Wednesday’s Newsday article reported that the number of closings on Long Island fell in March. Last month, there were 1,902 sales closings on Long Island, down 9.3% from February, based on data from Multiple Listing Service of Long Island. However, the number of contracts, or pending sales, in the month of March was up 38% from the previous month. MLSLI also reported that the median home closing price fell in Nassau County from $397,000 in February to $390,000 in March. In Suffolk County, prices stayed the same at $300,000.

Bankrate.com reported that, as of April 13, home equity loans averaged 6.95% nationally, a drop of three basis points from a week earlier. (A basis point is 0.01 of a percentage point.) The typical home equity line of credit had a rate of 5.55%, down one basis point from last week.

Reuters reported that applications for home mortgages fell to their lowest level in three months. The Mortgage Bankers Association released data on Wednesday that the seasonally adjusted index of mortgage application activity — which includes refinancing and home purchasing applications — fell 6.7% in the week ending April 8. It was the third straight week of declines and applications were at their lowest level since the week of January 21. The index of refinancing applications declined by 7.7% and applications for loan requests dropped 4.7%, according to the MBA.

U.S. mortgage rates fell to the lowest level in almost two months, according to a Bloomberg article. The average rate for a 30-year fixed-rate loan was 4.76% this week – down from 4.88% last week, based on data from Freddie Mac. After staying at 4.15% the past two weeks, the rate for a 15-year fixed-rate mortgage was 3.97%, according to the Bloomberg article. Experts believe the lower interest rates — a reaction to the crisis in Japan — will spur more refinancing.

Bloomberg also reported that mortgage applications fell the week ending March 11. According to the Mortgage Bankers Association, mortgage applications dropped 0.7%. The purchase application index declined 4% last week from two weeks ago, but the refinancing gauge was up 0.9%, Bloomberg reported. Look for the refinance index to increase, thanks to lower interest rates.

The New York Times reported that more people are turning to adjustable-rate mortgages (ARMs) as lenders are providing more conservative ARM products by eliminating “teaser” rates that adjust every six months, or the “pick-a-pay” and “option” features that allow borrowers to pay less than the monthly interest, only to be socked with a huge bill later on. The most popular ARMs are the 5/1 ARMs and 7/1 ARMs, in which the initial interest rate is fixed for the first five or seven years — after which many homeowners consider selling or refinancing their home — then adjusted annually at a capped rate toward a maximum level. The NYT article said the cost savings compared to a 30-year fixed-rate loan are significant. For example, someone borrowing $500,000 with a 5/1 ARM at 3.5% would save $42,507 over the first five years, compared to a fixed-rate loan of 5.25%. A 7/1 ARM at 4.125% would save $38,330 over the first seven years.

On Long Island, the number of home repossessions for February was 717. RealtyTrac data reported in Newsday showed that there were 340 new cases in Nassau County last month and 377 in Suffolk. The Newsday article also showed that, based on data from the Empire Justice Center, a nonprofit organization, Long Island had more than 26,079 homes in the foreclosure process last fall and another 20,985 loans at least 90 days past due. Since October 2010, the number of repos has declined.

Rates for 30-year mortgages have increased slightly. Freddie Mac reported this week that the average rate for 30-year fixed-rate mortgages was at 4.88%, up from 4.87% last week. The 5/1 ARM showed a slight increase from 3.72% last week to 3.73% this week. The 15-year rate remained unchanged at 4.15% and the one-year adjustable rate mortgage was at 3.21%, down from 3.23% the previous week.

According to Bloomberg, mortgage applications in the U.S. were up last week. Bloomberg reported that the Mortgage Bankers Association’s index of loan applications was up 16% for the week ending March 4 — the biggest gain since June 2010 — over the previous week. The MBA further noted that the purchase index rose 13% last week compared to the previous week (the most since November 2010) and the refinancing gauge jumped 17%. Economists say more people were looking to purchase or refinance their homes as unemployment eased up and more companies sought to hire more people.

An article in the San Francisco Chronicle stated that Republicans have introduced a bill to kill the Home Affordable Modification Program (HAMP). When HAMP was announced in February 2009, the Obama administration predicted that it would help 3-4 million homeowners avoid foreclosure under this voluntary program. As of December 31, 2010, only 522,000 homeowners participated in the program.

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.

The program is open to those with FICO scores down to 601 (for FHA fallout). The loan is a 5/1 ARM in the 6% range, with a loan-to-value maximum of 60%. But if you have a client for it, then we can definitely do it.

A stated self-employed program is available in the all 5 boroughs, Long Island, Westchester, Connecticut and New Jersey at very aggressive rates. The LTV maximum for this program is 70%. (For full-doc, we can go to 80% LTV with no mortgage insurance.) Rates are in the 4% range. Loan limit is $7 million.

Need A Jumbo Loan?
We have a jumbo full-doc program that has rates in the 4% range, up to $10 million for co-ops and condos in Manhattan. That market has been seeing an uptick recently.

We have FHA and conventional financing. REMEMBER: For FHA financing, the down payment and closing costs can be 100% gifted.

We can go down to 580 FICO, but the file must have compensating factors. There should be no late payments on mortgage refinancing in the last 12 months. For first-time homebuyers, there should be no late credit card payments in the last six months. (Rent checks will be needed for the last 12 months.)

Other Available Loan Programs:
● No-doc loans available on second homes and investment properties (no limit on cash-out).
● Jumbo loan financing up to $10 million (full-doc and no-doc).
● Foreign national lending, up to $2 million (with no traditional credit).
● Commercial loan programs that allow us to go to $50 million (must debt service).
● “Lite” documentation commercial funding to $3 million.

 We have private money programs as well as for quick closings.

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.

Yesterday, Freddie Mac reported that the average rate for a 30-year fixed-rate loan rose to 4.80% this week from 4.78% the previous week. The average rate on a 15-year fixed-rate loan also increased, from 4.05% last week to 4.09% this week. The average rate on a five-year adjustable-rate mortgage rose to 3.70% from 3.69% last week. Last month, the five-year rate was at 3.25%, the lowest rate on record dating back to January 2005. The one-year ARM rate was up slightly from 3.25% to 3.26%.

New home sales reached 329,000 units in December — a 17.5% increase over the previous month at 280,000 units, the Commerce Department reported. The December figure was at its highest level in eight months, but it is 7.6% off the mark from December 2009 figures.

The Mortgage Bankers Association’s index of loan applications fell 13% the week of January 21; both refinancing and purchase applications fell. Refinancing applications dropped 15% to the lowest in 12 months, while purchase applications fell 8.7% to the lowest level since October, the MBA said.

Interest rates for 30-year fixed-rate loans went from 4.46% last week to 4.61%, based on the most recent Freddie Mac survey. In addition, 15-fixed-rate loans averaged 3.96% last week, compared to 3.81% the week before. These rates are at the highest in six month, according to the REALTORMag.com article. Rates for adjustable-rate mortgages also increased.

As mortgage rates go up, yields on government bonds also rise. Investors sell off those bonds, causing their interest rates to go up. A recent Associated Press article suggested that President Obama’s deal with Senate Republicans on postponing tax hikes for the next two years and preserving tax cuts for most Americans.

Economists believe the tax plan will put more money back in Americans’ pockets right away and help the economy get back on its feet. When the economy is stronger, stocks become a more attractive investment than bonds.

The biggest losers, according to the AP article, are those who waited to lock into super-low mortgage rates on their refinancing, thinking rates would fall again. Although these rates are still affordable, they will not be getting that great deal they thought they would be getting.

Following an internet inquiry, Luis called me to offer the services of his company in late September.

After giving me the customary fees charged by his firm and a description of the package he was prepared to offer, we decided to proceed. I was glad to see that we had closed by November 18, 2010!

I was most impressed by Mr.  Figueroa’s professionalism, his thorough knowledge of the complex process of qualifying, his cheerfulness and his speedy resolution of problems as they arose. I have dealt with several other agents earlier and I found Luis in his work with me to be well above what I experienced with the other brokers.

I would recommend him most highly for his professionalism and efficiency.

Phoebus J. Dhrymes

Tuckahoe, NY

The MBA predicts that rates on the 30-year fixed-rate mortgage will average 4.4% in the fourth quarter of 2010, then to 4.7% in Q1 2011 and as high as 5.1% by the end of next year, according to MarketWatch. The organization expects an increase in purchase originations next year, but the mortgage volume for home purchases will be roughly the same as it was two years ago. Refinancing mortgage volumes, however, is expected to fall as mortgage rates start to rise.

Total mortgage volume is expected to be nearly $1 trillion next year, down from an anticipated $1.4 million this year and nearly $2 trillion in 2009, according to MBA forecasts. Foreseeing a slight increase in home sales in the coming year, the MBA says the annual purchase mortgage valuation will be $480 billion by the end of 2010 and $626 billion next year. Mortgage originations for refinancing are expected to take a precipitous drop from $921 billion by the end of this year to $370 billion in 2011.

The MBA also gave its prognostications on the economy. The unemployment rate will increase to 9.9% in the first quarter of 2011, but is expected to decrease to 9.5% at the end of next year and to 8.7% by the end of 2012. The organization also forecast GDP growth of 2.2% in 2010, 2.1 in 2011 and 3% in 2012.