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US fixed mortgage rates rise | Live Stock Trading News | Equities …

www.livetradingnews.com2/25/12

US fixed mortgage rates rise from historic lows US fixed mortgage rates this week increased from the previous week's record lows as the housing market.

30-Year Fixed Mortgage Rate Rises to Highest Rate in Four Weeks …

www.zillow.com2/21/12

Mortgage rates for 30-year fixed mortgages fell this week, with the current rate borrowers were quoted on Zillow Mortgage Marketplace at 3.76 percent, up from.

The Federal Reserve Bank’s plan to buy mortgage-backed securities in order to drive down interest in the U.S. appears to be working, as fixed mortgage rates fell for a second consecutive week, and the number of mortgage applications rose, boosted by an increase in refinancing applications.

Freddie Mac reported that the rate for a 30-year fixed home loan fell to 4.80 percent from 4.82 percent a week earlier, whilst the 15-year fixed rate remained unchanged at 4.48 percent.

The central bank is attempting to drive down interest rates by cutting the supply of outstanding mortgage bonds, thereby boosting their price and lowering their yields, thus allowing banks to reduce their rates on new mortgages, whilst continuing to sell mortgage securities at a profit.

Celia Chen, who is the senior director of Moody’s, Economy.com commented, “The policy is working. Mortgage interest rates are falling to a record low, which will stimulate some buying of homes”.

The not so good news is that sales of previously owned U.S. homes fell in March, after climbing by the biggest amount in more than five years just one month earlier.

Purchases decreased by 3% to an annual rate of 4.57 million, which was lower than the 4.71 million which was forecast, and prices were down 12% from a year ago, with distressed properties accounting for about 50% of all sales.

The Treasury Department finally announced on Wednesday, April 4th the names of the first six banks that will get massive government subsidies.

The names of banks and what they’ll be getting are;

• JPMorgan Chase – $3.6 billion in subsidy and incentive payments
• Wells Fargo – $2.9 billion
• Citigroup – $2 billion
• GMAC Mortgage, $633 million
• Saxon Mortgage Services, $407 million
• Select Portfolio Servicing, $376 million

The government’s program was announced on February 18th but specific details have only just become available, and the delay caused major frustration amongst housing counselors and distressed homebuyers.

The stated aim of the program is to help as many as nine million borrowers to stay in their homes, and Wells Fargo recently said in a statement, “We view this modification program as yet another incremental opportunity for thousands of homeowners to preserve and maintain the dream of homeownership”.

The two-part plan requires servicers to either reduce monthly payments to no more than 31% of an eligible borrower’s pre-tax income, or to refinance eligible mortgages, even if the homeowner has little or no equity.

The government has so far allocated $75 billion, to subsidize a part of the payment reduction, and it will also provide tens of thousands of additional dollars in incentives to participating servicers and borrowers.

Servicers will receive $1,000 for each loan modification, plus another $1,000 a year for three years if the borrower stays current. On top of this, the government will provide an additional $500 to servicers, and $1,500 to mortgage holders if they modify their at-risk loans before the borrower falls behind.

Homebuyers will get up to $1,000 a year for five years if they keep up with their payments, and the money will be used to lower their loan principals.

When asked “Where all this money come from?”, Treasury spokesman Andrew Williams answered, “We’re confident we’ll have enough money”.