Lending Landscape - December 27, 2007

The lending landscape is continuing to deteriorate, except for FHA lending. Rates bumped up a bit this past week -

The government-sponsored loan buyer said the rate on a 30-year fixed-rate loan averaged 6.17 percent for the week ending Dec. 27, up from 6.14 percent a week earlier.

At this time last year, the 30-year fixed-rate mortgage averaged 6.18 percent.

More concerns about the mortgage meltdown have forced Fannie Mae and Freddie Mac to assign risk premiums on high loan to value properties and for buyers with even decent credit.

FHA loans are gaining ground as they allow up to 97% LTV and accept a variety of credit scores. Some pending legislation could expand the capability of the government guaranteed program. Borrowers with large downpayments and credit scores above 680 will continue to have a variety of loan programs available to them, at rates comparable to the past few years.

Lending Landscape - December 20, 2007

The lending landscape hasn't made itself any clearer in the past week, though interest rates did slightly increase. Much discussion about bailouts for homeowners with adjustable rate mortgages has taken place, but the outlook is still unknown. The Treasury Department has come up with a plan to freeze interest rates for certain borrowers facing increased mortgage payments. As a result, Fannie Mae and Freddie Mac have increased their lending standards for borrowers who would have been considered "prime" in the past.

FHA Reform is finally moving forward. The Senate approved a plan to make it easier for home buyers to get the government backed loans. However, debate between the House and Senate for a final version to be signed by President Bush has yet to take place.

All this activity still leaves us wondering how the lending markets are going to shake out. News on Wall Street has evened out a bit which has pushed mortgage rates up a tad.

Strong reads on inflation and retail sales led to a slight lift in mortgage rates this week, Freddie Mac reported Thursday.

The government-sponsored loan buyer said the rate on a 30-year fixed-rate loan averaged 6.14 percent for the week ending Dec. 20, from 6.11 percent a week ago.

At this time last year, the 30-year fixed-rate mortgage averaged 6.13 percent.

For new home buyers with down payments of 5% and credit scores above 680, getting a loan is still business as usual. Everyone else is in a major "wait and see" position.

Lending Landscape - December 13, 2007

Despite a rate drop by the Federal Reserve Board earlier this week, advances in the bond markets propped up long term mortgages rates for the first time in many weeks. The standard 30 fixed mortgage moved up from last week and is hovering slightly below last year's rate.

The government-sponsored loan buyer said the rate on a 30-year fixed-rate loan rose to an average 6.11 percent for the week ending Dec. 13, from 5.96 percent last week.

At this time last year, the 30-year fixed-rate mortgage averaged 6.12 percent.

The credit markets are in disarray as rising foreclosures and mortgage delinquencies are forcing major lenders and the Government Sponsored Enterprises (Fannie Mae & Freddie Mac) to write off significant amounts of bad debt. As a result, borrowing costs for Prime loans are going up.

One lending arena that saw a decline during the housing boom, is now perfectly poised to assist first time home buyers and potential homeowners with troubled credit. The FHA has competitive rates, easier qualification and loan limits in Salt Lake County extend to $366,000.

Ask your builder about the opportunity to use FHA financing on your purchase.

Lending Landscape - December 6, 2007

The lending landscape has once again changed. Rates dropped last week, but changes in lending guidelines will make it harder to get high loan to value loans, even with medium grade credit scores.

Mortgage rates are at a level unseen for several years -

The government-sponsored loan buyer said the rate on a 30-year fixed-rate loan fell to an average 5.96 percent for the week ended Dec. 6. That was down from 6.10 percent a week ago.

At this time last year, the 30-year fixed-rate mortgage averaged 6.11 percent. It has not been lower since the week ending Sept. 29, 2005, when it averaged 5.91 percent.

Additionally, the Federal Reserve Board meets this Tuesday for their final policy conference of the year. It is widely expected they will cut the key overnight rate. That rate only affects short term mortgage rates.

Despite the lower rates, it's going to be harder to get a loan. For prime borrowers, Fannie Mae has changed its guidelines and will tack on up to 2% to the rate for properties with less than 30% equity and for borrowers with credit scores less than 680. Of course FHA has not made such changes and still provides attractive interest rates for first time buyers and new home buyers with less than perfect credit.

A storm of controversy is brewing now that the White House has announced its plan to help struggling homeowners. The next few months will be very telling as to how the housing market is going to shake out. Along the Wasatch Front, the new homes market has slowed down, but builders are aggressively pricing their homes and sales are still happening.