TAG | fha home loan
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Federal Reserve: It’s Time the Market Stands on its Own
Comments | Posted by admin in Uncategorized
According to Pedro Nicolaci da Costa and Reuters News, April 1 will be the first day that the Federal Reserve will end its debt purchase program and allow the struggling U.S. mortgage market to operate unassisted. As a result, the Fed believes mortgage rates will rise about three-quarters of a percent to about 6 percent, Boston Fed President Eric Rosengren said Saturday.
Fear of a worldwide perception that the U.S. government is simply printing money to use to purchase mortgage-related securities is a big reason the Fed has pulled back, analysts say. If that fear caused a sell-off of U.S. government bonds, it would push borrowing costs substantially higher and derail the economic recovery.
“We are still in uncharted waters,” Fed Vice Chairman Donald Kohn said in an unrelated speech Saturday. “We will need to be flexible and adjust as we gain experience.”
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Regional Fed Chief Says MBS Purchase Program Should End in March
Comments | Posted by admin in Uncategorized
Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, said the central bank should end its purchases of mortgage debt as planned in March. This program has been instrumental in keeping home loan interest rates at or near the record lows of the last year.
U.S. FED bankers have debated whether increasing and extending asset purchases should the economy weaken, with a few favoring the move and one seeking a reduction in their Dec. 15-16 meeting. They pledged to complete $1.25 trillion in purchases of mortgage securities and $175 billion of agency debt by March. Read More
After housing and mortgage loan applications were up for 5 straight months, it appears that there may be a double dip forming in the housing market. Home Buyers have benefited from the record low interest rates, courtesy of the Federal Reserve’s MBS buying program and the $8000 tax credit. Both programs are set to expire in a few months, leaving the housing market to stand on its own. Read More
Changes to the Real Estate Settlement Procedures Act that take effect today require mortgage loan lenders to provide consumers with a standardized Good Faith Estimate that discloses a loan’s key terms and settlement costs. To comply with the new regulations, loan originators must complete a three-page Good Faith Estimate form, providing estimated settlement charges based on the loan’s term, initial interest rate and monthly amount owed. Good Faith Estimates have been used for years, however the new estimate regulates which charges can and cannot change at the time of a loan settlement, thereby preventing loan originators from adjusting certain costs after providing an estimate. Learn more.
31
Mortgage Rates Expected to Rise when FED Stops Purchase Program
Comments | Posted by admin in Uncategorized
According to a recent Bloomberg article, Mortgage bonds are poised to slump after a record rally as the Federal Reserve’s unprecedented buying of $1.25 trillion of the securities ends as soon as March, driving up interest rates on new home loans.
Rising mortgage bond yields mean loan rates are likely to end 2010 almost 0.75 percentage point higher than current levels, based on forecasts for government bonds and spreads, adding to challenges for a housing market struggling to recover from its worst slump since the 1930s.
Existing-home sales rose again in November as first-time buyers rushed to close sales before the original November 30 deadline for the recently extended and expanded tax credit, according to the National Association of Realtors®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 7.4 percent to a seasonally adjusted annual rate1 of 6.54 million units in November from 6.09 million in October, and are 44.1 percent higher than the 4.54 million-unit pace in November 2008. Current sales remain at the highest level since February 2007 when they hit 6.55 million. Read More at Realtor.org.
The trend of rising interest rates appears to be gaining momentum. According to a recent Washington Post Article, Freddie Mac sees rates hitting 6% or above in the next year. If you are considering purchasing or refinancing a home and you are on the fence about your interest rate offer, it looks like the time to act is now. With rising rates, waiting to obtain a home mortgage loan could prove to be costly.
