Today's Mortgage Rates

Consumers are on alert when they talk with mortgage loan officers more than I have seen in recent years. All over the news, people are being bombarded with stories about how people are being foreclosed on all because some unethical mortgage loan officer put them in a bad loan and now they can’t afford their payments.

And in some strange way of thinking, people seem to gravitate toward the bigger lenders thinking that there is no way that anyone from would be able to do something that would be considered bad.

Wrong.

Heck, I see it happen all the time. As recently as yesterday. The simple case highlights:

Lady came to me wanting a mortgage and I quoted her a 5.125% rate.

She said that Wells Fargo quoted her a 4.875% rate and so she decided that we were too high and trying to “rip her off”.

Realtor just emailed me this exact email:
You will be happy to know who decided to go with Wells because their 4.875 was better than your 5.125 just closed… 5.25 (DOH)

So they promised a 4.875% and she ended up getting a 5.25% rate – worse than the actual 5.125% that I could have delivered?

Yes.

I see it all the time. At least once a week. Someone promising something they can’t deliver.

I wonder how she feels about Wells Fargo now?

The Obama administration said it is increasing the number of states that will receive funds aimed at stemming the tide of foreclosures. The news came on the heels of changes made last week to the government’s mortgage loan modification program.

The second HFA Hardest Hit Fund is targeting five states that have a high percentage of homeowners in economically distressed areas where unemployment was higher than 12% in 2009. The states that will receive $600 million of funding to help families stay in their homes are North Carolina, Ohio, Oregon, Rhode Island, and South Carolina.

The first HFA Hardest Hit Fund allowed up to $1.5 billion to be used in five states that had home price declines of more than 20%.

The aid allows the states to tailor foreclosure relief programs to local conditions. Depending upon the needs, funding could be used for unemployment programs, modifying mortgage loans, forbearance options, short sales, deed-in-lieu of foreclosures, reducing second liens, or writing down mortgage principal. Other programs could also qualify for funds.

More people are using cash to purchase homes. Data from the National Association of Realtors (NAR) show that 26% of home sales in January were all-cash purchases, compared with 18% a year earlier, according to USA Today.

Although some buyers are paying cash for homes to live in, many of these transactions are attributed to investors getting back into the real estate market. The NAR reported that 17% of home purchases in January were made by investors, up from 15% in December and 12% in November.

“Flippers, rehabbers, investors … are, in fact, buying,” Lisa Johnson of Coldwell Banker Residential Brokerage in Haverhill, Mass., told USA Today. ”I’m getting builders who have stopped building and are instead buying up condos and single-family homes to fix them up and sell them. It’s a neat change I haven’t seen in four years.”

Completely paying for a home with cash is something that many people can only dream about. But there are some serious benefits to doing an all-cash real estate deal. Among the reasons to pay cash if you can afford it are:

—Not having to go through the process of applying for a mortgage loan

—Avoiding many thousands of dollars in interest payments with a mortgage loan

—Having more negotiating power when dealing with sellers

—Having your pick of some really great properties that have gone into foreclosure or are just priced low

—You can rent out a property without having to deal with mortgage payments

While paying cash for a property is a good move for some people, it may not make sense for others. Do a total assessment of your overall savings, retirement income and other investments to determine if it makes sense to dip into your funds to pay cash for a home. Make a list of your financial goals to see whether an all-cash real estate deal fits into your plan.