Posts Tagged ‘Freddie Mac’

Freddie Mac Minces No Words: “Another 2017 Low”

A couple of weeks back, the ultimate authority on Bedford mortgage rates hadn’t minced words. That was Freddie Mac, whose opinion about mortgage rates constitutes the final say in the matter. Freddie isn’t modest about its preeminence (Freddie’s trademarked corporate slogan is “We make home possible”). Together with sibling Fannie Mae, the quasi-governmental entities stand behind 60% of U.S. mortgages.

Each week their PMMS survey collects data snapshots from thrifts, credit unions, banks, and mortgage lenders to gauge of the direction of the home loan market. Future Bedford home hunters and the homeowners whose properties are found in the current listings (or soon will be) are constantly affected by those ups and downs. For one thing, they dictate the “monthly payment” calculations you find in the detailed breakdown featured most online listings—including those on my site.

Naturally, the rate averages vary from lender to lender and state to state—but it’s the direction in which mortgage rates are headed that can be a spur for buyers. Either direction can cause activity. When rates rise quickly, buyers can be incented to lock in rates before they get out of hand. When they fall, that inducement disappears—although a shrinking monthly payment number does create an increasingly affordable scenario. Low rates create an encouraging “price is up, but cost is down” situation.

The week before last, Freddie’s headline had been an unequivocal piece of favorable news for Bedford buyers and sellers:

30-Year Mortgage Rate Hits Another 2017 Low.”

But last week’s follow-up failed to live up to what was expected (a slight rebound). Freddie’s headline on Thursday was neither fish nor fowl, up nor down. It was the third possibility, where mortgage rates don’t go anywhere: they just sit there, deadpan as a professional poker player, revealing nothing:

Mortgage Rates Hold at 2017 Low.

The U.S. weekly average was still 3.78%, tying the low for the year. For Bedford  buyers who may have missed out on locking in the previous week’s home loan bargain rates, the reprieve was welcome news. Whether the expected rebound was on the way remained to be seen.

Current Bedford mortgage rates are key when it comes to buying and selling area homes­­—and with rates holding at historic lows, it creates an undeniably auspicious market opportunity. Call me!

Joan Parcewski, Realtor & Notary

LAER Realty Partners     cell 978-376-3978

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Billerica Mortgage Rates: Perception and Reality

Billerica mortgage rates have been so low for such a long time that it would be surprising if area buyers didn’t begin to take them for granted. It’s only human nature. Addressing would-be home buyers who, though qualified, remain on the sidelines, government-sponsored Freddie Mac headlined the question, “If Housing Is So Affordable, Why Doesn’t It Feel That Way?

The article appeared in Freddie Mac’s Insight publication which noted that right now housing isn’t just affordable—it’s “near record” affordable! HUD’s Housing Affordability Index has been rising for over 35 years, interrupted only briefly by the housing crisis of the mid-2000s. It hasn’t quite sustained the all-time affordability peak but is holding steady well within hailing distance of that 2012 record.

Billerica mortgage rates have cooperated nicely, continuing to go with the national herd. For 30-year fixed-rate mortgages, U.S. rates averaged 3.90%—down even further from the previous week’s 3.93%. Of course, the 15-year and adjustable rate offerings were even lower.

With that kind of good news, why do the media report “affordability issues” (Mortgage Daily News) and even an “affordability crisis” (PBS)? The answers dwell in both perception and in some underlying realities.

There’s definitely reality in the widespread phenomenon of a shortage of housing supply. Billerica listings may show a number of properties being offered, but the national number of homes up for sale remains “very tight.” The echoes from 2009, when new housing starts hit rock bottom, are still having an effect. In that year, housing starts barely equaled a third of the previous averages. Even though current construction levels are nearly back to normal, they’ve yet to make up for that shortfall.

Less real is the public perception of how much cash is needed for a down payment. Billerica mortgage rates may be tantalizingly low, but when potential local applicants “mistakenly believe they must have a 20% down payment to obtain a mortgage,” the result is a number of otherwise-qualified buyers who don’t know that more than half of today’s borrowers make smaller down payments.

Not mentioned in the Insight article is another psychological factor that could explain two things at once. In The New York Times’ “Politics” section, a commentary sought to explain why the Federal Reserve wasn’t acting to boost interest rates. According to the author, the cause lay with inflation rates, which remain low—“and that’s a problem” for Fed rate-makers. The reason higher inflation would be a good thing (despite common sense) is that it makes consumers feel good when their paychecks go up. “A little inflation can brighten the economic mood…people enjoy the illusion.”

The upshot here may be that even though today’s extraordinarily low Billerica mortgage rates create actual affordability, some well-qualified customers may feel safer staying on the sidelines until the economy starts generating go-go economy headlines. It’s an ironic reality that by the time those headlines materialize, actual affordability might have already begun to slip away.

If you’ve been mulling the wisdom of your own Billerica home acquisition, let me show you some great properties…and some great numbers!

Joan Parcewski —CRS, MRP, CSHP, SRES, CBR, LMC, Realtor & Notary
978-376-3978    OR
Licensed MA & NH    
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Federal Housing Finance Agency New Guidelines as of 11/1/2012

This news release was originally released in August 21, 2012 but took effect on November 1, 2012.  With so many people involved with the short sale process it is important that they all be on the same page as to what these guidelines are.

FHFA Announces New Standard Short Sale Guidelines for

Fannie Mae and Freddie Mac;

Programs Aligned to Expedite Assistance to Borrowers

Washington, DC

Fannie Mae and Freddie Mac are issuing new, clear guidelines to their mortgage servicers that

will align and consolidate existing short sales programs into one standard short sale program.

The streamlined program rules will enable lenders and servicers to quickly and easily qualify

eligible borrowers for a short sale.

The new guidelines, which go into effect Nov. 1, 2012, will permit a homeowner with a Fannie

Mae or Freddie Mac mortgage to sell their home in a short sale even if they are current on their

mortgage if they have an eligible hardship. Servicers will be able to expedite processing a short

sale for borrowers with hardships such as death of a borrower or co-borrower, divorce,

disability, or relocation for a job without any additional approval from Fannie Mae or Freddie


“These new guidelines demonstrate FHFA’s and Fannie Mae’s and Freddie Mac’s commitment

to enhancing and streamlining processes to avoid foreclosure and stabilize communities,” said

FHFA Acting Director Edward J. DeMarco. “The new standard short sale program will also

provide relief to those underwater borrowers who need to relocate more than 50 miles for a


The new guidelines:

Offer a streamlined short sale approach for borrowers most in need: To

move short sales forward expeditiously for those borrowers who have missed several

mortgage payments, have low credit scores, and serious financial hardships the

documentation required to demonstrate need has been reduced or eliminated.

• Enable servicers to quickly and easily qualify certain borrowers who are

current on their mortgages for short sales.

: Common reasons for borrower hardship are death, divorce, disability, and distant employment transfer or relocation. With the program changes, servicers will be permitted to process short sales for borrowers with these hardships without any additional approval from Fannie Mae or Freddie Mac, even if the borrowers are current on their mortgage payments. Borrowers will now qualify for a short sale if they need to relocate more than 50 miles from their

home for a job transfer or new employment opportunity.

• Fannie Mae and Freddie Mac will waive the right to pursue deficiency

judgments in exchange for a financial contribution when a borrower has sufficient income or assets to make cash contributions or sign promissory notes

: Servicers will evaluate borrowers for additional capacity to cover the shortfall

between the outstanding loan balance and the property sales price as part of approving

the short sale.

• Offer special treatment for military personnel with Permanent Change of

Station (PCS) orders

: Service members who are being relocated will be

automatically eligible for short sales, even if they are current on their existing

mortgages, and will be under no obligation to contribute funds to cover the shortfall

between the outstanding loan balance and the sales price on their homes.

• Consolidate existing short sales programs into a single uniform program:

Servicers will have more clear and consistent guidelines making it easier to process and

execute short sales.

• Provide servicers and borrowers clarity on processing a short sale when a

foreclosure sale is pending

: The new guidance will clarify when a borrower must

submit their application and a sales offer to be considered for a short sale, so that lastminute

communications and negotiations are handled in a uniform and fair manner.

• Fannie Mae and Freddie Mac will offer up to $6,000 to second lien holders

to expedite a short sale.  Previously, second lien holders could slow down the short

sale process by negotiating for higher amounts. This alignment comes as part of a broader FHFA effort, the Servicing Alignment Initiative, tostreamline Fannie Mae and Freddie Mac programs for short sales and other foreclosure

alternatives to assist struggling homeowners. FHFA announced guidelines in June that establish strict timelines for servicers considering short sales. Servicers are required to review and respond to short sales within 30 days of receipt of a short sale offer; they must provide weekly status updates to the borrower if the offer is still under review after 30 days, and they must make and communicate final decisions to the borrower within 60 days of receipt of the offer and complete borrower response package. These borrowers will not be eligible for a new mortgage backed by Fannie Mae or Freddie Mac for at least two years after a short sale.  FHFA encourages homeowners to reach out early to their lender or servicer if they face any hardship affecting their ability to pay their mortgage.


The Federal Housing Finance Agency has directed Fannie Mae and Freddie Mac to align existing short sales programs into

one standard short sale program and issue clear guidelines to mortgage servicers. With these changes, Fannie Mae and

Freddie Mac will allow homeowners with eligible hardships to sell their home in a short sale even if they are current on

their loans. FHFA, Fannie Mae and Freddie Mac are making these changes to help more homeowners avoid foreclosure,

keep homes occupied and help maintain stable communities. The streamlined program rules will enable lenders and

servicers to quickly and easily qualify eligible borrowers for a short sale.

The programs being aligned are: Fannie Mae’s Home Affordable Foreclosure Alternative (HAFA) and proprietary short sale

programs, and Freddie Mac’s HAFA and proprietary short sale programs. The current Fannie Mae and Freddie Mac HAFA

programs are modeled on the U.S. Department of Treasury’s Home Affordable Foreclosure Alternative program, but with

this guidance, there will be one program offered by Fannie Mae and Freddie Mac – the Standard Short Sale/HAFA II.


Guidance will be issued by Freddie Mac August 21 and by Fannie Mae August 22 and will be effective by November 1.


• The existing mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac.

• The person must have a demonstrated hardship which includes:

• Death of a borrower or death of the primary or secondary wage earner in the household

• Unemployment

• Divorce

• Long-term disability

• Distant employment transfer/relocation (more than 50 miles one way)

• Increased housing expenses

• Disaster (natural or man-made)

• Business failure






• Offer a streamlined short sale approach for borrowers

most in need.

• Enable servicers to quickly and easily qualify certain

borrowers who are current on their mortgages for

short sales.

• Fannie Mae and Freddie Mac will waive the right

to pursue deficiency judgments in exchange for a

financial contribution when a borrower has suffi cient

income or assets to make cash contributions or sign

promissory notes.

• Offer special treatment for military personnel with

Permanent Change of Station (PCS) orders.

• Consolidate existing short sales programs into a single

uniform program.

• Provide servicers and borrowers clarity on processing

a short sale when a foreclosure sale is pending.

• Fannie Mae and Freddie Mac will offer up to $6,000 to

second lien holders to expedite a short sale.

• Borrowers that need to relocate more than 50 miles one way for a job, including service members with Permanent

Change of Station Orders, can be current or delinquent on their mortgage to apply for a short sale.

• Borrowers who have the capacity to contribute to shortages will be asked to make a reasonable contribution toward

the shortfall. However, service members with Permanent Change of Station Orders will not be asked for a contribution

towards the shortage for properties purchased on or before June 30, 2012.

• Borrowers will not be eligible for a new mortgage backed by Fannie Mae or Freddie Mac for at least two years after a

short sale.


Service members can check Fannie Mae or Freddie Mac websites to see if their loans are held by them or they can call

hotlines for military homeowners at 1-877-MIL-4566 or 1-800- FREDDIE.

FHFA announcement of 6/21/12: FHFA Announces Short Sale Assistance for Military Homeowners with Fannie Mae or

Freddie Mac Loans (


Homeowners can determine if they have a Fannie Mae or Freddie Mac loan by going to: or calling 800-7Fannie (8 am to 8 pm ET) or 800-Freddie (8 am to 8 pm ET)



A Short Sale, also known as a pre-foreclosure sale, is when you sell your home for less than the balance remaining on your

mortgage. If your mortgage company agrees to a short sale, you can sell your home and pay off all (or a portion of) your

mortgage balance with the proceeds.


If you need help with a short sale or aren’t sure, call Joan Parcewski, Realtor & CDPE, at,, or by phone at 978-376-3978

MSNBC Reports Mortgage Rates Tumble to Record Low

This is great news for people wanting to refinance or buy a  home. 


Mortgage rates tumble to record low        

            Average on the 30-year home loan slides to 3.87 percent from 3.98 percent

30-year fixed mortgage rates chart

        The average rate on the 30-year fixed mortgage dropped to the lowest since records have been kept, creating a tempting target for people to refinance their homes.

Freddie Mac said Thursday the average rate on the 30-year fixed mortgage hit 3.87 percent, down from 3.98 percent the prior week. That’s below the previous record of 3.88 hit two weeks ago.

The average on the 15-year fixed mortgage fell to 3.14 percent, also a record low. Records for mortgage rates date back to the 1950s.

Mortgage rates tend to track the yield on the 10-year Treasury note, which fell below 1.9 percent this week.

Mortgage rates have hovered near 4 percent for the past three months, and have perhaps contributed to a slight improvement in the housing market. But many homeowners remain underwater and the pipeline of foreclosures continues to be huge, putting heavy pressure on housing prices.

High unemployment and scant wage gains have made it harder for many people to qualify for loans. Many don’t want to sink money into a home that they fear could lose value over the next few years.

Sales of previously occupied homes were dismal last year. New-home sales in 2011 were the worst on records going back half a century.

Builders are hopeful that the low rates could boost sales next year. But so far, they have had a minimal impact.

Mortgage applications have risen slightly over the past four weeks, according to the Mortgage Bankers Association. But they are coming off extremely low levels.

To calculate the average rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.

The average rates don’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for the 30-year loan rose to 0.8 from 0.7; the average on the 15-year fixed mortgage was unchanged at 0.8.

For the five-year adjustable loan, the average rate fell to 2.80 percent from 2.85 percent. The average on the one-year adjustable loan rose to 2.76 percent from 2.74 percent.

The average fee on the five-year adjustable loan rose was unchanged at 0.7; the average on the one-year adjustable

The Associated Press contributed to this report.

Home Affordable Refinancing Program revamped to boost refis – A Reprint

The article below is a reprint

Home Affordable Refinancing Program revamped to boost refis

Lenders shielded from claims associated with original loan

By Inman News
Inman News™

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In an attempt to boost participation in the Obama administration’s mortgage refinance program, Fannie Mae and Freddie Mac will release lenders who sign off on a refinanced loan from some legal liabilities associated with the original loan.

Mortgage market analysts view the waiver of so-called seller servicer “representations and warrants” on Home Affordable Refinancing Program (HARP) loans as the most significant of a series of changes announced today by Fannie and Freddie’s regulator, the Federal Housing Finance Agency.

Fannie and Freddie will also lift the current 125 percent loan-to-value (LTV) cap on HARP refinancings, and sign off on refis without an appraisal if they have reliable automated valuation model (AVM) estimates for the property.

The new HARP guidelines also eliminate some risk-based fees if homeowners refinance into shorter-term mortgages that will get them out from negative equity situations more quickly.

A homeowner with a $200,0000 loan on a home worth only $160,000 would be able to pay their loan balance down to that level in 5 1/2 years by refinancing into a 20-year loan at 4.5 percent interest, FHFA said, compared to 10 years with a 30-year loan at the same rate.

The HARP program was originally designed to help “responsible” borrowers with little or no equity in their homes refinance without having to purchase additional private mortgage insurance.

Although the initial 105 percent LTV cap was raised to 125 percent just a few months after HARP’s February 2009 launch, lenders have been reluctant to refinance underwater borrowers and the program has fallen short of its original target of helping as many as 4 million homeowners refinance.

According to the latest numbers from FHFA, Fannie and Freddie had completed nearly 894,000 HARP refinancings through August, but only about 72,000 were mortgages with LTVs greater than 105 percent.

Data aggregator Lender Processing Services has estimated that 23 percent of an estimated 46 million homes whose owners are current on their mortgages — nearly 11 million homes — are underwater. LPS calculates that about 72 percent of homes in foreclosure have negative equity.

Only borrowers who are current on a mortgage sold to Fannie and Freddie before June 1, 2009 are eligible for the HARP program. Originally scheduled to phase out this year, FHFA said today the program will continue through the end of 2013.

In announcing the program changes, FHFA said it hoped to see HARP refinancings at least double from today’s level by the time the program winds down, which would equate to roughly 1 million refinancings.

Those refinancings would come at the expense of investors in the mortgage-backed securities (MBS) backed by the loans being refinanced. Because those investors include the Federal Reserve, Treasury and Fannie and Freddie themselves, taxpayers would share in that burden, which would be partially offset by a reduction in foreclosures.

Earlier this year the Congressional Budget Office estimated that a hypothetical program that produced 2.9 million refinancings could prevent 111,000 defaults, costing taxpayers $600 million and private investors $13 billion to $15 billion.

Dow Jones Newswires reported that prices for MBS issued by Fannie and Freddie fell today after investors were surprised by the extent of the changes to the HARP program.

The new policy “runs the risk of alienating the investors that provide the bulk of all credit to homeowners” Dow Jones reported, citing warnings earlier this month from the Mortgage Bankers Association that mortgage rates could go up if investors lose their enthusiasm for MBS. Bond prices and yields move in opposite directions, so reduced demand for MBS drives up mortgage rates.

MBA President and CEO David Stevens said in a statement today that the mortgage industry welcomes the changes to the HARP program. Lenders “are particularly gratified” by the decision to grant lenders relief from some representations and warranties in originating new HARP loans, he said.

While the changes “are not going to be a silver bullet to solve all the issues facing our housing market …  they will offer lenders another tool to help borrowers and hopefully help bring some stability to housing markets, particularly those most impacted by home-value declines,” Stevens said.

The “reps and warranties” that protect Fannie and Freddie from losses on defective loans usually show up “in the first few years of a mortgage and so the value of the reps and warrants decline over time,” FHFA said in justifying the new incentive.

“These are seasoned loans made to borrowers who have demonstrated a capacity and commitment to make good on their mortgage obligation through a period of severe economic stress and house price declines,” FHFA said.

On a conference call with reporters, FHFA acting director Edward DeMarco said lenders would still be liable to claims of mortgage fraud on the original loan.

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No rush to lock in record-low mortgage rates From Inman News

No rush to lock in record-low mortgage rates

Fannie Mae: Purchase-loan demand expected to double in next 2 years
By Inman News
Inman News™

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Rates on 30-year fixed-rate mortgages dropped below 4 percent this week for the first time in history amid increasing global economic concerns, Freddie Mac said in releasing its Primary Mortgage Market Survey.

A separate survey by the Mortgage Bankers Association suggested many homeowners and would-be homeowners are unwilling or unable to take advantage of record low rates, with demand for refinancings and purchase loans both falling last week.

Fannie Mae economists are projecting that mortgage rates will stay well below 5 percent through 2013, and that demand for purchase loans will more than double in the next two years.

Freddie Mac’s survey showed rates on 30-year fixed-rate mortgages averaged 3.94 percent with an average 0.8 point for the week ending Oct. 6, down from 4.01 percent last week and a 2011 high of 5.05 percent in February. Rates on 30-year fixed-rate mortgages have never been lower in Freddie Mac records dating to 1971.

Rates on 15-year fixed-rate mortgages averaged 3.26 percent with an average 0.8 point, down from 3.28 percent last week and a 2011 high of 4.29 percent in February. The 15-year fixed-rate loan, often used by homeowners to refinance, set a new low in records dating to 1991.

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loan averaged 2.96 percent with an average 0.6 point, down from 3.02 percent last week and a 2011 high of 3.92 percent. That ties a low, in records dating to 2005, last seen in September.

Rates on one-year Treasury-indexed ARM loans averaged 2.95 percent with an average 0.5 point, up from 2.83 percent last week but down from a 2011 high of 3.4 percent in February. The one-year ARM hit a low in records dating back to 1984 of 2.81 percent during the week ending Sept. 15.

Freddie Mac chief economist Frank Nothaft said interest rates for one-year ARMs rose as the Fed began moving $400 billion currently invested in short-term government bonds into Treasurys with remaining maturities of six years to 30 years, which will help reduce upward pressure on long-term interest rates.

Under a plan dubbed “Operation Twist,” the Fed is also reinvesting principal payments on the $1 trillion the government holds in Fannie Mae and Freddie Mac mortgage-backed securities (MBS) and debt back into agency-backed MBS as those investments mature.

Nothaft noted that Federal Reserve Chairman Ben Bernanke testified before Congress this week that the recovery is close to “faltering” and stressed the need for lawmakers to act.

The Mortgage Bankers Association’s Weekly Mortgage Applications Survey showed demand for purchase loans fell a seasonally adjusted 0.8 percent during the week ending Sept. 30, and was down 12.1 percent from a year ago.

Requests to refinance were down 5.2 percent from the week before, but accounted for nearly eight out of 10 mortgage applications.

In a Sept. 19 forecast, economists at Fannie Mae projected that mortgage purchase loans will total just $394 billion this year, down 16 percent from last year and 33 percent from 2009.

Fannie Mae’s forecast calls for purchase-loan demand to more than double within two years, growing 66 percent next year to $654 billion, and surging again in 2013, to $853 billion.

The mortgage giant’s economists don’t see upward pressure on mortgage rates, projecting that 30-year fixed-rate loans will average 4.2 percent during the final quarter of 2011 and stay there for the first half of 2012.

Fannie Mae’s forecast then calls for a gradual rise in rates for 30-year fixed-rate loans, to 4.4 percent during the final three months of 2012 and an average of 4.6 percent during 2013.

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