Mortgage rates resume decline, Freddie Mac says

Bank of America may be starting a trend. Self-Help will then sell them to Freddie Mac, the mortgage-finance company that has been under government control since 2008.

In 2014, Bank of America reached a $16 billion settlement with the Justice Department.

“Wells Fargo, Chase – other banks – could do similar programs through this if they wanted to”, said Guy Cecala, publisher of Inside Mortgage Finance. In correspondent lending, one lender buys loans that were made by another lender. There is no clear consensus this week, with 46 percent of the respondents predicting that mortgage rates will remain more or less unchanged over the next week.

As recently as six years ago, Bank of America was the second-largest provider of home loans insured by the Federal Housing Administration – loans marketed mainly to low- and moderate-income borrowers.

Freddie Mac reports the following national averages”. In order to prevent this from occurring, Self-Help will also provide post-closing counseling to any high-risk borrowers or homeowners who are struggling to pay.

“We believe the mortgage-lending sector is underserving families of modest means”, said Self-Help CEO Martin Eakes. Other rates also fell. He thinks Bank of America could be trying to fix its image with these new loans.

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Mr. Eakes is also CEO of the Center for Responsible Lending, a nonprofit advocacy group for borrowers that in the past has also asked the FHA to limit lenders’ damages for some errors. They will be low income, but they have to have a credit score of at least 660.

Since mortgage rates are closely tied to the movement of long-term bonds, interest rates on home loans continue to tumble. The number of loan modifications completed on Freddie Mac-backed loans in January was 3,474, down from 3,823 in December and down from the monthly average for 2015 of 4,491.

He said these borrowers will be thoroughly vetted. That’s the lowest it has been since early February of a year ago.

Low down payment loans aren’t a great fit for everyone, though.

“Many lenders, including us, are looking at the Fannie and Freddie programs as an alternative to the FHA”, said Quicken CEO Bill Emerson.


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