Archives for November 2012

B of A slashes nearly $5 billion in mortgages



As part of a settlement with the U.S. government Bank of America announced today that they have reached the half point in mortgage relief for homeowners which covers 30,000 customers.  In their settlement with the U.S. government, B of A agreed to rework nearly $8 billion worth of mortgage loans for troubled homeowners.  Borrowers have received, on average, a 35% reduction in their monthly mortgage payment.  Many other banks signed on to the settlement which requires banks provide quarterly updates.

A drop in delinquency rates

A new report from from Trans Union says that delinquency rates for mortgage loans have dropped nationwide, especially in California.  This is good news for homeowners that have seen their home values hit hard by a rash of short sales and foreclosures.   According to the report ” The national mortgage delinquency rate — the percentage of borrowers 60 days or more late on their payments — fell to 5.41% in the third quarter from 5.88% in the same period in 2011, said TransUnion, one of the three major credit reporting companies. The rate last quarter was the lowest since the first quarter of 2009, when it was 5.22%”.

Going forward I would expect to see delinquency rates continue their decline as the economy continues with a slow/moderate recovery.  Any sudden shock to the US economy could easily change this.  Mortgage rates should generally stay low with this improvement in delinquency rates as bond yields continue to enjoy record low yields.

Mortgage Interest Rate Update 11.13.2012

Starting off the week, yesterday was a holiday, mortgage rates seem to be flat… significant moves up or down.  The bond market is seeing some buying interest but only at a moderate level.  The recent election is generally seen as “bond friendly” which is good for long term mortgage rates.  The Federal Reserves continues it’s asset purchase program and is buying $40 billion a month of Mortgage Backed Securities (MBS).  Looking out towards the next several weeks we may see a slight up tick in rates right around the Thanksgiving as most lenders operate on a reduced staff.