FHA to Reduce Annual Insurance Premiums

FHA TO REDUCE ANNUAL INSURANCE PREMIUMS

Reduction to increase credit affordability and reflects improved economic health of FHA

FHA TO REDUCE ANNUAL INSURANCE PREMIUMS Reduction to increase credit affordability and reflects improved economic health of FHA WASHINGTON – As the nation’s housing market continues to improve, U.S. Housing and Urban Development Secretary Julián Castro today announced the Federal Housing Administration (FHA) will reduce the annual premiums new borrowers will pay by half of a percent. This action is projected to save more than two million FHA homeowners an average of $900 annually and spur 250,000 new homebuyers to purchase their first home over the next three years. Read FHA’s Mortgagee Letter.

Today’s action also reflects the improved economic health of FHA’s Mutual Mortgage Insurance Fund (MMIF). FHA’s recent annual report to Congress demonstrates the economic condition of the agency’s single-family insurance fund continues to improve, adding $21 billion in value over the past two years.

“This action will make homeownership more affordable for over two million Americans in the next three years,” said U.S. Department of Housing and Urban Development Secretary Julián Castro. “Since 2009, the Obama Administration has taken bold steps to reduce risks in the mortgage market and to protect consumers. These efforts have made it possible to take this prudent measure while also ensuring FHA remains on a positive financial trajectory. By bringing our premiums down, we’re helping folks lift themselves up so they can open new doors of opportunity and strengthen their financial futures.”

In the wake of the nation’s housing crisis, FHA increased its premium prices to stabilize the health of its MMI Fund. In addition, the Obama Administration took dramatic steps to safeguard consumers in the mortgage market to ensure responsible borrowers continued to have access to mortgage capital as many private lending sources tightened their lending standards.

Today’s reduction will significantly expand access to mortgage credit for these families and is expected to lower the cost of housing for the approximately 800,000 households who use FHA annually.

FHA’s new annual premium prices are expected to take effect towards the end of the month. Read FHA’s Mortgagee Letter.

Charlotte homes see drop in negative equity

Charlotte homes see drop in negative equity

Courtesy of the Mecklenburg TIMES

By: Roberta Fuchs January 13, 2015

The number of the Charlotte area’s mortgaged homes with negative equity fell to 6.8 percent in the third quarter of 2014 from 8.4 percent in third quarter 2013, according to CoreLogic.

 

The third-quarter 2014 figure rose slightly, however, from the second quarter of 2014, when 6.7 percent, or 31,652, of the homes in the Charlotte-Gastonia-Concord metropolitan statistical area carried negative equity. In the third quarter, that figure was 32,244 homes.

 

Negative equity means that borrowers owe more on their mortgages than their homes are worth. The situation can occur because of a decline in real estate value, an increase in mortgage debt, or a combination of both.

 

The CoreLogic report found that an additional 3 percent of area homeowners with a mortgage in the third quarter had near-negative equity, or less than 5 percent equity in their homes. The number of Charlotte area homes in near-negative equity decreased from the previous year, when 4.1 percent of homeowners with a mortgage had less than 5 percent equity in their properties.

 

The number of mortgages that were near negative equity in the second quarter of 2014 was 2.9 percent.

 

John Chesser, senior analyst at UNC Charlotte Urban Institute, says he believes the year-over-year decline in negative and near-negative equity reflects the steady recovery in the overall housing market, and strong growth in the local employment rate, which has boosted Charlotte-area home sales.

 

“The rise in negative equity during the recession was a natural consequence of the rapid drop in home values,” Chesser said. “Now, lending is tighter, so new home purchases result in a more solid equity position for purchasers and the overall rise in prices is helping reduce the negative equity situation that existing owners have been in over the last few years.”

 

Nancy Braun, owner and broker-in-charge of Showcase Realty in Charlotte’s South End, agrees. She attributes the drop in negative equity to a strong appreciation in housing prices, which is a reflection of the local economy.

 

“Plus,” she said, “We still have investors purchasing in the Charlotte-area market, which has bumped up prices as well. Low inventory is also boosting higher offers.”

Continue reading at The Mecklenburg TIMES

U.S. 30-Year Mortgage Rate Increased to 4.02%

According to a recent report released by Freddie Mac, the average U.S. long-term mortgage rates rose back over 4 percent. This is the second week of the rates increasing after it has dropped for five weeks even with the problems in the global economy.

Last Thursday, from 3.98 percent last week, the nationwide average of a 30-year-mortgage rose to 4.02 percent. But even with such increase, the mortgage rate remains to be at its lowest level since June 2013. The 30-year-mortgage rate reached 4.53 percent last January.

As for the 15-year mortgage, which has become a popular choice for refinancing individuals, it has risen from 3.13 percent to 3.21 percent. The one-year adjustable rate mortgage rose from 2.43 percent to 2.45 percent.

The drop in the rates during the five weeks has caused some homeowners to search for refinancing mortgages at a bargain rate.

Freddie Mac conducted a survey across the country from Monday and Wednesday weekly to calculate the average mortgage rates. Extra fees or points, which most borrowers need to pay to get the lowest rates isn’t included in this average.

Wells Fargo & Co. Ranks First In Charlotte’s Lists of Biggest Mortgage Lenders

Wells Fargo & Co. tops the list of Charlotte Business Journal’s list of the area’s biggest conventional and government-backed mortgage lenders, ranked by 2013 total mortgage amount secured by area properties.

The list shows that Wells Fargo & Co has government-backed loans amounting to $286 million and conventional loans up to $1.2 billion for home purchases and refinancing deals in Charlotte area.

From getting the 21st spot last year, Fairway Independent Mortgage Corporation has landed at the 11th place this year on the list of top conventional mortgage lenders.

According to the Charlotte regional manager of Fairway Tom Tousignant, the company has seen an increase in the overall volume to 39% at his operations even with the rising mortgage and interest rates.

Here are the top 3 largest conventional residential mortgage lenders:

1. Wells Fargo & Co.
2. Bank of America Corp.
3. SunTrust Banks Inc.

Here are the top 3 largest FHA and VA residential mortgage lenders:

1. Wells Fargo & Co.
2. Movement Mortgage
3. Quicken Loans Inc.

Read the October 24 issue of Charlotte Business Journal to get the complete lists.

Mortgage Rates Hit Below 4%

Mortgage rates continue to fall this week with the average of a 30-year mortgage now below 4 percent, which is the lowest since June 2013. According to Freddie Mac, a 30-year fixed-rate mortgage reached 3.97 percent from 4.12 percent in the week ending October 16. A 15-year borrowing costs feel from 3.30 percent to 3.18 percent. Furthermore, a one-year adjustable-rate mortgage averaged at 2.38 percent from 2.42 percent. With such drop in average costs, long-term mortgage rates are seen to be following the 10-year United States Treasury rate, which were seen falling briefly below 2 percent this week. “Mortgage rates are at their lowest levels since June 2013 amidst continued investor skepticism regarding the precarious economic satiation in Europe,” said Frank Nothaft, chief economist at Freddie Mac’s.