Top Ten Signs You Are Being Scammed - Mortgage Fraud

Mortgage rates down again

By Inman News
Inman News®

Mortgage rates eased for a second week in a row on mixed economic news, but could be poised for a rebound after the European Central Bank announced a new round of bond purchases today that undermined prices of U.S. Treasurys, pushing up yields.

Rates on 30-year fixed-rate mortgages averaged 3.55 percent with an average 0.7 point for the week ending Sept. 6, down from 3.59 percent last week and 4.12 percent a year ago, Freddie Mac said in releasing the results of its Primary Mortgage Market Survey. Rates on 30-year fixed-rate mortgages hit an all-time low in Freddie Mac records dating to 1971 of 3.49 percent during the week ending July 26.

For 15-year fixed-rate mortgages, rates averaged 2.86 percent with an average 0.6 point, unchanged from last week but down from 3.33 percent a year ago. Rates on 15-year fixed-rate mortgages hit a low in records dating to 1991 of 2.8 percent during the week ending July 26.

Rates on five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans averaged 2.75 percent with an average 0.7 point, down from 2.78 percent last week and 2.96 percent a year ago. Rates on five-year ARM loans hit a low in records dating to 2005 of 2.74 percent during the week ending July 26.

For one-year Treasury-indexed ARMs, rates averaged 2.61 percent with an average 0.4 point, down from 2.63 percent last week and 2.84 percent a year ago. That's a new all-time low in records dating to 1984.

A separate survey by the Mortgage Bankers Association showed demand for purchase mortgages fell a seasonally adjusted 0.8 percent during the week ending Aug. 31 compared to the week before. Demand for purchase loans was up 1 percent from a year ago.

Like Treasurys, investors see mortgage-backed securities (MBS) guaranteed by the government as a safe haven during times of economic uncertainty. Demand for Treasurys and MBS pushes their prices up, and yields down.

Investors were placing their bets today on an economic recovery, boosting the share prices of many publicly traded companies, after the European Central Bank announced a round of unlimited purchases of government bonds issued by deeply indebted European governments.

The move also helped pushed down the price of bonds issued by more stable countries, such as the U.S. and Germany, Reuters reported.

The Federal Reserve is scheduled to meet next week to discuss whether to launch another round of "quantitative easing" that could include stepped-up MBS purchases. Some analysts think that decision could hinge largely on employment numbers the Bureau of Labor Statistics will release Friday.

Speaking at an economics symposium in Jackson Hole, Wyo., last week, Federal Reserve Chairman Ben Bernanke called stagnation of the labor market "a grave concern," reiterating past promises that the Fed would "provide additional policy accommodation as needed."

A report issued today by payrolls processor ADP showed private sector employment increased by a seasonally adjusted 201,000 from July to August, the first time since March employment gains have exceeded 200,000.

Private, nonfarm employment growth since 2001

Right-click graph to enlarge. 

For the week ending Sept. 1, initial claims for unemployment insurance totaled 365,000, down from 377,000 the week before and 411,000 at the same time a year ago, the Department of Labor reported.

Although there's been some speculation that the Fed won't take action before the election, former Fed members told CNN Money that Bernanke is unlikely to be swayed by political pressure from either party.

Record low mortgage rates no panacea

Mortgage rates hit new lows again this week, driven by growing concerns about the health of the U.S. economy that have also fueled speculation that the Federal Reserve will soon embark on a third round of "quantitative easing," or QE3, to encourage borrowing and fuel growth.

Freddie Mac's weekly surveys of lenders show rates on 30-year fixed-rate prime mortgages available to borrowers with good credit have been below 4 percent during all but one week of 2012. Rates on 15-year fixed-rate mortgages, popular with homeowners who are refinancing, have been below 3 percent for the last eight weeks.

Although low rates have spurred another refinancing boom, many would-be homebuyers fear the possibility of another economic downturn, or are unable to obtain a mortgage, limiting the beneficial impacts that low borrowing costs would otherwise have on the economy.

"Many potential buyers are reluctant to purchase homes because of ongoing concerns about future income, employment and the direction of house prices," analysts with the Federal Reserve said this week in theirSemiannual Monetary Policy Report to Congress. "In addition, tight mortgage finance conditions preclude many borrowers from obtaining mortgage credit."

Freddie Mac's Primary Mortgage Market Survey showed rates on 30-year fixed-rate mortgages averaged 3.53 percent with an average 0.7 point during the week ending July 19, down from 3.56 percent last week and 4.52 percent a year ago. That's a new all-time low in Freddie Mac records dating to 1971.

Rates on 15-year fixed-rate loans averaged 2.83 percent with an average 0.6 point, down from 2.86 percent last week and 3.66 percent a year ago. That's a new all-time low in records dating to 1991.

For five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans, rates averaged 2.69 percent with an average 0.6 point, down from 2.74 percent last week and 3.27 percent a year ago. That's an all-time low in records dating to 2005.

Rates on one-year Treasury-indexed ARM averaged 2.69 percent with an average 0.4 point, unchanged from last week but down from 2.97 percent a year ago. Rates on one-year ARMs hit an all-time low in records dating to 1984 of 2.68 percent during the week ending July 5.

Mortgage interest rates 1995-2012

Source: Freddie Mac

A separate survey by the Mortgage Bankers Association showed demand for refinancings soared 22 percent last week compared to the week before, to the highest level since mid-June.

But demand for purchase mortgages was little changed from week to week after accounting for seasonal factors, and was down 3 percent from a year ago on an unadjusted basis.

In their Semiannual Monetary Policy Report to Congress, Federal Reserve analysts said the housing sector -- which has helped lead the nation out of past recessions -- "appears to be on a gradual uptrend, albeit from a very depressed level."

Home price declines and low interest rates have spurred sales of new and existing homes, but "factors that have restrained demand for owner-occupied housing in recent years have yet to dissipate."

Not only are some would-be homebuyers still worried about keeping their jobs and the prospect of additional price declines, but many potentially creditworthy borrowers have had difficulty obtaining mortgages or refinancing because of tight standards and terms, the Fed reported.

The Fed's surveys of loan officers show that from mid-2007 and into 2009, many lenders tightened mortgage lending standards -- even for borrowers with prime credit scores. Very few have eased standards since then. The range of credit scores on new prime mortgages has remained elevated since lenders instituted the shift toward higher-rated borrowers in 2008.

Credit score on new prime mortgages, 2003-2012

 
Source: LPS Applied Analytics

"Mortgage credit standards were clearly too lax in the middle of the previous decade, and some tightening of lending policies was warranted," the Fed advised lawmakers. "Nonetheless, industry data indicate that only about one-half of lenders currently even so much as offer a mortgage to borrowers with credit scores and loan-to-value ratios toward the lower ends of the ranges allowed by the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac."

That picture improved "only slightly" from 2010, the report said.

Loan officers were asked in April about their reluctance to make loans backed by the GSEs to borrowers on the low end of the credit scale. The factor most frequently cited was the elevated risk of "putbacks" of delinquent mortgages by Fannie and Freddie, who have stepped their demands that lenders repurchase loans with underwriting irregularities.

But nearly half of lenders said that, like homebuyers, they too have concerns about the outlook for home prices.

"Greater concern about their bank's existing exposure to residential real estate loans and increased concerns about effects of legislative changes, supervisory actions or changes in accounting standards were also cited relatively frequently as very important factors," the Fed reported.

Loan originators also cited issues with borrowers being unable to obtain private mortgage insurance -- which is required by Fannie and Freddie when borrowers make down payments of less than 20 percent -- and higher premiums charged by insurers.

If tight-fisted underwriting standards have limited the impact of low mortgage rates, the same has been said of the Fed's attempts to goose the economy by keeping long-term rates down. Loans are cheap, but hard to come by for many companies that power the economy -- particularly small businesses, analysts say.

The Fed is currently trying to keep a lid on long-term interest rates through "Operation Twist," in which proceeds from $267 billion in maturing short-term Treasury bills are being shifted into long-term T-bills at the rate of $44 billion a month. It's also reinvesting principal payments from its holdings of mortgage-backed securities (MBS) guaranteed by Fannie and Freddie into more of the same investments.

Fed policymakers must weigh whether expanding those programs -- and possibly creating new ones -- in a third round of "quantitative easing" will have much impact on the economy. Critics say the potential to stimulate the economy must be weighed against the risk of fueling inflation.

Testifying before lawmakers this week, Federal Reserve Chairman Ben Bernanke gave no clear indication of when -- or even if -- the Fed might take additional action.

If it's not managed carefully, the European debt crisis could still cause "significant disruption in global financial markets," which would "inevitably pose significant challenges for our financial system and our economy," Bernanke said.

Bernanke also warned lawmakers to "take into account the fragility of the recovery" as the U.S. once again approaches its debt ceiling. If lawmakers can't come to an agreement, the Congressional Budget Office has estimated that automatic tax increases and spending cuts scheduled to take effect at the end of the year will slash the federal budget deficit by $607 billion but trigger a shallow recession that could reduce the number of new jobs created in 2013 by 1.25 million.

That estimate of the impacts of the "fiscal cliff" doesn't take into account public uncertainty about how the problem will be resolved, Bernanke noted.

"As you recall, market volatility spiked and confidence fell last summer, in part as a result of the protracted debate about the necessary increase in the debt ceiling," Bernanke testified. "Similar effects could ensue as the debt ceiling and other difficult fiscal issues come into clearer view toward the end of this year."

After Bernanke's appearance, analysts surveyed by the Financial Times were mixed on the prospects for "QE3."

Julia Coronado of BNP Paribas expects Bernanke to make the case for QE3 at an August symposium in Jackson Hole, Wyo., and for the Federal Open Market Committee to green-light a further expansion of monetary policy at its Sept. 12-13 meeting.

Yardeni Research's Ed Yardeni told the Financial Times that Bernanke may be losing faith in the ability of monetary policy to stimulate the economy through "shock and awe," and worry that Congress will not be able to reach a compromise on the budget. If that's the case, Yardeni said, "then he might as well hold off from yet another round of easing until early next year."

Valid mortgage price quotes do exist

By Jack Guttentag
Inman News®

"How many lenders must I shop to be certain I receive a competitive price?"

If you have access to valid price quotes, three is usually enough. If you don't have access to valid price quotes, you won't get a competitive price no matter how many lenders you solicit.

Valid prices are prices that the lender would be willing to commit itself to at the time the price is quoted. Differences in valid prices posted by different lenders are small, which is why you don't have to shop many lenders. The reason is that 95 percent of all new mortgages today are either sold to Fannie Mae and Freddie Mac, or insured by FHA or VA, so that the federal government assumes virtually all of the risk.

The residual risk to the originating lenders, that they might be required to buy back loans or, at an extreme, lose their right to originate, is small and does not result in large price differences between them. Some lenders are more efficient than others, but price differences from this source are also small.

The challenge faced by mortgage borrowers who want to shop is that most price quotes are not valid, and soliciting them is a waste of time. Invalid prices can be quoted to shoppers with impunity because shoppers can't say, "Yes, I'll take it," until the information upon which the price is based has been confirmed, by which time the market will have changed.

Valid mortgage price quotes meet all of the following conditions:

They come from the internal pricing system of the lender, which I call their "posted prices," with no intermediation from loan officers. Loan officers are not bound to quote posted prices, and it is common for them to quote prices below the posted price, called "lowballing," in order to induce shopping borrowers to commit to them.

They are fully adjusted for all loan features that affect the price, such as credit score, type of property, purpose of loan, down payment, etc. The list is a long one. If anything that affects the price is left out, the lender assumes whatever generates the lowest price, which may or may not hold up.

For example, many lenders price loans without asking whether the borrower wants to escrow taxes and insurance. If in fact the borrower does not want to escrow, the price will have to be raised.

They include all price components. This means not only the interest rate and points but also other lender fees that are often left out of price quotes.

They are current as of the time of the quote, not as of the day before. The borrower shopping several lenders must do so on the same day, and to be safe within the same hour of the day, since prices are sometimes adjusted during the day.

Valid price quotes are available on the Internet if you know where to look. Every mortgage lender has a website, but few provide valid prices on them. Most are designed to entice shoppers to identify themselves so that they can be contacted by a loan officer who will give them a sales pitch.

But some lenders provide valid prices on their sites while allowing shoppers to remain anonymous until such time as the shopper elects to contact the lender. These include the seven Upfront Mortgage Lenders that I identify on my website. Shopping them is doable, if a bit of a chore, because each site is programmed differently and the shopper must visit each on the same day to extract the desired price data.

Much the better way to shop is on a multilender website where the site maintains valid prices for multiple lenders, which it presents in one single format for easy comprehension and comparison. There are three of those: mortgagemarvel.com; zillow.com; and mtgprofessor.com, which is mine.

Don't confuse multilender sites with lead generation sites, such as lendingtree.com and lowermybills.com, which do business with hundreds of lenders. These sites do not collect price data from lenders. Rather, they collect financial information including Social Security numbers from shoppers, which they sell as leads to lender clients.

These lead generation sites first identify the lenders who have indicated an interest in the particulars of a lead, and they sell the lead to the three or four lenders who will pay the most for it. The shopper then gets sales pitches from three or four loan officers who are under strong pressure to lowball the price because that is often the way to win the deal.

Mortgage rates resume search for bottom

By Inman News
Inman News®

Mortgage rates hit new lows this week, still searching for a bottom after pausing last week from six consecutive weeks of declines.

Rates on 30-year fixed-rate mortgages (FRM) averaged 3.66 percent with an average 0.7 point for the week ending June 21, down from 3.71 percent last week and 4.50 percent a year ago, Freddie Mac said in releasing the results of its latest Primary Mortgage Market Survey. That's a new low in Freddie Mac records dating to 1971.

For  15-year fixed-rate mortgages, rates averaged 2.95 percent with an average 0.6 point, down from 2.98 percent last week and 3.69 percent a year ago. Rates for 15-year loans -- a popular refinancing option -- hit an all-time low in records dating to 1991 of 2.94 percent the week ending June 7.

Rates on 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans averaged 2.77 percent with an average 0.6 point, down from 2.80 percent last week and 3.25 percent a year ago. That's a new low in records dating to 2005.

For 1-year Treasury-indexed ARM loans, rates averaged 2.74 percent with an average 0.5 point, down from 2.78 percent last week and 2.99 percent a year ago.  Rates on one-year ARMs hit an all-time low in records dating to 1984 of 2.72 percent during the week ending March 1.

Treasury bond yields eased somewhat this week on some worsening economic indicators bringing mortgage rates back into record low territory, Freddie Mac Chief Economist Frank Nothaft said in a statement.

Looking back a week, a separate survey by the Mortgage Bankers Association showed demand for purchase loans fell a seasonally adjusted 9 percent during the week ending June 15 compared to a week earlier. Demand for purchase loans was down 2 percent from the same time a year ago.

The weekly decline in purchase loan applications was likely "a recalibration following the Memorial Day holiday, as the level of activity remains within the narrow band seen for the past three years," said Michael Fratantoni, the MBA's top economist.

8 scenarios that hurt mortgage qualification

Do I jeopardize my mortgage application by changing jobs before the loan closes?

Yes. The underwriter approved your application based on your documented income covering two years or longer, from one source. At closing you must certify that all the information in your application continues to be true, which short of committing perjury you won't be able to do if you switch jobs. Your revised job history will be numbered in days rather than years, which could cause a rejection.

Back in the pre-crisis days, underwriters had discretion to use their judgment in such cases. If the borrower was moving up to a better position in the same field, for example, they would let it go. In today's market, however, underwriter discretion has been markedly reduced, and the likelihood of rejection is uncomfortably high. The prudent thing to do is to defer the job change until after the loan closes. Nobody will care what you do then.

Will the rental income I receive from renting out my house during part of the year help me qualify for the mortgage I need to buy that house?

No, anticipated rental income cannot be counted as qualifying income unless it is documented in the owner's tax return for at least two years. Further, only income net of expenses would be counted, and that number would be very small or zero if you expense everything you can in order to avoid taxes.

Can I qualify using my income and my spouse's credit?

No. Good credit without the means to pay is of little value to lenders, and good income without the willingness to pay is not much better. Lenders require both capacity to pay and willingness to pay in the same person.

Before the financial crisis, married couples who had one spouse with the required income and the other with good credit often took "stated income" loans. Stated income was not verified by the lender. These loans were taken in the name of the spouse with good credit, who stated that the income of the other spouse was theirs. But stated-income loans no longer exist.

Have preapprovals become more useful to homebuyers since qualification requirements became more restrictive?

Yes and no. The main purpose of preapprovals is to establish the bona fides of potential homebuyers to home sellers and their agents, who don't want to waste time dealing with wannabe buyers who can't qualify for a mortgage. With an increasing number of potential homebuyers unable to qualify, the value of reliable preapprovals has increased.

However, the same factors that make it more difficult to qualify for a mortgage today also make preapprovals less reliable. This is especially the case with self-employed buyers, who may be rejected despite having been preapproved. Preapprovals are always subject to conditions, the most important of which is a minimum appraised value. If an appraisal comes in below the minimum, the preapproval dies.

As a "nonpermanent resident alien," can I qualify for a mortgage?

Yes, but the terms are a little stiffer because of the risk that you might be obliged to leave the country. Lenders will require a larger down payment and/or a higher interest rate. In contrast, a "permanent resident alien" suffers no penalty.

Can an excess in appraised value over the purchase price be used to meet a minimum down payment requirement?

No, the down payment requirement is based on the lower of purchase price and appraised value. Any excess appraised value is ignored.

Will sizable student debt prevent my qualifying for a mortgage?

It may if you must begin repaying the debt within the first year of the mortgage, and if the amount is large relative to income. If the payments are deferred more than a year, it is a judgment call by the underwriter who will consider the size of the student debt, your credit and perhaps other factors.

As a divorced spouse who remains liable on an existing mortgage, can I qualify for a new mortgage?

Yes, if your income is large enough to afford the payment on two mortgages. If you can afford a new mortgage but not two mortgages, you must induce your ex-spouse to refinance the mortgage in her own name. Such a provision should have been part of a separation agreement.

The only other possibility is to convince the new lender that the ex-spouse remaining in the house is sufficiently creditworthy that there is negligible risk of your having to meet two payments. That will require documentation that your ex has been making the payments on her own for at least a year.

Loan approvals come with conditions attached

At the beginning of the year, a rumor was circulating that mortgage lenders were going to ease up on their stringent qualifying requirements, making it easier for buyers to buy and helping the housing market improve.

So far, that rumor has not been confirmed. If anything, the approval process has become more laborious. The home-sale market improved recently, resulting in significant lender backlog in underwriting and funding loans.

Many buyers haven't been able to remove their financing contingencies on time. A request for an extension of time from the sellers is common. Disgruntled sellers often don't understand why qualified buyers can't remove their financing contingency on time.

A delay can occur because the buyers and sellers negotiate on inspection-related defects. It can take a few days to a week for the parties to agree. The negotiations can result in a lower purchase price or a cash credit to be applied to the buyers' closing costs in consideration for the buyers taking care of the defects after closing.

In this case, an addendum to the purchase contract reflecting the credit or price reduction goes to the buyers' lender for underwriting approval. Often, the buyers' loan is already in underwriting at this point.

Any change to the contract that needs underwriting approval can move the buyers' loan package back to the end of the underwriting queue. This can delay final loan approval.

Setbacks at the approval stage can result in a delay in closing if there isn't enough time built into the contract between the deadline for the financing contingency and the closing date.

Most lenders issue loan approval with conditions attached. These will need to be satisfied and approved by underwriting before the lender will issue the loan documents that the buyers need to close the sale.

HOUSE HUNTING TIP: Make sure that you have no doubt about your ability to satisfy the lender's conditions before removing the financing contingency.

Last year buyers that were in contract to buy a home in Berkeley, Calif., were told by their lender that they could remove their loan contingency, which they did. A week or so later, the lender told the buyers that they didn't have a loan.

Fortunately, the sellers in this situation were accommodating. They agreed to an extension of closing date. The loan was reworked, approved and the deal closed. If it hadn't, the buyers' deposit would have been at risk because they had, based on the lender's say-so, removed all contingencies from the contract.

Frustration on the part of everyone involved typifies the homebuying experience in today's picked-up market if the purchase requires a new mortgage. Will lending conditions improve soon? Although a few lenders are lightening up a little, most lenders aren't confident enough that the current homebuying activity is sustainable. So, they're unlikely to ease up on underwriting requirements or hire additional employees to make the approval process move more smoothly.

The loans that are the easiest to process are the conforming loans from Fannie Mae, Freddie Mac or FHA. The conforming loan market has guidelines so there is more consistency in underwriting and loans are approved more routinely. These loans are available only in amounts up to $417,000, or $625,500 in high-priced areas.

Jumbo loans are available for homebuyers who need to borrow more. These loans require buyers to jump through qualification hoops. Two appraisals are sometimes required. There are more layers of underwriting, investor approval is often required and there is less consistency in terms on underwriting guidelines.

THE CLOSING: It's always best to work with an experienced loan professional. It can make a world of difference with jumbo loans if you work with someone who knows how to package your financial documentation in order to receive approval.

How long will you be underwater?

By Jack Guttentag
Inman News®

About 16 million homeowners owe more on their mortgage than their homes are worth, which means they are "underwater." So long as that condition continues, they have no equity that can be used to help finance the purchase of another house.

On the contrary, they can't sell the house without digging into their pockets to pay the difference between what they owe and what they can realize from the sale net of expenses.

But time heals most wounds, and negative equity is no exception. The principal component of the monthly mortgage payment reduces the loan balance by the same amount.

Refinancing into a mortgage carrying a lower interest rate reduces the interest portion of the monthly mortgage payment, thereby increasing the principal component and the rate at which the balance is paid down.

Although underwater borrowers generally can't qualify for a refinance, those fortunate enough to have their mortgages held by Fannie Mae or Freddie Mac comprise an important exception. The government's Home Affordable Refinance Program (HARP) permits negative equity, though borrowers must be in good standing to be eligible.

The other component of negative equity, depressed home prices, also appears to have turned the corner. Prices have begun to rise again in some areas in which the houses listed on the market have fallen short of demand from purchasers. It is plausible that within the year home prices in most areas will again be on the rise.

It is now time for underwater borrowers to start planning to get their heads above water. To help in that process, Chuck Freedenberg and I have designed two calculators designated 2d and 2e on my website. The first shows the borrower's equity in the property month by month for any combination of the various factors that affect changes in equity. These include the interest rate, property appreciation rate, and extra payments. Some examples are shown in the table.

Changes in Negative Equity with Initial Loan Balance of $200,000, Property Value of $150,000 and Monthly Payment of $1,300

Factors Affecting Change in Equity			Month When Equity Reaches:
Interest Rate	Appreciation Rate	Extra Payments	0	10%	20%
6%	0	0	122	148	170
6%	1%	0	98	123	147
6%	1%	$50	89	112	134
6%	2%	$50	74	95	116
6%	2%	$100	68	88	108
4.5%	0	0	79	99	117
4.5%	1%	0	67	86	104
4.5%	1%	$50	63	80	97
4.5%	2%	$50	55	71	87
4.5%	2%	$100	52	67	83

The table shows, for different combinations of interest rate, appreciation rate and extra payments, when the borrower will no longer be underwater, which is the month when equity hits zero. The table also shows how long it will take before equity hits 10 percent, at which point the borrower who is otherwise qualified will be able to refinance, and 20 percent where a refinance won't require mortgage insurance.

Borrowers may want to raise their targets to cover the expenses of whatever action they plan. If the goal is to sell the house, for example, they will need positive equity of 5-7 percent to cover sales costs. This is easy to find with the calculator.

The second calculator is designed for underwater borrowers who want to know how much extra they have to pay each month to reach a target equity level within a specified period. For example, the borrower paying 4.5 percent in the example above wants 10 percent equity in five years and believes his house will appreciate at a rate of 1 percent a year. The calculator tells him he must pay an additional $315.50 every month for 60 months to reach his objective. If his house does not appreciate, he has to pay $418.05.

While the calculator tells you what you must do to reach your objective, it doesn't tell you how to develop the commitment and determination to see it through. I am working on that.

Mortgage rates chart new lows

By Inman News
Inman News®

Mortgage rates hit all-time lows this week, but demand for purchase loans is only slightly higher than it was a year ago as tight lending standards and worries about what's been dubbed the "jobless recovery" continue to weigh on homebuyer demand.

Rates on 30-year fixed-rate mortgages averaged 3.84 percent with an average 0.8 point for the week ending May 3, down from 3.88 percent last week and 4.71 percent a year ago, Freddie Mac said in releasing the results of its weekly Primary Mortgage Market Survey. That's a new low in Freddie Mac records dating to 1971, breaking the old record of 3.87 percent set during the first three weeks of February.

For 15-year fixed-rate mortgages, rates averaged 3.07 percent with an average 0.7 point, down from 3.12 percent last week and 3.89 percent a year ago. That's also a new low in records dating to 1991, breaking the previous record of 3.11 percent set just three weeks ago.

Rates on five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans averaged 2.85 percent with an average 0.7 point, unchanged from last week but down from 3.47 percent a year ago. Rates on five-year ARMs hit an all-time low in records dating to 2005 of 2.78 percent during the week ending April 19.

For one-year Treasury-indexed ARM loans, rates averaged 2.7 percent with an average 0.6 point, down from 2.74 percent last week and 3.14 percent a year ago.

"Signs of slowing economic growth and inflation remaining subdued allowed yields on Treasury bonds to ease somewhat and brought most mortgage rates to new all-time record lows this week," said Freddie Mac's chief economist, Frank Nothaft, in a statement.

Nothaft noted that real gross domestic product rose at a 2.2 percent annual rate during the first quarter of this year, down from 3 percent during the final quarter of 2012 and below the consensus forecast of 2.5 percent.

Annual growth in the core price index of personal consumption expenditures (PCE) was 2 percent in March, which matches the Federal Reserve's implied inflation target, Nothaft said.

Although the Federal Reserve's Open Market Committee said last week that it expects to maintain "a highly accommodative stance for monetary policy" to support a stronger economic recovery, the committee announced no changes to existing policies.

Labor market conditions have improved in recent months but unemployment remains elevated, the committee said in a statement. Despite some signs of improvement, the housing sector "remains depressed," the statement said.

Mortgage broker and syndicated columnist Lou Barnes believes the Fed "has neither the intention nor capacity to inflate away our debt burden. With (PCE) above 2 percent, the Fed won't even embark on something as mild as QE3," Barnes said, referring to speculation over a possible third round of "quantitative easing."

Looking back a week, a separate survey by the Mortgage Bankers Association showed demand for purchase loans was up a seasonally adjusted 2.9 percent during the week ending April 27 compared to the week before. Purchase loans demand was up 3 percent from the same week a year ago

The National Association of REALTORS® last week reported that pending sales of existing homes jumped a seasonally adjusted 4.1 percent from February to March, to the highest level since April 2010. Pending sales were up 10.8 percent from the same time a year ago on a non-seasonally adjusted basis.

FHA CHANGES