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Current Trends in Texas Mortgage Market - Impact of subprime market downturnCurrent mortgage rates and optionsMortgage rates in Texas have gone up slightly as is the scenario in markets throughout the nation. Fixed rate loans including 30 year and 15 year mortgages have climbed up slightly above 6%. Interest rates on 1 year ARM have gone up to 6.00% whereas 5/1 year hybrid ARM rate have exceeded the 6% mark. 15 year fixed rate loans still remains a popular Average mortgage rates this week 15 Year FRM 6.48% 30 Year FRM 6.79% 1 Year ARM 6.14%option for refinancing in Texas. Besides, creative loan products like interest-only loans and option ARMs are being offered to those looking for higher priced homes.Texas reverse mortgageThe mortgage market in Texas has been able to develop a large base for reverse mortgage borrowers especially those looking for the HUD insured HECMs. The entire volume of reverse mortgages originated in Texas accounts for 5.7% of the total volume of such loans offered throughout United States. For the past few years, the largest number of reverse mortgage originations has taken place at Dallas in Texas. However, the amount of HECM insured by the HUD is restricted to each county in the state. This is known as the 203b limit. Subprime marketWith the shakeout in the subprime mortgage business nationwide, tougher lending standards are expected to follow and this is likely to affect Texas home buyers at a time when home sales are already on a slowdown. Increasing defaults and delinquencies in the subprime market have resulted in foreclosures in large numbers. Almost half of the current home foreclosures in Texas are due to the origination of subprime loans. Most of the subprime loans in default are adjustable rate mortgages on which borrowers failed to continue the payments due to variation in interest rates. It is expected that owners of entry-level homes may not go for higher priced homes due to lesser number of buyers being available in the market. Besides, borrowers being reluctant to go for higher prices, lenders are also not ready to approve loans until and unless enough documentation is being submitted. Housing market scenarioIn order to prevent loans from going into defaults, big mortgage companies are offering home loans on the basis of more upfront cash, higher income level, and better credit scores. On one hand, these changes can minimize the number of defaults and foreclosures while on the other hand, it will result in fewer home sales in Texas, especially in the northern region. Besides, there being a lack of 100% financing, home sales are likely to get affected further. As of now, sales on low and moderate income home buyers in some areas of Texas (like Dallas) have declined by more than 20% in the past few years. Due to the disturbance in the subprime market and the decline in home sales, builders who initiated new loan products have abandoned them. They are also concerned over the consequences of tightening lending standards on home sale activities. Home builders have slashed the new home starts by nearly 28% during the first quarter of the year compared to the same period last year. However, in spite of fewer home starts, closings of newly constructed homes are still on the rise. Mortgage rates aheadCurrently the economy in the state looks strong and consumer spending is expected to improve by the steady growth of employment and increase in household wealth. As such there is a possibility that the Fed may again raise interest rates in order to curb inflation.

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“I now have another career, and for me it would be a very bad mistake to go back into government.”

R ichard A. Gephardt used to be the Democratic leader in the House and a presidential candidate. via The Washington Post

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Zarlink Semiconductor Inc. is pleased to announce that it has closed its previously announced offering of 75,000 subscription receipts at a price of Cdn$1,000 per Subscription Receipt, for aggregate gross … via CNW Group

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Mainland steel and oil stocks surge on analyst upgrades The Hang Seng Index hit a record for the third consecutive day on analysts’ earnings upgrades for mainland steel and oil companies while a number of … via South China Morning Post

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The risk of owning corporate bonds soared to the highest on record after Germany’s IKB Deutsche Industriebank AG fueled concerns that losses from U.S. subprime mortgage bonds are spreading, credit-default swaps … via Bloomberg.com

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CanWest Global Communications Corp. , Goldman Sachs Capital Partners and Alliance Atlantis Communications Inc. via Customer Interaction Solutions

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Ever purchased your credit score from different bureaus on the exact same day only to notice your credit score is different with each of them?The main reason this happens is…

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