This Week’s Real Estate News
Not as much news as last week, but it all seemed to occur on Wednesday 11/21:
House Passes Anti-Predatory Lending Measure: The House of Representatives has approved a controversial bill intended to help combat predatory lending practices, widely considered a central cause of the nation's credit crunch and rising foreclosure rates. HR 3915, the Mortgage Reform and Anti-Predatory Lending Act of 2007, calls for the establishment of a national licensing program for all mortgage loan originators, and would force lenders to ensure a borrower's reasonable ability to repay the loan, among other requirements. (CAR, 11/21)
Mortgage Rates Continue to Fall: Mortgage rates continued to fall as the weak housing market remained a drag on the economy, Freddie Mac reported Wednesday. The government-sponsored loan buyer said the rate on a 30-year fixed-rate loan fell to 6.20 percent for the week ended Nov. 21 from 6.24 percent the prior week. At this time last year, the 30-year FRM averaged 6.18 percent. The 30-year rate has not been lower since the week ending May 10, 2007, when it averaged 6.15 percent, Freddie Mac said. Freddie Mac said rates on 15-year fixed-rate loans averaged 5.83 percent, down from 5.88 percent last week. A year ago, the 15-year rate averaged 5.91 percent. The 15-year rate has not been lower since the week ending February 2, 2006, when it averaged 5.81 percent. Five-year adjustable-rate mortgages (ARMs) averaged 5.88 percent this week, down from 5.96 percent last week. A year ago, the five-year ARM averaged 5.99 percent. One-year Treasury indexed ARMs averaged 5.42 percent this week, from 5.50 percent last week. At this time last year, the one-year ARM averaged 5.49 percent. (Freddie Mac, CNNMoney.com, 11/21)
Refi’s Prefer Fixed-Rate Mortgages in the 3rd Quarter: More borrowers who refinanced during the third quarter replaced their 15-year fixed-rate mortgages with traditional 30-year, fixed-rate loans, and 85 percent of borrowers with a one-year adjustable rate mortgage loan who refinanced selected fixed-rate loans, according to a recent report from Freddie Mac. (CAR, 11/21)
Mortgage Apps Decline: Mortgage application volume declined 3.6 percent during the week ending Nov. 16, according to the trade group Mortgage Bankers Association's weekly application survey. Refinance volume declined 5 percent during the week, while purchase volume fell 2 percent. Refinance applications accounted for 50.3 percent of total mortgage applications during the week. Application volume declined while interest rates barely moved. (AP, 11/21)
Housing Price Drops in 3rd Quarter: Housing price drops, driven by soaring foreclosure rates, accelerated during the three months ended September 30, according to the latest data from the National Association of Realtors (NAR). The median single-family house price in the United States fell to $220,800, which was down 2 percent from a year ago. Condo prices showed some resiliency: At $226,900, they rose 2 percent compared with 12 months ago. In Los Angeles-Long Beach-Santa Ana area, median home prices increased 1.1% to $588.400. (NAR, CNNMoney.com, 11/21)
Four major subprime lenders promised to give a break to California homeowners who cannot afford escalating mortgage payments, under a plan announced Tuesday by the lenders and Gov. Arnold Schwarzenegger. Countrywide, GMAC, Litton and HomeEq - which collectively service more than one quarter of subprime loans to people with poor credit - agreed to maintain the initial, lower interest rate for some subprime borrowers whose rates are scheduled to jump significantly higher. To qualify, borrowers must occupy their homes, have made their payments on time and prove they cannot afford payments with the higher interest rate. The voluntary program is designed to stem a huge wave of foreclosures. Half a million homeowners in the state have subprime mortgages that are scheduled to jump higher within the next two years after their introductory period elapses. Such loan resets, in combination with a slumping real estate market, already have led to a record number of foreclosures across California and the nation. (SF Gate, 11/21)
Sources: California Association of REALTORS (CAR), CNNMoney, AP, National Association of REALTORS (NAR), and SF Gate. Real
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