Vanguard weekly update

The longest recession since the Great Depression is likely over based on the first rise in real gross domestic product (GDP) in more than a year. According to the Conference Board's index of consumer confidence, however, U.S. consumers aren't necessarily convinced. Various other economic reports offered mixed signals. Durable-good orders were up and new-home sales were down. Employer costs continued to rise at record annual lows, while personal income was unchanged and personal spending dropped.

To read Vanguard(R) Economic Week in Review in its entirety, go to:

http://www.vanguard.com/visit/econweek103009

Mortgage applications plummet (CNN Money)

As rates ticked higher to above 5% mortgage applications plummeted 13.7% in the week ended Oct. 16 from the prior week.

Uncertainty about a possible extension and expansion of an $8,000 tax credit for first-time homebuyers could be another damper to the housing recovery. The tax credit now can be claimed by anyone buying a home who has not owned one for three years and who closes the deal by Nov. 30. For more details visit the CNN website

The only sustainable scenario under which mortgage applications will increase is when employment creation is encouraged and jobs are created that will not only give jobs to the existing unemployed population by the hundreds of thousands entering the workforce.

PrivoCorp processes residential mortgage loans for clients across the US.

MBA Forecasts: Unemployment Will Continue to Slow Economic Growth in 2010

According to a report by the Mortgage Bankers Association (MBA) and DSNews, economic growth will continue through the rest of 2009, but will slow down in the first half of 2010 under the weight of continued unemployment, before resuming a sustained pace and recording a 3 percent gain for all of 2010, the Mortgage Bankers Association (MBA) forecasts.

For all of 2009, the economy will show a decline of 0.5 percent, the group predicted.

Unemployment will continue to climb from its current 9.8 percent, to peak at 10.2 percent in the second quarter of next year, the group said.

Mortgage originations should reach $1.5 trillion in 2010, MBA said, depending on how much interest rates increase and dampen activity in the refinancing market. Modest increases in home sales should drive purchase originations, the group said.

“Perhaps the biggest unknown is the level and volatility of interest rates,” said MBA chief economist Jay Brinkmann.

While the lack of inflation, high unemployment, and excess capacity in the economy should hold interest rates down, the termination of the Federal Reserve’s purchase of mortgage-backed securities will put upward pressure on all long-term rates as well as the spread between mortgage rates and Treasuries, he said.

“The size of any resulting rate move will largely determine the size of the refinance market,” Brinkmann said.

The MBA forecasts fixed mortgage rates will average about 5 percent in the fourth quarter of 2009 and increase to 5.6 percent by the end of 2010.

Other highlights of the forecast:

• Total existing home sales for 2009 will end up about 2 percent higher than those for 2008, and will increase by about 11.2 percent in 2010.

• New home sales for 2009 will be down by about 18 percent from 2008, though sales seemed to have bottomed in the first quarter of 2009 and have been rebounding since then. For 2010, new home sales should increase about 21 percent from 2009’s low levels.

• National average home price declines should abate by early 2010, but will vary by state and home value. Demand will be highest for entry-level homes.

• Purchase originations for 2009 will be $718 billion, about 2 percent below $731 billion in 2008. Purchase originations should rise about 12 percent in 2010, as existing home sales recover and home prices stabilize.

• Refinance originations will end 2009 at $1.245 trillion, up about 60 percent from $777 billion in 2008. Refinance activity will likely decrease in 2010 to about $745 billion as mortgage rates increase.

Foreclosure Activity Sets New Record in Third Quarter: Report

Foreclosure activity in the United States set a new quarterly record in the three months ended September 30, increasing 5 percent from the previous quarter and 23 percent from the third quarter of 2008, according to new data released by RealtyTrac Thursday.

While there is some kind of hope with the GDP numbers and the results coming in slightly better than expected, a complete recovery can only be accomplished by job growth - which will in turn spur demand for all types of assets including homes. With the number of jobs that have been lost so far, even if the economy grows it will only be sufficient to mop up the extra workers entering the workforce. So an incremental number of jobs will have to be created to not only ensure there are jobs for the new entrants but also jobs for the ones that have lost their jobs due to the recession.

Check out the complete article at DSNews.com

PrivoCorp annouces October Special

PrivoCorp has announced its October Special for NEW CLIENTS ONLY.

* CLOSE 1 FHA FILE and the next one is on us.

* No charge for 2nd Submission

* FREE Audit on all closed files (depends on Net branch/Lender)

Please visit the PrivoCorp website for more information on this offer as well as more information about the fastest processor of home mortgage loans.

U.S. hits loan modification target early

According to the San Francisco Business times quoting the Obama administration, more than 500,000 troubled home loans have entered trial modification programs.

Federal officials recently stepped up pressure to modify troubled loans after criticism during the summer that banks and other loan servicers were dragging their feet adjusting loan terms for borrowers in danger of default. The government had given servicers a deadline of Nov. 1 to get 500,000 eligible borrowers into such programs, where payments are reduced to not exceed 31 percent of the borrower’s pre-tax income.

An estimated 16 percent of troubled borrowers (defined as those at least 60 days delinquent) have been placed into trial modifications. Here are some of the stats on mods by banks in the state in CA. Citigroup leads the mods list with a third of all loan mods.

PrivoCorp is not involved in any loan modification program. PrivoCorp is one of the fastest processors of mortgage home loans in the state of California.

Provident discontinues 3 year ARM in IL

According to an official release Provident Funding has discontinued Adjustable Rate Mortgage (ARM) loan products with an initial fixed period of 3 years or less for properties located in the state of Illinois. All affected loans currently locked will be honored, but must fund by the original lock expiration date.

All brokers working on these kinds of loans, please advise your borrowers appropriately or switch to another lender. PrivoCorp does not have any such loans in our pipeline at the current time.

PrivoCorp is one of the fastest processors of Conventional and FHA mortgage loans in the state of IL supporting several brokers in the greater Chicago area.