Today’s News Synopsis:
Mortgage application volume increased 11.3% from last week, according to the MBA. Fannie Mae and Freddie Mac are raising risk fees they charge lenders on loans they buy for resale to investors. HOPE NOW reports 1.76 million homeowners received a mortgage modification in 2010. Statistics from DBRS show 50 percent of loan modifications result in re-default.
In The News:
Mortgage Bankers Association – “Mortgage Applications Increase in Latest MBA Weekly Survey” (2-2-11)
“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending January 28, 2011. The Market Composite Index, a measure of mortgage loan application volume, increased 11.3 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 13.2 percent compared with the previous week.”
USA Today – “Costs for home mortgages rise as Fannie, Freddie hike fees” (2-2-11)
“For the first time since 2009, Fannie Mae and Freddie Mac are raising risk fees they charge lenders on loans they buy for resale to investors. The mortgage giants are also adding risk fees to more loans extended to people with stellar credit. To avoid a fee or to get a discount, most borrowers will need FICO scores of 740 or better and down payments of 25% or more. Lenders could absorb the cost, but most are expected to add it to loan costs within days, if they haven’t already, says Cameron Findlay, LendingTree economist.”
Los Angeles Times – “Agency warns banks of foreclosure protection for military personnel” (2-2-11)
“The new Consumer Financial Protection Bureau warned banks not to violate laws that protect active-duty military personnel from home foreclosures and high interest rates.”
Housing Wire – “Dow Jones closes above 12,000 for first time since 2008″ (2-1-11)
“The Dow Jones Industrial Average closed up 148.23 points at 12,040.16, the first time it ended a trading above 12,000 since just before the financial crisis in June 2008.”
Housing Wire – “Mortgage modifications increase 42% in 2010: Hope Now” (2-2-11)
“Roughly 1.76 million homeowners received a modification on their mortgage in 2010, a 42% increase from the year before, according to the Hope Now alliance of servicers, investors, insurers and nonprofit counselors.”
Housing Wire – “Private sector added 187,000 jobs in January” (2-2-11)
“The private sector added 187,000 jobs in January, led mostly by gains in small business, especially in the service industry, according to the ADP National Employment Report.”
Housing Wire – “DBRS finds half of mortgage modifications redefault” (2-2-11)
“When a mortgage servicer modifies the loan of a distressed homeowner, chances are 50-50 that they’ll redefault, according to a 2010 review of the sector from credit rating agency DBRS.”
Housing Wire – “CMBS takes a beating as delinquencies reach record high” (2-2-11)
“Commercial mortgage-backed securities delinquencies hit a record high, as the cumulative total jumped 20 basis points. According to a securitization report by Barclays Capital, 9.1% of all CMBS loans were 60 days or more delinquent as of Jan. 31.”
Orange County Register – “Dana Point homes take half a year to sell” (2-2-11)
“The newest ‘market time’ of Dana Point – Thomas’ math that tracks theoretical time it would take to sell all listed homes at the pace of new escrows opened — is 6.46 months. That is +11% (or roughly 19 days) in a year.”
Looking Back:
One year ago, the NAR’s index showed that pending home sales increased by 1 percent in December. Commercial and multifamily mortgage loan originations increased by 15 percent during the 4th quarter of 2009. The FHA reported that borrower delinquencies increased by 6.5 percent from the previous year. Fannie Mae was offering a 3.5 percent discount to all people who buy REO properties.
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