Category Archives: Mortgage Investing

As Feds Slow Bond Program, Mortgage Rates Jump
United States mortgage rates soared to their highest since September 2013 as real estate investors speculated the Federal Reserve’s slowdown on its $85 billion-a-month bond-buying program is aimed at maintaining lower borrowing costs. Freddie Mac reports the average 30-year fixed mortgage rate was 4.46% during the first week of December, up from 4.29%, while the average 15-year rate rose to 3.47% from 3.3%. Despite near-record lows in May, mortgage rates have steadily climbed, all while the Fed continues to weigh when it should scale back its stimulus. 10-year Treasury notes yields are their highest in two months, due to lower unemployment rates. The Treasury notes are considered a benchmark for home loans. Experts agree that the Federal Reserve is likely to taper sooner, not later. With a December 17 meeting looming, Federal Reserve Bank of Atlanta President Dennis Lockhart said he is optimistic about the economy's outlook. "I...
Single-Family Home Rental Boom: Who Wins, Who Loses?
For two years, a single-family home rental boom has been sweeping through the Tampa, FL area. Investors are buying up hundreds of single-family homes in attractive neighborhoods and counting on renting them to both the thousands of local residents affected by foreclosures and short sales, and new residents arriving from across Florida or from the north. Demand Keeps Pace with Supply Property management firm Home Encounter reports an increase in leased homes between early 2011 and this past September from about 120 to more than 500 in Hillsborough County. But rather than reducing rents, as some renters wish, average rents have remained fairly flat across three years, running $1300-$1500 in Hillsborough and Pinellas counties. The biggest buyer of Tampa-area rental homes is Dallas-based Invitation Homes, a division of giant investment firm Blackstone Group.  Property records reveal the purchase of 1,801 homes in Hillsborough and Pinellas counties for at...
Will Unintended Consequences of Dodd-Frank Make a Mess of the Mortgage Market?
The Dodd-Frank Wall Street Reform and Consumer Protection Act that passed was enacted into law in 2010, commonly referred to as simply "Dodd-Frank", is supposed to lower risk in various parts of the U.S. financial system. It was named after former U.S. Senator Christopher J. Dodd and former U.S. Representative Barney Frank because of their significant involvement in the act’s creation and passage. Dodd-Frank established new government agencies such as the Financial Stability Oversight Council and Orderly Liquidation Authority, which monitors the performance of companies deemed “too big to fail” in order to prevent a widespread economic collapse. Ultimately, the purpose is to protect consumers from the crazy home-lending excesses that caused the Great Recession of 2008. Banks are exiting from the mortgage business in large numbers, primarily because of the high operating costs and heightened litigation risks imposed by the Dodd-Frank financial-reform law. As banks...
Mortgage Applications Continue to Fall
Business Insider reports that mortgage applications, for the week ending November 9, 2013, fell 1.8%, on the heels of a 2.8% decline the week before. Also, the purchase index was down 1% for the week ending Nov. 9, compared to a drop of 5% the week prior. A similar trend was seen in the refinance market with that index dropping 2% during the week ending Nov. 9, a noticeably smaller decline than the 8% drop the week before. According to Freddie Mac, an organization chartered by Congress in 1970 which is designed to provide liquidity in the mortgage markets by purchasing qualifying mortgages from lenders, the 30-year fixed mortgage rate remained relatively unchanged at 4.16% for the week ending, down from a recent two-year high of 4.58%. However, in the following week ending November 14, rates took a significant one-week jump to 4.35%. Rates across the...
Looking for a Leader When it Come to Mortgages?
Taking a broad view of mortgage interest rates, one could easily argue that compared to interest rates of the past several decades, today’s rates are comparatively low. However, no one has the opportunity to finance a home with comparison rates from yesteryear. The reality is we are at the mercy of the interest rate markets at the time we are looking to finance a property.  The leading 30-year, fixed rate mortgage in September ascended to 4.53% from 3.35% last spring. That small 1.2% change in interest rates may not seem like much on the surface, but as we drill down, it plays a much larger role in easing pace of the U.S. economy. In late October, Bankrate.com reported that households earning the median income in only 8 of 25 major U.S. metropolitan areas could afford the median priced home in the same metro area. That is...
Can Mortgage Brokers Be a Pitfall of Trust Deed/Mortgage Investing?
Most Trust Deed investing for individual investors is facilitated through a Mortgage Broker.  For the borrower; the Mortgage Broker advertises that he has money to lend and negotiates the terms of the loan, is to conduct due diligence on the borrower and the property.  For the investor; the Mortgage Broker advertises that he has investment opportunities for the money of investors in properties.  Simply put; the Mortgage Broker is simply acting as a middleman between those that have the money and those that want the money. A successful Trust Deed Broker is typically every effective at marketing and sales as they must consistently cater to two groups at all times; the borrower and the investors to create a transaction so they can earn their fees.  However in most cases; at the core; they are not true Real Estate guys. The interest in the transaction usually begins and...