According to Fair Isaac (FICO) common credit mistakes could impact your credit score

• Maxed out lines of credit…at 680 this could drop your score between 10 and 30 points..at 780 it could drop 25-45 points (and balance above 80%)..as a rule keep your balances at 25% of the credit limit.
• 30 day late… at 680 it could drop your score 60-80 points at 780 it could drop 90-110 points
• Debt settlement…at 680 your score could drop 45-65 points…at 780 it could drop 105-125 points…be careful here if you owe it pay it and take the hit. The sooner you get this resolved the sooner you can move your score up
• Foreclosure…at 680 it could drop 85-105 points…at 780 it could drop 140-160 points
• Bankruptcy…at 680 it could drop 130-150 points…at 780 it could drop 220-240 points

It was quite a ride for mortgage rates last week as we saw them move a ¼% higher. It all started with the FED’s policy statement which provided a more upbeat statement on the economy and the fact that no QE3 was mentioned. It all seems confusing since the housing sector needs some support. But did the Fed anticipate that reaction?

“Rates are significantly higher from a trading perspective but not to a degree that would hurt the economy or concern the Fed,” said Richard Gilhooly, U.S. director of interest-rate strategy at TD Securities.

This Morning Mortgage rates are struggling to hold and we may see further erosion .

The NAHB Housing Market Index is based on a monthly survey of NAHB members designed to take the pulse of the single-family housing market. The survey asks respondents to rate market conditions for the sale of new homes at the present time and in the next 6 months as well as the traffic of prospective buyers of new homes.

“Builder confidence has now risen four months in a row, with the latest uptick being universally represented across every index component and region,” noted Bob Nielsen, chairman of the National Association of Home Builders (NAHB)

With Mortgage rates at all time lows now is a great opportunity to consider purchasing a home.

WASHINGTON ? Though its demise drew little attention because of the partisan
year-end brawl over the payroll tax cut extension in Congress, a key mortgage
financing benefit disappeared at the end of 2011: The ability of large numbers
of homebuyers and owners to write off the premiums they pay for mortgage
insurance.

The loss of that tax deduction ? plus mandatory new fees imposed by Congress on
all new conventional and FHA loans ? could effectively ratchet up the costs of
homeownership this year.
The expiration of mortgage insurance deductibility will hit many low-down
payment conventional loans originated since 2007, plus virtually all new
mortgages closed this year where the down payment is less than 20 percent.
Industry experts estimate a range into the millions of existing owners and new
purchasers potentially affected by the deductibility termination. Borrowers
using guaranteed veterans (VA) and rural housing loans, where down payments can
drop to zero, also are affected.

The change took effect Jan. 1 along with the expiration of 58 other tax code
benefits that Congress failed to renew, including credits for home energy
improvements, credits for builders of energy-efficient new houses and
deductions for state and local sales tax payments. Congress could still reauthorize all
or some of the write-offs retroactively this year, but the current political
atmosphere raises doubts about that happening.

The mortgage insurance premium deduction allows purchasers and refinancers who
use private mortgage insurance or federal insurance or guarantees, and who
itemize on their federal tax returns, to write off their premiums.

In many cases, the post-tax savings for these borrowers are significant. New
buyers with an income around $100,000 and a mortgage of $200,000 would save
between $600 and $1,000 a year, depending on their credit score and loan-to-value
ratio, according to MGIC, a private mortgage insurer. For households with lower
incomes, the impact would be less, depending on their marginal federal tax
brackets.

But there are other housing-related casualties from the pre-Christmas
skirmishing. As part of the temporary extension of the payroll tax cut,
negotiators tacked on a provision that raises fees on the majority of
conventional mortgages ? those originated for sale to, or guarantee by Fannie
Mae and Freddie Mac. Starting in April, Fannie and Freddie will impose a surtax
on the guarantee fees they charge private lenders equal to one-tenth of 1
percent. Lenders are likely to pass those fees to consumers in the form of a
higher note rate or loan charges up front. Industry estimates suggest the surtax
could add an eighth of a percentage point to rates and raise costs to borrowers
over the life of the loan by more than $4,000 on a $200,000 mortgage.

How is HARP being expanded? Borrowers will soon be able to refinance no matter how far underwater they are. This should have a big impact in certain parts of Nevada, Arizona, and Florida where many borrowers owe more than 125% of the value of their homes. In Nevada, for example, two thirds of all loans backed by Fannie Mae are underwater, and half of all loans are above the 125% loan-to-value cut-off.

Will I be able to refinance through HARP if I’ve already used the program once? No. The program will continue to be limited to loans that were delivered to Fannie and Freddie before June 2009, which means that anyone who has already refinanced under HARP won’t be able to refinance again.

What other changes are being made to improve HARP? One of the most important changes addresses the risk that banks will have to “buy back” defaulted mortgages from Fannie and Freddie if the loans are discovered to run afoul of underwriting rules. This has prompted banks to scrutinize appraisals and require extensive documentation of borrowers’ incomes on loans for which they don’t already collect payments, even if Fannie and Freddie already guarantee those loans. As a result, some borrowers can only qualify for HARP by going to their current mortgage servicer, rather than shopping around for the best rate. Some lenders have been just “cherry picking the easiest loans,” says Keane Ng, a mortgage broker in Kirkland, Wash.

Under changes to be announced on Monday, banks will be largely shielded from the “buy back” risk on HARP mortgages, and they’ll only have to verify that borrowers meet a more tailored set of eligibility rules: that they’ve made their last six payments and have no more than one missed payment in the last year and that they have a job or another source of regular income. Those changes are a pre-requisite for “any game-changing refinance activity,” says Mahesh Swaminathan, senior mortgage strategist at Credit Suisse.

How will this change help borrowers? This will streamline the refinance process, eliminating the need in many cases for borrowers to obtain appraisals or to provide extensive income documentation. Instead, borrowers will have to show that they’re current on their mortgage, that they have a job or another source of regular income, and that they meet the other eligibility criteria for HARP.

What if I have mortgage insurance? Mortgage insurers have also agreed to make it much easier to transfer existing mortgage insurance coverage, which has blocked many borrowers from refinancing.

What if I have a second mortgage? Borrowers with a second mortgage, such as a home-equity loan, need the mortgage owner to agree to “re-subordinate” the loan before refinancing the first mortgage. Federal officials say the largest lenders have agreed to automatically re-subordinate all second mortgages under HARP.

What else is being done to lower costs? Another change involves fees that Fannie and Freddie charge banks for riskier borrowers. The firms, and their regulator, the Federal Housing Finance Agency, have agreed to waive those fees for borrowers who refinance into loans with a shorter term, such as a 15-year mortgage. They’ll also reduce the fees, but not eliminate them entirely, for everyone else. (WSJ)

How do I find out if Fannie and Freddie own my mortgage? You can look that up online for http://www.fanniemae.com/loanlookup/ and https://ww3.freddiemac.com/corporate/

Federal Housing Finance Agency Release http://www.fhfa.gov/webfiles/22721/HARP_release_102411_Final.pdf

In addition next week’s economic calendar is packed full of economic reports which are market movers.