Arizona Real Estate Notebook

If you have an interest-only or pay-option ARM and you bought in the last year of so, assess your situation and, if you conclude that you are in jeopardy, act quickly. Two groups of borrowers should look ahead to see if they’re heading toward a reef that could sink them. The first group consists of [...]

6.33% and 0.8 points – 30-year fixed-rate mortgage, average in Western U.S. for week ending November 9, 2006. Blue line is Freddie Mac forecast made 11/02/2006. “Mortgage rates rose earlier in the week on news of large upward revisions over the past three months in employment figures, but began to drift lower as the market [...]

6.32% and 0.4 points – 30-year fixed-rate mortgage, average in Western U.S. for week ending November 2, 2006. Blue line is Freddie Mac forecast made 10/10/2006. “Lower than expected third quarter Gross Domestic Product (GDP) figures helped to put a damper on rising rates this week,” said Frank Nothaft, Freddie Mac vice president and chief [...]

6.38% and 0.6 points – 30-year fixed-rate mortgage, average in Western U.S. for week ending October 26, 2006. Blue line is Freddie Mac forecast made 10/10/2006. “At its most recent meeting, the Federal Reserve (Fed) again declined to raise rates for the third time, citing a slowdown in the housing market,” said Frank Nothaft, Freddie [...]

It’s nice to get the information straight from the horse’s mouth, unfiltered by reporters or pundits. The Federal Open Market Committee decided today to keep its target for the federal funds rate at 5-1/4 percent. Economic growth has slowed over the course of the year, partly reflecting a cooling of the housing market. Going forward, [...]

6.37% and 0.5 points – 30-year fixed-rate mortgage, average in Western U.S. for week ending October 19, 2006. Blue line is Freddie Mac forecast made 10/10/2006. “Mortgage rates didn’t move much either way this week as the markets wait for the next scheduled FOMC meeting,” said Frank Nothaft, Freddie Mac vice president and chief economist. [...]

6.36% and 0.5 points – 30-year fixed-rate mortgage, average in Western U.S. for week ending October 10, 2006. Blue line is Freddie Mac forecast made 10/10/2006. “Renewed concern that inflation is still an issue put some upward pressure on bond yields, which generally translates into higher interest and mortgage rates,” said Frank Nothaft, Freddie Mac [...]

MORTGAGE FRAUD with an Arizona connnection.

Mortgage Buyers Finding MORE BAD LOANS. Over $2 trillion worth of mortgage backed securities were issued by Wall Street last year. When loans are purchased for securitization, one of the provisos is that lenders must buy back loans that either defaulted early, or had underwriting errors. It’s not considered a serious problem at this point.

6.28% and 0.4 points – 30-year fixed-rate mortgage, average in Western U.S. for week ending October 5, 2006. Blue line is Freddie Mac forecast made 9/8/2006. “Mortgage rates fell to a six-month low this past week, and, not surprisingly, home refinancing rose 18 percent last week, accounting for almost half of all mortgage applications,” said [...]

MORTGAGE CURMUDGEON CHANNELS THE REGULATORS and what their final guidance on nontraditional mortgages should have said. “On the issue of risk underwriting and management, we regret that, because of our slowness to react, we did nothing to prevent an onslaught of foreclosures in the next few years. By the time we issued this document, most [...]

NEW LENDING GUIDELINES for Exotic Mortgages… Real Estate Prices to Suffer? Instead of qualifying for a mortgage at the popular 1.00% start rate banks will now qualify the buyer at the fully indexed rate. The change is 3 years too late. It’s sure going to cause a lot of pain for some borrowers. That is [...]

6.30% and 0.4 points – 30-year fixed-rate mortgage, average in Western U.S. for week ending September 28, 2006. Blue line is Freddie Mac forecast made 9/8/2006. “This week’s economic releases, which showed a slight one-year decline in both new and existing house prices in August, fell short of market expectations and prompted market analysts to [...]

25% of homeowners surveyed have already paid off their mortgage. More than 80 per cent of all homeowners surveyed have at least $50,000 of equity built up in their homes and almost 60 per cent believe they have at least $100,000 of equity in their homes, underlining how much home equity has been built up [...]

6.36% and 0.6 points – 30-year fixed-rate mortgage, average in Western U.S. for week ending September 21, 2006. Blue line is Freddie Mac forecast made 9/8/2006. “A slowing housing market and signs that inflation is leveling off have helped to lower mortgage rates lately and keep them more affordable,” said Frank Nothaft, Freddie Mac vice [...]

6.39% and 0.7 points – 30-year fixed-rate mortgage, average in Western U.S. for week ending September 14, 2006. Blue line is Freddie Mac forecast made 9/8/2006.

6.46% and 0.5 points – 30-year fixed-rate mortgage, average in Western U.S. for week ending September 7, 2006. Blue line is Freddie Mac forecast made 8/9/2006.

Boy, option ARMs are very risky loans. Here’s more from the Business Week article. Up to 80% of all option ARM borrowers make only the minimum payment each month, according to Fitch Ratings. The rest of the money gets added to the balance of the mortgage, a situation known as negative amortization. And once balances [...]

Some of the nuts and bolts of switching from an ARM to a fixed-rate home loan.

Business Week cover story this week is on “Nightmare Mortgages,” option ARM loans. If you want a good scare, don’t go to the movie theatre, just read this story. Also check out the “Cover Story Podcast” to hear an audio discussion of the story with the author and the head honcho of Business Week. Click [...]