Mortgage Rate News

There have been a lot of programs and plans announced over the past year or so meant to prevent foreclosures and stop their effect on the economy. One of the latest programs is one introduced as the Neighborhood Stabilization Program. This program is rolled out on the federal level, and aims to target areas that are prone to foreclosure and work on changing neighborhoods around. Real Estate Pro Articles describes the main thrust of the program:

The plan for these areas is to buy out units that are considered soon-to-be foreclosures. The units will then be handed over to non-profit housing organizations. Such associations will then be tasked to rehabilitate the properties. The repossessed houses will be made available to qualified buyers.

It seems like a pretty good idea. I like how the plan focuses on:

1. Buying homes before they enter foreclosure.
2. Fixing up homes and neighborhoods.
3. Qualified buyers will be screened for the properties.
4. It helps non-profit housing programs.

Alone, though, this program probably won’t be enough. Coordinated efforts are needed to fix this housing crisis. And, once it works its way through the mortgage market and the economy, sensible regulation is needed to prevent it from happening again. Unfortunately, many programs meant to reduce foreclosures only delay them for awhile (like the mortgage rate freeze enacted almost a year ago). Additionally, many of the efforts, though well-meaning, are a disconnected bunch of policies. Only a few bright spots have been seen, and they are disjointed, so they are not working in tandem to help the mortgage and housing market.

In any case, there are some good ideas out there. But I fear that the best solution is to let the housing bottom come as quickly as possible, and then let the whole thing work itself out. Oh, and people need to have a change in mind-set, harking back to the days when they bought what they could afford, and were reasonably satisfied with a modest home.

Just wanted to take the time to, on behalf of the Banks.com Mortgage Blog, wish you all a very:

Happy Thanksgiving!

I’ve come to the conclusion that Thanksgiving is, in fact, my favorite holiday. I was pondering this when my husband asked me, “If Christmas isn’t your favorite holiday, what is?” And I realized that, even though I knew I Christmas wasn’t my favorite holiday, I hadn’t really thought about it before. I like the tree and everything, but I just have a visceral reaction to all the garishness and materialism that comes with Christmas.

So, after much thought, and realizing how much I’ve been looking forward to Thanksgiving, I had an epiphany. Thanksgiving is about my favorite things:

1. Family
2. Food

A holiday that allows me to eat delicious comfort food that I don’t normally eat — and to do it with my family. Plus, there’s no pressure to buy gifts. Perfect!

Thanksgiving, for me, is a time of reflection. I have been in my house for a year, and so I am grateful that I was able to buy a home before things went bad. I am also thankful for my family and friends, and especially my darling son and loving husband. And I am glad that I can work from home and earn a good living. I have my health to be thankful for as well. The list could go on.

And that’s another reason I love Thanksgiving. It’s a time to just feel good about life. When you are thinking about contentment and what you enjoy about life, you are generally in a happier (and healthier) place than if you are focused on what you wish you had. So, while wanting isn’t always a bad thing, it is a good thing to sit back and be happy with what you already have.

Is Thanksgiving your favorite holiday? Why or why not?

Mortgage applications rose last week, thanks to an increase in those looking to refinance or buy. However, even though the Mortgage Bankers Association reports that overall mortgage applications are up, the specifics are less encouraging. Mortgage applications are still down as compared to this time last year, and fixed rate mortgage applications were down.

ARMs looking better again

According to the Mortgage Bankers Association, applications for adjustable rate mortgages are up to 3% of activity from 2.6% the previous week. This is somewhat discouraging, since one would hope that the lessons learned from the mortgage market crash would make fixed rate mortgages more palatable for many. On the positive side, though, applications for conventional mortgages are on the rise — meaning that conforming loans are becoming more popular (or people just realize they aren’t getting approved for jumbo loans right now).

And, mortgage interest rates dropped last week, reports MarketWatch:

Meanwhile, rates on 30-year fixed-rate mortgages averaged 5.99% last week, down from 6.16% the week before. The average for 15-year fixed-rate mortgages was 5.78%, down from 5.87%.

Rates on one-year ARMs rose, averaging 6.87%, up from 6.80% the previous week.

On this front, there is a great deal of hope that mortgage rates will fall even further after yesterday’s announced efforts from the government to force rates lower. By buying up mortgage obligations from Freddie Mac, Fannie Mae and Ginnie Mae, the government hopes to ease the flow of financing for mortgage loans — and bring down rates to make them more affordable.

Of course, the question is whether or not we’re going to be back in this place again in a few years. Mortgage lenders may be tightening requirements now, but what happens when times look good again and greed replaces fear? It is possible that this cycle repeats itself, since we are already seeing signs that our leaders and others are more concerned with ensuring the continuance of a debt-based economy, rather than encouraging wise personal finance decisions.