Thursday, November 18th, 2010, 11:32 am

The delinquency rate of mortgages at least one payment past due but not in the foreclosure process dropped 51 basis points from a year ago to 9.13% in the third quarter, according to the Mortgage Bankers Association.

It is also a drop of 72 bps from the previous quarter. The MBA surveyed 44 million first-lien mortgages for the report. Of those, 4.34 million were 90-plus days past due or in foreclosure, representing 8.7% of all those surveyed. It’s a decrease of 15 bps from a year ago and down 41 bps from the previous quarter.

Michael Fratantoni, MBA’s vice president of research and economics, said the number of loans in foreclosure dropped, bringing the serious delinquency rate to its lowest level since the second quarter of 2009.

But the number of loans entering the foreclosure process increased. Of the loans surveyed, 1.34% had a foreclosure action taken, up 23 bps form the previous quarter but down 8 bps from a year ago.

Fratantoni said improved delinquencies came from a more positiveemployment report in October, but, he said, it still remains high.

“Although the employment report for October was relatively positive, the job market had improved only marginally through the third quarter, so while there was a small improvement in the delinquency rate, the level of that rate remains quite high,” Fratantoni said. “As we anticipate that the unemployment rate will be little changed over the next year, we also expect only modest improvements in the delinquency rate.”

The economy added 151,000 jobs in October, and while the unemployment rate remains at 9.6%, the private sector is expected to add more jobs during the holiday season.

Foreclosure starts on prime mortgages reached a new record, according to the MBA. Of all prime fixed-rate loans, 0.92% had a foreclosure initiated, a 22 bps increase from the second quarter. It is the largest quarterly increase on record.

The MBA said recent foreclosure paperwork problems are unlikely to have a large impact on the third quarter data. But, Frantantoni said foreclosure inventories could increase in the next quarter and in early 2011 because of the issues. ”The servicers that halted foreclosure sales temporarily may show higher foreclosure inventory numbers in the fourth quarter of 2010 and in early next year than would otherwise have been the case,” Frantantoni said.

Your best days are ahead.

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or visit the Empower Home Loans website by clicking here:

U.S. house prices have risen by nearly 25 percent over the past two years, noted Bernanke, currently chairman of the president’s Council of Economic Advisers, in testimony to Congress’s Joint Economic Committee. But these increases, he said, “largely reflect strong economic fundamentals,” such as strong growth in jobs, incomes and the number of new households.

Bernanke’s thinking on the housing market did not attract much attention before Bush tapped him for the Fed job Monday but will likely be among the key topics explored by members of the Senate Banking Committee during upcoming hearings on his nomination.

Many economists argue that house prices have risen too far too fast in many markets, forming a bubble that could rapidly collapse and trigger an economic downturn, as overinflated stock prices did at the turn of the century. Some analysts have warned that even a flattening of house prices might cause a slump — posing the first serious challenge to whoever succeeds Fed Chairman Alan Greenspan after he steps down Jan. 31.

Bernanke’s testimony suggests that he does not share such concerns, and that he believes the economy could weather a housing slowdown.

“House prices are unlikely to continue rising at current rates,” said Bernanke, who served on the Fed board from 2002 until June. However, he added, “a moderate cooling in the housing market, should one occur, would not be inconsistent with the economy continuing to grow at or near its potential next year.”

Greenspan has said recently that he sees no national bubble in home prices, but rather “froth” in some local markets. Prices may fall in some areas, he indicated. And he warned in a speech last month that some borrowers and lenders may suffer “significant losses” if cooling house prices make it difficult to repay new types of riskier home loans — such as interest-only adjustable-rate mortgages.

Bernanke did not address the possibility of local housing bubbles or the risks faced by individual borrowers or lenders in a slowing market.

But if Bernanke is confirmed as Fed chief, and if the housing market slows more than he expects, he would be unlikely to use the central bank’s power over short-term interest rates to prop up falling housing prices for the sake of individual homeowners, according to comments he has made in numerous speeches and statements in academic papers.

Rather, he has argued for many years that the Fed should respond to rising or falling prices for stocks, real estate or other assets only if they are affecting inflation or economic growth in an undesirable way. Thus, he would advocate cutting interest rates if a reversal in the housing market sharply dampened consumer spending, triggering job losses or a fall in inflation to very low levels.

Lower interest rates encourage consumers and businesses to borrow and spend, spurring economic growth and hiring. That would also make it less likely that very low inflation could turn into deflation, an economically harmful drop in the overall price level.

Bernanke believes “the Fed’s job is to protect the economy, not to protect individual asset prices,” said William Dudley, chief economist for Goldman Sachs U.S. Economics Research.

Greenspan, for example, has rejected suggestions that the Fed should have raised interest rates in the late 1990s sooner or higher to slow soaring stock prices. He says the Fed got it right after that boom by cutting its benchmark rate deeply in 2001, in response to falling stock prices, the recession and the Sept. 11 terrorist attacks.

After Bernanke joined the Fed board in 2002, as the economic recovery remained sluggish and job cuts continued, he vocally supported Greenspan’s strategy of lowering the benchmark rate further and holding it very low until mid-2004, when it was clear that both job growth and the economic expansion were solid.

Bernanke also warned in a November 2002 speech that the Fed would act aggressively to prevent deflation, which had devastated the economy during the Great Depression that followed the 1929 stock market crash.

A former chairman of Princeton University’s economics department, Bernanke earned academic renown for his research on the Fed’s role in causing the Depression.

After the 1929 crash, the Fed mistakenly raised interest rates to protect the value of the dollar, which was then pegged to the price of gold, Bernanke wrote in an October 2000 article in Foreign Policy. The higher rates contributed to surging unemployment and severe price deflation. The Fed then made things worse by not acting to counter the credit crunch that resulted from the collapse of the banking system in the early 1930s.

“Without these policy blunders by the Federal Reserve, there is little reason to believe that the 1929 crash would have been followed by more than a moderate dip in U.S. economic activity,” Bernanke wrote.

In late 2000, looking ahead to the possibility of a sharp fall in then-lofty stock prices, Bernanke concluded, “history proves . . . that a smart central bank can protect the economy and the financial sector from the nastier side effects of a stock market collapse.”

And in words that might come to mind if housing tanks, he said the economic effects of falling asset prices “depend less on the severity of the crash itself than on the response of economic policymakers, particularly central bankers.”

There is no question – right now is the best time to buy real estate. The reality is, most of us will never see similar circumstances in our lifetime. So how do you capitalize on the opportunity? Simple; jump in! No really, that’s what you need to do. If you are a first time home buyer, buy a property at a discount (Empower Auction Properties) or just get into a great home that you can love and grow into. If you already have a home, consider an investment property to buy, fix, and sell, or buy and hold for a short season. With incredible mortgage rates, and accessible private money for investors, your excuses are ineffective!

10 reasons to buy real estate right now:

1. You can get a good deal! Prices are down 30 percent on average. They’re at a level that makes sense for people’s income.

2. Mortgages are cheap! At 4 percent on average for a 30-year fixed-rate mortgage, your costs to own are down by a fifth from two years ago.

3. You can save on taxes! When you add up the deductions for mortgage interest and others, the cost of owning can drop below renting for a comparable place.

4. It’ll be yours! The one benefit to owning that never changes is that you can paint your walls orange if you want (generally speaking; there might be some community restrictions). How many landlords will let you do that?

5. You can get a better home! In some markets, it’s simply the case that the nicest places are for-sale homes and condos.

6. It offers some inflation protection! Historically, appreciation over time outpaces inflation.

7. It’s risk capital! If the economy picks up, you stand to benefit from that, even if you’re goal is just to have a nice place to live.

8. It’s forced savings! A part of your payment each month goes to equity.

9. There is a lot to choose from! There are some 4 million homes available today, about a year’s supply. Now’s the time to find something you like and get it.

10. Sooner or later the market will clear! The U.S. is expected to grow by another 100 million people in 40 years. They have to live somewhere. Demand will eventually outpace supply.

Your best days are ahead.

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LOS ANGELES (AP) – The foreclosure crisis intensified across a majority of large U.S. metropolitan areas this summer, with Chicago and Seattle – cities outside of the states that have shouldered the worst of the housing downturn – seeing a sharp increase in foreclosure warnings.

California, Nevada, Florida and Arizona remain the nation’s foreclosure hotbeds, accounting for 19 of the top 20 metropolitan areas with the highest foreclosure rates between July and September, foreclosure listing firm RealtyTrac Inc. said Thursday.

Those states saw housing values surge during the housing boom years. When the boom ended, values collapsed and foreclosures soared.

But the latest data show that many of the metro areas in those states saw a decline in the number of households receiving foreclosure-related filings, while many cities in other states saw a spike in foreclosure activity.

“The epidemic is spreading from the states at the ground zero of the foreclosure problems out into areas that hadn’t been previously affected,” said Rick Sharga, a senior vice president at RealtyTrac.

The trend is the latest sign that the nation’s foreclosure crisis is worsening as homeowners facing high unemployment, slow job growth and uncertainty about home prices continue to fall behind on their mortgage payments.

In all, 133 out of 206 metropolitan areas with at least 200,000 residents posted an annual increase in foreclosure activity in the three months ended Sept. 30, RealtyTrac said.

The firm tracks notices for defaults, scheduled home auctions and home repossessions – warnings that can lead up to a home eventually being lost to foreclosure.

Eleven out of the nation’s 20 largest metropolitan areas saw foreclosure activity increase in the third quarter compared to the same period last year.

The Seattle-Tacoma-Bellevue metro area registered the sharpest annual increase – 71 percent. One in every 129 households received a foreclosure filing.

The Chicago-Naperville-Joliet metropolitan area posted the second-highest annual jump, a 35 percent increase. One in every 84 households received a foreclosure notice.

Among the other metro areas where foreclosure activity jumped by a large margin this summer were Houston-Sugar Land-Baytown, up 26 percent; Detroit-Warren-Livonia, at nearly 23 percent; and, Atlanta-Sandy Springs-Marietta, up 20 percent.

Economic woes, such as unemployment or reduced income, continue to be the main catalysts for foreclosures this year. The U.S. unemployment rate hit 9.6 percent last month.

In the Seattle metro area, unemployment stood slightly lower at 8.5 percent in August and has been edging lower. It was 8.7 percent in August last year.

Still, many troubled homeowners have been unable to hang on. As a result, there’s been no letup in the inventory of foreclosed homes on the market this year, says John Bauer, an agent with ZipRealty in Seattle who represents lenders selling foreclosed properties.

“It has been on an upward trend curve ever since 2008,” Bauer said. “And not just the third quarter of this year, but the last 12 months, it’s been on a steady ascension.”

Chicago also had the third-highest number of homes repossessed by lenders during the quarter – 12,568 – behind the Phoenix metro area’s 14,317 and the Miami metro area’s 12,963, RealtyTrac said.

Banks have seized more than 816,000 homes through the first nine months of the year and are on pace to seize more than a million.

A controversy stemming from allegations that banks evicted people without reading foreclosure documents wasn’t a factor in the July-September quarter, Sharga said.

Lenders such as Bank of America and Ally Financial’s GMAC Mortgage initially halted foreclosure activity but have since resumed processing foreclosures.

Preliminary data from this month shows almost no change in foreclosure activity versus September, Sharga said.

“We’re not seeing what we might have anticipated in terms of a falloff,” he said.

The Las Vegas-Paradise, Nev., metropolitan area topped the list of metropolitan areas with the highest foreclosure rates in July-September with one in every 25 homes receiving a foreclosure warning – more than five times the national average. But foreclosure filings declined 20 percent from the same quarter last year.

“It’s not out of the woods yet, it’s just less bad than it was a year ago,” Sharga said.

Rounding out the rest of the top 10 metros with the highest foreclosure rate were Cape Coral-Fort Myers, Fla.; Modesto, Calif.; Stockton, Calif.; Merced, Calif.; Riverside-San Bernardino-Ontario, Calif.; Miami-Fort Lauderdale-Pompano Beach, Fla.; Phoenix-Mesa-Scottsdale, Ariz.; Bakersfield, Calif.; and Vallejo-Fairfield, Calif.

The national gauge of home prices inched up in July for the fourth straight month, but many cities are bracing for a short season of declines in the year ahead.

The price increases were fueled by now-expired homebuyer tax credits. With the peak buying season over, a record number of foreclosures, job concerns and weak demand from buyers are pushing prices down.

The Standard & Poor’s/Case-Shiller 20-city home price index released Tuesday increased 0.6 percent in July from June. The monthly changes are based on a three-month moving average for May, June and July.

Sales in May and June were inflated by the government tax credits. July had the slowest sales pace in 15 years. Somewhat expected with the tax credit expiration.

Twelve cities showed monthly price gains, while Cleveland’s prices were flat.

However, seven cities showed month-over-month declines and the gains in many cities were weaker from the previous month.

The biggest monthly price increases were in Detroit, New York and Washington. All three cities had price increases of roughly 1 percent.

Las Vegas and Phoenix had the largest declines of 0.8 percent and 0.6 percent, respectively.

Nationally, prices have risen almost 7 percent from their April 2009 bottom. But remain nearly 28 percent below their July 2006 peak – an overinflated market.

Most experts predict about 5 million homes will be sold this year. That would be in line with last years performance, and still above 2008, the worst sales performance since 1997.

All in all, any increase is a good thing. The market will continue to stabilize, and consumer confidence will improve.

Your best days are ahead.

WASHINGTON (AP) – Rates on 30-year mortgages matched the lowest level in decades and rates on 15-year loans dropped to their lowest point in nearly 20 years.

Mortgage buyer Freddie Mac said Thursday the average rate for 30-year fixed loans fell to 4.32 percent, the lowest on records dating back to 1971. That’s down from 4.37 percent the previous week and equal to the average rate reached four weeks ago.

The average rate on 15-year fixed loans fell to 3.75 percent, the lowest on records dating back to 1991.

Rates have been at or near the lowest levels in decades since spring as investors poured money into the safety of Treasury bonds, lowering their yield. Mortgage rates tend to track those yields.

In recent weeks, Treasury yields have dipped as bond traders bet that the Federal Reserve will soon boost its Treasury purchases in the hope of giving the economy a lift. That has pushed down rates.

Still, historically low rates have done little to boost the struggling housing market, which had its worst summer in more than a decade – except in the investment property arena. Fix and Flip investors have been creeping out of the wood work taking advantage of incredible rates, and incredible inventory.

Fall sales are expected to be low – high unemployment and weak job growth have kept people from buying homes – despite their attempts. And many of the hardest-hit markets are bracing for a big wave of homes sold at foreclosure or short sales. A short sale is when a lender lets a homeowner sell for less than the mortgage is worth.

To calculate average mortgage rates, Freddie Mac collects rates from lenders around the country on Monday through Wednesday of each week. Rates often fluctuate significantly, even within a given day.

Rates on five-year adjustable-rate mortgages averaged 3.52 percent, down from 3.54 percent a week earlier. Rates on one-year adjustable-rate mortgages rose to an average of 3.48 percent from 3.46 percent.

Your best days are ahead.

Want to know more about your credit, and the mortgage process? Just ask. We have some great tools to help you – and it’s all free. If you would like a copy of our Client Information Pack (CIP) filled with lots of helpful advice about your credit, lending, and mortgage guidelines, simply navigate to the contact page, send an email, or complete the online application for more helpful information. To claim your copy, simply click here:

or visit the Empower Home Loans website by clicking here:

If you perusing the real estate marketplace to buy your first home, you may have already realized that the process involves many different levels of knowledge and understanding. Chances are many steps of the process may be completely foreign to you.

By arming yourself with an arsenal of important questions, as well as with ateam of professionals, you are sure to avoid some of the most common first-time homebuyer mistakes – and making sure you don’t miss a good deal.

1. make sure you ‘click’ with the agent.

Personalities and experience levels range greatly, just as with any profession. Consider interviewing several local agents before deciding on which one to hire. Do you want a new agent who is sweet, patient, and ready to answer lots of questions? Or would you prefer a seasoned agent who gets you the best deal, but has less than stellar people skills? The choice is entirely yours, neither one being better than the other, but will make a big difference on how you feel about the process. Make sure the real estate brokerage knows how to market.

2. play 20 questions with the lender.

Mortgages can be difficult to understand – you need to ask every question that comes to mind. It’s important to be sure you understand exactly what your mortgage will entail. Be sure to have your lender compare rates against the loan product that aligns with your goals the best. How long will you be likely to stay at this property? Do you need a 30 year fixed loan where the amortization schedule is skewed toward paying more interest payments rather than principle from every check you write?

3. be ready to put your money where your offer is.

In many markets, highly desirable areas come with a large amount of competition. Many buyers may be looking at the same homes as you. If you hesitate, you may very well lose out on your dream home. The best advice? Don’t begin the process of viewing homes unless you are really ready to buy.

4. begin with the end in mind.

You love the house, and you can deal with the small bedrooms and laundry room in the garage, but will the next set of buyers? If you are planning on selling the home in the next few years, you must remember to consider the resale value of a home. Am I getting a good enough discount off current market value? Is this neighborhood appreciating quickly, or are homes losing value?

5. be competitive.

We all want to buy a home for the best bargain price possible, but a careful consideration is respecting the seller. You may view a low ball offer as a starting point, but a seller may view it as an insult and refuse to answer your offer. If you really want a home, be reasonable with your starting bid.

You’re smart. Avoid some of the most common buyer mistakes! To learn more about some amazing new changes to FHA requirements, click here!

Your best days are ahead.

Want to know more about your credit, and the mortgage process? Just ask. We have some great tools to help you – and it’s all free. If you would like a copy of our Client Information Pack (CIP) filled with lots of helpful advice about your credit, lending, and mortgage guidelines, simply navigate to the contact page, send an email, or complete the online application for more helpful information. To claim your copy, simply click here:

or visit the Empower Home Loans website by clicking here:

New opportunities in commercial lending are about to sweep the country – thanks to the banks that leveraged themselves beyond their capabilities and drew the wrath of the FDIC, an insurer who has kept watch over depositors since 1933. The news to small businesses, developers, and the like could not come at a better time as the economy tries to gain stability with loan rates remaining unusually low.