Marc's Mortgage Matter's

Under "your tax dollars at work," here's an interesting tool for anyone looking for information on population trends. The U.S. Census Bureau launched an interactive map that focuses on 2010 Census population counts. The Bureau is releasing the information on a rolling basis through March, with the states completed so far in bold print. (Click on "Select Another State" in very small print to see another state.) CensusMap

Scott Garrett, the chairman of the House Financial Services subcommittee on capital markets and government-sponsored enterprises said that the U.S. government needs to end its role in the mortgage market as it decides the future of Fannie Mae and Freddie Mac. "Let me stress and be very clear where I stand: I am firmly committed to a purely private U.S. mortgage market over time, free of any government subsidies or guarantees," Garrett said today in Orlando at the American Securitization Forum trade group's annual conference. He added that lawmakers should scale back the government's role in the market before implementing any broad reforms, and that F&F should be forced to shrink their mortgage portfolios more quickly and lower the size of loans they buy from the current limit of as much as $729,750, and the agencies should be brought onto the federal budget, which would create political pressure on lawmakers to act more quickly.

Conforming mortgage rates caused a little stir by daring to climb over the 5% mark this week, but that was a mere formality compared to the rise in rates which occurred from last October to December. Since then, rates have been largely stable, awaiting clues that a better economic climate is forming, and that it is again safe to start to move money from safe-haven locations into riskier investments.
These moves -- completely foreseeable ones amid a growing economy -- may appear on a consistent or sporadic basis as we move away from panic and crisis and eventually (and hopefully) settle into a sustainable recovery.

Overall interest rates have been above the 5% market for a number of weeks, and private-market jumbo rates are trending toward the six-percent mark. Despite recent increases, mortgage rates remain well below "normal", or at least what has passed for normal over the past five or ten-year period.

The Treasury's proposal for housing market reform finally came this week, providing a broad sketch of the administration's considered thinking about how to change the structures of housing finance markets in the post-financial-crisis era. As to be expected, the details are thin, even if the implications are not: the markets will be reformed, some by the already-in-place Dodd-Frank regulations, some by the forthcoming Consumer Finance Protection Bureau, and some as the result of unclear changes designed to again foster a more fully private mortgage market.

Regardless of the choice of paths and the specifics of final reform (whenever it may ultimately come) costs for mortgages will rise, and credit will continue to be hard to come by for borrowers unable to make it over traditional underwriting hurdles, at least until it becomes more clear whether the regulatory changes in motion will make it possible for firms to again make money by making loans to people outside those norms.

Of the few specifics discussed in the Treasury document, we found a requirement for a minimum 10% down payment for a government-backed loan (mimicking the de-facto standard in the market today) and higher insurance premiums for FHA loans. As well, FHA would be turned back to its more traditional role of providing financing for low-to-moderate income borrowers amid a renewed emphasis on creating and supporting affordable rental housing.

It's safe to say at the moment that months of discussion (at least) will follow, and possibly years worth of reform await us. It's also important to keep in mind that these blueprints are certain to change as interested groups weigh in during these discussions, and that final reform may look little like the original outlines we see today.

Without a doubt, there are major changes coming to the mortgage markets. Some are happening already, such as new documentation and rules and structures and more as time rolls forward. Between now and then, a growing economy, global concerns about commodity and food price inflation, a still-accomodative Fed and other factors are serving to push interest rates in general and mortgage rates specifically to levels they passed on the way down about a year ago.

A new survey shows that Americans’ confusion over mortgage applications has become one of the most challenging aspects of buying a home today.

Nearly one-third of respondents said that understanding the mortgage process was the most difficult step in buying a home, according to the survey conducted by MortgageMatch.com, a unit of Move Inc. That was higher than the share of borrowers who said getting approved for the mortgage (23%) or negotiating the home purchase price (25%) was the most difficult step in buying a home.

The majority of buyers said that finding the right home (54%) was the hardest part of the buying process, while 37% of borrowers said saving for the down payment was the most difficult step. The survey “clearly points to the fact that borrowers want a process that’s easy to understand and follow,” said Sue Stewart, senior vice president at Move Inc.

While anyone who applied for a loan during the middle of last decade probably found that the process was a breeze, lenders have ratcheted down not only their lending requirements since the collapse of the housing market four years ago, but they’ve also become far pickier about documentation requirements.

Nearly 23% of those surveyed said that the mortgage process was challenging because documentation requirements from lenders kept changing, compared with 7% of borrowers who said it was hard to qualify because their credit score wasn’t strong enough. Among borrowers who are interested in buying a home, the survey found that 20% are primarily interested in buying an investment property, up from less than 6% in March 2009.

The survey also asked respondents what they believed should be President Obama’s top housing-market priority for 2011. Some 28% of borrowers said keeping interest rates low was their top priority, followed by 27% who said the top priority should focus on helping troubled borrowers avoid foreclosure.

Another 14% of borrowers said that the focus should be on keeping the federal mortgage-interest tax deduction at current levels, up from 9% in October 2009. Nearly 13% said there should be more affordable mortgage credit available, while 11% said the top priority should involve helping first-time home buyers to purchase a home.

The survey was based upon 2,000 phone interviews conducted from Jan. 7-9 and Jan. 14-16 by GfK Custom Research North America.

I went to the doctor for my yearly physical. The nurse started with certain basics.
"How much do you weigh?" she asked.
"135," I said.
The nurse put me on the scale. It turns out my weight is 180.
The nurse asked, "Your height?"
"5 foot 4," I said.
The nurse checked and saw that I only measure 5' 2"
She then took my blood pressure and told me that it is very high.
"Of course it's high!" I screamed, "When I came in here I was tall and slender! Now I'm short and fat!"
She put me on Prozac.
What a b&^%$.