The average rate for a 30-year, fixed-rate mortgage for the week ending Oct. 21 was 4.21 percent and 3.64 percent for a 15-year-fixed, according to Freddie Mac.  By comparison, the average 30-year-fixed mortgage was 5.09 percent in January and approximately 6 percent two years ago.

The New York Times
A little-known loan program for fixer-uppers
Home buyers thinking of purchasing a distressed property in need of repair, but who are concerned that the cost of the repairs could drain their savings account may qualify for the Federal Housing Administration’s (FHA) 203(k) rehabilitation program.

  • The FHA’s 203(k) rehabilitation program provides loans for covering renovation costs as well as the purchase price of the primary residence.  Investors are not eligible for this program.  Additionally, similar to traditional FHA loan programs, the rehab program allows for a down payment of as little as 3.5 percent.
  • A common misperception about the program is that the house needs to be unlivable.  Realistically, the property just needs to be outdated, according to a lender familiar with the program.  The property “just has to appraise below market value and then at market value with the repairs.”
  • Improvements deemed “luxury” are ineligible; however, the program has a wide range of definitions for “repairs” and “modernization.”  Covered repairs include items such as a new roof or heating system, as well as decorative changes, like replacing vinyl with ceramic tile on the kitchen floor or painting the interior.
  • In addition to putting down at least 3.5 percent of the current value of the property, buyers also must use a HUD-approved lender, appraiser, and a contractor approved by the lender for the repairs.  One list of approved businesses can be found at 203kcontractors.com.
  • Borrowers considering the FHA rehab loan program should be aware that loan rates typically run around a percentage point higher than conventional loans, and come in 15- to 30-year terms, either fixed or adjustable.  Additional paperwork for inspection, appraisal, title updating, and the like can increase closing costs by $1,000 or more.

For additional information about the FHA 203(k) rehabilitation program, please visit http://www.hud.gov/offices/hsg/sfh/203k/203kabou.cfm
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Los Angeles Times
Mortgage rates edge higher after three weeks of declines
Fixed rates on home loans edged higher this week after three weeks of declines, Freddie Mac said in its latest survey.
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Mercury News
So you bought a foreclosed home. Now what?
It seemed too good to be true: You bought a house in foreclosure at a fraction of the former price.  Maybe you even knocked out a wall or two and remodeled with all the money you saved.  But now thousands of foreclosures around the country may be invalid because of bank paperwork problems.  Should you worry?
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Los Angeles Times
Mortgage database’s murky legal status adds another wrinkle to foreclosure mess.
Major banks and mortgage lenders are coming down with another legal headache in their efforts to seize properties from homeowners in default.
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SmartMoney
Credit scores: How 720 became the new 680
Until recently, a credit score of 680 was something to be proud of.  It meant you paid most of your bills on time, got dinged when you went shopping for a refi, but in general, had a solid enough record to get a loan at the best rates.
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Mercury News
Foreclosure mess: Federal agencies probing banks, White House says
The White House says federal agencies are investigating allegations of widespread errors in foreclosure documents.
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