Jim Hadeed, Arizona REALTOR, Realty Executives – (602) 861-3300

McLean, VA – Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), and for yet another week, fixed-rate mortgages reached record lows, as did the 5-year adjustable rate in this survey. (The 30-year fixed-rate survey began in 1971, the 15-year began in 1991, and the 5-year adjustable in 2005.)

30-year fixed-rate mortgage (FRM) averaged 4.32 percent with an average 0.7 point for the week ending September 2, 2010, down from last week when it averaged 4.36 percent. Last year at this time, the 30-year FRM averaged 5.08 percent.

15-year FRM this week averaged a record low of 3.83 percent with an average 0.6 point, down from last week when it averaged 3.86 percent. A year ago at this time, the 15-year FRM averaged 4.54 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.54 percent this week, with an average 0.6 point, down from last week when it averaged 3.56 percent. A year ago, the 5-year ARM averaged 4.59 percent.

1-year Treasury-indexed ARM averaged 3.50 percent this week with an average 0.7 point, down from last week when it averaged 3.52 percent. At this time last year, the 1-year ARM averaged 4.62 percent.

Amy Crews Cutts, deputy chief economist at Freddie Mac, reports, “The 12-month price growth of core personal expenditures remained at 1.4 percent in July, which kept overall inflation expectations well at bay. Fed chairman Bernanke reiterated this in his August 27th speech in Wyoming, noting that with inflation expectations reasonably stable and the economy growing, inflation should remain near current readings for some time before rising slowly. As a result, mortgage rates eased further this week to new historic lows.”

She continued, “House prices, however, appear to be firming. Home prices rose 2.3 percent between the first and second quarter of this year, reaching the highest level since the fourth quarter of 2008, according to the S&P/Case Shiller® National Home Price Index. In addition, 15 metropolitan areas in the 20-City Composite Index experienced annual house price growth in June, compared to 13 in May and 11 in April.”

http://realestate.yahoo.com/info/news/modest-inflation-expectations-allow-mortgage-rates-to-once-again-set-new-record-lows;_ylt=Ahpve.F5AEKOBQiiobv5eSGkF7kF

McLean, VA – Freddie Mac today released the results of its Primary Mortgage Market Survey® (PMMS®), with the 30-year and 15-year fixed-rate mortgages reaching record lows for this survey. (The 30-year fixed-rate survey began in 1971, and the 15-year began in 1991.) The 5-year adjustable rate mortgage also reached its lowest level since Freddie Mac began tracking it in 2005.

30-year fixed-rate mortgage (FRM) averaged 4.49 percent with an average 0.7 point for the week ending August 5, 2010, down from last week when it averaged 4.54 percent. Last year at this time, the 30-year FRM averaged 5.22 percent.

15-year FRM this week averaged a record low of 3.95 percent with an average 0.6 point, down from last week when it averaged 4.00 percent. A year ago at this time, the 15-year FRM averaged 4.63 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.63 percent this week, with an average 0.6 point, down from last week when it averaged 3.76 percent. A year ago, the 5-year ARM averaged 4.73 percent.

1-year Treasury-indexed ARM averaged 3.55 percent this week with an average 0.7 point, down from last week when it averaged 3.64 percent. At this time last year, the 1-year ARM averaged 4.78 percent.

Frank Nothaft, vice president and chief economist at Freddie Mac, said, “And yet again, interest rates for fixed-rate mortgages and now the hybrid 5-year ARM fell to all-time record lows this week following the second quarter GDP release. Annual revisions cut the cumulative GDP growth in half over the past three years ending in the first quarter of 2010 from 1.4 percent to 0.6 percent. This reduces inflationary pressures and allows longer-term rates room to ease.

“More recently, housing investment picked up in the second quarter of this year as the homebuyer tax credit spurred new and existing sales and low mortgage rates encouraged remodeling. Fixed residential investment added 0.6 percentage points to second quarter real GDP growth following two quarters of decline.”

President Barack Obama signed Friday morning a three-month extension on the deadline for home buyers to obtain a federal home-buyer tax credit of up to $8,000.

Buyers now have until Sept. 30 to close on a home sale to be eligible for the credit. The closing deadline was originally June 30. To be eligible, buyers need a contract that was in place by April 30.

The National Association of Realtors has estimated that about 180,000 otherwise eligible buyers were likely to miss out on the credit if the original deadline was upheld. It’s been difficult for some buyers to get their mortgages approved on time, as lenders work through a clogged pipeline of applications.

Fom NEW YORK (CNNMoney.com) –

Home prices fell in the first quarter of 2010 but are still higher than they were a year ago.

According to the S&P/Case-Shiller nation-wide index, home prices fell 3.2% quarter-over-quarter but have still managed to climb 2% year-over-year.

The index continued to show weakness despite very low mortgage interest rates and tax incentives to encourage home purchases.

Two other indexes tracked by Case-Shiller registered declines for the month of March, 0.5% for its index of 20 major cities and 0.4% for the 10-city index.

“The housing market may be in better shape than this time last year; but, when you look at recent trends there are signs of some renewed weakening in home prices,” says David M. Blitzer, chairman of S&P’s index committee.

Brad Hunter, who follows the housing market for Metrostudy, a consulting and data-providing company, is predicting further price erosion along the lines of 10% or so before the market fully bottoms out.

“I’ve been dismayed by how weak demand has been across the country,” he said.

Many of the cities covered by the index showed continued problems: Las Vegas recorded a 12% decline over the past 12 months and Detroit prices have fallen 4.6% since March 2009.

There were a few winners led by San Francisco, where prices have jumped more than 16% over the past 12 months.

Over the past many months the housing market has shown some good signs and bad, according to Mike Larson, real estate analyst with Weiss Research.

“In the grand scheme of things, housing is affordable again,” he said. “Lenders aren’t really tightening standards any more and the employment situation has stabilized. That’s the good news.”

However, there is also a huge backlog of foreclosed homes that has become known as the “shadow inventory.” They could really depress prices as they start coming on the market.

And while financing has improved over the past year, it still can be tough for some people to get a mortgage. Also, employment gains have been modest at best and that is crucial for housing.

“We’re still missing robust job growth,” Hunter said, “the element that pulls us out of decline.”

This housing recovery will take a very different form than past ones, according to Susan Wachter, a professor of real estate at the Wharton School.

“Housing, which usually leads us out of recession and into recovery will be a lagging indicator this time,” she said. “Consumers will look to the health of the whole economy to decide whether to make a home purchase or not.”

There are no quick fixes for improving your credit score. But you can raise your score over time by demonstrating that you consistently manage your finances responsibly. Any of the following ten tips can help you to improve your credit score:

1. Pay your bills on time.

This is the best way to improve your score, and it’s never too late to start. Even if you’ve had serious delinquencies in the past, those will count less over time if you keep paying your bills on time.

2. Keep credit card balances low.

High outstanding debt can pull down your score. Don’t go maxing out your credit cards all the time.

3. Check your credit report for accuracy.

It’s possible that there may be inaccurate information on your credit report that can be easily cleared up (see How To Fix Credit Report Inaccuracies). If this proves to be the case, then you should contact one of the three credit reporting agencies-TransUnion, Experian or Equifax.

4. Pay off debt rather than moving it around.

Consolidating your credit card debt onto one card or spreading it over multiple cards will not improve your score in the long run. The most effective way to improve your score is by simply paying down the amount you owe.

5. Keep your credit cards – but manage them responsibly.

In general, having credit cards and installment loans that you pay on time will raise your score. Someone who has no credit cards tends to have a lower score than someone who has managed credit cards responsibly.

6. Don’t open multiple accounts too quickly, especially if you have a short credit history.

Opening too many accounts in too short of a time period can look risky because you are taking on a lot of possible debt. New accounts will also lower the average age of your existing accounts, something that your FICO score also considers.

7. Don’t open new credit card accounts you don’t need.

This approach could backfire and actually lower your score.

8. Don’t close an account to remove it from your record.

It’s a myth that closing an account removes it from your credit report. This is untrue-even closed accounts remain on your report, possibly for an indefinite period of time and may still be factored into the score. In fact, closing accounts can sometimes hurt your score unless you also pay down your debt at the same time.

9. Shop for a loan within a short, focused period of time.

FICO scores distinguish between a search for a single loan and a search for many new credit lines, based in part on the length of time over which recent requests for credit occur. If you shop for a number of loans over too long a time period, it can count against you.

10. Contact your creditors or see a legitimate credit counselor if you’re having financial difficulties.

This won’t improve your score immediately, but the sooner you begin managing your credit well and making timely payments, the sooner your score will get better.

Steps to Improve Your Overall Credit

If you have a history of poor credit or think that you might, it’s important that you find out and take the steps to improve it. It will take time, but with discipline, you may expect to see improvement in as little as six months. You see, creditors are interested in a track record. You’ll have to prove that you consistently pay your creditors on time and that you can effectively pay down your debt. Here’s the simple plan to improve your credit:

Know what’s on your credit report and resolve any discrepancies.

Even if you believe you have a good credit score, it is still wise to check with credit reporting agencies to make sure they contain a similar view of your credit history. It’s also wise to make sure there are no errors on your report, such as name misspellings or incorrect addresses.

Plan to pay your bills on time and follow through.

You can start this today, even before you take a look at your credit report. Contact your creditors to review your payment options and catch up with any late payments. Focus on ways to reduce your spending.

Stop using credit cards now.

Paying down your credit card balances will not only improve your credit rating over time, but you’ll be in a better position to negotiate a lower interest rate for your cards.

Don’t live beyond your means.

Make paying your bills and buying only essential items your main priority. Carefully weigh the importance of all new purchases against the greater importance of reestablishing your good credit.

Getting a handle on your spending, paying bills on time, and paying down credit cards takes a long-term commitment and strong self-control. It won’t always be easy, but the effort will pay off once you see your credit improve.

source: http://realestate.yahoo.com/info/guides/improve-your-credit-score;_ylt=AkdplPCr1lEeQVCNz29f1kzW4JF4

Refinancing a mortgage means paying off an existing loan and replacing it with a new one. There are many common reasons why homeowners refinance: the opportunity to obtain a lower interest rate; the chance to shorten the term of their mortgage; the desire to convert from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage, or vice versa; the opportunity to tap a home’s equity in order to finance a large purchase; and the desire to consolidate debt. Some of these motivations have both benefits and pitfalls. And because refinancing can cost between 3% and 6% of the loan’s principal and – like taking out the original mortgage – requires appraisal, title search and application fees, it’s important for a homeowner to determine whether his or her reason for refinancing offers true benefit.

Securing a Lower Interest Rate

One of the best reasons to refinance is to lower the interest rate on your existing loan. Historically, the rule of thumb was that it was worth the money to refinance if you could reduce your interest rate by at least 2%. Today, many lenders say 1% savings is enough of an incentive to refinance.

Reducing your interest rate not only helps you save money, but increases the rate at which you build equity in your home, and can decrease the size of your monthly payment. For example, a 30-year fixed-rate mortgage with an interest rate of 9% on a $100,000 home has a principal and interest payment of $804.62. That same loan at 6% reduces your payment to $599.55.

Shortening the Loan’s Term

When interest rates fall, homeowners often have the opportunity to refinance an existing loan for another that, without much change in the monthly payment, has a shorter term. For that 30-year fixed-rate mortgage on a $100,000 home, refinancing from 9% to $5.5% cuts the term in half to 15 years, with only a slight change in the monthly payment from $804.62 to $817.08.

Converting between Adjustable-Rate and Fixed-Rate Mortgages

While ARMs start out offering lower rates than fixed-rate mortgages, periodic adjustments often result in rate increases that are higher than the rate available through a fixed-rate mortgage. When this occurs, converting to a fixed-rate mortgage results in a lower interest rate as well as eliminates concern over future interest rate hikes.

Conversely, converting from a fixed-rate loan to an ARM can also be a sound financial strategy, particularly in a falling interest rate environment. If rates continue to fall, the periodic rate adjustments on an ARM result in decreasing rates and smaller monthly mortgage payments, eliminating the need to refinance every time rates drop. Converting to an ARM may be a good idea especially for homeowners who don’t plan to stay in their home for more than a few years. If interest rates are falling, these homeowners can reduce their loan’s interest rate and monthly payment, but won’t have to worry about interest rates eventually rising in the future.

Tapping Equity and Consolidating Debt

While the previously mentioned reasons to refinance are all financially sound, mortgage refinancing can be a slippery slope to never-ending debt. It’s important to keep this in mind when considering refinancing for the purpose of tapping into home equity or consolidating debt.

Homeowners often access the equity in their homes to cover big expenses, such as the costs of home remodeling or a child’s college education. These homeowners may justify such refinancing by pointing out that remodeling adds value to the home or that the interest rate on the mortgage loan is less than the rate on money borrowed from another source. Another justification is that the interest on mortgages is tax deductible. While these arguments may be true, increasing the number of years that you owe on your mortgage is rarely a smart financial decision, nor is spending a dollar on interest to get a $0.30 tax deduction.

Many homeowners refinance in order to consolidate their debt. At face value, replacing high-interest debt with a low-interest mortgage is a good idea. Unfortunately, refinancing does not bring with it an automatic dose of financial prudence. In reality, a large percentage of people who once generated high-interest debt on credit cards, cars and other purchases will simply do it again after the mortgage refinancing gives them the available credit to do so. This creates an instant quadruple loss composed of wasted fees on the refinancing, lost equity in the house, additional years of increased interest payments on the new mortgage and the return of high-interest debt once the credit cards are maxed out again – the possible result is an endless perpetuation of the cycle of debt.

Should You Refinance?

Refinancing can be a great financial move if it reduces your mortgage payment, shortens the term of your loan or helps you build equity more quickly. When used carefully, it can also be a valuable tool in getting your debt under control. Before you refinance take a careful look at your financial situation, and ask yourself: How long do I plan to continue living in the house? and How much money will I save by refinancing?

Again, keep in mind that refinancing generally costs between 3% and 6% of the loan’s principal. It takes years to recoup that cost with the savings generated by a lower interest rate or shorter term. So, if you are not planning to stay in the home for more than a few years, the cost of refinancing may negate any of the potential savings It also pays to remember that a savvy homeowner is always looking for ways to reduce debt, build equity, save money and eliminate that mortgage payment. Taking cash out of your equity when you refinance doesn’t help you achieve any of those goals.

Investopedia.com believes that individuals can excel at managing their financial affairs. As such, we strive to provide free educational content and tools to empower individual investors, including thousands of original and objective articles and tutorials on a wide variety of financial topics.

Source: Investopedia Staff, Investopedia

NEW YORK (CNNMoney.com) — The foreclosure plague may have finally reached its peak in April 2010 — but don’t expect delinquency statistics to plummet anytime soon.

The total number of foreclosure filings — notices of default, auction notices and bank repossessions — fell by 9% from March to April, and 2% compared with April 2009, according to data released Thursday by RealtyTrac, the online marketer of foreclosed properties.
This is the first time that has happened in the history of the report, which goes back to January 2006.

But the number of homes repossessed during April is at an all-time high of 92,432. That is a 45% increase over April 2009. If repossessions continue at this pace, more than 1.1 million homes will be lost in 2010.

“There were two important milestones in the April numbers that show foreclosure activity has begun to plateau, but at a very high level that will not drop off in the near future,” said RealtyTrac CEO James Saccacio.

Saccacio said he expects the pattern to become the norm for many months, with the overall numbers of filings staying high, but not increasing, and repossessions remaining at record levels.

0:00 /2:39Whitney: Housing set to fall again

The reason that repossessions can rise while filings hold steady is that lenders are working through a backlog of delinquent properties, taking more of them through the entire process to repossession, rather than letting them linger in limbo.

Walkaways

The numbers of repossessed properties, also called real-estate owned or REOs, have been boosted by a spike in the number of homeowners voluntarily giving up their homes because their the value has dropped so precipitously.

These “strategic defaults” now account for nearly one in three foreclosures, according to a recent report from the University of Chicago Booth School of Business and Northwestern’s Kellogg School of Management. That’s up from 22% 12 months earlier.

Some homeowners walk away when they are “underwater,” owing far more than the value of their home, because they realize that they will never recoup the losses. The further homeowners fall underwater, the more likely they are to leave.

About one in four U.S. homeowners is underwater, according to CoreLogic, a financial data provider. Nearly 5 million of those borrowers owe mortgage debt that exceeds their property values by 25% or more. The total of negative equity in these deeply underwater borrowers is a whopping $655 billion.

Foreclosure epicenters

Nevada continues to rank as the worst-hit foreclosure state, with one of every 69 households receiving some kind of filing. That’s nearly six times the national rate which is one household for every 387 receiving a filing.

Foreclosures: How bad is your state?

Arizona had the second highest rate; Florida the third; and California the fourth. California, the largest state in the union, had nearly 70,000 filings, more than any other state. Michigan, where the vast number of foreclosures can be traced to job losses and economic turmoil, recorded more than 19,000.

The metro area market that recorded the highest rate of foreclosure filings in April was Las Vegas, where one of every 60 homes was delinquent, Second was Modesto, Calif., with one in 101, and neighboring Merced, where one in 104 homeowners was in some stage of default.