Daily Archives: January 6, 2012

Freddie cuts some refi credit score requirements | North Salem Real Estate

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Thursday, January 5th, 2012, 6:04 pm

Freddie Mac eliminated the minimum credit score requirement for borrowers seeking a mortgage refinance from their existing servicer, as long as they have at least 20% equity in their home, according to guidance released Thursday.

The change goes into effect for any refinances with a settlement date on or after Jan. 5. Previously, Freddie required at least a 620 credit score before allowing such a high-equity refinance to take place.

In October, the Federal Housing Finance Agency instructed Fannie Mae and Freddie to remove barriers to allow more borrowers to take advantage of historically low interest rates through the Home Affordable Refinance Program.

Rates on most mortgage products began 2012 still below 4%. The government-sponsored enterprises removed upfront fees, limits on loan-to-value ratios and certain representation and warranty risk on the old loan file.

The GSEs took other steps since to fuel even more refis. In December, Fannie eliminated the requirement on lenders to determine the borrower’s ability to repay. The reasoning behind the new policy changes was to help more underwater borrowers stay current on their loans. With the latest adjustment Thursday, Freddie is targeting borrowers with high levels of equity as well.

In November, a group of Senators sent a letter to President Obama urging the administration to expand the changes to make it easier on borrowers with high levels of equity to refinance as well.

“Not only is this an issue of fairness, but applying these measures to higher equity borrowers makes good business sense,” wrote Sens. Barbara Boxer, D-Calif., and Johnny Isakson, R-Ga., who led the letter.

Fannie and Freddie refinances spiked in September, according to the FHFA. More than 263,700 GSE mortgages refinanced that month, up from 197,000 the month before. It was the highest total since March.

But the overwhelming majority of refinances came on high-equity loans. Of the refinances in September, only 35,000 had LTVs above 80%.

Roughly 4 million Fannie and Freddie loans are underwater.

Write to Jon Prior.

Follow him on Twitter @JonAPrior.

via housingwire.com

Mount Kisco Real Estate | 30-year Fixed-rate Mortgage Matches All-time Record Low – Jan 5, 2012

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30-year Fixed-rate Mortgage Matches All-time Record Low

MCLEAN, Va., Jan. 5, 2012 /PRNewswire/ — Freddie Mac (OTC: FMCC) today released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates starting the year at or near their all-time lows. The 30-year fixed averaged 3.91 percent matching its all-time record low amid recent data showing signs of improvement in the housing market and manufacturing industry. This marks the fifth consecutive week the 30-year fixed has averaged below 4.00 percent.

News Facts

  • 30-year fixed-rate mortgage (FRM) averaged 3.91 percent with an average 0.8 point for the week ending January 5, 2012, down from last week when it averaged 3.95 percent. Last year at this time, the 30-year FRM averaged 4.77 percent.
  • 15-year FRM this week averaged 3.23 percent with an average 0.8 point, down from last week when it averaged 3.24 percent. A year ago at this time, the 15-year FRM averaged 4.13 percent.
  • 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.86 percent this week, with an average 0.7 point, down from last week when it averaged 2.88 percent. A year ago, the 5-year ARM averaged 3.75 percent.
  • 1-year Treasury-indexed ARM averaged 2.80 percent this week with an average 0.6 point, up from last week when it averaged 2.78 percent. At this time last year, the 1-year ARM averaged 3.24 percent.  

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following links for Regional and National Mortgage Rate Details and Definitions. Borrowers may still pay closing costs which are not included in the survey.

Quotes

Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac.

  • “Fixed mortgage rates started the year a little lower this week just as recent data reports indicate the housing market and manufacturing industry are showing signs of improvement. Pending existing home sales in November jumped 7.3 percent, nearly five times greater than the market consensus forecast, to its strongest pace since April 2010. In addition, construction spending rose 1.2 percent in November, supported by the residential sector which exhibited its fourth consecutive monthly increase. Similarly, manufacturing expanded in December at the fastest pace in six months.”

Get the latest information from Freddie Mac’s Office of the Chief Economist on Twitter:@FreddieMac

Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.

SOURCE Freddie Mac

For further information: CONTACT: Chad Wandler, +1-703-903-2446, Chad_Wandler@FreddieMac.com

via freddiemac.mediaroom.com