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12 Aug 09 Mortgage Loan Application Activity Slowing

According to the Mortgage Bankers Association home loan rates hopped last week and the response was less mortgage applications. The volume of mortgage loan applications declined 3.5% compared with the previous week.  Home loan applications filed were still up an unadjusted 16.1% for the week ended Aug. 7 from the same week in 2008, according to the MBA’s weekly survey. The survey covers about half of all U.S. retail residential mortgage applications.   FHA mortgage applications filed last week to purchase homes rose 1.1% from the week before. Volumes for conventional, VA and FHA loan applications were all lower than expected.

Mortgage refinancing applications to refinance existing mortgages decreased 7.2%, on a week-to-week basis, reversing the 7.2% increase during the week ended July 31, according to the Washington-based MBA. The four-week moving average for all mortgages was down 0.7%. Home refinancing applications made up 52.3% of all applications last week, down from 54.2% the previous week. ARM mortgage loans accounted for 5.8%, up from 5.4%.

According to the MBA survey, thirty-year fixed-rate mortgage loans carried an average interest rate last week of 5.38%, up from 5.17% the week before. As for 15-year fixed-rate mortgages, the average rose to 4.71% last week, up from 4.60% the week before. And 1-year ARMs averaged 6.71% last week, up from 6.67% the week before.

To obtain mortgage interest rates this low, borrowers are charged of an average 1.125 points when locking a thirty-year fixed-rate home loan.  Loan officers typically refer to these lending costs as “points.” A point is 1% of the entire mortgage amount and it is considered prepaid interest for disclosure purposes.  Sign up and have the latest mortgage news emailed to you with mortgage rate alerts and special lending offers when they arise.

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30 Jun 09 Top Court Allows NY State Home Lending Probe

A recent Reuters’ article revealed a divided U.S. Supreme Court ruled on Monday that the New York attorney general’s office can investigate whether national banks and mortgage lenders discriminated against minorities seeking mortgage loans.  The justices overturned part of a ruling by a U.S. appeals court that blocked state Attorney General Andrew Cuomo from investigating or enforcing the fair lending laws against national banks because they are subject instead to what has been viewed as less stringent federal regulation.

In a 5-4 ruling, Justice Antonin Scalia, one of the Court’s more conservative members, joined the four most liberal justices in allowing Cuomo to bring lawsuits, though he could not at the same time issue subpoenas. The ruling struck down a regulation by the Office of the Comptroller of the Currency that essentially preempted states from enforcing their own fair lending laws, even when federal law appeared inadequate to protect consumers.  Scalia said it would be “bizarre” for states to be blocked from enforcing valid, non-preempted laws against national banks, such that “the bark remains, but the bite does not.”  Cuomo, in a statement, called the ruling “a huge win for consumers across the nation,” saying it reaffirms the role of state attorneys general “in protecting consumers from illegal and improper home loan practices by our country’s biggest and most powerful banks.”

The Clearing House Association LLC, a group of big banks supporting the OCC rule, was “disappointed that the principle of uniformity in national bank enforcement has been breached,” according to a spokesman.  Comptroller of the Currency John Dugan said he was disappointed but his agency would work with the states to ensure fair access to financial services and consumer protections. “  Everyone benefits from clarification of the law,” Dugan said in a statement.

Cuomo was trying to revive a probe begun in 2005 by his predecessor, Eliot Spitzer, into possible racial discrimination in FHA mortgage lending.  Spitzer sent letters of inquiry to mortgage providers including Citigroup Inc, HSBC Holdings Plc, JPMorgan Chase & Co and Wells Fargo & Co in response to data he said appeared to show a significantly higher percentage of high-interest home mortgage loans issued to black and Hispanic borrowers than to white borrowers.  Two lower federal courts ruled against Cuomo, whose appeal won support from the other 49 states and Washington, D.C. Cuomo contended that the economic crisis, due in large part to reckless subprime mortgage lending, has shown the need for more regulatory oversight and consumer protection.

Spitzer told Reuters by telephone that his office was driven to pursue the case because of concerns about disparate lending practices and concerns that subprime debt was becoming pervasive. “Obviously, it’s a little late to forestall the cataclysm that emerged when the subprime debt fuse finally exploded,” Spitzer said.  “As we look forward, this is a good thing for states to be able to ask the questions and get the information from nationally chartered banks as well as state chartered banks.” 

The ruling is a “serious loss for the banking industry,” and also gives attorneys general a “bully pulpit.” said James Cox, a securities law professor at Duke University. “Even without subpoena power they can still hold press conferences and take steps to swing public opinion.”  Groups representing real estate agents, state bank officials, and consumer and civil rights organizations supported Cuomo’s appeal.

Monday’s ruling “is a victory for taxpayers, who have suffered enormously as a result of abusive business practices in all types of mortgage lending,” said Michael Calhoun, president of the Center for Responsible Lending.  The Supreme Court last addressed a similar issue in 2007, when it ruled that states cannot regulate the mortgage-lending subsidiaries of banks regulated by the Comptroller’s office, which is part of the U.S. Treasury Department. The case is Cuomo v. Clearing House Association LLC, No. 08-453.  (Additional reporting by Elinor Comlay, Jonathan Stempel and Joseph Giannone in New York and Karey Wutkowski in Washington, D.C.; Editing by Gerald E. McCormick and Tim Dobbyn)  Read the original James Vicini article >

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30 Oct 08 Home Loan Applications Rise as Fed Cut Rates

As the Federal Reserve made another cut in its federal fund rate on Wednesday, the Mortgage Bankers Association reports that pent-up demand and already lowered rates led to a surge in mortgage applications of 17% last week.  FHA home loan activity rose, conventional mortgage activity jumped and home refinancing led the surge.

The Fed’s rate, what banks charge each other on overnight lending, now stands at 1% following a half-point cut made in concert with other countries several weeks ago.  According to mortgage executive Bryan Dornan, “Lowering the mortgage rates was the right thing for homeowners and it could to see the Federal Reserve is doing what it can to help give banks an incentive to lend money.”

Mortgage rates for a thirty-year, fixed-rate home loans dropped to 6.06% from 6.46% two weeks ago, according to mortgage giant Freddie Mac. The MBA reported that home refinance loans accounted for 46.9% of all applications last week, up from 42.6% the week before.

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