Existing home sales rose again in January, for the third consecutive month, with the annual rate of 5.36 million marking the first time in seven months that sales activity was higher than a year earlier.

The National Association of Realtors (NAR)released their monthly report on existing home sales on Wednesday.

Home sales are now 5.3 percent above the 5.09 million level in January 2010.

Lawrence Yun, NAR chief economist, said the improvement is good but could be better. “The uptrend in home sales is consistent with improvements in the economy and jobs, which are helping boost consumer confidence,” he said.

He continued, “The extremely favorable housing affordability conditions are a big factor, but buyers have

been constrained by unnecessarily tight credit. As a result, there are abnormally high levels of all-cash purchases, along with rising investor activity.”

A parallel NAR survey shows that first-time buyers purchased 29 percent of homes in January, down from 33 percent in December. Investors accounted for 23 percent of purchases in January, up from 20 percent in December.

All-cash sales rose to 32 percent in January from 29 percent in December, and they are now at the highest level since NAR began measuring them in October 2008.

“Increases in all-cash transactions, the investor market share and distressed home sales all go hand-in-hand. With tight credit standards, it’s not surprising to see so much activity where cash is king and investors are taking advantage of conditions to purchase undervalued homes,” Yun said.

The national median existing-home price for all housing types was $158,800 in January, down 3.7 percent from January 2010. The median home price in December was $168,800. Distressed homes edged up to a 37 percent market share in January from 36 percent in December.

NAR President Ron Phipps, said the median price is being dampened by unusual market factors. “Unprecedented levels of all-cash purchases, primarily of distressed homes sold at deep discounts, undoubtedly pulls the median price downward,” he said. “Given the levels of inventory we see today, we believe that traditional homes in good condition have held their value.”

Source- www.dsnews.com

Three of the top five lenders use Point In Time for retro income verification, according to Equifax. Point In Time, a service that validates and documents a borrower’s employment and income at the point of loan funding, is provided by Equifax’s the Work Number, the largest source for employer employment and income verifications.

“With the significant increase in repurchases and mortgage insurance rescissions, Point In Time is the preferred service to help lenders investigate requests-proven by its high adoption rate among the leading

financial institutions,” said Janet Ford, SVP of the Work Number. “With Point In Time, lenders save time and costs associated with responding to repurchase requests as well as potentially avoid costly buybacks.”

Point In Time delivers income data to confirm original verification information, providing a cost-effective method to re-verify a borrower’s income without compromising data security, according to the Atlanta-based company.

“In 2011, financial institutions will give priority to loan modifications, foreclosures, and repurchases as indicated by strong initiatives announced since the start of the year,” said Ford. “To respond to the growing repurchase problem, institutions like Bank of America are even establishing company units dedicated to servicing defaulted loans.”

According to Dann Adams, president of the Work Number, mortgage repurchases are growing.

“According to reports, Fannie Mae and Freddie Mac alone have made more than $13 billion in recent repurchase requests – so many that lenders are unable to respond in a timely manner,” Adams said. “Soon, we will see the consequences of not responding; therefore, lenders need a solution like Point In Time to efficiently and quickly defend their loans and prove underwriting due diligence.”

Source- www.dsnews.com

Interest rates on fixed-rate mortgages fell back this week according to industry data released Thursday. It marks the first time in five weeks that declines have been reported and follows a sharp spike last week of more than 20 basis points, which put the 30-year fixed rate at a 10-month high.

A national survey conducted by Freddie Mac shows that the 30-year fixed-rate mortgage averaged 5.00 percent (0.7 point) for the week ending February 17. That’s down from an average of 5.05 percent last week.

The average 15-year fixed rate came in at 4.27 percent (0.7 point) this week in the GSE’s survey. Last week, it was 4.29 percent.

According to Frank Nothaft, Freddie Mac’s chief economist, fixed mortgage rates are still “very affordable,” even with the steady increases seen in previous weeks. He explained that prior to 2009, interest rates for 30-year fixed-rate mortgages had never been at 5 percent since the GSE began tracking rates in April 1971.

To put today’s numbers into perspective, Nothaft pointed out that in both 1981 and 1982, fixed mortgage rates were over three times as high as they are now. Still, he says, “The housing market is struggling to regain traction.”

Adjustable-rate mortgages (ARMs) were mixed in Freddie’s study. The 5-year ARM dropped from 3.92 percent to 3.87 percent (0.6 point), while the 1-year ARM increased from 3.35 percent to 3.39 percent (0.6 point).

Source-www.dsnews.com