Last week's mortgage rates fell once again, with HSH Associates reporting lower average combined mortgage rates: Rates for a 30 year fixed rate mortgage (FRM) moved down from 4.62 to 4.58 percent; mortgage rates for a 15 year FRM dropped by 5 basis points from 4.07 to 4.05 percent. Average combined rates for a 5/1 adjustable rate mortgage (ARM) ticked downward by one basis point to 3.65 percent.
Last week's housing news also highlighted comments made by FHA Commissioner David H. Stevens suggesting that a nationwide moratorium on home foreclosures would do more harm than good for the nation's struggling economy and housing markets.
FHA commissioner discourages wholesale foreclosure moratorium
For homeowners who can't get out of upside down mortgage loans, a foreclosure moratorium may seem like a good thing, but the overall effect of a complete national moratorium would continue to impact communities and housing markets, along with families who are losing their homes and neighborhoods.
Stopping foreclosures would put many homes, some of them vacant and derelict, into limbo, meaning that mortgage lenders can not repair or sell such homes until title reverts to the lenders through a foreclosure sale or auction. This could cause housing markets to decline further.
Families, mortgage lenders, and communities lose on foreclosure delays
Along with foreclosure moratoriums come additional expenses for homeowners, as past due payments and late charges continue to accrue. Communities lose property tax revenue when homeowners stop making payments, and damaged vacant homes detract from local home values.
If you're looking for a fixer upper or a moderately priced first home, buying a foreclosed home from a mortgage lender may provide benefits in terms or pricing and financing concessions, but please proceed cautiously. Foreclosed homes are usually sold as-is and without warranties or other guarantees. Having any home you want to buy inspected by an independent home inspection service helps with determining the condition and necessary repairs for renovating a foreclosed home.
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