Prospective home buyers find it challenging to buy a home with a quality loan: Minnesota loan data report.
The OCC Mortgage Metrics Report for 2012's Second Quarter lets real estate professionals and economists see the percentage of mortgages that were current and performing, or if an underwater mortgage. At the end of Q2, 88.7 percent of U.S. homeowners are current of their home mortgages compared to 88.9 percent in the first quarter and 88.1 percent at the end of Q2 in 2011.
Buying A Home With A Quality Loan The OCC Mortgage Metrics Report, released September 2012, covers 30.5 million first-lien mortgages worth $5.2 trillion in outstanding balances, about 60 percent of all first-lien mortgages in the United States.
How Minnesota Fared On The Loan Data Report:
The Q2 Disclosure of National Bank and Federal Savings Association Mortgage Loan Data report released by the Office of the Comptroller of the Currency (OCC) show that homeowners have a better chance to buy a home because it is easier to obtain a quality loan. Minnesota had 1,485 home loan modification in Q2 of this year, with 0.7% gaining a mortgage term extension and 0.2% gaining a principal deferral. 430 of the modifications were through HAMP.
Highlights of the OCC Report Include:
The percentage of mortgages that were 30 to 59 days past due was 2.8 percent, up 12.1 percent from the prior quarter but down 7.5 percent from a year ago.
Seriously delinquent mortgages—60 or more days past due or held by bankrupt borrowers whose payments are 30 or more days past due—fell to their lowest level in three years.
The percentage of mortgages that were seriously delinquent was 4.4 percent, down 0.8 percent from the prior quarter and 9.2 percent from a year earlier.
The average loan modifications implemented in the Q2 of 2012 reduced borrowers’ monthly principal and interest payments by 24.6%, or $381. Modifications made under the Home Affordable Modification Program (HAMP) reduced payments by 35.3 percent on average, or $576.
Perhaps the best news -short sales increased by 5.7 percent from the previous quarter and 12.4 percent from a year earlier, meaning fewer foreclosures.
The number of completed foreclosures decreased 16.1 percent from a year ago to 101,735.
"The residential real estate market finally seems to be finding solid ground," said Equifax Chief Economist Amy Crews Cutts. "We're seeing signs that the contraction in mortgage debt is slowing and delinquencies continue to trend down at the same time that mortgage rates set new record lows on almost a weekly basis. The environment has been set for growth for a while—now it looks like it may finally be happening."
Buying A Home With A Quality Loan -Banks Trying To Accomplish Alternative Loss Mitigation
While the number of newly initiated foreclosures has increased, the decline in completed foreclosures is attributable to servicers holding loans in the foreclosure process for longer periods of time in an effort to accomplish alternate loss mitigation or home forfeiture actions. Servicers continued to emphasize alternatives to foreclosure
Factors Contributing To Buying A Home And Getting A Quality Loan
The OCC Report contributes year-over-year improvements to strengthening economic conditions, servicing transfers, and the ongoing effects of both home retention loan modification programs and home forfeiture actions. It is easier for underwater mortgages to refinance and potential home buyers to get a better quality loan due to more recent modifications that prioritize home loan affordability and sustainability. Modifications that decrease mortgage payments occur when loan servicers elect to lower homeowner's interest rates, extend the amortization period, defer principal or forgive principal. The reduced payments can make buying a home more affordable to borrowers and more sustainable over time.
Better Quality Loan Originations And Underwriting Sought
Under new rules from the Federal Reserve, the companies won’t force lenders to repurchase defaulted loans if borrowers have made 36 months of consecutive on-time payments. DeMarco has ensured that banks will be protected from buyback requests after only 12 months of payments for certain types of loans, such as those originated under the federal government’s Home Affordable Refinance Program, DeMarco said in the Raleigh, North Carolina, speech. “Ultimately, better quality loan originations and underwriting, along with consistent quality control, will help maintain liquidity in the mortgage market,” he said. Whether you're buying a home for the first-time or considering a mortgage refinance, start the process sooner than later and you will find your options expand the better your credit is and the more money you have saved toward obtaining a quality home loan.
Federal Quantitative Easing Hopes To Help More Homeowners
Federal Reserve Chairman Ben Bernanke announced in September that it is going on a third round of bond-buying stimulus. The policy, known as quantitative easing and often abbreviated as QE3, includes buying $40 billion in mortgage-backed securities each month. Officials overseas have had some strong reactions- including China - and have voiced concern that the Fed's easy-money policies have the potential to create asset bubbles, currency appreciation and inflation. Guido Mantega, Brazil's finance minister, has been particularly harsh of the U.S. decision, alleging it has contributed to a "monetary tsunami" that is hindering world wide economic growth. Bernanke defended his position and the outcome that QE3 will help open up access to quality loans in the long run. "The perceived advantages of undervaluation and the problem of unwanted capital inflows must be understood as a package, you can't have one without the other," Bernanke said.
Lenders Tight Standards Hinder Worthy Homeowners From Gaining Quality Loans
As NAR Chief Economist Lawrence Yun said in his September monthly press conference to release August existing-home sales figures, despite improvement in home sales and prices, these standards are keeping otherwise creditworthy households from getting financing, which could lead to wide and troubling disparities in home ownership rates down the road. “The tight underwriting standards are not a trifle matter,” he said. They’re “limiting who can become home owners and setting the stage for possible highly unequal wealth distribution in five years, because who will be getting [home price] appreciation over the next five years? They’re limiting the number of people in the middle who can become home owners.”
Home Destination offers you tips on home buying and where to find resources and current opportunities to gain a better quality home loan.
We invite you to contact Home Destination with any questions or comments you may have. Call 612-396-7832.
Jenna Thuening, a Residential Realtor helps buyers find Twin Cities homes and buy with a quality loan.
Eden Prairie MN 55334
Jenna's home page: homedestination.com
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