Kling Publications

In a sign of an improving economy, bank lending standards eased in the first quarter, according to the most recent Senior Loan Officer Opinion Survey from the Federal Reserve.

While easier lending guidelines is a good sign for the economy, the bad news is that residential mortgage lending standards remained unchanged, according to the survey. In the last two quarterly surveys about 10 percent of banks, typically smaller banks, tightened lending requirements for nontraditional mortgages. While smaller banks increased restrictions, larger banks left them unchanged. Continue Reading »

Homebuyers can now obtain a home for just $100 down through a new Housing and Urban Development Department initiative. Continue Reading »

Homebuyers and homeowners refinancing their current mortgages may face higher mortgage rates when the Federal Reserve stops buying Treasury bonds this summer.

The Fed had kept mortgage rates, as well as other interest rates, low by purchasing massive amounts of Treasury bonds this year through its second round of quantitative easing, colloquially know as QE2. The Fed has purchase 70 percent of Treasuries since it began its plan to buy $600 billion of the government bonds last November.

When it ends its program as expected in June, look out. Some experts believe rates will increase by 0.75 of a percentage point.

The reason for increasing mortgage rates is relatively straightforward. The Fed has been the main buyer of Treasury bonds, which the federal government issues to finance its ever-growing debt. Without the largest buyer, prices of the government bonds will fall and yields will increase. Bond sellers will have to offer higher interest rates to entice investors to buy the government bonds. Many bond investors have already sold off much of their Treasuries, anticipating that their values will drop as their yields increase.

Because mortgage rates and other interest rates are based on Treasury rates, they will also increase.

With rates expected to increase, homebuyers should act sooner rather than later. Homeowners considering refinancing their current home loans to lock into lower rates and decrease their monthly payments should also act soon.  

Still, there are other possible scenarios. The end of QE2 may allow the emerging economic to falter. Stock values will decline, prompting investors to move their money into Treasuries, boosting demand and holding down interest rates.

Homeowners can cut their energy costs through a new government-backed home loan program.

Homeowners can borrow up to $25,000 to make energy-efficient improvements to their homes, including installing insulation, duct sealing, replacement doors and windows, HVAC systems, water heaters, solar panels, and geothermal systems. Continue Reading »

Distressed housing markets throughout the American Sun Belt can turn to Canadian home buyers for help. One in five Canadians would now consider purchasing real estate in the United States, shows a survey by BMO Bank of Montreal. Lower prices for American homes and a strong Canadian dollar are prompting Canadian interest in U.S. properties. Home prices in the U.S. have dropped by about 30 percent, but have fallen even more in Sun Belt areas that traditional attract the interest of Canadian home buyers. Read full story.

Canadian home prices have reached an all time high. Some experts expect the real estate bubble will burst. Others think housing markets up north will cool down and avoid a collapse. Read full story.

Fewer home loans insured by the Federal Housing Administration were serious delinquency rate of mortgages last month, a hopeful sign for FHA mortgages.

Some mortgage experts were concerned about FHA home loans becoming delinquent after FHA loan originations exploded in recent years. However, the latest delinquency figures indicate the FHA is through its worst period and problem is under control. However, the latest delinquency figures indicate that the FHA is through its worst period and problem is under control. Read the full story.

Baby boomers have changed everything they’ve touched by their sheer numbers. Now they will create a home remodeling explosion as they sell their older homes and retire, predicts a study from the Joint Center for Housing Studies at Harvard University.

The new homeowners will be young, wealthy and eager to renovate the homes to suit their own needs and tastes. The FHA 203(k) home renovation loan may come in handy.

The mortgage and housing markets have been through difficult times over the last few years. Credit, debt-to-income limits, and down payment requirements all became more rigorous. Here are several reasons why mortgage qualifications guidelines will remain stringent this year.