Refinance Mortgage Rates

Analysts from JPMorgan Chase & Co. are dishing out financial advice to the U.S. government. Leading finance analyst, Matthew Jozoff, tips the U.S. Congress to take on a legal action to enforce radical loan modifications on Fannie Mae and Freddie Mac-backed bonds, implying that current low refinance mortgage rates are not enough to spur consumers.

Jozoff believes that U.S. Congress’s initiative to implement mortgage reforms can spark a ‘nuclear’ mortgage refinancing wave.

In a statement addressed to their clients last August 27, Jozoff wrote, “Congressional action would be required to trigger any significant “government-sponsored refinancing wave” in the market for bonds owned or guaranteed by mortgage financiers Fannie Mae and Freddie Mac.”

Since yields are unlikely to be diminished with mortgage bonds tied to the U.S. home loans, investors can safely put their money here, the JPMorgan Chase & Co. team of analysts likewise advised.

But Jozoff is not optimistic that this will happen anytime, soon. He looks at a more practical solution which will need government action.

He further takes note of information from the Barclays Capital Index data which shows the government-backed mortgage bonds gathered as compared with the U.S. Treasuries last July 23.

Jozoff is not optimistic that any other major increase will spring after this year’s initial big wave of applications to make financial modifications to existing mortgages.

Photo credit: The Truth About Mortgage

Home Foreclosures

The real estate and financing industries in the U.S. are experiencing seasonal highs at the end of the second quarter. The figures for the delinquency and home foreclosure rates for mortgage loans have sunk several points, compared to this year’s first quarter.

The Mortgage Bankers Association (MBA), in their national delinquency survey, validates a 21-basis-points dip by the second quarter this year for the delinquency rate of 9.85 percent on mortgage loans of residential properties. Included in the survey are loans that are at least a payment date-late.

On the other hand, there is a slight decrease in the number of loans that are processed for foreclosure. At the rate of 4.57 percent, this foreclosure rate is only six-basis-points lower from the previous quarter.

The rate for serious delinquency, or the chunk of loans that are at least three months past due or facing foreclosure, has likewise joined the seasonal drop. By the second quarter, at 9.11 percent, this is a comparatively substantial decrease of 43 basis points.

Still, it’s not all good news. Unemployment still caused a major dent on most mortgage loans. MBA’s chief economist, Jay Brinkmann, presents the other side of the coin.

Brinkman shares how the current trend may turn the other way around, “The disappointing news is that, after declining since the beginning of 2009, the rate of short-term delinquencies is going up and the increase in these short-term delinquencies may ultimately drive the foreclosure measures back up.”

NACA Home Loan Modification

Troubled South Florida homeowners have only until the end of Tuesday to line up for Neighborhood Assistance Corp. of American (NACA)-sponsored mortgage-modification marathon.

While NACA spokesperson, Darren Duarte, could not ascertain as to how many mortgages were successfully modified, he accounts that some 13,000 residents (from 8,200 households) have already taken advantage of their services.

Acting as a pro-homeowner mortgage broker, the NACA loan modification program mediates negotiations with big lenders and recommends some of their own loans. The organization helps homeowners facing foreclosure by agreeing to minimal fixed interest rates that will result to greatly-reduced monthly installments.

The NACA has put up their 24-hour counseling sessions at the Palm Beach Country Convention Center. Most of those who participated are homeowners nearing foreclosure options.

This is NACA loan modification program’s third mortgage-marathon, also dubbed as the “Save The Dream” tour, in South Florida this year has experienced an 80-percent success rate on its fourth day. It will continue until 8 p.m. on Tuesday.

To qualify for NACA’s program, homeowners have to live in their own homes. Before you head to the Palm Beach County Convention Center (650 Okeechobee Blvd., West Palm Beach), make sure to be armed with your updated monthly mortgage statements, property tax bill, some pay stubs and homeowner’s insurance bill.

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Citigroup Home Loan Modification

Despite the reported increase in mortgage modifications in the recent months, thousands of homeowners still feel shortchanged in certain services provided by their lenders.

Homeowners have carped on lenders like Citigroup Home Loan Modification for calling off trial modifications in their housing loans. The frustrated homeowners have figures to back up these claims.

In Citigroup alone, according to the Making Home Affordable servicer July report, the numbers of cancellations of trial modifications have escalated to 77,502, from 68,818 in June. Furthermore, lenders’ trial modifications are accused of putting the mortgage provider first, over the homeowners.

While homeowners may be outright denied of the benefit of a trial modification; some of those who were granted temporary modification may also still lose because they cannot catch up with the stringent pay requirements on the issued trial period.

Still, troubled homeowners can look at some hopeful options. Homeowners can run to the “Making Home Affordable Program” which offers alternative payments and other home loan modifications.

Outside this program, they can assume alternative payment schedules, if they are denied of trial modifications. Alternately, they may also jump at the chance of a short sale and deed, instead of diving into foreclosure plans that will risk them their homes.

Photo credit: The Truth About Mortgage

Mortgage Rates Today

Based on their official records last July, the Federal Housing Finance Agency (FHFA) has reported a 0.13 percent dip in the national average contract mortgage rates today applied to the purchase of previously occupied homes by combined lenders, compared to the previous month.

The FHFA report is based from calculations derived from the agency’s monthly interest rate survey (MIRS) of purchase-money mortgages on loans closed during the last month of July.

From the middle to late July, housing loans were closed with mortgage interest rates that averaged at 4.78 percent. The reports also show that 30-year mortgage loans valued at $417,000-or less have a fixed rate of 4.84 percent. This figure is 16 basis points less than in June. On the other hand, the fixed rate of 15-year mortgage loans of the same value ($417,000) has experienced a 19-basis-points hike to 4.66 percent in July.

At 4.77 percent, contract rates for the composite of fixed and adjustable-rate mortgage loans sank 13 basis points in July. Finally, the implemented interest rate also dipped by 12 basis points to 4.90 percent last month.

Mortgage rates today are reflective of the initial payments for preliminary fees and charges, which soared to 0.87 percent—the highest in record since December 1998. The said increase is largely attributed to the waning share of “no-point” mortgages. After all, a quarter of last month’s purchase-money mortgage loans were the same “no-point” mortgages.

Photo credit: The Truth About Mortgage