Here’s a bit of uplifting news amidst the subprime mortgage crisis.

According to Bankrate Inc., New York tops the nation in mortgage closing costs.

Bloomberg reported:

Origination and title costs on a $200,000 mortgage in New York average $6,183, compared with $5,623 in 2010, according to an annual survey released by Bankrate today. Nationwide, closing costs on the same-sized loan average $4,070, up 8.8 percent from a year ago, the North Palm Beach, Florida-based company said.

The 10 percent rise in closing costs is linked to stricter lending standards and increased regulation within the mortgage industry.

Texas is the second-priciest state to close a mortgage. Costs there average $4,944, a 5 percent rise from $4,708 last year. Utah was third, at $4,906. The cheapest places for closing costs are Arkansas, North Carolina and Indiana, according to Bankrate. Arkansas fees total $3,378, with North Carolina at $3,410 and Indiana at $3,430.

Despite the housing crisis, some home buyers are still opting for risky adjustable-rate mortgage loans over their sensible fixed-rate counterparts.

According to Inside Mortgage Finance, the market share for ARM’s actually rose to 12 percent, the highest point since 2008.

The New York Times Reported:

Keith Gumbinger, a vice president of HSH Associates, a financial publisher in Pompton Plains, N.J., said, “ARMs are good for borrowers with short-term time frames, usually seven years or less.”

“This can include certain first-time borrowers who expect to trade up,” Mr. Gumbinger continued, “such as a single person buying a studio apartment; folks who get transferred, or expect to be, within that time; folks refinancing with just a few more years expected in the old suburban mansion; jumbo mortgage seekers looking for a lower-cost alternative, and even folks who are approaching retirement age who want to seriously improve their cash flow to maximize their retirement accounts.”

Conversely, ARMs aren’t wise for borrowers who plan to stay put, Mr. Gumbinger said, or those who would have trouble managing rising payments. That includes people who expect cash-flow strains, such as those starting a family.

Well, there you have it. Is anyone surprised at these statistics in wake of the housing crisis?

Mortgage applications declined for the fourth week in a row on refinancing, even as borrowing costs dipped.

The Mortgage Bankers Association’s index fell 5.1 percent in the week ended July 8. The MBA’s purchase gauge decreased 2.6 percent, while the refinancing measure dropped 6.2 percent.

The average rate on a 30-year fixed loan fell to 4.55 percent from 4.69 percent the prior week. The average rate on a 15-year fixed mortgage decreased to 3.68 percent from 3.79 percent

National foreclosure rates are down as of lately, but not because of successful foreclosure prevention efforts. Since being subjected to scrutiny and new regulations, banks have been scrambling to reform shoddy mortgage modification procedures. Very few struggling homeowners have benefited from current federal foreclosure prevention programs, and servicers aren’t biting at the incentives.

The Obama administration is considering revamping programs. The Wall Street Journal’s Nick Timiraos reports:

Policy ideas include having taxpayer-owned mortgage giants Fannie Mae and Freddie Mac relax their rules for loans to investors, allowing those buyers to vacuum up excess housing inventory. In certain markets, Fannie and Freddie could hold some foreclosed homes off the market and rent them out to ease the property glut.

Even with a complete overhaul will the government be able to effectively enforce new standards and regulations? It certainly hasn’t so far.

The Treasury has been pushing principal reductions on servicers by offering incentives for writing down balances of homeowners in distress. Last month the Treasury revealed data on this initiative that showed about 16,000 active principal reduction mortgage modifications. Of those, nearly 5,000 have been made permanent. That’s out of over 2 million foreclosures.

Fannie Mae and Freddie Mac, who own or guarantee the majority of U.S. mortgages, refuse to participate in principal reduction programs. Despite being owned by tax payers and seized by the government, the two mortgage giants have not been forced to comply with new programs.

The Obama administration’s proposed revamped foreclosure prevention efforts will most likely flounder like their predecessors as long as Fannie Mae and Freddie Mac have the option to opt out.

No one can predict what the economy will bring in the next six months, but could real estate be the wisest long-term investment over the next 20 years? Despite the recent housing crisis, Time Magazine seems to think so.

Falling home prices plus the foreclosure backlog probably mean a flat-to-down market over the next couple of years. But beyond the current desolation, the outlook is exactly the opposite. In fact, three different trends are aligning that figure to produce a major home-price boom over the next 20 years.

1. The Economic Cycle. Admittedly, the current recession is far worse than a typical cyclical downturn. Nonetheless, the economy has grown for seven straight quarters. It is possible that there could be a double-dip recession – triggered perhaps by the default of Greece or Portugal. But the worst damage to the U.S. economy appears to be behind us. Home prices are largely driven by demand, which depends on the number of people working, their prospects for salary increases and the availability of credit for mortgages. All three of those things are bad right now, but they typically lag the economic cycle for GDP. Once the economy finally recovers, the factors that drive housing demand will follow.

2. The Real Estate Bust. The collapse in housing prices has destroyed confidence among home buyers and left perhaps a quarter of all properties worth less than the mortgages they carry. But the experts see prices within 5% to 10% of a bottom. Once the process is done, prices will have been knocked all the way down. As a general rule, the worse the crash in a market, the longer the subsequent recovery can last, because there is nowhere to go but up.

3. The Inflation Outlook. The combination of a cyclical economic recovery and the end of the housing bust is by itself reason enough to buy real estate. But in my view, there is an even more compelling long-term argument – the near-inevitability of higher inflation, as I have argued before. Basically, if the U.S. continued building up debt at its present rate, the country would eventually end up where Greece is today. The reason that won’t happen is that while Greece’s debt is in euros, a currency it can’t control, U.S. debt is in dollars. The U.S. will always be able to pay its debts because the Federal Reserve and the Treasury can simply work together to create more dollars (what people used to call “printing money” in the days before electronic funds).

There are a couple of catches to this theory. For one, it’s dependent on rising inflation and devaluation of the U.S. dollar. Such an environment fosters appreciation in property values, as seen in the 1970′s. Also, the market hasn’t bottomed out yet and recovery based profits will most likely remain unseen for the next decade to come.

This town in New Jersey has a foreclosure rate that’s three times the national average.

Mortgage rates rose to their highest level since May as demand for home loans fell.

The average rate for a 30-year fixed loan rose to 4.6 percent from 4.51 percent in the week ended today, according to Freddie Mac. The average 15-year rate rose to 3.75 percent from 3.69 percent a week ago.

Tighter lending standards and high unemployment rates have discouraged many buyers, while skyrocketing foreclosures continue to drive down home values.

The federal government is set to decrease the size of loans eligible for federal backing. In October, the maximum eligible loan will drop to $625,500 from $729,750.

This move, which will force high-end buyers into expensive jumbo loans, has many scrambling to get their mortgage applications in before the deadline.

The proposal of lower loan limits is causing anxiety in coastal California and other high-end housing markets. Those with mortgages that exceed the cap not only get hit with higher interest rates but are often required to put down more than 20%.

If borrowing costs rise, sellers must reduce their prices, which could send home prices down even further. This is good for those buyers who are able to double their down payments, but not so beneficial for those not able to come up with such a large amount of cash.

The government hopes to encourage more private investing with this proposal.