Today’s News Synopsis:
The MBA’s weekly survey shows mortgage applications increased 2.7% this week. SB1275, the foreclosure/modification bill, was rejected by congress in a 36-30 vote. Fannie Mae’s new rule regarding appraisal cutting takes effect today. Construction spending decreased 1 percent in July, according to the Commerce Department.
In The News:
Mortgage Bankers Association – “Mortgage Applications Increase as Rates Hit New Low in MBA Weekly Survey” (9-1-10)
“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending August 27, 2010. The Market Composite Index, a measure of mortgage loan application volume, increased 2.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 2.3 percent compared with the previous week.”
Reuters - “Loan picture improves but troubles remain: FDIC” (9-1-10)
“The Federal Deposit Insurance Corp revealed some encouraging figures about the bank industry, saying the sector earned $21.6 billion during the quarter largely due to banks putting away less money to cover expected loan losses. During the first quarter, the industry earned $17.8 billion.”
San Francisco Chronicle – “Assembly rejects foreclosure/modification bill” (9-1-10)
“SB1275, which was rejected 36-30 late Monday, would have required lenders to provide homeowners with a fully considered loan modification decision prior to foreclosing. Unlike federal initiatives, it would have given homeowners the right to sue the lender if that process did not occur.”
Housing Wire – “Fannie’s appraisal cutting ban takes effect” (9-1-10)
“Fannie Mae’s new policy to reduce appraisal cutting takes effect today. If a lender is trying to sell the GSE a loan, they are now prohibited from changing the market value of a home on the request form. Fannie Mae said Tuesday if a loan servicer does not properly handle a troubled mortgage loan in a timely manner, it will demand compensation from the servicer for the mortgage.”
Housing Wire – “Fed buys $900 million of Treasury debt” (9-1-10)
“Dealers offered to sell the Fed $25.79 billion in debt. The three slices of debt purchased by the Fed include $131 million maturing Nov. 15, 2012; $345 million maturing Dec. 15, 2012; and $424 million maturing Jan. 31, 2013. At its meeting from earlier this month, the Federal Open Markets Committee directed the New York Fed to maintain the total face value of domestic securities held in the system open market account at about $2 trillion.”
Housing Wire – “DebtX July CRE loan value up to 79.4%” (9-1-10)
“The value of commercial loans priced by The Debt Exchange in July that collateralize commercial mortgage-backed securities rose to 79.4% of the original balance. DebtX said the value is up from 77.4% in June, marking the fourth-straight month of increases, and is higher than the 71.1% for the year-ago July. The values are based on loans priced by DebtX. In July, the company priced 57,801 CRE loans with an aggregate principle balance of $679.5 billion that collateralize 623 CMBS trusts.”
Bloomberg - “Construction Spending in U.S. Declined Twice as Much as Forecast in July” (9-1-10)
“The 1 percent drop brought spending to $805.2 billion, the lowest level in a decade, after a revised 0.8 percent drop in June that wiped out a previously estimated gain, Commerce Department figures showed today in Washington. Spending on federal government projects fell by the most in a year.”
Bloomberg - “Real Estate Premium Near Record to U.S. Bonds Signals Time to Buy Property” (9-1-10)
“Capitalization rates, a measure of real estate yields, averaged 7.22 percent in the second quarter, based on an index calculated by the National Council of Real Estate Investment Fiduciaries. That was 429 basis points, or 4.29 percentage points, higher than the yield on 10-year government bonds as of June 30, according to data compiled by Bloomberg. It’s about 475 basis points higher than Treasury yields as of yesterday.”
Looking Back:
One year ago, the NAR reported that pending home sales increased 3.2 percent in one month. The average price of homes bought with mortgages funded by Freddie Mac increased 1.7% during the 2nd quarter of 2009. A wildfire north of Los Angeles threatened more than 12,000 homes and forced the evacuation of more than 4,300 people.