Last Friday’s US jobs data might be an indicator that mortgage interest rates are on their way down. As economic data shows an increasingly difficult economy, lower mortgage interest rates may be expected as lenders seek to attract more borrowers. The worst jobs data in five years could be a good sign for mortgage interest rates, reports Origination Times:

If you were looking for rates to move lower, last week’s dismal Jobs Report was just what the doctor ordered. Rates reacted favorably as the Labor Department reported a much worse than expected loss of 80,000 jobs in March - which was the largest jobs loss reported in five years.

However, it is worth noting that mortgage interest rates haven’t necessarily been behaving as one would expect lately. They haven’t been keeping proper pace with 10-year Treasury notes due the fact that mortgage lenders are feeling a little wary of borrowers right now, and that has made mortgage interest rates a little less predictable. Liquidity has been one of the main reasons cited for mortgage interest rates and for reluctance to lend money.

They have been falling recently, though, and government efforts to increase liquidity in the market, as well as proof that the government is willing to help bailout the mortgage industry, should continue to help loosen things up.

As mortgage rates — along with home prices — drop, it becomes an increasingly attractive buyer’s market in the real estate world. If you have good credit and a reasonable down payment saved up, you should be able to get a good deal on a home mortgage loan. Not to mention having access to great home prices. Just make sure that you keep the recent subprime mortgage crash lessons in mind and only get a home that you can afford.

Tags: mortgage interest rates, mortgage rates drop, home mortgage loan, mortgage loan blog,
mortgage lenders, subprime mortgage crash, home prices

Last Friday’s US jobs data might be an indicator that mortgage interest rates are on their way down. As economic data shows an increasingly difficult economy, lower mortgage interest rates may be expected as lenders seek to attract more borrowers. The worst jobs data in five years could be a good sign for mortgage interest rates, reports Origination Times:

If you were looking for rates to move lower, last week’s dismal Jobs Report was just what the doctor ordered. Rates reacted favorably as the Labor Department reported a much worse than expected loss of 80,000 jobs in March - which was the largest jobs loss reported in five years.

However, it is worth noting that mortgage interest rates haven’t necessarily been behaving as one would expect lately. They haven’t been keeping proper pace with 10-year Treasury notes due the fact that mortgage lenders are feeling a little wary of borrowers right now, and that has made mortgage interest rates a little less predictable. Liquidity has been one of the main reasons cited for mortgage interest rates and for reluctance to lend money.

They have been falling recently, though, and government efforts to increase liquidity in the market, as well as proof that the government is willing to help bailout the mortgage industry, should continue to help loosen things up.

As mortgage rates — along with home prices — drop, it becomes an increasingly attractive buyer’s market in the real estate world. If you have good credit and a reasonable down payment saved up, you should be able to get a good deal on a home mortgage loan. Not to mention having access to great home prices. Just make sure that you keep the recent subprime mortgage crash lessons in mind and only get a home that you can afford.

Tags: mortgage interest rates, mortgage rates drop, home mortgage loan, mortgage loan blog,
mortgage lenders, subprime mortgage crash, home prices

Back in the fall, the Bush Administration announced the formation of the Hope Now alliance. The idea was to encourage mortgage lenders to enact a mortgage rate freeze and then re-do mortgage loan terms for subprime borrowers in danger of foreclosure. However, a few months later, the New York Times reports, there is doubt as to how helpful Hope Now actually is:

Even Hope Now says it is unsure how effective it is. The group does not break out the number of loan workouts that occur as a result of its efforts and those that might have happened anyway. Some people who work with Hope Now say it has done little to keep the housing crisis from deepening.

“Hope Now is a failure,” said Michael Shea, the executive director of the Acorn Housing Corporation, a large counseling agency that is part of the Hope Now alliance. “It’s industry-dominated.”

Others disagree, insisting that Hope Now is providing information to subprime borrowers and using the existing infrastructure to connect those at risk for foreclosure with mortgage lenders who are willing to help them refinance. The organizations itself claims that it has helped over one million so far.

Then next question, of course, deals with Hope Now’s sister program, Project Lifeline. This is meant to expand the number of people who have access to new mortgage loan terms. Is this program facing the same ambiguity that Hope Now does?

And do either of these programs actually help homeowners in the long run. For the most part, the new mortgage loan terms are likely to reflect mainly the needs of the mortgage lenders. The terms just make the loans more payable, ensuring that subprime borrowers can limp along for a few more years without folding.

Another issue is whether or not anyone is learning from the subprime lending crisis. Are mortgage lenders reconsidering those they will give mortgage loans to? Are borrowers reconsidering the types of home mortgage loan they really ought to have?

Or are we just learning the government is prepared to swoop in and “save” us when our bad decisions catch up with us?

Tags: subprime borrowers, Project Lifeline, home mortgage loan, mortgage lenders,
mortgage loan terms, mortgage loan blog, subprime lending