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Lenders Flooded with Refinancing Applications as Mortgage Rates Fall | RISMedia

With mortgage rates dancing around a 65-year-low of 4.75%, homeowners are checking their credit scores and lenders are being deluged with refinancing applications.

“I’ve been through about four refinance crazes in my career, and this is the most significant I’ve seen,” said Marshall Boyd, co-president of Southwest Bank Mortgage and a founding and managing partner of Williams Trew Real Estate Services.

“The No. 1 reason is that rates are lower this time,” Boyd said. “I never dreamed we would be refinancing people with loans in the 5’s to loans in the 4’s.”

Linda and Jeff Hochster watched rates for several months before refinancing their home in Fort Worth’s Mira Vista neighborhood. “We started doing research and reaching out to brokers. We just kept watching as the rate was falling over the last 45 days,” said Linda Hochster, a retired public relations manager for Southwest Airlines.

While you're not allowed to deduct principal payments on loans, there are a few tactics you can try to reduce your tax liability

My vacation rental business owns 23 properties on which we make over $200,000 in principal payments annually. Since we make $195,000 in annual profit, every year we end up in the hole financially. We take depreciation on the properties, but it doesn't offset our taxes by much. Is there a way to deduct the principal payments we're making on our properties? —D.P., Cartersville, Ga.

No. "You cannot deduct principal payments on loans," says Bill Fleming, a tax partner at PricewaterhouseCoopers. "This is a typical issue with any leveraged investment—especially real estate, since that is nearly always leveraged."

Time to refinance? You've got to run the numbers - MarketWatch

WASHINGTON (MarketWatch) -- Question: I have a two-year-old, 15-year cash-out refi in Texas. It's now considered a home equity loan, at 6.5%. I am thinking that it does not make sense for me to refinance again at 5% to save $170 per month because I would have to pay two additional years on the back end.

The savings is net of borrowing 100% of the $5,000 in closing costs, so there will be no up-front cash out of pocket. The original loan was for $143,500 and has a balance of $131,500. By refinancing, the $1,250 payment would be reduced to $1,080 on a new loan balance of $136,500. E.L.

Answer: To make the right choice, at least arithmetically, you gotta run the numbers. Here's how:

Figure out what you are going to spend by refinancing. In your case, that would be $5,000 plus, since you are going to roll that amount into the loan's principal, whatever your interest costs will be.

Mortgage rates rise, but 30-year fixed-rate still below 5% - MarketWatch

CHICAGO (MarketWatch) -- Mortgage rates rose this week, but the average rate on 30-year fixed-rate mortgages remained below 5%, according to Freddie Mac's weekly survey of conforming mortgage rates, released on Thursday.

The 30-year fixed-rate mortgage averaged 4.87% for the week ending April 9, up from last week's 4.78% average. The mortgage averaged 5.88% a year ago.

Rates on 15-year fixed-rate mortgages averaged 4.54%, up from 4.52% last week. The mortgage averaged 5.42% a year ago.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 4.93%, up slightly from 4.92% last week, but still well below their 5.56% average a year ago. One-year Treasury-indexed ARMs averaged 4.83%, up from last week's 4.75%; the ARMs averaged 5.18% a year ago.

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Fremont Bank lends $800 million in home mortgages - San Francisco Business Times:

Fremont Bank said Friday that it has made $800 million in home mortgages in the past 90 days.

The loans went to 3,600 borrowers and the bank expects to provide an additional 15,000 to 20,000 homeowners the ability to refinance by year-end.

The figures show that community banks are participating in the mortgage lending boom as mortgage rates fall to the lowest levels in years. Wells Fargo (NYSE: WFC) said Thursday that it expects record first-quarter profit resulting from its purchase of Wachovia and its brisk mortgage business.

Best Tips to Get Your House in Tip Top Shape | RISMedia

As the all-important spring selling season approaches in an historically slow housing market, sellers need to do all they can to market their home - and that includes staging it to attract and “wow” potential buyers. Home stagers know just the right moves to take a house from bland to grand and bring home the biggest return on investment. “Attention to detail throughout the home can make the difference between a house that sells and one that sits on the market,” explains Kate Hart, one of America’s top home stagers and owner of Hart & Associates Staging & Design.

“In particular, improvements to the kitchen and bath - the two rooms that sell a home - will always help bring in the buyers.”

Top Economists Say Recovery Has Begun

Economic recovery is about making people feel more confident, says Mark Zandi, chief economist of Moody’s Economy.com.

Zandi evidenced increasing home sales and gains in the stock market are some promising signs that the worst is over and people will start spending again.

“We’re starting to see some pent-up demand for goods,” he says.

But Zandi warns that the situation is still fragile. "Confidence is a very fickle thing. It can go from abject pessimism that pervades now to a more balanced view of the world rather quickly.”

Robert Brusca of FAO Economics is predicting strong growth in the last half of the year and a quick recovery for the labor market. "You've lost 5 million jobs. It shouldn't be hard to put 2.5 million jobs back on rather quickly after you hit bottom," he said.

Joseph Carson, chief economist at AllianceBernstein, calls improving home sales, a rising stock market, and better-than-expected retail sales in February and March good signs of a turnaround. By the time President Obama’s stimulus package takes effect, the economy will be ready, he says.

"The stimulus has a much better chance of working if trends are already turning up than if it needs to halt a decline," he said.

Source: CNNMoney, Chris Isidore (04/06/2009)

Despite downturn, 2008 was record year for sales of high-end homes - San Jose Mercury News

By Sue McAllister

Mercury News

Posted: 04/05/2009 01:01:00 PM PDT

Last year was a grim time in the real estate market, wasn't it? Foreclosures, falling values, the credit crunch.

Nonetheless, in Santa Clara County more homes sold for $5 million or more than at any time since the dot-com-nirvana year of 2000. And in San Mateo County — home to luxury-home strongholds like Atherton and Woodside — it was a record-breaking year for sales of super-expensive castles.

Only in the final quarter of 2008 did the recession finally bite into the top end of the market, sending sales plummeting. While the super rich weathered the early days of the credit crisis far better than most, experts say, last fall's stock market crash drastically impaired their ability to snap up multi-million-dollar manses.

At least 31 homes in Santa Clara County and 60 in San Mateo County sold for $5 million or more in 2008, according to MDA DataQuick, which gathered the information from public records. There were probably even more such sales, the company said, because buyers and sellers of very expensive homes often opt to "hide" the price when their deeds are recorded.

Jumbo mortgage rates starting to become more affordable - MarketWatch

CHICAGO (MarketWatch) -- Jumbo mortgages became more expensive and harder to come by as the nation's credit crisis deepened. That might be starting to change.

"Jumbo" refers to mortgages that are too large to be bought by Freddie Mac or Fannie Mae. The "conforming loan limit" for those government-backed entities is $417,000 in many parts of the country, but goes as high as $729,750 in high-cost areas of the continental United States.

Bank of America recently began trumpeting its jumbo program, offering 30-year fixed-rate jumbo mortgages with rates in the high 5% range, said Vijay Lala, product management executive for the bank. "We decided it was time to really go after that market," he said.

More lenders may soon join in, said Guy Cecala, publisher of Inside Mortgage Finance.

Eligibility Requirements And Getting Started With The Making Home Affordable Program

The 'Making Home Affordable' program is more commonly called 'The Obama Refi Plan'

The Making Home Affordable program is officially official. Mortgage lenders are now processing applications and paperwork for the help-the-homeowner plan often referred to as "The Obama Plan".

Because Making Home Affordable is a new program, there have been a lot of questions about how it works, who is eligible, and how to apply for a Making Home Affordable refinance.

What follows is a collection of questions and answers from my clients, the press, plus other things I think you should know.

Of primary importance -- first -- are two points:

Only Fannie Mae- and Freddie Mac-backed loans are eligible for The Obama Plan
Fannie Mae and Freddie Mac use different sets of refinancing rules

Be forewarned. In some respects, Fannie Mae and Freddie Mac are like the National League and the American League -- it's the same game, but with different rules. Or, maybe a NFL / CFL comparison is more apropos.

Government cracking down on mortgage scams - San Jose Mercury News

Associated Press

Posted: 04/06/2009 08:36:26 AM PDT

WASHINGTON — Top federal and state officials today announced a broad crackdown on mortgage modification scams, accusing "criminal actors" of preying on desperate borrowers caught up in the nation's housing crisis.

Government officials say scammers are seeking to take advantage of borrowers in danger of default. The frauds often involve companies with official-sounding names designed to make borrowers think they are taking advantage of the Obama administration's efforts to help modify or refinance 7 to 9 million mortgages.

Officials say such operations almost always are fraudulent, and that help is available for free from government-approved housing counselors.

Spring Home Sales

Spring is the optimum time to sell a home. Regardless of whether it's a buyer's market or a seller's market, inventory almost always rises in the spring. Why? Because the largest number of buyers are actively searching for a new home during the months of April, May and June.

Tip: If your home has been languishing on the market since the holidays, take it off the market. Give it a chance to "cool down" for a few weeks before putting it back on the market. Nobody is going to look at your home in the spring if the DOM show it's been on the market for several months. Buyers gravitate toward fresh, new listings!

Here are 15 things you can do to improve the odds that your home will stand out among the sea of new listings flooding the spring-time real estate market:

How not to be a victim of foreclosure fraud

by Jay Hammond on March 31, 2009

As the number of struggling homeowners facing foreclosure continues to rise, so do the number of unscrupulous individuals and firms will to prey on them.

“A mortgage lender or a financial counselor can assist you in finding real options to avoid foreclosure,” said Sissy Osteen, an Oklahoma State University Cooperative Extension resource management specialist. “If someone is offering to consult with your lender and offers to arrange to stop or delay foreclosure for a fee be sure to check his or her credentials, reputation and experience. It’s important to protect yourself and not be a victim of a foreclosure scam.”

Is California real estate coming back?

No state has been harder hit by the housing bust than California.

It has piled up more foreclosures and has endured among the worst home-price declines. The median price of a single-family home sold in February was $247,590, down 41% from 12 months earlier, according to the California Association of Realtors (CAR).

And home construction in the Golden State has nearly vanished: December housing permits shrank to about a quarter of what they were during the boom years, according to the National Association of Homebuilders.

Buying Foreclosed Homes: Be Careful

If you're looking for a great deal on a house, one option might be to purchase a home that's in foreclosure.

But Early Show financial contributor Vera Gibbons says the process isn't for everyone: It's complicated and fraught with potential stumbling blocks.

There's certainly no shortage of properties in or approaching foreclosure to pick from.

Some three million foreclosures are expected this year alone, according to the Web site RealtyTrac.com>, three-to-four times the usual number.

Prices usually range from 20 to 80 percent below market value, depending on where the house is located.

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Types of Home Inspections

Question: What Types of Home Inspections Can a Buyer Do?

A reader asks, "My husband and I had our offer accepted last night on a house in a really cool neighborhood. The house is a little old, so we're concerned that it might not pass a home inspection. Our agent says a home inspector might refer us to other inspectors. What other inspectors? What types of home inspections can a buyer do?"

Answer: Your real estate agent should be able to give you a list of the types of home inspections that are generally conducted in your area. She is correct in saying that your home inspector might suggest that you hire other inspectors.

Does a Home Inspector Check Everything in a House?

Mortgage Rates 'as Low as 2 percent'

Some of the 3 to 4 million homeowners eligible for loan modifications could see interest rates as low as 2 percent under the Obama administration's new "Making Home Affordable" (MHA) initiative.

Originally dubbed the "Homeowner Affordability and Stability Plan," MHA contains a provision to modify mortgages for qualified homeowners struggling to make the monthly payment.

A loan modification, unlike a refinance, changes the terms of the existing loan without writing a new one. Modifications are designed to make mortgages more affordable.

Also called a "workout," this provision is open to anyone including those who haven't missed payments, but may be at risk of missing payments.

The modification plan is open to anyone with any loan that has a balance under Fannie Mae and Freddie Mac limits, which now as high as $729,750 in some high-cost areas.

Questions to Ask Buyers to Get Feedback

The most important question a home seller can ask a buyer who has just finished viewing a home is "What did you think?" Yet, many sellers (and their agents) hesitate to get buyer feedback after showings. Why? Some people don't know which questions to ask, and others, most likely, are afraid to hear the answers.

Buyer feedback is essential. Without it, home sellers won't know what they are doing right and what could be improved upon. Because after all, it doesn't really matter what the seller thinks. It's the buyer's opinion that matters.

Here are sample questions that you can use to get buyer feedback:

30-Year Mortgage Rates Remain Low for Second Week

The weekly average rate borrowers were quoted on Zillow Mortgage Marketplace for 30-year mortgages remained relatively steady for the second consecutive week at 5.09%, up slightly from 5.06% the week prior, according to the Zillow Mortgage Rate Monitor, compiled by real estate website Zillow.com. Meanwhile, rates for 15-year fixed mortgages increased to 4.80%, up from 4.73% and 5-1 adjustable rate mortgages dropped, down to 4.66% from 4.69% the week prior.

Mortgage Type Average Rate Average Rate % Change
Week ending 3/29/09 Week ending 3/22/09

30-year fixed 5.09% 5.06% 0.6%
15-year fixed 4.80% 4.73% 1.5%
5-1 ARM 4.66% 4.69% -0.6%

Rates for 30-year fixed purchase mortgages had decreased slightly, with the average rate on Zillow Mortgage Marketplace at 4.99%.

Should You Go FSBO?

Pronounced “fizzbo,” an FSBO (for sale by owner) is a Realtor acronym for a property that an individual is looking to sell on their own.

To a certain extent, the notion may be driven by tough economic times. With equity evaporating in many markets, it might be a necessity for some sellers to go the DIY route. It is a question brought about by the perception of high cost for very little real work and a nagging sense that, hey, maybe I could do that.

Maybe you can. Maybe you shouldn’t.

The market, motivation, familiarity with the process, knowledge of real estate law, disposition, time, and resources should all be considered before you begin the process of selling your own home.

The Market

They don’t call them buyers and sellers markets for nothing, and, to a large extent, market conditions are often mostly local. A gripping nationwide recession, industry-wide job losses, and lenders’ unwillingness to lend, tend to have nationwide implications. But, even at the darkest of times, there are pockets of prosperity where demand for housing is high. In most cases, even if you over or under estimate the price, the market will eventually catch up to you.

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