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MORTGAGE MARKET INDICATORS
- Freddie Mac National Average: 30-Yr Fixed Mortgage Rate down 0.09% to 4.28% on Mar. 6
- MBS (3.5%) - Currently 100.58, High: 100.99, Low: 100.41
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- Asian & European Stock Market Indexes changed -0.678%
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REAL ESTATE & MORTGAGE NEWS
NAR Pending Home Sales Index Jumps in May
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Mortgage Broker Relevance Renewed
By Al Crisanty - I believe that 2014 will be the year when mortgage broker relevance reemerges and broker-originated mortgage loans reclaim at least a 20% market share—a threshold that signifies that they have once again become a force in the market.
At this level brokers will have broad market visibility, the ability to leverage the tremendous power of word of mouth and social media endorsements needed to satisfy consumer’s need for experienced professionals offering a vast amount of lending choices. >>Read More
Subprime Makes Comeback as ’Nonprime’: Mortgages
By Kathleen M. Howley - Bill Dallas, whose last two subprime lenders went bust during the global credit crunch, pledges to get it right this time around.
Dallas, 58, plans to offer the loans through his new company, NewLeaf Lending in Calabasas, California, this year. He’s one of a growing number of executives striving to resuscitate the market, which six years ago crippled the global economy, with a revamped subprime product. >>Read More
CFPB accuses another mortgage company of illegal kickbacks
The Consumer Financial Protection Bureau is accusing one of the biggest mortgage originators in the country of orchestrating a mortgage insurance kickback scheme that started as early as 1995.
The CFPB alleged Wednesday that PHH Corporation and its subsidiaries – PHH Mortgage Corporation, PHH Home Loans, Atrium Insurance Corporation and Atrium Reinsurance Corporation – took kickbacks in the form of mortgage reinsurance. The CFPB is seeking a civil fine, a permanent injunction and victim restitution. >>Read More
Construction Spending Inches Up in December, Touches 5-Year High
By: Tory Barringer - Construction spending saw a modest increase in December, rising to its highest level in nearly five years as November’s total was revised down.
The Department of Commerce reported Monday that spending in December ran at a seasonally adjusted annual rate of $930.5 billion, 0.1 percent above November’s revised estimate of $929.9 billion and 5.3 percent ahead of December 2012’s $883.6 billion. >>Read More
2013 Originations Estimated at $1.8T, Big Players Give Up More Ground
By: Tory Barringer - Despite a precipitous drop in fourth-quarter volume, origination numbers turned out stronger than expected in 2013—and analysts at FBR Capital Markets say 2014 could be similarly surprising.
Industry data reviewed by FBR suggests origination volumes plunged from $460 billion in Q3 2013 to $305 billion in Q4. While disappointing, FBR says the decline “was expected as interest rates meaningfully slowed refinance activity and spooked the purchase market.” >>Read More
Home-Flipping Resurgence May Slow Down This Year
Home flipping has come back strong, but it’s unclear for how long.
By Evan Nemeroff
The average gross profit for investors who bought a home and resold it within six months increased about $10,000 last year, according to the data firm RealtyTrac. (The figure reflects the difference between the purchase and resale prices and does not take into account investments in the home, such as repairs.) If home prices stabilize as they are expected to this year, this activity may become less profitable, and less attractive to investors. >>Read More
1 in 6 Housing Markets Back to Pre-Recession Levels
by Jann Swanson - "Housing markets across the nation are continuing their slow and steady climb back to normal levels," National Association of Home Builders (NAHB) Chairman Rick Judson said today. Judson announced that the NAHB/First American Title Insurance Leading Markets Index hit .87 this month, indicating that the nation is now running at about 87 percent of normal economic and housing activity. In addition, 58 metropolitan areas made the NAHB list of leading markets, meaning they have returned to or exceeded their last normal levels of economic and housing activity. >>Read More
Fannie & Freddie Ignored Warnings on Potential Problem Loans
By: Krista Franks - About four years after the Federal Housing Finance Agency (FHFA) directed the GSEs to develop a uniform collateral data portal, the Office of the Inspector General of the Federal Housing Finance Agency (FHFA OIG) finds the portal is not being used to its potential, and the GSEs continue to purchase loans with red flags.
After “extensive” development and testing, the OIG concluded in a recent audit, “more remains to be done to use the portal’s data to minimize the risk of loss.” >>Read More
MBA: Credit loosens as lenders adjust to QM
How easy is it to get a mortgage?
By Brena Swanson - The mortgage credit availability index ticked slightly higher in January and increased 1.85% from 110.9 in December to 113.0 in January, the latest Mortgage Bankers Association report said.
"Overall, mortgage lenders and investors slightly expanded credit offerings in January on net, but this represented the combination of two divergent trends,” said Mike Fratantoni, chief economist at MBA. >>Read More
Experts Predict Diminished Investor Activity, 4.5% Appreciation in 2014
By: Tory Barringer - A majority of experts surveyed by Zillow and Pulsenomics expect large-scale investors will pull out of the housing market in the next few years—and that hopefully means a smoother field for consumer buyers.
Out of 110 economists, real estate experts, and investment strategists surveyed in Zillow’s latest Home Value Index, 57 percent said they think institutional investors will work to sell the majority of homes in their portfolios “in the next three to five years.” These investors are largely credited with propping up housing during its recession, helping to keep sales volumes from plummeting too far. >>Read More
Applications Point to Spike in New Home Sales
A survey of loan application volume from mortgage subsidiaries of homebuilders across the country suggests sales of new homes experienced a substantial leap in January. The Mortgage Bankers Association's (MBA) Builder Applications Survey indicates new home sales ran at a seasonally adjusted annual rate of 543,000 last month, reflecting a month-over-month increase of 35 percent. On an unadjusted basis, the group estimates there were 38,000 new home sales in January, a 36 percent increase over December. » Read More
Are mortgage lending standards easing?
by Ryan Smith - Could mortgage lending standards finally be starting to ease? Wells Fargo seems to think so. The big bank has announced that it will lower its minimum credit score for certain government-backed mortgages.
Wells Fargo will begin origination Federal Housing Administration-backed purchase loans for borrowers with credit scores as low as 600, the Journal reported. The bank previously had a limit of 640 through its retail channel. Borrowers with credit scores below 620 are usually considered subprime.
Refinances to See Second Wind?
By: Tory Barringer - There’s no denying that 2014 has been lackluster for the housing market so far, but economists at Freddie Mac aren’t ready to pack up their optimism just yet.
Noting that interest rates have spent most of the last two months on a downward slope (despite actions from the Federal Reserve to bring down asset purchases), Freddie Mac’s chief economist, Frank Nothaft, says the refinance segment of the market may be getting its second wind, thus giving a lift to overall applications activity. >>Read More
Borrowers Keep Moving To ARMs; Credit Requirements Keep Loosening
Mortgage Orb - During the first month of the new year, credit requirements continued to loosen, and the percentage of adjustable-rate mortgage (ARM) loans continued to increase, according to Ellie Mae's Origination Insight Report for January.
To get a meaningful view of lender "pull-through," Ellie Mae says it reviewed a sampling of loan applications initiated 90 days prior (i.e., the October 2013 applications) to calculate an overall closing rate of 54.9% in January of this year, up only slightly from 54.3% in December.
All of the following highlights from the report are attributable to Jonathan Corr, president and chief operating officer of Ellie Mae:
The purchase-to-refinance mix was “relatively steady” - with a 1% change from the month before. >>Read More
Declining Affordability: Shock or Not?
By: Scott Morgan - The degree to which a homebuyer can afford a house depends greatly on whether the buyer already owns a home, according to a report released Thursday by Mark Fleming, chief economist at CoreLogic.
After a few years in a favorable market, first-time buyers are starting to face a tougher time, Fleming reports. The market overall is being affected by the intersection of rising home prices, rising interest rates and stagnating incomes, which puts first-time buyers behind the curve that has benefitted them greatly since 2007. >>Read More
Mortgage Risk Continues to Climb
By:Tory Barringer - Last month’s implementation of the Consumer Financial Protection Bureau’s (CFPB) qualified mortgage (QM) guidelines did little to stem the rise of mortgage risk across the nation, according to the latest from the American Enterprise Institute (AEI).
The index saw the greatest lift from a rise in the share of purchase loans backed by the government, which was up to 33 percent. The stressed default rate among those loans increased to 23.7 percent. Isolating only loans backed by the Federal Housing Administration (FHA), the default rate was 24.4 percent. >>Read More
CFPB Aims Sights at Real Estate Offices
Well it’s here. There is a class action lawsuit for $11.2 million against a large real estate company for RESPA violations.
NAR can’t really do anything about this one. Long & Foster Real Estate is on the short end of the stick with regards to a huge RESPA lawsuit. They’re allegedly in cahoots with another company sharing settlement fees and they are facing a lawsuit over it all. A lawsuit to the tune of over $11 million PLUS guys. I think a lot of us figured the real estate agents out there were pretty well protected by their mega watch dog the National Association or Realtors with respect to this kind of stuff, but it would appear that this isn’t the case. >>See Frank & Brian Video
Buying Costs Still Beat Renting, but for How Long?
By Tory Barringer - Despite reports of declining home affordability nationwide, Trulia’s latest data shows purchasing a home still remains more affordable than renting in the largest markets—though the scale is close to tipping in a few.
Mortgage rates would have to climb to 10.6 percent before ownership costs eclipsed rental costs on a national scale, Trulia says in its Winter 2014 Rent vs. Buy Report. The last time rates went that high was nearly 25 years ago, the company points out. >>Read More
Tax Proposal Will Dramatically Alter Housing Landscape
NAR President Steve Brown says: “Proposed limits on the mortgage interest deduction and capital gains, and the repeal of deductions for state and local property taxes ... will impact every single American, either directly or indirectly,”
The comprehensive tax reform discussion draft that House Ways & Means Committee Chairman Dave Camp, R-Mich., released yesterday envisions a very different picture for home owners than what’s in place today. In a statement about the plan, the association is concerned with many of the proposals. >>Read More
January Pending Sales Essentially Flat
Pending home sales ticked up slightly in January, just barely moving from December’s two-year low, the National Association of Realtors (NAR) reported Friday.
The group’s Pending Home Sales Index (PHSI), a forward-looking sales indicator based on contract signings, edged up 0.1 percent to an even 95 last month, a meager improvement from December’s upwardly revised reading of 94.9.
Compared to January 2013, pending sales were down 9.0 percent. >>Read More
More Homeowners Plan to Rent over Selling
By Tory Barringer - Home inventory will see a big boost as owners gear up for the spring shopping season? Survey results from Redfin suggest otherwise.
In a poll of more than 1,900 homebuyers across 22 major metro areas, the online broker found 39 percent of homeowners have plans to rent out their existing home after buying a new place—limiting the number of supply coming to the market. >>Read More
Finance Execs Maintain Cautious Optimism for 2014
By: Tory Barringer - A recent survey of senior leaders at banks, credit unions, and other financial institutions all across the country finds many have fairly high hopes for the economy in 2014, even as headwinds threaten to blow the recovery off course.
Out of more than 900 respondents to Fiserv’s 2014 Boardroom Series Outlook Survey, 50 percent expressed “somewhat” or “very optimistic” expectations for economic growth this year, with another 42 percent expecting the year to follow more or less the same track as 2013. A combined 9 percent said they are “somewhat” or “very pessimistic.” >>Read More
Mortgage Rates Sharply Higher; More Volatility Ahead
by Matthew Graham - Mortgage rates moved quickly higher yesterday, in the context of their recent range. That is to say, yesterday's "sharp" movement is nothing compared to those seen in mid 2013, but it did leave rates as high as they've been in exactly two weeks. At current levels, the most prevalently quoted conforming 30yr Fixed rate for the best-qualified borrowers (best-execution) begins to lean more toward 4.5% though 4.375% is still available. When adjusted for day-to-day changes in closing costs, rates moved higher by an equivalent of 0.06% today. >>Read More