ABBA First Mortgage News

Rates remain low through these troubling times

September 16th, 2020

For the week ending September 10, Freddie Mac announced that 30-year fixed rates fell to 2.86% from 2.93% the week before. The average for 15-year loans decreased to 2.37S% and the average for five-year ARMs increased to 3.11%. A year ago, 30-year fixed rates averaged 3.56%, over .50% higher than today. “Rates on home loans have hit another record low due to a late summer slowdown in the economic recovery. These low rates have ignited robust purchase demand activity, which is up twenty-five percent from a year ago and has been growing at double digit rates for four consecutive months. However, heading into the fall it will be difficult to sustain the growth momentum in purchases because the lack of supply is already exhibiting a constraint on sales activity,” said Sam Khater, Chief Economist, Freddie Mac.

Are foreclosures on the rise?

September 9th, 2020

CoreLogic is predicting the serious delinquency rate will quadruple by the end of 2021. That pushes up to 3 million homeowners into serious delinquency absent any additional government programs or support. There’s been much said about what the forbearance to foreclosure pipeline might look like once the CAREs ACT forbearance program comes to an end. Much of the sentiment has been optimistic with economists pointing to the record amount of equity that homeowners have these days. Meaning that if homeowners get to the end of the line and find they still can’t pay their mortgages, they always have the option to sell their homes. Also lending to that optimism is the fact that the forbearance uptake is on the decline. CoreLogic’s forecast puts some black clouds on that outlook. “Barring additional intervention from the federal and state governments, we are likely to see meaningful spikes in delinquencies over the short to medium term,” said Frank Martell, president and CEO of CoreLogic, in a press release.

Every little bit helps as rates inch back down again

September 2nd, 2020

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

The typical 1% origination fee or discount point is used when most banks or lenders quote rates unless you are savvy enough to ask for a rate with no points and with no origination fees.  When compared to ABBA First Mortgage, the savings can be seen by obtaining either lower fractional points for the same rate or a better rate if using a higher origination fee or discount point.  Please compare apples and apples when shopping for your best rate and always give ABBA First Mortgage the opportunity to quote you aggressively to earn your business.

For the week ending August 27, Freddie Mac announced that 30-year fixed rates fell to 2.91% from 2.99% the week before. The average for 15-year loans decreased to 2.46% and the average for five-year ARMs remained at 2.91%. A year ago, 30-year fixed rates averaged 3.58%, over .50% higher than today. “This year has been anything but normal and as the uncertainty lingers, interest rates remain near record lows. These rates continue to incentivize potential buyers and the home buying season, which shifted from spring to summer, will likely continue into the fall,” said Sam Khater, Chief Economist, Freddie Mac.

Call 910-332-0650 and ask for Rich Biagini to quote you on your next mortgage inquiry for the best rate and terms.

Fannie and Freddie added a half point fee and then they took it back

August 27th, 2020

On Tuesday afternoon, Freddie Mac and Fannie Mae announced that the implementation the GSEs’ universally hated Adverse Market Refinance Fee would be postponed from September 1 until December 1.

Rumors of the delay surfaced over the weekend, after the Wall Street Journal reported that the Federal Housing Finance Agency had been in contact with mortgage industry groups, many of whom expressed outrage at the fee and its bizarre mid-pandemic timing.

“It was completely uncalled for and at the worst time possible,” Arcus Lending CEO Shashank Shekhar said of the fee. “The economy is tanking, the unemployment rate is near an all-time high, and the only saving grace, financially speaking, is the low mortgage rate.”

Foreclosure crisis in our future?

August 19th, 2020

Just recently, statistics have been released showing the lowest foreclosure rate in history for the first half of this year, according to ATTOM Data Solutions. How can that be true during a deep recession? These low foreclosure rates are actually a function of two different factors. For one, the rate of foreclosures was low before the COVID-induced recession hit. Secondly, the government quickly implemented a moratorium on foreclosures as soon as the economy was shut down.

Eventually we will have to “pay the piper” for this combination of a deep recession and a foreclosure moratorium which will certainly end. The result should be a flood of foreclosures, not only because we will be catching up from the foreclosures which would have occurred without the recession — but also because many who lost their jobs during the recession will not be able to make the payments when they resume.

Will this be the housing crisis of 2008 all over again? Most analysts think not — again because of two reasons. First, a greater percentage of homeowners have equity in their homes, unlike during the Great Recession. Secondly, there is great demand for homes and a shortage of listings today. If you have equity and you can sell your home quickly, you will sell rather than turning it over to the bank. As a matter of fact, this phenomenon may help solve the listing shortage we now have by making more homes available. In conclusion, we will have more foreclosures in the near future. However, a foreclosure crisis is not necessarily a certainty, depending upon how long the economy suffers.

Back to RECORD LOWS ending August 6th

August 12th, 2020

For the week ending August 6, Freddie Mac announced that 30-year fixed rates fell to 2.88% from 2.99% the week before. The average for 15-year loans decreased to 2.44% and the average for five-year ARMs fell to 2.90%. A year ago, 30-year fixed rates averaged 3.60%, almost .75% higher than today. “The resilience of the housing market continues as rates on home loans hit another all-time low, giving potential buyers more purchasing power and strengthening demand. We expect rates to stay low and continue to propel the purchase market forward. However, the main barrier to rising demand remains the lack of inventory, especially for entry-level homes,” said Sam Khater, Chief Economist, Freddie Mac.

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Yikes! Almost 1 out of every 3 Americans didn’t pay their mortgage for the fourth straight month!

August 6th, 2020

For the fourth straight month, nearly one in three Americans missed their housing payments – but the situation could be at least temporarily alleviated through another stimulus package, according to a new study from Apartment List.

As eviction bans expire across the country, 32% of homeowners and renters failed to make their full housing payments on time, according to the study. More than 20% owed more than $1,000.

“In the first week of August, 11 percent of survey respondents made a partial payment of their monthly rent or mortgage bill, while an additional 22 percent have yet to make any payment whatsoever,” study authors Igor Popov, Chris Salviati and Rob Warnock wrote. “This continues a trend that has now lasted four months; the combined rate of missed and partial first-week payments has ranged from 30 to 33 percent going back to May.”

Each month so far, Apartment List found that many missed mortgage and rent payments were made whole with late payments by the end of the month.

The study found that 65% of homeowners with unpaid housing bills worried about facing foreclosure within the next six months, while 66% of renters in the same boat feared facing eviction within that time frame.

“With the recent expiration of most federal eviction and foreclosure protections and a lapse in expanded unemployment benefits, this insecurity is sure to deepen over the coming weeks,” the authors wrote.

At the beginning of August, 8% of homeowners had accumulated missed housing payments of under $1,000, while 11% owed between $1,000 and $2,000 and 13% owed more than $2,000, the study found. Meanwhile, 15% of renters owed their landlords less than $1,000, 11% owed between $1,000 and $2,000, and 5% owed more than $2,000.

“These accumulating missed payments affect renters and homeowners very differently,” the study said. “Some owners can defer payments through forbearance plans or even tack payments missed due to financial hardship onto the end of their loan period. Renters lack these options and the clarity that accompanies them.”

Could stimulus solve the problem?

“As congress continues to debate another round of stimulus, these data serve as an important indicator of the amount of assistance required to get Americans caught up on their housing payments (and potentially save thousands of families from losing their homes),” the study authors wrote.

According to the study, a stimulus check of $2,000 would be sufficient to meet the unpaid rent bills of 83% of renters who are currently behind on their payments. An additional $1,200 payment would alleviate half the nation’s outstanding housing debt.

“That said, a one-time payment does little to alleviate the underlying economic crisis causing this problem, so it is likely that housing debt would again accrue as widespread unemployment continues,” the study said.

From MPA on 8/6/2020

Rates are low once again, just like they were before they went up slightly

August 5th, 2020

For the week ending July 30, Freddie Mac announced that 30-year fixed rates eased to 2.99% from 3.01% the week before. The average for 15-year loans decreased to 2.51% and the average for five-year ARMs fell to 2.94%. A year ago, 30-year fixed rates averaged 3.75%, approximately 0.75% higher than today. “Rates continue to remain near historic lows, driving purchase demand over 20 percent above a year ago. Real estate is one of the bright spots in the economy, with strong demand and modest slowdown in home prices heading into the late summer. Home sales should remain strong the next few months into the early fall,” said Sam Khater, Chief Economist, Freddie Mac.

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

As banks struggle with handling loan volume, rates edge up a bit.

July 30th, 2020

ABBA First has continued to lead the mortgage marketplace in both low rate and excellent service over the past several months since the COVID19 pandemic made its’ ugly presence known.  We’ve seen the market go up and down with rates moving in tandem based on several factors, some of which were never usually considered before.  For the week ending July 23, Freddie Mac announced that 30-year fixed rates rose to 3.01% from 2.98% the week before. The overwhelming requests for new loans has caused a bottleneck with lender’s “turn-times” slowing down.  To offset the influx of new loans which in turn would allow lenders to meet the consumer’s demand, banks simply raise their mortgage interest rates .  The average for 15-year loans increased to 2.54% and the average for five-year ARMs rose to 3.09%. A year ago, 30-year fixed rates averaged 3.75%, approximately 0.75% higher than today. “While housing demand continues to rebound, the month-long swoon in economic activity has caused the 10-year Treasury benchmark to drop. In the short-term, this means the demand will continue on the back of near record low rates on home loans. However, the most recent consumer spending data has been pointing to slow growth since mid-June. The concern is that the pause in economic activity will cause unemployment to remain elevated which will lead to longer-term labor market distress,” said Sam Khater, Chief Economist, Freddie Mac.

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Local housing market bounces back after Covid-19 dip

July 9th, 2020

 

 

SOUTHEASTERN, N.C. — The housing market in the Cape Fear Region has bounced back to pre-Covid-19 summer figures, according to data shared by Cape Fear REALTORS® Wednesday.

Pending sales jumped 56.1% in June year-over-year, up 15% from May.

In April, pending sales took a dip, signifying tentative behavior from buyers as the pandemic continued to impact the local economy. New listings were also down, marking the same behavior out of sellers.

May’s figures indicated sellers were acting more cautiously while buyers are scooping up new listings quickly, possibly motivated by slimmed down inventory and low mortgage rates, according to Cape Fear REALTORS®.

The most recent data from June reflects more typical levels on par with a normal summer season, erasing losses logged in the spring months.

The lack of inventory is squeezing median sale price up 6% to $264,563 in the tri-county region.

“We continue to gain traction in home sales and selling prices while our inventory is low. The pressure on limited inventory is not a new element seen in our market and is one we continue to monitor closely,” Cape Fear REALTORS® president Tony Harrington said in a press release.

Reprinted from Port City Daily News Online