Tag Archives: Fixed-Rate Mortgage

The economy and housing market enter the New Year with mixed results, and will likely remain that way for at least the first part of 2012, Freddie Mac forecasted in a report Thursday. Citing numerous indices in his outlook, Frank Nothaft, VP and chief economist with Freddie Mac, predicted that economic growth will likely hit 2.1 percent in the first quarter, up from the doldrums during the financial crisis. He said that U.S. unemployment will likely remain around 8.5 percent following a reversal for seasonal job growth.

Interest rates for mortgage loans plunged to new lows Thursday, as debt crises in Europe continued to weigh heavily on investors. Finance Web site Bankrate.com and mortgage company Freddie Mac released separate surveys signaling all-time lows for mortgage rates. For Freddie, the 30-year fixed-rate loan fell to 3.88 percent, down from 3.89 percent last week. Bankrate.com revealed rates for the 30-year mortgage staying the same at 4.18 percent. The 15-year fixed-rate mortgage went up a percentage point for Freddie, reaching 3.17 percent, up from 3.16 percent last week.

Mortgage application volume shot up 23.1 percent on a seasonally adjusted basis, largely on a refinancing surge that eclipsed averages year-over-year as investors frittered about Europe. The Mortgage Bankers Association reported the figures in its latest Weekly Mortgage Applications Survey. The trade group├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós Market Composite Index, a measure of application volume, climbed 38.1 percent on a seasonally unadjusted basis from the week before. The Refinance Index accordingly reflected a 26.4-percent increase from the week before to the highest level seen since August last year.

Witnesses testifying before the House Financial Services Committee Wednesday warned lawmakers that the controversial Volcker Rule could tighten bank liquidity and make U.S. financial institutions less competitive with banks overseas. Once finalized by regulators, the rule ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô unless modified or repealed by lawmakers ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô will enact a provision under the Dodd-Frank Act that prohibits U.S. banks from engaging in short-term proprietary trading practices. Douglas Elliott, a fellow with the Brookings Institution, called for an outright repeal of the Volcker Rule.

Earlier Tuesday the FDIC went forward with a notice of proposed rulemaking in the Federal Register that calls for annual stress tests to determine capital adequacy for banks. The notice built on the Basel Accords, which the Basel Committee on Banking Supervision revisited with help from a consortium of central bankers over 2010 and 2011. Basel III is the latest by BCBS to require stress tests for systemically important financial institutions, which include Bank of America, Citigroup, JPMorgan Chase, Wells Fargo, and several other U.S. lenders.

Mortgage rates slumped to record lows Tuesday. Again. Real estate Web site Zillow released the weekly Zillow Mortgage Marketplace, which it develops by pooling quotes for mortgage rates from online users. The Web site reported the 30-year fixed-rate mortgage hitting 3.69 percent this week ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô rock bottom, and a new low for the third straight week. Interest rates for a 15-year fixed-rate mortgage hovered around 3.03 percent, all while the figures for 5-year and 1-year adjustable-rate mortgages averaged 2.63 percent.

Although Freddie Mac did away with minimum credit scores for refinancing borrowers in early January, a small amount of equity on a home with scores below a certain level can still make it difficult for homeowners to secure mortgages, FreeScore.com said Monday. In a statement, the Web site said that borrowers with credit scores below the mid-600s could pay higher interest rates or larger down payments, if their home equity averages anywhere around 20 percent. FreeScore.com said that Freddie Mac sees scores between 770 and 850 as very good.

Federal Reserve Gov. Elizabeth Duke offered to reassure bank executives Friday that the central bank wants to avoid a one-size-fits-all approach to regulation and work with smaller financial institutions to ensure that new mortgage banking rules work effectively. Speaking before the California Bankers Association in Santa Barbara, the official, a former banker-turned-regulator, said that the Fed will strive to prepare examiners and work with banks ahead of stress tests and final rules. She said regulators will include statements before every rule for bankers.

Stocks and shares for the nation├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós four largest banks slid back Friday on news that ratings agency Standard & Poor's slashed credit ratings for several debt-saddled euro zone countries, including France, Italy, and Spain. A 0.4-percent dip led the Dow Jones Industrial Average to end the day at 12,422 points, a 48.96 loss from the day before. The S&P 500 went south in a 0.5-percent tizzy, losing 6.41 points to close at 1,298. S&P ignited an investor selloff in the markets earlier Friday by announcing credit changes for 16 European countries. S&P slashed U.S. sovereign credit last fall.

Eleven chief economists forecasted Friday that the U.S. economy will continue to improve modestly as job growth steadies, along with easing declines in home prices, sales, and starts. The 11 economists all from banks and members of the American Bankers Association's economic advisory committee said that GDP growth rose to 2.5 percent in 2011. The committee also said home sales and starts could catch an upward draft seen in 2011 that lasts this year, with home prices likely continuing to stagger.