You have just recieved a Notice of Default, you have 111 days to mitigate these circustances. What do you do next?
Can you refinance after you have recieved the Notice of default, if so, who will loan you money on your property and if you find someone that says they will make a loan can you be sure that you can actually afford it. what are the motives for someone to make a loan to a property owner who has demonstrated that they could not honor the past payment requirements. Stay tuned!
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OK Hold it, The last time the LENDING industry went into the toilet it was blamed in part on Appraisers, unscrupulous mortgage types and of coarse the unsuspecting dumb borrower and guess what else, fixed rate loans, yeah lenders had the gaul to claim that they were stuck with low percentage fixed loans and people like Cynthia Wellencamp were compromizing the lenders ability to remain competetive with other lenders by assuming those low rate mortgages and leaving them high and dry with no ablilty to charge any new fees or rates. Guess what the fix was, initially it was the VIR, Variable Interst Rate Loans, and then the AML, Adjustable mortage loan and finally the ARM, ajustable rate mortgage which is in use today.
Now we have another problem in the lending industry and lets make sure that we understand the True problem, it is a LENDING problem, not a housing problem, and why are we bothered with a lending problem well it is the LENDERS, it is Not the appraisers, brokers, inspectors, buyers, not subprime borrowers or anybody else. This debacle rest squarely on the sholders of the people who are supposed to be managing the lending industry, setting sound policy and underwriting while providing credit worthy clients with loan products that do not prey on them. The problem simple is one of greed and the willingness of major lenders to consentrate their lending goals in a braisen attempt to stick their greedy hands as far up the consumers as they possibly can and blame everybody else when their policies fail.
There is is not one circumstance where the perspective borrower has ever designed their own loan product. and then to suggest that they would design a product with esculators, resets, rate increases, payment increases, plus penalty’s for paying off the loan and also less not undrwrite the loan based on the fully indexed rate that way we will not know how much money will be needed down the road to make the payment when these increases start to take effect.
One more point, If the borrower takes out a fixed rate loan for a median priced house in the bay area it will cost them approx $3,521 per month. That comes to $42,252. dollars per year and in five years of fixed interest only payments you have paid the lender a total of $211,260. dollars.
Who’s Fault is it NOW.
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Who the heck can figure out what’s going on with interest rates right now? The FED lowers the prime rate which, in the past, has brought down the cost of borrowing. But not this time. So what’s the problem?
The credit/mortgage crunch that started in 2007, and now with inflationary concerns, is still and will continue to affect the real estate market for some time to come.
While FreddieMac.com is reporting an average interest rate of 5.72% for a conforming 30 year fixed, lending rates are up. Two rate decreases in the last 2.5 weeks, FreddieMac reporting well under 6% yet getting a fixed rate below 6% without paying points is next to impossible. To say this reflects a lack of confidence in the economy is an understatement.
While the FED is considering another rate cut, the concerns over inflation are pushing mortgage rates higher. The bond data is good but inflation is the real concern at the moment. Until the concern over inflation subsides, don’t expect a decrease in mortgage rates.
The rule of thumb? FED rate cuts do not always mean that mortgage rates with follow suit. There are many more economic factors that enter in to the mix that determine what lenders will charge for their money. For more on this, check out this article from MortgageNewsDaily.com. Great place for “truth in lending”.
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This real estate article was posted from Sacramento Real Estate Views
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Fixed Rate Mortgage Rates Plummet - 30-Year and 15-Year Fixed Rate At Lowest Level Since Spring 2004
According to Freddie Mac website:
McLean, VA Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®)
1. 30-year fixed-rate mortgage (FRM) averaged 5.48 percent down from last week when it averaged 5.69 percent as well.
Last year the 30-year FRM averaged 6.25 percent. The 30-year FRM has not been lower since the week ending March 25, 2004 when it averaged 5.40
2. The 15-year Fixed Rate averaged 4.95 percent down from last week when it averaged 5.21 percent.
Last Year, the 15-year FRM averaged 5.98 percent. The 15-year FRM has not been lower since the week ending April 1, when it averaged 4.84 percent.
3. Five-year ARMs averaged 5.13 percent this week,
Last Year the 5-year ARM averaged 6.00 percent.
Still the help will be severely diminished two things
1. Many of the more predatory variable loans had high prepayment penalties making it difficult to take advantage of the lower rate
2. Many of the most at risk homeowners have poor credit and new loan standards will hamper their ability to get out from under.
The best answer beside massive Govt. (not likely for the homeowner, but possible for the banks if this continues to deteriorate). The best chance for the homeowner is for the bank to realize if they dont partner up with the borrower and find ways to keep them in their homes they will be warehousing properties for a long time at lower and lower equity values
Thanks for Reading
Howard Bell
http://www.yourpropertypath.om/
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A weekly summary of the mortgage rate national averages summary from yourpropertypath.com
According to the Freddie Mac site: web site
1. 30-year fixed-rate mortgage: averaged 5.48 percent. The 30-year FRM has not been lower since the week ending March 25, 2004 when it averaged 5.40 percent.
2. 5-year FRM: averaged 4.95 percent. The 15-year FRM has not been lower since the week ending April 1, when it averaged 4.84 percent.
3. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.13 percent, The 5-year ARM has not been lower since June 30, 2005, when it averaged 5.06 percent
* These are weekly numbers and national averages. Your mortgage rate would vary.
Frank Nothaft, Freddie Mac vice president and chief economist. says that “For the year as a whole, housing starts dropped nearly 25 percent, from 2006’s level. This was the largest annual decline since 1980. New permits issued also fell to the lowest level since March 1993.
Thanks for Reading
Howard Bell
www.yourpropertypath.com
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