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As economic influences affect the housing market in the United States, there has been the introduction and development of programs to assist with the downturn.
During the 2009 economic crisis in the United States that resulted in home prices and values falling, a program named HARP was introduced to assist the many affected homeowners.
Harp has since developed and a 3.0 version has been introduced. As a result, many homeowners are beginning to wonder: What will Harp 3.0 mean for homeowners after 2014?
The Economic Crisis: Harp 1.0 In 2009
In 2009, HARP 1.0 was introduced. The program was designed to help homebuyers who couldn’t refinance their homes because of the sudden and significant dip in home values.
It was open to borrowers with loans that were taken out prior to May 31, 2009, and other requirements made the program available only to homebuyers with a good payment history and a loan-to-value ration of 125 percent, meaning that the borrower could not receive a loan of over 25 percent of the home’s total value.
This program came to help some homeowners who were affected by the economic downturn, but wasn’t available to those in the foreclosure centers in particular areas of California, Nevada, and Arizona.
Harp 2.0: Redefined Assistance
In October of 2011, Harp 2.0 was introduced with changes that helped to make the program more helpful to homeowners who were in trouble as a result of the financial and housing downturn.
The 125 percent limit on the loan-to-value of the Harp 1.0 program was removed, allowing those with significant value drops in their homes to receive help as well. Changes were also added to allow borrowers to refinance investment properties, and borrowers were allowed to switch lenders to shop around for a refinance under the Harp 2.0 program.
Harp 3.0 For Homeowners In 2014
Though the previous Harp programs have assisted over three million homeowners since the financial downturn, there are still many homeowners in need of assistance. With nine million homeowners in a financial crisis after the 2009 economic downturn, there is still much that can be improved upon to help assist in these circumstances.
The Responsible Homeowner Refinancing Act of 2013, which is widely referred to as Harp 3.0, is one approach to solving the problem.
The Harp 3.0 program has been presented, and, if passed, will lower the fees involved. This means that need for appraisals will be lessened, making the program more widely available to homeowners experiencing financial difficulties, and there will be greater ease in the underwriting process.
The Harp 3.0 program, if passed, would also not be constrained to only loans owned by Fannie Mae or Freddie Mac, as restricted in Harp 1.0 and 2.0. The new version of the Harp refinance program means that homeowners with sub-prime mortgages may become eligible, too.
With the media covering the possibility of Harp 3.0 in 2014 and many homeowners anticipating its availability, which might finally mean their eligibility for refinancing, there is a great chance of significant financial improvement and progress for homeowners. Getting refinanced is exactly the progress many homeowners have been awaiting.
For more information on the Harp 3.0 program, talk to your mortgage professional today.
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Results from a Federal Reserve survey of senior bank loan officers indicated that lenders have held the line on prime lending standards and have raised standards for sub-prime and non-traditional home loans.
Survey respondents represented 74 U.S. banks and 23 foreign banks. Survey respondents also said that demand for mortgage loans was lower; this could be an unintentional result of tight credit standards for mortgage loans.
Analysts said that tight credit requirements and less demand for home loans could mean more trouble for the housing industry.
Home Prices Rise In March, But At Slower Rate
The annual rate of increase for national home prices was 11.10 percent as compared to February’s 11.80 percent year-over-year rate of increase.
February’s reading was the fastest pace of home price growth in eight years, but March’s slower level of home price appreciation was the lowest month-to-month reading in three years. Fewer affordable homes were cited as a reason for slower growth in housing markets.
CoreLogic reported that home prices rose by 1.40 percent in March, and that Arkansas was the only state that posted a drop in home prices. Several states, including North Dakota and Texas, achieved new peaks in home prices due to strong job growth.
The slow-down in home price growth isn’t necessarily all bad news; analysts said that home prices could not continue to climb when household incomes aren’t keeping up.
Many first-time buyers have been sidelined with a combination of slow job growth, higher home prices and tight mortgage credit. CoreLogic reported that these factors contributed to their forecast for home prices to grow by about 6.70 percent in 2015.
Mortgage Rates Fall, Fed Chair Speaks
Freddie Mac reported lower average mortgage rates on Thursday. The rate for a 30-year fixed rate mortgage was 4.21 percent as compared to last week’s reading of 4.29 percent. Discount points dropped from 0.70 to 0.50 percent. The average rate for a 15-year mortgage was 3.32 percent and six basis points lower than the prior rate of 3.38 percent.
Discount points were unchanged at 0.60 percent. The rate for a 5/1 adjustable rate mortgage was unchanged at 3.05 percent, but discount points dropped from 0.50 to 0.40 percent.
Janet Yellin, chair of the Federal Reserve, spoke before the Senate Budget Committee on Thursday and said that the Fed can shrink its current balance sheet of $4.3 trillion by not reinvesting proceeds from its portfolio of maturing bonds.
This is directly connected to the Fed’s tapering of its quantitative easing (QE) program, which is currently at a level of $45 billion per month in mortgage backed securities (MBS) and treasury securities.
Some analysts believe that members of the Fed’s FOMC meeting discussed the end of QE in their last meeting, but this cannot be verified until the minutes of the meeting are released May 21.
The end of QE could cause higher mortgage rates as the program’s purpose is to hold down long-term interest rates.
Weekly Jobless claims fell to a new low of 319,000 against predictions for 325,000 new jobless claims and 345,000 new claims for the prior week. Seasonal anomalies caused by the Easter holiday and spring break schedules were cited as causes for ups and downs in new jobless claims in recent weeks.
This week’s scheduled economic news includes several consumer-related reports including Retail sales, Consumer Price Index, core CPI, Homebuilder’s Index, and Housing Starts.
Thinking about ways to engage your children in gardening and educational opportunities outside of the classroom?
Creating your very own veggie patch with them is a great way to help them develop interest in the wonderful hobby of gardening!
Growing a vegetable garden links together many concepts your children are learning about in school while teaching them the art of discipline, responsibility and delayed gratification. Here are some great tips on how to nurture this project with your children.
Choose Pick-And Eat-Vegetables
The joy of being able to eat the fruits of their labors straight out of the garden will be an amazing reward for children. Vegetables like snap peas and cherry tomatoes are great for this. A bonus is that pea seeds are big and easy for those tiny hands to plant if you are going to have your children involved in the garden from the very beginning.
Pick Fun Vegetables The Kids Can Use Later
Another great route when choosing what to plant is picking vegetables that children have a strong connection to. Pumpkins are a great example of this. Children will love to grow pumpkins because of the promise of carving a jack-o-lantern later in the year.
Ensure Your Garden Is Conveniently Placed
One thing you don’t think about until you have kids is how to streamline your garden activities in a way that accommodates them. Convenience is critical when trying to manage children and do gardening at the same time. Go easy on yourself by placing your garden as close to a water source as possible.
Plant A Few Seeds That Will Grow Quickly
It is always nice to give children a bit of excitement right off the start. Lettuce is always good for this. It grows fairly quickly and will grab the interest of your children while they wait for the other plants to sprout.
Make Your Children Planting Assistants
Involving your kids in the planting is definitely a lot of work, but it really helps build their interest and education later on. Get them to hoe rows, dig holes, or water as you plant. This will help them connect all the processes together in their minds, and will keep the engaged later on.
Keep The Garden Front Of Mind
Make the garden an ongoing, continuous project that the children are involved in. Don’t let weeks go by before you bring the kids out to it again – they might get bored or develop other interests. Always look for opportunities to involve them in the work.
Plant A Colorful Garden
One of the easiest ways to get children excited about what is growing in the garden is to make it come alive with color. There are many different ways you can bring a splash of color to the garden. Choose a variety of lettuce, radishes, or squash to bring interesting and unique shapes, sizes and color to the garden!
Building a garden is a fun way to teach your children the value of hard work and perseverance, and to help them learn science! A garden can engage children and draw you all closer together as you work toward a common goal. If you have questions as to whether a garden will increase the value of your property, call your trusted mortgage professional today for more information.
Over the course of a lifetime, financial development can lead to some wonderful opportunities. A person’s financial development and state of affairs is something that is particularly important when it comes to taking out a bank loan to further progress in life, and the largest loan most people will require is a mortgage for a home purchase.
Since the process of getting approved for a mortgage is heavily dependent on credit history and that three-digit credit score that reflects reliability as a borrower, you should always put forth practices to keep that number healthy and growing.
However, how much importance does a credit score hold? Does that magic, three-digit number need to be above 800 in order to get approved for a mortgage?
The FICO Score: The Magic Number That Counts
When you apply for a mortgage, you will have to provide certain information to your financial institution or mortgage broker. The mortgage specialist at your bank or mortgage broker will then pull your credit score and your credit report.
Fair, Isaac and Company is the scorekeeper of your FICO score, which ranges from 300 to 850, 850 being the highest of all scores, and 300 being the lowest.
Every person in the United States has three FICO scores from the three different credit-reporting bureaus. Up to 80 percent of financial lenders will use a borrower’s FICO score in order to approve a mortgage application and determine a suitable interest rate on the loan.
The 600 Range: Fair And Good Credit Mortgage Options
If your credit score isn’t perfect (ie. above the 800 mark), you need not worry too much. There are many options available for those with credit scores around 600, and, with many different financial lenders to consider, having a mortgage approved sometimes means persisting with an application to several different lenders before receiving a “yes.”
With a “fair” and “good” credit rating falling between 620 and 719, there are options available to get approved for a mortgage well under the perfect 800 mark. An FHA loan is a type of mortgage loan that is insured by the US Federal Housing Administration, offering an option with more flexible qualification measures. For homebuyers with a credit score above 620, this is a viable and common option.
720 To Perfect: Under 800 And Still In Great Shape
The median credit score in the United States is 723, and anything above 720 is placed with the marker of “excellent credit.” Therefore, just because you may range just slightly above 720, which may feel miles away from a perfect 800, you’re likely in just as good of shape when it comes to getting approved for a mortgage. You can expect a mortgage approval with good interest rates if you have a credit score higher than 720.
Keeping an eye on your credit rating and understanding the measures that are used in determining your credit score will certainly help you maintain a good score. Of course, speaking with a professional and receiving expert advice is always recommended. For specified information on your particular situation, contact your mortgage professional to discuss your options for receiving a mortgage loan.
Last week’s economic news included several reports related to housing and mortgages. The NAR started the week on a positive note with its Pending Home Sales Index released Monday. Pending home sales in March were higher with an unexpected increase of 3.40 percent over February for an index reading of 97.40.
This is encouraging news for home sales that were severely affected by a hard winter in many areas, and suggests that as warmer weather approaches, home sales will pick up. Analysts do not expect the rapid rate of price appreciation seen in 2013. The Fed’s tapering of its “quantitative easing” program has caused mortgage rates to rise, and last year’s rapid run-up of home prices has made affordability an issue in many areas.
The S&P Case-Shiller Home Price Index for February performed slightly better than expected with a seasonally-adjusted month-to-month reading of 0.80 percent. The expected reading was 0.70 percent.
The year-over-year reading fell short of January’s reading of 13.20 percent and the expected reading of 13.00 percent at 12.90 percent. Analysts noted the continuing trend of slowing momentum in home price growth, but seem confident that home prices will continue to increase over the spring months.
Fed Continues Tapering Of QE, Mortgage Rates Mixed
Wednesday brought the FOMC’s customary statement after its two-day meeting concluded. There were no surprises as the statement verified another monthly tapering of $10 billion from the Fed’s quantitative easing (QE) program of asset purchases.
The tapering was evenly divided with $5 billion less in MBS purchased and $5 billion less in treasury securities purchased. The ongoing tapering was seen as contributing to rising mortgage rates, but the Fed asserted that its asset purchases remain sufficient to dampen rapid increases in long-term interest rates, which include mortgage rates.
The Fed repeated its usual reminder that its decisions are not on a pre-set course and that the committee members would closely monitor economic and financial developments as guidance for future decisions.
Freddie Mac reported mixed results for mortgage rates on Thursday. Average rates rose by four basis points to 4.29 percent for a 30-year fixed rate mortgage with discount points of 0.70 percent.
The average rate for a 15-year fixed rate mortgage dropped by one basis point to 3.38 percent; discount points steady at 0.60 percent. The average rate for a 5/1 adjustable rate mortgage rose by two basis points to 3.05 percent; discount points dropped from 0.50 to 0.40 percent.
Weekly jobless claims made an unexpected jump to 344,000 as compared to the prior week’s revised figure of 329,000 jobless claims and an expected reading of 320,000 new jobless claims.
Analysts note that week-to-week figures continued to show volatility, but said that on balance, the rolling average for jobless claims appeared consistent with moderate growth in labor markets.
This week’s scheduled economic news shows no events related to housing and mortgages. Highlights include Fed Chair Janet Yellen’s appearance before the Joint Economic Committee in Washington, D.C. and the usual releases of mortgage rates and new jobless claims on Thursday.
Believe it or not, paint colors can affect your mood. When remodeling your home, the color you use on the walls can end up being just as critical to the thematic consistency of your home as the furniture you use to decorate it.
Before you slap any old color on the walls, take some time to consider what mood you’d like each room to inspire.
Red, Yellow And Orange: The Colors Of Excitement, Hunger And Happiness
Ever wonder why the dining rooms, kitchens and entertainment rooms you see in magazines always seem come in every shade of red? It’s because these rooms are dedicated to eating and leisure time. Shades of red, especially bright, vibrant reds, have been linked to increased appetite and increases in energy levels.
In a similar vein, we have shades of yellow. Typically, yellow hues have been known to encourage feelings of happiness and joy.
That said, it’s a good idea to steer clear of especially bright shades of yellow that can be harder on the eyes, as they can foster feelings of frustration and an inability to concentrate.
Orange, like red, provides a great way to bring up energy levels, but like yellow, is prone to cause irritation when used excessively. People are more likely to be excitable and show more enthusiasm in rooms that incorporate this color. In order to reap the benefits of orange without causing irritation, restrict your use of it to the odd wall here and there.
Blue, Green And Purple: The Colors Of Restfulness, Peace And Serenity
It’s no surprise that blue is the color of calm and relaxation. For bedrooms and bathrooms, blue hues are ideal for inspiring restfulness; however, this color’s calming influence makes it a poor paint color choice for high traffic areas where high energy levels are necessary.
Occasionally, overusing this color – especially in darker shades – can bring moods down beyond calmness and into sadness and depression.
Green is yet another color that inspires peace and restfulness. The advantage of green is that the serenity it brings on is accompanied by feelings of rejuvenation and replenishment. Think of green spaces as places where you can gather yourself and quietly rebuild your energy levels.
Purple is often associated with lavishness and luxury in deep, rich hues that spark creative thinking. In lighter shades, it has the same calming influence of blue but, thanks to its red undertones, none of the sadness that blue can often have.
Making The Most of These Colors: A Little Goes A Long Way
It’s unlikely that you will be painting any of the rooms in your house in a single shade of any of these colors. Experiment with different shades and work with colors that inspire similar emotions to break up the visual impression of the room.
You can use neutral paint colors like brown, black and white to bring depth to room, or to suppress the harsh tones of brighter colors like yellow and orange.
Psychologists have long known that colors affect mood, and in recent years, the interior design world has caught on as well. Now that you understand how paint colors can alter your mood, it’s important to paint your walls wisely.
The FOMC of the Federal Reserve released its customary statement after its meeting concluded April 30.
FOMC members said that the economy is improving after a winter lull caused by poor weather. The national unemployment rate remains high, although some improvement in labor markets was reported. Fiscal policy is restraining economic growth, although FOMC said that the restraint is diminishing.
FOMC Monitors Inflation, Further Reduces Asset Purchases
The FOMC statement reflected members’ concerns about the inflation rate remaining below its goal of two percent, and said that this could eventually impact economic recovery. The Fed expects inflation to approach its goal within the “medium term.”
The Fed will reduce its monthly asset purchases of mortgage-backed securities and Treasury securities to a total of $45 billion in May. FOMC members said that the Fed’s level of asset purchases is sufficient to maintain downward pressure on long term interest rates and to support mortgage markets.
The Fed expects to continue reducing its asset purchases as long as improvements in the labor market and general economic conditions occur. As of March, the national unemployment rate was 6.70 percent; the Fed previously established a goal of 6.50 percent unemployment as an indicator of economic recovery.
The statement included its usual comment that asset purchases are not on a pre-set course and that FOMC members monitor economic reports and other financial data on an ongoing basis as part of the FOMC’s decision making process.
Fed Funds Target Rate Unchanged
FOMC members agreed to maintain the Fed’s current “highly accommodative” monetary policy and left the target Federal Funds rate at between 0.00 and 0.25 percent. The committee expects this policy to continue long after the asset purchase program concludes.
FOMC members will continue to monitor economic and financial developments along with inflation to determine the course of the target federal funds rate.
The FOMC noted that retail sales in March reached their highest level since September of 2012; this was viewed as a sign of a stronger overall economy.
This FOMC statement mentioned inflation as a basis for reviewing monetary policy more than in recent statements, and clearly established maximum employment and the committee’s target two percent inflation rate as benchmarks for decisions related to future policy decisions.
April’s unemployment rate is set for release on May 2.
After three consecutive months of decline, the S&P Case-Shiller 20-City Composite Index remained nearly unchanged in February. Year-over-year home prices rose by 12.90 percent in February as compared to 13.20 percent in January.
20 Percent Below Their 2006 Pre-recession Peak
Analysts note that in spite of recent slowdowns in home prices, the year-over-year rates of home price growth remain close to peak price growth attained in 2006. National home prices remain approximately 20 percent below their 2006 pre-recession peak.
13 cities posted lower rates of price gains in February. The Case-Shiller 10 and 20 city indices showed year-over-year price gains of 13.10 and 12.90 percent respectively. Only five cities posted year-over-year gains in price appreciation.
Las Vegas, Nevada continues to lead home price growth but its year-over-year rate of home price growth slowed from January’s reading of 24.9 percent to February’s reading of 23.10 percent. Washington, D.C. posted its eighth consecutive month of home price gains with a year-over-year reading of 9.10 percent, its highest rate of price increases since May 2006.
Dallas, Texas posted a year-over-year rate of 10.10 percent and a month-to-month increase of 0.20 percent, which continues the city’s record home price growth.
Home Price Gains Expected To Slow In Coming Months
Analysts said that more homes are expected to come on the market and also noted that the rapid increase in home prices for some areas likely sidelined some buyers. As inventories of homes increase, home prices are expected to rise at more modest rates. Job markets continue to experience ups and downs and incomes are relatively flat.
These factors can cause would-be homeowners to take a “wait-and-see” stance. Price increases in other sectors can also impact home prices, as buyers adjust their home purchase plans to what they can afford to spend.
Pending Home Sales Rise In March
The NAR reported that its pending home sales index rose by 3.40 percent in March as compared to a decrease of -0.80 percent for February. The March reading showed the first increase in pending home sales in nine months, and was the highest reading since November.
Warmer weather allowed more buyers shop for homes, but remains 7.90 percent lower than in March 2013. Higher home prices and low inventories of available homes were cited as reasons for the lower reading.
Pending home sales by region showed mixed results, and suggested the impact of severe winter weather on potential home buyers.
Northeast: +1.40 percent
Midwest: -0.80 percent
South: +5.60 percent
West: +5.70 percent
Based on a slow start during the first quarter of 2014, the NAR forecasts 2014 sales of existing homes at 4.9 million as compared to 5.1 million existing homes sold in 2013.