April 06, 2007

Home sweet home, until it isn't

Poof! That's the American dream of homeownership vanishing for those unable to pay their mortgages – leading one major mortgage lender to declare bankruptcy this week. Perhaps Americans need to rethink the merits of this dream.

The US rate of homeownership is at a historic high – 69 percent. But there's no rule that says "countries prosper when 'x' percent of people own homes." Some developed nations have high homeowner rates (Singapore, 91 percent; Spain, 83 percent; Ireland, 77 percent). Others have lower ones (Switzerland, 35 percent; Germany, 43 percent; Denmark, 53 percent).

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Posted by LendingArticles at 08:51 AM |

Gotham’s Mortgage Market

So with all of the tizzy about subprime mortgage defaults, I’m getting deluged with questions from buyers—and sellers, for that matter—about what the mortgage market looks like. Understand that I’m a real estate agent, not a mortgage lender, but I’ll try to make sense of the situation.

The first thing to realize is that New York City isn’t quite like the rest of the country. In some areas nationwide (notably Florida), buyers took out loans that weren’t suitable for them, figuring that they’d refinance as prices went up. And then prices didn’t behave. While New York City buyers may have been betting on the same thing, the first thing to remember is that prices haven’t collapsed here.

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Posted by LendingArticles at 08:50 AM |

Exotic mortgage holders face difficult refinancing

Refinancing a mortgage, suddenly, isn’t such an easy thing to do.

That’s troubling news for some homeowners who bought during the last two or three years using interest-only mortgages, payment-option plans or adjustable-rate mortgages that allowed for quick escalation of the interest rate.

Thanks to an upswing in delinquencies and foreclosures – and new scrutiny from federal regulators and Congress – mortgage lenders have tightened their standards for granting loans. And with home prices rising modestly, if at all, appraisers are tightening their opinions on value. Borrowers stuck with mortgages that are more expensive than they had expected can no longer count on a quick home sale to bail them out of the deal. It’s pay up – or refinance into a loan with better terms.

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Posted by LendingArticles at 08:49 AM |

Suit claims New Century misappropriated mortgage payments

UBS Real Estate Securities Inc. sued New Century Financial Corp. on Thursday, claiming the subprime lender misappropriated millions of dollars from mortgage payments made on loans owned by the investment firm.

In the 14-page filing with the U.S. Bankruptcy Court for the District of Delaware, UBS claims New Century breached the terms of a contract that called for the subprime lender to buy back home loans sold to UBS under certain conditions, such as when borrowers default soon after taking on the loans.

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Posted by LendingArticles at 08:48 AM |

Slight increase in mortgage rates

Mortgage rates crept up this week, although rates on 30-year mortgages still hovered close to their low for the year. Freddie Mac reported in its nationwide survey that 30-year, fixed-rate mortgages rose to 6.17 percent from 6.16 percent last week. Even with the uptick, it was near the low for this year of 6.14 percent, set during the first two weeks of March.

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Posted by LendingArticles at 08:45 AM |