Mortgage Rate News

Ben Bernanke isn’t in Barcelona, but he delivered remarks to an international monetary conference being held there. This morning, amidst concerns about the latest bank sector issues and how they will continue to affect the US economy and the mortgage market, Bernanke continued his policy of making upbeat comments designed to inspire confidence in the market.

Bernanke insisted that the economy is likely to turnaround in the second half of the year. He also addressed such concerns as inflation, interest rates, the US dollar and the stock market. Bernanke also mentioned that the housing market slump could continue to put hurdles in the way of the economy, reports the Associated Press:

Until the slumping housing market and falling home prices show “clearer signs of stabilization,” there will continue to be threats to the economic growth getting back to full throttle, he said. Moreover, recent increases in oil prices pose “additional downside risks to growth,” he said.

Bernanke did imply that housing prices are starting to stabilize, and that we could be nearer the end of the current downward trend. He credited the recent interest rate cuts with loosening the money supply and providing a catalyst for growth. However, he did indicate that further rate cuts are unlikely. All of this could mean that mortgage lenders start loosening up a bit with their requirements, but it really might be better if they remained tough.

The remarks did provide a boost to the US dollar on the FX market, as well as facilitate a bump in a stock market struggling to recover from yesterday’s banking sector shenanigans. However, it remains to be seen whether or not these changes will promote long-term economic stability. Additionally, we will have to wait and see with regard to whether or not this helps the mortgage market.

What do you think about the economy? Do you think the housing market and the mortgage market crisis is coming to an end?

Tags: housing market, mortgage market, home mortgage loan, mortgage loan blog,
Ben Bernanke, interest rate cuts, mortgage lenders

The FBI has released its 2007 mortgage fraud report, and it is no surprise that the agency is finding that mortgage fraud is on the rise. Indeed, according to the report, the current mortgage market and real estate market trends are conducive to fraud:

The downward trend in the housing market provides an ideal climate for mortgage fraud perpetrators to employ a myriad of schemes suitable to a down market. Several of these schemes have emerged with the potential to spread as the recent rise in foreclosures, depressed housing prices, and decreased demand place pressure on lenders, builders, and home sellers. Emerging and re-emerging schemes for 2007 included builder-bailouts, seller assistance, short sales, foreclosure rescue, and identity thefts exploiting home equity lines of credit.

It is important to be on your guard at this time. Here are a couple mortgage fraud schemes to be on the lookout for:

• Foreclosure assistance. Beware of those claiming that they can stop a foreclosure on your home. Some scammers will claim that they can stop a foreclosure and help you save your home. They charge a “fee” of between $600 and $2,000 in order to “take care of paperwork” and “negotiate with your mortgage lender.” They have you fill out a bunch of forms, take your money — and your home goes through foreclosure anyway.
• Equity stripping. This is when scammer arranges to take over the loan on your home and let you live there as a renter. It stops the foreclosure, but you are signing your home over. The scammer may charge high rent. At some point, though, you fall behind again, but with no house now. You are kicked out, and the scammer has your home plus its equity.
• Bait and switch. Watch out for this. You are told that you are signing forms that bring your loan current — or restructure it. You pay an “administrative fee” or make a “loan payment.” In reality, the papers have you signing over the deed to your house. So you lose ownership of your house — and the money you paid.

Be sure to carefully examine all documents before signing. Or have a trusted attorney review them. If you are worried about foreclosure, talk to your mortgage lender well in advance and see if you can arrange something. Here are some resources that can help you avoid foreclosure:

• ACORN’s HELP program: 888-409-3557.
• Neighborhood Assistance Corporation of America: 888-302-6222.
• Homeowner’s Hope: 888-995-4673

Tags: mortgage lender, home equity, home mortgage loan, foreclosure,
mortgage fraud, mortgage loan blog, avoid foreclosure

Janet Yellen, the president of the San Francisco Federal Reserve, has said that housing markets have “hit the skids” since the days of easy credit and booming home sales. Finally, years of easy money and easy mortgage financing requirements have caught up with the markets. Housing relief bills and other government measures may not be enough. Calculated Risk reports on some of Yellen’s comments about housing markets:

Since then, housing markets have “hit the skids.” In inflation-adjusted terms, residential construction fell by 13 percent in 2006 and by 14 percent in the first half of last year. Of course, once the financial shock hit last summer, things got even worse, with real residential construction dropping at a 24 percent rate on average since then. And, indicators of conditions in housing markets are pointing lower for the future. Housing starts and permits as well as sales are trending down, and inventories of unsold homes remain at very high levels. These inventories will need to be worked off before construction can begin to rebound.

Indeed, with housing markets showing increased inventory, it is no surprise that home prices are down quite a bit as sellers try to do what they can to sell their homes. Also contributing to the lower home prices overall are the foreclosures. These are sold at low prices so that mortgage lenders do not have to sit on them.

If you are savvy with your decisions, and if you have the credit score and down payment to make it possible, you can probably not only get a good deal when you buy a home, but you could also get a good deal on a home mortgage loan. Now might be a good time to invest in real estate.

Tags: housing markets, home prices, home mortgage loan, mortgage loan blog,
Janet Yellen, mortgage lenders, invest real estate