Mortgage Credits Adjusting to the Market Recovery
Mortgage standards that have kept many potential buyers out of the market are beginning to loosen. In addition, banks are speaking about increasing their mortgage business soon and shore up their residential mortgageassets within the next year. All these prospective changes are being driven by a sharp rise in mortgage demand in conjunction with more home purchase applications being approved (60% compared to 55% of a year ago). This will combat but not fully eliminate the highly competitive home buying marketthat will still require standards such as 20% down.
“Fear Fannie Mae and Freddie Mac will force lenders to take back risky mortgages continues to be the primary condition constraining lending,” RealtyTrac reports. “Other conditions that have lenders holding tight to mortgage purse strings include obtaining insurance, slow economic growth, concerns about securitization, and processing capacity.”
“Mortgage Squeeze Loosens, Somewhat,”
Data Shows Mortgage Credit Easing, Others Not so Sure
Here are the national averages for mortgage rates for the week ending May 16:
- 30-year fixed-rate mortgages averaged 3.51 percent, with an average 0.7 point, increasing from last week’s 3.42 percent average. A year ago at this time, 30-year rates averaged 3.79 percent.
- 15-year fixed-rate mortgages averaged 2.69 percent, with an average 0.7 point, rising from last week’s 2.61 percent average. Last year at this time, 15-year rates averaged 3.04 percent.
- 5-year adjustable-rate mortgages averaged 2.62 percent, with an average 0.5 point, rising from last week’s 2.58 percent average. Last year at this time, 5-year ARMs averaged 2.83 percent.
- 1-year ARMs averaged 2.55 percent, with an average 0.4 point, rising from last week’s 2.53 percent average. A year ago at this time, 1-year ARMs averaged 2.78 percent.
To curb the rate of foreclosures, BofA is offering $25,000-30,000 of assistance in relocation fees if they are willing to complete the short sale instead of foreclosure. Why? Banks are seeing short sales as a money saving avenue than if a homeowner falls into foreclosure. The difference between the two processes is simple; short sales tend to give the bank ownership of the home more efficiently leaving the condition of the property optimal for a speedy turn around on the selling end with low fees. In addition, data reveals that short sales bring in more money than foreclosures in the long run.
the place to buy it. Now, after a year of testing to see the viability, the Costco we know and love will be implementing a full-service mortgage lending program on its website in partnership with 11 well know lenders. Over 10,000 mortgages have been issued under the program already. They are hoping that number will swell as word gets out.
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