Mortgage applications increased 15.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 11, 2013.

The Market Composite Index, a measure of mortgage loan application volume, increased 15.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 45 percent compared with the previous week. The Refinance Index increased 15 percent from the previous week. The seasonally adjusted Purchase Index increased 13 percent from one week earlier to the highest level since April 2011. The unadjusted Purchase Index increased 47 percent compared with the previous week and was 5 percent higher than the same week one year ago.

The refinance share of mortgage activity remained unchanged at 82 percent of total applications from the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 3 percent of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) remained unchanged at 3.61 percent, with points decreasing to 0.38 from 0.41 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) increased to 3.88 percent from 3.78 percent, with points unchanged at 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.39 percent from 3.35 percent, with points decreasing to 0.58 from 0.69 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 2.88 percent, with points decreasing to 0.27 from 0.39 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 2.66 percent from 2.64 percent, with points decreasing to 0.34 from 0.37 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

For more information, visit www.mortgagebankers.org.

Mortgage applications increased 7.0 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending January 18, 2013.

The Market Composite Index, a measure of mortgage loan application volume, increased 7.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 8 percent compared with the previous week. The Refinance Index increased 8 percent from the previous week. The seasonally adjusted Purchase Index increased 3 percent from one week earlier and was at its highest level since May of 2010, immediately following the expiration of the homebuyer tax credit. This increase in purchase applications was primarily for conventional loans, as the seasonally adjusted Conventional Purchase Index was at its highest level since October of 2009. The unadjusted Purchase Index increased 9 percent compared with the previous week and was 26 percent higher than the same week one year ago.

The refinance share of mortgage activity was unchanged from the previous week at 82 percent of total applications. The adjustable-rate mortgage (ARM) share of activity increased to 4 percent of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 3.62 percent from 3.61 percent, with points increasing to 0.43 from 0.38 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The contract interest rate for 30-year fixed mortgages has increased for five of the last six weeks. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) decreased to 3.85 percent from 3.88 percent, with points decreasing to 0.34 from 0.38 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA increased to 3.40 percent from 3.39 percent, with points decreasing to 0.53 from 0.58 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.87 percent from 2.88 percent, with points increasing to 0.39 from 0.27 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 5/1 ARMs decreased to 2.61 percent from 2.66 percent, with points decreasing to 0.32 from 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

For more information, visit www.mortgagebankers.org.

Even though Real Estate websites have over one million listings on them, the inventory of available homes around the country is much lower than it should be in a "healthy" economy.  While that's a concern for the housing market as a whole, it's making a dramatic difference for the year. But for how long will this decrease in inventory last? Well, That depends on where you look. Typically, real estate experts consider a "fair" inventory (meaning one that doesn't favor buyers or sellers) to be enough homes to sell in six months' time, at the current selling pace. In some metros, though, the inventory is only a month or so.


According to Realtors’ group last Tuesday "Prices, meanwhile, are picking up because the number of homes for sale continues to drop despite the sales volume gains. The number of homes for sale fell to 1.82 million at the end of 2012, an 8.5% drop from November and a 21.6% decline from one year earlier"

"Here’s a breakdown of why inventory has continued to drop this year:

• Many homeowners are underwater
• Others don’t have enough equity to “trade up”
• Everyone wants to buy at the bottom, but few want to sell
• More purchases from investors of all stripes
• Banks have been slower at foreclosing
• Builders have been putting up fewer homes

See the story behind of these six at wsj.com

Solid gains in both single-family and multifamily housing production resulted in nationwide housing starts rising 12.1 percent to a seasonally adjusted annual rate of 954,000 units in December, according to newly released data from the U.S. Commerce Department. This is the highest level of new home production since June of 2008.

“Builders have become increasingly optimistic about conditions in local housing markets in recent months and this report underscores that the housing recovery is well on its way,” says Barry Rutenberg, chairman of the National Association of Home Builders (NAHB) and a home builder from Gainesville, Fla. “With inventories of new homes at razor thin levels, builders are moving prudently to break ground on new construction ahead of the spring buying season to meet increasing demand.”

“Overall, this report represents a solid ending to 2012 and a promising start to 2013,” says NAHB senior economist Robert Denk. “Multifamily production is almost back to normal levels and while single-family starts still have a way to go, they are gaining momentum. This trend could be even stronger if not for persistently tight credit conditions for home buyers, flawed appraisal values and uncertainties regarding economic policy debates in Washington.”

Single-family housing starts rose 8.1 percent to a seasonally adjusted annual rate of 616,000 units in December, while multifamily production jumped 23.1 percent, to 338,000 units.

Combined single-family and multifamily starts activity was up across all regions in December. The Northeast posted a gain of 21.4 percent, the Midwest was up 24.7 percent, the South posted a 3.8 percent increase and the West was up 18.7 percent.

Permit issuance, which can be a harbinger of future building activity, held virtually steady at a 903,000-unit rate in December. Single-family permits rose for a fourth consecutive month, by 1.8 percent to 578,000 units while multifamily permits declined 2.1 percent to 325,000 units.

Regionally, permits rose 19 percent in the Northeast and 6.6 percent in the West while the South and Midwest posted respective declines of 3.4 percent and 5.7 percent.

For more information, visit www.nahb.org.

David H. Stevens, President and CEO of the Mortgage Bankers Association (MBA), issued the following statement on the final Mortgage Servicing Rules released recently by the Consumer Financial Protection Bureau (CFPB).

“MBA commends Director Cordray and the CFPB for finalizing the mortgage servicing rules, and continuing to produce regulations that enhance transparency and certainty for borrowers and servicers alike. Overall, the objective of this effort is the right one – create one set of rules so that borrowers know how they will be treated and servicers know what is expected of them.

“While we still have not seen the full rule, the information we have seen so far indicates that the CFPB made productive changes to a number of the provisions, many of which were suggested by MBA and other stakeholders and we appreciate the CFPB’s inclusive rulemaking process. As with any rule of this size, the devil is truly in the details, and for servicers, that means how the rules are implemented and operationalized.

“An initial reading of the summary indicates that there are some issues that still concern us. For example, the definition of ‘small servicer’, while improved, may still be too narrow and there may be inconsistencies between the new rules around dual tracking and existing timelines mandated by Fannie Mae, Freddie Mac, FHA and the states.

“We look forward to continuing to work with the CFPB to smooth over the implementation process for these new rules and address any remaining concerns with the new standards.”

For more information, visit www.mortgagebankers.org.

Have you ever picked a color from the myriad of paint samples available, put it on the wall and decided that it was all wrong? It shouldn't have to be that difficult but trying to pick the perfect color from those little swatches is just not that easy.

Painters and decorators suggest you buy a small amount of the colors you're considering. Your paint store should be able to mix them in any brand and any color. Once it's on the wall, it will be easy to determine if it needs to be lighter or darker or if it's completely wrong.

Take them home and paint a 2' x 2' area on the wall. If you're concerned about testing the colors on your wall, you can paint some sample boards that can be easily moved around to see how they'll look with the furniture, floors and other items in the room.

Instead of guessing what it's going to look like, you'll actually see how it looks during different times of the day, in natural and artificial light.

While $30 to $40 a gallon for paint may seem like a lot of money, the cost in time and labor to put it on the wall is even more. It's worth taking the time to test the color on the wall before you buy all the paint needed

Freddie Mac recently released the results of its Primary Mortgage Market Survey® (PMMS®), showing mortgage rates largely unchanged from the previous week helping to keep homebuyer affordability high, refinancing strong and should continue to aid the ongoing housing recovery.

Results showed that the 30-year fixed-rate mortgage (FRM) averaged 3.38 percent with an average 0.7 point for the week ending January 17, 2013, down from last week when it averaged 3.40 percent. Last year at this time, the 30-year FRM averaged 3.88 percent.

Additionally, the 15-year FRM this week averaged 2.66 percent with an average 0.7 point, the same as last week. A year ago at this time, the 15-year FRM averaged 3.17 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.67 percent this week with an average 0.6 point, the same as last week. A year ago, the 5-year ARM averaged 2.82 percent.
The 1-year Treasury-indexed ARM averaged 2.57 percent this week with an average 0.4 point, down from last week when it averaged 2.60. At this time last year, the 1-year ARM averaged 2.74 percent.

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Visit the following links for Regional and National Mortgage Rate Details and Definitions. Borrowers may still pay closing costs which are not included in the survey.

"Mortgage rates were flat to down a little this week amid reports that inflation remains contained,” says Frank Nothaft, vice president and chief economist, Freddie Mac. “The overall producer price index rose 0.1 percent between November and December, below the market consensus forecast, and the consumer price index was unchanged. For the year as a whole, consumer prices rose just 1.7 percent in 2012, almost half that of 2011's increase of 3.0 percent."

For more information, visit www.FreddieMac.com.

Is this the right time to buy a home? If not now, then when? When you get older? Maybe you need to tell tell this to yourself before you get scared away from paying the monthly mortgage. Why would I rent if I can own my home?!

Renting means that home will never be yours anyways... Add to that the growing home market.

"Home prices have finally started to recover in many areas, though they are still low enough to get a deal in many places. And after a period of across-the-board declines, once again "housing markets are very local phenomena," says Stan Humphries, chief economist at real-estate firm Zillow. According to the Standard & Poor's/Case-Shiller index, home prices in October 2012 ranged from down 1.3% in the Chicago area to up 21.7% in the Phoenix area from a year earlier.

Interest rates are hovering around historic lows. Meanwhile, renting—the option for many 20-somethings—is getting more expensive. "

Read more here wsj.com

As wage earners in the United States begin to receive their first paychecks in 2013, they'll likely notice their net pay has gone down. That's because a two-year payroll tax holiday expired on December 31, 2012, and was not renewed as part of the fiscal cliff deal, explains Barry Habib, chief market strategist at Residential Finance Corp (RFC), a nationwide mortgage lender. How can the average American offset the loss in take-home pay? Refinancing a home mortgage is one strategy definitely worth thinking about, Habib says.
Every worker will see a two percent FICA tax increase now that the rate has reverted from 4.2 percent to 6.2 percent. The increase in the FICA tax, which is deducted from workers' paychecks, will cause take-home pay to decrease by $600 per year for workers with an annual income of $30,000. Workers with an annual income of $50,000 will bring home $1,000 less per year, while workers with an annual income of $100,000 will bring home $2,000 less per year.

"While two percent may sound like a modest increase, the toll it takes on discretionary spending is much greater," Habib adds. Consider a couple in which each partner earns $45,000 per year, earning $90,000 combined. They will likely pay $26,000 in taxes, and their living expenses may be in the range of $46,000 a year, he explains. "That leaves a couple earning $90,000 in combined income with $18,000 in discretionary spending. A two percent tax hike resulting in $1800 less per year will feel more like a 10 percent reduction, as they're losing 10 percent of their discretionary income," Habib says.

One practical solution to offset the decrease in income is to refinance a home mortgage, Habib notes. With rates at historical lows, many Americans could benefit by refinancing to a lower interest rate, he says. "Of course, not everyone is qualified to refinance, or is in a position where it makes sense. However, for many homeowners, refinancing their mortgage could more than offset the loss homeowners will feel from the increase in the FICA tax," Habib says.

Habib offers the following tips to consumers considering a refinance:

• Know the Current Value of Your Home
  A drop in your home's value may prevent you from being able to refinance if the equity in the property isn't enough to meet lenders' criteria. "Do some research and speak to a couple of real estate agents on what similar homes in your neighborhood have been selling for to get an accurate valuation. Doing so allows you to make a well-informed decision about whether refinancing is feasible and makes sense, before you spend money on an appraisal or pay any of the other additional fees associated with refinancing," according to Habib.
• An Assumable FHA Mortgage Will Make Your Property More Valuable and Easier to Sell
  Homeowners may want to consider refinancing to an assumable Federal Housing Authority (FHA) mortgage, Habib says. With an assumable mortgage, the home buyer has the ability to take over the existing mortgage of the seller. An assumable mortgage typically raises the value of your home, and will certainly make it more sellable should you decide to sell, he notes. "Selling a home with an assumable mortgage gives you an edge on your competition," Habib says.
• Instead of Giving the Bank Money in Points, Pay Yourself
  Think twice about paying points on a refinance, Habib advises. "It's tempting to see how low a rate you can get by paying more points, but you need to consider the cost of the money you're spending today," he says. Instead, Habib suggests homeowners think about using the money to reduce the principal on their mortgage. For example, on a $200,000 mortgage, rather than paying three points or $6000, the homeowner could pay their mortgage down to $194,000. "While your rate will be higher, your payment is based on a smaller principal amount, so you'll spend less on your mortgage in the long run," Habib says.
• Refinance to a 15- or 20-Year Loan
  Strongly consider refinancing to a 15- or 20-year mortgage. "With today's low interest rates, you may find that your mortgage payments are pretty darn close to what you're paying now," Habib says. "With a shorter loan term, so much more of your payment is going toward principal, that even after a couple of months, you're realizing a benefit. "Homeowners who are able to refinance to a mortgage with a shorter term build a much greater amount of equity in their homes as time goes on, he adds.

Source: http://www.ResidentialFinance.com

Fannie Mae issued approximately $10.8 billion of multifamily MBS in the fourth quarter of 2012, backed by new multifamily loans delivered by its lenders. Total issuance for 2012 was $33.1 billion, which was up from $23.8 billion in 2011. Fannie Mae also resecuritized $2.2 billion of DUS® MBS through its Fannie Mae Guaranteed Multifamily Structures (Fannie Mae GeMSTM) program in the fourth quarter, bringing the total GeMS issuance for 2012 to $10 billion.

“Market activity for our securities was robust in 2012 with total issuance topping $33 billion,” says Kimberly Johnson, Senior Vice President of Multifamily Capital Markets, Fannie Mae. “Issuance was particularly strong in the fourth quarter, in part due to the Fed’s aggressive bond-buying program, which has helped to keep borrowing costs at record lows. Private-sector lending has shown signs of growth as well, adding liquidity for all market participants.”

The company’s DUS MBS securities provide market participants with highly predictable cash flows and call protection in defined maturities of five, seven and ten years. Fannie Mae’s GeMS program consists of structured multifamily securities created from collateral specifically selected by Fannie Mae Capital Markets. Features of Fannie Mae GeMS have included block size transactions, collateral diversity and pricing close to par through Fannie Mae’s multifamily REMICs (ACES®) and multifamily Mega securities.
Highlights of Fannie Mae’s multifamily activity in the fourth quarter of 2012 include the following:

1) Multifamily MBS Backed by New Multifamily Acquisitions
New multifamily MBS business volumes in the fourth quarter of 2012 totaled approximately $10.8 billion.

2) Fannie Mae GeMS & Aces Issuance
Issuance of Fannie Mae’s structured multifamily securities created from collateral selected by Fannie Mae Capital Markets totaled $2.2 billion in the fourth quarter of 2012. This includes two Fannie Mae GeMS REMIC transactions. In addition, dealers issued three multifamily REMICs backed by $1.1 billion of DUS MBS in the fourth quarter of 2012, adding to the liquidity of Fannie Mae DUS MBS. The combined Fannie Mae GeMS and ACES issuance backed by DUS MBS was $13.9 billion in 2012.

3) Fannie Mae Sales
Fannie Mae Capital Markets sold approximately $1.9 billion of multifamily mortgage securities from its portfolio in the fourth quarter of 2012.

For more information, visit www.fanniemae.com.