Tag Archives: HELOC

The number of homeowners eligible for refinancing has shrunk from about 10 million in December 2012 to about 5.7 million as of August, according to Lender Processing Services' (LPS) latest Mortgage Monitor report. LPS cites heightened refinance activity over the past few years and rising interest rates as reasons for the decline and sees a market ripe for home equity lines of credit as a result of rising prices.

The FOMC voted Wednesday to continue its policy of near-zero interest rates and its $85-billion-per-month bond-buying program. In a subtle change of language designed to assuage nervous stock investors, the FOMC statement said the committee ""reaffirmed its view that a highly accommodative stance of monetary policy will remain appropriate for a considerable time after the asset purchase program ends and the economic recovery strengthens.""

Home Equity Conversion Mortgages (HECMs) and reverse mortgages, tools to which many seniors turn to help manage expenses in their later years, can be challenging products to navigate, according to testimonies delivered during a Senate committee hearing Tuesday morning. While the Department of Housing and Urban Development (HUD) considers changes to the HECM program, the Senate Committee on Banking, Housing, and Urban Affairs held a hearing to determine the best path forward for the program.

Household net worth jumped by $3 trillion in the first quarter as real estate values grew $836 billion, the Federal Reserve reported Thursday in its quarterly Flow of Funds report. With a drop in mortgage debt, owners' equity in real estate increased a sharp 2.5 percentage points to its highest level since 2007. Owners' equity as a percentage of real estate value has been on a steady upward trajectory since dropping to 36.3 percent in the first quarter of 2009.

The percentage of banks reporting stronger demand for mortgage loans rose in the second quarter, the Federal Reserve reported Monday, with more banks easing lending standards. Those results, revealed in the Fed's Senior Loan Officers Opinion Survey, are consistent with reports that mortgage loans are becoming easier to obtain. While the results suggest a trend in lending standards, they could be misleading: A bank which has tightened standards as much as possible may not necessarily ease them.

After issuing a finalized qualified mortgage (QM) rule on Thursday, the Consumer Financial Protection Bureau (CFPB) also released its guidance on rules to protect consumers of high-cost mortgages. For borrowers with high-cost mortgages, the bureau's final rule bans potentially risky features such as balloon payments (with some exceptions) and penalties for borrowers who pay off loans early. The rule also bans and limits certain fees and practices, such as fees for modifying loans and fees for requesting a payoff statement.

Home equity installment balances rose 0.3 percent in August--the first monthly increase since November 2007, according to Equifax. After plummeting 49 percent over the past four years to just $143 billion, the company contends August's uptick could signal ""a possible turning point in mortgage demand."" Equifax says amid signs the contraction in mortgage debt is slowing and delinquencies are trending down, it looks like positive growth may finally be taking hold in the mortgage market.

Low interest rates and better debt management brought mortgage delinquencies down in Q2, the Federal Reserve Bank of New York reported Wednesday. The New York Fed released its latest Quarterly Report on Household Debt and Credit, revealing that the delinquency rate for mortgages declined from the first quarter to 6.3 percent. Meanwhile, an estimated 256,000 consumers had a foreclosure notation added to their credit reports, the lowest number since mid-2007.

The percentage of first-mortgages 30 days or more past due saw a double digit year-over-year decline, according to a report from Equifax. First-mortgage delinquency rates dropped 15 percent in July 2012 from July 2011. In addition, first mortgage severe derogatory rates, which are mainly loans transitioning to REO status, declined 17 percent year-over-year.

Out of 11 categories of loan types, only home equity lines of credit (HELOC) rose, according to a report from the American Bankers Association (ABA). The report showed that for the first quarter of 2012, the delinquency rate for open-end home equity lines of credit rose from 1.69 percent to 1.78 percent. Open-end loans are those with a fixed amount of available credit but a balance that changes based on usage. ABA Chief Economist James Chessen attributed the increase to the painful adjustment still underway in the housing sector.