The number of applications for home purchases is expected to become a bigger part of the market in 2011 as home prices stabilize, predicts the Mortgage Bankers Association. Refinancing has mostly dominated in recent months as home owners looked to lock-in low rates, but experts predict refinancing to slow as home purchase shoppers dominate. Real estate analysts predict the other following trends in the home loan market for 2011:

• Rates on the rise. The Mortgage Bankers Association predicts rates to rise slightly in 2011 and hover around 5%. They expect rates to increase to about 6% in 2012.
• Jumbo loans become more attractive. Jumbo loans (loans over $417,000 in our housing market) are expected to pick up pace in the next few months. Jumbo loans often have higher rates than conforming loans. However, with rates on jumbo loans dropping, experts predict a hike in refinancing and purchase applications for high-end housing.
• All-cash purchases. All-cash purchases represented about a quarter of all existing home purchases in the last four months of 2010, according to Lawrence Yun, chief economist of the National Association of REALTORS®. He expects all-cash purchases to continue to represent a big part of the real estate landscape in 2011.
• Slow and complex loan process. The time between application and closing can take as much as 60 days and that's not expected to get any faster, experts say. Lenders often recommend borrowers lock in a loan 60, 75, or 90 days to help ensure the loan process will be completed within that lock-in period. The industry's new levels of documentation and verification that is now required is causing lengthy delays in the loan process, experts say. Source: MSNBC

START OVER - 1.53 million Americans filed for personal bankruptcy (either Chapter 7, 11 or 13) in calendar year 2010, the 4th consecutive year of an increasing national total. (Source: American Bankruptcy Institute)

MORE THAN A MILLION - 1,046,762 homes were seized by lenders in calendar year 2010 as a result of foreclosure, an average of 2,868 per day. There are 75 million homeowners in the USA, 24 million of which do not have any mortgage debt on their homes. (Source: RealtyTrac, Census Bureau)

DEBT - 50% of the 75 million homeowners in the USA either have an outstanding mortgage balance on their primary residence that is less than 50% of their home's current fair market value (e.g., mortgage debt of less than $100,000 on a $200,000 home) or they have no outstanding mortgage debt at all. (Source: Census Bureau)

Since late 2006

387

major U.S. lending operations have "imploded

Source: American Banker  

New Credit

Number of recently opened accounts, and proportion of accounts that are recently opened, by type of account
Number of recent credit inquiries
Time since recent account opening(s), by type of account
Time since credit inquiry(s)
Re-establishment of positive credit history following past payment problems

Types of Credit Used

Number of (presence, prevalence, and recent information on) various types of accounts (credit cards, retail accounts, installment loans, mortgage, consumer finances accounts, etc.)

In our next issue we will provide a brief summary and a few tips to maintain a good credit score.

72% of the market have purchase opportunities at RENTAL PRICES.
 
Source: TBWS Daily

In its latest real estate and economic forecast, the National Association of Realtors anticipates that sales of existing homes, after falling 4.8% in 2010, will rise 7.9% this year, to 5.3 million, and another 4.5% in 2012, to 5.53 million.

Lawrence Yun, NAR's chief economist, said in a statement, "Modest gains in the labor market and the improving economy are creating a more favorable backdrop for buyers, allowing them to take advantage of excellent housing affordability conditions. Mortgage rates should rise only modestly in the months ahead, so we'll continue to see a favorable environment for buyers with good credit."

I have worked with Pete Stegler twice now -- for my first ever mortgage and now for a refinancing. Pete is the perfect person for a new home buyer. I had NO idea what I was doing and in many ways, didn't want to get involved with the details. Pete walked me through every step so clearly, explaining exactly what I needed to know. He is absolutely great at his job. I recommend him to everyone I know, and wouldn't use anyone else!

Beth C.