WASHINGTON// Mortgage rates scarcely budge; Fed vote awaited

Rates on 30- year mortgages, after rising for the first time in five weeks, edged down slightly this week.

That compared with 6.37 percent last week when rates had risen after having fallen to a seven-month low of 6.24 percent.

Rates on five-year adjustable-rate mortgages rose to 5.57 percent, up from last week’s 5.56 percent.

The mortgage rates do not include add-on fees known as points. (Read More)

Source: Baltimore Sun

On May 18, 2005, a small Indiana company bought 184 duplex homes in a down-and-out neighborhood in northeast Indianapolis for an average price of $50,000 each. Less than a month later, the company began selling the properties for $120,000 apiece to church secretaries, truckers, retirees and factory workers — sometimes as many as three a day to a single individual — all of them 577 miles away in Martinsville, Va. A week after the details of those suspicious transactions emerged federal investigators are still trying to sort out the scope of what some are describing as one of the largest cases of mortgage fraud in recent years.

The Indianapolis situation may prove to be the most vivid example yet of how the boom in housing has provided fertile ground for mortgage fraud, industry experts and regulators say. And the boom created incentives for the mortgage industry not to look too closely.

As the appetite for home loans soared on Main Street and Wall Street, the industry came to increasingly rely on networks of independent mortgage brokers, appraisers and other officials to keep the lending assembly line well supplied.

William A. Birkle, a county assessor in Indianapolis, caught wind of the home sales in the northeast neighborhood, Windsor Village, when a fraud analyst at Wells Fargo Home Mortgage called last year to ask him about them.

But they believe that the larger problem is that companies too often rely on the representations of mortgage brokers or correspondent bankers without seeking independent verification.

“It’s symptomatic of a faceless origination process,” said Arthur J. Prieston, chairman of the Prieston Group, a consulting and insurance firm that specializes in mortgage fraud.

Countrywide, the nation’s biggest mortgage lender, disputes that it did not do enough to detect any problems earlier, noting that the bank that originated the loans, People’s Choice, was contractually obligated to vet and check the loans.

The Federal Bureau of Investigation estimates that mortgage fraud totaled $1 billion in 2005, up from $429 million in 2004 but still a tiny fraction of the $3 trillion mortgage business. (Read More)

Source: NY Times

Tags: Home Buying, Home Selling, Mortgages, Mortgage, Mortgage News, Real Estate, Real Estate Tips, Real Estate News

JOYCE AND ERIC PETERSEN started renting out their house in Westport, Conn., about four years ago when they realized that they didn’t need to be rooted to one place anymore.

From deciding what should go into storage to finding the right tenant to keeping the yard from becoming overgrown when the gardener suddenly stops showing up, the Petersens have learned a number of lessons in their time as temporary landlords.

And they pay all their bills online because mail forwarding “is not what one would hope it would be.” Taking out a newspaper or online ad may work for owners trying to rent their houses without using a broker, and the popularity of Web sites like Craigslist and Sublet.com have made the process far easier.

Perhaps more important, if the tenant suddenly stops paying rent, you can always go to the broker for help.

Brokers typically run credit checks and ask for letters of reference from employers to screen potential tenants.

He said he planned to run credit and criminal background checks on any serious applicants.

“For a couple hundred dollars, you get a service to run these checks and find out who you’re dealing with,” he said.

Finding someone to run a background check is as easy as a quick search on the Internet.

A criminal check can cost as little as $20 to search criminal records in one state, but they can run as high as $300 for a thorough review that includes nationwide criminal, civil and bankruptcy searches. (Read More)

Source: NY Times

Tags: Home Buying, Home Selling, Mortgages, Mortgage, Mortgage News, Real Estate, Real Estate Tips, Real Estate News

MILLIONS of homeowners have in recent months shifted gears with their mortgages, opting out of adjustable-rate loans to avoid facing the prospect that their interest rates will jump into the stratosphere.

In August, the company, a subsidiary of New York Mortgage Trust, began marketing an ARM that offers borrowers long-term protection against interest-rate increases, while still allowing them to benefit from decreases.

Should the London Interbank index drop, though, the interest rate on the loan would do the same, down to a floor of 4 percent.

After 10 years, the interest rate ceiling would rise to 10 percent.

“But with this, you can basically get a fixed-rate loan and still make the bet that rates will fall.”

Mr. DeLaney said interest rates on the Homeowner Protection ARM will run about a quarter-percentage point higher than standard ARM’s.

With it, borrowers can take a loan for up to $100,000 against the value of their home, with the interest rate fluctuating in accordance with the prime rate.

If short-term interest rates drop, borrowers can convert the loan again to an adjustable rate at no charge.

E. Kennedy Carter, an executive vice president of National City Home Equity, says other lenders offer similar products, but typically with limits on how much, and how frequently, borrowers can convert to fixed rates.

With the increase in short-term interest rates, he said, National City has seen a commensurate increase in inquiries about this product. (Read More)

Source: NY Times

Tags: Home Buying, Home Selling, Mortgages, Mortgage, Mortgage News, Real Estate, Real Estate Tips, Real Estate News

The real price of the home— the price you should pay— is set by the market. Watch for signs the buyer may be willing to settle for a lower price. These include a home that’s been on the market longer than usual, bad winter weather, signs that an owner has already moved out and estate sales.

Earnest money is a deposit that signifies you are serious about the deal.

Builders may be willing to throw in a few free upgrades if that’s what it takes to seal your deal.  (Read More)

Source: The Seattle Times: Real Estate

Tags: Home Buying, Home Selling, Mortgages, Mortgage, Mortgage News, Real Estate, Real Estate Tips, Real Estate News