A Federal Home Loan Mortgage Corp (OTCBB:FMCC) report revealed that the average fixed mortgage rates are inching higher, taking the fixed mortgage rates to their peak level of the year. The housing entity noted in its report that the fixed rate mortgage for a 30-year period stood at an average of 3.87%, higher than the last week’s average of 3.84%. The 30-year fixed-rate mortgage was at 4.12% during the same period in 2014.
Improved housing sales
Federal Home Loan Mortgage Corp (OTCBB:FMCC)’s deputy chief economist, Len Kiefer stated that the mortgage rates have touched their peak in 2015. He shared that the new home sales increased 6.8% to an annual pace of 517,000 units in the month of April. The report indicated that the existing home sales fell 3.3% to 5.04 million units on a seasonally-adjusted basis but showed an increase of 6.1% on a yearly basis.
At the same time, the S&P Case-Shiller 20-city home price index has also reported a hefty gain of 5% during the last 12-months ended on March 2015.The 15-year fixed mortgage rate improve by 0.5% to 3.11% this week as against 3.05% last week. In 2014, the 15-year fixed mortgage rate was at 3.21% during the same period.
Removal of AUS Fees
Amid the growing housing sales, Federal Home Loan Mortgage Corp (OTCBB:FMCC) has decided to boost its business by freeing up the charge on its Loan Prospector automated underwriting system (AUS). Starting June 1, the government sponsored enterprise will not charge mortgage lenders for using its AUS. The move is encouraging as lenders currently pay $20 to find out through AUS if the loan matches Freddi’s criteria. Clearly, AUS is crucial for the lenders to decide if they should move forward with the mortgage application.
While announcing the decision, Federal Home Loan Mortgage Corp (OTCBB:FMCC)’s representative Brad German said that the move will aide lenders to manage costs and will eventually encourage liquidity in the market. German added that the elimination of the fee is permanent and that the company has no plan to reintroduce it later. The stock of Federal Home Loan Mortgage Corp (OTCBB:FMCC) was down 0.40% to $2.48 as 2.15 million shares changed hands.