Mortgage rates took a beating last week. Even the most aggressive lenders are now creeping towards 5.00% (for WELL-QUALIFIED borrowers).

During the course of the holiday shortened work week, benchmark Treasury note yields rose persistently which lead mortgage backed security prices lower and forced lenders to offer even higher mortgage rates. I say “even higher” as a reminder of something that AQ has been writing all over Mortgage News Daily lately.

As always with Treasury auctions, supply is known in advance so market participants look at the demand for our nation’s debt to gauge its success or failure. Despite record amount of U.S. borrowing, demand for our nation’s debt has been quite strong all year, especially from foreign central banks, which has helped keep mortgage rates near historic low levels. If mortgage rates are to stop rising, we need foreign central bankers, China and Japan specifically, to continue providing support heading into 2010.

NEW YORK, Nov 5 (Reuters) – U.S. mortgage rates fell below 5 percent for the first time in three weeks, a key level that may boost home home loan demand and help the hard-hit housing market recover, a closely watched mortgage survey showed Thursday.

Interest rates on U.S. 30-year fixed-rate mortgages averaged 4.98 percent for the week ending Nov. 5, down from the previous week’s 5.03 percent, according to a survey released on Thursday by home funding company Freddie Mac.

WASHINGTON (AP) — The Obama administration is unveiling a new program to provide support to state and local housing agencies to provide help to thousands of home buyers and renters.

The program will feature two parts — a new bond purchase program to support new lending by housing finance agencies and a temporary credit and liquidity program to improve access by housing agencies to credit sources for their existing bonds.

The new program will operate under a law that Congress passed in 2008 to bolster the housing industry, which has been battered by the worst slump in decades, a downturn that saw home sales and home prices plunge and mortgage defaults soar to record levels.

NEW YORK, Sept 2 (Reuters) – The U.S. Mortgage Bankers Association said on Wednesday it will ask Congress to transform mortgage lenders Fannie Mae, Freddie Mac into several smaller, privately held companies that would issue mortgage securities with a government guarantee.

The new companies would guarantee the securities against defaults on underlying mortgages and pay fees into a federal insurance fund that would make good on interest and principal payments to bondholders if the companies were unable to make them.

The percentage of residential mortgages either in foreclosure or with at least one payment past due hit 13.16% in the second quarter, the highest percentage ever recorded by the Mortgage Bankers Association, the industry group reported on Thursday.

The delinquency rate for mortgages on one- to four-unit properties rose to a seasonally adjusted 9.24% of all mortgage loans outstanding in the second quarter, up from 9.12% in the first quarter and 6.41% in the second quarter of 2008, according to the MBA’s national delinquency survey. The delinquency rate doesn’t include mortgages in the foreclosure process.

Mortgages somewhere in the foreclosure process reached 4.3% of all mortgages, up from 3.85% in the first quarter and 2.75% in the second quarter of 2008, the MBA said.

However, mortgages entering the foreclosure process during the second quarter actually fell slightly to 1.36% of all loans, down from 1.37% in the first quarter. Foreclosure starts were still up from 1.08% in the second quarter of 2008.

NEW YORK, June 18 (Reuters) – U.S. mortgage rates dropped in the latest week, retreating sharply from a seven-month high as fears over inflation abated and Treasury yields dropped.

Interest rates on U.S. 30-year fixed-rate mortgages plunged to 5.38 percent for the week ending June 18, according to a survey released on Thursday by home funding company Freddie Mac.

A year ago, 30-year mortgage rates averaged 6.42 percent, 15-year mortgages were at 6.02 percent and the one-year ARM was at 5.19 percent. A year ago, the 5/1 ARM averaged 5.89 percent.

California, Florida, Nevada and Arizona continued to take an outsize share of the blame for the foreclosure epidemic sweeping the nation.

The Mortgage Bankers Assn. reported Thursday that foreclosures were at record levels, with 1.37% of all home loans nationally starting the foreclosure process during the first quarter of the year.

The Obama administration provided details on Wednesday for its program to help homeowners at risk of losing their houses obtain taxpayer-subsidized reductions in their mortgage payments, a program that becomes available immediately.

Administration officials said the program could help three million to four million families avoid foreclosure, and it is expected to cost $75 billion over the next several years.

In theory, there is no limit on the so-called loan-to-value ratio for a modified mortgage. In other words, people are eligible for help even if the value of their house is far less than the outstanding amount of the mortgage, as is the case for about 14 million people who bought houses at the very peak of the market and often put no money down. Administration officials have said, however, that people who owe more than 150 percent of the current market value of their homes will probably have a harder time persuading their lenders to modify the mortgage.

Below is a list of key elements of the plan outlined Wednesday by President Obama that aims to aid as many as 9 million households in fending off foreclosures:

• Allows 4 million–5 million homeowners to refinance via government-sponsored mortgage giants Fannie Mae and Freddie Mac.
• Establishes $75 billion fund to reduce homeowners’ monthly payments.
• Develops uniform rules for loan modifications across the mortgage industry.
• Bolsters Fannie and Freddie by buying more of their shares.
• Allows Fannie and Freddie to hold $900 billion in mortgage-backed securities — a $50 billion increase.

Some homeowners who are underwater on their mortgages and those stuck in high-cost subprime loans could soon be eligible for a lower mortgage rate, according to an Obama administration plan announced on Wednesday.

But those in the mortgage industry say they’re waiting on details to discover exactly what the requirements are for a homeowner to be eligible for the new assistance.

The government also plans on continuing the purchase of mortgage securities backed by Freddie Mac and Fannie Mae to keep mortgage rates down, President Obama said in a speech.