Mortgage Rates Reach 4 Year High
30-year mortgages rates has climbed to the highest number in four years. Some people believe that at the end of this year it could rise as much as 7 percent. Both new homes and sales of existing homes are also plummeted this year.
Freddie Mac, the mortgage company, reported Thursday that rates on 30-year, fixed-rate mortgages averaged 6.49 percent for the week ending April 13. That was up from 6.43 percent last week and was the highest since mid-July of 2002.
Mortgage rates rose as Wall Street investors fretted that an improving jobs climate could drive up wages and thus inflation, analysts said. Those fears were fanned by a government report last week showing the unemployment rate dropped to 4.7 percent in March.
With real estate being so unstable even more than usual, kind of makes me glad that I rent a house and that I don’t own it. Also makes you think twice about buying a home of your own.
Mortgage Lenders and The FSA Join Forces
The Financial Services Authority (FSA) has joined forces with lenders to try and stop the rampage of fraud that has only risen in the last few years. Mortgage fraud is costing everyone in the business billions of dollars annually and it doesn’t look as though it is slowing down anytime soon.
The two are setting up a system in which they hope to reduce the amount of fraud that involves applications handled by intermediaries.
Stephen Bland, Director of FSA’s Small Firms Division:
“We very much appreciate the input and co-operation of the CML and lenders in this important initiative. It is the first time we have used information of this type in this systematic way, and it is an example of our strategy of working with the market to supervise small firms working effectively in practice. Mortgage fraud is a serious matter and can lead to criminal proceedings both for intermediaries and mortgage applicants. We are looking to all lenders to help us in the fight against this practice.”
Michael Coogan, Director General of the Council of Mortgage Lenders:
“We welcome and support this new, co-ordinated approach to collecting information on fraud. We hope that it will make it easier for the FSA to identify systematic suspicion and act quickly upon it.”
Rob Griffiths, associate director of the Association of Mortgage Intermediaries (AMI):
“We’re delighted to support anything that reduces mortgage fraud as fraud is detrimental to the entire industry. AMI takes mortgage fraud very seriously and has produced member guidance in the form of our ‘Fraud Prevention’ factsheet which is available from the AMI website.”
Examples of mortgage fraud include:
Proven Fraud
- Fraudulent documentation, for example bank statements, utility bills, wage slips, Passports, Driving Licenses etc;
- False employment or income details;
- Inconsistent information relating to the same applicant, i.e. various applications made with different incomes/details either to the same lender or lenders within a group.
Suspected Fraud
- Doubts over income and employment details;
- Links with other applicants where fraud is suspected, for example shared addresses, purchases on same development, identical loan amounts etc;
- Links between different mortgage applicants, for example shared bank accounts, and addresses;
- Applications cancelled when further information/verification is requested;
- Suspected fraudulent documentation.
Source: First Rung
Mortgage Brokers Taking A Bigger Bite of the Pie
More than a decade ago most mortgage brokers were taking between 10 to 15 percent of all sales made. But today many are getting more than 30 percent and growing. The ones who get shaking down is always the home buyer of course.
The commercial and industrial mortgage industry is changing rapidly, Mr. Hutcheson says. It has become increasingly sophisticated. Types of financing unheard of a decade ago are prevalent today. To top it off there has been an enormous inflow of money into the mortgage market. Potential lenders far outnumber potential borrowers.
He can see a whole new business for the company’s Canadian operation — earnings fees for helping structure real estate financing.
“In the United States, CB Richard Ellis Capital Markets has become the second-largest mortgage broker in the county,” he says. “Last year alone it handled a third of all commercial and industrial mortgages placed.
Source: Globe Investor
Mortgage Fraud Hits A New High (Or Low)
MarketWatch has a great article on the latest mortgage fraud and what you can do to protect yourself. Law Enforcement believe that most of these frauds would not be possible without an industry insider leading the way.
Often, the borrower is a willing accomplice, but these schemes, which the FBI calls “fraud for profit” and which account for about 80% of mortgage-fraud cases, usually require the work of an industry insider.“It’s hard to perpetrate fraud-for-profit without some kind of third- party professional being involved, whether an appraiser, loan officer, real estate broker — someone to extract the money from the lending channel,” said Mark Fleming, chief economist with CoreLogic, a firm in Sacramento, Calif., which makes tools for lenders to assess fraud risk.
Mortgage Rates The Highest They’ve Been In Two Years
Cnn has reported that mortgage rates have continued to rise and now stand at the highest rates in over 2 1/2 years.
Vice President of Freddie Mac, Frank Nothaft had this to say:
“In the first quarter of 2006, it appears that economic growth picked up relative to the last three months of 2005. There is concern that the continued high level of energy cost may lead to inflation in other sectors of the economy. And fear of inflation leads to higher mortgage rates, like the ones we see this week.”
Mr. Nothaft continued to say:
“Our forecast for the year as a whole is for economic growth of 3.8 percent in 2006, above the 3.2 percent in 2005, which may warrant even more Fed rate hikes than previously expected. If that is the case, mortgage rates may continue their gradual upward trend.“
Dominion and Wells Fargo Now Joint Forces
Dominion Homes Inc. and Wells Fargo Home Mortgage Inc. have sealed the deal which now makes them a joint venture. The new name of this single company will be Centennial Home Mortgage LLC. and will fund mortgages for Dominion customers. The new business will also be handling qualifying borrowers and processing applications which were previously in the hands of Dominion.
Dominion has been dealing with allegations of fraud from customers and Dominion spokeswoman Lori Steiner gave this statement:
“We wanted them to be majority shareholders because we wanted them to be completely responsible for daily operations as well as regulatory compliance.”
Some Weekly Home Mortgage Rates in Major Cities
Bankrate has recently released some numbers showing the average rates for single home families in some major cities in the US. Here are the numbers:
| Apr. 5 Prev. Wk |
| percent+points
|
| Boston 6.51 + 0.21 6.45 + 0.20 |
| Chicago 6.65 + 0.06 6.59 + 0.08 |
| Dallas 6.51 + 0.45 6.44 + 0.53 |
| Detroit 6.59 + 0.00 6.52 + 0.00 |
| Houston 6.49 + 0.52 6.43 + 0.61 |
| Los Angeles 6.55 + 0.39 6.47 + 0.54 |
| New York 6.45 + 0.20 6.42 + 0.22 |
| Philadelphia 6.42 + 0.40 6.33 + 0.55 |
| San Francisco 6.59 + 0.22 6.51 + 0.34 |
| DC Metro 6.35 + 0.71 6.29 + 0.74 |
| National Avg 6.51 + 0.32 6.44 + 0.38 |