25 Nov 11 Daily Mortgage News
The Lead Planet offers a new special for new accounts seeking mortgage marketing services. New Free Mortgage Lead Incentives for Purchase and Refinancing Leads.Freddie Mac says the rate on the 30-year fixed loan fell to 3.98 percent from 4 percent the previous week. Business Week reports that fixed mortgage rates have fallen below 4% on thirty-year terms. -
Higher Loan Limits as FHA extends support with a new role in Government financing. The Daily Herald examines FHA’s elevated loan limits.
14 Nov 11 New Mortgage Lender Liability Rule for HARP Coming Soon
The effectiveness for government sponsored mortgage relief may become evident as soon as tomorrow, when the specifics for the revised program named the Home Affordable Refinance that will be spelling out the lender liability. The Federal Housing Finance Agency is the regulator that oversees government mortgage programs like, Fannie Mae and Freddie Mac announced last month that they were expanding the guidelines for the HARP program that was created in an effort to help struggling homeowners who are unable to qualify for conventional refinancing because they have little or no equity in their homes. According to Reuters, the HARP mortgage program, hinges on lenders voluntarily writing new mortgages for distressed borrowers who have suffered because falling home prices that have sunk their property values underwater.
The Chicago Tribune published an article that underscores how important the new changes for the Home Affordable Refinance Act really are. It’s no secret that many mortgage lenders have been concerned that they could be forced to buy back refinanced loans if defects with the initial mortgage are found, a concern that has undercut the program’s effectiveness. FHFA made it clear that they would be loosening the guidelines including the representations and warranties participating home loan lenders have to abide by as part of its revamp of the program.
Lenders will learn on Tuesday to what extent those contracts, which determine their liability for bad loans, will be waived. “For those originating the new loans, they will look at how these waivers are going to structured,” said Bose George, an analyst with Keefe, Bruyette & Woods Inc in New York. “If they provide enough of a comfort zone, these changes to the representations and warranties could bring meaningful participation.”
Analysts at Barclays Capital estimate up to 3.1 million mortgage liens are eligible for the program. The Home Affordable Refinance is open to borrowers who have little or no equity in the homes as long as they are making timely payments and their loans are guaranteed by Fannie Mae and Freddie Mac, which back about half of all residential mortgages in the United States. As part of the HARP expansion announced in October, FHFA said it would eliminate the LTV restrictions that prevented borrowers whose home loan exceed 125% of the property’s value from participating in the program. Read the original Chicago Tribune Article.
09 Nov 11 Refinance Activity Rises for Homeowners in the US
Home loan applications in the United States spiked last week as interest rates fell once again to record lows. The mortgage refinance activity drove the rise in mortgage applications last week. The increased demand for lower monthly payments continues to rise for homeowners looking to save money where ever they can. According to the Mortgage Bankers Association, the refinance rates fell for conforming and FHA loan programs.
The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, climbed 10.3 % in the week ended Nov 4. “Treasury rates dropped last week, as renewed turmoil in Europe once again led to a flight to quality, and thirty-year interest rates dropped to their second lowest level of the year,” Mike Fratantoni, MBA’s vice president of research and economics, said in a statement.
The MBA’s seasonally adjusted index of refinancing applications rose 12.1% to its highest level in a month. Fratantoni said some lenders saw even bigger increases. Fixed 30-year mortgage rates dropped 9 basis points to average 4.22%. The refinance share of total mortgage activity rose, after declining for three weeks, to 78.6% of home loan applications from 77.1 % the week before. The gauge of loan requests for home purchases gained 4.8 %.
03 Oct 11 Guidelines for Obama Mortgage Program for Unemployed Homeowners Too Strict
Unfortunately most of the struggling borrowers who need mortgage help due to unemployment are not able to meet the qualifications for Federal aid. The Obama Administration rolled out a $1 billion program to help the unemployed homeowners make their mortgage payment will likely end up spending only half the funds, at most, because so few borrowers met the strict guidelines. The Housing Department, which had to approve the applications for the Emergency Homeowners Loan Program by Friday, expects that only 10,000 to 15,000 people will qualify. That’s only a small sliver of the roughly 100,000 who applied.
Passed last year as part of the Dodd-Frank mortgage reform bill, it was modeled after a very successful program in Pennsylvania that has helped tens of thousands of residents since 1983. The federal effort offered interest-free, forgivable loans to homeowners who lost at least 15 percent of their income because of the economy or their own medical condition. Applicants had to be at least 90 days delinquent, facing foreclosure and show that they could resume payments if they found a new job. If they qualified, they could receive up to $50,000 or 24 months of assistance, whichever came first.
Only 34 of the 174 homeowners who came to Tierra del Sol Housing Corp. in Las Cruces, N.M., met the criteria, said Rose Garcia, the agency’s executive director. Read Chicago Tribune Article on Federal Mortgage Program for Unemployed
30 Sep 11 FHA Loan Limits Decline Tomorrow
For those of you that don’t know there is bipartisan legislation, The Homeownership Affordability Act of 2011, has been introduced in the House and Senate that would extend the current Fannie Mae, Freddie Mac and FHA loan limits for two more years but most insiders don’t believe the bill will pass. Unfortunately there has not been enough of a lobby against the declining loan limits because it will only dramatically affect 5 or 6 states. Beginning tomorrow, the maximum limit for government mortgages will fall in many of the nation’s high cost real estate markets. Over the next few weeks it’s worth watching what happens to sales of properties priced between the new and old limits For details on how the loan limits will affect your state read 2012 FHA Loan Limits on the Nationwide blog.
16 Sep 11 New Record Low Rates Spur Refinancing Activity
Rates for home buying and refinancing have broken al-time record lows as the Federal Reserve and the poor economic conditions have cause interest rates to fall once again. Record low Treasury bond yields have driven mortgage rates to new record lows in rate offers set by banks and other mortgage lenders early Tuesday, according to a review of rates. Treasury prices fell in early morning trading in New York as investors focused on today’s 10-year note sale. The drop in the 30-year fixed rate found the benchmark mortgage at a low of 3.93% on Money Rates, which is well off a new record low average set last Thursday at 4.12% tracked by Freddie Mac. The mortgage refinance rate on shorter term fixed terms and adjustable rate loans were also significantly lower.
The 15-year fixed rate loan reached a low of 3.23% in early morning offers made to home purchasers and those looking for mortgage refinance loan options available through Housing Predictor mortgage vendors. The 5-year hybrid mortgage rates fell to 2.69%, the lowest rate ever on record.
High unemployment, averaging 9.1% across the U.S. with much higher levels in many areas especially hard hit by the housing bust and economic uncertainty are troubling financial markets, including bankers who are trying to stir-up more business. The deteriorating debt crisis in Europe is also troubling financial markets. Stock markets have been on a roller coaster ride for more than a month with wide swings on the New York Stock Exchange industrial average, making 200 point gains one day and then 200 Read the Housing Predictor Article.
17 Aug 11 Obama Warming to Idea of Helping Mortgage Giants Fannie and Freddie
President Obama announced yesterday that he is leaning towards funding a reorganization of the two failing government mortgage agencies Fannie Mae and Freddie Mac. The White House and Treasury Department also acknowledged that the Obama administration is working on a plan to continue the U.S. government’s role as an insurer of home mortgages for most homebuyers, keeping the struggling Fannie Mae and Freddie Mac under government management.
Fox News reported that one of the options would be to restructure Freddie Mac and Fannie Mae as public utilities managed by a government regulator. The second option being considered would be to eliminate the mortgage lenders role in the loan origination process and replace them with “successors that would have their mortgage securities guaranteed by the government in exchange for a fee.” A third option is to wind down the home financing giants and limit government’s role in insuring loans to other agencies.
Not surprisingly, the White House would not commit to any specific plan as Obama continued his bus tour. According to White House spokesman Jay Carney, “It is simply untrue that the administration has settled on a single proposal for the longer-term structure of the home financing market.” Carney stated, “The article in question mischaracterizes a lot of the core housing and finance principles that the administration laid out in its February report to Congress.”
Deputy Treasury Secretary Neil Wolin also issued a statement saying that the three options outlined in the report to Congress allow for the government’s “footprint in the housing finance market” to “shrink substantially.” Wolin continued, “For now, Fannie Mae and Freddie Mac are playing a critical role in providing support to a still-fragile housing market and making mortgage credit available. However, in each of the three options, Fannie Mae and Freddie Mac will be wound down on a responsible timeline.”
17 Aug 11 Mortgage and Home Loan News
Why Mortgage Leads in Less Popular States Convert Better – The Lead Planet, a mortgage marketing company from San Diego, California discusses why sometimes buying leads in random states makes sense financially.
Freddie Mac and Fannie Mae Default Ratings – Taxpayers have spent about $150 billion to rescue them, the most expensive bailout of the crisis.
How to Qualify for a FHA Loan – First time home buyers continue to go to the government for purchase mortgages for many reasons. Mortgage rates are low and the credit guidelines are flexible.
Home Loan Applications Increased with Interest Rates Declining – With the Federal Reserve’s commitment last week, interest rates fell once again and mortgage applications soared across the country.
Will Homeownership Rates Revive? – With low mortgage rates and talk of the housing market improving many people anticipate that the rate of consumers becoming homeowners will soar again. The New York Times says — Not so Fast.
10 Aug 11 Home Mortgage News
10 Ways to Stimulate the Housing Sector in 2012 – Bryan Dornan wrote an interesting article that promotes ten steps to help eliminate the housing crisis. He makes some aggressive suggestions like eliminating taxes on capital gains and tax credits for 1st time home buying. These may be the types of recommendations needed to get our housing market back on track.
Low Rates from the Federal Reserve Won’t Fix the Economy or Retirees – According to Paul Wiseman, “No matter how much the Fed lower the rates, nervous consumers and wary businesses remain reluctant to spend money or take risks to revive the economy.” The average 30-year fixed rate mortgage declined last week to an annual low of 4.375%.
Is Fannie Mae Buying More Bad Debt from BofA? – According to Origination News, Fannie Mae may be forcing B of A to unload the $73 billion of MSRs because the bank is doing an extremely poor job of managing the receivables.
Measuring the Refinance Demand – The Mortgage Refinance Index jumped 30.4% from the previous week. The four week moving average rclimbed 13.7%.
Going Online to Find Best Mortgage Lenders – Nationwide offers tips to consumers for shopping lenders on the internet.
Comparing Rates with FHA Lenders – Talk to loan companies that have experience with government lending.
09 Aug 11 Mortgage News for August 9 2011
The Mortgage News Post has highlighted these worthy financial articles below.
3 Reasons Lower Home Mortgage Rates Are Important – Even cutting 1 or 2% points off of your mortgage rate can significantly lower the total amount of interest expense you pay on your house.
5 Top Home Loans for Refinancing – Nationwide lender publishes an article that highlights the five best loans for mortgage refinancing.
How the Credit Downgrade Could Affect Your Home Loan– CNN-Money reported that the response to Fannie Mae and Freddie Mac being reduced to AA+ from AAA. Mortgage refinance rates were composed to continue to fall. HSH Associates quoted the average fixed 30-year mortgage rate at 4.44% yesterday. Keith Gumbinger, of HSH Associates said, “We expect to see home mortgage rates drop into the 4.30′s by noon tomorrow.”
Real Estate News: Ripple Effect May Include Higher Mortgage Rates – The downgrade of the U.S. credit rating could have a negative impact on American mortgage markets that remain on government tab.
What do lower credit ratings for Fannie, Freddie mean for you? – Today, the Federal Reserve announced that it would not hike key rates until 2013. So home loan rates should remain at record levels, but there are still many obstacles in housing market like mortgage refinance guidelines.
Fannie Mae Posts Wider Losses: Fannie posted a net loss of $2.9 billion for the second quarter, up from a year-ago loss of $1.2 billion. The company has now reported losses in 15 of the last 16 quarters and must ask the U.S. for another $2.8 billion in bailout funds after it makes quarterly dividend payments to the Treasury
Federal Reserve extended key interest rates at record lows – According to Priya Misra, “The market wanted the Fed to acknowledge the weakened outlook, and they did,” said head of U.S. rates strategy at Bank of America Merrill Lynch in New York, one of the 20 primary dealers that trade with the Fed. “The explicit commitment to mid-2013 by the Fed has reaffirmed price action.”
05 Jul 11 Mortgage Rates Hold Steady
ABC news reported that fixed home mortgage rates remained at 2011 lows. Freddie Mac said the average interest on the 30-year mortgage rates inched up slightly to 4.51%. It hit its lowest level of the year three weeks ago, at 4.49%.
The average rate on fixed 15-year mortgage rates, a popular refinancing option, stayed at 3.69%. It reached its low point of the year two weeks ago, at 3.67%. Rates typically track the yield on the 10-year Treasury note, which has been rising in the past week.
That could change this week when the Federal Reserve’s $600 billion bond buying program ends. The Federal Reserve has purchased around $75 billion worth of bonds each month since November. That drove the yield on 10-year mortgage rates lower than 3% this spring. As a result, rates on loans and other home mortgages also fell.
04 May 11 BofA Has Mortgage Servicing Rating Downgraded
Moody downgraded Bank of America’s mortgage servicing quality ratings were downgraded yesterday, because of deterioration in the mortgage lender’s collections and loss mitigation on home loans. BofA recently reduced some of the home loan programs in an effort to simplify mortgage originations nationally. Moody, the respected credit rating agency said it downgraded both BAC Home Loans Servicing LP and Bank of America, N.A. to SQ2 from SQ1 as a primary and special servicer for both 1st and 2nd mortgages. Moody’s action moves BofA down one notch from the highest rating on a five-step scale used by the ratings agency for mortgage servicing. Moody’s also said it would maintain a review for possible future ratings cuts, except as a primary servicer of second mortgage loans.
A BofA spokesman Dan Frahm said the downgrade was not a surprise, and the cuts reflected a recent settlement with bank regulators over problems with the industry’s foreclosure practices. Frahm said the bank expected the rating to rise again after the bank complies with the settlement with bank regulators and finishes the overhaul of its foreclosure practices. Bank of America is the largest servicer of home mortgages and its lending operations have been surrounded by controversy recently as the bank temporarily halted foreclosures after critics cited that legal procedures may have been circumvented. Investors have spoken openly about concerns that the bank could be responsible to buy back billions of dollars of mortgages for people with bad credit because of delinquencies and defaults.
06 Apr 11 Looming Government Shutdown Could Have Negative Impact on FHA and the Mortgage Industry
Lenders across the country have been scrambling this week, because the FHA mortgage loans could be placed on hold during the government shutdown. According to FHA commissioner, David H. Stevens, if the government does shut down, HUD will be forced to stop endorsing new FHA mortgages. According to a memo drafted by a housing trade group, “FHA cannot offer endorsements for any new FHA loans in the Single Family program and are not allowed to make further commitments in the Multifamily if the government shutdown happens.” FHA lenders will need to brace for the government shutdown or shift gears with conventional loans backed by Fannie Mae and Freddie Mac.
Wells Fargo & Co. spokesman from the country’s largest home loan lender said that “Wells Fargo would expect to be able to take loan applications and close mortgages provided that a shutdown doesn’t continue for any extended period.” But if the federal government shuts down, we won’t be funding any new FHA loans because these loans would not be insured in a government shutdown. Banks can still originate FHA mortgages, but they won’t be able to close them until the government re-opens the Federal Housing Administration.
According to analysts at Keefe, Bruyette & Woods last year, the “FHA insured almost 40% of all mortgage liens totaling $200 billion. According to the GSE regulator, the government shutdown would not stop Fannie Mae and Freddie Mac from buying and securing home mortgage loans.” According to a statement issued by the Federal Housing Finance Agency, “A government shutdown would not impact the operations of Fannie Mae and Freddie Mac as the GSE’s are not subject to the annual appropriations process.” Read the original article online > FHA and the Effects of the Government Shutdown
30 Mar 11 New Mortgage Legislation Being Introduced by Republican Law Makers
More than ever before, Congress and the Senate have been introducing new bills to improve and regulate the mortgage and housing industries. Government home financing maintains over 95% of the marketplace between Fannie Mae, Freddie Mac and FHA loans. The House Republicans who will ultimately have the most influence on the decision have come out with a plan for reforming the two government sponsored enterprises Fannie Mae and Freddie Mac. Scott Garrett (R-NJ) Chairman of the House Financial Services Subcommittee on Capital Markets and Government-Sponsored Enterprises released what was actually a summary of eight bills, each covering a different aspect of reform and each introduced by a different member of the parent Financial Services
The GSE Mission Improvement Act, sponsored by Ed Royce (R-CA)
This legislation would permanently abolish the affordable housing goals of Freddie Mac and Fannie Mae. According to Royce’s comments accompanying the bill, these goals were a central cause behind the collapse of the GSEs and the ongoing goal of the GSEs should be to reduce risk to taxpayers rather than expose them to further losses. “To meet these goals, the GSEs purchased more than $1 trillion in ‘junk loans.’ These home loans accounted for a large portion of the mortgage giants’ losses – losses that were later loaded onto the backs of American taxpayers.”
The Fannie Mae and Freddie Mac Accountability and Transparency for Taxpayers Act (H.R. 31), sponsored by Judy Biggert (R-IL) Chairman of the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity.
This bill would establish an Inspector General (IG) within the Federal Housing Finance Agency (FHFA,) the conservator of the GSEs, provide him/her with additional law enforcement and personnel hiring authority, and require him/her to submit regular reports to Congress on taxpayer liabilities, investment decisions, and management details. These reports would be made publically available.
The GSE Debt Issuance Approval Act, Sponsored by Steve Pearce (R-NM).
Under the requirements of this legislation, the Department of the Treasury would have to formally approve any new debt issued by the GSEs. Pearce comments that, “This will help protect taxpayers by requiring the formal legal authority of U.S. debt issuance to approve the issuing of agency debt which is roughly the same as U.S. debt.”
GSE Credit Risk Equitable Treatment Act, sponsored by Scott Garrett.
This proposed home loan legislation would apply any of the standards applied to private secondary mortgage market participants to the GSEs. It would, according to Garrett, ensure that the GSEs are not exempt from new risk-retention rules mandated by Dodd-Frank and that they face the same retention standards as private market participants. Read the complete article from Mortgage News Daily > Republicans Dive Head First into GSE Reform with Eight New Bills
30 Mar 11 New Retention Rule to Impact Government Backed Home Loans
April 1st is the date when the Dodd-Frank mortgage rules are set to kick in, but few lenders and brokers really believe that the finance reform act will be enforced. Meanwhile the Obama administration seeks to reduce the government’s role in housing, reliance on Fannie Mae and Freddie Mac may be reinforced by a rule growing out of the Dodd-Frank regulatory overhaul. The Federal Deposit Insurance Corp. and the Federal Reserve yesterday released for public comment a proposed rule requiring lenders and bond issuers to keep a stake in some mortgage loans they securitize. The proposal would require loan companies that securitize mortgages to retain as much as 5% of an issue if it is based on mortgages whose borrowers have imperfect credit and make down payments of less than 20%.
The rule includes a key exemption from those standards: Lenders could avoid keeping a share in more challenging conventional and FHA home loans if they get them insured by federal agencies or sell them to Fannie Mae and Freddie Mac, the government-sponsored enterprises now under U.S. conservatorship. The GSEs and the Federal Housing Administration own or insure more than 96% of mortgages now being originated. Making their home loans exempt from the rule would maintain the government as the main holder of mortgage-market risk, said Karen Shaw Petrou, managing partner of Federal Financial Analytics in Washington. “If finalized as proposed, which we doubt, the regulation would memorialize U.S. home financing in the hands of FHA, Fannie Mae and Freddie Mac” Petrou said.
If the housing market recovers and private capital becomes available for mortgages, the rule’s biggest beneficiaries could be the largest lenders, including Wells Fargo Home Mortgage and JPMorgan Chase Mortgage Large institutions can more easily afford to hold loans on their books. Community banks, which generally need to sell their home loans in order to keep originating new mortgages, would find it harder to meet the new standard if they couldn’t get government backing for riskier loans. The risk-retention rule is mandated by the Dodd-Frank mortgage reform and is designed to prevent the shoddy underwriting practices that fueled the housing bubble. During the debate on the Dodd-Frank bill last year, some housing interest groups applauded the amendment allowing exceptions for qualified residential mortgages, or QRMs, assuming that regulators would carve out many if not most home loans.
“We’re very glad to see that the regulators are proposing to exempt loans sold to Fannie and Freddie,” said Ann M. Grochala, vice president of lending and accounting policy at the Independent Community Bankers of America. “In that regard, it should have a minimal impact on community banks.” Jerry Howard, president of the Washington-based National Association of Homebuilders, questioned whether Fannie Mae and Freddie Mac would have the capacity to finance any more mortgages. FHA loan limits are set to be reduced in October and the administration and congressional Republicans are seeking to cut the companies’ portfolios, meaning they won’t be able to hold as much debt. “The ability of the GSEs to continue to do their jobs is going to be greatly impeded,” he said. Many mortgages now being originated don’t meet the 20% down-payment standard. According to Corelogic Inc, over a fifth of the nearly 464,000 home mortgages issued in 2010 had down payments of less than 15%. Read the complete Bloomberg article online > Dodd-Frank Mortgage Risk-Retention Rule May Reinforce Role of Fannie Mae
