Mortgage Rates for March 30, 2008

Direct From the Freddie Mac Site

30-year fixed-rate mortgage: Averaged 5.85 percent down from last week when it averaged 5.87 percent. Last year at this time, the 30-year FRM averaged 6.16 percent.

15-year fixed-rate mortgage: Averaged 5.34 percent up from last week when it averaged 5.27 percent. A year ago at this time, the 15-year FRM averaged 5.86 percent.

Five-year Treasury-indexed hybrid ARMs: averaged 5.67 percent this week up from last week when it averaged 5.56 percent. A year ago, the 5-year ARM averaged 5.88 percent.

One-year Treasury-indexed ARMs: averaged 5.24 percent this week up from last week when it was 5.15 percent. At this time last year, the 1-year ARM averaged 5.43 percent

Can this low change year over year change the situation. i dont think so.....will the govt ask Freddie MAc to become the lender of last resort and buy all this bad paper that will not be helped by such small changes in the mortgage rates. If they can socialize the investment banker problem, then they should be able to help out the home owner.



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Howard Bell

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Real Estate Market Bottom: Bottom Fishing for Mortgage Deals

No Bottom Until the Mortgage Investors Come Back to Buy

The way lenders replace the cash they have loaned is to resell the mortgage to other investors. They could be Insurance companies, mutual funds, hedge funds or state pension plans. This is how lenders regain the liquidity needed to loan to new customers. The problem we have been facing is that no one is trusting the mortgage and so they are not buying, leaving the lender with no new money.

The real estate markets cannot recover until investors are willing to buy these debts from the lender.

Good News:

Its not nearly a turn around yet, but here are signs that the investors who keep the system flush are starting to look around and the bargain hunting is just beginning. According to a Yahoo news report

Some of the state pension plans are beginning to look at these mortgage obligations.. According to the Yahoo article; ""This really has no bearing to the fair market value of these assets anymore," agreed Bob Borden, who oversees South Carolina's pension investment decisions. South Carolina has only put $8 million into that fund that includes some subprime mortgages, but Borden expects the rest to go in rapidly as the market swings from extreme fear toward greed."

My feeling is that this will take quite a while and the investment bankers, stock markets and REITS will recover first. I think the buying public is a little shocked and I dont see a buying frenzy just yet. Still, this is how a recovery starts, fragile and tentative...we'll have to wait to see if it sticks.


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Howard Bell
www.yourpropertypath.com
A web site of over 450 articles related to real estate focused primarily on property mangement and always free

Mortgage Rates: Long Term: Mortgage Rates Plummet

Short-Term Rates Barely Changed

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30 Fixed Rate Mortgage: Averaged 5.87 percent with an average 0.5 point for the week ending March 20, 2008, down from last week when it averaged 6.13 percent

15-year Fixed Rate Mortgage: Averaged 5.27 percent with an average 0.5 point, down from last week when it averaged 5.60 percent. A year ago at this time, the 15-year FRM averaged 5.90 percent.

Five-year Treasury-indexed ARMs: Averaged 5.56 percent this week, with an average 0.9 point, down from last week when it averaged 5.58 percent. A year ago, the 5-year ARM averaged 5.91 percent.

One-year Treasury-indexed ARMs: Averaged 5.15 percent this week with an average 0.8 point, up from last week when it was 5.14 percent. At this time last year, the 1-year ARM averaged 5.40 percent

This is the first big move for long term mortgages that I have seen. Almost .05% less than this time last week. Now that is helpful!

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Howard Bell
www.yourpropertypath.com

Fed Rates: What it Means

The market was up by 300 points on the expectation that the Fed would lower rates 1 point. Instead they lowered rates by 3/4 of a point and the Dow is up 290 points. This is about the confidence necessary to give people who need to borrow and lenders who would like to lend some room. It does not do all that much for the mortgage crises.

I think this is much more about a bail out for the financial industry not the homeowner. Lehman Bros. and Goldman Sachs, both said Tuesday their first-quarter profits fell more than 50%. Yesterday, peolple thought Lehman Bros. was next to go the way of Bear Sterns. Its high fore the year was $160.00 and it sold yesterday for $2 bucks a share. Both shares are up dramatically!
Regarding the home crises, these moves dont really lower rates that much. I believe that this will take an effort whereby the banks join the Fed and do their part. I believe the banks have to renegotiate these loans to help keep people and their homes off the streets. The only other way is fore the Govt to intervene and be the lender of last resort and buy all this bad paper.

Plenty will howl, and rightfully so, about how we help out all those who speculated or lied to take a chance. After all we are the land of " a deal's a deal". Still, if we dont we will tank big time...a serious a crises as we have ever seen.

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Howard Bell

www.yourpropertypath.com

Your Property PathSF

A new blog for property owners and managers in San Francisco

Morgae Rates Rise Three Weeks in a Row

Freddie Mac report on Fixed Rate Mortgages

30-year

The 30-year fixed-rate mortgage (FRM) averaged 6.24 percent with an average 0.5 point for the week ending February 28, 2008, up from last week when it averaged 6.04 percent. Last year at this time, the 30-year FRM averaged 6.18 percent.

15-year

15-year FRM this week averaged 5.72 percent with an average 0.5 point, up from last week when it averaged 5.64 percent. A year ago at this time, the 15-year FRM averaged 5.92 percent.

Freddie Mac Hybrid Rates

Five-year Treasury Indexed ARMs

The 15 year ARM's averaged 5.43 percent this week, with an average 0.4 point, up from last week when it averaged 5.37 percent. A year ago, the 5-year ARM averaged 5.93 percent.

One-year Treasury-indexed ARMs

One-year Treasury-indexed ARMs averaged 5.11 percent this week with an average 0.7 point, up from last week when it was 4.98 percent. At this time last year, the 1-year ARM averaged 5.49 percent

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Howard Bell

www.yourpropertypath.com

Home Foreclosing: Get Out of Jail Free Card?

Here is a very interesting story from bloomberg on how some peopel are getting around forclosure.

Feb. 22 (Bloomberg) -- Joe Lents hasn't made a payment on his $1.5 million mortgage since 2002.

"That's when Washington Mutual Inc. first tried to foreclose on his home in Boca Raton, Florida. The Seattle-based lender failed to prove that it owned Lents's mortgage note and dropped attempts to take his house. Subsequent efforts to foreclose have stalled because no one has produced the paperwork."`

Seems that the bank had trouble following the paper trail of the mortgage and couldnt prove it actually owned the note. During boom times companies hire bodies to handle the onslaught of business and a mountain of paperwork. If the original lender, who may have had the mortgage sold and resold five or six times.

The Bloomberg piece goes on to say that "Judges in at least five states have stopped foreclosure proceedings because the banks that pool mortgages into securities and the companies that collect monthly payments haven't been able to prove they own the mortgages. The confusion is another headache for U.S. Treasury Secretary Henry Paulson as he revises rules for packaging mortgages into securities."

More than $2 trillion dollars of these loans have been bundled and sold several times. Each time the loan has to be assigned to the new owner of the loan and many times the paper was lost or shortcuts were taken.

Lost-Note Affidavits

.."Nobody knows how widespread the use of lost-note affidavits are, Charney said. She's had foreclosure proceedings for 300 clients dismissed or postponed in the past year, with about 80 percent of them involving lost-note affidavits, she said.

"They raise the issue of whether the trusts own the loans at all,'' Charney said. "Lost-note affidavits are pattern and practice in the industry. They are not exceptions. They are the rule.'"

*Special thanks to Bob Ivery for this story.

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