Dennis' Mortgage Blog

Question of the week:  In light of Independence Day tomorrow, what are the restrictions or legal barriers to homeownership?

Answer:  Thankfully there are not many.  While there are still some deeds out there that have the racial restrictions as the property has not been exchanged since before 1968, title VIII of the Civil Rights Act of 1968 made covenants on deeds that restricted ownership based on race, sex, religion, illegal.  The Fair Housing Act removed the remaining legal barriers to homeownership for all Americans.  Today the only legal form of limiting homeownership are age restrictions for senior housing or communities—such as Leisure World. 

If a buyer does not need a loan to purchase a property, is legally able to enter a contract and can come to an agreement on price with a seller then he/she may purchase property. 

Should a borrower require a loan to purchase property there are more restrictions, obviously due to the ability to qualify for the mortgage; however the restrictions are imposed not by the government but rather by the lending requirements.  The Equal Credit Opportunity Act bans lenders from discriminating against applicants based on race, sex, religion, so any qualified applicant can obtain a mortgage and purchase property.

Our Founding Fathers were land and property owners, as were those who wrote and adopted our Constitution, recognizing the benefits of such ownership succeeding generations of America’s leaders have removed all barriers to homeownership; to the extent that the American Dream is alive and well—and still a sought after dream, owning our own home.

Happy Independence Day!

I will keep this link on my “Question of the Week” section to assist new homeowners:

IRS Form 5405 for First Time Buyer Tax Credit for those eligible

Have a question for me?  Ask me!   

The past week had negative news for the U.S. economy with Consumer Confidence and employment numbers coming in worse than expected.  While negative economic news generally helps bonds and mortgage rates, the news this week came out during a slow trading week-as a result little benefit accrued to mortgages.

Some technical comments on the mortgage backed securities (MBS) market.  Last week MBS broke above the 25 and 200 day moving averages, which had merged for a day.  This is usually good news as it can establish a new range of trading above the previous range, keeping in mind higher prices for MBS means lower rates.  This week MBS dived on Tuesday and on Wednesday it appeared they would push through the 200 day moving average going down, which is not good news for rates.  Instead of breaking through however MBS bounced off the 200 day floor and headed back up.  Yesterday MBS tested the 50 day moving average moving up and before reaching it prices retracted.  Next week we may see MBS bouncing around the 50 day average as the ceiling for rates, any significantly negative news could push MBS through this critical barrier and we lead to rates dropping a bit.  My feeling is that rates will continue to trade between the two averages (200 and 50 day) with mortgage rates being within the range of last week and this—barring some unexpected outside event.

Rates up this week slightly this week except conforming—Tuesdays drop in prices was too much to overcome on a short week.  Too early to tell if these rates will continue, market is volatile so plan accordingly.  Follow me on Twitter (dcslb is my Tweet) if you want through the day mortgage market updates.

FIXED RATE MORTGAGES AT COST OF 1 POINT*

30 year conventional  5.125%                           FLAT

30 year conforming-jumbo 5.625%                   UP .125%

30 year FHA    5.5%                            UP .125%

30 year FHA jumbo 6.00%                              UP .125%

Please note that these are base rates and adjustments may be added for condominiums, refinances, credit scores, loan to value, and period rate is locked (i.e 45 days instead of 30 days).

Please note that rates quoted are based on average of several lenders for a purchase transaction with 20% down payment and a minimum FICO score of 740; APR is not quoted as it is dependent upon specific loan amounts, lenders and services selected.  Numbers provided are for comparative purposes only.

This weekend we celebrate the Declaration of Independence from Great Britain by the Continental Congress in 1776.  Here is a great link for the history of the Declaration and that fateful week in Philadelphia.

Happy Birthday Bud, have a beer with Sis and Mom.

Happy Independence Day everyone, remember Our Creator has endowed you with these inalienable rights, life, liberty and the pursuit of happiness. 

Pursue!

Dennis

Remember this update is posted weekly on My Blog at www.DennisCSmith.com ; feel free to forward the link to family and friends who may be interested in past commentaries.