But the problem is, would regulators even allow that to happen because the bank is already too big to fail. They are likely going to be on their own to succeed or fail. Perhaps they could shed assets rapidly and start to rebuild the bank with a smaller footprint for the future.
Bank of America is a major player in the U.S. housing market. It is unclear what the impact will be should there be a problem at the bank.
- The Debate: Will Bank of America Have to Sell Fresh Stock (blogs.wsj.com)
- Bank of America Met with Treasury, Federal Reserve this Week (johnmurphyreports.com)
- Bank Of America Is Tanking AGAIN (BAC) (businessinsider.com)
- AIG Sues Bank of America over Mortgage Fraud (johnmurphyreports.com)
- Bank Of America Is The Most Troubled Bank In The U.S. But It Has A Plan (BAC) (businessinsider.com)
The federal government has a program called Home Affordable Modification Program where they encourage the large banks to offer loan modifications and sometimes wipe away the second mortgages on property. The Treasury department is offering another $4.7 billion to help with the program. According to this Housing Wire story, $27 billion has already been contributed from taxpayers to homeowners and bankers. Remember, this programs don’t just benefit homeowners…the bankers are benefiting financially as well.
Last week the Huffington Post published this story that the Obama Justice Department is investigating Wells Fargo for possible discriminatory lending to African Americans. Usually these disputes are settled before they go to court to look for Wells Fargo to settle for millions and millions of dollars to make this story go away.
- Wells aims to resolve probe over lending to blacks (sfgate.com)
- Wells Fargo Illegally Pushed Thousands Of Borrowers Into Subprime Mortgages, Falsified Loan Documents, Federal Reserve Says (huffingtonpost.com)
- DoJ Civil Rights Division Investigating Wells Fargo for Mortgage Fraud (news.firedoglake.com)
Minnesota Association of Realtors Forms Changes August 1, 2011 – Revisions to Purchase Agreement, Listing and Buyers Representation
The Minnesota Association of Realtors updates forms every year. This year is no exception. It looks like it’s a huge list of forms revisions for 2011. Just about everything we use is being updated.
From the Minnesota Association of Realtors site: the following forms have been changed with an effective date of August 1, 2011:
- Addendum to Purchase Agreement
- Buyer Facilitator Services Agreement
- Buyer Purchasing “As Is” Addendum
- Common Interest Community Modification/Waiver of Purchaser’s Right of Rescission (Residential)
- Condominium/Townhouse/Cooperative Addendum Common Interest Community (CIC)
- Contract for Exclusive Right to Represent Buyer
- Contract for Exclusive Right to Represent Tenant
- Contract for Nonexclusive Right to Represent Buyer
- Exclusive Right to Lease Listing Contract
- Exclusive Right to Sell Listing Contract
- Financing Addendum Conventional or Privately Insured Conventional Mortgage
- Financing Addendum DVA Guaranteed Mortgage
- Financing Addendum FHA Insured Mortgage
- Inspection Contingency Addendum
- Internet Display Options
- New Construction Purchase Agreement
- Owner Leasing Facilitator Services Agreement
- Purchase Agreement
- Residential Lease Agreement
- Seller Facilitator Services Agreement
- Seller’s Property Disclosure Statement
- Short Sale Contingency Addendum
- Showing Contract
- Tenant Facilitator Services Agreement
- Vacant Land Purchase Agreement
In addition, the Buyer’s Financial Disclosure Statement has been discontinued, effective August 1, 2011.
If you go to their page, there is also a link to download a 5 page pdf that has a detailed summary with the specifics of what was changed in the forms highlighted above.
If you are selling your home on your own without representation, or if you are considering doing so, please make sure you are familiar with these new changes.
- New FTC Short Sale Rules for Realtors/Brokers – MARS Rules (johnmurphyreports.com)
- Three steps to ensure you get the best deal when buying a house (springssummitgroup.wordpress.com)
- Buyers, What About That Buyers Broker Agreement – to Sign or not Sign? (janicephilippe.com)
Fannie Mae is the largest holder of mortgages in the U.S. At this point in the U.S. real estate market, as Fannie Mae goes, so goes the rest of the market. As one can imagine, they have been buried in defaulted mortgages. There was some better news recently that whereby Fannie Mae’s delinquent loans had fallen to 4.14% in May, down from 4.19% in April and down from 5.15% one year ago.
There has been much discussion and debate in Washington and within the industry as to what to do about Fannie Mae and Freddie Mac. There are many who want the out of the mortgage market altogether and replaced by private enterprises. At this point no solution has been reached, but it is expected that they will be a path created to transition or dissolved these entities in the near future.
- Minnesota Fannie Mae REO Homes for Sale – HomePath (johnmurphyreports.com)
- How Do I Know If My Mortgage Loan Is Fannie Mae or Freddie Mac? (thinkup.waldenu.edu)
- Fannie Mae Requiring “Service” from Servicing Companies (mortgageheathervt.wordpress.com)
As the State of Minnesota prepares for what looks like an inevitable government shutdown, many are wondering if they will be able to get their mortgage loan approved and if their real estate transaction will close.
Alex Stenback from RMG and publisher of Behind The Mortgage blog has an excellent article entitled, “Will a Minnesota Government Shutdown Impact Your Loan Approval?
The media coverage has been rampant about the government shutdown. While we expect things to continue as much as normal, there are likely to be some hiccups along the way.
- Minnesota State Government Shutdown Looms – Real Estate Transactions Expected to Continue as Normal (johnmurphyreports.com)
- Minnesota cage match, cont’d (powerlineblog.com)
- Mortgage Rate Trends Week of June 13, 2011 – Alex Stenback: Behind the Mortgage (johnmurphyreports.com)
Alex Stenback has a good summary of trends going on in the mortgage market this week. I must say that for most of the year, people have been expecting rates to rise significantly because of the U.S. debt situation, but the opposite has been true. Rates have been trending down lately except for the pop in rates yesterday.
- What to Expect with Refinancing a Home Today (johnmurphyreports.com)
- Adam Hanft: Moody’s Should Shut Its Mouth About U.S. Debt (huffingtonpost.com)
- What’s Ahead For Mortgage Rates This Week : June 13, 2011 (clewismortgage.wordpress.com)
According to this story in HousingWire, home sales in Las Vegas have just hit a 5 year high! However, the percentage of homes purchased with a mortgage is at a 17 year low – wow!
In February, 3,879 new and resale houses and condos closed escrow in the Las Vegas-Paradise metro area – the highest sales figure for any February since 2006, when 6,065 sold, up 4.9% from the year-ago period, according to DataQuick Information Systems of San Diego.
The number of homes purchased with cash rose to 2,198 – 56.7% of all transactions – was the highest since at least 1994. The number of homes purchases financed with a mortgage fell to 1,681 – the lowest for any month since February 1995.
We are seeing more homes being sold to cash buyers. Typically these are investors who will usually buy, fix and flip. For the housing market to stabilize and improve, we need to see more purchases with mortgages and less with cash. We aren’t there yet.
- Really? Vegas is U.S. foreclosure capital (lansner.ocregister.com)