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December 12th, 2010 (Modified on December 14th, 2010)

Weekly Recap (12/06/10-12/11/10)

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Calender1 Saturday

5 keys to buying a bank-owned property

Last week we shared advice for those of you considering buying a foreclosure. Yesterday we shared some tips for those looking to buy a short sale property. As part of the “distressed real estate package” we created here at HSH.com, it’s about time we talk about real-estate owned (REO) properties as well.

What exactly is an REO property?

An REO is a property that has reverted to the mortgage lender after an unsuccessful foreclosure auction. REOs are a large part of the housing market these days. In September 2010, distressed properties — many of them REOs — accounted for nearly 48 percent of home-purchase transactions, according to the Campbell Inside Mortgage Finance Survey…

Friday

Is a ’short sale’ worth my time and effort?

If you’re a homebuyer in today’s market, you’re bound to encounter at least some short sale properties in the search for your new home.

Short sales differ from most home purchases in almost every way. At every step, from shopping to negotiating to mortgage financing, short sale properties are just harder to deal with. Here’s what you need to know.

What is a “short sale?”

A “short sale” indicates that the sales price of the property is less than the amount the former homeowner owed against it. With so many American homes underwater, it’s a common sight in real estate listings these days. But a short sale does not mean a screaming deal for the homebuyer — at least, not necessarily. Just because the mortgage lender is probably taking a loss doesn’t mean that the property is priced way below market value…

Thursday

Why are mortgage rates rising?

By now you know that mortgage rates are rising — three out of our four blog posts this week discussed the fact. Amy Hoak of MarketWatch.com just wrote an article titled “Mortgage rates jump to six-month highs.”

But, why are mortgage rates rising? There’s not just one answer, there are a couple other factors in play:

1. If the economy is really starting to improve, and with the Fed’s QE2 program expected to help it improve some more, we could be in for a much firmer recovery than was expected just a couple of months ago. The result: higher rates.

2. There was a lot of new Treasury supply hitting the market this week, explains HSH.com’s VP Keith Gumbinger, which met tepid demand (probably due to investors looking to lock in positions/gains for the end-of-year period…

Wednesday

Mortgage rates continue to rise

For the last few weeks I’ve been reporting that mortgage rates are rising. Today was no different. At the close of business today, the 30-year conforming fixed-rate mortgage increased to 4.78 percent, up from last week’s average of 4.62 percent. This is well above our most recent low of 4.32 percent back on October 22, 2010.

Concerned about rising mortgage rates? If so, be sure to read “What to do when mortgage rates are rising”…

Fannie, Freddie in talks to reduce underwater principal

The White House is beginning to apply additional pressure on Fannie Mae and Freddie Mac to reduce the principal balance of certain underwater homeowners. The underwater crisis, triggered by a massive falloff in home prices, has led to record-setting foreclosures and strategic defaults.

So far, Fannie and Freddie haven’t expressed any interest in participating in the latest wrinkle of the Treasury’s Making Home Affordable program, a principal-reduction initiative called the “Principal Reduction Alternative“…

Tuesday

Worried about rising mortgage rates? Perspective is important

Mortgage rates have been ticking upwards over the last few weeks. Since mid-October, mortgage rates have risen about thirty basis points, a small take-back after a near year-long decline:

Last week, the average rate for 30-year fixed-rate mortgages moved eight basis points higher (.08%), ending HSH.com’s national survey at 4.86%, its highest value since early August…

Monday

Mortgage rates rise last week

Mortgage rates have been rising for the last few weeks, and that upward trend continued last week. While improving economic conditions are providing the foundation for firming rates, last week’s unemployment report did keep mortgage rates from rising even more than they did.

In addition to improving economic conditions was a rising 10-year Treasury yield which also helped push rates upward:

The 10-year Treasury, a benchmark for fixed-rate mortgages, crested above 3% [last] week, and has risen by nearly a half-percentage point from November’s daily low. In fact, the yield is the highest since July, and mortgage rates are following right along. Some dreams of low-rate refinancing have come to an end, at least for the moment…

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One Response to “Weekly Recap (12/06/10-12/11/10)”

  1. Tweets that mention Weekly Recap (12/06/10-12/11/10) | HSH Financial News Blog -- Topsy.com Says: December 12th, 2010 at 12:59 pm

    [...] This post was mentioned on Twitter by REOGoldminer, Boise Home Loans, boise mortgage, Mario, John Carmine and others. John Carmine said: Mortgage & Housing Market News from HSH.com: REOs are a large part of the housing market these days. In Septembe… http://bit.ly/dUSh82 [...]

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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