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Record-low mortgage rates sparked a wave in mortgage applications for home purchase and refinancings last week, increasing more than 20 percent in a week, the Mortgage Bankers Association reports. 

for the week ending Jan. 13, mortgage applications for refinancing applications jumped 26.4 percent while home purchase applications, a future gauge for home buying, increased 10.3 percent.  

“With mortgage rates reaching new lows, refinance volume jumped,” Michael Fratantoni, MBA’s vice president of research and economics, said in a statement. “Purchase activity also increased as buyers returned to the market after the holiday season.”

Freddie Mac reported that 30-year fixed-rate mortgage averaged a record low of 3.89 percent for the week ending Jan. 12. For six consecutive weeks, 30-year fixed-rate mortgages — the most popular choice among home buyers — has averaged below 4 percent. 

Source: “Mortgage Applications Surge on Refinancing Demand,” Reuters (Jan. 18, 2012)

More news from the “Sierra Foothills” of El Dorado, Placer, Amador and Sacramento Counties of California at: www.sierraproperties.com or www.dougandbudzeller.com

Appraisals continue to hamper deals. In the first six months of the year, one-third of real estate professionals say appraisals have caused a delay or canceling of contracts — that’s up from 29 percent for all of last year, the National Association of REALTORS® reports. Rural areas where similar comparable sales may be hard to find seem to experience more delays. At least we find this in foothill areas like the Placerville, California region.

Lenders are requiring more thorough appraisals, which appraisers are saying requires them to pull more comparable sales, which sometimes may include foreclosures or short sales that sell at discounted prices. Appraisers used to cite about three recently sold homes but now lenders require two to three times that, David Stevens, president of the Mortgage Bankers Association told SmartMoney. 

When the appraisals come in lower then the accepted offer — which more frequently is what is occurring — the seller either has to lower their price or the buyer has to pay the difference. From the three months ending September, 13 percent of real estate professionals say contracts were renegotiated to a lower sales price due to a low appraisal, according to NAR data.

Housing experts recommend that buyers add a statement in their contracts that says they’ll receive their initial down payment back if financing doesn’t come through the agreed price or the appraised value is below the offer in the contract, according to the SmartMoney article. 

Source: “How Appraisals Are Derailing Home Sales,” SmartMoney (Nov. 4, 2011)

U.S. Sens. Barbara Boxer (D-CA), Johnny Isakson (R-GA), and Robert Mendendez (D-NJ) have joined 13 of their colleagues in urging the Obama administration to quickly implement administrative reforms to help responsible homeowners refinance and take advantage of today’s record low interest rates.

With interest rates at an all-time low of 3.94 percent, the Senators encouraged federal housing regulators to take immediate steps to lower the barriers that have kept borrowers as well as to address other hurdles that have limited the success of current refinance programs.

In a bipartisan letter to top administration officials, the senators wrote, “Time is of the essence and we urge you to act quickly and aggressively to ensure that responsible homeowners receive the full benefit of these lower rates.”

Here’s hoping they will keep rural regions like Placerville, CA. in mind!

To read more of the letter, please visit:  http://boxer.senate.gov/en/press/releases/101111.cfm

Delinquent home owners are living in their homes longer, rent-free. Home owners with a loan in foreclosure haven’t made a payment, on average, for 20 months or 599 days–a new record, according to new data by Lender Processing Services Inc. 

Of nearly 1.9 million loans that are 90 or more days delinquent–but not yet in foreclosure–42 percent of the home owners have not made a payment in more than a year, with an average delinquency of 397 days–another record, LPS reports. 

The slowdown in foreclosures was most evident in judicial foreclosure states. At the current rate of foreclosure sales, judicial foreclosure states would require 111 months to work through inventories of loans that are 90 or more days delinquent or in foreclosure.

On the other hand, non-judicial states like California would be able to clear inventories in about 32 months, according to LPS data. Our Sacramento and Placerville regions reflect about the same amount of time.

More information at: “LPS’ Mortgage Monitor Report Shows Average Loan in Foreclosure Is Delinquent for Record 599 Days,” LPS (Aug. 30, 2011)

Although the Consumer Financial Protection Bureau, the federal agency created to oversee mortgage lending, only recently opened, the Bureau started looking at ways to protect consumers during the loan-shopping period long before it’s official start date.

Making sense of the story:

1) The bureau is exploring avenues for combining the two forms that borrowers currently receive – the three-page Good Faith Estimate and the two-page Truth in Lending Act form. These forms tell would-be borrowers the terms of their loan – for instance, how payments on an adjustable-rate mortgage change. They also lay out fees.

2) Fees can make a big difference when comparison shopping. The simplest way to compare loans is by looking at the Annual Percentage Rate, or A.P.R. That calculation rolls in fees as well as the stated interest rate. Because lenders are required to follow the same formula, useful comparisons can be made.

3) Borrowers are advised to request a Good Faith Estimate from every lender they approach. While the Good Faith Estimate is in place to help borrowers, according to one lender, some lenders may provide interest-rate quotations that expire almost instantaneously, making it difficult for buyers to comparison shop.

4) Borrowers should be wary if they receive two or three different Good Faith Estimates and there is a difference of several thousand dollars.

Read the full story at: http://nyti.ms/oYblab

Other articles relating to the Sacramento and Placerville, California regions at: www.sierraproperties.com

More people are applying for mortgages: Applications for home mortgages had their largest increase in three months due to falling record-low interest rates, the Mortgage Bankers Association reports.

MBA’s seasonally adjusted index of mortgage application activity increased 13 percent for the week ended June 10. That marks the index’s biggest gain since March. The index measures applications for refinancing and purchase demand.

Most of the spike was from refinancing applications, which increased 16.5 percent from last week. However, requests for mortgage applications for home purchases also rose 4.5 percent.

“Mortgage rates have declined for 8 of the past 9 weeks,” Michael Fratantoni, MBA’s vice president of research and economics, said in a statement. “Coming off of the Memorial Day holiday, refinance application volume increased significantly, as borrowers jumped to lock in the lowest mortgage rates since last November.”

Source: “Mortgage Applications See Biggest Gain in 3 Months: MBA,” Reuters News (June 14, 2011 

Other articles relating to the Sacramento and Placerville, California regions at: www.sierraproperties.com

The Mortgage Bankers Association says loan originations plummeted 35 percent to $325 billion in the first quarter and likely will hover around $1 trillion for all of 2011 and stay put next year.

Despite low interest rates, lenders have seen a drop in refinancings that has not been offset by home purchases. In response, some lenders are reducing their staff; while others are closing retail branches, consolidating, cutting costs, or branching into new markets.

Source: “Banks Fearing Prolonged Mortgage Slowdown,” (Login required) American Banker, Kate Berry (June 6, 2011) 

Other articles relating to the Sacramento and Placerville, California regions at: www.sierraproperties.com

For the fifth straight week, mortgage rates inched down again–this time reaching the lowest level of the year as well as lowest year-to-date. The 30-year fixed-rate mortgage averaged 4.61 percent this week, while the 15-year rate averaged 3.80 percent, Freddie Mac reports in its weekly mortgage market survey.

The 30-year mortgage hasn’t reached 4.61 percent or below since December 2010. Last year at this time, it averaged 4.84 percent while the 15-year fixed-rate mortgage averaged 4.24 percent.

The falling rates may be yet another lure to buyers during real estate’s traditionally prime home buying season. Owning a home has also recently been found to be more affordable than renting in 78 percent of the major U.S. cities, according to the latest data from Trulia.

Mortgage applications, meanwhile, are increasing as interest rates continue to fall. Mortgage loan application volume increased 7.8 percent this week when compared to the week prior, according to the Mortgage Bankers Association. Refinancings,  hit the highest level since mid-December, increasing 13.2 percent over the prior week, while the purchase index for mortgage applications dropped 3.2 percent.

Source: “Fixed-Rate Mortgages Hit a New Year-to-Date Low,” Freddie Mac (May 19, 2011) and “Mortgage Applications Grow Again on Home Refinancings,” HousingWire (May 18, 2011) 

Other articles relating to the Sacramento and Placerville, California regions at: www.sierraproperties.com

Despite interest rates well below 5 percent, mortgage applications continue to be in flux this month.

Loan applications increased 2.7 percent for the week ending March 18, after dropping the previous week. Earlier this month, mortgage applications posted a 15 percent drop, according to the Mortgage Bankers Association.

The unadjusted purchase index for mortgage applications increased 3 percent this week compared to the week prior. However, the purchase index remains down 15.3 percent compared to the same week a year ago.

Meanwhile, refinancing activity mostly stayed stable this week at 66.4 percent of the total applications, MBA reports.

Source: “Mortgage Applications Remain in Flux, Rise 2.7%,” HousingWire (March 23, 2011) 

Other articles relating to the Sacramento and Placerville, California regions at: www.sierraproperties.com

Applications to purchase homes rose 5.5 percent last week compared to the previous week on a seasonally adjusted basis, according to the Mortgage Bankers Association weekly survey.

On an unadjusted basis, purchases increased 3.1 compared over the previous week. This was the third consecutive week that purchase applications rose. They are at the highest level since May.

“The increases in purchase applications we have seen over the past couple of weeks align with the better than expected news from October’s employment report and other data indicating some improvement in the economy’s growth prospects,” says Michael Fratantoni, MBA’s vice president of research and economics.

Mortgage rates held steady:

· 30-year fixed-rate mortgages remained unchanged at 4.28 percent.
· 15-year fixed-rate remained unchanged at 3.64 percent.

Source: Mortgage Bankers Association (11/10/2010)