Rates at ALL-TIME Lows!

Mortgage rates slammed into a new, record-setting low Thursday, with mortgage giant Freddie Mac reporting that figures for the benchmark 30-year fixed-rate mortgage fell below 4 percent for the first time in history. Finance Web site Bankrate.com noted similar albeit less history-making lows.

Freddie and Bankrate.com released weekly surveys to yield the results for this week.

Making the biggest waves, the GSE found the 30-year loan dropping on average to 3.94 percent nationally, down from 4.01 percent last week and 4.27 percent over the same time last year.

This marks the first time that Freddie saw the benchmark mortgage hitting lows below 4 percent.

Bankrate.com reported no new records, seeing the 30-year loan fall only to 4.21 percent, down from 4.30 percent last week.

The Finance Web site meanwhile saw a slide in 15-year fixed-rate mortgages from 3.47 percent last week to 3.46 percent this week, with 5-year and 1-year adjustable-rate mortgages (ARMs) hitting a 3.11-percent stride, inching below 3.13 over the same period.

Freddie departed from the findings by again seeing record lows for the 15-year loan, with interest rates falling to 3.26 percent this week from 3.28 percent last week.

The GSE recorded a 2.96-percent average for the 5-year ARM, a few percentage points down from 3.02 percent last week, and a 2.95-percent average for the 1-year ARM this week, down from 2.83 percent last week.

The chief economist with Freddie, cites action from the Federal Reserve and investors fleeing euro zone markets as dual forces contributing to “incredibly low” mortgage rates.

He specifically highlights the $400-billion buy-up in short-term Treasury debt by the Federal Reserve and doubts about whether bigger euro zone economies will bail out their faltering neighbors.

Asked whether record lows for the benchmark 30-year will help stimulate demand, he says that it helps but that low consumer confidence, fears about a double-dip recession, and a wait-and-see approach to still-falling home prices keep first-time homebuyers on the sidelines.

“There’s not strong demand for credit in the housing market and that’s tending to keep a lid on borrowing costs,” Sal Guatieri, a senior economist with BMO Capital Markets, tells us.

Beware of Seller’s Concession Limitation on FHA Short Sales

07/13/2011 by Dean Henderson, CRMS

When there is a Short Sale(AKA Pre-Foreclosure Sale) on a HUD, FHA loan, and the new Buyer is also getting a new FHA loan, HUD only allows up to a maximum of 1.0% for Seller’s Concessions or Allowable Closing Costs. If you see the link below, and look at page 2 of 18, the sixth bullet point down, and it is there that you will find this.

HUD will only allow 1% Seller Closing Costs (line 509) and that is ONLY if the buyer is using FHA financing.  Any other buyer financing HUD will allow 0% for an FHA Short Sale.

http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/08-43ml.doc

Here are some more HUD/FHA Pre-foreclosure guidelines:

http://www.hud.gov/offices/hsg/sfh/nsc/rep/pfsfact.pdf