Interest Only Mortgage Loan News

News from Freddie Mac says that it plans to stop buying and securitizing interest-only mortgage loans. They gave no explanation for the decision, but their January summary of operational activity indicated that delinquency on interest-only mortgages is running around twice the rate of fully amortized mortgages. For example, on interest-only fixed rate mortgage loans originated in 2006, 90 day delinquencies were substantially higher than fully amortized loans from the same time period.

Current Mortgage Rates and Information

Update on 30 Year Mortgage Rate News

Based on Freddie Mac's weekly survey, mortgage rates rose this week, with the average rate on 30-year fixed mortgages climbing above 5%.

Freddie Mac's chief economist said 30 year fixed mortgage rates followed long term bond yields higher as data about the real estate market's recovery remained uncertain.

Demand for real estate, after showing signs of strength in earlier months, has dropped in recently mostly because of the job market. Sales of new homes unexpectedly hit a record low in January.

30 year fixed mortgage rates averaged 5.05% for the week ended Thursday, up from last week's 4.93% average. 15 year fixed mortgage rates were 4.4%, up from 4.33% last week.

Mortgage Quotes and Information

Mortgage Refinance or Home Equity Loan Offers Cooling Off Period

After you sign documents for a mortgage refinance or home equity loan, you can still cancel the loan if you change your mind. 

The law says that lenders must give 3 business days to cancel a mortgage, without any penalty. You have the right to rescind until midnight of the third business day, including Saturday, but not Sunday.

When you sign mortgage loan documents, the lender gives you copies of the right of rescission notice. If you decide to cancel your home mortgage, the notice must be signed and delivered to the lender within the 3 day rescission period.

The right of rescission law does not apply to a home purchase mortgage, or a loan for investment, rental, or vacation real estate. It only applies to a refinance, home equity loan, or second mortgage on an owner occupied principal residence.

Mortgage loan rates and home financing information.  

Mortgage News Brief

Our government is supporting a basically insolvent mortgage banking system. Because of the relatively low number of home sales that have generated losses, the outstanding national mortgage debt has not changed much. The problem is that home values backing these mortgages have dropped substantially.

Banks have been unloading toxic mortgages onto the government, who is supporting home prices with the hope of managing the mortgage market long enough that the losses will not engulf the system before the real estate market rebounds. Hopefully, these efforts to stabilize housing will not create a second price bubble.

Mortgage Loan Rates