Thursday, January 29, 2015

Recognizing the hallmarks of an online rental scam

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Be aware that rental scams exist. While Craigslist is a widely accepted way to find rentals it may be safer to go with a real estate agent. It's a good idea to view a property in person and meet the landlord or their agent before sending over any monies. Below is a typical situation that illustrates a possible scam. Please be safe and smart out there.

Recognizing the hallmarks of an online rental scam

My boyfriend and I have been saving up to move into a place of our own, but we are having difficulty contacting our new landlord.


We found an apartment listed on Craigslist and sent an email indicating our interest. The landlord responded by telephone and told us that, although he was out of town on business, we were free to stop by and take a look at the apartment. We drove by, decided we loved the place and called him to let him know we wanted to be his tenants.

His attorney shortly thereafter sent us a one-year lease agreement. We signed the lease and paid him first and last month's rent, using an online cash card because the landlord was out of town and he had indicated that an immediate move-in required prompt payment.

Now we are receiving calls from the landlord's attorney saying that we must send additional money as a security deposit before they will transfer the keys to us. Should we send the deposit even though we don't think the lease requires it?

Wednesday, January 21, 2015

Falling mortgage rates spur surge in home loan applications

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With mortgage rates continuing to fall it has many borrowers finally making the move to purchase a home. Home loan purchase applications soared 24% for the week ending Jan. 9. With 30 fixed loan rates at a low 3.66% makes buying a home more enticing as well as affordable. Even people who have refinanced in the last year are thinking of doing it again too. Refinancing applications jumped 66%. For now, borrowers are taking advantage of the low rates.

Falling mortgage rates spur surge in home loan applications

Low mortgage rates spur home loan boom 

Given the weakness in global economies, mortgage rates are likely to stay low for the near future, experts say. That should help spur home sales by making housing more affordable. Above, a home for sale in Alameda, Calif., in July. (Ben Margot, Associated Press)

Applications for home loans soared 49% for the week ended Jan. 9, according to the Mortgage Bankers Assn., the largest pop since 2008. The jump from a week earlier came from a 66% increase in refinances, and a 24% gain in purchase applications.

And the surge could continue. Mortgage finance giant Freddie Mac said lenders on average were offering a 30-year fixed loan at 3.66% last week, compared with 3.73% a week earlier, and 4.41% from the same time last year.

"Our business is exploding," said Jeff Lazerson, president of the Mortgage Grader brokerage in Laguna Niguel. "We can't write deals fast enough."

The mortgage rate decline has defied forecasts. The average on a 30-year fixed loan ended 2014 at 3.87%, a far cry from the 5% many experts predicted. Concerns over slowing economies overseas have caused investors to rush into safer U.S. Treasury securities and government-backed mortgage bonds, which has put downward pressure on mortgage rates.
The rates over the last two weeks were the lowest since May 2013, when they started to rise and choked off a refinance boom. The latest drop in rates has led to a boom in applications once again, local mortgage professionals say. Two weeks ago — the latest data available — the volume of applications was the most since August 2013.

"A lot of people who refinanced in the past year are calling again," said Richard T. Cirelli, head of RTC Mortgage Corp. in Laguna Beach. "So far it looks like a very good year for people refinancing, as well as people that are buying."

Given the weakness in global economies, mortgage rates are likely to stay low for the near future, said Stuart Gabriel, director of UCLA's Ziman Center for Real Estate. That should help spur home sales by making housing more affordable, he said.

"There is very low probability of rising mortgage rates in the very near future," he said.

Many industry leaders, including the Mortgage Bankers Assn., have predicted rates on a 30-year-fixed loan to climb to about 5% by the end of 2015 as the U.S. economy improves and the Federal Reserve makes an expected increase to its short-term interest rates.

However, those predictions came before the most recent drop-off in mortgage rates amid increasing concerns with economies abroad. Although the U.S. economy appears to be strengthening, Asia and Europe have been struggling with lackluster growth.

"It is very difficult to conjure up a scenario of 5% any time this calendar year," Gabriel said.
But as the U.S. economy improves, rates could trend higher, though not significantly, said Keith Gumbinger, vice president of, which tracks mortgage rates.

"We started 2014 in the 4.6% range. It may be a struggle to even get to that level this year," he said.
But even if rates stay low, it's uncertain if there will be a continued surge in applications.

Guy Cecala, publisher of Inside Mortgage Finance, said many homeowners have already refinanced in recent years, limiting the number of people who would benefit from low rates. He added that low rates don't spur purchases as much as other factors, such as income or wage growth.

"I don't think there is any question it's going to spur refinance and home purchase activity," he said. "It's just a question of how much."

In December, the nation posted solid job growth, making 2014 the best year for hiring since 1999. However, wage growth — a stubbornly lacking part of the economic recovery — was missing. Average hourly earnings for all private-sector workers fell 5 cents from November.

For now, however, borrowers are looking to take advantage of low rates that many thought were history.

One of those is Gary Lynch.

The 33-year-old utility worker started looking for a house in December after a hiatus of several months, in large part because of the cheaper cost of borrowing. He said he now feels a sense of urgency and had planned a busy Saturday with his wife in the Temecula area, where he lives.
"We are going to be looking at 30 different houses," he said.


Thursday, January 15, 2015

Average rate on 30-year mortgage falls to 3.66%

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Mortgage rates still falling and at lowest level since May 2013.

Average rate on 30-year mortgage falls to 3.66%

APphoto_Mortgage Rates 

Home for sale in Charlotte, N.C. Freddie Mac says the nationwide average for a 30-year mortgage slid to 3.66% this week from 3.73% last week. (Chuck Burton / AP)

Mortgage company Freddie Mac says the nationwide average for a 30-year mortgage slid to 3.66% this week from 3.73% last week. The rate for the 15-year loan declined to 2.98% from 3.05% last week.

The ongoing decline in rates lured a crop of prospective buyers, as applications for mortgages marked their biggest weekly gain last week in over six years. Applications jumped 49.1%, the biggest weekly increase since November 2008, according to the Mortgage Bankers Association.




Home sales perk up in Southern California as price gains slow

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Home sales volume picked up around 4.3% compared to the same month a year ago. This may be a sign the Southland's housing market recovery is finally reaching more people as prices have stabilized allowing more would be buyers to find a home they can afford. The improving economy and still historically low interest rates contribute to affordability as well.

Home sales perk up in Southern California as price gains slow

Wednesday, January 7, 2015

FHA to lower cost of mortgage insurance


Relief is on its way for those borrowers who are subject to FHA mortgage premiums as costs decrease. This should increase the purchasing power for borrowers. That is welcome news.

 FHA to lower cost of mortgage insurance 

CNNMoney's 2015 Playbook: Housing 

January 7, 2015: 3:39 PM ET


In an effort to make owning a home more affordable, the Federal Housing Administration will dramatically cut the costs associated with the mortgages it backs.

Premiums for FHA mortgage insurance, which is designed to protect the agency in case a borrower defaults on a loan, will be cut from 1.35% of a loan's value to about 0.85%, the White House said in a statement Thursday.

As a result, a typical first-time homebuyer will save $900 a year on their mortgage payments. Existing homeowners who refinance into an FHA loan will see similar savings.

"Too many creditworthy families who can afford -- and want to purchase -- a home are shut out of homeownership opportunities due to today's tight lending market," the White House said.
The White House estimates that the lower premiums will enable up to 250,000 new buyers to purchase a home.

In the wake of the financial meltdown and ensuing foreclosure crisis, FHA raised its mortgage insurance premiums to shore up its finances. But now home values are on the rise, the jobs picture is improving and foreclosures have fallen to their lowest level since 2006.

Last March, the FHA announced it would not need another bailout due to improving financial conditions. The White House said that even after lowering premiums, reserves in the fund are projected to grow by $7 billion to $10 billion annually.

FHA loans have been an important lifeline for low-income and higher risk borrowers in the wake of the financial crisis. As private lenders tightened their lending standards, FHA-backed loans became the only mortgages available to many of those buyers, given their tiny down-payment requirements and easier credit-score hurdles.