According to Housing Predictor, Freddie Mac purchased fewer loans in March and reduced its share of the mortgage market. The number of mortgages Freddie Mac bought in March dropped 4.7% to $2.14 trillion. Citing the bills in Congress to abolish, or at least reform, Freddie Mac and Fannie Mae, Freddie Mac is now on a path to reduce the number of mortgages it buys. The unpaid principal balance of Freddie Mac- and Fannie Mae-related home mortgages in their portfolios fell $4.1 billion as lenders were forced to buy back more mortgages that were determined to be underwritten at low quality levels.

Mortgage delinquencies on single-family homes dropped in March, as did first-quarter homeowner vacancies, as reported by Realtor.org. Delinquencies on single-family homes fell to 3.63% last month compared to 3.78% in February, as reported by Freddie Mac. Meanwhile, overall vacancies remain high, even though the percentage of empty homes dropped in the first three months of the year. The South held the highest rates for the first quarter with 2.8%, followed by the Midwest with 2.7%.

MarketWatch recently reported that the average mortgage rates fell again. According to the latest Freddie Mac survey, the average rate for a 30-year fixed-rate mortgage was 4.78% for the week ending April 28, down from 4.8% in the previous week. Meanwhile, the rate for 15-year fixed-rate mortgages fell from 4.02% last week to 3.97% this week. This week’s rate was at its lowest level since early December 2010.

According to an article in The Wall Street Journal, many who support a government-backed housing finance system are predicting calamity for the housing markets without government mortgage guarantees, yet the Federal Reserve is telling a different story. Reserve data shows that nonbank institutional investors had assets of $28 trillion in the fourth quarter of 2010. The WSJ article went on to explain that about $13 trillion of this amount was invested in fixed income or debt securities, but only $1.8 trillion was invested in U.S. government-backed securities.

Home sales in the Hamptons are dropping. Bloomberg.com reported that the summer playground for wealthy New Yorkers has seen a 22% drop in the first quarter, plunging to 309 transactions from 396 the previous year. This drop was the largest since the second quarter of 2009. The drop isn’t due to lack of demand but, rather, the relentless snow and poor weather that kept Manhattan buyers away from the market.

Reverse Mortgage Daily recently reported that the reverse mortgage market index dropped 18% from peak levels in 2006. The latest data from the Reverse Mortgage Market Index (RMMI) shows that the amount of home equity held by seniors fell to $3.3 trillion at the end of 2010. According to RiskSpan, the growth or decline of the reverse mortgage market largely depends on the senior population growth, housing prices and senior debt levels.

The Home Equity Conversion Mortgage (HECM) is expected to generate $304 million of receipts in 2012, as reported by Reverse Mortgage Daily. This growth is largely due in part to the Federal Housing Administration’s new HECM Saver program, which gives borrowers access to home equity in amounts that are between 10-18% less than it would have been available with the HECM Standard option.

Credit Scores Education Month is a month-long campaign sponsored by the Consumer Bankers Foundation and the Leadership Conference on Civil Rights Education Fund. The campaign was developed with mostly low- and middle-income Americans in mind to inform consumers about their credit and the importance of actively taking responsibility for maintaining its health and educate them about the important steps they can take to establish and maintain good credit. These include paying bills on time, keeping credit card balances as low as possible and resisting the urge to open up more credit cards than are needed within a short period of time.

Many people do not know what their credit score is, how it is calculated or what constitutes a good credit score. According to a survey conducted by Opinion Research USA, more than 70% incorrectly identified a credit score of 600 as “average” or “above average.” Those who wish to learn about their credit score are allowed one free credit report per year under the Fair and Accurate Credit Transaction Act.

Affordable Financial Services urges everyone who is thinking of applying for a mortgage to get a credit report first and then take a look at their credit score. Many people believe that checking your credit score will hurt your ability to get a loan, but that is not true. It doesn’t hurt to check your credit score, but it does hurt if you don’t know your score.

On January 19, 2011, the Federal Housing Administration announced more stringent lending requirements. One of the requirements asks for borrowers with credit scores below 580 to leave higher down payments with the lender. The FHA sought these requirements to protect itself from rising defaults and stave off the need for a taxpayer-funded bailout of the agency.

Many borrowers do not want to have the same problems they had during the subprime mortgage mess when they lent money to borrowers they knew were not creditworthy and were unable to pay back the loan. Affordable Financial Services offers niche products for those who wish to take out a loan but have less-than-perfect credit, as well as debt consolidation services to help those pay off their debt more easily, thereby helping them improve their credit score.

For more information, call 1-888-500-0282 or visit http://www.affordable-financialservices.com.

Good news and bad news for the housing market: The good news is that The National Association of REALTORS reported today that existing home sales in January increased 2.7% from the previous month. The NAR reported a seasonally adjusted rate of 5.36 million units in January, compared to the downwardly revised figure of 5.22 million units in December. In addition, last month’s figure was 5.3% higher than the January 2010 figure of 5.09 million units. This is the first time in seven months that existing home sales were higher than the previous year. (Existing-home sales are completed transactions that include single-family homes, townhouses, condominiums and co-ops.)

Now the bad news: The Commerce Department said new home sales in January dropped by 12.6% to a seasonally adjusted rate of 284,000 units, compared to 325,000 units in December. Meanwhile, the pending home sales index also fell, from 91.5 in December to 88.9 in January. The drop in home sales could be attributed to tighter credit, high unemployment and declining consumer confidence, despite the tax cuts that went into effect this year.

Economists in a Reuters poll predict that home prices will fall by 2.3% in 2011 and then begin a slight recovery next year. Many see a rise in distressed home sales and foreclosures as the reasons for the drop in home prices. Distressed home sales hit a one-year high of 37% of all existing home sales, according to the Reuters article.

A recent Bloomberg article quoted Alabama Republican Congressman Spencer Bachus as saying a bill to overhaul Freddie Mac and Fannie Mae should be done “within three to four months.” The bill calls for Fannie and Freddie and the rest of the $11 trillion U.S. mortgage market to be weaned from its reliance on the federal government. However, the Washington Post reported that Treasury Secretary Timothy Geithner said reducing the federal government’s role will adversely affect the housing market as the costs will be passed on to the taxpayers.

I had asked a friend of mine if she knew any mortgage brokers that can help and, sure enough, she referred me to Brian. WOW! He was on top of this from Day One. He knew exactly what to do and how long it took to do it and we got it done in a matter of about two weeks. He worked endlessly on my transaction to get this loan refinanced and closed. He and his co-worker Angelene Bellittieri worked to no end trying to get payoff information and getting the numbers straight and also dealing with my 100 questions per hour.

I would definitely recommend him and Angelene to anyone that needs a mortgage or wants to refinance. They both totally know what they’re doing!

Thanks, guys!

Cindy Cucuzza
New York, NY

Fitch Ratings announced on Wednesday that it is unveiling a new model to determine potential losses from securities backed by U.S. home mortgages. The new home price model will help predict which borrowers will end up “underwater” — that is, owing more than what their home is worth. This system will help investors who buy mortgage-backed securities. Fitch plans to seek comments on its new modeling system for the next 45 days from investors.

The Mortgage Bankers Association predicts that residential mortgage lending is expected to shrink to its lowest levels since 1997 as demand for home refinancing plunges due to higher interest rates and stricter lending requirements. The MBA says lenders will underwrite $966 billion on mortgages in 2011, down from $1.505 trillion in 2010 and $1.995 trillion in 2009. In 1997, mortgage originations were at $833 million. However, mortgage bankers expect an increase in loans for home purchases from $473 billion last year to $614 billion this year.

The Washington Post reported Tuesday that more people near the end of last year did “cash-in” refinancing of their mortgages, mostly to qualify for interest rates that were at near-historic lows. In the fourth quarter of 2010, 46% of borrowers who refinanced their primary mortgage brought cash to settlement to lower the balance on their loans, according to Freddie Mac. That is the highest percentage of “cash-in” refinances since the company tracked such numbers in 1985.

This week, the average contract interest rate for the 30-fixed rate loan was 4.77%, down slightly from 4.78% last week. Meanwhile, the average rate for a 15-year mortgage saw a small increase, from 4.15% last week to 4.16% this week According to an Associated Press article, interest rates have risen half a percentage point over the past two months; during that time, investors sold off Treasury bonds, driving yields lower. Mortgage rates tend to track the yield on the 10-year Treasury note.

The Mortgage Bankers Association said mortgage applications rose 5% this week, compared to the previous week. The MBA added that the refinance index rose 7.7% this week, the third straight week of increase in refinances, but the number of purchase applications fell by 1.9%.

Next to 2009, the year 2010 was the worst year for new home starts. The AP reported on Wednesday that builders broke ground on a total of 587,600 homes in 2010, compared to 554,000 housing starts in 2009. The 2010 figures mark the second worst year for new homes since 1959. In December, builders started work at a seasonally adjusted rate of 529,000, according to the Commerce Department. That is a 4.3% decrease from November.

According to data from LPS Applied Analytics, the Empire State holds the longest average in the nation, with mortgage loans in the foreclosure process having been delinquent for 600 days on average. Florida, New Jersey, Hawaii and Maine have been delinquent for an average of more than 500 days, followed by California (461 days) and Nevada (427 days). Nebraska and Wyoming, on the other hand, were found to have had the quickest foreclosure process, averaging 358 days.

One reason for the delays is that some states use a judicial process that has backlogged the courts. In New York, foreclosures are handled either in court or out of court, although in-court foreclosures are more common, according to RealtyTrac.

Another reason is that government officials and agencies delay the process through temporary moratoriums, mandatory mediation sessions and loan modification or assistance programs. Also, mortgage servicers may even cause delays because they do not want to take on the legal and financial responsibilities of owning any more homes.

According to the Mortgage Bankers Association, the refinance index also declined for the fifth consecutive week by 0.7%. However, the refinancing share of the mortgage activity grew to 76.7% of total applications, up from approximately 75% the week before. Meanwhile, purchase applications fell 5% after three weeks of gains.

Michael Fratantoni, MBA’s vice president of research and economics, said the decline in refinancing activity could be attributed to mortgage rates reaching six-month highs as Treasury rates increased after the Federal Reserve initiated another round of purchasing government securities.

The MBA also reported that the average interest rate on a 30-year fixed-rate mortgage was 4.84% last week, compared to 4.66% last week — the highest level since May 2010. Rates for 15-year fixed-rate mortgages increased from 3.98% to 4.21%.

TransUnion LLC predicts that mortgage delinquencies will decline to 4.98% by the end of this year, compared to 6.21% by the end of this year. The delinquency rate peaked at 6.89% in the fourth quarter of 2009, as lenders tightened underwriting standards, according to the WSJ article. However, TransUnion also said it is seeing an increase in delinquencies 60 or more days overdue on their mortgages, going above 2%.

A decrease in mortgage delinquencies could lift the economy and the real estate market in general. The U.S. Census Bureau recently announced that the unemployment rate inched up to 9.8% and, while pending home sales shot up 10.4% in October, new home sales fell the same month by 8.1% and existing home sales declined by 2.2%

TransUnion also predicts that credit card delinquencies — an important gauge of future losses for lenders — will continue to decline, albeit slightly. Borrowers who are 90 days or more delinquent on one or more of their credit cards is expected to reach 0.75% by the end of this year, but will fall to 0.67% by the end of 2011. Credit card delinquencies are lower than mortgage delinquencies in part because lenders have more ways to control potential losses, such as reducing customers’ lines of credit.