Arizona Real Estate Informer

Existing-home sales edged up in May

WASHINGTON - Sales of existing homes edged up slightly in May although median home prices continued to fall.  More...

At Countrywide's End, an Emotional CEO

I hardly feel sorry for Angelo Mozilo, as he made $168 million in compensation over the last 5 years, according to Forbes.  Read story about the final Countrywide shareholder meeting.  I bet he gets to keep his compensation while his borrowers lose everything, including their homes.

U.S. Mortgage Crisis Rivals Savings and Loan Meltdown

The home has long been the bedrock asset of most American families. Now, its value has become the biggest question mark hanging over the global economy and financial system.

Over the past decade, Wall Street built a market for more than $2 trillion in securities sold globally and backed by loans to U.S. homeowners on two long-accepted beliefs and one newer one. The prevailing logic: The value of the American home would never fall nationwide, and people would almost always make their mortgage payments. The more recent twist: Packaging mortgage loans and turning them into securities would make the global economy more resilient if anything went wrong.

In a matter of months, though, much of the promise of the new financial architecture -- together with its underlying assumptions -- has proven to be a mirage. As house prices fall and homeowners default on mortgages at troubling rates, the pain has spread far and wide. An examination of the resulting crisis shows that it is comparable to some of the biggest financial disasters of the past half-century. More...

Overnight real estate rates continue climb

Long-term mortgage interest rates increased Monday, and the benchmark 10-year Treasury bond yield moved up to 4.16 percent.

The 30-year fixed-rate average rose to 5.8 percent, and the 15-year fixed rate edged up to 5.38 percent. The 1-year adjustable rate increased to 5.54 percent.

The 30-year Treasury bond yield was also up at 4.62 percent.

Rates and bonds are current as of 7:15 p.m. Eastern Standard Time.

Mortgage rate figures are according to Bankrate.com, which publishes nightly averages based on its survey of 4,000 banks in 50 states. Points on these mortgages range from zero to 3.5. More...

PMI and LPMI - the comeback kids

For the last few years, the common financing trend among buyers to avoid PMI (private mortgage insurance) when they didn't have the standard 20% down payment has been to obtain a second mortgage, also known as a "piggyback." Piggybacks financed the portion of the mortgage over 80% and up to 100%. In the last few months, the market for second mortgages has nearly dried up.

Second mortgages are considered the ultimate in financing risk. If the borrower defaults, the second mortgage holder is less likely to receive payment - if they ever do. With areas of depreciating values, it's possible any money recovered from a default may not even cover the first mortgage, let alone a second. The last thing lenders and investors want right now is more risk, so second mortgages are becoming harder to find and those that still exist are considerably more expensive.

So what's the solution if you don't have a 20% down payment? Enter our old friend PMI. With PMI, the borrower is required to pay a monthly premium to cover the lender's back in case the borrower defaults. Most people don't have a 20% down payment (or 20% equity if they are refinancing), so situations requiring PMI are very common. More...

No free ride for subprimers

NEW YORK (Money) -- If you think responsible borrowers are getting the short end of the stick with President Bush's mortgage freeze - don't worry - subprime borrowers aren't getting off scot-free.

"When do my husband and I get a break? We were responsible and bought a house that we could afford," a Los Angeles reader named Ann wrote among the nearly 500 comments on CNNMoney.com's TalkBack blog. "Bitter, you better believe it!"

The thousands of subprime borrowers eligible for the rate freeze are still being "punished" for reckless behavior in the past - just not by as much as they would if their adjustable-rate mortgages were allowed to move to unaffordable levels. More...

Fannie follows Freddie in loan buyback change

WASHINGTON (AP) -- Mortgage finance giants Fannie Mae and Freddie Mac are changing their criteria for purchasing delinquent home loans they've guaranteed, in order to reduce the number they buy from investors, the companies said Monday.

The two government-sponsored companies, which together own or guarantee around two-fifths of U.S. home-mortgage debt, have cut their dividends and sold billions of dollars of special stock recently to buttress their finances after posting stunning third-quarter losses.

Fannie Mae and Freddie Mac, its smaller competitor, have been forced to set aside billions of extra dollars to account for bad home loans, eroding their profits at a time when home prices are falling and defaults are spiking on high-risk mortgages made to borrowers with weak credit histories. More...

Trade group lifts outlook for 2008 home sales

WASHINGTON (AP) - Bucking conventional wisdom, a trade group for real estate agents on Monday said the battered housing market is on the verge of stabilizing and inched-up its outlook for 2007 and 2008 home sales.

The revised monthly forecast from the National Association of Realtors, which followed nine straight months of downward revisions, calls for U.S. existing home sales to fall 12.5 percent this year to 5.67 million - the lowest level since 2002. Last month, the association predicted 5.66 million existing homes would be sold this year.

The Realtors' group also forecast sales will rise slightly in 2008 to 5.7 million, up from last month's prediction of 5.69 million. More...

Americans split on mortgage bailout

NEW YORK (CNNMoney.com) -- Americans are nearly equally divided on whether those facing defaults on their mortgages should get special help, with most believing the borrowers are to blame for their own problems.

A poll conducted for CNN by Opinion Research Corp. found that 51 percent of Americans surveyed believed that those at risk of defaulting on their mortgages and losing their homes "should receive special treatment." But 46 percent said there should not be any special treatment afforded to those in trouble.

In addition, when asked which statement comes closer to their feelings on the topic, 51 percent agreed they felt sorry for those whose homes are at risk, but that those borrowers willingly entered into those agreements and have no one to blame but themselves. The survey found 46 percent agreed that they think the borrowers are the victims of bad lending policies by the banks who provided mortgages to them. More...

What a rate cut means to homeowners

NEW YORK (CNNMoney.com) -- Most analysts see the Fed cutting rates for the third consecutive time tomorrow. What investors don't know is just how deep the Fed will cut. What will this mean for your mortgage? Here's what you need to know.

1: Long-term mortgages won't move much
Right now investors are split on whether the Fed will lower the funds rate by another quarter point to 4.25% or cut it by a half-point, to 4%. But the fact is, there's not much doubt that the Fed will cut rates. And because of that, the market has already priced that in, says Mike Larson with moneyandmarkets.com. 30-year fixed rates have been falling for some time. More....