Former Ditech executive, Jeff Morris, says “When the average borrower with a jumbo mortgage can qualify to refinance at a competitive interest rate, I’ll know we have turned the corner.”  Morris continued, it’s a mess out there…Many homeowner think that Obama is going to give them 2% fixed rate even if they are 120 days late on their mortgage.”  FHA mortgage rates have been low, but not that many borrowers qualify because the credit crunch is still preventing mortgage refinancing and new home loans for many 1st time home buyers.  Mortgage loan modification requests are piling up higher than refinance applications.

According to Lawrence Yun, chief economist of the Realtors’ group, the number of home foreclosures may rise to 2.5 million this year and that would be the highest since keeping records of home loan defaults.  “The foreclosure wave we’ve been through is not over,” said Susan Wachter, a real estate professor at the University of Pennsylvania’s Wharton School in Philadelphia. “That’s why we don’t see a bottom in housing yet.”

According to Seattle-based real estate data service Zillow.com. About 20.4 million of the 93 million houses, condos and co- ops in the U.S. were worth less than their loans as of March 31st.  After the Federal Reserve pledged to acquire as much as $1.25 trillion in mortgage-backed securities to free up money for mortgage loans, mortgage interest rates fell to a record low of 4.78 percent twice in April. Rates began climbing last month on investor concern federal spending will fuel inflation.�