Lowest Mortgage Rates since the 1950′s…

WASHINGTON — Mortgages are cheaper today than they’ve been in a half-century. If only most people had the job security, the credit score and the cash to qualify.

The average rate for a 30-year fixed loan sank to 4.69 percent this week, beating the low set in December and down from 4.75 percent last week, Freddie Mac said Thursday. Rates for 15-year and five-year mortgages also hit lows.

Rates are at their lowest since the mortgage company began keeping records in 1971. The last time they were any cheaper was the 1950s, when most long-term home loans lasted just 20 or 25 years.

Almost no one expects falling rates to energize the economy, though. Sales of new homes collapsed in May after an enticing tax credit expired.

“As long as prospective homebuyers are still concerned about their jobs and financial well-being, many will be reluctant to take the plunge, even though affordability has never been better,” said Greg McBride, senior financial analyst with Bankrate.com.

Rates have fallen over the past two months as investors have become nervous about Europe’s debt crisis and the global economy and have shifted money into safe Treasury bonds. The demand has caused Treasury yields to fall. Mortgage rates track those yields.

While mortgages are getting cheaper, low interest rates hurt Americans who are trying to save. Puny rates for savings accounts and CDs are especially hard on people who are living on fixed incomes and earning next to nothing on their money.

Americans normally rush to refinance when rates plummet. But refinancing activity now amounts to less than half the level of early 2009, when long-term rates hovered around 5 percent, according to the Mortgage Bankers Association.

Besides, many people who want to refinance — and are able to — have already done it, said Michael Fratantoni, vice president of research and economics at the trade group. And refinancing costs can total several thousand dollars.

“Rates haven’t dropped low enough to justify a second refinancing,” Fratantoni said. “The group of people who could potentially benefit is much smaller than it was 15 months ago.”

Tax Credit Extension?

Sen Harry Reid joined the call for an extended first-time homebuyer tax credit, introducing an amendment to the proposed American Jobs and Closing Tax Loopholes Act of 2010 being considered by the Senate.

The bill — House Resolution 4213 — passed the House vote in December and moved through the Senate Committee on Finance in March. Reid’s amendment would extend the homebuyer tax credit by three more months.

“There is growing concern that because of the time it takes for banks to complete transactions such as short sales, many of these home purchases would not be complete before the deadline through no fault of the homebuyer,” according to a statement from Reid’s office.

He is joined in the effort by Sen Johnny Isakson and Sen Chris Dodd, who co-sponsored the proposed amendment.

Under the tax credit’s current deadline, qualifying purchases that were under contract by April 30 must close by June 30. Under the proposed amendment introduced by Reid, Isakson and Dodd, that closing deadline would be pushed to Sept. 30, 2010 in an effort to ensure the qualifying sales can close.

“In addition to making it easier for thousands of [buyers] to purchase their first home, it helped reduce the sitting inventory of homes,” Reid said in a statement. “By extending the transaction deadline, we can ensure that everyone taking advantage of this credit can complete the purchase of their new home.”

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Countrywide to Refund Mortgage Borrowers $108m in Fees…

More than 200,000 bankrupt Countrywide Financial mortgage borrowers will receive more than $108m in refunds for “rip-offs” they incurred during the “outrageous practices” at two of the mortgage provider’s servicing operations,  according to Jon Leibowitz, chairman of the Federal Trade Commission (FTC — headquarters pictured above).

The two firms named in today’s law enforcement action are Countrywide Home Loans and Countrywide Home Loans Servicing, now doing business as BAC Home Loans Servicing.

According to a conference call this morning, Countrywide borrowers were “victimized” in bankruptcy in such a way that they emerged from proceedings still owing improper fees, said Cliff White, the director of Executive Office for U.S. Trustees, under the Department of Justice (DOJ), who helped litigate the law enforcement action. “Homeowners who file bankruptcy and obey the rules are entitled to a fresh start,” he added.

According to Leibowitz, Countrywide made it a business strategy to take advantage of a system of affiliates that would overcharge for services related to a home centered in bankruptcy filings. For example, Countrywide overcharged for valuation services and in subsequent property preservation once the home became vacated.

“$300 for mowing a loan is extraordinary,” said Leibowitz. “I want that job.”

Leibowitz said that Countrywide charged up to $2,500 in trustee fees even though entities such as Fannie Mae  cap such charges at $600.

The FTC said that Bank of America, which took over Countrywide in 2008 was exceptionally cooperative in negotiating the settlement.

Leibowitz adds that the FTC is asking Congress for more money and power to go after what it feels are unfair practices in the housing industry.

The FTC set up a Web site for claims information, that went live today.

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