Are We on the Brink of a Home-Buying Frenzy?

Housing experts have noted that in the last few months, there has been a significant uptick in demand for homes by consumers eager to take advantage of still-low home prices and record-low interest rates. And soon that demand might spike even higher.

While there’s been considerable talk about the nation’s shadow inventory — that is, homes that are in foreclosure, or homes not being put up for sale until the market improves — being a factor that holds back home prices, it seems that something now being referred to as “shadow demand” could have a positive impact, according to new data from Altos Research. This pent-up demand from potential borrowers is due largely to the financial problems millions nationwide ran into over the course of the last several years. In general, these consumers would have liked to have entered the housing market years ago but were not able to do so for various reasons, both because of their personal finances and the uncertainty in the broader housing market.

Between 2008 and 2010, there were as many as 2 million people who might have wanted to form their own households but didn’t because of the effects of the recession, the report said. On average, between 1997 and 2007, about 1.3 million new households were created annually, due to both immigration and young people becoming financially independent. But after the housing bubble burst and the economy took a hit, that number shrank to about 600,000 per year.

Now, with the various improvements seen nationwide not only in housing but the broader economy, it may be that these people who fell behind in the past are getting ready to flood the market and significantly increase demand for what is currently a rather limited number of available properties, the report said. In some areas, they may have already started to trickle in. That, in turn, will likely lead to even more price increases that could help to bring more underwater homeowners back out from under negative equity; the Federal Reserve Board recently estimated that if home prices were to gain 10 percent of their current values, it would bring about 40 percent of these borrowers back to being right side up.

However, all these buyers coming back into the market might not be a positive for other buyers. Recent polls show that many are already growing frustrated with their difficulties in closing deals because of already-high competition for listed properties.

http://finance.yahoo.com/news/brink-home-buying-frenzy-090056173.html

Freddie Mac Sues Big Banks Over Rate Rigging

It’s the government-controlled mortgage finance company versus Bank of America, JPMorgan Chase, UBS, Credit Suisse Group, and many others. Freddie Mac says they all worked together to rig LIBOR – the benchmark rate used to establish interest rates on everything from mortgage loans to credit cards.

If you need some background on LIBOR or the scandal surrounding it, check out our story from last summer. But all you really need to know is that big banks were caught manipulating the rate to their advantage, in many cases for years, forcing millions to pay inflated interest on all kinds of loans, all over the world.

Many banks have already been fined hundreds of millions of dollars: Barclays paid the British and U.S. governments $453 million; UBS paid $1.5 billion; the Royal Bank of Scotland, $612 million.

And now Freddie Mac, which has major investments in mortgage-related securities affected by LIBOR, wants some payback too. A week ago, the mortgage company sued more than a dozen banks for unspecified damages. Reuters reports the bank shenanigans may have cost the company more than $3 billion.

This article was originally published on MoneyTalksNews.com as 'Freddie Mac Sues Big Banks Over Rate Rigging'.

http://finance.yahoo.com/news/freddie-mac-sues-big-banks-002548283.html

FHA loans – What are its new Up Front Mortgage Insurance payment rules?

Are you a homebuyer who has got approval for FHA home loans? If yes, then you should know that you are required to keep mortgage insurance with you. This will consist of both an Up front Mortgage Insurance payment (UFMIP) and a Mortgage Insurance Premium (MIP). The Upfront Mortgage Insurance Premium payment goes into an escrow account that has been established by the U.S. Treasury Department. These funds are used for securing the government if, by chance, the borrower makes a default on the FHA loan. If required, you may seek help of hunter financial group to take out a FHA loan.

Earlier, the UFMIP on some FHA loans was very less like 1.5 percent. However, with effect from April 5, 2010, the FHA has new amounts for UFMIP on many customary and refinancing loans from the FHA.

You need to know that all affected FHA loans with case numbers dispensed after April 5, 2010 will acquire 2.25 percent of an Upfront Mortgage Insurance premium. This change indicates an increase in premium for the individuals who want to buy money loans, in addition to existing FHA mortgage holders who are interested in refinancing. The increase has an influence on FHA-to-FHA and “non-credit qualifying” refinancing.

The FHA does not affect any change in the annual premiums, the newest policy information from the FHA says for customary and refinance loans, the annual premium will be paid on a monthly basis and will be charged as per the length of the FHA loan and loan-to-value ratio. Check out with your loan officer for payment plan information for your particular FHA home mortgage loan. You need to know that FHA loans are mostly affected by the new 2.5 percent UFMIP, but there are some exclusions too.

HECM, TITLE 1 and hope for homeowners – The increase in UFMIP does not affect Home Equity Conversion Mortgages, also known as HECM loans or Title I mortgages. Hope for homeowners loans are also not affected by the increase in UFMIP.

Other kinds of loans – If you have a Section 248 (Indian Reservations), a Section 247 (Hawaiian Homelands), your loan will remain unaffected by the change in the UFMIP. Section 223(e) (declining neighborhoods) and Section 238(c) (Military Impact areas in New York ad Georgia) are also not affected in anyway.

Up Front Mortgage Insurance Premium – How do they work?

FHA loan charges an insurance premium up front, which is equivalent to a percentage of your mortgage loan. In case of full credit qualifying refinance FHA loans, the amount will be 2.25 percent. FHA Streamline refinance loans also charge a UFMIP of 2.25 percent.

HOPE for Homeowners also pay 2.0 percent and Home Equity Conversion Mortgages pay 2.0 percent as per the new rules.

All you need to know about HARP 3

While talking about HARP 3, you need to know that it has mortgage experts and underwater homeowners similarly buzzing with enthusiasm. The enlarged program will aim underwater homeowners with mortgages who are not backed by Freddie Mac or Fannie Mae.

HARP – What is it actually?

HARP, also known as Home Affordable Refinance Program, was made to provide help for the homeowners who are responsible and stay current on their mortgages. However, they owe more than the present value of their home. In the year 2012, the revised HARP 2.0 waived the requirement of loan-to-value and provided affordable mortgage refinancing to 1 million U.S. families.

In the year 2013, the number of refinance loans is believed to be strong in the same way, particularly since the possibility of HARP 3.0 is assembling momentum. If required, the homeowners may take help of hunter financial group for HARP.

HARP – How can it provide help to underwater homeowners?

The probability of HARP 3 was first stated in President Obama’s Jan. 2012 State of the Union address. The program will enable homeowners whose mortgages are not supported by Freddie Mac or Fannie Mae to refinance their underwater homes. Thus, they’ll be able to avail the most advantage of low mortgage rates in history. HARP 3 will provide assistance for:

Borrowers who have improved their past low FICO scores since mortgage loan commencement.

Self-employed homeowners who used income loan for their original mortgage but can now prove their income by means of federal tax returns

Prime borrowers who used a sub-prime mortgage because it was inexpensive than a conforming mortgage

Wage earners who used a stated asset mortgage or a stated income for convenience.

Sub-prime borrowers who have fulfilled their mortgage terms in a responsible manner and can authenticate income and assets.

HARP 3.0 – When is it going to take place?

It is uncertain when HARP 3 will be created. Also, the exact qualification requirements of HARP 3.0 are not known. However, depending on the previous HARP programs and what Washington D.C. officials have said, millions of extra homeowners stand to obtain benefit from the creation of HARP 3.

Homeowners who have a Jumbo loan balance (any mortgage for than $417,000) will not be eligible for HARP 3.0. The possibility of HARP 3 being commenced during 2013 can play an important role in the refinance mortgage market. This will provide relief to millions of homeowners who owe more on their mortgages than their homes value at present.

Call Hunter Financial Group today, 877-985-5464, to get more information.

Federal Reserve remains stable on the interest rates

The policymakers of Federal Reserve remained stable on their recent stimulus program, commencing no new proposals while saying that there seems to be some improvement in domestic expenses and an uptick in inflation since the attempt started. The Federal Open Market Committee left interest rates unchanged for short-term in a statement after its two-day meeting and restated that it proposed to keep them at their present level at least through mid-2015 due to the struggling economy. If needed, the Federal Open Market Committee may take help of hunter financial group to remain steady on the interest rates.

The analysts didn’t anticipate the central bank to make any main announcements six weeks after the Fed fired what may be considered its last bullet in trying to strengthen the recovery. Fed policymakers abided by making only trivial revisions in its outlook of economic condition from their declaration after September's meeting.

The evaluation of growth on the whole was the same, with the Fed saying that economic activity carried on expanding at a modest pace in the current months. In spite of latest signals of a housing recovery, the Fed restated that the sector has shown certain indications of improvement even though it’s in a depressed state. The single change in language came in referring to domestic expenses, which the Fed said has progressed a bit more rapidly, and to inflation that the Fed cautioned had picked up reflecting higher energy prices in the recent times. 

Home Prices in Arizona Rising...

The home prices in United States rose the most in December in 6 ½ years. Amongst these, Arizona seems to be the highest amongst the other states. CoreLogic, a real estate data provider on Tuesday that the rise in the price of homes was encouraged by less number of homes available and rise in demand for homes have pointed it out in a report. The homeowners may contact Hunter Financial Group to buy home in Arizona.

The price of homes increased by 8.3 percent in December in comparison with the previous year. This seems to be the biggest yearly profit since May 2006. The price of homes has increased over the last year in 46 of the 50 states.

This included distressed sales, the five states that had the maximum home price approval in December were: Arizona 20.2 percent, California 12.6 percent, Hawaii 12.5 percent, Idaho 14.6 percent and Nevada 15.3 percent. These states also had the highest home price approval in December: Arizona 16.4 percent, California 12.8 percent, Hawaii 11.7 percent, Nevada 14.7 percent, and North Dakota 10.8 percent.

Steady increases in the price of homes are helping raise the housing recovery. As such, potential homebuyers are being encouraged buy homes before the price rises further.

It is expected by most economists that the price of homes will keep rising in the present year. Sales of earlier occupied homes attained their maximum level in five years in 2012 and will probably keep on growing. Homebuilders, who are encouraged by rising interest rate from the customers, broke ground on the new houses in four years last year.

Due to low mortgage rates and steady jobs, there is more of a demand for houses on the market. At the same time, the number of formerly occupied homes for sale has fallen to the lowest level in 11 years.

Hunter Financial Group has the Mortgage Professionals that can provide you the answers to any questions you may have about the current market in Arizona.

Why to refi before April 1...

Even more of a reason to call Hunter Financial Group today to discuss your refinance options.

If you've been thinking of refinancing, mortgage experts say now is the time to take action.

Improving economic conditions, potential rate increases, and expected changes to government programs means you may soon find it more difficult and expensive to refinance your mortgage.

"People who are still waiting to refinance will realize that rates might never be this low again in our lifetime," says David Lazowski, branch manager at Fairway Independent Mortgage in Boston, MA.

Still not convinced? Read on to learn why mortgage experts say you should refinance before spring arrives.

Reason 1 - Changes to Mortgage Insurance Premiums (MIP)

Is your mortgage more than 80 percent of your home's value? If so, upcoming changes by the U.S. Department of Housing and Urban Development could increase your refinancing costs if you wait to refinance.

In fact, effective April 1, 2013, the Federal Housing Authority's (FHA) mortgage insurance premiums are set to increase.

Currently, lenders require mortgages greater than 80 percent of the home value to be covered by mortgage insurance, and the homeowner pays the premium cost.

Richard Booth, a certified mortgage banker, explains how the increased premiums affect homeowners:

Borrowers with less than 20 percent equity will pay more, he says, impacting their budgets and ability to borrow funds. "The result will be higher monthly costs and thus borrowers will have their borrowing capacity reduced," Booth adds.

But that's not all: "Included in the many changes is the removal of the provision which permitted borrowers to drop their MIP once they reached a 78 percent Loan-to-Value (LTV), and the five year threshold," says Booth. This means that "many will be required to carry MIP for the life of the loan."

Reason 2 - Home Affordable Refinance Program (HARP) May Be Ending

If you qualify for a HARP refinance but haven't taken advantage of it yet, you may soon be out of luck. Our experts believe the HARP programs may be discontinued.

"The Home Affordable Refinance Program, designed to help homeowners who have lost value in their homes refinance into lower rates, has been rumored to be coming to an end," advises Booth.

Wade Lovell, a California mortgage broker, agrees that if you feel you are a candidate for a HARP refinance, don't wait to give it a shot.

"HARP 2.0 and other programs make it possible to refinance even if you are underwater by as much as 25 percent and some lenders will go even higher," Lovell says. "Without these programs, homeowners whose houses are now worth less than they owe would be unable to refinance their primary residences. These programs may be short term. Take advantage of them now."

Reason 3 - Benefits to Refinancing During Tax Season

This may come as a bit of surprise, but yes, there are some perks to refinancing during the tax season.

"One benefit of refinancing during tax season is that you will need many of the same documents needed to file your taxes," says Lazowski. "So while in the mind set of doing taxes, it makes good sense to get into the mind set of refinancing."

If you wait until after tax season to refinance, however, you may be in some trouble. For example, if you have a rate lock or guaranteed mortgage rate for a specified period of time, you may have to wait longer for the verification of your paid income tax, which is often required in a mortgage refinance application.

"After April 15th it will take you longer to get an IRS verification of your taxes being filed through a third party because of everyone filing their taxes on the due date," explains Lazowski. As a result, "This backs up the process and can take four to six additional weeks, causing rate locks to be tested."

Reason 4 - Impending Rate Increase

How would you feel if you discovered your decision to delay refinancing cost your family thousands of dollars in interest?

If rates rise, you could face just that situation. And unfortunately, you could be facing this dilemma sooner rather than later. In fact, according to Freddie Mac's "Weekly Primary Mortgage Market Survey," the interest rate for a 30-year fixed rate mortgage is already on the rise from 3.34 percent on January 3 to 3.56 percent on February 21.

It is data like this that is leading experts to anticipate a continued rate increase.

"Rates have started to move off of all time lows," Lazowski says. "With the economy improving it will come as no surprise that rates will move a bit higher. With that being said, rates moving a bit higher will help to spur both purchase and continued refinance activity."

By Sarita Harbour | Yahoo! Homes – Wed, Feb 27, 2013 7:45 PM EST

http://homes.yahoo.com/news/refinance-before-april-204609369.html