Mortgage delinquency rate drops in Colorado and Nationwide

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Mortgage delinquencies on homes in Colorado dropped in third quarter 2012, The state of Colorado currently has one of the lowest rates residential foreclosure rates nationally, according to the American Bankers association. The current delinquency rate of 5.04% and the number of foreclsoures starts fell to .57% during the quarter , and the number of homes in foreclosure is at 1.66% which has also dropped

The delinquency rate was recently at 5.68 percent at the end of the second quarter, so the current rate in the third quarter is .6 better.

However, the delinquency rate for subprime adjustable rate mortgages in the state jumped by a half percent to 15.73 percent. Suprime fixed rate delinquency has also increased by nearly half a percent to 14.53%

Nationally, the delinquency rate for mortgage loans on residential properties fell to 7.40 percent from 7.58 percent the previous quarter.

Colorado is ranked 44th in delinquencies and 42nd in foreclosure starts as reported by the mortgage lenders association. Mississippi ranked the highest in delinquencies at 13.1 percent of all residential mortgages.

The state previously ranked 42nd in delinquencies at the end of the second quarter 2Q.

Read more: Mortgage delinquency rate drops in Colorado, nation – The Denver Post http://www.denverpost.com/2012/11/15/mortgage-delinquency-rate-drops-in-colorado-nation/#ixzz2CabMgwXA
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Big Banks Struggle with Service Issues

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The Service at Big Banks is Angering Customers

(Reuters) – Big U.S. banks are hiring mortgage lenders to meet a surge in demand for home loans and refinancings, but they are still struggling to process applications, which could undermine the Federal Reserve’s attempts to stimulate the economy.

              Since the Fed announced its plan in September to buy up to $40 billion of mortgages a month, consumer mortgage rates have fallen more slowly and by less than they would have done in more normal times.

              On average, 30-year home loan rates are down just 0.18 of a percentage point this week from September 13, when the Fed announced its latest stimulus program. Some analysts estimate that in more normal markets, rates would have fallen by roughly 0.31 of a percentage point or more. That could save a home buyer thousands of dollars over the lifetime of a mortgage.

              The dysfunction in the mortgage market, which has yet to fully recover after its battering in the U.S. housing bust and subsequent financial crisis, means most benefits from the Fed’s new stimulus plan may be accruing to banks instead of consumers.

              Banks still committed to the home loan business are hiring to meet increased demand, but fewer banks are committed to the business after the 2007-2009 mortgage crisis pulverized some of the biggest lenders in the United States and wounded many others.

              Capacity constraints work in the banks’ favor. Profit margins for home lending are more than double their usual level, JPMorgan Chief Executive Jamie Dimon told investors last Friday. The major U.S. banks, including JPMorgan Chase & Co, Wells Fargo & Co and Citigroup Inc, all said mortgage operations boosted third-quarter profits.

              Lenders making mortgages say they do not want to hire too many staffers only to lay them off when volume declines. The Mortgage Bankers Association estimates that banks will make $1.47 trillion of home loans this year for home purchases and refinancings, but then just $1.04 trillion in 2013, a decline of nearly a third.

“We are trying to … not over hire,” Andy Cecere, chief financial officer at U.S. Bancorp, said in an interview on Wednesday.

              Top U.S. mortgage lender Wells Fargo added about 2,000 people in the third quarter as volume surged. Chief Financial Officer Tim Sloan said in an interview the bank is responding to the impact of the Fed’s plan. Chase has increased its number of loan officers by 23 percent over the last year, and expects to keep hiring aggressively, said Kevin Watters, head of mortgage originations at JP Morgan Chase.

              But mortgage applications are also jumping, rising nearly 17 percent in the week ended September 28. With demand that strong and no staffers to handle extra business, banks have little reason to cut rates much. In a speech on Monday, New York Federal Reserve President William Dudley acknowledged that difficulty, noting the Fed’s efforts to stimulate the economy in recent years would have had a bigger economic impact if consumer mortgage rates were falling more.

              Bank staffing issues are a headache for mortgage applicants already struggling with tough appraisals and wary lenders. Many borrowers tell Kafka-esque stories of bureaucracy, where what used to be a 30- to 60-day process has stretched to 90 days or more.

PROFIT BONANZA

              The mortgage business has grown much more concentrated. The top two mortgage lenders made 14 percent of mortgage loans in 2000, 29 percent of mortgages in 2006, and 44 percent in the first half of 2012, according to Inside Mortgage Finance data.

              Wells Fargo and JPMorgan Chase are the top two lenders now, and their predecessor companies were the top in 2000.

              In 2006, Countrywide Financial Corp – now owned by Bank of America Corp – and Wells were the top. Bank of America last year stopped buying loans from other banks after suffering billions of dollars of losses from its exposure to home loans, which has cut its volume in half and limited smaller banks’ capacity to lend.

Bankers are unsure how long the refinancing bonanza will last.

JPMorgan Chase CEO Dimon told investors the mortgage boom will continue “next quarter, maybe for a couple of quarters after that but it won’t last for that much longer.”

              Citigroup Chief Financial Officer John Gerspach told investors on Monday that figuring out how long the refinancing boom will last is “one of the big questions facing a lot of institutions at this point in time.”

              Smaller banks are struggling with the same questions.

              Matt Williams, president of Gothenburg State Bank in Gothenburg, Nebraska, and incoming chairman of the American Bankers Association, said his bank was not adding staff even though its 28 employees were “stressed to the max right now.”

              Williams said his bank, with $125 million in assets, expects rates eventually will go up, cutting demand for refinancing.

              Mortgage demand was rising even before the Fed announced its latest plan to buy home loans, but that announcement immediately lowered bank funding costs. The effect on bank revenues will take longer to show up, because it takes months to process and close mortgage applications.

              For consumers, capacity constraints among mortgage lenders mean rates are not falling as much as they theoretically could.

              The average 30-year consumer mortgage rate was 3.37 percent, Freddie Mac said on Thursday – about 1.13 percentage points higher than rates investors in mortgage bonds would accept, as measured by the “secondary rate” for mortgages guaranteed by Fannie Mae.

              In the second half of 2011, the gap between consumer mortgage rates and the secondary rate averaged closer to about 0.9 percentage point, suggesting lenders could cut rates another 0.23 point. However, Freddie Mac and Fannie Mae boosted fees for guarantees by 0.1 of a percentage point in August, meaning the difference may be only about 0.13 of a percentage point.

              (Reporting by Dan Wilchins in New York and Rick Rothacker in Charlotte, North Carolina; Additional reporting by David Henry and Michelle Conlin in New York and Emily Stephenson in San Diego; Editing by Paritosh Bansal, Martin Howell and David Gregorio)

According to Gallup, The Improved Housing Market is Lifting the Mood of Americans

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Americans feel a lot better about the economy and the improvements in the housing market are a big reason for that. Optimistic consumers spend more, which further stimulates the  economy. The recent interest rates are working to free up the budgets of millions of households by lowering home mortgage payments.  Unfortunately,  housing traditionally lifted the economy out of recessions quickly, but this recovery still has a long way to go because of the persistent unemployment.

But we’ll take the good news about housing.

Home Ownership Assistance Program (HOAP)

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Home Ownership Assistance Program (HOAP)

Pre-Purchase Counseling:

Mortgage loan processes can be confusing to first-time homebuyers. HOAP counselors help make the home purchasing process understandable by providing information needed to make well-informed choices concerning special programs available to first-time, low and moderate-income home buyers. To qualify, you must meet income and program guidelines attend a Homebuyer Education Class and contribute 1 percent to the purchase of the home. The property must be occupied by the homeowner and not used as a rental property.

Educational Seminars:

The HOAP staff provides educational seminars and fairs on an on-going basis. These seminars help potential first-time homebuyers understand the process of purchasing a home. The seminar addresses Fair Housing-related terminology, financing, credit reports, working with a Realtor and Lender, city codes, caring for a home, responsibilities of home ownership, and much more. Please check the schedule for a list of locations, dates and times.

Financial Assistance Seminars

Seminars are required when applying for financial assistance with down payment and closing costs. They are free and are available once a month. Registration is required in advance because there is limited seating. Location may be subject to change. Because these seminars are for educational purposes, we ask that you not bring children. Seminars are held at: Martin Luther King, Jr. Library, 9898 E. Colfax Ave. All classes are held on Saturdays. For reservations, call 303-739-7966 (automated line) Please follow operator prompts and you will automatically be registered for the seminar. Location may be subject to change. You will not receive a reservation confirmation (unless a change has been made to the seminar date or location) just show up at the seminar you registered for. The following is a schedule of the upcoming seminars:

Seminars for homeowners

Education seminar on buying a house Pre-Purchase Counseling: Mortgage loan processes can be confusing to first-time homebuyers. HOAP counselors help make the home purchasing process understandable by providing information needed to make well-informed choices concerning special programs available to first-time, low and moderate-income home buyers. To qualify, you must meet income and program guidelines attend a Homebuyer Education Class and contribute 1 percent to the purchase of the home. The property must be occupied by the homeowner and not used as a rental property.

Educational Seminars:

The HOAP staff provides educational seminars and fairs on an on-going basis. These seminars help potential first-time homebuyers understand the process of purchasing a home. The seminar addresses Fair Housing-related terminology, financing, credit reports, working with a Realtor and Lender, city codes, caring for a home, responsibilities of home ownership, and much more. Please check the schedule for a list of locations, dates and times.

Financial Assistance Seminars

Seminars are required when applying for financial assistance with down payment and closing costs. They are free and are available once a month. Registration is required in advance because there is limited seating. Location may be subject to change. Because these seminars are for educational purposes, we ask that you not bring children. Seminars are held at: Martin Luther King, Jr. Library, 9898 E. Colfax Ave. All classes are held on Saturdays. For reservations, call 303-739-7966 (automated line) Please follow operator prompts and you will automatically be registered for the seminar. Location may be subject to change. You will not receive a reservation confirmation (unless a change has been made to the seminar date or location) just show up at the seminar you registered for. The following is a schedule of the upcoming seminars: 2014 HOAP Income Guidelines Aurora’s Home Ownership Assistance Program (HOAP) offers a variety of housing-related counseling services as well as educational seminars and financial assistance to help qualified, first-time homebuyers. Other programs include:  commercial and home rehabilitation, emergency repair, handicap accessibility, and various public facilities projects. Since 1985, HOAP has been dedicated to making home ownership a reality for Aurora’s low and moderate-income families. As a HUD-approved counseling agency, the HOAP program offers free pre-purchase, foreclosure, pre-foreclosure sale, and reverse equity mortgage counseling, as well as financial assistance to homebuyers. The HOAP staff conducts educational seminars to first-time homebuyers (in English and Spanish), which covers the process of buying and owning a home.  It is mandatory to attend a HUD-approved homebuyer seminar prior to applying for financial down payment assistance.  HOAP staff also acts as a referral service for residents to other service providers within the community. The Home Ownership Assistance Program (HOAP) will pay down payment and all allowable closing costs under the HOAP guidelines. This can depend on the type of loan. Maximum assistance is up to $10,000 however the full amount is not guaranteed. Once HOAP has received a fully executed contract, contact the HOAP Loan Processor to receive a document checklist. Please be sure to forward us a lender package as soon as possible. Prompt return of all paperwork is essential to avoid delays in client’s closing. We require a minimum of ten (10) business days from the time we receive a complete package from you to process and issue a letter of commitment to you. If at all possible, we prefer that closing dates be scheduled for Fridays after 10:00 a.m. Please inform the title company that we will be assisting the borrower with down payment, closing costs, the amount of the assistance, and that we attend the closings. The title company will need to collect $21.00 to record our 2nd Deed of Trust with Exhibit A. This recording fee also should be shown on the settlement sheet. Our office will prepare the Promissory Note, Deed of Trust, and Truth in Lending Statement for the 2nd mortgage as well as present the documents and check at the closing. A representative from the City of Aurora will arrive towards the end of the closing for our portion. If there are changes in closing dates, times, locations of closings etc., please inform us immediately. We would hate to have your borrower not receive our assistance because we were not notified of the closing! If there are changes in the sales price or loan terms, we need to know ahead of time to verify the first mortgage financing is still within the HOAP guidelines. In order to reserve funds, the borrower is required to attend a one-on-one counseling session with our office prior to obtaining a purchase agreement. We are sorry, but there can be no exceptions. We hold a free mandatory seminar once a month which needs to be completed before closing. This seminar is conducted once a month to assist future homeowners in the purchase process (understanding terminology, credit, working with realtors and lenders, City of Aurora codes and property maintenance, etc.). Please have your clients check our website regarding the time and date of seminars. There is limited seating and reservations need to be made ahead of time. Certificates are issued after borrowers have attended the seminar. Seminar certificates are required for HOAP assistance. The seminar meets Fannie Mae, Freddie Mac, CHFA and HUD’s educational requirements. Because of HUD Regulations, (Handbook 1378, Tenant Assistance, Relocation and Real Property Acquisition, Chapters 2 and 3), the City of Aurora cannot assist if the purchase property is renter occupied. A current renter occupying the property and purchasing that property is acceptable. The tenant relocation costs are financially prohibitive to HOAP. In other words, the property needs to be owner occupied at the time the contract is written, or if the property was tenant occupied within the last three (3) months, seller must provide proof that the tenant was not displaced. Please feel free to refer customers to us that you are unable to help. We will be happy to counsel them and prepare them for home ownership. When your customer is ready for their loan, we will return them back to you. Be sure to have them say who sent them to our program. If you are interested in any of our other programs: pre-purchase counseling, foreclosure prevention counseling or reverse equity mortgage counseling (62 years and older), please contact our office. We will gladly send you a brochure or come to your office for a presentation on the Home Ownership Assistance Program. We are continually working to improve our programs. If you have any ideas to share with us, please do not hesitate to contact me. We are looking forward to working with you in the future. Please call 303-739-7900 if you have additional questions.