| The housing market in America has been tipped | | | | 4. FHA tightens up requirements |
| upside down because of uncertain economic times | | | | Typically conventional loans will allow the seller to help |
| and trouble in the mortgage markets. Mortgage rates | | | | the buyer out by taking back up to 3% of the sales |
| news is not encouraging and trends are not behaving | | | | price. The FHA had a more liberal allowance of 6% |
| the way the professionals predicted and while they | | | | and that's what made their loans so attractive. |
| are at their lowest rates since the 1950s, nobody is | | | | Unfortunately the FHA has decided to conform with |
| buying anything. Why? The answer partially lies in | | | | the other lenders and limit that assistance to 3% |
| these seven disturbing mortgage trends. | | | | knocking even more people out of the house buying |
| 1. Mortgage rates are going? | | | | market. |
| The Federal Reserve plowed billions of dollars into | | | | 5. Jumbo loans now more available |
| mortgage backed securities which drove interest | | | | While banks are tightening requirements for |
| rates down. That spending binge ended in April and | | | | conventional loans they are easing requirements for |
| virtually every mortgage expert expected the rates | | | | jumbo loans. Where before banks required a 25% |
| to rise in the Spring and Summer of 2010 however | | | | down on a jumbo, lenders have relaxed that |
| the rates have stabilized and show no signs of | | | | threshold to 20%. So if you are wealthy you can get |
| increasing. The reason most offered to explain this is | | | | a loan for your mansion for less down than you could |
| that demand for mortgages is low because of the | | | | before. |
| uncertain economy. | | | | 6. Does SAFE really make us safe |
| 2. Is demand low or are we all just too poor | | | | Firmly slamming the barn door after the cow had |
| With the average existing mortgage at 5.9% and | | | | already left, the federal government came up with |
| new mortgages going for 4.75% it would seem like | | | | the SAFE Mortgage License Act as a way to insure |
| people would be scrambling to refinance their home | | | | that lenders and brokers understood the market |
| to get a lower monthly payment. In normal times | | | | place and to protect consumers from the sharks that |
| they would but these are not normal times. The | | | | swim in the mortgage waters. However it appears |
| housing market has taken a huge hit thanks to the | | | | that this act does not apply to everyone. If you are |
| enormous number of bank owned sales that has | | | | a lending company or a broker you need to pass a |
| driven the value of most properties down. Today it is | | | | test. If you work for a bank you don't. |
| not uncommon to find a homeowner, even a long | | | | 7. FHA still the most attractive new home mortgage |
| term homeowner, whose mortgage is greater than | | | | While most of the concerns are about refinancing, |
| the value of his home. No equity means no | | | | those that qualify for a new home mortgage but are |
| refinancing. | | | | short on the down payment will find the FHA loan |
| 3. HARP program a complete flop | | | | very attractive. Without doubt, the down payment |
| The federal government presented the Homeowners | | | | requirement of just 3.5% of the sale price is the |
| Affordable Refinance Plan that was designed to | | | | lowest a consumer can find anywhere. |
| make it possible for homeowners to get refinancing | | | | On the one hand if you have great credit and a |
| even if they were upside down on their mortgage. | | | | bunch of cash this is a fantastic time to take |
| The administration predicted this plan would help | | | | advantage of super values in the housing market. On |
| refinance 2 million homes in 18 months. Unfortunately, | | | | the other hand, if your upside down don't expect to |
| this is not a mandated program and banks, even the | | | | get right side up anytime soon. Mortgage rate trends |
| ones who got all the TARP money don't have to | | | | are now totally unpredictable and will remain so until |
| participate. Eleven months into the program fewer | | | | this economic crisis is over. |
| than 300,000 refinance loans have been approved. | | | | |