I have helped many people use their home equity to ease their financial situation in retirement by replacing their current mortgage with a reverse mortgage that has no monthly payment as long as they live in the home, or by using a reverse mortgage as a line of credit to meet unexpected expenses.  Look at the Reverse Mortgage page of this blog to learn more or to ask questions, and visit my mortgage web site to contact me if you need help.

The March 2012 ADP National Employment Report® published on Wednesday, April 4, showed employment in the U.S. nonfarm private business sector increased by 209,000 from February to March on a seasonally adjusted basis. Estimated gains for previous months were revised higher; the gain from December to January was revised up by 9,000 to 182,000, and the gain from January to February was revised up by 14,000 to 230,000. Still, the central bank’s assessment of the economy remained cautious. Economists expect growth to have slowed in the first quarter compared to the 3.0 percent annualized rate in the final months of last year.

Fed lays egg & mortgage rates bunny-hop up
By Polyana da Costa • Bankrate.com
Mortgage rates inched up this week after the Fed signaled to investors that it won’t buy more bonds to provide further stimulus to the U.S. economy.

The benchmark 30-year fixed-rate mortgage rose two basis points this week, according to the Bankrate.com national survey of large lenders. One year ago, the mortgage index was 5.08 percent.

The benchmark 15-year fixed-rate mortgage fell two basis points this week, and the benchmark 5/1 adjustable-rate mortgage rose one basis point.

Fed can’t keep rates low forever
The Fed has helped to keep mortgage rates artificially low through its continuous purchase of government and mortgage bonds, which is a policy known as quantitative easing.

Many investors hoped the Fed would add another round of stimulus, but most Fed members lean away from that idea and seem ready to let the U.S. economy stand on its own. At least, that is the message investors got Tuesday, after the minutes from the last Federal Open Committee Meeting were released. What does that mean for borrowers? It means rates won’t stay low forever. Rates started to climb as soon as the FOMC minutes came out Tuesday afternoon, but they adjusted down a little after Spain’s troubled bond market made the headlines Wednesday morning.

Buyers get off the sidelines
While most of the mortgage applications come from refinancers, activity from buyers has increased, the MBA says.

“Applications to buy a home picked up last week, and they are running more than 2 percent above the level reported at this time last year,” says Michael Fratantoni, the MBA’s vice president of research and economics. “Home purchase applications for conventional loans are now about 10 percent above last year’s level. Renters are realizing, when they talk to people, you’ve got the perfect market,” he says. “Rates are low; prices are low; and they’ll go up sooner than later. Trying to guess the bottom is not a wise thing to do.”

For the full story click on the link below.

Mortgage rates sink

8 ways to save money on costly lawn care
By Claes Bell • Bankrate.com

When people think of saving money around the house, they think of things that happen inside, such as utility usage and family meals. But your lawn care and gardening habits could be costing you more than you think. Between water, fertilizer, lawn care services, seed, gardening equipment and other costs, Americans spend an estimated billion caring for their lawns every year, according to “American Green: The Obsessive Quest for the Perfect Lawn.” Not only that, but they also spend an average of 73 hours a year cutting grass, pruning and doing all the other tasks that help keep yards beautiful, according to the Bureau of Labor Statistics.

That’s a huge investment of time and money that should be put to the best use possible. For 8 ways to help you frugalize your yard and save money over the long term, click on the link below:

Saving money on lawn care

Federal Reserve weighs new ‘sterilized’ QE
By Sheyna Steiner • Bankrate.com

Highlights

• A new strategy is being considered, and it should mitigate inflationary concerns.
• Sterilized bond buying would limit the liquidity introduced into the banking system.
• The economy’s anemic recovery may prompt future Fed action if warranted.

Fed watchers may be on the edge of their seats next week in light of a new report in The Wall Street Journal stating that the central bank is weighing a new strategy for quantitative easing, or QE. The Federal Open Market Committee, or FOMC, has reportedly been considering new ways of utilizing its bond-buying capability should more quantitative easing become necessary. Even so, it’s unlikely the rate-setting team of the Federal Reserve will make any moves at its March 13 meeting. The Wall Street Journal reported March 7 that Fed officials are considering so-called sterilized bond buying, which would limit the amount of liquidity introduced into the banking system using complicated financial transactions known as reverse repurchase agreements, or reverse repos. Previous bond-buying programs involved creating money with which to make outright securities purchases. Critics contend that printing money willy-nilly and leaving it sloshing around could prove inflationary once the economy is up to speed. The new strategy should mitigate those concerns, the Journal reported.

“It does introduce a new variable, but I still think next week will be a wait-and-see meeting,” says Dan Greenhaus, chief global strategist at BTIG, a global financial services firm.

The FOMC meets eight times per year to discuss monetary policy and set the federal funds rate, or the short-term rate banks charge each other for overnight loans. The rate, in turn, influences CD and savings rates, credit card interest rates and other loan rates.

But interest rates have been a moot point as of late. The federal funds rate is currently targeted between zero percent and 0.25 percent and will be until 2014, as of the last Fed meeting. More salient these days is the likelihood of further rounds of quantitative easing.

Despite the Journal’s report, the probability remains low — for now.

Two underlying reasons foreshadow a lighter meeting: some improvements in the economy and a fairly significant meeting in January.

For the full story, please click on the link below.

Federal Reserve

Have you considered a reverse mortgage for purchase?

Do you have an older client (62 or older) who would like to:

- downsize for more affordable living
- relocate to be closer to family
- purchase a single-level, more accessible home, or
- purchase a more expensive home than they qualify to purchase with a forward mortgage?

If so, an FHA-insured Home Equity Conversion Mortgage could enable your client to
make this purchase without having a monthly mortgage payment as long as they live in the home.
A reverse mortgage for purchase could be your ticket to making a sale that otherwise
you may not be able to close. Think outside the box!

Contact George Cooper, your Open Mortgage reverse mortgage specialist in Land O’Lakes, Florida for more information.
Have a wonderful and productive week!

George Cooper
Open Mortgage Loan Officer & Reverse Mortgage Specialist
NMLS #367456
813-996-6100
My Web Site
GeorgeCooper@Openmortgage.com

The benchmark 30-year fixed-rate mortgage fell six basis points, according to the Bankrate.com national survey of large lenders. One year ago, the mortgage index was 5.01 percent. The benchmark 15-year fixed-rate mortgage fell 4 basis point from the previous week, and the benchmark 5/1 adjustable-rate mortgage fell 10 basis points. Mortgage experts expected rates to shoot up again this week after last week’s spike, but recent economic reports pushed rates down.

Consumers seem to share his view. The Consumer Confidence Index dropped 1.4 points to 70.2 in March, as consumers worried about inflation and rising gas prices.

The latest data on the housing market were dismal.

“Despite some positive economic signs, home prices continued to drop,” says David M. Blitzer, chairman of the Index Committee at S&P Indices. According to the 20-city Standard & Poor’s/Case-Shiller Home Price Index released Tuesday, home prices fell 3.8 percent in January.

The pace of home sales also slowed down a bit in February, according to the National Association of Realtors. The Realtors index slipped 0.5 percent in February, but it remained significantly better than a year ago.

Expect volatility in rates
As investors continue to get mixed signals on the local and global economy, mortgage rates will fluctuate, Becker says.

“We might be entering another period of volatility, which is scary because we got so complacent with rates being in a tight range for a while,” he says.

The 30-year fixed rate averaged 4.17 percent in the first quarter of the year, down from an average of 4.26 percent in the fourth quarter of 2011, according to Bankrate’s weekly survey.

Barry Habib, chief market strategist for Residential Finance Corporation in Marlboro, N.J., says he expects rates will improve in coming days before they begin to rise again.

“There is going to be a lot of volatility,” he says. “The next couple of days could be the best time to lock in. Beyond that, we’ll probably get a wave of ups and downs. The summer will be a real turning point for rates.”

Borrowers must get off the fence
Borrowers who think they should wait for better rates and homebuyers who want to wait for lower prices shouldn’t take the chance, Habib says.

“Would you rather buy a little higher at a much lower rate or a bit cheaper at a much higher rate?” he asks.

For the full story click on the link below.

Mortgage rates sink

Fannie Mae finds Americans remain committed to homeownership
By Kerri Panchuk • March 27, 2012

Home values may be down nationwide, but the majority of Americans surveyed by Fannie Mae in the fourth quarter still prefer homeownership as opposed to renting.

Fannie released its quarterly national housing survey Tuesday morning after interviewing 3,000 Americans between the months of October and December.

Two-thirds of renters surveyed said they hope to buy a home in the future — a trend that subsists across all education levels and demographics.

“In spite of the impact of the housing crisis on home values and homeownership rates across the country, Americans by and large still hope to become homeowners,” said Doug Duncan, vice president and chief economist of Fannie Mae. “Some may not be financially positioned to own a home in the near future, but Americans may begin to revisit that aspiration as employment and household balance sheets improve over the coming years.”

Still, Duncan noted that many renters are fearful of homeownership and believe it would be “difficult for them to get a home.”

For the full story click on the link below

Fannie Mae

Improving Housing Market Driving Economy: Jamie Dimon.
By: Margo D. Beller CNBC.com Wednesday, 28 Mar 2012

The U.S. housing market is very close to a bottom and there are already signs its improvement is giving a boost to the overall economy, JPMorgan Chase CEO Jamie Dimon told CNBC Wednesday.

I believe we’re very close to the inflection point. People look at prices that are still coming down but all the other signs are flashing green,” Dimon said during a job fair in New York for hiring veterans.

Housing is more affordable and “the shadow inventory everyone talks about is lower today than it was 12 months ago. It will be a lot lower 12 months from now,” he said.

Distressed inventory “is actually coming down, not going up. Homes for sale are about half what they were four years ago. You could come up with a pretty bullish case. If the economy grows, housing gets better, quicker.”

He said the U.S. economy is “getting stronger all the time. It’s broad-based, companies are in great shape…Consumers are in great shape.”

So are the banks — JPMorgan was one of those that passed the Federal Reserve’s latest round of stress tests. The bank was so pleased by this it jumped the gun and announced it was raising its dividend and buying back shares before the official release of the test results.

Dimon believes the threat of a double-dip recession is behind us.

“No one can forecast the economy with certainty,” Dimon said, “but most of us in business [have] got growth plans that have nothing to do with the actual state of the economy. We’re going to always open new branches,” do more marketing, hire more people and work to bring in more customers.

For the full story, please click on the link below.

Improving Housing Market

Have you considered a reverse mortgage for purchase?

Do you have an older client (62 or older) who would like to:

- downsize for more affordable living
- relocate to be closer to family
- purchase a single-level, more accessible home, or
- purchase a more expensive home than they qualify to purchase with a forward mortgage?

If so, an FHA-insured Home Equity Conversion Mortgage could enable your client to
make this purchase without having a monthly mortgage payment as long as they live in the home.
A reverse mortgage for purchase could be your ticket to making a sale that otherwise
you may not be able to close. Think outside the box!

Contact George Cooper, your Open Mortgage reverse mortgage specialist in Land O’Lakes, Florida for more information.
Have a wonderful and productive week!

George Cooper
Open Mortgage Loan Officer & Reverse Mortgage Specialist
NMLS #367456
813-996-6100
My Web Site
GeorgeCooper@Openmortgage.com

Mortgages Rise But Keep Refinance Alive

By Polyana da Costa • Bankrate.com

Mortgage rates inched upward this week as investors gain confidence in the economy and banks signal they’ve strengthened their systems enough to weather another recession.

The benchmark 30-year fixed-rate mortgage rose 4 basis points this week. One year ago, the mortgage index was 4.91 percent.

The benchmark 15-year fixed-rate mortgage rose 4 basis points, the benchmark 5/1 adjustable-rate mortgage rose 11 basis points.

“If the economy keeps chugging along, rates could really take off,” says John Walsh, president of Total Mortgage Services in Milford, Conn.

Good economic news

Two key economic indicators signaled to investors this week that the economy might be coming out of the woods. Retail sales figures released Tuesday showed that consumers spent more in stores in February, as sales rose 1.1 percent compared to January. It may seem like a small change, but that’s the biggest gain in five months, according to figures from the U.S. Department of Commerce.

The economy added 227,000 jobs in February, according to a report released last week. While the unemployment rate remains high and stalled at 8.3 percent, the report shows the labor market has improved for three months in a row.

The Fed also painted a somewhat positive — or at least not as negative — picture of the economy after the Federal Open Market Committee met this week.

The Fed says “it anticipates that the unemployment rate will decline gradually,” and points that the “strains in global financial markets have eased, though they continue to pose significant downside risks to the economic outlook.”

Stronger banks

Another factor that fueled investors’ confidence this week was the Fed’s stress test for banks. The Fed evaluated whether banks would have sufficient capital to operate normally and enough money to lend to consumers and businesses during a “severe” economic crisis. Of the 19 banks evaluated, 15 passed the test.

“The idea that these banks are more financially sound” certainly put pressure on rates this week, says Michael Becker, a mortgage banker at WCS Funding in Baltimore.

As investors gain confidence, they target riskier investments such as the stock market, and that usually means higher rates.

“You’re seeing money pulled out of the bonds market and going into the stock market,” says Derek Egeberg, branch manager for Academy Mortgage in Yuma, Ariz.

For the full story click on the link below.

Mortgage rates rise

Home Repossessions Set to Jump in 2012.

By Jon Prior • March 12, 2012 • Housingwire.com

Analysts expect between 900,000 and 1 million homes will move from delinquency into REO in 2012, back to levels seen before the robo-signing slowdown.

Servicers moved roughly 800,000 properties through the foreclosure process and into REO liquidation in 2011, according to RealtyTrac. After resolving affidavit problems late last year, banks began moving more properties through the process. JPMorgan Chase analysts expect repossessions to reach as high as 900,000 even with a wave of new alternatives to foreclosure.

“Several major policy changes in the last few months have sped up resolution of the pipeline. Of course, new delinquencies will ensure that full resolution will still take years, but the pace may be faster than we expected,” analysts said.

Daren Blomquist, vice president of RealtyTrac, said that pace could return this year.

“For 2011 we hit 804,423, not quite the 825,000 we were on pace for because of a slowdown in November and December,” Blomquist said in an interview. “We are expecting close to 1 million REOs in 2012 as some of the delayed foreclosures finally complete the process this year.”

The pace began to pick up in January but is still down from 2011. Servicers repossessed 66,500 homes that month, up 8% from December but down 15% from one year ago.

Just because a property moves into REO doesn’t mean it will be resold that year, either. For instance, Freddie Mac data shows the GSE had to wait an average of nearly 200 days to unload an REO. According to Blomquist, there were nearly 538,000 REO sales in 2011, roughly two-thirds of all homes repossessed that year.

About 2.6 million loans, or half of the total delinquency inventory, will be removed either through modification, short sale or a traditional repossession in 2012, Chase analysts said.

For the full story click on the link below

Home repossessions set to jump in 2012

4 Emotional Mistakes Made by Home Sellers

By Michael Estrin • Bankrate.com

Keep emotion out of selling a home

The greatest hindrance to the sale of a home can be a seller who is seized by emotion.

“It is very important for sellers to (keep) in mind that a real estate transaction is most likely the single largest financial transaction they will ever undertake,” says Fiona Dogan, a realtor in the Rye, N.Y., office of Julia B. Fee Sotheby’s International Realty. “It should be viewed and handled primarily as a business transaction, with cold, hard decisions being made on a financial and investment basis.”

Home sellers who allow emotions and sentimental attachments to overtake them during the sales process run the risk of making hasty, sometimes poor decisions, Dogan says.

Here are some tips to help any home seller avoid making emotional mistakes that could cost money.

• Overpricing
  Getting top dollar is the dream of every home seller. But getting a buyer to pay a premium for features that are valuable only to you? That’s closer to fantasy, according to Tracie Hamersley, senior vice president and associate broker at Citi Habitats in New York City.”Overpricing often occurs because of emotional reasons,” Hamersley says. “So many sellers make the mistake of thinking that their home is special and that a special buyer will pay more because they also fell in love with the property.” 
• Home-seller error: Going to a showingThere are a lot of legitimate reasons why a seller might want to be present for the home’s showing. But having a seller there tends to sour the experience for most buyers, according to Renee Weinberg of Petrey Real Estate in Long Beach, N.Y.
•  ”Getting the seller out of the house is key,” Weinberg says. “Whenever we take a listing, this is explained in advance.” 
• Rejecting early offersSellers be warned: The longer a property sits on the market, the worse the offers are likely to get, says Nick Jabbour, a New York City real estate agent and vice president of Nest Seekers International.
•  ”Once a property is marketed, it will receive the most attention during the first two weeks,” Jabbour says. “(The home is) new to the market, and any buyers that have been in the market for a home will see it come up. If it is priced right, an educated buyer, (who has) been in the market for a while (and) sees the home as a fit, will put a serious foot forward.” 
• Don’t take offers personallyWhen you’re selling your home, it’s easy to take everything personally. But doing so is a big mistake, according to Fiona Dogan, a realtor in the Rye, N.Y., office of Julia B. Fee Sotheby’s International Realty.
•  ”Sellers need to become emotionally detached very quickly from their homes,” Dogan says. “By its very nature, a real estate transaction is aggressive and confrontational since the seller wants the highest price and the buyer wants the lowest.”

For full details on each mistake, please click on the link below.

4 emotional mistakes

Have you considered a reverse mortgage for purchase?

Do you have an older client (62 or older) who would like to:

- downsize for more affordable living
- relocate to be closer to family
- purchase a single-level, more accessible home, or
- purchase a more expensive home than they qualify to purchase with a forward mortgage?

If so, an FHA-insured Home Equity Conversion Mortgage could enable your client to
make this purchase without having a monthly mortgage payment as long as they live in the home.
A reverse mortgage for purchase could be your ticket to making a sale that otherwise
you may not be able to close. Think outside the box!

Contact George Cooper, your Open Mortgage reverse mortgage specialist in Land O’Lakes, Florida for more information.

Have a wonderful and productive week! By the way, Saint Patrick’s Day is Saturday. Remember, God invented whiskey to keep the Irish from ruling the world. So, please celebrate responsibly!!!

George Cooper
Open Mortgage Loan Officer & Reverse Mortgage Specialist
NMLS #367456
813-996-6100

My Web Site

GeorgeCooper@Openmortgage.com

“Reverse mortgages should be a breakout product of demographic destiny.

Millions of older Americans are hurtling toward very uncertain retirements. Survey after survey documents a serious lack of retirement planning and nest eggs too small to support even modestly comfortable retirements. Continued longevity gains are extending the retirements of many people to 20 and 30 years, if not longer. Government spending on seniors is threatened by budget deficits and conservative opposition to government programs….

Where will the money to support tomorrow’s retirees come from? Enter the reverse mortgage. It is the only mainstream financial product that permits older Americans to tap the equity in their homes. Reverse mortgages allow homeowners to get money out of their primary residences, and also free them from making future mortgage payments for as long as they live in their homes.”

The article continues to explore reverse mortgages and the reasons why they have not taken off the way you would think.  The author has a little misunderstanding about how HECMs work, but all in all this is an excellent commentary on the industry from an outside observer.  A whole lot more people would benefit from reverse mortgages with some education of consumers and a little clarity from the government.

Read the whole article.

The National Reverse Mortgage Lenders Association has upgraded their consumer web site to make it easier for people to get information they can understand about reverse mortgages.  It is very consumer friendly, and even has a special section for children of seniors so that they can help their parents judge the suitability of a reverse mortgage for their situation.  Check it out!

Reverse Mortgages and 3in4 Need More