Average U.S. rates on fixed mortgages edged up this week but remained near historic lows. Low rates have helped drive the housing market’s steady recovery.
Mortgage buyer Freddie Mac said Thursday that the average rate for the 30-year fixed loan rose to 3.57 percent from 3.54 percent last week. That’s near the 3.31 percent reached in November, which was the lowest on records dating to 1971.
The average rate on the 15-year fixed mortgage increased last week to 2.76 percent from 2.72 percent last week. The record low of 2.63 percent was also reached in November.
The lowest mortgage rates in decades are spurring more home purchases and refinancing. That’s helped the broader economy. Increased sales are also pushing home prices higher.
In February, sales of previously occupied homes rose to a seasonally adjusted pace of 4.98 million, the fastest in more than three years. And U.S. home prices rose 8.1 percent in January, the fastest annual rate since the peak of the housing boom in the summer of 2006.
Fewer people signed contracts to buy homes in February. But the level stayed near a three-year high, leading many analysts to predict re-sales will keep rising in the coming months. There’s normally a one- to two-month delay between a signed contract and a completed sale.
One concern remains the limited number of available homes for sale. That could slow sales at the start of the all-important spring-buying season.
And some people are unable to take advantage of the low mortgage rates, either because they can’t qualify for stricter lending rules or they lack the money for larger down payment requirements. First-time home buyers made up 30 percent of existing home sales in February, well below the 40 percent that is typical in a healthy market.
Associated Press
CHARLOTTE, N.C. - A year ago, a $25 billion settlement ordered banks to do a better job helping troubled homeowners, and to end the stories of borrowers trapped in a confusing web of mortgage negotiations leading to foreclosure.
The stories, however, keep coming, even as banks take their required steps to improve how they handle homeowners in distress.
One of the most widely criticized practices was “dual-tracking,” in which banks pressed ahead with foreclosure proceedings while borrowers scrambled to get their loans modified.
The settlement was supposed to change that. The architects of the deal with Bank of America, Wells Fargo and three other major banks said the agreement would give troubled borrowers “every opportunity” to modify their loans before facing foreclosure.
But the rules spelled out in the settlement give banks the latitude in many cases to move toward a foreclosure sale even as they work with borrowers trying to save their homes.
Banks can send foreclosure notices and schedule court hearings and eviction dates - all while a homeowner is filing paperwork for a loan modification.
The settlement did force some improvements: Banks can’t actually sell the home while a modification is pending. And they can’t start foreclosures against borrowers who seek help soon after becoming delinquent.
Still, the rules mean homeowners around the country can end up planning for foreclosure hearings while trying to work with their banks. Advocates and lawyers tell of borrowers having to juggle legal notices, loan modification applications and a search for a new place to live at the same time.
“They think their loan is going to be modified. They’re told not to worry about the pending foreclosure action,” said Mal Maynard of the Wilmington, N.C.-based Financial Protection Law Center. “At the last possible minute, they learn that they will not get a modification and are thrown off the cliff into foreclosure.
“The thought behind the provision is to give a borrower full and fair consideration for a loan modification before beginning the foreclosure proceeding. They are often deprived of that opportunity.”
Both Bank of America and Wells Fargo say they are doing everything the settlement requires. Executives at both banks say their mortgage servicers repeatedly try to reach out to delinquent borrowers before referring a loan to foreclosure.
Randy Bockenstedt, senior vice president in customer contact and collections at Wells Fargo Home Mortgage, said he still believes borrowers have every opportunity to get a loan modification before facing foreclosure. He said many complaints about dual-tracking come from confusion about what the settlement requires and does not.
“We don’t stop working with a borrower just because they’ve been referred to foreclosure,” he said.
Janet Menetrier was surprised to be served a foreclosure notice on her Charlotte, N.C., home in early December, just three months after Bank of America promised her a loan modification over the phone. The next month, she found three letters from the Charlotte bank in her mailbox.
The first said she was being considered for a loan modification on the home she’d been battling to save from foreclosure for nearly six months.
The second said the bank needed more information to process her application.
The third said she’d been denied for all loan modifications.
Each letter bore the same date, Jan. 12. And her foreclosure hearing had already been set for just three weeks away.
“I thought they were supposed to make things better and easier,” Menetrier said as she spread reams of paperwork across her kitchen table. “What they’re doing is just wrong.”
North Carolina Attorney General Roy Cooper, one of the chief negotiators of the settlement, said complaints to his office on servicing standards have gone down in the past year, but his office was unable to provide specific numbers.
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