| Homeowners deluge mortgage brokers
For people like Shari De Cambra of Chino Hills, the rate cut provided the opportunity she was looking for to trade the uncertainty of her adjustable rate loan for the security of a mortgage with a fixed rate of 5.25% for 30 years. I dont want to ever do it again, said De Cambra, who teaches math at Diamond Bar High School, said of her third refinance. Every time it costs you money. .
Md. mortgage fee lawsuit reinstated
A ruling yesterday from the state's highest court over prepayment mortgage charges could make it more expensive for some to obtain home equity loans, the banking industry's trade association warned.
The Maryland Court of Appeals found that state-chartered Provident Bank assessed a "prepayment charge" that's not allowed under state law. The bank had waived $680 in closing costs on a $17,000 loan to Andrew Bednar in 2003 but collected the money after the loan was paid off early when he refinanced with another lender two years later.
The ruling overturns a decision by Baltimore Circuit Court to dismiss the lawsuit against Provident.
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Low Interest Rates Spur Mortgage Refinancing
Homes sales may get a boost when the fed's recent interest rate drop translates into mortgage rates. The cut will make it easier for many people to get into a new home and will also enable people to refinance to avoid future hardship. Several loan officers and mortgage lenders all say the same thing -- now is the time to refinance your home. But before you do, consumers need to understand the process is not cut and dry. Loan officers around the valley say more and more homeowners need to look into refinancing to take advantage of the low interest rate. Different loans can either lower your monthly payment or even shorter your term But it's not that simple. In order to refinance, you have to have decent credit and have some equity built up in your home.
Analysts predict wave of home refinancing
The economic stimulus plan agreed on Thursday could unleash a wave of mortgage refinancing that would amplify the effect of the Federal Reserve's 75 basis-point interest rate cut this week, according to analysts. While the Fed has cut rates aggressively, until now a large number of homeowners and would-be buyers have not been able to take advantage of the lower interest rates, because of high spreads in the dysfunctional secondary market for jumbo (large denomination) loans. Under the plan, the so-called conforming loan limit would be expanded for the two government-sponsored enterprises to 125 per cent of area median sales price up to a maximum of $729,750, from a current $417,000. Now more homeowners will be able to refinance or take out new mortgages in the functioning segment of the market that “conforms" to Fannie and Freddie rules.
Stimulus Package Gets Passing Grade, But Many Had Hoped For More
But many business people had hoped for other provisions that they say would have provided a longer term boost to the economy.
The stimulus package does take aim at the problems in the mortgage markets. A provision to let the Federal Housing Administration insure more subprime loans could help hundreds of thousands of people now facing foreclosure to refinance. The provision letting the government-sponsored housing finance companies, Fannie Mae and Freddie Mac, buy bigger "jumbo" loans should help housing markets with high home values.
Some economists still question the need for any stimulus at all. "Given where the economy is right now and the best forecasts of where it is heading, the fiscal package seems unnecessary as a short-run measure, while in the long run adding to the debt burden without doing anything to improve incentives for economic growth," N.
Mortgage Rates Hit 30-Month Low
More bad news on the economy sent mortgage rates down for the third straight week to a 30-month low. The average rate on a 30-year, fixed-rate mortgage fell 18 basis points to 5.69% during the week ended Thursday, according to a survey by Freddie Mac (FRE - Cramer's Take - Stockpickr). A basis point is a hundredth of a percentage point. Over the past three weeks, 30-year mortgage rates have fallen by a cumulative 45 basis points. Freddie says that's the steepest three-week decline since September 2003. At this time last year, rates on 30-year fixed-rate mortgages averaged 6.23%. The news wasn't all good: Those looking to purchase a home or refinance an existing mortgage can now expect to pay origination fees and discount points of 0.5% of the total loan amount, on average.
Plan's on borrowed time Home loan piece of stimulus may be shortlived
A provision in the new economic stimulus package that would make it cheaper and easier to buy or refinance a home a boon in the pricey Bay Area might be terminated almost as soon as it begins. President Bush and House Speaker Nancy Pelosi trumpeted a plan this week to raise loan limits for mortgages that FannieMae and FreddieMac can purchase, a move that would allow lenders to offer many more home loans of a greater amount and with the lowest mortgage rates available. The only problem is the loan limits would expire at year's end if the stimulus package follows the proposal as outlined in the current stimulus package. Some key U.S. senators want to extend the time period for the higher loan limits, perhaps indefinitely. The idea behind the higher limits is to stoke demand for homes in high-priced housing markets such as the East Bay and other parts of the Bay Area.
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