Thursday, November 20, 2014

More Mortgages Current: TransUnion

More homeowners paid their mortgages on time in the third quarter of 2014 compared to the third quarter of 2013, according to the national consumer data firm TransUnion.

TransUnion reported in its latest mortgage report the percentage of borrowers at least 60 days late fell for the 11th straight quarter to 3.36% as of Sept. 30. The mortgage delinquency rate has declined nearly 17% in the last year (down from 4.03% in Q3 2013), the firm said.

Some of the nation’s largest markets saw the biggest drops, TransUnion said.

Between Q3 2013 and Q3 2014, Miami (-31.6%), San Francisco (-28.6%), Phoenix (-27.1%) and Los Angeles (-24.2%) experienced major improvements in delinquency. Of the largest markets, only two did not have double-digit declines: New York (9.9%) and Philadelphia (-9.4%), TransUnion added.

“While mortgage delinquency rates remain elevated relative to historic norms, they are steadily improving,” Joe Mellman, vice president of mortgage in TransUnion’s financial services business unit said. “New mortgage cohorts over the past several years have been squeaky clean from a risk perspective. This fact, combined with the continuing clearance of the foreclosure backlog and the gradual but steady rise in home values, serves to drive the ongoing trend toward lower mortgage delinquency rates overall.”

TransUnion pointed out that mortgage delinquency rates for Los Angeles (2.53%) and Phoenix (2.47%) are now nearly one full percentage point below the national average of 3.36%.

This is remarkable, Transunion observed, because for much of 2009 and 2010 those areas had delinquency rates that exceeded 10%, whereas the national average never breached the 7% mark.

“It’s especially heartening to see major declines in areas that were hardest hit by the mortgage crisis,” Mellman continued. “In part, it speaks to the broader rebound in the economy. As unemployment continues its decline and home values improve, consumers have both greater wherewithal and motivation to stay current on their housing payments.”

TransUnion added that on a quarterly basis, all 50 states and the District of Columbia experienced declines in their mortgage delinquency rates between Q3 2013 and Q3 2014. Nevada (-29.0%), Florida (-28.8%) and California (-26.5%) saw the biggest declines.

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Tuesday, November 18, 2014

BofA's Underwater Lien Cases Granted Certiorari

WASHINGTON (CN) - Bank of America persuaded the U.S. Supreme Court on Monday to take up cases in which its "underwater" liens on bankrupt individuals were voided.
     The 11th Circuit ruled against Bank of America in both of the cases that the Supreme Court accepted. Its brief decisions in each case stem from decisions by the Middle District of Florida.
     In the first, delivered on May 15, Bank of America had a junior lien on property owned by Edelmiro Toledo-Cardona.
     This individual had two mortgage liens at the time he filed for Chapter 7 bankruptcy, and the debt owed on the first mortgage exceeded the fair-market value of the property.
     Bank of America held the second mortgage, worth more $100,000, but the bankruptcy court considered this junior lien wholly "underwater" because the debt secured by the first lien exceeded the value of the property.
     As such the bankruptcy court agreed to "strip off" or "void" Bank of America's lien, and the District Court affirmed.
     The District Court also affirmed the void of another unsecured second-priority lien that Bank of America had on a different Chapter 7 debtor, David Caulkett.
     After the 11th Circuit affirmed for Toledo-Cardona on May 15, 2014, it cited that case in affirming for Caulkett on May 21.
     The Supreme Court granted Bank of America writs of certiorari in both cases Monday. With the exception of consolidating the cases for an hour of oral argument, and permitting the filing of an amicus brief from a group led by the Loan Syndications and Trading Association, the court made no comment on the case.

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Monday, November 17, 2014

NY Family Accused of Taking Out $20 Million in Mortgages While Collecting Food Stamps

Twelve members of a single family were charged Thursday with lying to lenders to obtain more than $20 million in mortgage loans while claiming poverty to collect food stamps and other government benefits over the past decade in what federal authorities call "sweeping and cynical fraud."

An indictment unsealed in federal court in White Plains Thursday charged real estate developer Irving Rubin and his relatives with conspiring to commit bank fraud and conspiring to make false statements. It alleged that family members used the proceeds to pay their credit card debts and their own home mortgages and to fund other real estate projects.

The defendants include Rubin, his wife, two sons, three brothers and five in-laws. A lawyer and an appraiser also were charged.

Sources told NBC 4 New York that 13 suspects were arrested in Brooklyn and Kiryas Joel, an Orange County village, and two others surrendered to authorities Thursday. Authorities also served search warrants and seized 23 properties worth a combined $50 million.

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Thursday, November 13, 2014

Some U.S. Homeowners Getting 2.80% Mortgage Rates While Paying No Closing Costs Whatsoever

ARMs "Beating" The Market

Is your adjustable-rate mortgage (ARM) about to adjust? Consider yourself lucky.

At current mortgage rates, today's ARMs are resetting to all-time lows near 2.80%, proving that adjustable-rate mortgages can be financially-wise even beyond their initial 5- and 7-year teaser period.

Yet, homeowners appear eager to refinance their ARMs away.

According to Freddie Mac, through the first nine months of 2014, nearly 9 in 10 refinancing homeowners abandoned their ARM for something non-adjusting, such as a 30-year fixed or a 15-year fixed.

So, why do homeowners refinance ARMs into fixed-rate loans when mortgage rates for ARMs are so much lower? For some households, it's a decision governed by fear.

You don't have to refinance that ARM. It may be better for it to adjust.

Click for today's live mortgage rates.
Adjustable-Rate Mortgages : A Long-Term Winner?

An adjustable-rate mortgage is a mortgage for which the interest rate can change (i.e. adjust) over time based on "market conditions". Sometimes, ARM mortgage rates adjust higher. Sometimes, ARM mortgage rates adjust lower.

Over long periods of time, ARM mortgage rates will often adjust both higher and lower.

Because ARM interest rates rise and fall over time, the product carries financial risk to households which use them. There is no way to know what your mortgage rate will be in 10 years, for example; or, in 20 years when your home finances may have changed.

Because of these uncertainties, carrying an ARM can be frightening.

It can also be rewarding.  

Consider that over the last 11 years -- beginning in 2003 -- nearly all U.S homeowners who financed their home with a conventional ARM have "beat the bank" on their mortgage. Adjustable-rate mortgages have adjusted lower year after year and, today, adjustable-rate mortgages are adjusting to their the lowest levels in recorded history.

If your home is financed with an adjustable-rate mortgage, you're winning the mortgage game.

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Wednesday, November 12, 2014

Improving Mortgage Origination Activity Likely To Extend Into Q4

The U.S. mortgage industry saw an improvement in the volume of total originations for a second consecutive quarter in Q3, with data compiled by the Mortgage Bankers Association estimating that $300 billion in mortgages were originated over the period. While this figure is only slightly higher than the $297 billion in originations for the previous quarter, it is being interpreted by investors as a sign of overall improvement in the industry which has seen a drastic reduction in activity since late 2012.

This comes as a relief to the country’s biggest banks, most of which have seen a sharp decline in mortgage revenues over recent years. While the impact on banks such as Bank of America and Citigroup, which were forced to slash their mortgage operations in the wake of the recession, has been negligible, those such as Wells Fargo and U.S. Bancorp – which bulked up their mortgage banking businesses considerably after the economic downturn – have been hit the most. The steady increase in the number of mortgage applications over the last two quarters, coupled with the growing demand for refinancing options in October due to falling mortgage rates point to a strong quarter for the industry in Q4 2014.

In this article, we highlight the changes in mortgage origination volumes for each of the country’s five largest commercial banks over the last two years and also what to expect from each of them over the coming years.

The mortgage industry has been extremely volatile since early 2005 – with a boom over 2005-2007 being followed by the crash that contributed to the economic downturn. As the economy recovered from the recession, record-low interest rates and government-led incentives gave a boost to the industry in 2011-2012, when homeowners rushed to get their mortgages refinanced to benefit from the improved interest environment and lending terms. Refinancing activity dried up soon, though, and without much improvement in the demand for fresh mortgages, Q1 2014 saw the lowest mortgage origination volumes since Q3 1997. Data compiled by the Mortgage Bankers Association shows that U.S. mortgage origination volumes jumped from a low of $246 billion in Q1 2011 to $597 billion in Q4 2012 before diving to $247 billion in Q1 2014. A notable increase in fresh mortgage originations ($185 billion in Q3 2014 compared to $124 billion in Q1 2014) helped total originations climb to $300 billion by Q3 2014.

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Tuesday, November 11, 2014

Mortgage borrowing dips as housing market comes off the boil but buy-to-let loans jump 15%

Mortgage borrowing dipped in September to put further downward pressure on house prices, although the fall in loans to owner-occupiers was offset by a bounce in buy-to-let mortgages, major lenders have reported.

The Council of Mortgage Lenders said that 'fears of over-heating in the housing market are now dissipating' after the overall monthly decrease in lending.

However, the September fall did not prevent lenders posting the highest quarterly total for mortgages since 2007 between July and September.

Overall lending to home-buyers decreased in September to 58,600 loans, down 7 per cent compared to August. The value of these loans was £10billion, down 8 per cent.

This remains significantly higher than September 2013, since when the number of loans has increased by 13 per cent and the value by 20 per cent.

Lending to first-time buyers declined for the second month in a row with 26,800 first-time buyer loans in September, 3 per cent fewer than in August, but still 16 per cent up on September 2013. By value, there was £4 billion advanced to first-time buyers in September, down 2 per cent from August but 25 per cent higher than last year.

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Monday, November 10, 2014

U.S. 30-year mortgage rate up to 4.02%

Average U.S. long-term mortgage rates rose last week, with the benchmark 30-year loan crawling back over 4 percent. It was the second straight week of increases in rates after they had fallen for five weeks amid concern over global economic weakness.

Mortgage company Freddie Mac said Thursday the nationwide average for a 30-year mortgage increased to 4.02 percent from 3.98 percent last week. Still, at 4.02 percent the rate remains at its lowest level since June 2013. The 30-year rate stood at 4.53 percent back in January.

The average for a 15-year mortgage, a popular choice for people who are refinancing, jumped to 3.21 percent from 3.13 percent.

The five-week decline in long-term rates sparked a wave of homeowners looking to refinance mortgages at a bargain rate.

U.S government figures released last week showed that the U.S. economy powered its way to a solid annual growth rate of 3.5 percent from July through September, outpacing most of the developed world and appearing on track to extend its momentum through this year and beyond.

An improving economy led the Federal Reserve last week to end a bond buying program that it launched during the 2008 financial crisis. The monthly bond purchases were intended to keep long-term interest rates low.

Fed officials also have indicated that they will continue to hold shorter-term rates at near-zero levels until signs emerge of rising inflation.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday each week.

The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged from last week at 0.5 point. The fee for a 15-year mortgage also remained at 0.5 point.

The average rate on a five-year adjustable-rate mortgage rose to 2.97 percent from 2.94 percent. The fee was steady at 0.5 point.

For a one-year ARM, the average rate rose to 2.45 percent from 2.43 percent. The fee held at 0.4 point.

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