Survey looks at some current mortgage topics

A majority of consumers now feel it’s easier to obtain a mortgage loan, according to Fannie Mae’s National Housing Survey.

Fifty-two percent of respondents in the company’s latest survey said they think it would be easy to get a mortgage today, reflecting a climb of 2 percent.

The number of consumers saying it would be difficult to obtain a loan fell three points, meanwhile, dropping to 45 percent.

“For the first time in the National Housing Survey’s 3 ½ -year history, the share of respondents who said it is easy to get a mortgage surpassed the 50 percent mark,” said Doug Duncan, chief economist at Fannie Mae.

“The gradual upward trend in this indicator during the last few months bodes well for the housing recovery and may be contributing to this month’s increase in consumers’ intention to buy rather than rent their next home.”

The share of consumers who said they would buy if they moved climbed to an all-time survey high of 70 percent, while the share of those who would rent declined to an all-time low of 26 percent, it was reported by DS News.

Respondents also seem reluctant to accept projections of rising mortgage rates over the year, with the share of those expecting increases dropping for the second straight month to 55 percent.

Five percent said they expect rates to drop, up slightly from the December survey.

On the other hand, it appears more people have taken notice of reports of slowing home price gains. The share of consumers expecting home prices to increase in the next year fell six percentage points to 43 percent, while the share expecting prices to stay the same increased seven percentage points to 45 percent.

Q: What is an openended mortgage?

A: This is a type of mortgage that allows the borrower to increase the amount of the mortgage at a later time. Openend mortgages permit the borrower to go back to the lender and borrow more money if certain conditions have been met.

Usually a set dollar limit on the additional amount can be borrowed. This mortgage can be very risky for the lender, as noted in National Mortgage News:

“Indeed, one can easily envision a lawsuit or Consumer Financial Protection Bureau action against a lender, who, without disclosing the financial incentive for a loan officer to close an open ended loan, advises a borrower to forego a fixed-rate closed-end loan.

“Given the broad authority for the CFPB to define what constitutes an unfair or deceptive act or practice, hidden financial motives are highly problematic.”

Q: How many homeowners have benefited from the HOPE NOW program? A: Quite a few. HOPE NOW, a voluntary, private sector alliance of mortgage servicers, investors, mortgage insurers and nonprofit counselors, released a press release outlining its loan modification data from 2013.

In total, 768,000 homeowners received loan modifications from HOPE NOW in 2013. Q: Are new-home sales still rising?

A: New single-family homes were running at a seasonally adjusted annual rate of 543,000 units in January 2014, based on data from the Mortgage Bankers Association’s Builder Applications Survey.

“While the big jump may appear to conflict with other data, such as MBA’s purchase application index and NAR’s existing home sales data that point to a weak market for existing homes,

our Builder Application Survey estimate is consistent with reports of home builder sentiment that show strength in the market for new homes,” said Mike Fratantoni, MBA’s chief economist. “It is also worth noting that the significant January increase also followed a particularly slow pace of sales in November and December.”

Q: Are title insurance profits expected to continue to grow this year?

A: This year’s revenue growth for title insurers is likely to be constrained, according to a Fitch Ratings press release reported by DS News.

Fitch cites rising interest rates and Home Affordable Refinance Program participation as a limiting factor for title insurers, who have experienced steady revenue growth and improving profit margins over the last two years.

Q: Have the guarantee fees for mort--

gages been raised?

A: Yes, the Federal Housing Finance Agency has directed Fannie Mae and Freddie Mac to raise their g-fees.

The g-fee increase consists of three components: the base fee for all mortgages will increase 10 basis points; the g-fee grid will be updated to ensure pricing is aligned with credit risk; and the adverse market fee of 25 basis points is being eliminated except in four states where foreclosure carrying costs are exponentially high, it was reported by DS News.

Q: Is the number of homes on the market growing?

A: Inventories of homes for sale have been slow to bounce back since the 2007-09 recession, despite steady price appreciation since January 2012. Normally, higher prices reflect robust sales.

But lately, prices have been rising even though sales remain stuck at relatively low levels, largely due to a lack of inventory.