REAL ESTATE NEWS

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Mortgage Rate Drop Sparks Refinancing Wave

The Mercury News

Historically low interest rates coupled with a strengthening economy are getting the new year off to a fast start, stirring hopes that the housing and mortgage markets may finally come to life in 2012.

After hovering around 4 percent since September, rates reached an "all-time record" low of 3.89 percent for a 30-year fixed-rate mortgage last week. More first-time buyers are shopping for homes, according to brokers, while those who already own homes and have enough equity are keeping mortgage brokers busy with requests to refinance their loans.

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Fed to Regularly Forecast Interest-rate Changes

San Francisco Chronicle

In a major shift, the Federal Reserve will start announcing four times a year how long it plans to keep short-term interest rates at existing levels, according to minutes from its December policy meeting.

The shift marks the Fed's latest effort to make its communications with the public more open and explicit.

The change is intended to reassure consumers and investors that they will be able to borrow cheaply well into the future. And some economists said it could lead to further Fed action to try to invigorate the economy.

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Amid Squeeze on Home Equity, a Revival for Reverse Mortgages

The Wall Street Journal

Converting home equity into cash has been a challenge for homeowners since the real-estate downturn, but a growing number of lenders are quietly reviving a loan for seniors that does just that: the reverse mortgage.

Reverse mortgages allow homeowners who are at least 62 years old to draw down on their home's equity in exchange for cash in several ways, including one lump sum, a line of credit or monthly payments.

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Pay Off Mortgage Early to Save Money

The Mercury News

Paying off your mortgage might sound like an ambitious plan, especially if you have recently refinanced into a 30-year term. But it's still smart for homeowners to give some serious thought as to how they'll pay off their home loan; if not in 2012, then sometime.

An early mortgage payoff can net substantial interest savings compared to making scheduled payments for 15 or 30 years.

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Home Seizures May Jump 25% Percent This Year

The San Francisco Chronicle

Banks may seize more than 1 million U.S. homes this year after legal scrutiny of their foreclosure practices slowed actions against delinquent property owners in 2011, RealtyTrac said.

About 1.89 million properties received notices of default, auction or repossession last year, down 34 percent from 2010 and the lowest number since 2007, the data seller said Thursday. One in 69 U.S. households received a filing.

While the seizure process has been "highly dysfunctional," there were "strong signs in the second half of 2011 that lenders are finally beginning to push through some of the delayed foreclosures in select local markets," RealtyTrac Chief Executive Officer Brandon Moore said in the statement.

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California House Price Drop 7th Biggest in U.S.

The Orange County Register

California house prices had the seventh-biggest price drop among U.S. states in November, falling 5.9% from year-ago levels, according to Santa Ana-based data firm CoreLogic.

When distressed houses — bank-owned properties and homes selling for less than their mortgages — are removed from the mix, prices were down 0.9% from the previous November.

On the one hand, California no longer ranks among the top five states with the biggest price drops. But six years into the housing market crash, it’s still in the top 10 (See chart at right).

By comparison, the national average price drop was 4.3% including all single-family houses in the nation, and 0.6% when distressed housing was excluded.

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Turning Foreclosures into Rentals

CNN Money

Federal officials hope to launch a pilot program in early 2012 to convert government-owned foreclosures into rental properties.

The program, which was cited by Federal Reserve Chairman Ben Bernanke last week as one way to address the housing crisis, would sell foreclosed homes now owned by Fannie Mae (FNMA, Fortune 500) and Freddie Mac (FMCC, Fortune 500) to investors in bulk. The properties would then be converted into rentals.

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A Good Rental History Can Help Borrowers

The New York Times

IF you’re planning to buy a home for the first time later this year, your chances of qualifying for a mortgage might be better if you’ve had a history of paying the rent on time.

Last year Experian, one of the three leading credit-reporting companies, added a section to millions of credit reports showing on-time rent payments, and raised the credit scores of many people. The company said that this year it would add in negative marks, including mentions of bounced checks or of tenants’ leaving before a lease was up.

Now two other companies, CoreLogic and FICO, are planning a new credit report and score that incorporates payment histories from landlords, as well as payday and other nontraditional loans, child support and, later on perhaps, utility and mobile phone bills.

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State Targets Property-tax Payers

Orange County Register

As many as 5 million California property-tax payers who have been taking the entire amount they pay off their state income taxes could see a major cut in their deductions when they file next year.

Beginning with the 2012 tax bill (the one due in April 2013), the state Franchise Tax Board will require property owners to break down their property taxes into deductible and non-deductible portions.

That means property owners who have been deducting their Mello-Roos fees — often running into thousands of dollars — will no longer be able to deduct those or any other special assessments like vector control or mosquito abatement.

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Five Reasons to Get a New Mortgage in 2012

The Mercury News

Mortgage interest rates, near all-time lows, are likely to remain attractive throughout 2012.

That means opportunities for new homebuyers and for homeowners who want to refinance.

Here are five reasons why you might want to get a new mortgage, and what you should know.

While depressed housing prices and low mortgage rates have made homes more affordable, economic uncertainty and volatile housing markets have discouraged so many homebuyers that mortgage purchase applications dropped to a 15-year low in August, the Mortgage Bankers Association reported.

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Foreclosures Fall to Lowest Level Since 2007

CNN Money

Foreclosure filings and repossessions fell to their lowest level since 2007 last year.

Total filings, including default notices and bank repossessions were down 33% for the year to 2.7 million, according to RealtyTrac, the online marketer of foreclosed properties.

One in every 69 homes had at least one foreclosure filing during the year, while 804,000 homes were repossessed. That's a significant improvement from the peaks reached in 2010 – when 1.05 million homes were repossessed – and the lowest levels seen since 2007.

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More Lenders Added to California Mortgage-aid Program

San Diego Union-Tribune

The number of loan servicers taking part in a state mortgage-aid program continues to grow roughly one year after its launch, said officials from the California Housing Finance Agency.

The Keep Your Home California program, which began in February, now has 55 participating mortgage servicers, up from 21 in June.

The growing list is important because the $2 billion in aid, which aims to help low- to moderate-income homeowners, is contingent on lender participation. Homeowners send their monthly mortgage payments to loan servicers.

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Fed Up with the Depressed State of Housing

The Wall Street Journal

For an institution that jealously guards its independence, the Federal Reserve is wading into treacherous political waters.

With the economic rebound still mediocre at best, the Fed is charging into the housing debate. But in doing so, it runs the risk of politicizing itself, while also sending mixed signals to banks still trying to find their postcrisis feet.

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Survey: Mood Improves on Home Prices

The Wall Street Journal

Consumer expectations for U.S. home prices perked up in December, matching a modest fourth-quarter improvement in the U.S. economy, according to a monthly survey from mortgage market firm Fannie Mae.

For its December reading, Fannie Mae said survey respondents now expect home prices to rise by 0.8% over the next year, up from the 0.2% gain predicted in November.

Views on the direction of the U.S. economy also improved: 22% of respondents indicated a belief that the U.S. economy is on the right track, marking a 6-percentage-point jump from November’s survey.

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