Homeowners are turning almost exclusively to fixed rate loans for their refinance needs, according to new data from mortgage finance company Freddie Mac. Of all the refinance loans made in the first quarter of 2012, 95 percent of them were fixed rate mortgages, indicating borrowers desire for security and the attractiveness of long-term interest rates right now.

Those who already had a hybrid adjustable rate mortgage (ARM) tended to feel a bit more comfortable sticking with them, but still largely gave up ARMs for the consistency of fixed rate loans. Of those with hybrid ARMs who refinanced in the first quarter, 68 percent opted for a fixed rate mortgage, while 32 percent remained with an ARM product.

These numbers are dramatically different from the housing boom, when ARMs where extremely popular and the only affordable option for many. Record low rates are making fixed rate loans and even shorter term loans a nice choice for many now though. Out of all the borrowers who refinanced in the first quarter 31 percent chose to reduce their loan term from 30 years down to 20-year, 15-year, or shorter term loans.

“Compared to a 30-year fixed-rate mortgage, the interest rate on a 15-year fixed was about three-quarters of a percentage point lower during the first quarter,” said Freddie Mac vice president and chief economist Frank Nothaft in a press release. “For borrowers motivated to refinance by low fixed-rates, they could obtain even lower rates by shortening their term. Further, under the enhanced Home Affordable Refinance Program-HARP-announced by FHFA on October 24, 2011, certain risk-based fees are waived for HARP borrowers who refinance into shorter-term loans.”

He added,

“Fixed mortgage rates averaged 3.92 percent for 30-year loans and 3.19 percent for 15-year product during the first quarter in Freddie Mac’s Primary Mortgage Market Survey®, well below long-term averages. The Bureau of Economic Analysis has estimated the average coupon on single-family loans was about 5.1 percent during the first quarter of 2012. It’s no wonder we continue to see strong refinance activity into fixed-rate loans.”

After six years of declining, home prices showed improvement in more than half of all U.S. metropolitan areas in the first quarter, according to the National Association of Realtors, a shift that many hope is a sign that the housing market is stabilizing.

Prices for existing homes rose in 74 of 146 markets in the NAR survey in the first quarter of 2012 compared with the previous year. That is up dramatically from the fourth quarter of 2011 when prices rose in only 29 metro areas.

The overall national median home prices was still down, falling 0.4 percent from last year to $158,100, even though home sales made a strong comeback in the first quarter. Sales of existing homes grew 4.7 percent to a seasonally adjusted annual rate of 4.57 million in the first three months of this year from the previous quarter, and were up 5.3 percent from the 2011 first quarter.

“This is the highest first quarter sales pace since 2007,” said Lawrence Yun, NAR chief economist in a press release.  “With strong market fundamentals, total home sales this year should rise 7 to 10 percent.”

In regards to prices, he added,

“Home prices are more volatile than normal because of sudden upswings in buyer activity in some localities, and also are affected by the prevalence of distressed sales,” he said.  “Home prices lag sales activity because the transactions were negotiated mostly in the previous quarter.  Given the steadily dwindling supply of inventory and notably higher listing prices that are being negotiated today, prices are expected to show further improvements in the near future.”

Prices showed the biggest improvement in the Cape Coral-Fort Myers, Fla. market with a yearly gain of 28.1 percent. Grand Rapids, Mich. prices were up 19 percent, while the Tampa market saw a 16.1 percent increase. The areas that had the largest declines were Kingston, N.Y. with a 22 percent price drop, Bridgeport-Stamford-Norwalk, Conn. had a 18 percent decrease, and Mobile, Ala. prices fell 14.7 percent.

The number of permanent mortgage modifications dropped by almost a third in the first quarter this year, according to an alliance of mortgage professionals today.

Hope Now, a group consisting of mortgage serviciers, investors and non-profit counselors, reported that only about 207,000 struggling homeowners had their mortgage loans permanently changed in the first three months of 2012, down 31 percent from the 298,449 modified loans from the first quarter of 2011.

Of the loans modified this year rouhly 147,000 were reworked privately by banks, and 60,225 were modified as part of the Obama administration’s Home Affordable Modification Program (HAMP.)

Overall, the total number of borrowers helped by HAMP is continuing to grow, even if at very slow pace. On Friday, the Treasury Department released statistics showing that as of March the program has helped about 795,000 homeowners stay in their homes when they otherwise might have fallen into foreclosure. That number has grown 12,000 since February’s 783,000 total.

Still, HAMP, which was launched in spring 2009, was originally designed to save as many as 3 million borrowers from foreclosure. And while there have been 1.8 million homeowners who have started the program at some point, only 43 percent of those have made it through. Some didn’t qualify for HAMP’s terms and others were still unable to make payments after trial modifications and had to drop out.

There is still plenty of room for new enrollees, with the government having spent only about $2.9 billion of the $30 billion allotted from the 2008 financial industry bailout. Banks and lenders receive money as incentives every time they help modify a customer’s loan, by reducing payments, lowering interest rates, or reducing principal balances. The last of those is the least popular with only 52,000 borrowers having had their principal cut down, according to the Treasury statistics.

Many economists and housing market analysts have been expecting another wave of mortgage foreclosures to hit soon, now that the robo-signing mess has been sorted out. Yet, according to new reports from LPS Applied Analytics and CoreLogic this week, the foreclosure waters are still fairly calm.

Foreclosures did rise 8.1 percent in March from the month before, based on findings from LPS, but they were still down 31.1 percent from March 2011. The LPS March Mortgage Monitor also found that mortgage delinquencies fell 8.8 percent, a sign that homeowners may now have a better grip on their finances. The number of borrowers who were in foreclosure or at least 90 days behind on their payments had fallen 6.7 percent as well.

“What we’re seeing so far in the data, it doesn’t amount to a flood. There are regional bursts of activity here and there, but not that wave of foreclosures that people were expecting,” said Herb Blecher, senior vice president at LPS Applied Analytics as quoted in a Wall Street Journal blog post.

CoreLogic also found that foreclosures were down significantly. It’s monthly survey reported that there were 69,000 completed foreclosures in March, down from 85,000 one year earlier. While the CoreLogic data showed no national change in delinquencies, it did find that late payment rates were getting better in some of the worst-hit housing states like Nevada, Arizona and California.

It is still possible that backed-up foreclosure inventory could hit the market in the near future. There is also the possibility, though, that with the new rules imposed on big banks through the robo-signing settlement, banks may try to manage foreclosures differently now, like through more short-sales and writing down customer balances. Those steps could help prevent any major foreclosure waves from devastating the market.

U.S. banks are not yet making it easier to obtain a mortgage loans, according to a new survey from the Federal Reserve, although credit card and auto loan requirements have loosened considerably since the financial crisis.

“Domestic banks generally reported having eased their lending standards and having experienced stronger demand over the past three months,” the Fed said in its survey, noting that the easing was primarily on consumer and car loans.

Mortgage loans remain the touchy spot for lenders, an area where they are not interested in lowering loan standards.

“Regarding loans to households, standards on prime residential mortgage loans and home equity lines of credit (HELOCs) were about unchanged,” the Fed said in it statement as quoted in a Bloomberg article. “However, the April survey indicated a moderate strengthening in demand for prime residential mortgage loans.”

The Fed survey included a new special question section, with 52 banks responding, asking them about their willingness to make mortgage loans now compared with 2006, the height of the housing bubble.

When asked about making a home loan to a borrower with a FICO credit score of 620 and a down payment of 10 percent, 43 of the banks (roughly 83 percent) said they were less likely to do so now than six years ago.

With a credit score of 680 and a 10 percent down payment, still 36 of the banks, or 69 percent, were less likely to make the loan today.

Higher credit scores made a difference though. There were 37 banks, or 71 percent, who were just as likely to lend now as in 2006 to a borrower with a credit score of 720 and a 10 percent down payment. And if the borrower increased the down payment to 20 percent, 47 of the banks, or 90 percent were more likely or as likely to approve the loan today as in 2006.

With all the mixed data coming out of the U.S. housing market these days, the last thing anyone would expect is a re-emergence of bidding wars for properties. Yet, that is the case in many areas around the country as a result of dwindling inventories.

In its quarterly survey, the Wall Street Journal reported that the number of homes for sale dropped significantly in each of 28 metro areas tracked. Across the country, at the current sales pace there was a 6.3-month supply of homes in March. That’s down almost by half from the peak of the housing crisis when there was an 11.1-month supply.

And of course, there are certain markets where that supply is much lower. In Sacramento, Calif. For example, there was only a 1.5-month supply in March while Phoenix had only 2.4-months worth of homes for sale. Other in the top five for smallest home inventories were San Francisco and Washington D.C. both with 3.4-month supplies, and Miami with a 4.1- month supply.

On the flip side are places like Long Island, N.Y., where there is still a glut of homes - a 16.1-month supply in March - and Chicago with a 9.4-month supply. Still the Wall Street Journal survey found that inventory is even declining in those areas.

Supply of homes is down in part because of the many investors paying cash and buying up most of the foreclosures and lower priced properties. Another issue is that many foreclosed homes have not yet been released on the market, as lenders slowed down their filings after the robo-signing turbulence. Those foreclosures may surface soon as banks now own roughly 450,000 distress properties and 2 million others are somewhere in the foreclosure process.

For now though, the bidding wars are on in many markets, with record-low mortgage rates making investing in high priced, urban areas more attractive these days.

Mortgage finance companies Fannie Mae and Freddie Machave adopted new rules concerning short sales, a move encouraged by their regulator, the Federal Housing Finance Agency (FHFA) in order to avoid more foreclosures.

Short sales give troubled homeowners an alternative to foreclosure, when banks allow them to sell their homes for less than the balance owed. This can often be in the banks’ interest as well, as they are able to recoup at least part of their loans, instead of having to foreclosure on the homeowners and go through the process of selling the property themselves. Such short-sales, unfortunately, have deterred many potential homebuyers because the process is notoriously long, lasting many months or longer.

Fannie and Freddie will now require mortgage servicers and banks to make a decision on short sale offers within 30 days of having a received an offer under Fannie or Freddie’s short sale program. If no decision is made by then, the buyers must receive weekly updates from the servicers and final decision must be made by the end of 60 days.

“FHFA and the Enterprises are committed to enhancing the short sales and deeds-in-lieu process as additional tools to prevent foreclosure, keep homes occupied and help maintain stable communities,” said FHFA Acting Director Edward J. DeMarco, in a press release as reported in a MarketWatch article. “These timeline and borrower communication announcements set minimum standards and provide clear expectations regarding these important foreclosure alternatives.”

And Freddie Mac Senior Vice President of Single-Family Servicing and REO Tracy Mooney echoed DeMarco’s comments.

“Short sales are more complex than routine home sales since they may involve multiple parties and long-distance negotiating,” she said in a separate press release. “Freddie Mac’s new timelines are intended to help make the decision process more transparent and timely for short-sales under the Obama Administration’s HAFA program or Freddie Mac’s traditional short-sale option. Today’s announcement underscores our commitment to help reduce credit losses and taxpayer risks by supporting more opportunities for sustained occupancy in our nation’s homes.”

The press release also mentioned that Freddie Mac completed 45,623 short sales in 2011, a 140 percent since the beginning of the housing crisis.

Sales of existing U.S. home fell in March, according to the latest data from the National Association of Realtors (NAR), although sales and prices are up compared with the previous year.

March sales decreased 2.6 percent to a seasonally adjusted annual pace of 4.48 million homes, down from February’s upwardly revised 4.60 million. Yet the new sales rate is up 5.2 percent from the 4.26 million pace from March 2011.

The NAR was very optimistic about the yearly growth.

“The recovery is happening though not at a breakout pace, but we have seen nine consecutive months of year-over-year sales increases,” said Lawrence Yun, NAR chief economist in a press release. “Existing-home sales are moving up and down in a fairly narrow range that is well above the level of activity during the first half of last year.  With job growth, low interest rates, bargain home prices and an improving economy, the pent-up demand is coming to market and we expect housing to be notably better this year.”

The national median home price actually rose on a monthly and yearly basis, growing to $163,800 in March, up from $155,600 in February and up 2.5 percent from the previous year.

At the same time inventory of existing homes on the market shrank by 1.3 percent to 2.37 million units. That represents a 6.3-month supply at the current sales pace. Compared with March 2011, inventory is down 21.8 percent.

Distressed properties continue to make up a large share of the market. In March foreclosures and short sales made up 29 percent of all sales. That is down, however, from 34 percent in February.

Meanwhile, mortgage interest rates have remained near historic lows during the month, with mortgage finance company Freddie Mac report that the national average rate on a 30-year fixed rate loan in March was 3.95 percent.

The number of foreclosures on U.S. homes during the first quarter of 2012 fell by 16 percent from the previous year, according to the latest data from market research firm RealtyTrac, reaching the lowest point since before the housing market collapsed.

There were 572,928 foreclosure filings, including default notices, scheduled auctions and bank repossessions during the first three months of the year. That accounts for one filing out of every 230 U.S. housing units. The last time the level was that low was the fourth quarter of 2007 when it was 527,740.

Foreclosure filings are also down on a monthly basis, with roughly 199,000 filings in March, down 4 percent from February.

Yet these falling numbers are not necessarily a means for celebration that the housing market is coming back on track.

“The low foreclosure numbers in the first quarter are not an indication that the massive reservoir of distressed properties built up over the past few years has somehow miraculously evaporated,” RealtyTrac chief executive Brandon Moore said in a statement. “There are hairline cracks in the dam, evident in the sizable foreclosure activity increases in judicial foreclosure states over the past several months, along with an increase in foreclosure starts in many judicial and non-judicial states in March. The dam may not burst in the next 30 to 45 days, but it will eventually burst, and everyone downstream should be prepared for that to happen–both in terms of new foreclosure activity and new short sale activity.”

The slowdown in foreclosures continues to be the fallout from the robo-signing scandal in the fall of 2010 when it was discovered that many banks were improperly processing foreclosures. Now that the issues have been settled, the thousands of foreclosures that were put on hold during the the past year are now starting to work their way through the pipeline again.

Nevada has the highest percentage of foreclosure activity during the first quarter, with one out of every 95 households receiving a notice, even though filings there dropped 62 percent for the year.

California was next on the list with one in every 103 households receiving a foreclosure filing. The state had the highest total number of foreclosures filings with 133,245.

Recent data from two of the nation’s biggest banks point to progress in the mortgage world, something there has been little of in the past four years.

Both JPMorgan Chase & Co. and Wells Fargo & Co. posted strong profits in their mortgage units in their first-quarter bank earnings reports, a sign that home-buying and refinancing is gaining some traction these days.

JPMorgan reported making a $461 million profit on its mortgage loans during the first quarter of 2012, a major improvement from the $1.1 billion loss it incurred last year. Mortgage revenue for the bank grew 80 percent to $1.6 billion. JPMorgan’s mortgage application volume increased 33 percent and originations were up six percent to $38.4 billion. This positive movement is making executives think the housing market is looking up.

“We think housing is getting very close to the bottom,” said J.P. Morgan CEO Jamie Dimon as quoted in a Wall Street Journal piece.

Wells Fargo saw its earnings rise 42 percent in the first quarter to $2.87 billion from $2.02 billion the year before. Mortgage originations for the company grew to $129 billion up from $120 billion in the fourth quarter of 2011. CEO John Stumpf agreed that the housing market is picking up steam.

“On the housing side, we’re seeing improvement, and we’ve been seeing that for some time,” Wells said during a conference call with analysts. “When you have the dynamics of higher rental rates and lower home values at attractive financing rates, there’s a point in time where the market is going to clear. I think we’re getting very close to that tipping point.”

Both banks are still dealing with the effects of the housing crash foreclosure epidemic, having to write off many loans. Fortunately, those figures are falling. Wells Fargo’s net charge-offs declined to $791 million in the first quarter, down from 844 million and JPMorgan’s allowance for loan losses fell by $1 billion. While both banks expect to continue to have plenty of charge-offs in the the coming months, the decrease this quarter is at least encouraging that the housing market it getting back on its feet.