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Raleigh Home Loans – today Bank of American announced another settlement with the Justice Department, this time for 16.6 billion.
The bank has been accused of misleading the buyers of a mortgage backed securities (bonds) about the performance and quality of the instruments.
Mortgage companies in Raleigh used BOA as one of their wholesale lenders until couple of years ago when BOA left the wholesale channel and decided to focus their mortgage efforts on the retail.

The settlement today adds to a total of 72 billions BOA paid in penalties. Raleigh Home Loans are in no way affected by this development today. Mortgage rates in Raleigh are also stable as the development did not have much impact on the financial markets.

•In 2010, it paid $2.8 billion to Fannie Mae and Freddie Mac over mortgages.
•In 2011, it paid trustee Bank of New York $8.6 billion and bond insurer Assured Guaranty $1.6 billion after they filed lawsuits over bond deals that went sour.
•In 2012, it paid nearly $12 billion to help settle lawsuits over wrongful foreclosures and more than $2 billion in a class-action suit it inherited from Merrill Lynch.
•Last year, it paid Fannie Mae almost $12 billion more.
•Earlier this year, it paid the Federal Housing Finance Authority more than $9 billion. And those are just the big ones.

if you are looking for a Raleigh home loans we are here to assist.

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Mortgage lenders Raleigh market update

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Mortgage lenders Raleigh – There is no doubt that the world has seen its share of conflicts in 2014. We have seen major conflicts in areas such as Ukraine, Gaza, Iraq, Syria, Libya. With the turmoil the world markets have been pretty solid with our stock market being no exception. By mid-July, the Dow and the S&P were again in record territory. As always, this effects mortgage rates in Raleigh and mortgage lenders Raleigh.

The Ukrainian crisis has occupied the headlines for the good part of 2014. Yet, the downing of a civilian airliner has brought the conflict to a center stage as many countries have implemented economic sanctions against Russia because of it’s actions in Ukraine. Russia has retaliated with it’s own sanctions and now we have a possible economic cold war in the making. The markets have reacted negatively to these escalating developments. Mortgage lenders Raleigh are on lookout for the effects of those developments on mortgage rates in Raleigh. Mortgage companies Raleigh and mortgage brokers realize that in such economic and political landscape mortgage rates can be volatile.

Experts have indicated that the stock market is due for a correction, as it has been almost three years since the last real correction of at least 10%. Each time we have had a pullback in the past 3 years, the markets have rebounded quickly and this past week we saw at least a moderate rebound. The question in if the Russian crisis escalates, could we be in for a real correction?
However, there is some positive news which has arisen from the stock market’s recent international malaise. Long-term rates and oil prices have both headed lower. At a time when we are hearing positive news with regard to the economic recovery, lower rates and lower oil prices may serve to hasten economic growth. If economic growth accelerates, that is good news for stocks — but possibly only if rates stay low. Mortgage rates Raleigh will possibly experience some kind of correction. Mortgage lenders Raleigh will need to reassess the impact of this on future mortgage applications.

The Mortgage Markets in Raleigh – mortgage brokers Raleigh
•Fixed mortgage rates in Raleigh fell slightly in the past week with rates staying within the same range they have been for almost the past three months.
•Freddie Mac announced that for the week ending August 14, 30-year fixed mortgage rates in Raleigh fell slightly to 4.12% from 4.14% the week before.
•The average for 15-year mortgage rate in Raleigh loans ticked down to 3.24%.
•Adjustables were also stable in the past week, with the average for one-year adjustables up slightly to 2.36% and five-year adjustables decreasing marginally to 2.97%.
•A year ago 30-year fixed mortgage rates in Raleigh were at 4.40%.
•Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac — “Rates on home loans in Raleigh were down slightly amid a week of light economic reports. Of the few releases, retail sales were virtually unchanged in July after a 0.2% increase in June, ending five months of increases. Excluding motor vehicles and parts, retail sales were up 0.1% last month.”

Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes. Mortgage lenders Raleigh, mortgage companies Raleigh.

Mortgage Raleigh

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Mortgage Raleigh and foreclosures. Many markets across the country are seeing fewer foreclosures. That’s because foreclosure inventory has plunged 35 percent nationally from a year ago, but housing experts aren’t ready to say the foreclosure crisis is completely behind the nation quite yet. Completed foreclosures fell 9.9 percent year-over-year, but on a month-to-month basis completed foreclosures ticked up 2.7 percent in June compared to May, according to CoreLogic’s June National Foreclosure Report, which provides a snapshot of completed foreclosures and the foreclosure inventory. There were 54,000 completed foreclosures in June – still elevated compared to historical averages of about 21,000 per month between 2000 and 2006. In June, about 648,000 homes were in some stage of foreclosure, known as foreclosure inventory, compared to 1 million last year at this time, CoreLogic reports. Foreclosure inventory has fallen 35 percent year-over-year and the foreclosure inventory now makes up 1.7 percent of all homes with a mortgage including mortgage Raleigh. It represents the 32nd consecutive month for year-over-year declines. “While 32 straight months of year-over-year decline in the foreclosure rate is cause for celebration, the total number of homes still in the foreclosure process remains almost four times as high as the average in the early 2000s,” says Mark Fleming, chief economist for CoreLogic. “Additionally, there is concern over whether or not we can maintain this pace of improvement as the foreclosure inventory becomes more concentrated in judicial states with lengthier, more complex processes and timelines.” Source: CoreLogic. This represents similar statistics to those effecting mortgage in Raleigh NC.

Four draft appraiser-specific policy documents that will be part of the Federal Housing Administration’s (FHA) Single Family Housing Policy Handbook (SF Handbook) were posted for review and feedback. This posting is a continuation of FHA’s progress toward a consolidated, authoritative SF Handbook that will make it easier for stakeholders to do business with FHA. The four drafts posted will work in concert with the appraisal requirements in the SF Handbook Application through Endorsement section and contain:
•FHA Appraiser Roster eligibility requirements in the draft Doing Business with FHA-Other Participants in FHA Transactions-Appraisers document;
•Appraiser oversight and compliance policies in the draft Quality Control, Oversight & Compliance-Monitoring of Other Participants Appraisers document;
•Appraiser requirements for performing an FHA appraisal, including property eligibility requirements, in the draft Appraiser and Property Requirements for Title II Forward and Reverse Mortgages document; and
•Forms and data delivery requirements in the draft Appraisal Report and Data Delivery Requirements guide.

Feedback from stakeholders on the drafts will be accepted through September 2, 2014. Visit FHA’s Drafting Table SF Draft Handbook Appraiser Requirements Web page here ( for detailed descriptions and to access each draft document. FHA specifically encourages FHA Roster appraisers, and lender staffs that underwrite appraisals, to review and submit feedback. Source: FHA

Mortgage Raleigh and home loans Raleigh – The S&P/Case-Shiller home price index, a closely watched measure of home values, posted a 9.3% annual increase in its May reading, down from the 10.8% rate in April. The rate of increase was as high as 13.7% in November before slowing every month since. The good news for homeowners is that the index has now been up every month over the last two years — after posting drops almost every month over the previous five years. And some experts say the current growth is better for the market, because rapid price increases can keep some buyers on the sidelines. “Today’s Case-Shiller data is consistent with the slow glide-path down towards a more normal housing market,” said Stan Humphries, chief economist for real estate Web site Zillow. “Almost across the board, lower-priced homes have been appreciating more quickly than the most expensive homes, a welcome reversal from prior years.” Prices rose in all 20 cities measured by the index, and nine of those markets posted double-digit percentage gains. A drop in foreclosures and unemployment rates and pent-up demand for people who had wanted to buy homes have combined to help lift home prices. A recovery in home sales and prices has been a major driver of the rebound of the U.S. economy so far this year, as the jump in prices has increased household wealth. The price increases and low rates also helped many homeowners refinance and lower their home payments. But even with two years of increases, prices are still 17% below the peak reached at the height of the housing bubble in early 2006. Source: CNN/Money

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Raleigh mortgage rates

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Raleigh mortgage rates information for this week.

This week we have had a week to consider the barrage of data released during the last week of the month and the first days of August. The markets were volatile during this period with the Dow moving from record territory by mid-July to a 2.5% loss in one week and negative territory for the year as of August 1. Other markets moved as well during this period as oil moved down below $100 per barrel the same week and long-term interest rates were also volatile. Of course, this had effect on mortgage rates in Raleigh.

Previously we asked why mortgage rates in Raleigh are staying so low if it looks like the economy is rebounding. As a matter of fact, one of the reasons the stock market reacted so negatively to the good news regarding the economy is that there was a concern the Federal Reserve Board might raise rates more rapidly than expected. The Fed even noted in its recent announcement that inflation was moving closer to their target numbers. We note that this was just one reason for the negative reaction in the stock market. There were others. For example, there continues to be plenty of political and financial turmoil overseas. Plus, with the Dow and S&P reaching record territory again and again in the first half of the year, the markets could have been due for a correction.

Keep in mind that if the Fed does raise their benchmark mortgage rates that effect Raleigh, short-term rates will rise. But this is no guarantee that long-term rates will also rise. With international turmoil and plenty of negative economic news to balance the overall good reports we have seen, long-term rates are more likely to go up if the markets feel that the Fed is over-stimulating the economy. In other words, the Fed paring down the purchases of Treasuries and Mortgage Backed Securities and talking about raising rates can actually ease the concerns of the markets and keep long-term rates stable. At least for now. The Fed and the markets will be watching the real estate markets closely from here because this is the one area which has been weak and the economy is not likely to overheat while real estate sales continue to be sluggish.

The Mortgage rates markets
•Fixed mortgage rates in Raleigh rose very slightly in the past week, but stayed in the same range they have been for almost two months now.
•Freddie Mac announced that for the week ending August 7, 30-year fixed mortgage rate rose slightly to 4.14% from 4.12% the week before.
•The average for a 15-year home loan in Raleigh ticked up to 3.27%.
•Adjustable mortgage rates were also stable in the past week, but fell slightly with the average for one-year adjustables easing to 2.35% and five-year adjustables decreasing marginally to 2.98%.
•A year ago 30-year fixed mortgage rates in Raleigh were at 4.40%.
•Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac –“Rates on home loans were little changed amid a week of light economic reports. Of the few releases, the ISM non-manufacturing index rose to 58.7 in July from 56.0 a month earlier. Also, factory orders were up 1.1% in June. The two reports signal steady economic growth in the third quarter of the year.”

Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes. Mortgage Raleigh NC.

Raleigh Mortgage Rates Update

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The Raleigh Mortgage Rates Markets

•Raleigh mortgage Rates were stable at recent lows in the past week.
•Freddie Mac announced that for the week ending July 24, 30-year fixed rates were unchanged at 4.13%.
•The average for 15-year loans ticked up to 3.26%.
•Adjustable rates were also stable in the past week with the average for one-year adjustables unchanged at 2.39% and five-year adjustables increasing marginally to 2.99%.
•A year ago 30-year fixed rates were at 4.31%.
•Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac –“Rates were little changed for the week with 30-year fixed-rate loans remaining unchanged. Meanwhile, we received some good news on housing with existing home sales climbing 2.6 percent to a seasonally adjusted annual rate of 5.04 million in June, the highest pace since October 2013.”

Raleigh mortgage rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

The Consumer Financial Protection Bureau (CFPB) clarified its rules regarding lending to same-gender, married couples. The agency recognizes all lawful marriages valid at the time of the marriage in the jurisdiction where the marriage was celebrated. CFPB Director Richard Cordray recently issued a memo to lenders explaining the CFPB’s laws, regulations and policies regarding lending to same-gender married couples. The memo follows the June 26 United States v. Windsor case in which the Supreme Court struck down section 3 of the Defense of Marriage Act (DOMA) as unconstitutional. Section 3 provided that marriage would only be recognized as a legal union between one man and one woman. “The Bureau will regard a person who is married under the laws of any jurisdiction to be married nationwide for purposes of the federal statutes and regulations under the Bureau’s jurisdiction regardless of the person’s place of residency,” Cordray writes. Source: Reverse Mortgage Daily For Access to the Full Memo Click Here

The Federal Housing Administration (FHA) posted two draft sections of its Single Family Housing Policy Handbook (SF Handbook) — Doing Business with FHA—FHA Lenders and Mortgagees and Quality Control, Oversight and Compliance — for stakeholder review and feedback.
•The draft Doing Business section contains information regarding eligibility, approval, and recertification requirements for FHA lenders and mortgagees; and
•The draft QC/Oversight section explains ongoing lender and mortgagee responsibility to perform institution and loan-level quality control.

The posting of these two sections is a continuation of FHA’s overall effort to develop a comprehensive SF Handbook that will be, at its completion, the single, authoritative source for all Single Family housing policy. Both sections, as well as supporting information, will be posted for review and feedback on the SF Drafting Table on their respective web pages — Doing Business with FHA—FHA Lenders and Mortgagees and Quality Control, Oversight and Compliance. FHA invites voluntary stakeholder feedback on these SF Handbook sections until the end of July. Source: FHA

One of Julian Castro’s early dilemmas as head of the Department of Housing and Urban Development likely will be how he handles industry calls to lower Federal Housing Administration premiums. The San Antonio mayor, who won Senate confirmation July 9 as the new HUD secretary, is bound to face lobbying from banking and housing groups that view lowering FHA premiums as the answer to improving loan affordability. Many expect HUD to avoid such a move, and instead push for lenders to reduce their self-imposed credit overlays that limit lending. HUD is also developing special programs to help marginal borrowers gain access to FHA financing. Both Shaun Donovan, Castro’s predecessor, and FHA Commissioner Carol Galante have resisted calls to lower premiums. But the lobbying effort is expected to continue. “Based on what I hear in conversations with lending and real estate executives, lowering premiums needs to be part of the solution,” said industry consultant Brian Chappelle. “While FHA proposed steps will help, they simply do not go far enough.” Last year’s actuarial report showed the FHA’s Mutual Mortgage Insurance Fund was undercapitalized, triggering a $1.7 billion infusion from the Treasury Department. However, according to David Stevens, head of the Mortgage Bankers Association, some projections suggest the upcoming MMIF report due out in November could show the fund’s capital ratio being above the critical 2% threshold. Stevens said that would give Castro an opportunity to make at least a modest reduction in premiums. Source: National Mortgage News

Foreclosure activity in June was down 16 percent from a year prior, marking the lowest level since July 2006 — before the housing bubble burst — according to RealtyTrac’s Midyear 2014 U.S. Foreclosure Market Report. The report showed a much-improved picture: Foreclosure filings, which include default notices, scheduled auctions, and bank repossessions, were down 19 percent in the first half of 2014 compared to the previous six months and 23 percent from year-ago levels. Ten states in June reached their lowest level of foreclosures since 2006. “Nationwide foreclosure activity in June reached an important milestone, dropping to levels not seen since before the housing-price bubble burst in August 2006,” says Daren Blomquist, vice president at RealtyTrac. “Over the next six to nine months, nationwide foreclosure numbers should start to flatline at consistent historically normal levels.” Not all states are out of the woods yet. For example, nine states saw foreclosure activity rise during the first half of 2014 compared to a year ago according to the report. “While it’s important that any remaining foreclosure infection is addressed promptly to keep it from festering, foreclosures are no longer a widespread contagion threatening to derail the housing market’s return to full health,” Blomquist says. Source: RealtyTrac

Raleigh Mortgage Rates Update

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Why Are Rates Not Going Up?

Mortgage Company Raleigh NC. After a good hike in long-term rates during the second half of 2013, just about every analyst in the country seemed to be sure that this was just the first phase of rate increases to come. After all, rates were the lowest in a generation and the increase we witnessed last year still put rates in very, very attractive territory. Jobs growth started accelerating during the second half of the year and the systems were ready to fire on all cylinders while the recovery finally got into full gear. Then came the long, cold and hard winter. So we understand that factor. Once again, the recovery halted and rates came down. Many wonder what is on the horizon for mortgage seekers in Raleigh and how Raleigh mortgage companies will respond to the new.

Mortgage Companies in Raleigh NC generally agree that this factor has passed. Job growth has heated up again and the stock market is at all time highs. The Federal Reserve has been slowing their purchases of treasury bonds and home loans in an effort to slow down fiscal stimulus and they are meeting this week with most observers feeling that rate hikes will be coming in early 2015. The question remains, why aren’t rates going up in response to all of these factors? We could take the easy way out by saying that predictions of the future are futile and while this is true, we believe there are other factors at work. What does that mean for borrowers seeking mortgage in Raleigh NC?

Certainly one factor encompasses the political tensions around the world. Ukraine, Syria, Libya, Iraq and Gaza are all spots of conflict right now. The tragedy of a passenger jet being shot down just demonstrates how dangerous these situations are. When the world erupts, while our economy has not been as stable as we would like — it is still a haven of safety compared to the rest of the world. When there is unrest, Treasuries are still a choice for those who are looking for safety in a world of conflict. While this factor does not completely explain why rates are not rising right now, there is no doubt that this factor is important and it also explains why predictions are futile. Next week, in addition to the analysis of the Fed meeting and the employment data, we will talk about one other factor contributing to low rates.

Mortgage Raleigh NC and mortgage companies in Raleigh NC will be on a lookout for what is to come.

Mortgage Raleigh NC Rates Update

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Mortgage Raleigh NC- still Work To Be Done

As the euphoria wears off in the aftermath of our stellar June employment release, we realize that there is still work to be done in order to fully recover from the financial crisis and deep recession. The recovery has been going on for five long-years, but it is still not fully mature. For example, while we have recovered all jobs lost during the recession, we have not added enough jobs to accommodate the population growth that has occurred during and since the recession. Even at today’s increased pace of job growth, this void will not be filled for two years or longer. Mortgage Raleigh NC, how will this affect mortgage rates in Raleigh?

While the unemployment rate has dropped to 6.1% — which was the lowest in almost six years, the “underemployment” rate still stands at 12.1%. The underemployment rate includes those who are working part-time because they can’t find full time jobs. The labor participation rate stands at 62.8% which is a 36-year low. It is true that the baby boomer generation is reaching retirement age and this contributes to the labor participation statistic. Mortgage companies in Raleigh NC evaluate the best fitting programs for this age group. On the other hand, it is not merely how many jobs are created — it is also what type of jobs are created. America needs more high paying full-time jobs.

So before we celebrate the end of bad times, we must understand that there is truly more work to accomplish. The fact that we have more room to grow is actually good news for right now because this gives the Federal Reserve Board latitude to keep interest rates lower for a longer period of time and not worry about the economy overheating. The markets will cause rates to rise as we witness the start of the cycle of better times. If this surge in job hiring spreads to the real estate markets, we will start making up ground in a hurry instead of the snail’s pace of the past five years. If that happens, expect the Fed to act much more quickly.

The Mortgage Markets in Raleigh NC and mortgage rates in Raleigh NC

•Mortgage Rates in Raleigh were up slightly in the past week, showing little change despite the strong employment data.
•Freddie Mac announced that for the week ending July 10, 30-year fixed rates increased slightly to 4.15% from 4.12% the week before.
•The average mortgage rate in Raleigh for 15-year loans rose to 3.24%.
•Adjustable rates in Raleigh were also stable in the past week with the average for one-year adjustable rates rising slightly to 2.40% and five-year adjustable rates increasing marginally to 2.99%.
•A year ago 30-year fixed mortgage rates in Raleigh were at 4.51%.
•Attributed to Frank Nothaft, vice president and chief economist, Freddie Mac –“Rates on home loans increased for the week as the labor market appears to be improving. Based on the employment report released last week, the U.S. economy added 288,000 jobs in June, gained 224,000 in May and increased by 304,000 in April. Also, the unemployment rate in June fell to 6.1 percent from 6.3 percent in May.”

Mortgage rates in Raleigh indicated do not include fees and points and are provided for evidence of trends only. the quoted mortgage Raleigh NC They should not be used for comparison purposes.

Raleigh Home Loans getting more expensive.

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Home Loans in Raleigh are about to get more expensive (FHA that is). If you are thinking about buying a new home under the FA program, you should consider making your move before June 1st 2013.
The Federal Housing Administration is making some major changes in their fee structure and they will directly hit your pockets. Under the current payment schedule, if you put the usual 3.5% down on a 30 year mortgage, you pay approximately $192 a month on a $200,000 home. But your Raleigh home loan payment will be about $50 a month more comes June.
But the FHA did not stop there. Even more drastic changes will come to the mortgage insurance premiums as it pertains to its cancelation. Currently the MIP on a 30 year term loans with 3.5% down payment stays for a minimum of 5 years but it drops once you reach 22 % equity. Under the new rules your MIP will stay for the life of the loan regardless of how much equity you have. If you put 10% down or more, you will need to keep the MIP for 11 years. Awch!

I think that FAH is sending us a very clear message – go ahead get an FHA loan but do refinance out of it in a few years.
So what can you do to avoid this increase? Well, for starters try to get the loan secured, specifically FHA case number pulled (mortgage speak…) before June 1st of this year.

Next, if you have a credit score of 660 or more and are able to put 5% down, consider a conventional loan. So far, there is no news of the mortgage insurance premium raising on conventional al home loans.

If your score if not exactly 660, but somewhere between 620-660, you can get the FHA loan and wait about 6-8 months. If you make your payments on time, your credit score is likely to increase to the 660 required to refinance into a conforming loan. But keep in mind that most lenders will want to see at least 6 payment made before they let you refinance.

Home Loans in Raleigh are getting more expensive but the good news is that rates are still very low and that eases the pain of home loan financing.

If you have any questions about the raising MIP or would like to request rate and payment quote, or if you just want to chat about the landing environment, please call me! I would love hear from you.

Mortgage Companies in Raleigh scratch heads over banks lawsuit

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Mortgage Companies in Raleigh scratch heads over banks lawsuit. Why now? What has changed between the big bank collapse of 2008 and now? Here is an interesting article from NPR website:

In a sweeping move, the government on Friday sued 17 financial firms, including the largest U.S. banks, for selling Fannie Mae and Freddie Mac billions of dollars worth of mortgage-backed securities that turned toxic when the housing market collapsed.

Among the 17 targeted by the lawsuits were Bank of America Corp., Citigroup Inc., JP Morgan Chase & Co., Goldman Sachs.

The lawsuits were filed Friday by the Federal Housing Finance Agency which oversees Fannie and Freddie, the two agencies that buy mortgages loans and mortgage securities issued by the lenders.

The total price tag for the securities bought by Fannie and Freddie affected by the lawsuits: $196 billion.

The government didn’t provide a dollar amount of how much it seeks in damages. It said that it wants to have the purchases of the securities canceled, be compensated for lost principal and interest payments as well as attorney fees and costs. The lawsuits allege the financial firms broke federal and state laws with the sales.

Home mortgage-backed securities were risky investments that collapsed after the real-estate bust and helped fuel the financial crisis in late 2008.

In the lawsuits that were filed in federal or state court in New York and the federal court in Connecticut, the government said the securities were sold with registration statements and prospectuses that “contained materially false or misleading statements and omissions.”

The Federal agency said the banks and mortgage lenders also falsely represented that the mortgage loans in the securities complied with underwriting guidelines and standards. They also included representations “that significantly overstated the ability of the borrower to repay their mortgage loans.”

The 17 institutions are Ally Financial Inc., formerly known GMAC LLC, Bank of America Corp., Barclays Bank PLC, Citigroup Inc., Countrywide Financial Corp., Credit Suisse Holdings Inc., Deutsche Bank AG, First Horizon National Corp., General Electric Co., Goldman Sachs & Co., HSBC North America Holdings Inc., JPMorgan Chase & Co., Merrill Lynch & Co. and its unit First Franklin Financial Corp., Morgan Stanley, Nomura Holding America Inc., The Royal Bank of Scotland Group PLC, and Societe Generale.

Mortgage Companies in Raleigh wonder how and if this latest development will affect the mortgage environment as well as the recover of the housing market. Opinions on the matter are highly divided; is it an attempt to score political points on part of the FHA commissioner? Does he have his eye on a new Washington appointment?

One issue still remains unanswered: why, in the face of blatant wrongdoing, perhaps a conspiracy to defraud investors and a huge market collapse, there are no heads rolling? We hear about “settlements”, “fines”, layer upon a layer of overreaching legislation and restrictions in the mortgage arena. What we don’t hear about is a good, old criminal prosecution of those involved in creating the mess. As of current, small potatoes like a few-person mortgage shops are subjected to audits, fines, examinations and licensing, while the big fish (bank COEs, Managers, fund managers) smile all the way to the bank.

Mortgage Companies in Raleigh scratch heads over banks lawsuit and wonder why now….

Mortgage Rates Raleigh and impact of PMI Group shut down on lending

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Mortgage Rates Raleigh and impact of PMI Group shut down on lending is a subject of much discussion among Raleigh mortgage brokers this week. On Saturday it has been announced that one of bigger players in the arena of mortgage insurance has been ordered to shut down two of its main units. Straggling mortgage insurer PMI Group has been ordered to stop issuing mortgage insurance. While details are still emerging, mortgage rates Raleigh and impact of PMI Group shut down on lending creates additional uncertainty and stress to the already bruised housing market.

So what doe it all mean to a potential buyer or a home owner looking to refinance? PMI or private mortgage insurance is a required monthly payment for those borrowers who do not have 20% to put down or have not built 20% equity in their home. Lenders require that you, the borrower, buy insurance that will pay the lender off (or at least a sizable part of the loan) in case you default.

The concern over Mortgage Rates Raleigh and impact of PMI Group shut down on lending is that the fallout of this one company may create a domino effect within the industry. Private mortgage insurance allows borrowers to get in a home with less than 20% down payment. Those entities suffered tremendous losses during the last few years as the housing market suffered unprecedented difficulties. If more private insurance companies go out of business, borrower will have more difficult time getting a loan as they will need to come up with 20% down payment or opt of an FHA loan.

FHA mortgage requires as of time of this writing 1% upfront mortgage insurance payment (can be rolled into the loan) and monthly mortgage insurance premium for at least 5 years. So even if you reach 20% equity in your home in year number 3, you still have to pay 2 more years of mandatory mortgage insurance. Of course, you can always refinance out of FHA loan earlier, as there are no prepayment penalties in Raleigh NC.

PMI Group has a chance to cure itself per NYSE rules, but it will remain to seen what impact it has on the real estate market and Raleigh mortgage industry.

Mortgage Rates Raleigh and impact of PMI shut down on lending is a subject of heated talk within the mortgage community.

Mortgage Rates