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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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06 Jan 09 IndyMac Sold to Private Equity Investors

According to a Kelly Curran article, the Federal Deposit Insurance Corporation’s Board of Directors approved Friday the sale of Pasadena-based IndyMac Federal Bank, FSB, to a thrift holding company controlled by IMB Management Holdings LP for a price tag of $13.9 billion.  IMB HoldCo is owned by a consortium of private equity investors led by Steven Mnuchin, former Goldman Sachs partner and current co-CEO of Dune Capital Management LP.  The complete sale of the bank includes 33 branches, a reverse home mortgage unit and a $176 billion loan-servicing portfolio. The FDIC agreed to share losses on a portfolio of qualifying loans with New IndyMac assuming the first 20 % of losses.

From there, the FDIC will split losses 80/20 for the next 10 % of losses and 95/5 thereafter.  “The current economic climate is challenging for selling assets, but this agreement achieves the goals that were set out by the Chairman and Board when the FDIC was named conservator of IndyMac in July,” said FDIC Deputy Director James Wigand, the lead negotiator for the transaction.  Sign up for the latest Mortgage News>.

The deal with IMB HoldCo was expected to be announced prior to the first of the year. But the deal apparently hit a snag Tuesday, as sources close to the sale negotiations revealed to HW that Fannie Mae (FNM: 0.82 +12.33%) was holding the deal hostage and threatening to jeopardize the potential sale. After IndyMac was seized by regulators this summer, Fannie quickly — and quietly — handed the bank a bill for $1 billion, one source said under the condition of anonymity, claiming the failed thrift had violated representations and warranties on various loans sold to the GSE. See full story.

InyMac also agreed to continue the FDIC’s existing loan modification program which has been recently championed by FDIC chairman Sheila Bair as golden template for the industry, which has modified 8,512 home mortgages to date, according to Friday’s press release.  “The continuation of the loan modification program will be a condition for the FDIC to provide any type of loss-sharing on IndyMac’s assets,” the FDIC stated.  Read the complete article online >


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15 Dec 08 Obama Announces Shaun Donovan to be HUD Secretary

President-elect Barack Obama has named a former commercial mortgage executive as his choice to head the U.S. Department of Housing and Urban Development. This will be the second term at HUD for the nominee.


In a weekly radio address Saturday, Obama announced his nomination of Shaun Donovan as HUD secretary, according to a transcript of his prepared statement. Donovan currently serves as commissioner of New York City’s Department of Housing Preservation and Development.  The HUD nomination is a more important nomination than most years, because the HUD secretary is sure to play a key role in cleaning of the mortgage industry in hopes of ending the foreclosure crisis.  Get the latest mortgage news online.



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03 Dec 08 Paulson Announces Mortgage Loan Programs with More Credit

HENRY PAULSON, TREASURY SECRETARY: Today the Treasury and the Federal Reserve are announcing a facility to finance issuance of non-mortgage asset-backed paper in order to support lending to consumers and small businesses which is vital to our economy. The consumer asset-backed securities market is a source of liquidity to financial institutions that provide federally guaranteed small business loans and consumer lending such as home mortgages, auto loans, student loans and credit cards.

Issuance of ABS in these areas reached $240 billion in 2007, but credit market stresses led to a steep decline in the third quarter of 2008, and the market essentially came to a halt in October. As a result, millions of Americans cannot find affordable financing for their basic credit needs. Credit card rates are rising, making it more expensive for families to finance everyday purchases. This lack of affordable consumer credit undermines consumer spending and as a result weakens our economy.  Mortgage rates remain low, but the need for more obtainable credit has become more evident.  FHA loan programs continue to offer new opportunities for existing homeowners to refinance and new home-buyers to finance homes.

To address this need and support the return of consumer lending, the Treasury will provided 20 billion of credit protection to the Federal Reserve in connection with its $200 billion term asset-backed securities loan facility. By providing liquidity to issuers of consumer asset-backed paper, the Federal Reserve facility will enable a broad range of institutions to step up their lending, enabling borrowers to have access to lower cost consumer finance and small business loans. The facility may be expanded overtime and eligible asset classes may be expanded later to include other assets such as commercial mortgage-backed securities, non-agency residential mortgage-backed securities or other asset classes.

Throughout this financial market turmoil, our focus has been to stabilize the system and to support the lending that is vital to our economy. Toward that end, we’ve taken steps to strengthen the capital position of our financial institutions, to stabilize the system and to enable them to increase lending to American consumers and businesses. Similarly we’ve acted to stabilize the GSEs and to purchase GSE mortgage-backed securities in order to increase the availability of affordable mortgage loans throughout our nation. Today’s initiative to support small business and consumer finance market is similarly aimed at increasing the availability of affordable lending.

Today’s announcement by the Fed that it will purchase direct mortgage loan obligations of Fannie Mae, Freddie Mac and the Federal Home Loan Banks and also mortgage-backed securities guaranteed by Fannie, Freddie and Ginnie Mae underscores our support for the housing market. Nothing is more important to getting through this real estate and housing markets corrected than the availability of affordable mortgage loans. It will take time to work through the difficulties in our market and our economy and new challenges will continue to arise.

I and my regulatory colleagues are committed to using all the tools at our disposal to preserve the strength of our financial institutions and stabilize our financial markets to minimize the spill-over into the rest of the economy. Now I’d be happy to take your questions.  Get the Latest mortgage news.  


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