FHA Drops the Ceiling on Home Mortgages

The U.S. Federal Housing Administration will scale back the size of loans it backs to a maximum $625,500 at the beginning of 2014 to reduce its share of the U.S. mortgage market, the agency said on Friday. Currently, the FHA's limits that vary by region, from $271,050 up to $729,750 in the country's most expensive housing markets. The FHA's move brings it partly in line with taxpayer-owned mortgage financiers Fannie Mae and Freddie Mac, which use a $417,000 cap in most areas and have an upper limit of $625,500.

"As the housing market^[4] continues its recovery, it is important for FHA to evaluate the role we need to play," Carol Galante, FHA Commissioner, said in a statement. "Implementing lower loan limits is an important and appropriate step as private capital^[5] returns to portions of the market." Those in favor of lower limits say the government should not be helping borrowers at the high end of the real-estate market. The FHA became a major backer of new mortgage financing during the housing crisis when banks^[6] became reluctant to lend.

The reductions will impact buyers in about 650 counties across the country with relatively high home prices. Loan limits are based on median home prices in each county, and they do not go any lower than $271,050. That floor will remain unchanged, the FHA said.

The FHA, which is mainly funded through insurance pr emiums it brings in, backed about a third of loans used to purchase homes last year. In September, the FHA said it needed to draw $1.7 billion in cash from the U.S. Treasury to help cover losses from troubled loans, marking the first time in its 79-year history that it has needed aid. With an FHA loan, buyers can put down as little as 3.5 percent. The FHA, which does not make loans, provides mortgage insurance to borrowers without enough of a down payment to qualify for prime loans.

Source : http://realestate.aol.com/blog/2013/12/09/fha-limits-size-home-mortgages/

Jobs growth drives mortgage rates

NEW YORK (CNNMoney)

Mortgage rates jumped this week on stronger-than-expected economic reports, according to Freddie Mac's weekly survey.

The 30-year, fixed-rate loan, the most popular product for homebuyers, rose to 4.46% from 4.29% last week. The average rate on a 15-year, fixed-rate mortgage, typically used for refinancing higher interest mortgages, also jumped 0.17 percentage point to 3.47%.
This week's rate approached a high for the year. Rates on the 30-year have ranged from a low of 3.34% in the first week of January to a high
Source : http://rss.cnn.com/~r/rss/money_realestate/~3/enqLEtDl-_c/index.html

Soaring new home sales: Not what they seem

It was the sharpest jump in more than three decades, but housing watchers are already poking holes in the new home sales numbers. After delays due to the government shutdown, data for both September and October were released together, in addition to a large downward revision for August. Follow the numbers, and the gains are not quite what the headline seems.

Contracts signed to buy newly built homes jumped 25.4 percent in October month to month, after falling 6.6 percent in September from August. The seasonally adjusted annual rate went from an originally reported 421,000 units in August, which was revised down to 379,000 units, and to 354,000 units in September. The number for September was a 10 percent drop from September of 2012. It then rose to 444,000 units in October. There is a nearly 20 percent margin of error on all these numbers.

"The October 'preliminary' report released this morning, along with the terrible August and September data, is the outlier and will be revised lower next month in line with the new trend lower that began in July," noted housing analyst Mark Hanson.

August sales estimates were revised down by 15 percent on an unadjusted basis and September sales dropped from there.

"Both the September and October new home sales data were released together and averaged 399,000 annualized versus the estimate of 424,000 and compares with the average year-to-date of 422,000," said Peter Boockvar, chief market analyst of economic advisory firm  The Lindsey Group. "The weakness seen in July through September was clearly in response to the rise in rates and the almost 25-basis-point decrease in mortgage rates in October seemed to have brought out buyers that were previously on the fence."
^[3]

Builders say it wasn't just the falling rates, but the end of the government shutdown.

Source : http://www.cnbc.com/id/101246658

New Home Sales Surge in October as Supply Dwindles

Lucia Mutikani

WASHINGTON -- Sales of new U.S. single-family homes recorded their biggest increase in nearly 33½ years in October, suggesting the housing market recovery remains intact despite higher mortgage rates.
The Commerce Department said Wednesday^[1] sales jumped 25.4 percent to a seasonally adjusted annual rate of 444,000 units. It also said new home sales fell 6.6 percent in September.
The release of both the September and October reports was delayed because of a 16-day partial shutdown of the government^[2] last month.

Economists polled by Reuters had expected new home sales to set a 428,000-unit pace last month.

Compared with October last year, new home sales were up 21.6 percent.

The strong rise in new home sales, which are measured when contracts are signed, suggested higher mortgage rate had not derailed the housing market recovery.

Higher mortgage rates^[3] have slowed the pace of home sales, but demand for accommodation as household formation continues to recover from multidecade lows is keeping demand supported.
Home resales fell in October for a second straight month and confidence among single-family home builders has ebbed somewhat since nearing an eight-year high in August.
Strong new home sales in October saw the stock of houses on the market falling 3.7 percent after touching their highest level in nearly three years in September. Despite the tight supply of properties, the median price of a new home slipped 0.6 percent from a year-ago.
At October's sales pace it would take 4.9 months to clear the houses on the market, down from 6.4 months in September. A supply of 6.0 months is normally considered as a healthy balance between supply and demand.

Source : http://realestate.aol.com/blog/2013/12/04/new-home-sales-surge-october-higher-mortgage-rates/

New mortgage rules may mean less choice

(CNNMoney)

New rules launching early next year designed to make mortgages safer may result in less choice for borrowers.

The problem: small banks may drop out of the business because of the cost of tougher regulations.

Beginning Jan. 10, banks have to ensure that monthly mortgage payments are affordable, a result of the Dodd Frank law passed in 2010. The failure to do so carries strict penalties.

"My concern is that we're going to be in an environment where some lenders are too small to comply," said David Stevens, CEO of the Mortgage Bankers Association.

During the housing bubble, some banks issued loans without even checking applicants' income or assets.

Under the new rules, lenders must carefully determine that borrowers have the ability to repay their loans. That means, for example, that the banks can't lend to anyone whose total debt payments would exceed 43% of their income. Lenders must carefully examine and double check pay statements, bank records, tax returns and other paperwork provided by borrowers.

Banks will have to make three main changes, according to Anthony Hsieh, CEO of loanDepot, an online mortgage bank.

They will have to update their underwriting policies and procedures, change their technology and retrain staff.

Is there a housing bubble in California?

Already, lending had become more complicated.

Five years ago, Total Mortgage, a mid-sized lender in Connecticut, had a single attorney on retainer to handle compliance issues, according to its president John Walsh.

Today, Total Mortgage has three full-time workers who work exclusively on compliance in addition to the outside counsel, even though his business has not grown.

"I expended a lot of effort to stay ahead of the new regulations," Walsh said. "You just can't make mistakes these days."

Related: 10 Best Places to Retire^[4]

Banks large and small are hiring outside companies to handle a share of their mortgage underwriting to ensure the quality, according to Jeff Taylor, co-founder of Digital Risk, a provider of risk, compliance and transaction management services.

Big banks can handle the cost, but small lenders may not be able to afford all the extra manpower.

The changes are coming at an already challenging time. Fewer homeowners have been refinancing their old, high interest mortgages. "Now that the refi boom is over, we'll see a lot of small banks fading away," said Taylor.

It's possible that bankers, never receptive to regulation, may be overstating the impact of the new rules, according to Ellen Schloemer, spokeswoman for the Center for Responsible Lending, a consumer advocacy group.

She points to an October report from CoreLogic that asserted that lenders should be able to meet the requirements. The report was written by Margarita Brose, a consultant on lender risks, and Faith Schwartz, who ran Hope Now, a coalition of lenders, consumer groups and government organizations that fights foreclosure.

Lenders will "figure out a way to deliver . . . mortgages in a way that meets all the regulatory requirements, incorporates sound lending and consumer protections -- and makes a profit," according to the report's authors.

Source : http://rss.cnn.com/~r/rss/money_realestate/~3/Zg2Uv1bAM6U/index.html

Mortgage Applications Slide for Fifth Straight Week

Luciana Lopez

NEW YORK -- Applications for U.S. home loans tumbled in the latest week, led by a sharp slide in refinancing applications, data from an industry group showed Wednesday.

The Mortgage Bankers Association said^[1] its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, sank 12.8 percent in the week ended Nov. 29.

The week's results included an adjustment for the Thanksgiving holiday last Thursday, the group said.

The data marked the fifth straight weekly drop for the index, taking it to its lowest level since early September.

The fall in mortgage applications comes as investors try to gauge when the U.S. Federal Reserve^[2] might exit its bond-buying program.

The Fed has said it would begin to scale back its $85 billion a month in purchases of Treasuries and mortgage-backed securities when policy makers are convinced of a steady, self-sustaining recovery.

But data on the world's biggest economy^[3] have been mixed, leaving investors uncertain about the future path of U.S. monetary policy.

MBA data showed 30-year mortgage rates rose 3 basis points in the latest week to 4.51 percent.

The refinancing index sank 17.5 percent while the purchase index, a leading indicator of home sales, fell 4.1 percent.

The mortgage survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.

Source : http://realestate.aol.com/blog/2013/12/04/mortgage-applications-slide-fifth-straight-week-mba/

TxDOT Commissioner: Highway 288 a top priority

Texas Transportation Commissioner Jeff Moseley met with Pearland and Brazoria County officials at the Pearland Chamber of Commerce monthly mobility committee meeting Thursday (Nov. 14). Appointed by Governor Rick Perry in June 2012, Moseley is one of five commissioners who govern the Texas Department of Transportation (TxDot).

Matt Buchanan, President at Pearland Economic Development Corporation, opened the meeting; outlining commercial and residential growth statistics and the launch of the 288 Municipal Management District.

"We hope to work with the state to improve the appearance of the State Highway 288 (SH 288) area through the new 288 Municipal Management District," he said. "Our goal is to clean up that area to make a better first impression to those coming into our city to help attract people and businesses to our community."

Trent Epperson, Pearland's Director of Project Management, outlined a number of projects, including ongoing construction on State Highway 35 (SH35) and needed improvements to Farm to Market Road 518 (FM 518) which he said are the city's top transportation priorities.

"The SH35 widening project was originally scheduled to be complete in late 2012 and is now significantly behind schedule. The main reason we wanted to bring this forward is these delays are really affecting the businesses along that corridor," Epperson said. "We now see a light at the end of the tunnel. The most recent traffic switch really helped the businesses there. But, we still expect that area to be under construction through April of next year.

"I think the main thing we want to do is to make sure as we move forward is that April time frame is not moved any further out and we can get everything back up and running," he said.

Alleviating traffic problems on the west end of the city along FM518 was another top priority, Epperson said.

"FM 518 is a very important transportation artery. It is the nexus of Pearland's retail and commercial area with Pearland Town Center on the southwest corner just west of SH288." he said. "In fact, all four corners there have a significant retail component. We've got the Memorial Hermann site and also the future site of the Alvin ISD high school.

"The last major reconstruction was roughly 20 years ago on the segment from SH35 to Friendswood and (west side improvements) need to be looked at in the very near future."

But, it was the proposed SH288 toll road that took center stage. Matt Sebesta, Brazoria County Commissioner, Precinct 2, made a presentation outlining the project's progress and correct status.

"We expect construction to begin in the first quarter of 2015 and hopefully we will open the facility in 2017 from County Road 59 all the way up to the MacGregor area," he said.

Commissioner Moseley said the proposed SH288 toll road project had become a top priority for TxDot officials.

"We've identified the top 100 congestion points in the state. It helps us prioritize how we can leverage these precious gasoline tax dollars that aren't nearly enough; that's why SH 288 is a strategic corridor," Moseley said.

Two portions of SH288 are listed among the state's most congested roadways, including an 11-mile section stretching from the Beltway to Loop 610, a section now included in the proposed toll road.

"SH288 has become a dynamic corridor where we see a large percentage of the area's workforce moving in and out," Moseley said. "The Texas Medical Center has 100,000 workers who report to work every day with about 10 percent commuting from this region. That's a wonderful reason why this project is a priority for the state to look at to enhance mobility along SH 288. "

Moseley served as chief executive officer of the Greater Houston Partnership prior to his appointment where he worked on numerous regional transportation policy efforts. In addition to serving as Transportation Commissioner, Moseley is a partner in Griffith Moseley Johnson and Associates which provides economic development and site selection consulting.

"I have worked with Commissioner Moseley for many years in various capacities," Carol Artz-Bucek, Chamber President and CEO said in a press release announcing the event. "I am thrilled he again represents the entire State of Texas; although, this time for better mobility and, he lives and breathes the Houston region transportation issues we all experience daily."

The Pearland Chamber of Commerce Transportation Committee meets monthly at the Commerce Center located at 6117 Broadway. For more information, call 281-485–3634 or visit www.pearlandchamber.com^[1]

Source : http://www.yourhoustonnews.com/pearland/news/txdot-commissioner-highway-a-top-priority/article_f3fd751c-6f2d-56ab-92a2-f922fc69fcb0.html