Despite record-low mortgage rates and all of the talk about health care, global warming and other topics in recent months, the Obama administration is being pressured to turn its focus on the economy as of late – specifically the mortgage industry.

The housing crisis and the mortgage industry still is not fixed and the problem continues to get worse as though if it were a leaking roof. Everybody can see the spot on the ceiling getting bigger and the leak is getting worse, but the ceiling is still there and the water has not broken through just yet. One of the most recent stories this past weekend just added to the problem when Fannie Mae announced a loss of more than $16 billion for the last quarter of 2009. In addition to that, the nation’s leader in providing mortgage loan also asked for another $15 billion from the national Treasury so the company could “stay in the black.”

The reason for the problem is the rising number of people defaulting on their mortgages that they are getting from Fannie Mae. According to a recent report, there are about 8 million homeowners and condo owners who are behind on their monthly mortgage payments. Of that number, about half of them are currently going through a foreclosure. About 25 percent of the current mortgages are underwater, too, which means that the homeowners owe more on their mortgage loan than what the loan is actually worth. Further, of that 25 percent, the average mortgage loan which is in foreclosure is 18 months behind in payments. One year ago, the average foreclosure was only 11 months behind. That’s a huge difference considering it has only been one year!

In addition to that problem, the prices of homes have been constantly falling. The number of new homes sold has dropped more than 10 percent in the last 13 months and there are millions of homes that remain empty due to a homeowner just walking away from the loan or because they have already moved out and nobody is buying the property.

Some analysts are concerned that these factors combined could create another financial crisis. As a result, more and more people in high places are urging President Obama and his administration to switch their focus to the economy and specifically the housing crisis. There are a number of viable solutions, but it takes time and cooperation to put those plans into effect. Hopefully, the administration will be able to lay out some type of plan before things get much worse. We are at a crossroads where things could take a huge tumble and get much, much worse before they can get better. Whether we agree with his politics or not, let’s ban together and support the president’s decisions in an effort to get out of this jam while we still can.

We've talked a lot about how the Fed's purchase of Mortgage Backed Securities has kept rates low. The chart below shows the Fed's balance sheet and how it has changes with the aggressive purchase of MBSs.

In case you're having trouble see it, the MBS portion is the brown wedge in the upper right. You can see how the Fed has been buying aggressively since Feb 2009.

Here's how MBS purchases have trended:

According to the Fed's February 24, 2010 financial highlights:

• The Fed purchased a net total of $11 billion of agency-backed MBS through the week of February 17. This purchase brings its total purchases up to $1.199 trillion, and by the end of the first quarter of 2010 the Fed will have purchased $1.25 trillion (thus, it is 96% complete).

Mortgage rates spiked in June 2009 even as the Fed came off some of its heaviest buying of MBS. But as the Fed continued to absorb mortgage backed securities, rates fell through the second half of the year. Connected? Maybe.

As the Fed ends its purchase of MBS's over the next couple of months, it will be interesting to see its impact on mortgage rates.

Taking advantage of the current mortgage rates and the first-time homebuyer's credit is driving many people to mortgage companies across the country to apply for a home loan. But do you know which mortgage company you should choose when it comes time to purchase your home? There are so many to choose from and the options can be overwhelming if you do not know what to look for. Following are some tips for choosing the right mortgage company for your home buying needs.

Mortgage Company or Bank?
Many home buyers choose a mortgage bank over a mortgage company because they feel more secure as a mortgage bank seems more stable and reliable. These institutions are regulated and monitored by the federal government and they have to follow certain rules regarding mortgages and loans. You should check with your current bank about the mortgage rates it would charge before going somewhere else. When you already have an established financial relationship somewhere, you may be given a lower rate or better terms. The only thing to remember when going to a bank for a mortgage loan is that they often have fewer options when choosing between the types of mortgages that you can choose.

Mortgage Brokers
Mortgage brokers are not as stable but they can be one way to get a mortgage. Brokers are not necessarily licensed, but they do have to follow the same laws that banks and other lenders have to follow. In essence, a mortgage broker is a middleman between the banks or lending institutions and you, the buyer. They can search various mortgages to find the best one with the terms that fit your particular financial situation. Before deciding on a mortgage broker, shop around and talk to several of them. Be sure to ask about any fees or charges they impose for their services and always read the fine print before signing anything.

Homebuilders
Did you know you can actually get a mortgage through a homebuilder? It is probably more common than you think. A homebuilder will do much of the work for you when trying to get a mortgage on a home their company has built. Just remember to choose a reputable builder that has been around for many years and will probably continue to be around. Also, be sure to ask about the fees and charges for their services so you are not surprised at the cost when the bill arrives.

If you are the type of person that does not like to share much of your personal information with others, a mortgage broker is probably your best choice. A mortgage bank, however, may be your best option if you have good credit and a stable job. A construction company is ideal if you want a quick mortgage. It all depends on your needs and your financial situation. Just always remember to ask about the fees and read the small print before agreeing to anything.

A few weeks ago, we told you about some advantages to buying a foreclosed property. While there are many advantages to it, buying a foreclosure is not always the best way to own a home. Buying a foreclosure has many disadvantages that you may not have considered. If you want to take advantage of today's mortgage rates by buying a foreclosed home, consider these disadvantages before making your final decision.

The Procedure
When you are buying a foreclosed property, it is not like making a traditional home purchase. In fact, there are several hoops you have to jump through in order to get a foreclosed home. Most foreclosed homes are sold to home buyers "as is." This means that you buy the home and if something is wrong with it, it is your responsibility. There is no warranty to cover it. If you are not careful, this could end up costing your tens of thousands of dollars to bring the house up to code or even livable conditions.

Liens and Liabilities
Purchasing a foreclosed property often means that you will need to pay any liens or back taxes on the home before you can take ownership. If you are getting the home for a reduced price, paying these fees may still make the home a great deal. However, be aware of these hidden charges before getting too excited about a foreclosed home's price. There could be a chance that you would have to pay more than just the price of the home.

Purchasing a Foreclosed Home at an Auction
There are many auctions that sell foreclosed properties to the highest bidder. You can participate in these auctions and get great deals on foreclosed homes. However, you must be able to have 10 percent for a down payment when you bid on the home and you must also be prepared to show your proof of financing before you will be allowed to sign the dotted line. If you are not prepared for these stipulations, you could bid on the home of your dreams and then have to say goodbye to it.

Returning Owners
It does not happen very often, but there are times when a previous owner may return to the foreclosed home after you have moved in and try to claim their right to the property. In some cases, you may even have a hard time getting them to move out when you purchase the home. There are remedies for these situations, but it can be frustrating and nerve-wracking.

Foreclosed homes are a good way to get a quality home at a bargain price. However, you must know what you are getting into when you purchase a foreclosed home. Consider these four disadvantages and buying a foreclosed home may work out perfectly for you.

With mortgage rates at historic lows and the homebuyer's tax credit about to expire, it's time to jump into the housing market if you have been considering that new home. But what do you do about finding a real estate agent? Do you want to find one who has several years of experience or do you want to find one who is new so you can save money? There are several advantages for both, but here are four advantages of hiring a new real estate agent for your home buying needs.

New Agents are Usually Less Busy
In most circumstances, a new real estate agent has not built up a clientele. It can take years for that to happen so they are willing to take new clients all the time. In some cases, you may even be the realtor's only client depending on how long they have been in the business. As a result, you can expect personalized attention because they are eager to keep you as a client and they do not have to split their time up as much among different clients.

Newer Agents May be Less Expensive
In order to create a client base, a new real estate agent may charge a lower commission just to attract more business from potential home buyers. There are two ways to look at this, however. One way is to look at it as though you are getting a "good deal" by hiring a real estate agent that will work for cheap. The other way to look at it is that you are "getting what you pay for," but it will be up to you to make that decision.

New Agents Tend to Be More Competitive
Real estate agents who are new to the business will tend to be more competitive because they have more energy and a willingness to please their customers. This is true in many businesses, but real estate agents are a different kind of breed. What this means for you is that you will probably save money on the purchase of the home.

New Agents are More Open
If you have dealt with real estate agents in the past who have been doing this for many years, you may notice they are more "salesy" than they are customer oriented. New agents, however, are usually committed to dealing with clients in a personal way. For home buyers, this can be very refreshing because it makes them feel more like a person rather than a customer.

If you are trying to make the decision between a new real estate agent and a seasoned one, consider these four advantages. When in doubt, you will just have to follow your gut feeling and choose the one that you think is right for you.

The Obama Administration is considering prohibiting home foreclosures that haven't been reviewed for assistance under the HAMP program.

According to Bloomberg:

"The proposal, reviewed by lenders last week on a White House conference call, “prohibits referral to foreclosure until borrower is evaluated and found ineligible for HAMP or reasonable contact efforts have failed,” according to a Treasury Department document outlining the plan.

“It is one of the many ideas under consideration in the administration’s ongoing housing stabilization efforts,” Treasury spokeswoman Meg Reilly said in an e-mail. “This proposal has not been approved and there are no immediate planned announcements on the issue.”

Today, foreclosure proceedings can continue even while homeowners try to get HAMP approval. For those that aren't familiar about HAMP, it's a program to help at-risk homeowners refinance their mortgages using government funds. From the HAMP website:

The Home Affordable Refinance Program gives up to 4 to 5 million homeowners with loans owned or guaranteed by Fannie Mae or Freddie Mac an opportunity to refinance into more affordable monthly payments. The Home Affordable Modification Program commits $75 billion to keep up to 3 to 4 million Americans in their homes by preventing avoidable foreclosures.

Whether the plan is approved or not it shows just how concerned the government is about the housing market. An improving housing market does not need this type of government intervention.

About 2.82 million U.S. homeowners lost properties to foreclosure last year and 4.5 million filings are expected in 2010, RealtyTrac Inc., an Irvine, California data company, said last month. Foreclosures may reach as high as 7 million mortgages.

The average rate on a 30-year fixed rate mortgage rose by 12 basis points from 4.93% to 5.05% according to data from Freddie Mac. The BestCashCow averages also showed a rise, with the average 30-year fixed rate mortgage moving from 5.031% to 5.042%. 30-year mortgage rates continue to dance around the 5% range.

Averages though won't get you a mortgage and I like to check and see what rate is actually available. Since I live in Massachusetts I checked Massachusetts mortgage rates. Below I compared the best rate I could find on a $200,000 30-year fixed rate mortgage with 0 points:

This Week Last Week

Rate: 4.750% 4.875%

Points: 0 0

Fees: $1,995 $1,995

While the best available rate increased slightly last week, it came back down this week to where it's been over the last five weeks. AimLoan.com continues to offer the best 30-year fixed rate mortgage in Massachusetts according to the BestCashCow rate tables.

The 15-year FRM this week averaged 4.40 percent, up from last week when it averaged 4.33 percent. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 4.16 versus last week's 4.12 percent. The 1-year Treasury-indexed ARM dropped significantly again from 4.23% to 4.16%.

Here's what Freddie Mac had to say about the rate situation:

“Interest rates for 30-year fixed mortgages followed long-term bond yields higher and rose above 5 percent this week amid a mixed set of economic data reports” said Frank Nothaft, Freddie Mac vice president and chief economist. “For instance, the January producer price index jumped well above the market consensus, but the consumer price index remained subdued and consumer confidence declined to the lowest level since April 2009, according to the Conference Board.

“There were also varying reports as to the current state of the housing market. The S&P/Case-Shiller® national home price index rose for the third consecutive quarter in the fourth quarter, albeit at a slower rate, and the 20-city composite index showed an increase in December 2009 for the seventh month in a row; six metropolitan areas experienced positive year-over-year growth, compared to four in November. New home sales, however, unexpectedly slowed in January to the smallest pace since records began in 1963, and the supply of homes at the current sales rate rose to 9.1 months, the most since May 2009.”

Mortgage rates remain in a tight range. As the chart shows, they've gone mostly sidways since September of 2009. Many analysts are predicting rates will rise, but weak economic data as well as testimony from Fed Chairman Bernanke show the economy is still far from recovered. Even with the Fed ending its purchase of MBS, it's possible rates may stay well below 6% for some time.

Use the BestCashCow rate tables to find the best mortgage rates in your area.