MBA looking to help Underwater Homeowners

Are you an underwater homeowner? Looks like the MBA has got your back.

The Mortgage Bankers Association currently have their eye on the government’s HARP program to make it more accessible and available for homeowners who are having trouble with their mortgage. Right now they are urging the government to reduce, and to even completely eliminate, the limit on how far an underwater homeowner can qualify for the program.

So what exactly is the HARP program all about that is getting the MBA’s attention? HARP, an acronym for Home Affordable Refinance Program, was developed by the government to help underwater homeowners improve their financial status by availing of lower interest rates on their homes. Lenders are provided incentives to encourage them to allow homeowners to refinance with them, despite the fact that their loan may be more than what their property is worth.

Certainly, this impossibility sounds too good to be true. And it does seem to be so. The HARP program has fallen far behind on their original projections, achieving only a total of half a million borrowers, compared to their original projection of 4 – 5 million. That’s a huge gap from the original numbers that provided hope for many homeowners.

Fannie Mae and Freddie Mac, the lenders that are involved with the program are rumored to be gradually put to the end by the government to reduce their role in mortgage markets. This possibility has pushed the MBA to further seek reforms in the program.

At this time, mortgage rates are also rising by more than three-quarters of a percentage point from their lows in November, making refinancing less of a juicy option for homeowners. With these markets, the MBA continues to push for the lowering of requirements plus the extension of the deadline of the program. HARP is supposed to be expiring come June this year. But hopefully it can be extended until December 31, 2012 to match the deadline of a similar program called HAMP mortgage loan modification.

Among the things the MBA is advocating for, it is also calling for Freddie Mac and Fannie Mae to adopt standardized guidelines in the HARP to things such as borrower and loan type eligibility, employment requirements and property inspections, closing costs, and income documentation. Having requirements that are less strict will allow more underwater homeowners a chance to avail of HARP refinancing, and giving them the chance to move up from their rocky financial situations.

Mortgage Rates Back Bounce Back Up a Little This Week – Oct 21st

Mortgage Rates decided to rebound a little this week, but by no means is this any indication that they will continue to rise.

We have seen rates bump back up like this a few times in the past only to see them drop even more the following week.

October 21, 2010 30-Yr FRM 15-Yr FRM 5/1-Yr ARM 1-Yr ARM
Average Rates 4.21 % 3.64 % 3.45 % 3.30 %
Fees & Points 0.8 0.7 0.6 0.7

Last week the 30 year was at 4.19%.

The 5/1 ARM has actually continued downward falling from 3.47% last week.

When will rates start heading back up?

It is hard to say when rates will head back up.  With the election coming, the holidays and a new year we could see the economy start doing better.

Old article?  Check out the Mortgage Rates here.

Mortgage Rates Slightly on the Rise – September 9

Rates Moving UpMortgage rates back bounce to where they were on August 26th.

It is not to often these days that we see rates on the rise.  Although some experts think that is about to change.

Todays rates are slightly higher than they were last week.

  • 30-Yr Fixed – 4.35 %
  • 15-Yr Fixed – 3.83 %
  • 5/1-Yr ARM – 3.56 %

Last week rates looked like this.

  • 30-Yr Fixed – 4.32 %
  • 15-Yr Fixed – 3.83 %
  • 5/1-Yr ARM – 3.54 %

These rates are based on the Freddie Mac Primary Mortgage Market Survey.  Banks all over the nation are polled for there current rates and these are the averages.

The 30 year fixed is base off of 0.7% points, while the 15 year and the 5/1 ARM are based off of 0.6% points.

Old Article? See todays mortgage rates.

Should you lock your rate in now?

Rates are at the lowest they have been in many decades.  It is foolish to not lock in now while they are this low.  You may make the estimation that rates will continue to fall in a week economy, but to me the risk/reward factor is not large enough to float your rate.

Once lenders catch a glimpse of a strengthening economy those rates are likely to shoot up by a half percent or more.

Back in January and February of 2008 rates were dipping close to 5%.  There was a frenzy of refinances and loan locking.  Many people decide to try and float their rate to get under 5%.  Within an hours time lenders put a hold on rates so no one could lock.  When that hold was lifted rates were sitting back at 5.5% and continually rose after that.

Many people missed out on 5% fixed rates, including me. Yes, I decided to try and hold out for a lower rate.  That decision as cost me more than 60 dollars a month for more than a year and half now.  To date I have blown $1080.  If I stay in this mortgage for just 5 years that will be a  $3600 dollar mistake, and if I stay in the house for the entire term of the mortgage it will have been a $21,600 dollar mistake.

You know, I have never actually done the math on that decision and it hurts.

Free Falling – Mortgage Rates – August 26th

According to the Primary Mortgage Market Survey by Freddie Mac mortgage rates have continued to free fall.

Currently Rates are:

  • 30 year fixed – Averaged 4.36% – Last week it was at an average of 4.42%. A year ago this week the 30 year rate was at 5.14%.
  • 15 year fixed – Averaged 3.86% – Last week it was at an average of3.90%. A year ago this week the 15 year fixed 4.58%.
  • 5 year ARM (Adjustable Rate Mortgage) – Averaged 3.56% which was the same as last week. A year ago this week the 5-year ARM 4.67%.

The 30 year fixed and 5 year arm are based on an average of 0.7 points, and the 15 year fixed is based on .06 points.  Additionally the rates posted are based on an average from across the nation and may not necessary reflect the mortgage rate you will receive if you refinance today.

This is a wonderful time for those that have a mortgage to refinance to take advantage of the lowest rates this country has seen in decades. Hundreds and thousands of dollars are being saved by those able to refinance their existing mortgage to a lower rate.  The trouble for most homeowners is the lack of equity in their home caused by the current recession which makes them unable to refinance.

How will this effect the ecomony?

As for how this will effect the economy the opinions are being reflected as both positive and negative. Many believe this is just more troubling news for an ever weakening economy. Signs that things are getting worse and we are not on the road to recovery quite yet.

Other experts feel these low rates could put more money in consumers pockets due to the savings from refinancing.  This higher cash flow could help spur the economy on for the better.

Time will tell.  Let us know your thoughts in the comments below.

Mortgage Rates Reach Another All Time Low

Mortgage Rates have steadily declined, setting new record lows since mid June.

According to the Freddy Mac Primary Market Mortgage Survey rates are now at there lowest in the history of this survey.

*TermAugust 16thAugust 6th
30yr fixed4.19%4.31%
15 yr fixed3.43%3.48%
5/1 ARM2.92%2.86%

The average 30 year fixed mortgage just above 4.5%.  Just 6 months ago it was over .50% higher, sitting at 5.09% on January 7th.

The 15 year mortgage is just about to break below the 4% average.  At the beginning of 2010 the 15 year rate was 4.50%

The story is no different for the 5/1 ARM.  Dropping from 4.44% on January 7th to 3.76% now.

For 6 straight weeks mortgage rates continue to dip into record lows.

Are you planning on purchasing a new house or refinancing your current mortgage?  Now is a great time, and remember to checkout our mortgage help page for all the help you need.

*The Graph on this page updates regularly with current rates. It may or may not reflect information congruent with this article.