Many Homebuyers Spend More Time Shopping For A TV Than Looking For The Right Mortgage

By Ashlee KielerJanuary 13, 2015

 

 

Potential homeowners might spend months nitpicking and fretting over the features of a seemingly endless series of houses they could buy, but a new report from the Consumer Financial Protection Bureau claims that half of American homebuyers aren’t taking the same care when it comes to shopping around for the right mortgage, often putting themselves in precarious lending situations and missing out on savings.

To combat the rise of the uninformed mortgage borrower the Bureau is releasing a toolkit aimed at helping consumers gain greater control over the outcomes of the mortgage process, while maximizing the benefits of this major transaction.

The latest CFPB report [PDF] found that while it’s true that the mortgage industry is less risky than it was before the housing market crash, there are still varying terms and features that can wreak havoc on consumers’ finances if they aren’t fully informed about the products.

“People may well put more time and effort into shopping for smaller products such as appliances and televisions than they do in shopping for the right mortgage,” CFPB director Richard Cordray says.

“The failure to look around can mean real money lost for consumers.”

Read more here.

HUD Chief Defends FHA Premium Cut, Saying 'It's the Right Time'

U.S. Department of Housing and Urban Development Secretary Julian Castro expressed support for President Barack Obama's plan to cut Federal Housing Administration premiums after Republicans criticized the decision. Republicans pointed out that the FHA's fund remains well short of its statutory minimum. Castro countered that the annual mortgage insurance premium reduction will delay reaching the 2 percent minimum by just a few months. He also told reporters that struggling borrowers who are having trouble obtaining credit need more assistance as quickly as possible.

From "HUD Chief Defends FHA Premium Cut, Saying 'It's the Right Time'"
American Banker (01/09/15) Collins, Brian

Friday Rate Update

Mortgage Rates Continue Dropping

The rate for a 30-year fixed-rate mortgage averaged 3.73 percent this week, down from last week’s 3.87 percent and reaching the lowest level since May 2013, Freddie Mac said yesterday. At this time last year, the 30-year FRM rate averaged 4.51 percent.

This week’s 15-year FRM rate averaged 3.05 percent, down from last week’s 3.15 percent rate. A year ago, the 15-year FRM rate averaged 3.56 percent.

Mortgage Rates Rise Slightly

The rate for a 30-year fixed-rate mortgage averaged 3.87 percent last week, up from the previous week’s 3.83 percent but still near 2014 lows, Freddie Mac said last week. At this time last year, the 30-year FRM rate averaged 4.53 percent.

Black Knight: Mortgage Delinquency Rate Surges to 10-Month High

After holding below 6 percent since February, U.S. mortgage delinquencies came in above that threshold last month. Black Knight reports that the pace increased 12 percent from October, taking it to the highest point in 10 months. The company also noted, however, that foreclosure inventory continues to shrink and is now the smallest it has been since January 2008. Additionally, foreclosure starts are down on a monthly basis to the lowest volume since May 2006.

From "Black Knight: Mortgage Delinquency Rate Surges to 10-Month High"
Housing Wire (12/30/14) Swanson, Brena

The bank will close tomorrow at 2pm and will reopen at 9am Friday morning, January 2nd.  Happy New Year!

Mortgage Lenders Roll Out 3 Percent-Down Loans at Breakneck Pace

The quickness with which lenders have adopted 3 percent down-payment mortgages has been a nice holiday gift for the mortgage industry as well as home buyers. Lenders are able to get the product out there faster because larger numbers of them are selling loans directly to Fannie Mae and Freddie Mac instead of to aggregators or wholesale lenders that then attach their own extra guidelines -- called overlays -- to loan requirements. Also, the qualified mortgage rule has made it easier for lenders to assess quality control, underwriting, and decisions to bring products to market. Still, the mortgage industry will need to make consumers aware that low-down-payment loan products are available in order to take full advantage of the opportunity. "If you want to push it, market it, and get it out there, I think you should absolutely be able to increase your business if you market it to your clients and real estate agents and everybody else," says Michael Deery, president of San Diego-based mortgage brokerage Citywide Financial.

From "Mortgage Lenders Roll Out 3 Percent-Down Loans at Breakneck Pace"
American Banker (12/26/14) Finkelstein, Brad