Why you shouldn't pay down your mortgage faster

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August 30, 2012, 6:45 AM PST

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Why you shouldn't pay down your mortgage faster
 The impulse to pay off your mortgage more quickly than you need to is understandable, especially these days.
    Interest rates are near historic lows, so it's possible to replace a 30-year mortgage with a 15-year loan and still afford the monthly payments. Or, if you've already refinanced at a dirt cheap rate, you can take those savings and pay down your principal faster.
    But the allure is more emotional than financial. Mortgage debt provides great financial flexibility, and paying it down fast probably isn't the best way to grow your nest egg. >>CBS News

US taxpayers bail out California homeowners, as banks fail to pay their share
 By William La Jeunesse
   Contrary to what voters were led to believe, California took the unprecedented step this month to give banks and struggling homeowners up to $100,000 in taxpayer funds to reduce underwater mortgages.
   Originally, banks and lenders were supposed to pay 50 percent of the cost of reducing the principal for those whose homes are worth less than their mortgage. But when the banks refused, California took the controversial step of paying the entire amount, up to $100,000.>>Fox News

Mortgage Rates Unchanged To Slightly Higher To Begin The Week
 Mortgage rates moved gently higher today in most cases, though some lenders were unchanged and in rare cases, slightly improved.  There was little by way of relevant data or events to motivate market movement as the August "vacation weeks" gets underway.  The little movement that was seen was not enough to make any sort of dent in the 3.5% Best-Execution rate that recently returned for 30yr Fixed Conventional loans>> Mortgage News Daily

Former Citigroup Chief Weill Surprises with Call for Break-Up of Big Banks
By Jed Horowitz and David Henry .Sanford "Sandy" Weill, the tycoon who built financial conglomerate Citigroup Inc. into a massive U.S. commercial and investment bank, said it is time to split up the biggest banks so they can go back to growing again.
The comments were an astonishing about-face for Weill, who in the late 1990s smashed the U.S. law known as "Glass-Steagall" that divided commercial and investment banking. Riskier investment banking should be separated from safer commercial banking and the government should only have to insure the latter, Weill said. Insurance Journal

New Home Sales 25% Higher than July 2011, Inventory Continues to Shrink
 New home sales rose in July to a seasonally adjusted annual rate of 372,000 units.  According to a joint release from the U.S. Census Bureau and the U.S. Department of Housing and Urban Development, this was an increase of 3.2 percent from sales in June.  The June rate was adjusted upward from the 350,000 originally reported to 359,000 units.   July sales were 25.3 percent higher than in July 2011 when the rate of sales was estimated at 297,000 units. >>Mortgage News Daily

GSEs to Allow Short Sales for Borrowers Who Are Current on Mortgage
The streamlined program rules will enable lenders and servicers to quickly and easily qualify borrowers, who do not have to be delinquent on their mortgages, to qualify for short sales.  As a further step to facilitate speedy sales, both of the GSEs have authorized a payment of up to $6,000 to incentivize second lien holders to allow the short sales to proceed. >> Mortgage News Daily

Did you miss out on lowest mortgage rates? By Amy Hoak
 (MarketWatch)-Mortgage rates have edged up for the past few weeks, but rate watchers aren't so sure the trend is here to stay.
"The U.S. economy is not out of the woods, the European debt crisis has not been solved, we've got this looming fiscal cliff ... there is no shortage of headwinds to the economy and there's the possibility of more Fed stimulus," said Greg McBride, senior financial analyst for Bankrate.com, an aggregator of financial rate information. "All it would take is one hiccup and we could see rates moving back down." >>Read More MarketWatch

No-fee mortgage option is on the way By Jennifer Liberto
 Richard Cordray, who runs the consumer bureau, announced new rules Friday that would limit fees on mortgages.  Lenders would have to offer potential home buyers an option to get mortgages with no fees, under a rule proposed by the Consumer Financial Protection Bureau.  Generally, homeowners pay fees and points in exchange for lower overall interest rates on mortgage loans. >> Read More CNN Money

California median home price highest in nearly 4 years By Alejandro Lazo
 Median price hits $281,000 in July as more expensive homes were sold and fewer foreclosures were purchased in the key Southern California and San Francisco Bay Area markets.The median home price in California rose to a nearly four-year high in July as more expensive homes sold and fewer foreclosures were purchased in the key Southern California and San Francisco Bay Area markets.  Read More Los Angeles Times

Mortgage Reach Two Month Highs.

Mortgage Rates made an abrupt move higher today, leaving most lenders at their worst levels since early June.  Recent momentum has carried rates in a weaker direction despite a relative lack of impetus from underlying market events.  At first, this could be chalked up to low volume volatility, but volume surged today (yesterday too, to a smaller extent), and securities in rates markets hit levels not seen in months.  All told, it was enough to move the Best-Execution rate decisively up to 3.625%.  Read More Mortgage News Daily 

The 2 Million Dollar Intern
 Click the post title above to watch today's video! Catch all your real estate news and mortgage news with Frank Garay and Brian Stevens at www.TBWSDailyShow.com!

Mortgage Rates Edge Higher Despite Generally Improved Market Conditions
 by Matthew Graham
Mortgage Rates were paradoxically higher today giving some pause to a bounce back from the month's highest rates last week.  Although not altogether uncommon, today's mortgage rate landscape is slightly counterintuitive in the sense that Treasuries and even underlying MBS (the "mortgage-backed-securities" that most directly influence mortgage rates) have been in marginally improved territory most of the day (improved = lower rates). Read More Mortgage News Daily

Exclusive: Former Barclays trader "has cooperated" with Libor probe
 By Matthew Goldstein and Jennifer Ablan
NEW YORK (Reuters) - A former Barclays Plc trader who was fired by the bank for sending inappropriate emails about Libor "has cooperated" with the federal criminal probe into the alleged rigging of international benchmark interest rates, according to the New York hedge fund that currently employs the trader.  Read More Reuters

Ten Charged With $40 Million Jersey Shore Mortgage Fraud
 By David Voreacos
Ten people were charged with a $40 million fraud relying on phony documents and straw buyers to bilk mortgage lenders for properties at the New Jersey Shore and resorts in South Carolina and Georgia, prosecutors said.
The 10 were accused today of using unqualified buyers to purchase 28 oceanfront condominiums from financially distressed developers in Wildwood Crest, New Jersey, according to an indictment in federal court in Camden, New Jersey. They used similar methods to buy 21 properties in Georgia and South Carolina, and eight properties in foreclosure in New Jersey. Read More Bloomberg

National Foreclosure Activity Gradually Subsiding; Many States Remain Distressed
 Foreclosure activity appears to finally be on a downward track, although the road is still a rough one in many states.   The RealtyTrac U.S. Foreclosure Market Report for shows that foreclosure filings were down 3 percent in July compared to June and were 10 percent lower than in July 2011.  This was the 22nd consecutive month that the annual rate declined. Read More Mortgage News Daily