Interest rates for borrowers were low in January but have been creeping back up

Homeowners often look at refinancing their mortgages as a way to save money, but some people may have missed a brief window of opportunity in January to do so.

“The rates have crept up now, so this kind of refinance boom has gone away,” said Brad Church, the president of Bradford Mortgage in Winston-Salem.

There was a flurry of refinancing-application activity around the country last month as interest rates dropped.

A weekly survey of mortgage applications by the Mortgage Bankers Association showed the Market Composite Index, a measure of mortgage-loan application volume, was 981.5 the week ending Jan. 18. At the time, refinance applications were up 92 percent since the beginning of November and purchase applications were up 7 percent. The average contract interest rate for 30-year, fixed-rate mortgages was 5.49 percent.

But interest rates have been rising since then.

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Health care is a hot topic this primary season, drawing Americans deeper into tactical questions about how best to provide medical coverage to the millions of people who don’t already have it.

Sens. Hillary Clinton and Barack Obama spent 16 minutes during Tuesday night’s Democratic debate in Ohio in a vigorous dispute over whose health-care proposal would cover more people and hold costs down most effectively.

In an effort to get to universal coverage, both candidates want to strengthen employer-based health insurance and provide additional options for people who can’t get it through their jobs. Each has proposed new regulations that would force health plans to accept all comers and said the plans’ financing would come from phasing out tax cuts for the wealthiest taxpayers and projected savings from a reduction in wasteful spending.

Their only major disagreement appears to be whether to require uninsured people to buy coverage. Clinton’s plan includes such an individual mandate, as did former Sen. John Edwards’ plan. Obama proposes to compel adults to find coverage for their children but doesn’t require adults to buy it for themselves, although he recently said he wouldn’t rule that out in the future.

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While we await the 10am Existing Home Sales, have a gander at this delightful article from this weekend’s Chicago Tribune. Its a bizarre tale of Housing excess, corruption, and fraud:

“The new buyers of a rundown graystone on the South Side showed up Jan. 9 to look at the house they won at a foreclosure auction. They took the plywood off the front door and went inside to make sure the utilities had been shut off. Then they called the police.

Sitting upright in the corner of a bedroom off the kitchen was a human skeleton in a red tracksuit. Next to him lay a dead dog. Neighbors told police the corpse was almost certainly Randy Johnson, a middle-age man who lived alone in the North Kenwood house.

The cause of Johnson’s death has not yet been determined, but it is just one of the mysteries about 4578 S. Oakenwald Ave. Somehow, Johnson’s house was transferred three times to new owners without anyone noticing he was inside. It’s a story involving forged deeds, a corrupt title company and a South Side family that has been under investigation for mortgage fraud.”

How on earth is that possible? Three transfers, and not a single property appraisal or inspection?

Bizarre…

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Should I reverse mortgage now?

According to a recent survey by a reverse-mortgage sector group, SEQUAL, about four out of five people over 60 have heard of reverse mortgages. Yet less than half - two in five - understand how they work.

The lenders’ survey of 1000 seniors showed that about a third expect to rely on their home to top up their retirement funding. Most thought they would be forced to downsize their home to obtain access to their home equity.

They were looking for as little as an extra $300 a month to live on. As a spokeswoman for the lenders noted, it is not worth selling a house for such a small amount of additional income.

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Watch and hope for final passage of the FHA Modernization Bill, for there could be a reverse mortgage in your future, even if you live in a co-op or high-cost areas such as New York, Chicago or the cities of California.

The House and Senate bills to bring up to date the Federal Housing Administration and its popular reverse mortgage program, the Home Equity Conversion Mortgage, passed with bipartisan support late last year and have been in a conference committee to iron out minor differences. Preoccupation with the economic stimulus package has delayed action on the housing bill.

While lawmakers are still haggling about the housing portions of the bill, what concerns us here are the sections that provide new incentives for older homeowners to take advantage of the FHA-guaranteed reverse mortgage. It’s one way to use the equity in your home to get a tax-free cash cushion that can be taken in a lump sum, a line of credit or monthly payments, with the money used to pay debts or buy long-term care insurance.

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For more than 30 years, David Sorin owned and operated barbecue restaurants. Also during that time, he worked as a consultant, helping other people get their businesses up and running.

Most recently, the 65-year-old was a consultant to the owners of Old Venice Pizza Co. and the owners of Atlanta Bread Co.

But as Sorin has gotten older, his career interests have shifted from barbecue to reverse mortgages. He’s now a reverse mortgage specialist with Residential Loan Centers of America, Memphis headquarters.

“It’s very interesting because I get to deal with a very diversified group of people because everybody’s case and challenges are so different,” Sorin said. “Some people are trying to pay off a mortgage, some people are trying to get money for their parents or themselves to get in home care, some people use the money to travel with.

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SPOKANE, Wash. — The Spokane Spokesman-Review reports that a man convicted of securities fraud in Colorado has been selling reverse mortgages in Spokane, while waiting to begin his prison term.

Michael Duane Smith is listed in a brochure issued by Golf Savings, a mortgage subsidiary of Sterling Savings Bank of Spokane. A spokeswoman said yesterday that he no longer works there.

He was convicted of securities fraud in May in federal court in Denver for a scheme in which investors lost nearly $50 million. No sentencing date has been set. Smith’s lawyer, Richard Stuckey of Denver, says Smith would have further comment.

The Washington Department of Financial Institutions says Smith applied for a loan originator’s license but was denied because of his felony conviction. He needs the license to work for a mortgage company, but not a bank.

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Bidding for the General Motors Building in Manhattan gets under way.

The bidding has begun for New York City’s most prized trophy office tower.

Bids for the General Motors Building, a gleaming 50-story building across the street from the Plaza Hotel and home to a number of hedge funds, were due on Friday and were evaluated over the holiday weekend. The building boasts the highest rents per square foot of any office tower in the city.

“The G.M. Building clearly is one of the best pieces of commercial real estate in the country,” says Robert Knakal, chairman of Massey Knakal Realty Services. “And I’m sure that all of the investors with the capability of owning such a building would have interest in it.”

The owner of the building, Harry Macklowe, has said that it is worth $3.5 billion, or $1,700 per square foot. Whatever the price is, it will certainly exceed the $1.4 billion he paid for the building back in 2003.

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Linda Leary, president of Reliable Caregivers, already has done the math and figures that a new law requiring San Francisco business owners to contribute money toward their workers’ health coverage will cost her $450,000 a year.

Leary, who employs about 150 full- and part-time caregivers, raised her patients’ rates this month by about $2 an hour to offset the expense. She said she supports offering health coverage to her employees but is concerned about how she will be able to stay in business when other agencies outside the city do not carry the same financial burden.

“I’m worried about pricing myself right out of the market because my rates will have to go up so high and we’re competing against South Bay agencies,” said Leary, who has been in business for six years. She said she might also need to hire another employee to manage the new requirement.

After a series of legal fits and starts, businesses with employees who work in San Francisco are just now starting to grapple with the details of the city’s groundbreaking law that requires large and midsize companies to pay a specific minimum amount of money to their workers’ health care, either in the form of insurance or a fee to the city to cover those costs.

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More Washington-area residents are turning to reverse mortgages for retirement income as traditional sources of credit grow scarce.

In the D.C. area alone, the number of home-equity conversion mortgages (HECMs), by far the most popular type of reverse mortgage loan, has risen 289 percent since 2005, according to the National Reverse Mortgage Lenders Association.

Diana and Peter Nicholson, a couple in their 60s who live in a condominium in the Van Ness area, took out a reverse mortgage about a year ago at the urging of their friends.

“We took it out as a security blanket,” said Mrs. Nicholson, a retired paralegal. “So far we have used it for some basic household expenses.”

Nationwide, reverse mortgage lending has seen similar growth, with 107,558 loans originated in fiscal 2007, up 249 percent since 2005, according to the Federal Housing Administration. HECMs make up most of the reverse mortgage market - about 90 percent - because the loans are insured by the FHA, making them a much safer investment for lenders.

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