Great news for everyone ! - More Homeowners Returning to Positive Equity

Thousands of homeowners are seeing improvements in their home equity as the housing market continues its recovery, however, they represent a dent in the surface of total underwater mortgage holders. Approximately 200,000 residential properties returned to a state of positive equity during the fourth quarter of 2012, according to data from CoreLogic.

This brings the total number of properties that moved from negative to positive equity in 2012 to 1.7 million, bringing the total of mortgaged residential properties with equity to 38.1 million.

Despite steady gains in home prices, the number of homeowners who have moved into positive territory is overshadowed by a vast number of those still underwater. Negative equity, often referred to as “underwater” or “upside down,” can occur because of a decline in value, an increase in mortgage debt or a combination of both.

Data show that 10.4 million, or 21.5% of all residential properties with a mortgage were still in negative equity at the end of the fourth quarter of 2012, down from 10.6 million (22%) in the third quarter.

Also of note is that out of the 38.1 million properties with positive equity, 11.3 million have less than 20% equity.

Underwriting constraints may make it more difficult for these borrowers to obtain new financing for their homes, according to CoreLogic. Even more disadvantaged are the 2.3 million properties that had less than 5% equity by the end of the fourth quarter 2012. These “near-negative equity” borrowers are at risk should home prices drop, writes CoreLogic. Under-equited mortgages accounted for 23.3% of all residential properties with a mortgage nationwide in the fourth quarter of 2012, the average amount of equity for all properties with a mortgage being 31%. “The scourge of negative equity continues to recede across the country. There is certainly more to do but with fewer borrowers underwater, the fundamentals underpinning the housing market will continue to strengthen,” said Anand Nallathambi, president and CEO of CoreLogic. “The trend toward more homeowners moving back into positive equity territory should continue in 2013.”

Of the 38.1 million residential properties with positive equity, 11.3 million have less than 20 percent equity. Borrowers with less than 20 percent equity, referred to as "under-equitied," may have a more difficult time obtaining new financing for their homes due to underwriting constraints. At the end of the fourth quarter, 2.3 million residential properties had less than 5 percent equity, referred to as near-negative equity. Properties that are near negative equity are at risk should home prices fall. Under-equitied mortgages accounted for 23.2 percent of all residential properties with a mortgage nationwide in the fourth quarter of 2012. The average amount of equity for all properties with a mortgage is 31 percent.

Finally, Mortgage Applications Pick Up Steam

According to a report in National mortgage news,

After several weeks of application declines, it appears that low interest rates are finally causing an increase in new business.

According to new figures compiled by the Mortgage Bankers Association, loan applications increased on a sequential basis by 6.3% for the week ending Sept. 9. (The figures, which are seasonally adjusted, also take into account the Labor Day holiday.)

Refinance applications continued to dominate, accounting for 77.3% of all new business, compared to 77.1% one week prior.

As expected, consumers continue to favor 30-year and 15-year fixed rate products. MBA found that the average contract rate for a 30-year FRM declined 6 basis points during the week to 4.17%, setting another all time low. Points decreased to 0.94 from 1.04 (including the origination fee) for 80% loan-to-value ratio loans.

MBA tracks activity through its proprietary application index.

Read more - http://www.nationalmortgagenews.com/dailybriefing/2010_431/mortgage-applications-up-1026545-1.html

IL Homes Sales Pick up Nicely

According to a report in National mortgage news,

Existing home sales in Illinois in July were up 18% over the previous year but median prices were down by 4%, the Illinois Association of Realtors reported. The data includes both single-family properties and condominiums.

Even though conditions are good for the home purchase market, until the job situation clears up, a recovery will be difficult, an economist warned.

Geoffrey J.D. Hewings, director of the Regional Economics Applications Laboratory of the University of Illinois, said, "It would seem that until the economy signals a clear rebound—with sustained employment growth of the order of 200,000 jobs added per month—can we expect to see a sustained up tick in housing sales and some modest recovery in prices. Since April, the unemployment rate has not shown any definitive movement."

In the Chicagoland metropolitan area, home sales (single family and condominiums) totaled 6,625 homes, up 19.2% from July 2010 sales of 5,560 homes. The median price in July was $182,500 in the area, down 5.4% from the previous year.

Statewide sales totaled 9,708 homes sold while the median price was $153,000.

Read more visit - http://www.nationalmortgagenews.com/dailybriefing/2010_413/il-homes-sales-pick-up-nicely-1026185-1.html

Mortgage Rates: Regaining Some Ground

According to a report in mortgage news daily,

( Aug/ 8 /2011)
Last week the intense rally in bond markets helped mortgage rates reach their best levels of the year, but the rally came to an end on Friday. Then on Friday evening, news the S&P downgraded the US Sovereign Debt Rating set a chain of events in motion that completely rocked the markets. Despite steep losses in stocks and insane rallies in Treasuries, the Secondary Mortgage Market has been more of a bystander today, leaving Home Loan Borrowing Costs slightly better than Friday, but not as good as Thursday.

CURRENT MARKET*: The BestExecution 30-year fixed mortgage rate is 4.250%. Not many lenders are willing to offer 4.00% but 4.125% is available if you're willing to pay additional closing costs. On FHA/VA 30 year fixed BestExecution is 4.00%. Fewer lenders willing to quote 3.875% (includes additional closing costs). 15 year fixed conventional loans are still best priced at 3.75% and we're still seeing aggressive quotes at 3.625%. Five year ARMs are still best priced at 3.25. ARMs and 15 year quotes seem to have bottomed out.

It's important that we point out an increased amount of variation in what individual lenders are quoting as their BestExecution rates. This is a factor of price volatility in the secondary mortgage market. Unfortunately when volatility picks up in the secondary mortgage market, the cost of doing business gets more expensive for lenders (hedging costs go up). Those added costs are usually passed down to consumers via extra margin in rate sheets.

GUIDANCE: We've realized a good portion of the rates rally we'd been holding out for. And while things could still improve, it's an especially volatile time for the broader markets, meaning lenders have been slow to pass along gains. Mortgage rates DO NOT like volatility and uncertainty. Relative to various market levels, rate sheets are conservative yes, but there's no telling when things will get better, and sadly, always a chance that they won't get better at all. Incidentally, we lean toward the possibility of them getting better, but the timing and flexibility required to capitalize on that possibility makes floating a less attractive choice for most scenarios right now, especially when what's on the table is already so much better than everything else 2011 has to offer and fairly darn close to all time low rates.

Read more just visit - http://www.mortgagenewsdaily.com/consumer_rates/223734.aspx