Record low mortgage rates gone for good?

WASHINGTON – Feb. 1, 2013 – Mortgage interest rates have ticked up for three of the past four weeks, and while big increases are unlikely, further drops are, too.

The average for a 30-year, fixed-rate mortgage hit 3.53 percent this week, the first time rates pushed above 3.5 percent in more than three months, mortgage giant Freddie Mac reported Thursday.

“I do think that perhaps the all-time low is behind us,” says Freddie’s chief economist, Frank Nothaft.

That was set in November when 3.31 percent was the average for a 30-year fixed-rate loan, according to Freddie Mac’s weekly mortgage rate surveys.

For the rest of 2013, Nothaft expects rates to gradually rise, ending the year at about 3.75 percent and then moving above 4 percent next year. “There’s no point to dilly-dally” to wait for lower rates if someone is considering refinancing their home, Nothaft says.

Rising rates will affect homeowners looking to refinance more than home shoppers, says Jed Kolko, chief economist with real estate website Trulia. That’s because refinancing is mainly an interest-rate-driven decision, while home purchases have more to do with jobs and lifestyle changes, he said. Even though they’re up, rates are still near historic lows.

Along with an improving economy, rates have edged up, given less demand for “safe haven investments” such as bonds since Congress partly averted the so-called fiscal cliff of tax increases and spending cuts on Jan. 1, says Greg McBride, senior financial analyst for Bankrate.com.

McBride said mortgage interest rates may dip below current levels on occasion. He, too, expects them to hover between 3.5 percent and 4 percent for most of this year. That assumes no big shocks to the U.S. economy.

Except for a few weeks, mortgage rates have been below 4 percent for the past 14 months, Freddie Mac data show. The low rates have helped the housing market, which is showing signs of strengthening. Home prices were up 5.5 percent in November year-over-year, Standard & Poor’s/Case-Shiller data showed this week. New and existing home sales are also up. That is helping the overall economy.

“If the economy is getting better, slightly higher interest rates are a natural occurrence,” says Keith Gumbinger, vice president of mortgage tracker HSH.com. “But there’s no reason to believe that rates are headed upward in a straight line.”

© Copyright 2013 USA TODAY, a division of Gannett Co. Inc., Julie Schmit

COMMITTED: Freddie Mac aims for 75% reduction in short-sale timelines

 

In speaking with a source earlier today, one who is now completely out of the REO investments space, he remarked, "REO is a dying business."

It's a development he seems happy with and added, "there is no positive reward [to doing REO], it's always a regrettable situation."
It's a sentiment shared by the industry, which by and large supports short sales as a foreclosure alternative. It's a process that needs to move faster to gain support — these deals used to be painfully slow only a few years ago. Still, progress is being made, and future projections on timelines are pretty big.
Freddie Mac EVP Tracy Mooney put up a blog today, titled The Shorter Short Sale. In it, she outlines steps the government-sponsored enterprise is taking to streamline short sales.
"We estimate that the time to complete a short sale will decrease by approximately 50% to 75%," as a result of the changes, Mooney writes.
Short sales are, in large part, a commitment with the borrower's personal situation taken into consideration. It is rumored to help keep the credit score more intact, though that's a topic of some debate, but there are numerous other benefits.
For example, homeowners can qualify for up to $3,000 in relocation assistance from Freddie when the short sale is complete.
It's part of what the industry now refers to as the "graceful exit."
And with the changes coming from Freddie, the exit is about to get much faster.

BofA settles with Fannie Mae for $10 billion

Bank of America said Monday it will pay $10 billion to federal mortgage issuer Fannie Mae to settle allegations that mortgages were improperly handled during the financial crisis.

The Charlotte, N.C-based bank will pay $3.6 billion in cash related to how it sold and distributed certain residential mortgage loans.

Bank of America (BAC) will also repurchase $6.75 billion worth of residential mortgage loans it and its Countrywide Financial unit sold to Fannie Mae, about 30,000 loans, from January 2000 through December 2008.

STORY: Ten banks settle foreclosure claims for $8.5 billion

The repurchased loans had a total original principal of about $1.4 trillion. The outstanding principal balance is about $300 billion.

The bank also said it agreed to sell servicing rights on 2 million residential mortgage loans worth about $306 billion. Plus, the bank will pay $1.3 billion to Fannie Mae to compensate the federal mortgage issuer for loan servicing fees.

The bank's stock price was up about 0.5% to just over $12 a share in Monday trading. The stock price had jumped 2% in pre-market trading when the deal was first announced.

Bank of America bought Countrywide Financial in July 2008, just before the financial meltdown triggered by the bursting of a residential real estate bubble. Countrywide was a giant in mortgage lending, but was also known for approving risky loans.

Fannie Mae and Freddie Mac, which packaged loans into securities that were sold to investors, were in effect nationalized in 2008 when they nearly collapsed under the weight of their mortgage losses.

Federal lawmakers initially lauded Bank of America's purchase of Countrywide because the bank was viewed as eliminating a bad actor from the mortgage market. But the purchase has resulted in a host of regulatory fines, lawsuits and losses for the bank's mortgage business.

The acting director of the Federal Housing Finance Agency, which approved the settlement terms, said he was pleased.

This settlement "is in the best interest of taxpayers and reduces uncertainty in the nation's mortgage finance market," said Edward J. DeMarco, FHFA Acting Director.

Bradley Lerman, Fannie Mae's general counsel, also praised the terms of the settlement. "Fannie Mae has diligently pursued repurchases on loans that did not meet our standards at the time of origination," he said in a statement Monday.

Bank of America's CEO Brian Moynihan said in a statement that the settlement is "a significant step in resolving our remaining legacy mortgage issues, further streamlining and simplifying the company and reducing expenses over time."

The bank said the settlement will reduce the firm's pretax income by approximately $2.7 billion in the fourth quarter of 2012.

Contributing: The Associated Press

Home prices post biggest annual jump in two years

The recovery in the housing market continues to pick up steam, as home prices posted the biggest percentage gain in more than two years in the latest reading of the closely followed S&P/Case-Shiller index.

The index showed prices up 4.3% in October compared to a year earlier. That's the best improvement since May 2010. But that earlier increase was due to a temporary spike caused by a homebuyers' tax credit of up to $8,000 on homes purchased in late 2009 and early 2010.

This latest rise comes as the housing market has shown numerous other signs of recovery in recent months. A combination of near record-low mortgage rates, lower unemployment and a drop in foreclosures to a five-year low means there are more buyers interested in purchasing fewer available homes. That in turn has lifted prices.
October marked the fifth straight month that the index has been up on a year-over-year basis.
Related: 2013 housing outlook

The improvement in housing market fundamentals has helped to lift the pace of both home sales and home building. But even with the latest rise in prices, the index is still down 29% from the peak reached in June 2006.
The continued rebound in prices likely will be another positive for both purchases and construction in the year ahead. Higher prices give current homeowners a better chance to sell their home and get the down payment they need on their next home purchase. They also encourage buyers who may have been on the sidelines because of uncertainty about home prices' direction that now is the time to buy.
Of course, home builders benefit from higher prices and increased demand. Leading home builders such as PulteGroup (PHA), Lennar (LEN), KB Home (KBH), D.R. Horton, Inc. (DHI) and Toll Brothers (TOL) have all enjoyed better than a 50% rise in their stock price over the last 12 months, with PulteGroup's stock nearly tripling in value.
The increases in home values were widespread in this latest reading, with only two of the 20 cities tracked by index showing modest price declines from a year earlier. Prices were down a little more than 1% in Chicago and New York.
The biggest rise was in Phoenix, one of the cities hardest hit when the housing bubble burst. Prices in Phoenix were 21.7% higher than in October 2011.

 

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FOR IMMEDIATE RELEASE

ENGEL & VÖLKERS RECEIVES BBB ACCREDITATION IN RECOGNITION

OF HIGH STANDARDS AND QUALITY SERVICE

The Villages, Florida – Engel & Völkers The Villages today announced that it has

received accreditation from the Better Business Bureau, and is currently the only real

estate brand in the The Villages assigned this highly trusted endorsement of service

quality.

“We are ecstatic to be the only real estate agency in The Villages at this time to have been

vetted and accredited by the Better Business Bureau,” said Alistair Powell, Engel &

Völkers Managing Broker and owner in The Villages. “It shows that we are once again at

the forefront of professionalism.”

Companies that achieve the BBB Accreditation have been recognized for meeting the

Bureau’s standards of trustworthy business practices embodied in the eight principles that

make up the “BBB Standards for Trust”. The standards are designed to build consumer

trust through sound business practices, truthful advertising, transparency and

responsiveness safeguarding privacy.

The Engel & Völkers office in The Villages provides a distinct brand of real estate service

backed by a global reputation for exceptional quality shared by the more than 480

residential shops around the world. The high-end global real estate brand has been

expanding throughout the United States and especially in Florida where there are offices

in prime markets including Miami, Naples and Key West. Engel & Völkers The Villages

serves The Villages, a highly desirable, master planned retirement community; Ocala, an

active equestrian real estate property market; and the high-end golf community of Harbor

Hills.

About Engel & Völkers

From its beginning in 1977 as a specialty boutique providing exclusive, high-end real

restate services, Engel & Völkers has become one of the world’s leading companies

specializing in the sale and lease of premium residential and commercial property and

yachts. Engel & Völkers opened its first shop in the U.S. in 2006 extending its global

network of 3,800 real estate advisors in 480 residential property shops and 39 commercial

offices spanning 35 countries offering both private and institutional clients a

professionally tailored range of luxury services. Committed to exceptional service, Engel

& Völkers supports its agents with an array of high quality business services; marketing

programs and tools; cutting edge mobile, social and web technologies; as well as access

to its global network of real estate professionals and data. Engel & Völkers is an active

supporter of the Fair Housing Act and the Equal Opportunity Act. Each office is

independently owned and operated. For more information about Engel & Völkers, please

visit us at

www.evusa.com, like us www.facebook.com/EngelVoelkersUSA and follow us

at

www.twitter.com/EV_USA

# # #

For further information please contact:

Willy Sybert

Engel & Völkers The Villages

352.551.4479

Willy.Sybert@evusa.com

 

Rebecca Taylor

Engel & Völkers Florida Residential LLC

239-348-9000

Rebecca.Taylor@evusa.com