Delinquencies accelerate in fourth quarter

Some bad news for you, it seems that delinquencies have risen again in the fourth quarter last year from the previous third quarter. At 4.6% this is the highest it has been since over 16 years ago, during the last major savings and loan problems.
In real estate delinquencies were over six percent in the fourth quarter up from 3 percent in the previous year.
What does this mean? People are falling behind on their housing loan payments! Their mortgages are in danger. While this statistic does not reflect the actual foreclosures or bankruptcies, this does indicate some of the things to come. Right? When people fall behind on their payments, that means their mortgages are in peril and what comes next? Foreclosures?

Fixed Mortgage Rates Drop

From Bloomberg:
Fixed mortgage rates in the U.S. fell for a second consecutive week as the Federal Reserve plan to buy mortgage-backed securities helped drive rates lower.

The rate for a 30-year fixed home loan declined to 4.80 percent from 4.82 percent a week earlier, Freddie Mac, the McLean, Virginia-based mortgage buyer, said today. The 15-year fixed rate was unchanged at 4.48 percent.

The Fed said on March 18 it would purchase as much as $750 billion of additional mortgage-backed securities from Fannie Mae, Freddie Mac and Ginnie Mae. The program helped lower rates earlier this month to 4.78 percent, a record low in Freddie Mac data going back to 1971.

“The policy is working,” said Celia Chen, senior director at Moody’s Economy.com in West Chester, Pennsylvania. “Mortgage interest rates are falling to a record low. That will stimulate some buying of homes.”

Sales of previously owned U.S. homes fell in March after jumping a month earlier by the most in more than five years. Purchases decreased 3 percent to an annual rate of 4.57 million, lower than forecast, from 4.71 million in February, the National Association of Realtors said today in Washington. The median price slumped 12 percent from a year ago and distressed properties accounted for about 50 percent of all sales.

The central bank is trying to lower rates by cutting the supply of outstanding mortgage bonds, boosting their price and lowering yields. That would allow banks to reduce the rates on new mortgages and still sell mortgage securities at a profit.

Mortgage Refinance

Fed Plan

The Fed announced a program in November to purchase $500 billion of securities backed buy home loans guaranteed by U.S. mortgage-buying agencies. It’s also buying up to $300 billion in Treasuries to lower interest rates.

U.S. home prices fell 6.5 percent in February from a year earlier, the second-smallest drop in six months and a sign that low mortgage rates may be spurring demand. Prices in February rose 0.7 percent from the prior month, the Federal Housing Finance Agency in Washington said yesterday. The FHFA’s monthly house price index is down 9.5 percent from its April 2007 peak.

The number of mortgage applications in the U.S. rose last week, boosted by an increase in refinancing applications.

Should I Refinance

The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan increased 5.3 percent to 1,172.2 in the week ended April 17, from 1,113.2 the week before. The group’s purchase index dropped 4.2 percent and the refinancing gauge rose 7.7 percent.

Interesting bits

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Read the news carefully today. You never know what you're gonna get. For recommended reading materials on mortgages and refinance aspects and how to fix your deeds or just plain news on real estate, check out the new york times online. It's a very good source of information.