According to foreclosure-tracking firm RealtyTrac, foreclosure filings topped 300,000 for the 12th straight month last month as 1 in every 418 U.S. homes received a foreclosure filing.

It’s a small improvement from January and a just 6 percent increase over February 2009.

On a per-capita basis, foreclosure density varied by state:

Nevada : 1 foreclosure filing per 102 homes
Florida : 1 foreclosure filing per 163 homes
Arizona : 1 foreclosure filing per 163 homes
California : 1 foreclosure filing per 195 homes

Also, as in January 2010, foreclosures across the country were concentrated. 10 states beat the national Foreclosure Per Capita average; 40 states fell below. Like everything else is real estate, it seems, foreclosures are local.

For today’s Tumwater home buyers, foreclosures represent an interesting opportunity. 

Homes bought in various stages of foreclosure are often less expensive than other, non-foreclosure homes. It’s one reason why distressed home sales account for 38 percent of all resales. However, less expensive doesn’t always mean less costly.  A foreclosed home may be in various stages of disrepair and they’re often sold as-is, as policy.

Buying new or used in Pierce County can be cheaper than buying broken-down.

Therefore, if you’re in the market for a bank-owned home, make sure you know what you’re buying before you sign a contract. Have qualified professionals review and inspect the property, as needed. Damage to pipes or the property’s structure, for example, may not be so obvious on a walk-though and you’ll want to know about it before you buy.

Also, foreclosed homes are federal tax credit-eligible. Buyers must be under contract by April 30, 2010 and closed by June 30, 2010.

Wednesday’s bond market has opened in negative territory as investors prepare for today’s Treasury auction. The stock markets are showing minor gains again with the Dow up 13 points and the Nasdaq up 7 points. The bond market is currently down 8/32, which will likely push this morning’s rates higher by approximately .125 – .250 of a discount point.

There is no relevant economic data scheduled for release today. The 10-year Treasury Note auction is being held today and could influence mortgage rates later. It is common to see some weakness ahead of these important sales as participants look to protect themselves against potential volatility. This is especially true when there is not a high expectation of a strong sale. However, if the sales are met with decent demand, it is also common to see the morning losses erased during afternoon trading.

Results of today’s auction will be posted at 1:00 PM ET. If investor demand for the 10-year Notes was h igh, we may see bonds rally during afternoon trading, possibly improving mortgage rates this afternoon. But, is the sale was met with weak interest, selling in bonds could precede an increase to mortgage pricing. The results of recent sales do not give us much to look forward to, so it is not likely that these auctions will fuel a bond rally today. We also get to repeat the process tomorrow for the 30-year bond auction.

Tomorrow brings us the release of two relatively minor economic reports. January’s Goods and Services Trade Balance is the first. It gives us the size of the U.S. trade deficit and is expected to show a $41.0 billion deficit. It is the week’s least important piece of news and likely will not influence mortgage rates much.

Also early tomorrow morning is the weekly release of unemployment figures from the Labor Department. They are expected to say that 460,000 new claims for unemployment benefits were filed last week, which would be a decline from the previous week. The larger the number, the better the news for bonds and mortgage pricing. However, since it tracks only a week’s worth of new claims, it usually takes a wide variance between forecasts and the actual total for it to affect mortgage rates.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… Lock if my closing was taking place between 21 and 60 days… Float if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

©Mortgage Commentary 2010

In November, Congress extended and expanded the First-Time Home Buyer Tax Credit program to include a subset of “move-up” buyers — homeowners that have owned and lived in their home for 5 of the last 8 years.

The credit ranges up to $8,000 per buyer. There’s now just 7 weeks left to take advantage.

To be eligible, home buyers must be under contract for a new home no later than April 30, 2010, and must be closed no later than June 30, 2010.

In addition to meeting the deadline dates, there’s a basic set of requirements to be tax credit-eligible:

You can’t purchase the home from a parent, spouse, or child
You can’t purchase the home from an entity in which the seller is a majority owner
You can’t acquire the home by gift or inheritance
Each buyer in the purchase must meet eligibility requirements

There’s other criteria, too.

For one, the sales price on the subject property cannot exceed $800,000. Homes sold for more than $800,000 are ineligible for the tax credit. Furthermore, households earning more than $125,000 as single-filers, or $225,500 for joint-filers, are ineligible.

You can read the complete eligibility requirements at the IRS website, or, you may just find it simpler to speak with your accountant about it. There are some nuances in qualifying for and claiming the tax credit on your returns and getting a professional’s opinion is always wise.

And lastly, don’t forget that government’s tax credit program is a true tax credit. It’s not a tax deduction.  This means that a tax filer whose “normal” tax liability is $3,500 and who is eligible for $8,000 in credit will receive a $4,500 refund from the U.S. Treasury.

If you’re currently in the House Hunt, mark your calendar for April 30, 2010. It’s 7 weeks away and you can be sure that as the date gets closer, buyer traffic is going to increase.  You may find sellers more willing to negotiate today than several weeks from now.

Call CU Mortgage Division at (360) 539-4687 to obtain your FREE mortgage loan pre-approval or visit our website at www.cumortgagedivision.com .

Mortgage markets improved last week in low-volume trading.

Between Monday to Thursday, Wall Street focused on the upcoming jobs reports and mortgage markets gained while traders jockeyed for position. Mortgage rates drifted lower through Thursday afternoon. But, then, after a better-than-expected Non-Farm Payrolls report Friday morning, mortgage markets — and mortgage rates — reversed.

Overall, mortgage rates dropped last week, but only by a small margin. Rates were best Thursday afternoon.

It was the second consecutive week in which mortgage rates fell.

Last week was also interesting in that both stock markets and bond markets improved, proving that rates don’t always rise when stock prices do. 455 of the S&P 500 companies posted gains last week.

If you’re shopping for a home or a refinance, though, don’t rest on your laurels. After Friday’s big sell-off, this week opens into a major headwind and, plus, the Federal Reserve’s support for mortgage markets ends in just 3 weeks.

This week, without much data to influence traders, the upward momentum in rates may have little cause to temper. We’ll see the Consumer Confidence numbers on Tuesday and Retail Sales on Friday.  Beyond that, there’s not much else.

After last week’s performance, conforming mortgage rates in Washington State may be poised to rise rather sharply. If you’re waiting for the right time to lock your rate, it may have been this past Thursday. Consider locking your rate early this week to protect against further rate hikes.