According to the latest survey released by the Mortgage Bankers Association, mortgage applications are up 12.8% from last week. In the whole world, home prices did not show any signs of change in the third quarter. TransUnion forecasted mortgage delinquencies would decrease almost 7% by 2012.
“Global home prices idled in the third quarter, staying at the same level from the second quarter, according to the Knight Frank Global House Price Index.”
“Mortgage applications increased 12.8 percent from one week earlier (which included the Thanksgiving holiday), according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending December 2, 2011.”
“It has been a volatile week with the stock market rising rapidly on Wednesday after renewed hope for the world economy surfaced. It was reported that major central banks came together to add liquidity to the global financial system in an effort to help the Euro zone crisis. On the other hand, mixed economic reports continue to draw concern which helped keep low mortgage rates stable.”
“Insurance companies are offering the best terms on senior commercial real estate loans as banks halt or scale back lending, a study by real-estate adviser CBRE Group Inc. (CBG) showed.”
“As $17.5 billion in securitized loans backed by U.S. hotels come due in the next two years, lenders are doing more to avoid foreclosure on lodging properties than on any other type of commercial real estate.”
“Prepayment speeds on Fannie Mae and Freddie Mac mortgage-backed securities remained flat in October when compared to November, a new report from KBW analysts said Wednesday.”
“The current year will close with a 7 percent yearly decline in mortgage delinquencies, matching last year’s decline, according to predictions released Wednesday by TransUnion.”
Looking Back:
UCLA economists expected unemployment to remain above 10% until the end of 2012. TransUnion predicted the national mortgage delinquency rate could fall below 5% in 2011. A survey from RealtyTrac showed 60% of Americans believed housing woulod not recover for another 2 years. According to HOPE NOW, 1.54 million permanent mortgage modifications were completed in the first 3 quarters of 2010.
In this week’s video, Aaron Norris gives the news of the week in the world of real estate and other big events. According to the Los Angeles Times, the unemployment rate in California dropped to almost 12% in October. Lawmakers are pushing to increase the size of loans issued by FHA. Housing Wire reported a slight decrease in mortgage delinquencies in the month of October.
“President Obama signed into law a government spending bill Friday morning effectively reinstalling higher conforming loan limits for the Federal Housing Administration through the end of 2013.“
“Freddie Mac (OTC: FMCC) released the results of its Primary Mortgage Market Survey® (PMMS®), showing average fixed mortgage rates changing little and remaining at or near 4.00 percent for the past three weeks amid positive economic and consumer confidence data.”
“The National Association of Home Builders (NAHB) today applauded Congress for reinstating for another two years the higher conforming loan limits for the Federal Housing Administration (FHA), noting that this is an important step to help mend the struggling housing market.”
“One index of U.S. homebuying shows sales activity and pricing at five-month lows. The national homebuying index from DataQuick and its analysts at DQNews attempts to give a weekly snapshot into most-recent trends, using “not modeled” home sales counts and median selling prices. This math — we’ve dubbed it the “DQ98″ — tracks on a weekly basis the freshest homebuying patterns in 98 out of the 100 largest U.S. markets (sorry, Louisville and Wichita!) to compile a national benchmark.”
“Mortgage delinquencies declined slightly to 7.93% in October from the previous month, according to the Lender Processing Services (LPS: 17.88 +0.11%) first look at the monthly statistics in its loan-level database of nearly 40 million mortgages.”
“California’s unemployment rate fell by two-tenths of a percentage point to 11.7% in October as the state created 25,700 new jobs, the Employment Development Department reported. The agency also reported Friday that it had revised job growth in September upward, to 39,200, from about 12,000.”
“A fair housing case headed to the Supreme Court could have direct and indirect impacts on mortgage lending and regulatory enforcement.”
Looking Back:
Delinquencies on residential properties dropped 9.13% in the third quarter of 2010, according to the MBA. MDA DataQuick’s monthly statistics released showed that 6,122 new and resale houses and condos closed escrow in the Bay Area. The CBIA reported California housing affordability increased 1.7% in the 3rd quarter of 2010. Jobless claims increased by 2,000, said the Labor Department.
CNN Money reported that existing home sales increased 7.7%. Mortgage rates are still at their lowest, but not showed any signs of change. Mortgage delinquencies increase .08% in August from July, although market conditions are expected to improve according to CreditForecast.com’s latest report.
“Faced with a lethargic economy and a jobless rate hovering at 9 percent, the nation’s central bank reached deep into its bag of tricks on Wednesday and pulled out a move to spur growth that it hadn’t used in 50 years. The move, dubbed “Operation Twist” when it was first used in 1961, is intended to push long-term interest rates lower, which the Fed hopes will spur lending, induce businesses to expand and tempt consumers into spending more.”
“Mortgage delinquencies rose to 6.62 percent in August, according to a report from CreditForecast.com, supported by Moody’s Analytics and Equifax. This is up from 6.54 percent in July.”
“Bank of America Corp. (BAC) and Wells Fargo & Co. (WFC) had long-term credit ratings downgraded by Moody’s Investors Service, which said U.S. support is less likely in an emergency. Citigroup Inc. (C)’s short-term rating also was cut.”
“The Federal Open Market Committee left interest rates unchanged Wednesday and said it would buy $400 billion of Treasury bonds in an effort to lower long-term borrowing costs. The bond buying program begins Oct. 3.”
“Mortgage rates this week continued to be stable at record lows which is the result of the slow economic recovery that has become somewhat worrisome to investors. On the bright side, this give consumers more time to get in and take advantage of low mortgage rates and low home prices, a double opportunity that does not happen often.”
“California homeowners are pocketing the more cash after a home sale this year, with sellers keeping the largest amount after a deal in three years, a Realtor survey of California real estate agents shows.”
“Home buyers are starting to creep back into the housing market, lured by rock-bottom prices. Sales of existing homes rose 7.7% last month to an annual rate of 5.03 million homes, from 4.67 million homes in July, according to the National Association of Realtors.”
“The architecture billings index, an economic indicator of construction activity, turned positive in August, according to the American Institute of Architects.”
“Home prices are expected to grow at an average rate of 1.1 percent through 2015, according to a survey released Wednesday by New Jersey-based MacroMarkets LLC.”
“California home sales are expected to remain essentially flat this year and rise slightly in 2012, according to a housing market forecast from the California Association of Realtors.”
Looking Back:
One year ago, loan originations increased 25% from 2008, according to the Federal Financial Institutions Examination Council. The Commerce Department reported new home and apartment construction rose 10.5% in August 2010 to a seasonally adjusted annual rate of 598,000. Zillow claimed interest rates fell again to 4.25%.
Rismedia reported the rate for 15-year fixed loans is now at 3.54%, lowest it has been in 20 years. HOPE NOW recently released data showing both mortgage delinquencies and foreclosure sales decreased this year. Bloomberg also reported a decrease in home prices in 75% of metropolitan areas in the U.S. Median prices also decreased for single-family existing homes, according to Inman.
“The Obama administration will begin working on new strategies for how to better sell previously foreclosed homes held by Fannie Mae, Freddie Mac and the Federal Housing Administration, which may include renting more REO.”
“The average rate for a 15-year fixed loan dropped to 3.54 percent last week from 3.66 percent the week before, according to Freddie Mac—the lowest result since 1991.”
“Mortgage delinquencies declined 27 percent in the first half of 2011 compared to the first half of 2010, according to data from HOPE NOW. For the first half of 2011, the number of 60 day plus delinquencies was 2.7 million, down 1 million from the first half of 2010.”
“Home values fell in almost three- fourths of U.S. cities in the second quarter as foreclosures that sell at cut-rate prices devalued real estate. The median price of a single-family home declined in 109 metropolitan areas out of 150 measured, the National Association of Realtors said in a report today.”
“Things have been quite active this past week with the debt ceiling crisis coming to an end last Tuesday when an agreement was finally reached at the last minute. By the end of the week, Standard and Poor’s went ahead and downgraded the U.S. credit rating. Although the stock market is dropping, low mortgage rates have survived both the debt crisis and U.S. downgrade.”
“Mortgage applications increased 21.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending August 5, 2011. The Market Composite Index, a measure of mortgage loan application volume, increased 21.7 percent on a seasonally adjusted basis from one week earlier.”
“Median sales prices for existing single-family homes fell in the second quarter in the vast majority of metropolitan areas covered by the National Association of Realtors in its latest quarterly report.”
“Bank of America (BAC: 6.77 -10.92%) has been forced to mark down billions of dollars worth of the troublesome Countrywide Financial Corp. mortgage portfolio since acquiring it in early 2008.”
“The continuing global stock market panic is the gift that keeps on giving to the U.S. Treasury. Despite the U.S. credit-rating downgrade by Standard & Poor’s last week, the Treasury on Wednesday saw huge demand when it sold $24 billion in new 10-year notes.”
“In an unusual step, the Federal Reserve vowed Tuesday to keep interest rates low for at least the next two years. The Fed said it’ll keep its key benchmark interest rate near zero through mid-2013. The Fed’s commitment was welcome news to many in the real estate industry who see it as a positive move for the housing industry, allowing buyers more time to take advantage of ultra low mortgage rates.”
Looking Back:
The new FHA short refinancing program provided additional refinancing options to underwater homeowners starting Sept. 7, 2010. According to Integrated Asset Services, nationwide home prices increased 1.1% in the second quarter of 2010. Zillow reported California’s then current rate on 30-year mortgages was 4.34%. CoreLogic estimated that short sales in Arizona, California, Florida and Texas would cost lenders $310m in unnecessary losses in 2010.
The prices of homes increased in April for the first time in eight months. However, for the whole year prices actually decreased 4% in 20 cities from April 2010 to April 2011. DS News reported that reports of mortgage fraud increased 31% in the first quarter. The passage of Senate Bill 510 is being pushed, which would increase the amount of legal work required for appointing a branch manager for a large real estate company.
“U.S. home prices rose in April from a month earlier, the first increase in eight months, though much of the improvement reflected the start of the spring-summer home buying season, according to the S&P Case-Shiller home-price indexes.”
“One in 10 residential mortgages in New York City is seriously delinquent – meaning over 90 days delinquent or in foreclosure – according to an analysis of the regional housing market released this week by the Federal Reserve Bank of New York.”
“A drop in some mortgage loan limits for the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac and the Federal Housing Administration scheduled to occur on Oct. 1 will reduce housing demand and place downward pressure on home prices in major housing markets, according to a new study from the Economics and Housing Policy Group at the National Association of Home Builders (NAHB).”
“A total of 25,485 suspicious activity reports (SARs) involving alleged mortgage fraud were submitted to the Financial Crimes Enforcement Network (FinCEN) during the first quarter of this year.”
“There is currently a bill working its way through the California legislature that, if passed, will significantly increase the legal liability of individuals who are branch office managers for large real estate companies.”
“QE2 is just about done. But the Federal Reserve will still be buying massive amounts of long-term Treasuries. In fact, the Fed’s purchases over the next year will likely be at least $300 billion. That’s half the size of QE2 — even if QE3 never takes place.”
“The U.S. Department of Housing and Urban Development recently released a study that finds the nation’s 1.2 million public housing units need an estimated $25.6 billion for large scale repairs.”
“Fannie Mae will retroactively charge mortgage servicers for failing to process severely aged loans, according to state timelines.”
Looking Back:
Statistics from the Federal Reserve showed the median borrower who ‘strategically’ defaulted didn’t walk away from the mortgage until the amount owed exceeded the value of the home by 62%. McGraw-Hill Construction reported new construction starts increased 3% in April 2010. According to CoreLogic, more than 11 million borrowers owed more on their mortgage than it was worth. Experian statistics showed that 19 percent of all defaults in 2009 were strategic.
Energy efficiency loans hit the skids as many banks see the risk outweighing the rewards. A White House-created commission look at possibly increasing the age for retirement benefits with the backing of AARP. California rates as one of the country’s hottest real estate markets for price increases while a PMI Mortgage Insurance Co. report lists 7 California areas (both northern and southern) that will most likely witness price declines in the next two years.
“The percentage of households that could afford to buy an entry-level home in California stood at 64 percent in the second quarter of 2010, compared with 67 percent for the same period a year ago, according to a report released today by the CALIFORNIA ASSOCIATION OF REALTORS® (C.A.R.).”
“Funds dry up, and many projects are left in limbo, after regulators and lenders raise alarms over terms of the Property Assessed Clean Energy program.” This is better known as PACE in most green circles.
“A White House-created commission is considering proposals to raise the retirement age and make other changes to shore up the finances of Social Security, prompting key players to prepare for a major battle over the program’s future. The commission is looking into ways to address the country’s long-term fiscal problems, but even before it settles on proposals many liberals are vowing to block cuts in retirement benefits. Some key players appear open to a deal, however, including the White House and the powerful senior group AARP.”
“In the first part of 2010, the Florida Office of Financial Regulation (OFR) passed a mandate that mortgage processors and underwriters must become licensed as loan originators. According to an email sent today from the Mortgage Bankers Association (MBA), the trade group successfully convinced the OFR to reverse this requirement.”
“On average, districts represented by Democrats have an average serious delinquency rate of 9.9%, while the Republicans, which represent 77 fewer districts, have an average rate of 8.7%.”
“The risk of price declines in the next two years declined during the first quarter in 75 percent of 384 markets tracked by PMI Mortgage Insurance Co., including 40 of the 50 nation’s most populous metro areas.” 7 of of 10 for California isn’t that bad. Right?
“The government should create an apartment real estate investment trust (REIT) to rent out foreclosed properties — a method that would avoid flooding the housing market with foreclosed properties, a real estate consultant said as President Obama’s “Future of Housing Finance Conference” kicked off Tuesday.”
“In assuming an “extremely adverse scenario,” it is conceivable that Bank of America, Wells Fargo, JPMorgan Chase and Citi could be on the hook for as much as $180 billion in loan repurchase requests from Fannie Mae and Freddie Mac, Fitch Ratings says.”
“The study distinguishes debt across the following types of accounts: mortgage accounts (including home equity installment loans (HEL)), home equity revolving accounts (HELOCs), auto loans, credit cards, student loans, and other loan accounts including consumer finance, retail stores and gas station accounts. As of June 30, American consumers owed $11.7 trillion, down 1.5 percent from the previous quarter and 6.5 percent below the peak level for consumer debt ($12.5 trillion) at the end of the third quarter of 2008. This downward trend has now continued for seven quarters.”
HAMP’s permanent loan modifications increased 5.9% by the Bank of America, while the number of applications for mortgages increased 13%. On the same note, according to the Mortgage Bankers Association the number fo refinancings for mortgages increased 17.1% in the previous week, while the amount of people filing for bankruptcy increased 20%. Fannie Mae and Freddie Mac began searching for any bad loans or dishonest loan applications, while in other news Barney Frank believes Fannie Mae and Freddie Mac should no longer be allowed to operate. However, there are no current plans for this to happen as the White House is trying to fix the problems. Also, as the demand on homes decreases, the merging and aquisition of homebuilders may rise. On a similar note, Veri-tax is now owned by Blue Horizon Capital. Finally, the Fed’s have come up with a plan to prepare for an increasing decline in the economy by using money made from securities to buy Treasuries.
“Bank of America (BAC: 13.4305 +1.67%) pushed its total number of permanent mortgage workouts under the Home Affordable Modification Program (HAMP) to 76,300 in July, a 5.9% increase from June.”
“The number of mortgage applications in the U.S. increased last week, propelled by a surge in refinancing as borrowing costs hovered near record lows. The Mortgage Bankers Association’s index rose 13 percent in the week ended Aug. 13, the Washington-based group said today. Refinancing jumped 17 percent to reach the highest level since May 2009, while purchases fell 3.4 percent.”
“Transaction prices of commercial properties sold by major institutional investors surged over 17 percent in the second quarter of 2010, according to an index developed and published by the Center for Real Estate at the Massachusetts Institute of Technology (MIT).”
“Fannie Mae and Freddie Mac should be abolished but this has to be done over a period of time, Rep. Barney Frank, chairman of the House Financial Services committee, told CNBC on Tuesday. Frank agreed that phasing out the housing behemoths would help bolster private mortgage financing, but stressed that the process would take time.”
“Homebuilder takeovers may increase as tumbling demand for new houses and a faltering U.S. economic recovery spur companies to consolidate to gain market share, according to Citigroup Inc.”
“For on-the-go home buyers, The Real Estate Book / RealEstateBook.com, the leading publisher of real estate information online and in print in North America, launches a new application that provides iPhone, iPod Touch and iPad users with access to all its listings – millions of homes for sale across the U.S. and around the world.”
“Blue Horizon Capital, a private investment firm based in Los Angeles, California, acquired Tustin, California-headquartered Veri-tax LLC late last month. A provider of tax verification and fraud management solutions for the mortgage lending and consumer credit industry, Veri-tax clients include two of the nation’s top four banks, as well as a slew of other lenders, originators, and financial institutions.”
“While mortgage delinquencies are easing, banks are facing a new round of losses from loans made just before the financial crisis, and the fight to keep them off their balance sheets is intensifying. Leading the charge to make originators repurchase their loans are Fannie Mae and Freddie Mac, the two government-owned finance agencies that guaranteed the mortgages. The firms are sorting through delinquent loans for signs of any violations of the representations and warranties, known as “reps and warranties.” In essence, they are looking for lies made by borrowers or lenders in loan applications.”
“Will Fannie Mae and Freddie Mac still be here in three years? Or will they be replaced by a new federal mortgage agency? Will the government begin a grand exodus from the housing market and leave the American Dream to the private sector?”
“Lenders seized fewer homes in July for a third straight month, repossessing nearly 10% fewer homes than in June. Meanwhile, default notices filed against homeowners who have missed three or more house payments increased 9% last month from June’s levels.”
“Real estate data provider Altos Research says its newest housing market report confirms what the company has been saying for some time: the mini “boom” of this spring was created by seasonal demand, with some extra help from the federal homebuyer tax credits.”
“The Deloitte Consumer Spending Index, which tracks consumer cash flow to predict future spending, declined for the third straight month in July due to weaknesses in the post-tax credit housing market.”
“The national mortgage loan delinquency rate – measuring the ratio of borrowers 60 or more days behind on their home loan payments – fell again in the second quarter of 2010, suggesting the credit conditions in the housing sector have begun to stabilize, according to TransUnion.”
“Realogy Corporation, a global provider of real estate and relocation services, announced that its chief executive officer Richard A. Smith traveled to Washington, D.C., today to participate in the Conference on the Future of Housing Finance. The invitation-only event is being hosted by Secretary of the Treasury Timothy Geithner and Secretary of Housing and Urban Development (HUD) Shaun Donovan.”
“The Fed’s move to begin buying long-term Treasuries with proceeds from maturing mortgage-backed securities opens up the possibility of quantitative easing if the economy declines further, according to Deutsche Bank.”
“The US does not intend to wind down completely Fannie Mae and Freddie Mac, the large government-sponsored mortgage companies that are eating up billions of taxpayer dollars, given the fragile state of the housing market.”