Lowest rates ever! FHA rates down to 3.5%, 35 yr fixed,non recourse,83%ltv,1.2 dsc. Check www.theHUDgroup.us, www.drbinconsulting.com, pdribin@dribinconsulting.com 314-412-0608
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January 2012
January 19, 2012
January 18, 2012
Mortgage Applications Jump Significantly
Mortgage applications jump 23.1%
by KERRI PANCHUK
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Wednesday, January 18th, 2012, 6:20 am
Mortgage application filings jumped 23.1% this past week on low interest rates and a dramatic upswing in refinancing activity, an industry trade group said Wednesday.
The Mortgage Bankers Association, which measures mortgage loan application volume through its market composite index, said home loan volume soared 23.1% from the previous week as the refinance index grew 26.4% from the previous week, reaching its highest level in five months.
Home purchase activity also increased, with the seasonally-adjusted purchase index increasing 10.3% from a week earlier.
Refinance activity made up 82.2% of all mortgage activity, compared to 80.8% a week before.
"Interest rates dropped last week due to continuing anxieties regarding the fragile economic situation in Europe," said Michael Fratantoni, MBA's vice president of research and economics. He added, "With mortgage rates reaching new lows, refinance volume jumped and MBA's refinance index reached its highest level in the last six months. Purchase activity also increased as buyers returned to the market after the holiday season."
Interest rates declined further last week, with the 30-year, fixed-rate mortgage on loans with conforming limits dropping to 4.06%, its lowest level in the history of the survey.
The 30-year, FRM with jumbo loan balances increased to 4.40% from 4.34%.
Meanwhile, the average 15-year, FRM fell to 3.33% from 3.40%, and the 5/1 ARMs remained unchanged at 2.90%. The 30-year, FRM backed by FHA declined to 3.91% from 3.96%.
Write to Kerri Panchuk.
January 17, 2012
Fitch Predicts Mild Housing Recovery by Mid 2012
Fitch: 'Mild' 2012 recovery for housing
by ANDREW SCOGGIN
Tuesday, January 17th, 2012, 1:40 pm
Fitch Ratings said the foundation is in place for "mild" recovery for the U.S. housing sector, though the economy continues to temper a revival.
In a report released Tuesday, the ratings service said it expects existing home sales to grow 3% for 2012, with single-family housing starts and new home sales up 5% and 5.5%, respectively.
Fitch's report follows another Friday by Fannie Mae. Economists at the government-sponsored enterprise predicted a 3.5% increase in total home sales for 2012.
The housing sector finds itself coming off a disappointing year, Fitch said, much the same as a year ago. It's also not filling its traditional role, the report said, as a driving force for a post-recession economy.
But the economy itself, Fitch said, continues to drag on the market. Home prices could lag over at least the next few quarters with employment and financial markets unstable and declines in personal income. The Census Bureau reported a 2.3% decline in real median household income to $49,445 in 2010.
A "negative psychology" from potential homebuyers could also weigh down the market, Fitch said.
"Many people expect or fear that home prices are vulnerable to further declines and buying now might be a mistake," the report said. "This psychology applies to all types of buyers, but especially applies to trade-up and second-home buyers."
Fitch said homebuilders should remain cautious on land purchases and reductions in liquidity, or cash, in 2012. Builders currently can do little to effect revenue and profitability, the report said, but can still control balance sheets.
The ratings service has most homebuilders on stable credit outlook, with the exception of negative credit watches on PulteGroup (PHM: 7.47 -1.97%) and KB Home (KBH: 9.035 +2.32%). Any progress, or contraction, in housing could bring a "reconsideration of ratings," Fitch said.
The next decade will likely bring more mergers and acquisitions in the sector, Fitch said, much like the Pulte-Centex Corp. deal in 2009.
Write to Andrew Scoggin.
Follow him on Twitter @ascoggin.
January 13, 2012
Posted in National-and-international on Friday, January 13, 2012 12:24 pm Updated: 2:02 pm. | Tags:
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January 12, 2012
Policies of Fannie/Freddie are Hurting Economic Recovery
GSE loan repurchase policies impede economic recovery
by LAURENCE E. PLATT
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Tuesday, January 10th, 2012, 2:23 pm
The loan repurchase policies of Fannie Mae and Freddie Mac are one of the factors that have exacerbated the U.S. housing crisis and impeded economic recovery, according to two recent releases by notable federal government actors.
These reports call into question whether the aggressive repurchase stance of the Federal Housing Finance Agency, as conservator of the GSEs, to reduce short-term losses to U.S. taxpayers instead might work to the long-term detriment of such taxpayers. Lenders reportedly responded by saying: “Like, duh!”
The board of governors of the Federal Reserve System issued its white paper, entitled "The U.S. Housing Market: Current Conditions and Policy Considerations" last week. Noting that the prolonged problems in the U.S. housing market continue to impede the economic recovery, the white paper identifies among other causes "a marked and potentially long-term downshift in the supply of mortgage credit" which contributes to weakness in housing demand. Some tightening of mortgage lending standards was necessary to overcome the prior lax standards, but the extraordinarily tight standards that now prevail, according to the paper, "reflect, in part, obstacles that limit or prevent lending to creditworthy borrowers."
The Fed's white paper cites data indicating that less than half of lenders are currently offering mortgages to borrowers with FICO scores of 620 and a down payment of 10%, notwithstanding the eligibility of such loans for purchase by the GSEs. It attributes this hesitancy of lenders in part "to concerns about the high cost of servicing in the event of loan delinquency and fear that the GSEs could force the lender to repurchase the loan if the borrower defaults in the future" based on alleged breaches of loan-level representations and warranties.
Confirming what the lending industry has been saying for some time, the white paper highlights the conundrum of federal housing policy: "Aggressively putting back delinquent loans to lenders helps the GSEs maximize their profits on old business and thus limits their draws on the U.S. Treasury, but at the same time, it discourages lenders from originating new mortgages." The board suggests that short-term losses by the GSEs actually might be in the interest of taxpayers "if those actions result in a quicker and more vigorous economic recovery."
William C. Dudley, the president and CEO of the Federal Reserve Bank of New York, drilled down further to explain what is wrong with the GSE repurchase policies in a speech to the New Jersey Bankers Association Economic Forum Jan. 6, entitled "Housing and Economic Recovery."
Like the white paper, the speech focuses on the extent to which the problems in the U.S. housing market impact economic recovery. He also notes that the restoration of housing demand requires reasonable access to mortgage credit for eligible borrowers and that steps should be taken to improve such access. He validates the oft-stated position of lenders that they are discouraged from making new prime conforming loans "due to excessively stringent put-back rules on these mortgages."
Dudley explains that the cause of the lenders’ concerns revolves around the lack of a link between the alleged breach of a representation and warranty and the cause of a borrower’s delinquency, saying that GSE rules afford them a "broad scope to force the originator to repurchase at par loans that go delinquent if there are any errors in the mortgage loan paperwork — even if the error has no direct link to the delinquency."
He basically argues that lenders should not bear the economic risk of a borrower’s job loss. While making it clear that lenders should be held accountable for their representations and warranties, he is looking for penalties that are more appropriate.
By exposing lenders to significant credit risk through the current repurchase regime, argues Dudley, lenders are encouraged to focus only on the lowest-risk customers and apply tougher restrictions than required by the GSEs "in order to limit the risk that they will have to take back such loans when they become delinquent." He suggests that the insertion of a materiality test would foster a better balance between incentives for sound underwriting and credit availability. He also suggests that in the future representations and warranties should have a finite duration but be supplemented by a rigorous, real-time quality control check of the underwriting based on a random sample of the loans.
Read together, the white paper and the Dudley speech give voice to the profound consternation of the lending industry that the GSEs unfairly are seeking to reallocate the credit risk of loss for delinquent loans on sellers and servicers when such losses are the result of post-sale changes in the circumstances of the borrower.
The fact that one branch of the federal government is criticizing another branch of the federal government should not be that surprising, given the lack of a comprehensive, holistic approach to federal housing policy. What really is going on, I suspect, is that the Fed board is providing an intellectually honest foundation to the FHFA, as conservator for the GSEs, to conclude that the continued aggressive pursuit of loan repurchase claims without regard to the materiality of the breach or the cause of the loss is contrary to the FHFA’s statutory mandate to protect the interests of the taxpayers. Hard to argue with that one.
This commentary first appeared on the K&L Gates website and is reprinted here with permission from the author.
http://www.dribinconsulting.com- dribin's housing blog
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January 11, 2012
Demand for Home Mortgages Has Increased
US Mortgage Applications Picked Up Last Week
Published: Wednesday, 11 Jan 2012 | 8:03 AM ET
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By: Reuters
Applications for U.S. home mortgages rose in the first week of the year as demand for both purchases and refinancing perked up, an industry group said on Wednesday.
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The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 4.5 percent in the week ended Jan 6.
The MBA's seasonally adjusted index of refinancing applications gained 3.3 percent, while the gauge of loan requests for home purchases climbed 8.1 percent.
The refinance share of total mortgage activity eased to 80.8 percent of applications from 81.9 percent the previous week.
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The improvement in demand came even as interest rates rose. Fixed 30-year mortgage rates averaged 4.11 percent in the week, up 4 basis points from 4.07 percent.
The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.
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