Mortgage rates bloom despite Fed's gloom

"A Greek default is not scaring people as much as it used to," he says. "It's like, if you talk about something enough, you get used to it, even if it's bad. They keep kicking the can down the road, but nothing is actually happening yet."Sinnott says this week's rate increase already affected the volume of refinance applications.The volume of mortgage applications declined 5 percent last week, compared to the previous week, according to the Mortgage Bankers Association.Higher fees add pressure to ratesAnother factor adding pressure to rates is a recent increase in fees Fannie Mae and Freddie Mac charge lenders. That increase will get passed on to borrowers and will translate into about an eighth to a quarter of a percentage hike in interest for a 30-year fixed mortgage.But Fed wants low ratesThe Fed isn't as optimistic about the economy, and it's determined to keep rates low."While indicators point to some further improvement in overall labor market conditions, the unemployment rate remains elevated," read the Federal Open Market Committee's statement on Wednesday. "Household spending has continued to advance, but growth in business fixed investment has slowed, and the housing sector remains depressed."The Fed says it will keep the key federal funds rate near zero until late 2014. Previously, it had committed to keeping the rate low until mid-2013. While the federal funds rate isn't directly tied to mortgage rates, it influences their direction.It also will continue to reinvest in long-term securities and mortgage-backed securities, which is another way to keep rates low.David Kuiper, a mortgage planner at First Place Bank in Holland, Mich., says he doesn't foresee higher rates anytime soon."People still see investing in the United States as a safe haven," he says. "But you don't want to take a chance."That's especially true for homeowners who have rates in the 6 percent or 7 percent range."If they lock now, they are still so ahead of the game," he says.Powered By iWebRSS.co.cc

Mortgage rates 'to be volatile'

27 January 2012 Last updated at 06:58 ET Brokers are revelation new borrowers to expect mortgage rates to fluctuate in the coming months, owing to economic uncertainty. A number of vital lenders have increased the cost of a mortgage for new borrowers in recent days. Brokers suggest that the increased activity is likely to be followed by an "ebb and flow" in the mortgage market in the first half of 2012. Lenders are concerned about the cost of funds to lend in the current climate. Uncertainty in the eurozone means that they do not want to overstretch themselves with lending, when there is a chance that accessing funds could become more expensive. 'Shop around' In recent days, some of the vital lenders have increased their mortgage rates by up to 0.3 percentage points. Others have changed the loan-to-value bands, so borrowers might not always get a cheaper deal by offering a larger deposit. "It really does pay to shop around at the moment if you are looking for a mortgage as some lenders are much more expensive than others," said Aaron Strutt, of Trinity Financial. Lenders tend to move as a herd, as they do not wish to be inundated with mortgage applications if they suddenly become cheaper than their rivals. Andrew Montlake, of mortgage broker Coreco, said: "We are going to see a period in which the Bank rate remains stable, so lenders will manage the business they want by increasing or decreasing their rates." A few lenders have reduced mortgage rates for new borrowers in recent days. He predicted that this volatility would continue for the first half of the year at least, until there was a clearer picture in the eurozone crisis. Long-term costs for lenders have risen, he said, owing to uncertainty as a resul! t of the crisis. Powered By iWebRSS.co.cc

Mortgage deal draws detractors from all sides

In this Sept. 14, 2010 file photo, a house in Homestead, Fla. sits empty, for sale as a foreclosure home in a neighborhood where half of the houses were empty and up for foreclosure. A draft settlement between states and mortgage companies that would let the nation's biggest banks pay out billions to compensate for a raft of foreclosures has public interest groups across the political spectrum hopping mad over a deal they say was forged behind closed doors and is being strong-armed by the Obama administration. The draft proposal, which was sent to state officials Monday for approval, is supposed to overhaul the mortgage industry and help homeowners. In it, the country's five largest mortgage lenders offer to pay out as much as $25 billion to cover new terms for homeowners driven out by foreclosure. But people who lost their homes are unlikely to get them back or see much financial benefit from the deal. Advocates and watchdogs on both sides of the political aisle are fighting the deal, although for very different reasons. On the left, complaints about the agreement being pushed by the administration center on whether the federal government is letting the banks off the hook for a foreclosure crisis that critics say could've been avoided had the banks been more upstanding about their deals. However, President Obama's supporters also credit him for his plans to launch an investigative unit on abusive lending to be led by the Justice Department, a move announced in the State of the Union Tuesday night. The argument from the other side claims the administration is trying to fast track a deal that amounts to extortion of banks that followed federal government rules to expand access to loans. Judicial Watch announced this week that it is suing the Department of Justice and the U.S. Department of Housing and Urban Development in an effort to get more information about the settlement offer and the audits that purport to prove the banks defrauded consumers.
! 3;"What' s going on here is there's this really incredible pressure that's being brought to bear on the banks," said Tom Fitton, president of Judicial Watch. "All Americans deserve to know the full truth about the Obama administration's effort extort $20 billion from the nation's banking industry." Fitton said selective leaking of information related to the settlement amounts to a "gangster government." "This is another game on secrecy the Obama administration is playing," Fitton told FoxNews.com. "It is this type of gamesmanship that has resulted in the Obama administration's transparency crisis." Liberal groups like Moveon.org and Campaign for America's Future are criticizing the Obama administration for agreeing to what they say is a weak deal that doesn't hold banks accountable. Color of Change is circulating a petition asking Obama and Attorney General Eric Holder to "reject a settlement deal that lets Wall Street banks off the hook, protecting them from legal prosecution, and instead, push for a full investigation, compensation to homeowners and real accountability for those responsible." At Obama's State of the Union Tuesday night, the president said he was having the Department of Justice create a special unit federal prosecutors and state attorneys general to expand investigations "into the abusive lending and packaging of risky mortgages that led to the housing crisis." "This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans," Obama said. The president's supporters called the investigation a "clear victory" for those allegedly cheated by the system, but warned the draft settlement "must not infringe" on that probe. The outcome must also include a "guaranteed minimum amount of money set aside for reducing the mortgage principal of 'underwater' homeowners in key states impacted by the foreclosure crisis." said MoveOn Executive! Directo r Justin Ruben. State officials first learned the details of the draft settlement on Monday, and Iowa Attorney General Tom Miller, who is leading the settlement negotiations, said the states "won't reach a settlement any time this week." While the deal includes changes in foreclosure practices -- a major goal of the Obama administration -- a little states are not receptive because they are concerned about being able to pursue separate claims, situation the administration would like to avoid. New York Attorney General Eric Schneiderman and Delaware Attorney General Beau Biden last year started their own investigation in to the mortgage crisis. Massachusetts Attorney General Martha Coakley in December sued five national banks for their role in the foreclosure crisis. On Wednesday, Schneiderman would not indicate how close the two sides are to a deal on the latest proposal. "Well my concern has always been to make sure that we're not releasing claims that obviously are now even more important than me, because I'm investigating," New York Attorney General Eric Schneiderman said Wednesday. Monday evening, the director of the Delaware attorney general's fraud division said Biden is "opposed to the proposed settlement as drafted." "This position, given his prior public comments, should come as no surprise," spokesman Ian McConnel said in a written statement. "The settlement is currently confidential and when it is made public he will speak more specifically about it." The attorneys general of California and Nevada late last year also launched a joint investigation in to "misconduct and fraud in the mortgage industry." "The mortgage crisis is a law enforcement matter, and we will prosecute to hold accountable those who are responsible and also protect the homeowners who are targeted for fraud," California Attorney General Kamala Harris said in December. A banking executive familiar with the talks told Fox Business Network t! his week that the five banks and the attorneys general want California in on the agreement because the state is home to many foreclosures and lawsuits there could get expensive. According to terms of the deal, the five major banks -- Bank of America, JPMorgan Chase, Wells Fargo, Citibank and Ally Financial -- would apply the settlement only to privately held mortgages issued between 2008 and 2011. Powered By iWebRSS.co.cc