30 Yr Fixed Mortgage Rates Break 5 Percent Mark
After reaching record lows a few weeks ago, 30 Yr mortgage rates are again above the 5 percent level. This follows the steady gains which have been noted for the last month as mortgage rates steadily inched-up from the 4 percent mark.
30 Yr Fixed- mortgage rates were at 5.05 percent up from last week’s 4.94. This marks the first time in 2 months that 30 Yr FMR hovered above the 5 percent mark. Mortgage applications were also done mainly due to increasing mortgage rates seen in the past few weeks.
The last time mortgage rates were above the 5 percent level was on the last week of October, when they stood at 5.03. Interest rate hit a new record low of 4.71 on the first week of December but has since lost ground and steadily climbed over the past weeks.
“Although interest rates for 30-year fixed-rate mortgages are above 5 percent this week for the first time since the end of October, they are still around 0.5 percentage points below this year’s peak set in mid-June,” according to Frank Nothaft, Freddie Mac vice president and chief economist.
Rates on 15 Year FRM also gained a few basis points from last week. Average rates hiked from 4.38 percent to 4.45 in this week’s reports. Other plans also saw their averages rise this week, 5 year ARM’s were up at 4.4 percent from 4.37.
Mortgage applications
Applications for mortgage also dropped this November as concern over increasing mortgage rates dampened the home buyers market. Mortgage rates continue to be the most important factor for new homeowners planning to purchase a home or applying for refinancing.
Reports from the Mortgage Bankers Association said that applications fell by 12 percent compared to the previous week. Refinance applications also dropped by 10 percent with homeowners concerned about higher mortgage rates.
Mortgage rates and applications are often related with each other’s movement. Higher rates translate to lower applications and vice versa.
Reported by REOProteams
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Holiday Cheers from Citigroup
Citigroup suspends foreclosures for 30 days
Citigroup will give around 4,000 homeowners in danger of foreclosure or eviction a 30 day break as it weighs options to offer “long-term alternative fundamentals” to foreclosure. Citigroup says that the temporary suspension will run from December 18 to January 17 of next year. This offer however is only good for mortgages which the bank owns and does not cover mortgages which are only paid through the bank.
In an interview, Sanjiv Das, Citigroup mortgage division says, “We want our borrowers to have a much less stressful time, to spend their time with their families during the holidays as opposed to worrying about their homes.”
The bank in a statement says that the move would help around 2,000 homeowners who are scheduled for foreclosure sales and another 2,000 homeowners from being evicted. The company in its statement says that these are part of their “long-term alternative fundamentals” but declined to elaborate on their statements.
This move is similar to last year’s suspension on foreclosures as banks waited while the Obama administration formulated its $75 billion housing program. Foreclosures however saw their numbers rise to a rate of 300,000 per month as the number of homeowners in danger of foreclosure or defaulting on payments steadily grew.
More disappointing news as Citigroup also announced that only 270 of homeowners who applied under the permanent loan modification program received approval. Citigroup has 100,000 borrowers under the government’s loan modification program but these remain to be temporary. The company has attributed the low number of permanent modifications to “reporting errors” and expects the number to rise exponentially by year-end.
In a similar statement, Fannie Mae said that it too was suspending foreclosure proceedings on homes this holiday season. This comes as little comfort to homeowners living in these foreclosed properties as the suspension is only good from December 19 to January 3 next year.
Reported by REOProteams
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Mortgage Rates Stay Below 5
Mortgage rates continue to inch higher but interest rates for 30 Yr Fixed mortgages continue to stay below the 5 percent figure. Figures released from Freddie Mac placed the average rate for 30 Yr Fixed mortgages at 4.94 up from last week’s 4.81 percent.
Mortgage rates continue to post low numbers as a result of government efforts to push rates down and spur new home purchases. The Federal Reserve released $1.25 trillion in a push to help the ailing real estate industry by buying mortgage back securities, but the program is scheduled to end spring of next year.
“Mortgage rates followed bond yields higher once again this week amid signs of an improving economy,” said Frank Nothaft, Freddie Mac vice president and chief economist. “On the consumer side, retail sales jumped 1.3 percent in November and consumer sentiment, as measured by the University of Michigan, rose above the market consensus forecast to the highest reading since September. Industrial production also showed large gains in November.”
Yields on long-term government debt are one of the factors which determine mortgage rates, 30 Yr rates however have spiked since hitting a record low of 4.71 percent in the first week of December.
Rates on other mortgage plans also reflected the rise on 30 Yr Fixed mortgages, with the 15 Yr Fixed hiking to 4.38 from last week’s 4.32 percent. 5 year ARM’s ended at 4.37 percent a few basis points higher than figures posted a week ago. 1 year ARM’s were at 4.34 percent up from 4.24 percent.
Year to year comparison shows that this week’s mortgage rates remain lower. 30 Yr Fixed Rate mortgages were at 5.19 percent and 15 Yr Fixed stood at an average of 4.92 percent.
Reported by REOProteams
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Mortgage Modification Continues at a Slow Pace
In a report made by the Treasury Department, only a total of 31,382 homeowners have been awarded permanent loan modifications with an almost equal number being denied. This number only represents a fraction of the millions of homeowners who are in danger of losing their homes or facing difficulty in paying their next mortgage payment.
This is the first report showing the actual extent of how far Government efforts to curb foreclosures have reached. It is estimated that only 4 percent of homeowners have been given permanent loan modifications, which falls short of government targets. The government has released billions of dollars to mortgage institutions and banks in an effort to transform mortgage contracts.
“Our focus now is on working with servicers, borrowers and organizations to get as many of those eligible homeowners as possible into permanent modifications,” said Phyllis Caldwell, chief of Treasury’s Homeownership Preservation Office.
This has fueled speculations that the $75 billion released is still short as it the number of foreclosures remain high. With 4 million homeowners in the process or danger of foreclosures, the numbers of homeowners who have received permanent loan modifications represent a drop in the bucket.
With an equal number if homeowners rejected, the small number of modifications does not put any significant dent in the housing difficulties we face today. 30,650 homeowners had their application for permanent loan modification denied; this according to reports released by treasury officials.
The number of applications being processed however rose to 697,026 from 650,994 the previous month. Homeowners meanwhile feel frustrated because of the low success rate of permanent loan modifications. Most applications remain to languish under trial programs with banks and mortgage firms complaining that these poor numbers are due to the lack of paperwork being submitted by the homeowners.
Some of the nation’s biggest banks have failed dismally in processing majority of these filings and applications. Bank of America tops the list as figures show that only a total of 98 applications out of the total 160,000 were signed into a deal. Other banks didn’t fair any better as GMAC mortgage the top lender could only post 7,100.
The government through the Treasury Department set a goal of 500,000 for November as the pace of applications being processed last summer fell far below goals. Government plans were to place troubled homeowners under trial programs before finally being approved for permanent loan modifications. But the amount of paperwork needed seems to be one of the problems causing delays in the program.
Permanent loan modifications could save homeowners an average of $550 from their current monthly mortgage payments. These could give homeowners a 5 year break of easier monthly payments before loans are payments finally settle to rates agreed upon the time of adjustment.
Reported by REOProteams
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