Hoboken, NJ

Rates for 30-year home loans edged up last week, but remain close to record lows reached over the spring.

The average rate for a 30-year fixed mortgage was 5.14 percent, up from 5.12 percent a week earlier, mortgage company Freddie Mac said Thursday. Rates, while above the record low of 4.78 percent hit in the spring, are still at attractive levels for people looking to buy a home or refinance.

To revive the economy, the Federal Reserve has spent more than $600 billion out of a promised $1.25 trillion in mortgage-backed securities, which has driven down rates on home loans. It has also left a key interest rate near zero.

Now that the economy is on the mend, Fed policymakers must decide how and when to withdraw that support. Some analysts think it could take four or five years for the Fed to pull back entirely and shrink a balance sheet that is now about $2 trillion, more than double what it was when the financial crisis struck.

Despite government efforts to prop up the mortgage market, qualifying for a loan is still tough. Lenders have tightened their standards dramatically over the past year, so the best rates are available to those with solid credit.

The average rate on a 15-year fixed-rate mortgage rose to 4.58 percent, from 4.56 percent last week, according to Freddie Mac.

Rates on five-year, adjustable-rate mortgages averaged 4.67 percent, down from 4.57 percent a week earlier. Rates on one-year, adjustable-rate mortgages were unchanged at 4.69 percent.

The rates do not include add-on fees known as points. The nationwide fee for all loans in Freddie Mac’s survey averaged 0.7 point for 30-year and 15-year loans, and 0.6 point for five-year and one-year loans.

For more valuable information please go to I Want to Buy my Home at the Bottom.

If you are looking for assistance in finding the perfect home in Hoboken, contact Eddie Perez at (201) 344-2886 or go to Hoboken Condo Expert.

It is estimated that almost 6 million Americans are behind on their mortgage payments or in foreclosure, many more are using savings and retirement accounts to avoid joining those ranks. For the fortunate ones, there is a loan modification in their future.

When borrowers fall behind on their payments, lenders will sometimes modify the terms of the loan to make it more affordable. They might lower the interest rate, eliminating part of the principal or some other financial juggling to avoid foreclosure.

The process often involves a lot of paperwork and lengthy delays.

There are a few Web sites that offer to walk borrowers through the loan modification application process online, including the freeHomeownerToolbox.com.

The site delivers a submission-ready document that, along with supporting financial materials, the homeowner must mail or fax to their lender to be considered for a modification.

The site also offers tips on how to better understand the loan modification process and avoid mistakes on applications.

Borrowers, however, should also check their lender’s Web site because many of them, including JPMorgan Chase and Wells Fargo, have applications that borrowers can download at home or fill out online.

And for those who need extra help navigating the process, there’s an array of nonprofit housing agencies with counselors certified by the Department of Housing and Urban Development that provide counseling free of charge www.hud.gov/foreclosure.

The HomeownerToolbox began in April, the company charged a $99 fee, but eliminated it in July.

The site claims it can predict the likelihood a borrower’s application will get a thumbs up from the lender. The Web site’s “Success Probability Meter” gives a range of success between zero and 100 percent.

For more great information go to First Time Home Buyers Are Leading The Way.

To find out all the benefits and options for preventing foreclosure, contact Eddie Perez, Broker-REALTOR and Certified Distressed Property Expert (CDPE). Markets include Hoboken, Jersey City, Weehawken and Union City. He can be reached at eddie@InvestHoboken.com or 201-344-2886.

National Association of Home Builders is making the effort to extend the tax credit through Nov. 30, 2010. They’re also requesting for Congress to make the credit available to all buyers of principal residences, not just first-time home buyers.

According to NAHB, extending the tax credit program would spur an additional 383,000 home sales, including 80,000 new homes, and create nearly 350,000 jobs over the next year. Every time a house is sold or built, it pumps thousands of dollars into the economy on purchases of everything from appraisals and title insurance to home improvement supplies.

A tax credit has helped the housing market recover before, and it’s starting to help again.

There’s no down side to extending the tax credit another year and expanding it to all home buyers.

What is really important to know is that this isn’t the first time Congress has been asked to make the home buyer tax credit more widely available. A bill introduced in January by Sen. Johnny Isakson (R-Ga.) would have provided up to a $15,000 tax credit for all home buyers of primary residences. It also would have made the money available up front for down payment and closing costs. It got some support on the Senate side, but none from the House.

Hopefully, Congress has seen how consumers jumped on the opportunity to buy a car with some federal assistance, they’ll be more open to helping housing, which is a major factor in the nation’s economy.

For more valuable information please go to I Want to Buy my Home at the Bottom.

If you are looking for assistance in finding the perfect home in Hoboken, contact Eddie Perez at (201) 344-2886 or go to Hoboken Condo Expert.

In the aftermath of the housing collapse, the mortgage broker industry is a target for reform. Regulators and legislators at the state and federal levels are busy implementing a variety of laws and regulations designed to protect consumers and prevent another housing crisis in the future.

Here’s an overview of recently enacted state and federal legislation and regulation of mortgage brokers:

Brokers Must Act in the Interest of Consumers: About a dozen states have passed regulations requiring that brokers act in the best interest of consumers. If you are going to be a licensed, insured, bonded mortgage broker you are legally required to represent the interests of the borrower. Without rules like this, brokers are basically third-party agents that are getting paid to help borrowers but are disclaiming that responsibility in the fine print and accepting compensation from the lender that may not be in the buyer’s best interest.

National Mortgage Broker Licensing: A law signed by President Bush in 2008 establishes a nationwide mortgage licensing system to be in place by July 30 of this year. States have an additional year to establish a state loan originator licensing and registration system. The system requires all loan originators, including mortgage brokers, to undergo a substantial background check, including fingerprinting, and to take a minimum of 20 hours of continuing education, pass an exam and post either a surety or net worth bond.

Funds to Compensate Defrauded Consumers: Several states have established funds to compensate consumers who have been defrauded by mortgage brokers. In Florida, the Mortgage Guaranteed Trust Fund will make payments to consumers who have obtained a judgment against a mortgage broker or loan originator but are unable to collect from that individual.

Compensation Proposals: A number of state and federal proposals for regulation deal with mortgage broker compensation and disclosures of that compensation. A big hot-button issue is the yield-spread premium, which is a rebate paid to a mortgage broker or bank based on the difference between the lowest interest rate available to a consumer and the interest rate at which a consumer’s loan is closed.

For mortgage brokers, their incentive isn’t really to see loans perform in the long run, it is to close as many loans as possible. For unethical brokers, there is an additional incentive to extract as much fee income out of each deal. To get to the root of the problem, you have to address the incentives that prompted brokers to steer people to unsuitable products.

For more interesting information go to Would You Walk Away?

Allow me to help you find the home of your dreams Contact Eddie Perez at (201) 344-2886, www.investhoboken.com.

Would you, under any circumstances, default on your home mortgage, even if you could afford to make the monthly payments?

According to new research from theUniversity of Chicago’s Booth School of Business and Northwestern University’s Kellogg School of Management.

A study found that 26 percent of the record numbers of home mortgage defaults across the country are “strategic” — that is, calculated economic decisions to bail out of loans by owners who actually have the money to make the payments but can’t handle the negative equity they’re carrying caused by local property value declines.

Co-authors Paola Sapienza, Luigi Zingales and Luigi Guiso used interviews with members of 2,000 American households in December and March to explore the moral and social dynamics of strategic defaults. The two 1,000-person samples came from the Chicago Booth/Kellogg School Financial Trust Index, which monitors the level of trust households have in the financial system.

An important factor in walkaways, according to the researchers, is the level of foreclosures owners observe in their community and their personal acquaintance with owners who have defaulted. In the latter case, owners who know someone who defaulted strategically are 82 percent more likely to default themselves, compared with owners who do not know anyone in that situation.

The higher the number of foreclosures in a given ZIP code, the higher owners’ willingness to walk away, the researchers found, suggesting what they call a “contagion effect that reduces the social stigma associated with default as defaults become more common.” High numbers of foreclosures also appear to create a “vicious circle” that increases neighboring owners’ negative equity and greatly raises the probability of additional defaults, foreclosures and equity destruction in the area.

Though the authors offer no specific remedies — they are behavioral researchers, not policy advisers — they argue that the traditional assumption that borrowers default because they can’t afford their monthly payments needs to be re-examined in light of accelerating foreclosures in some markets combined with plummeting equity.

The Obama administration appeared to take a step in that direction on July 1 when it allowed refinancings of Fannie Mae- and Freddie Mac-owned mortgages where owners have up to 25 percent negative equity. Previously the limit was 5 percent.

To find out all the benefits and options for preventing foreclosure, contact Eddie Perez, Broker-REALTOR, CDPE or Anoir Redouane, REALTOR, CDPE. Their market includes Hoboken, Jersey City, Weehawken and Union City. They can be reached at eddie@InvestHoboken.com or 201-344-2886.