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Rate Update and HARP Extension

Generally weaker than expected economic data resulted in slight improvement in mortgage rates this week. January Pending Home Sales fell 7.6%, far below the forecasts for a small increase. The expected surge in sales from the extended and expanded homebuyer tax credit has yet to materialize so far. This decline adds to evidence the housing market is struggling to rebound after reports released the week prior showed large decreases in New and Existing Home Sales. The National Association of Realtors suggests that we may still see a pick-up in sales as buyers rush to take advantage of the tax credit before the April 30th deadline. The Fed’s Beige Book report showed the economy plodded along with slow growth, but remains hampered by soft labor markets and a weak commercial sector. The employment report proved to be the lone bright spot last week as less jobs were lost than expected and the Unemployment Rate remained unchanged from January at 9.7%. Currently, the 30-Year Fixed sits at 4.625% (4.804% APR) and the 15-Year Fixed is at 4.000% (4.307% APR). Do not expect much change this week as Retail Sales and $74 billion in Treasury auctions highlight an otherwise light economic calendar.

The Federal Housing Finance Agency, overseer of Fannie and Freddie, announced the Home Affordable Refinance Program (HARP) will be extended to June 30, 2011. HARP is part of the Making Home Affordable Program, and is designed to expand access to refinancing for otherwise qualified borrowers who cannot obtain more affordable mortgages because of a lack of equity in their homes. This means that Fannie’s Refi Plus program and Freddie’s Relief Refi program, originally set to expire on June 30th, will be extended for one more year. In case you forgot, the Making Home Affordable Program was made possible by $75 billion in stimulus funds aimed at helping 9 million homeowners avoid foreclosure. This refinance initiative allows underwater homeowners to refinance up to 125% of their home’s value with no monthly mortgage insurance. Borrowers are also allowed to re-subordinate existing 2nd liens and equity lines. No cash out is allowed on this program, and lender closing costs are limited to ensure maximum benefit for the homeowner. Some clients may also qualify for more relaxed documentation requirements. Contact your mortgage professional to see if you qualify.

Central Coast Lending, Inc.
(805) 543-LOAN
info@centralcoastlending.com

Written by Keith Byrd - Go to Keith's Website/Profile