Mortgage rates hit low of 4.54 percent

Mortgage Rate Trend Index

Over the next week, 74% of the industry experts surveyed by Bankrate.com believe mortgage rates will remain relatively unchanged; 21% think rates will rise; and 5% think they’ll fall.

NEW YORK – July 30, 2010 – Mortgage rates are the most affordable in decades for those who can qualify for a loan.

For many, the opportunity to buy a home or refinance at this time is lost because of the tough economy and tight credit standards. But those who have secure jobs, superior credit and strong finances could do even better than the 4.54 average rate that Freddie Mac reported Thursday, according to experts.

The latest rate is the lowest for a 30-year fixed loan since Freddie began tracking rates in 1971. It also marks the fifth time in six weeks that the mortgage company has reported hitting a new average low.

Still, it’s possible to get an even lower rate if a borrower contributes more than 20 percent to the downpayment or has impeccable credit.

“Scores matter,” said Ritch Workman, co-owner of Workman Mortgage in Melbourne, Fla. He can offer a rate of 3.375 percent on a $200,000 Freddie Mac loan. The caveat: The borrower must put down 20 percent, have a credit score of 800 and pay $1,400 in add-on fees.

Susquehanna Bank, which has branches in Pennsylvania, New Jersey, Maryland and West Virginia, is advertising a similar loan. But the credit score requirement is 720 and the add-on fees total $750.

Sometimes the best rates are offered by community banks or credit unions. They keep mortgages on their books instead of selling them to investors, said Greg McBride, a senior financial analyst at Bankrate.com. Other times, bigger banks or smaller mortgage bankers have the best deals.

Keep in mind that rates fluctuate significantly, even within a day, like airfares on a travel site. And the key to finding the best rate is to shop around online and in person.

Either way, borrowers are getting good deals. The last time home loan rates were lower was during the 1950s, when most mortgages lasted just 20 or 25 years.

The rate on 15-year fixed loans, a popular choice for refinancing, also are the lowest on records dating back to 1991. That rate fell to 4 percent from 4.03 percent last week.

Mortgage rates have been falling since spring. Yields on U.S. Treasury bonds have dropped as jittery investors seek safer investments. Rates tend to track the yields on Treasurys.

Low rates helped spark a little activity in the weak housing market. Applications to purchase homes rose 2 percent last week from the previous week, the Mortgage Bankers Association said Wednesday. Still, the housing market has been struggling and overall applications for loans were down last week as fewer people applied to refinance.

High unemployment, slow job growth and tight credit have made it difficult for many to purchase homes. Home sales got a boost this spring when the government offered homebuying tax credits, but activity has fizzled since those expired in April.

Sales of previously occupied homes fell 5.1 percent in June. New home sales jumped last month, but it was the second-weakest month on record and it came after sales tumbled in May.

Refinance activity has increased over the last month as homeowners seek more affordable monthly payments. But many don’t qualify for a loan or don’t have the cash to pay for closing costs. And rates have been low for so long that many have already refinanced.

To calculate the national average, Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country.

Rates on five-year adjustable-rate mortgages averaged 3.76 percent, down from 3.79 percent a week earlier. Rates on one-year adjustable-rate mortgages fell to an average of 3.64 percent from 3.70 percent.

The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount. The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 a point for all loans.
 Copyright © 2010 The Associated Press

Foreclosure vs. short sale: pros and cons

PALM BEACH, Fla. – July 28, 2010 – With today’s reduced property values and increased unemployment, it’s tempting for some homeowners to just throw their hands up in defeat, allow the bank to take their home in foreclosure and rid themselves of the monthly mortgage burden.

Even suffering through the paperwork and stress of a short sale may seem too much for an overwhelmed borrower to handle.

But Florida homeowners should be aware of unique rules in the state that make the benefits of a short sale typically outweigh the ease of walking away in a foreclosure.

“I want to be very clear on this, short sales are a better solution than a foreclosure, even when all the options in a situation where you lose your house are not great,” said Mark Greene, owner and president of Short Sale Operations LLC in North Palm Beach.

The biggest difference between Florida and many other states when it comes to losing a home is the deficiency judgment.

While some states ban lenders from collecting the remainder owed on a loan after a foreclosure or short sale is completed, Florida law allows banks to go after borrowers for up to 20 years. That can lead to a garnishment of wages long after the home is gone.

In a short sale, where the bank agrees to take a lesser amount for the home than what is owed on a loan, lenders sometimes are willing to write off the deficiency on the front end.

Greene said in 90 percent of the cases he handles, the bank has waived its right to seek a deficiency.

That was the case with Jupiter resident Kathryn Lorello, who in 2008 found herself in a home she couldn’t afford.

Following a divorce, and with three children, Lorello bought a $408,000 home that she lived in comfortably for a year. But then she lost her job as a manager of a real estate company.

She remembers the day the bank served the notice of foreclosure.

“I cried my eyes out,” Lorello said. “That’s when I panicked because I really didn’t want it to happen.”

Lorello got advice from Greene on doing a short sale.

Her bank, Wells Fargo, waived its right to seek a deficiency even though it ended up taking $200,000 less than what was owed on the loan.

Also, if a bank refuses to waive the deficiency in a short sale, it still would have to go back to court to seek a judgment.

In a foreclosure, at the end of the proceeding, a deficiency judgment is automatically awarded by the courts and the bank is free to seek a claim.

“In the past, people just wanted to move from the property and get on with their lives and didn’t understand what the lenders’ rights were in terms of pursuing a deficiency claim,” said Paul Baltrun, director of loss mitigation at the LaBovick & La-Bovick law firm.

“I think people are more aware now about what can happen after the fact and that their nightmare can continue.”

Another consideration is the effect of a foreclosure or short sale on credit.

According to the Fair Isaac Corp., which developed the widely used measurement of credit risk called a FICO score, the negative effect of a foreclosure is only marginally worse than a short sale.

But in Florida, a deficiency judgment from a foreclosure is likely to have a much larger impact that will prohibit your ability to buy another home for many years.

Daniel Poulos, a mortgage broker with Elite Lending in North Palm Beach who has studied the effect of foreclosures and short sales on credit, said unless a borrower pays off the deficiency, it may be 20 years before someone is eligible for another mortgage.

“That’s the kind of information that’s not getting out in Florida,” Poulos said.

There are a few situations where some experts believe it is better for someone to go to foreclosure rather than do a short sale.

To do a short sale, a borrower must give all of his or her financial information to the bank before it will decide whether to allow the short sale. The idea is that if a person can afford to pay the mortgage, the short sale may be denied.

“Now the lender knows everything about your finances and they can better decide whether they will go after you or not,” said Jon Maddux, CEO of YouWalkAway.com, a company that advises people on strategic defaults.

If a lender doesn’t know your finances, Maddux argues, it reduces the chances it will go after you following a foreclosure.

“You might fly under the radar,” he said. “With the millions of people going through this, they are probably going to go after the low-hanging fruit.”

Copyright © 2010, The Palm Beach Post

Facebook logs 500 million members

McLEAN, Va. – July 27, 2010 – Scarcely two years ago, Facebook had 100 million users. Today, that number is dwarfed by the number of friendships confirmed on an average day – 115 million.

On Wednesday, Facebook reached its 500 millionth member. Because of privacy constraints, we won’t know exactly who that is, or where; and there’s no prize waiting for him or her. Nonetheless, those numbers generate some huge and interesting statistics in the aggregate. Facebook users have uploaded 50 billion photos (and tagged 15 billion of them). Einstein, Twain, Wilde, Gandhi and Shakespeare are among the most quoted people on profiles.

Nearly 20 percent of users list themselves as single, about 16 percent as married. Members create 400,000 events each day.

Yet one of the most interesting aspects of the community for Randi Zuckerberg, who does marketing for Facebook (and is founder and CEO Mark Zuckerberg’s sister), is what has stayed constant through the growth spurt. For example, “even back when we had 1 million users, Harry Potter and the Bible were the most popular books. 500 million later, Harry Potter and the Bible are still there.”

Facebook has grown up since it began as a haven for a few select universities in 2004. About 70 percent of Facebook’s users now live outside of the USA, with the Middle East, Indonesia, Malaysia, Singapore, India and Brazil becoming some of the fastest-growing regions. “It has changed in a lot of ways,” Zuckerberg says. “Instead of looking at Facebook as a tool to look up other college students, you really feel like you can look up almost anyone in the world.”

Facebook eclipsed its former rival, MySpace, in April 2008 in terms of unique monthly worldwide visitors, meeting it near the 100 million mark. It remains the largest in the social network universe, alongside quickly growing but still smaller networks such as Twitter and professional networking site LinkedIn, which have about 105 million and 70 million users, respectively. Facebook has gained 100 million new members since February alone.

“My prediction is that we’ll reach a billion users on Facebook,” says James Fowler, co-author of Connected: The Surprising Power of our Social Networks.

Facebook’s exponential growth, Fowler says, reflects the “classic” growth pattern of networking technologies. First comes the steady trickle of early adopters. Their real-life social networks become the next wave, which eventually draws in even those hesitant to embrace the technology – older generations who can now view pictures of their grandchildren on Facebook.

“Early on, if you had a telephone, but none of your friends did, it wouldn’t have been useful to you,” Fowler says. “If you have two friends who get a telephone so they can talk to each other, you’ll suddenly have two reasons to adopt the technology.”

That expanding web lets users “see beyond their social horizon” to the big picture once only understood by researchers such as himself, Fowler says. “Now, on Facebook, they can see all the connections between their friends, and they have access to this picture of their world they never had before.”

No matter how big Facebook gets, Zuckerberg says, it will stay committed to enabling sharing. It has launched a site (stories. facebook.com) that allows users to submit stories about their experiences with the site – in 420 characters or less, of course, the length of a status update.

“Whether we’re 500 million or a billion or more, it’s still all about the site being personal and relevant for every individual,” Zuckerberg says. “We really still think of ourselves as at the beginning of the journey.”

Copyright © 2010 USA TODAY

Mortgage rates hit 4.56%, record low

Mortgage Rate Trend Index

The majority (67%) of industry experts polled by Bankrate.com this week think that mortgage rates will remain relatively unchanged in the near future; 22% believe rates will rise; 11% think they’ll fall.

NEW YORK (AP) – July 23, 2010 – Mortgage rates fell to a record low for the fourth time in five weeks. But low rates haven’t been enough to lift a struggling housing market.

The average rate for 30-year fixed loans this week was 4.56 percent, down from 4.57 last week, mortgage company Freddie Mac said Thursday. That’s the lowest since Freddie Mac began tracking rates in 1971.

The last time home loan rates were lower was during the 1950s, when most mortgages lasted just 20 or 25 years.

The rate on the 15-year fixed loan dropped to 4.03 percent, down from 4.06 percent last week and the lowest on records dating back to 1991.

Rates have fallen since the spring. Investors worried about the European debt crisis have shifted money into the safety of Treasury bonds. That has forced those yields down. Mortgage rates tend to track yields on Treasury debt.

However, low rates have yet to spark home sales and refinancing activity remains moderate.

Sales of previously occupied homes fell in June and are expected to keep sinking. The National Association of Realtors said Thursday that last month’s sales fell 5.1 percent to a seasonally adjusted annual rate of 5.37 million.

The housing market stalled after federal tax credits for homebuyers expired at the end of April. Home sales have dropped off, homebuilder confidence has waned and consumer sentiment is in the dumps.

It’s unlikely low mortgage rates will bolster housing. Rates have hovered near historic lows for more than a year, so many people have already taken advantage of them to buy or refinance a home.

And many of those who haven’t wouldn’t qualify for a loan. They either owe more than their homes are worth, have shaky credit or have lost their jobs.

To calculate the national average, Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day.

Rates on five-year adjustable-rate mortgages averaged 3.79 percent, down from 3.85 percent a week earlier. Rates on one-year adjustable-rate mortgages fell to an average of 3.70 percent from 3.74 percent.

The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount. The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 of a point for 30-year, 15-year and 1-year loans. The average fee for 5-year loans was 0.6 of a point.
 Copyright © 2010 The Associated Press

Florida’s existing home, condo sales rise in June 2010

NAR:

Existing-home sales slow in June, above year-ago levels.

ORLANDO, Fla., July 22, 2010 – Sales of existing homes in Florida rose 15 percent in June, marking 22 consecutive months that sales activity has increased in the year-to-year comparison, according to the latest housing data released by Florida Realtors®.

A total of 18,038 single-family existing homes sold statewide last month compared to 15,732 homes sold in June 2009, according to Florida Realtors. June’s statewide existing home sales increased 7.7 percent over statewide sales activity in May. Meanwhile, last month’s statewide existing-home median price of $143,400 was 2.1 percent higher than May’s statewide existing-home median price of $140,400. It marks the fourth month in a row that the statewide existing-home median price has increased over the previous month’s median.

Fifteen of Florida’s metropolitan statistical areas (MSAs) reported higher existing home sales in June, while 16 MSAs posted increased existing condo sales. A majority of the state’s MSAs have reported increased sales for 24 consecutive months.

Florida’s median sales price for existing homes last month was $143,400; a year ago, it was $147,700 for a decrease of 3 percent. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in May 2010 was $179,400, up 2.7 percent from a year earlier, according to the National Association of Realtors® (NAR). In California, the statewide median resales price was $324,430 in May; in Massachusetts, it was $299,000; in Maryland, it was $249,177; and in New York, it was $194,900.

More jobs are key to the continued recovery of the housing market, according to NAR’s latest industry outlook. “If jobs come back as expected, the pace of home sales should pick up later this year and reach a sustainable level of activity given very favorable affordability conditions,” said NAR Chief Economist Lawrence Yun. “We’ll also keep a close eye on market conditions on the Gulf Coast.”

In Florida’s year-to-year comparison for condos, 6,916 units sold statewide last month compared to 5,215 units in June 2009 for an increase of 33 percent. The statewide existing condo median sales price last month was $95,000; in June 2009 it was $112,800 for a 16 percent decrease. The national median existing condo price was $181,300 in May, according to NAR.

The interest rate for a 30-year fixed-rate mortgage averaged 4.74 percent in June, down from the 5.42 percent averaged during June 2009, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s larger markets, the Tampa-St. Petersburg-Clearwater MSA reported a total of 3,226 homes sold in June compared to 2,848 homes a year earlier for a 13 percent increase. The market’s existing home median sales price was $138,400; a year earlier it was $139,400 for a decrease of 1 percent. A total of 912 condos sold in the MSA in June compared to 671 units sold in June 2009 for an increase of 36 percent. The existing condo median price was $99,100; a year earlier, it was $113,300 for a decrease of 13 percent.

© 2010 Florida Realtors®