Rates Below 5% as Homebuyer Tax Credit Deadline Looms

The rate on the 30-year fixed mortgage stayed under 5 percent for another week, but most economists see rates moving upward later in the year as the economic recovery takes a stronger foothold and the Federal Reserve unwinds it purchases of mortgage-backed securities. The 30-year fixed rate averaged 4.95 percent for the week ending today, down slightly from 4.97 percent the previous week, according to Freddie Mac’s weekly report.

Obama Short Sale Plan Avoids Foreclosure with Less Debt

A new initiative by the Obama Administration in its slow-moving and often-criticized foreclosure rescue effort will now offer a short-sale alternative that includes some principal forbearance and $1,500 in “relocation” assistance to borrowers. The plan kicking off April 5 — Home Affordable Foreclosure Alternatives, or HAFA – is for homeowners who have already qualified for the government’s primary foreclosure-prevention campaign, the $75 billion Home Affordable Modification Program, HAMP, and have failed to complete its reduced-mortgage payments trial.

Home Price Reductions Slip to 19% of Listings, Trulia Says

The percentage of homes with a price reduction fell below 20 percent for the first time, according to Trulia’s nine-month-old measure of price discount activity. But the trend may reverse as the deadline for the homebuyer tax credit looms. Trulia, the real estate research site, said that 19 percent of listings currently on the market in the United States have at least one price cut as of March 1, 2010.

Crisis Leftovers: Fannie, Freddie Force More Mortgage Buybacks

Fannie Mae and Freddie Mac are forcing the nation’s biggest lenders to buy back more of the badly-written mortgages that served as a trigger for the financial crisis, and a dash for cash has ensued. The government-controlled mortgage finance giants Fannie and Freddie could force some of the top lenders – including Bank of America, JPMorgan Chase, Wells Fargo and Citigroup – to buy back $21 billion of home loans this year as part of its housecleaning of souring mortgages.

Homebuyer Tax Credits Fail to Spur Existing Home Sales

Winter storms had some impact, but a 7.6 percent drop in the pending home sales index for January from the National Association of Realtors indicates expanded and extended homebuyer tax credits are not bolstering the housing market. The NAR index is based on contracts signed in January. It fell to 90.4 from an upwardly revised 97.8 in December. But it is 12.3 percent higher than January 2009 when it was at 80.5.

Refi-Led Mortgage Applications Rebound, Up 14.6%

The composite mortgage applications index from the Mortgage Bankers Association jumped 14.6 percent on a seasonally adjusted basis last week. The healthy rebound, led by refinancing contracts, was the first increase in a month. For the week ending Feb. 26, the MBA’s purchase index rose 9 percent, while the refinance index surged 17.2 percent, both seasonally adjusted.

Obama Extends Fannie, Freddie Mortgage-Refi Program

The Obama Administration is extending for another year its refinancing assistance for homeowners with little or no equity, a program which has fallen short of helping its targeted number of borrowers. The program has refinanced 190,180 mortgages with loan-to-values (LTVs) between 80 percent and 125 percent. It has been plagued by lender delays in processing complex refinancing packages for homeowners with secondary mortgages. And some borrowers have failed to qualify or cannot afford closing costs or related fees.

Risk Re-Defined: Fannie, Freddie & Unlimited Credit

In its controversial Christmas Eve announcement, the U.S. Treasury said the following on overhauling the housing finance enterprises of Fannie Mae and Freddie Mac after giving both of them unlimited credit lines for three years. “The Administration is in the process of reviewing issues around longer term reform of the federal government’s role in the housing market.” Treasury also said that President Obama would provide a ‘preliminary report” in his fiscal 2011 budget in February 2010. That report did not happen.

Fannie to Tap Into U.S. Treasury Again, This Time for $15.3B

Mortgage finance giant Fannie Mae, already majority-owned by the U.S. government through “conservatorship,” is requesting to tap into a U.S. Treasury credit facility for an additional $15.3 billion in its ongoing efforts to help “every borrower we can and to address rising foreclosures.” That would bring to a total of more than $128 billion sought by both Fannie Mae and Freddie Mac from the Treasury’s open-ended credit line.

Double-Dip Housing? Existing Home Sales Fall 7.2%

Financial markets have started to ponder fears of a double-dip recession in the wake of worrisome figures on jobless claims and potentially waning consumer demand this week, but the housing market has unleashed more negatives than any other sector. Today, the National Association of Realtors reported that existing-home sales – including single-family homes, townhomes, condominiums and co-ops – dropped 7.2 percent to a seasonally-adjusted annual rate of 5.05 million units in January.

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