Market Conditions

Higher rates loom for some modified mortgages

4.02.2014
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Homeowners who got government loan modifications during the financial crisis will begin to see monthly payments rise this year, government report says.

Almost 800,000 homeowners will see mortgage payments rise about $200 a month in the next few years as the benefits of their government loan modifications ease, a new government report says.

The first higher payments will hit more than 30,000 homeowners this year. They received the initial mortgage modifications in 2009 under the government’s Home Affordable Modification Program (HAMP), says the report from the office of the Special Inspector General of the Troubled Asset Relief Program (SIGTARP).

The modifications were intended to help homeowners avoid foreclosure as housing prices sank and unemployment soared. About 95% of HAMP modifications included cuts to interest rates, some to as low as 2%, SIGTARP says.

But the “permanent” modifications only last five years, after which interest rates […]

5 ways the jumbo mortgage market will change in 2014

16.01.2014
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Big changes are coming to jumbo mortgages.
Wealthy home buyers signed up for these loans in droves last year because of their low rates and flexible repayment options. The total dollar amount of originated private jumbo mortgages—which exceed $417,000 in most parts of the country and $625,500 in pricey housing markets such as New York and San Francisco—was on track to be the highest since 2007.
But the jumbo-mortgage landscape is shifting this year. New mortgage rules from the Consumer Financial Protection Bureau, which go into effect on Jan. 10, could limit choices. Other regulatory actions are also expected to kick in that could make credit access on the high end more expensive.
Despite the changes, there is a silver lining for wealthy buyers: More lenders are competing for their attention, which means that rates on jumbo mortgages could rise at a slower pace than […]

Far fewer mortgage borrowers ‘deeply underwater’

15.01.2014
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A growing number of mortgage borrowers are keeping their heads above water, according to a report from RealtyTrac.

The company reported Thursday that 9.3 million properties, or 19% of all homes with mortgages, were “deeply underwater” in December, meaning borrowers owed at least 25% more on their mortgage than the home was worth. That’s down significantly from 26% of all homes with mortgages, or 10.9 million properties, last January, RealtyTrac reported.

A recovery in home prices has certainly helped to turn around the fortunes of many homeowners. The average U.S. home price jumped nearly 14% year-over-year through October (the latest data available), according to the S&P/Case-Shiller home price index. That has added thousands of dollars to the average home’s value.

An increase in home equity typically means fewer foreclosures, said Daren Blomquist, a spokesman for RealtyTrac. “Negative […]

The switch to self-employment has mortgage implications

15.01.2014
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I am an unintended consequence.

I have loads of money. I own four properties free and clear. I have no debt. My credit file is impeccable. I have a credit score of 760.

And I was just turned down for a mortgage.

Not just any mortgage, but a cash-out refinance of less than six figures on a foreclosure I bought for cash, rehabbed and turned back on the market as a rental. Furthermore, I was only asking for a loan-to-value ratio of 70%, meaning I was leaving 30% of the home’s value as equity. And I was rejected.

All of my rental properties are fully leased, each supported by current rental agreements. The lender had copies of my tax returns for 2011 and 2012, each year validated by copies from the IRS. The lender also had copies of each and every one of my bank statements […]

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