Case-Shiller Shows Home Prices Up 4.3% From Year Earlier

The recently released S&P/Case-Shiller Home Price Indices (HPI) outstripped analysts expectations with strong increases in home prices over the 12 months ending in October.  Both the 20-City and the 10-City showed anticipated seasonal weaknesses in October itself, however and along with 12 of the 20 cities, posted a monthly price decrease.

The 10-City Composite Index was up 3.4 percent on an annual basis in October compared to 2.1 percent in September and the 20-City Composite rose 4.3 percent compared to 3.0 percent.  On a month-over-month basis both composites declined 0.1 percent.   S&P/Case-Shiller presents most of its data on a non-seasonally adjusted basis.

In 19 of the 20 cities the annual increase in October was higher than that in September and only two cities, Chicago and New York, had negative annual returns.  The recovery seems well established in some markets; for example Phoenix home prices increased for the 13th consecutive month and San Diego for the ninth.

David M. Blitzer, Chairman of the Index Committee at S&P Dow Jones Indices said, "The October monthly numbers were weaker than September as 12 cities saw prices drop compared to seven the month before.  The five which turned down in October but not in September, were Atlanta, Dallas, Miami, Minneapolis and Seattle. Among all 20 cities, Chicago was the weakest with prices dropping 1.5%, followed by Boston where prices fell 1.4%. Las Vegas saw the strongest one-month gain with prices up 2.8%.

"Annual rates of change in home prices are a better indicator of the performance of the housing market than the month-over-month changes," Blitzer said, "because home prices tend to be lower in fall and winter than in spring and summer.  Both the 10- and 20-City Composites and 19 of 20 cities recorded higher annual returns in October 2012 than in September. The impact of the seasons can also be seen in the seasonally adjusted data where only three cities declined month-to-month. The 10-City Composite annual rate of +3.4% in October was lower than the 20-City Composite annual figure of +4.3% because the two weaker cities - Chicago and New York - have higher weights in the 10-City Composite."

Blitzer said it is clear that the housing recovery is gathering strength.  Continued annual price gains and the strong performances in both the southwest and in California, both of which were strongly affected by the housing bust, "confirm that housing is now contributing to the economy. Last week's final revision to third quarter GDP growth showed that housing represented 10% of the growth while accounting for less than 3% of GDP."

Even cities at the bottom are showing gains.  Detroit had a 24.2 percent annual increase even though prices there are still about 20 percent lower than they were 12 years ago.  Blitzer also cited 22.5 percent and 22.1 percent increases in San Francisco and Phoenix from their recent lows and prices "comfortably higher" than 12 years ago.

As of October average home prices nationwide were back to autumn 2003 levels.  Measured from their June/July 2006 peaks, the decline for both Composites is approximately 30% through October 2012 and approximately 35% from the June/July 2006 peak values to their recent lows in early 2012. The October 2012 levels for both Composites are about 8.4 to 9% above their early 2012 lows.

In October 2012, 12 MSAs and both Composites posted negative month-over-month returns. Detroit, Las Vegas, Los Angeles, Phoenix, Portland, San Diego and San Francisco were the only cities that recorded positive monthly returns. Denver remained flat.

The S&P/Cash Shiller Home Price Index is a composite of single family home price indices for the nine U.S. Census divisions and is calculated quarterly. The 10- and 20-City indices are weighted averages of metropolitan area indices. Each index has a base value of 100 in January 2000. 

Fannie Freshens its Forecast Following Strong Home Sales

Strong reports on sales of new and existing homes encouraged Fannie Mae to increase its sales forecasts for 2012 and 2013 modestly, though sales next year are still project to rise at a slower rate than they will this year.

Fannie’s economists upped their estimates for total homes sales in 2012 from 4,981,000 to 5,013,000 in 2012 and from 5,191,000 to 5,297,000 in 2013.  Total yearly home sales haven’t exceeded 5 million since 2010.  The new forecast would put total sales in 2012 9.8 percent higher than in 2011.

New home sales would rise 22.3 percent this year and 20.7 percent next year under the new forecast.  Existing home sales would increase 8.9 percent this year and 4.4 percent next year.

“Recent data continue to point to a gradually strengthening housing recovery. Both existing and new home sales posted gains in the third quarter from the second quarter, and the year-over-year home sales price rate saw the largest increase since 2006 at 5 percent. Contrary to the past six years, during which the housing market created a drag on economic growth, housing is expected to contribute to GDP this year with an additional increase in 2013. However, as it accounts currently for only 2.5 percent of GDP, such growth isn’t likely to provide a substantial boost to the economic recovery,” said Fannie Mae’s monthly housing outlook.

Mortgage Rates Dip Again To New Record Lows

According to Freddie Mac's released results of its Primary Mortgage Market Survey^®(PMMS®), it showed  fixed mortgage rates finding new record lows for the second consecutive week keeping borrowing costs attractive to support the ongoing housing recovery.

News Facts

• 30-year fixed-rate mortgage (FRM) averaged 3.31 percent with an average 0.7 point for the week ending November 21, 2012, down from last week when it averaged 3.34 percent. Last year at this time, the 30-year FRM averaged 3.98 percent. 
• 15-year FRM this week averaged 2.63 percent with an average 0.7 point, down from last week when it averaged 2.65 percent. A year ago at this time, the 15-year FRM averaged 3.30 percent.  
• 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.74 percent this week with an average 0.6 point, the same as last week. A year ago, the 5-year ARM averaged 2.91 percent.
• 1-year Treasury-indexed ARM averaged 2.56 percent this week with an average 0.5 point, up from last week when it averaged 2.55 percent. At this time last year, the 1-year ARM averaged 2.79 percent.  

Average commitment rates should be reported along with average fees and points to reflect the total upfront cost of obtaining the mortgage. Borrowers may still pay closing costs which are not included in the survey.

Home Prices Soared to Six-year Record in September

Any improvements in home prices is a positive indicator of the overall health of the economy. The improvements are an even better indicator when this excludes distressed home sales. PrivoCorp as a processing company has seen volumes of new home sales as well as refis increase over the past few months mirroring the observations of the Niche Home report as well as the corelogic data.

As per Niche Report Home prices nationwide, including distressed sales, increased on a year-over-year basis by 5 percent in September compared to September 2011, the biggest increase since July 2006 and the seventh consecutive increase in home prices nationally on a year-over-year basis, according to CoreLogic Pending’s HPI indicates that October prices will be even stronger, rising by 5.7 percent on a year-over-year basis from October 2011 and falling by 0.5 percent on a month-over-month basis from September 2012 as sales exhibit a seasonal slowdown going into the winter.

Excluding distressed sales, October house prices are poised to rise 6.3 percent year-over-year from October 2011 and by 0.2 percent month-over-month from September 2012. The CoreLogic Pending HPI is based on Multiple Listing Service (MLS) data that measure price changes for the most recent month.

On a month-over-month basis, including distressed sales, home prices fell by 0.3 percent in September compared to August*.  The HPI analysis from CoreLogic shows that all but seven states are experiencing year-over-year price gains.

Excluding distressed sales, home prices nationwide also increased on a year-over-year basis by 5 percent in September compared to September 2011. On a month-over-month basis excluding distressed sales, home prices increased 0.5 percent in September compared to August , the seventh consecutive month-over-month increase. Distressed sales include short sales and real estate owned (REO) transactions.

“Home price improvement nationally continues to outpace our expectations, growing five percent year-over-year in September, the best showing since July 2006,” said Mark Fleming, chief economist for CoreLogic. “While prices on a month-over-month basis are declining, as expected in the housing off-season, most states are exhibiting price increases. Gains are particularly large in former housing bubble states and energy-industry concentrated states.”

“Home prices are responding to better market fundamentals, such as reduced inventories and improved buyer demand,” said Anand Nallathambi, president and CEO of CoreLogic. “So far this year, we’re seeing clear signs of stabilization and improvement that show promise for a gradual recovery in the residential housing market.”

Highlights:

•  Including distressed sales, the five states with the highest home price appreciation were: Arizona (+18.7 percent), Idaho (+13.1 percent), Nevada (+11.0 percent), Hawaii (+8.9 percent) and Utah (+8.7 percent).
• Including distressed sales, the five states with the greatest home price depreciation were: Rhode Island (-3.5 percent), Illinois (-2.3 percent), New Jersey (-1.8 percent), Alabama (-1.3 percent) and Delaware (-0.5 percent).
• Excluding distressed sales, the five states with the highest home price appreciation were: Arizona (+14.0 percent), Idaho (+10.5 percent), Nevada (+9.5 percent), Montana (+8.5 percent) and California (+8.4 percent).
• Excluding distressed sales, this month only four states posted home price depreciation: Alabama (-3.1 percent), New Jersey (-1.6 percent), Delaware (-1.4 percent) and Rhode Island (-1.3 percent).
• Including distressed transactions, the peak-to-current change in the national HPI (from April 2006 to September 2012) was -27.0 percent. Excluding distressed transactions, the peak-to-current change in the HPI for the same period was -20.4 percent.
• The five states with the largest peak-to-current declines, including distressed transactions, are Nevada (-53.9 percent), Florida (-44.7 percent), Arizona (-41.7 percent), California (-37.2 percent) and Michigan (-35.0 percent).
• Of the top 100 Core Based Statistical Areas (CBSAs) measured by population, 18 are showing year-over-year declines in September, nine fewer than in August.

*August data was revised. Revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results.

Average 30-Year Rate Sets New Record Low

Mortgage rates returned to record low levels yesterday, according to Freddie Mac’s latest weekly mortgage rate survey.

According to the Freddie Mac survey for the week ended September 20, 2012, 30-year fixed-rate mortgages averaged 3.49 percent, matching the record low set late in July.

Last week, 30-year fixed home loans were at 3.55 percent. A new historical low was set for 15-year fixed-rate mortgages; average rates tumbled from 2.85 percent last week to 2.77 percent as of yesterday. The previous record low was 2.80 percent, set at the same time as the record for 30-year fixed loans.

Last Thursday, the Fed confirmed that it would buy $40 billion a month worth of mortgage-backed securities, a move known as quantitative easing, or QE3, as this is the third implementation. QE3 is intended to drive further recovery for the country’s housing market and overall economy; this would lead to lower mortgage rates, thus better opportunities for homeowners to refinance.

Many analysts see this continuing trend as something that could potentially help the struggling U.S. housing market. Refinancing homes under these lower rates could help people reduce the amount of interest they spend on their mortgages.                                                                                                                                                       

However, home sales figures have been slow to recover, and in fact, have been lower in some categories month-on-month. Previously occupied home sales, for instance, dropped to 4.55 million for the month of May, yet still increased on a year-on-year basis.

Last year, mortgage rates were at 4.09 percent for 30-year fixed-rate mortgages, so borrowers can potentially save more than $1,000 annually if they would refinance now. Companies like PrivoCorp - the fastest contract mortgage processors in the country are the ones to look for by brokers. If you are a borrower, then go to companies like First Rate Mortgage Group (www.firstratemtg.com) for the lowest rates in the country.

Housing Starts Decline in July, Ending Winning Streak

Single-family housing starts fell 6.5% in July from the month prior while multifamily starts jumped nearly 10%.As per the Census Bureau reported Thursday morning that single-family starts fell to a 502,000 seasonally adjusted annual rate in July from a 537,000 rate in June.

Prior to July, single-family starts moved up four months in a row. Starts have risen 17% from a year ago.

The Wells Fargo Securities Economics Group reported that much of the building is “partially built-out developments where land prices have fallen and new homes can compete with foreclosures in neighboring areas.”

There is also demand for smaller land parcels near key employment centers, but not in the outskirts of major housing markets that are still plagued by foreclosures and depressed house prices. “The implication is that the upside for single-family construction has a relatively low ceiling at least until jobs and income growth improves and a large proportion of the foreclosure pipeline is cleared,” according to WFS economists.They expect builders will start construction on 510,000 single-family homes this year, up 18.4% from 2011. In July, construction of multifamily units rose to a 229,000 seasonally adjusted annual rate from a 209,000 rate in June.Total housing starts were at 746 thousand (SAAR) in July, down 1.1% from the revised June rate of 754 thousand (SAAR). Note that June was revised from 760 thousand. Single-family starts decreased 6.5% to 502 thousand in July.This shows the huge collapse following the housing bubble, and that total housing starts have been increasing lately after moving sideways for about two years and a half years.Total starts are up 56% from the bottom start rate, and single family starts are up 42% from the low.

This was slightly below expectations of 750 thousand starts in July, but the key is starts are up solidly from last year. Right now starts are on pace to be up about 20% from 2011. Also note that total permits were at the highest level since 2008.Overall, multifamily construction is up 30% from July 2012. “The multifamily sector is a bright spot for new construction,” the WFS report says. “The demand for apartments is expected to remain strong over the next several years.”

What this means for contract processing companies like Privo Corporation (PrivoCorp) is to be seen (positive obviously!) - www.privocorp.com

Shrinking Housing Debt Nothing to Fear?

U.S. consumers owed $8.995 trillion on their residential loans at the end of March—the lowest debt figure recorded in almost five years, according to new figures compiled by National Mortgage News and the Quarterly Data Report.

It seems like peak of the market occurred in the fourth quarter of 2009 when consumers owed $10.138 trillion on their homes Since that time, outstanding loan balances nationwide have declined steadily each quarter. Maybe the reason for the reduction in loan balances is loans being removed from the loan tally, plus some consumers that have the ability to refinance are engaging in “cash-in” refis where they bring money to the closing table to reduce their payments even further. According to figures compiled by Freddie Mac, roughly 70% of consumers who are refinancing either keep their loan balance the same or reduce it. In recent quarters that ratio has been as high as 77%. As Freddie Mac economist Frank Nothaft once noted, “This is primarily a 'rate-and-term' market, meaning that the typical homeowner is looking to cut their interest rate or shorten their loan term.”

When Mortgage Servicing Rights ( MSR) begin increasing in size again, that’s a different matter. It likely won’t happen until the housing market stabilizes and more consumers decide to buy new or existing homes—something that will only come when the employment picture improves in earnest.Of the $8.995 trillion in outstanding home mortgages today, 76% are fixed-rate loans, the lowest reading since 2008.Servicing advisors who make their living off of MSRs don’t seem particularly worried about the shrinking residential loan balances. “It’s not something we get hung up on,” said one manager based in Denver. “In time it will start rising again.”Also, investment bankers believe it’s just a matter of time before MSRs begin to rise in value, though they’re not sure when.

As on March 31, Wells Fargo Co. ranked first among all servicers with MSRs of $1.84 trillion, a 2% gain from a year ago. Bank of America ranked second with $1.69 trillion (-16%), followed by JPMorgan Chase with $1.1 trillion (-8%).

The top three servicers, combined, have a market share of 51.57%, according to NMN/QDR. We at PrivoCorp are waiting and watching for the results to improve - and the most important metric we are looking at is the employment picture.

Record Low Rates Drive Refis, But No Sales

New-home sales fell unexpectedly in June, tumbling 8.4%, after sales in May hit the highest level in two years, according to the Census Bureau’s latest snapshot on the housing market.The disappointing drop in sales was partially due to an upward revision in the May figures by 23,000 units.

The Census Bureau reported Wednesday morning (Aug 2012??) that sales of newly built single-family homes fell to a 350,000 seasonally adjusted annual rate in June from a 382,000 rate May.

The April sales rate was revised upward by 15,000 units.Despite the drop in June, new-home sales rose 15% compared to June 2011.Wall Street analysts were forecasting that new-home sales would edge up 1% or less from May to June.After strong sales in the winter and spring, forecasters pared back expectations following a National Association of Realtors report last week which found existing-home sales fell 5.4% in June.In trading Wednesday several homebuilding firms saw their stock prices decline. KB Home was down 3% with Ryland Homes and D.R. Horton falling by 2% each.

This is a report from publicly available data sources and information provided to the SEC.

Home Ownership Rate Forecast

The U.S. home ownership rate stands at a 15-year low with the latest figures showing 65.6 percent of Americans living in owner-occupied homes.  At peak in 2004 the ownership rate was a hair shy of 70 percent.  Over the next two years it may fall further, possibly to 64 percent before stabilizing.  But the falling homeownership rate will not mean fewer home sales.  The dynamics is such that both the rental and ownership households will rise, though the proportion will be such that the home ownership rate will fall.

Ownership over the years (US)

Though ownership and rental demand at first appear to be a trade-off in most years, the net number of homeowners and renters also rises simultaneously in most years.  It is a natural outgrowth of about 3 million additional people living in the country each year, which generally leads to about 1.1 to 1.3 million net new household formations each year.  From the 1960s on, the number of home-owning households rose on average by about one million each year while the number of rental households rose by 300,000 to 400,000.  In some years, there are distinct tradeoffs between owning and renting with one rising while the other falls.  The starkest example of this are the years since the housing bubble crashed.  The number of homeowners fell from 2005 to today while the number of renters rose quite significantly.  The key reason for this prolonged multiyear trade-off development arose because of a sharp slowdown in household formation.  Household formation in the past 5 years has been only the half the normal rate.  It is understandable, given the difficult economic conditions of the past several years, for many young adults to move into their parents’ home or find extra roommates to share the living costs.  But a return to normal household formation will finally mean a rise in the net new numbers of homeowners and renters, as has been historically the case.  In a more optimistic scenario, if the household formation burst out in order to compensate for the prolonged suppression, to say something like 1.5 million annually over the next few years, then the increase in net new homeowners and net new renters could both be higher than their historic average gains.

This article was forwarded to us be someone in the industry and didnt have a source to quote from. PrivoCorp does not claim ownership of the article and regrets the inability to provide the source. However, it does seem like the article has made reasonable assumptions which are true and can only be an indicator of things to come. One thing is that the article does not provide any information on what the home ownership rates will "stabilize" to. This would be helpful in making some meaningful projections. Either way, this could only be beneficial for a contract mortgage processing company like Privo Corporation!

Long-Term Rate-Indicative Yield Returns to Its Record Low

The benchmark 10-year Treasury’s yield on Monday morning matched its all-time low of 1.44%, putting more downward pressure on long-term mortgage rates.The 10-year last was this low on June 1, according to Yahoo Finance. Subsequently in June it had rebounded to levels as high as 1.65% or so, hovering around 1.6% until July got underway. After July hit, it began sliding toward 1.5%. The downward trend in the rate-indicative bond yield began intensifying during the latter half of last week, when the yield started to dip below 1.5%.

Zuckerberg’s Loan Gives New Meaning to the 1%

Billionaire Mark Zuckerberg is giving new meaning to the term “the one percent.”

The Facebook Inc. (FB) founder refinanced a $5.95 million mortgage on his Palo Alto, California, home with a 30-year adjustable-rate loan starting at 1.05 percent, according to public records for the property.While almost all lending rates have reached historical lows this year, the borrowing costs available to high-net-worth individuals are even lower if the person is willing to bear the risk of monthly interest rate adjustments, said Greg McBride, senior financial analyst with Bankrate Inc., a North Palm Beach, Florida-based firm that tracks interest rates. Large increases are unlikely anytime soon with the Federal Reserve signaling it will keep interest rates near zero for at least two years.

“When you can borrow at a rate below inflation, you’re borrowing for free,” McBride said in an e-mail. “This is the concept of using other people’s money and it preserves financial flexibility for the borrower.”

“The one percent” is a phrase popularized last year by the Occupy Wall Street movement to protest growing U.S. income inequality. The top one percent of Americans earns a fifth of the country’s income and controls more than a third of its wealth, according to Joseph E. Stiglitz, a Nobel Prize-winning economist, whose book “The Price of Inequality,” was published last month.

The average rate on a one-year adjustable mortgage was 2.69 percent on July 12, up from a record low 2.68 percent a week earlier, according to Freddie Mac, the McLean, Virginia-based mortgage-finance company. The average rate for a 30-year fixed loan fell to a record low 3.56 percent on July 12. Freddie Mac doesn’t survey rates for loans that adjust monthly.

This is from Bloomberg online ... and more information can be got from http://www.bloomberg.com/
 

Wells Fargo Calls it Quits on Wholesale Lending

Wells Fargo — the nation's largest funder of home mortgages through loan brokers — is calling it quits on wholesale lending, dealing yet another devastating blow to this struggling origination channel.

"We will still fund loans through correspondents," a Wells spokeswoman confirmed to National Mortgage News, "but for independent mortgage brokers things will change."
She said the cut-off date is Friday, July 13. Further clarification on the issue will come later today.
According to NMN and the Quarterly Data Report, Wells ranked first in 1Q in wholesale lending, table funding $7.3 billion of mortgages through brokers. Provident Funding Associates, Burlingame, Calif., ranked a close second with $7 billion.
After those two, the next largest player is Flagstar Bank FSB with $2.9 billion.
Wells' decision to exit the channel comes in the wake of a fair lending settlement with the Justice Department. "While not part of the DOJ settlement, Wells Fargo, on its own volition, also announced today that on July 13 it will discontinue funding mortgages that are originated, priced and sold by independent mortgage brokers through its mortgage Wholesale channel," the company said in a press statement.
It added: "Mortgages sold by independent brokers in this manner currently represent five percent of the Company's home mortgage funded volume. Mortgage brokers operate as independent businesses and are not employed by Wells Fargo. Therefore, Wells Fargo cannot set loan prices for independent mortgage brokers nor control the combined effect of the negotiations that thousands of these independent mortgage brokers conduct with their customers.
After July 13, 2012, the Company will no longer accept new applications for loans originated by independent mortgage brokers through its Wholesale channel, but will work to ensure existing applications are processed and closed."

Wells Fargo economists see 'budding recovery' in housing, but don't get too excited

Wells Fargo Securities senior economists Mark Vitner and Anika Khan say the nation's housing market is improving, but that new home sales and construction are nowhere near what they once were. It is really great to hear economists "observe" that new home sales are "improving" - but I dont think it takes a major MBA and a fancy corner office to determine that they are "nowhere what they once were". My fourth grader  - if given the numbers - might be able to deduce that one number is greater than the other.

"Even with the overall economy slowing, the budding recovery in the housing market appears to be gradually gaining momentum," the two economists say in a July 5 report to Wells Fargo (NYSE: WFC) clients. "We have continuously stressed the need to keep the recent improvement in the housing market in perspective. Even with the recent gains, new home sales and residential construction remain shadows of their former selves."

In January, Vitner made headlines, at least in the San Francisco Business Times, by saying a "true" housing recovery could be a decade away. He's sticking to that prediction. At least that's what he told me when we met over coffee earlier this week. He was visiting from Charlotte, where the heat wave was shattering records, so he was eager to share with me his immediate impressions of the Bay Area: the weather's cool and the economy's hot.

U.S. home sales up 20% from last year: DataQuick

During the 30-day sales period ending July 5, approximately 211,000 homes were sold in 98 of the top 100 metropolitan statistical areas, research firm DataQuick said Thursday.

Sales overall rose 12% from the same period a year earlier and 10.6% from 2009 levels.


Home prices also went up with the median price hitting $193,000 on July 5, up 6% from a year ago and 4.3% from three years ago.
In a little over a month, the median sales price rose from $186,000 to $193,000.
The DataQuick report analyzes 66.25% of all U.S. home sales, excluding the key markets of Louisville and Wichita.

The red-hot real estate market is getting hotter

According to Niche Report., the red-hot real estate market is getting even hotter thanks to regional property appreciation. This situation was recently reported by online real estate market analysis site Trulia, and it is bound to attract more real estate investors to some metropolitan areas where urban dwellers are taking a break from the American Dream of home ownership in favor of lease agreements.

According to the figures released by Trulia, monthly rents in the United States climbed by 5.4 percent on an average basis since June 30th of the previous year. This increase is not surprising given the pace of foreclosures over the last few years, as well as the incredibly strict credit and lending guidelines imposed on mortgage applicants.

In some metropolitan areas like San Francisco, renters are now paying almost 15 percent more than in 2011. This has had a positive, yet disproportionate, effect on real estate values in the San Francisco market, where residential properties are now priced 2.5 percent higher than they a year ago. A similar situation can be observed in nearby Oakland, where rents went up by 10 percent, although home purchase prices barely inched up compared to twelve months ago.

Refinancing Applications Spike by 13%

A 13% increase in refinance applications led to a 9.2% seasonally adjusted increase in overall application volume for the week ended May 11, according to the Mortgage Bankers Association. As in the previous week, the activity was spurred by record low rates for all four categories of fixed-rate loans the trade group tracks.

The one thing that the rise in refi apps cannot be attributed to is the Home Affordable Refinance Program, said Michael Fratantoni, MBA's vice president of research and economics.

"A flare-up of the sovereign debt troubles in Europe once again led investors to flee to the safety of U.S. Treasury securities last week. As a result, mortgage rates have reached new lows in our survey, and refinancing application volumes picked up substantially as a result.

"Survey participants indicated that this was not due primarily to HARP volume—the HARP share of refinances fell to 28% of refinance applications, down relative to last week and last month, when the share was just above 30% in April. The increase in refinance activity last week was concentrated in the conventional sector, which was up around 14% for the week, while government refinance applications were up only 4%," Fratantoni explained.

The Purchase Index decreased 2.4% compared with the previous week and was 1% lower on an unadjusted basis than the same week one year ago. The refi share of apps increased to 74.9% from 72.1% in last week's survey.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) decreased by five basis points from the previous week to 3.96%. The average contract interest rate for 30-year Federal Housing Administration-insured loans declined by six basis points to 3.75%.

The rate for 30-year FRMs with jumbo loan balances fell by nine basis points to 4.2%. The average contract interest rate for 15-year FRMs declined three basis points to 3.26%.

For more details on this and other mortgage related information visit www.mbaa.org

Thirty-Year Rate Holds Fast to Its Record Low

As per Origination news..The average weekly rate for a 30-year fixed-rate mortgage in Freddie Mac’s primary market survey held steady at its record low of 3.78% during the week ending May 24.

The average rate for a 15-year FRM, at 3.04%, also remained unchanged week to week. Similarly, the five-year Treasury-indexed hybrid stayed put at 2.83%.
The average rate for a one-year Treasury adjustable-rate mortgage slid three basis points to 2.78% and carried an average of just 0.4 of a point.
The 30-year, in contrast, came with an average of 0.8 of a point in the most recent week, while the 15-year carried an average of 0.7 of a point and the five-year Treasury hybrid included on average 0.6 of a point.
The plateau in most rates came during a week when there were several indicators suggesting relative improvement in the housing market, said Freddie Mac chief economist Frank Nothaft in his weekly report. He said rate-driven affordability contributed to this.
Nothaft also noted in his monthly economic and housing outlook issued Wednesday that there have been some encouraging signals, although residential fixed investment is still weak.
A Mortgage Bankers Association report adjusting the group’s origination estimates upward Thursday did so on the strength of higher-than-expected refinancing that government programs as well as rates have contributed to.
But it also suggested that purchase volumes look weaker than they had.

Home prices rise for first time in 8 months

As per The Niche Report Home prices rose in March for the first time since last July, helped by tighter housing inventory, data analysis firm CoreLogic said on Tuesday.

CoreLogic’s home price index gained 0.6 percent from February, but was still down 0.6 percent compared with March a year ago.
Excluding sales of distressed properties, prices climbed 0.9 percent on a yearly basis. Homeowners in danger of foreclosure, or in “distress”, often sell their homes at significantly reduced prices.
“This spring, the housing market is responding to an improving balance between real estate supply and demand, which is causing stabilization in house prices”, Mark Fleming, chief economist at CoreLogic, said in a statement.
Of the top 100 statistical areas measured by population, 57 showed year-over-year declines, down from 65.
The closely watched S&P/Case Shiller index released in late April showed a rise in U.S. single-family home prices in February for the first time in 10 months, with a gain of 0.2 percent on a seasonally adjusted basis.

15 Year Fixed Rate Mortgage Hits New All-Time Record Low

 released the results of its Primary Mortgage Market Survey® (PMMS®) on the 12th of April 2012, showing average fixed mortgage rates declining for the third consecutive week on the heels of a weaker than expected employment report. The 30-year fixed averaged just above its record low while the 15-year fixed averaged a new all-time record low of 3.11 percent breaking its previous low of 3.13 percent on March 8, 2012.

News Facts

• 30-year fixed-rate mortgage (FRM) averaged 3.88 percent with an average 0.7 point for the week ending April 12, 2012, down from last week when it averaged 3.98 percent. Last year at this time, the 30-year FRM averaged 4.91 percent.
• 15-year FRM this week averaged 3.11 percent with an average 0.7 point, down from last week when it averaged 3.21 percent. A year ago at this time, the 15-year FRM averaged 4.13 percent.
• 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 2.85 percent this week, with an average 0.7 point, down from last week when it averaged 2.86 percent. A year ago, the 5-year ARM averaged 3.78 percent.
• 1-year Treasury-indexed ARM averaged 2.80 percent this week with an average 0.6 point, up from last week when it averaged 2.78 percent. At this time last year, the 1-year ARM averaged 3.25 percent. 

This report follows the weaker than expected unemployment report from March. A good way to get updates from FreddieMac would be to follow the Office of the Chief Economist Follow @FreddieMac

Demand for Apartments is Driving the Multifamily Mortgage Market

Per Niche Report ... rather than looking for single-family residences, more Americans are opting for rental deals, and thus the mortgage market for multifamily properties like apartment buildings is heating up.

The rate of American home ownership has fallen to levels not seen since another financial bubble became manifest on Wall Street. In November of 1998, the dot-com bubble was in full swing with the Initial Public Offering (IPO) of the Globe.com, an online social network that failed to attain the stature of Facebook. That IPO made history by allowing lucky investors to realize the most one-day gains ever, and it only took one year for it to collapse. Interest rates at that time were considerably low at that time, and thus home ownership began to edge up in 1998. Mortgage interest rates are even lower today, and yet rates of home ownership are just as low as they were then.

Check the link http://goo.gl/gUwZw

Details of the $25B mortgage settlement emerge

As per Niche report.com , the U.S. Department of Justice has filed the respective settlement agreements that the five major mortgage lenders recently signed in relation to their questionable foreclosure processing practices. The agreements amount to a total $26 billion monetary settlement that the banks will have to disburse in the form of cash payments and mortgage principal reductions.

The financial entities involved are: Ally Financial (formerly GMAC), Bank of America, Citigroup, JP Morgan Chase, and Wells Fargo. The agreements are highly detailed and complex, as evidenced by the fact that they are more than 300 pages each. Although the settlement agreements were signed earlier this year, the full details and the mechanisms the banks must adopt to compensate their mortgage borrowers are just beginning to emerge.This settlement is historic in the sense that it is the highest sum obtained from private enterprises by a joint state and federal effort. For the homeowners who were wrongly foreclosed upon and evicted from their properties, the settlement brings some relief.

Check more http://goo.gl/CQcIJ

MBA: Mortgage Applications Decrease in Weekly Survey

According to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 9, 2012.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.4 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 1.8 percent compared with the previous week. The Refinance Index decreased 4.1 percent from the previous week to its lowest level since January 6, 2012. This is the fourth consecutive weekly decline in the Refinance Index. The seasonally adjusted Purchase Index increased 4.4 percent from one week earlier to its highest level since January 13, 2012. The unadjusted Purchase Index increased 6.0 percent compared with the previous week and was 0.4 percent lower than the same week one year ago. For more information on this check the link http://goo.gl/wz3JL

President Clinton Offers a Fix for Underwater Mortgages

According to a report in National Mortgage News, Former U.S. President Bill Clinton outlined his plan to help troubled mortgage borrowers before a standing-room-only crowd packed into an auditorium the size of a football field at the Jacob K. Javits Convention Center during the National Retail Federation's Annual Convention & Expo this week.

"This economic crisis is about way more than economics," Clinton said. "It has gone to the core of people's sense of who they are, what they are worth and how they get through life with meaning."

Clinton's plan for resolving the current crisis is to immediately lower principal and interest rates for underwater borrowers to match current valuations and market rates. In exchange, the homeowner would agree to pay the bank a portion of the money earned from eventually selling the home in a recovered market.

This is an older article ... but anyways, for more click here. 

Tax Cut Extension Now Officially Raising Mortgage Rates

According to a report in the Mortgage News Daily, As part of the temporary resolution to the recent battle over the Tax Cut Extension that took place in the last weeks of December, Congress decided that mortgage borrowers should foot part of the bill. Technically, Congress increased the "Guaranty Fees" that Fannie Mae and Freddie Mac charge to lenders that securitize MBS (Mortgage-Backed-Securities) with the Agencies, but ultimately, this cost must either be absorbed by lenders, passed on to consumers, or some combination of the two.

For more information on the article click here :

GSE Guarantee Fee Hike Coming April 1

According to a report in the National Mortgage News, The Federal Housing Finance Agency has directed Fannie Mae and Freddie Mac to implement a congressionally mandated increase in their loan guarantee fees on April 1.

For more visit: http://www.nationalmortgagenews.com/dailybriefing/2010_506/gse-guarantee-fee-hike-1028074-1.html#. PrivoCorp is a contract mortgage processing company, and we keep track of movements in fees like these and try to correlate fees increase/decrease to processing volumes

Realtors Report Signals Higher Sales in Coming Months

According to the report in National Mortgage News, A leading indicator of future home sales jumped 7.3% in the November to its highest level in over 19 months, according to the National Association of Realtors.

For more: http://www.nationalmortgagenews.com/dailybriefing/2010_506/realtors-report-signals-higher-sales-1028071-1.html

We at PrivoCorp consider this a good opportunity for contract mortgage processors, Visit us @ http://www.privocorp.com/