Archive for the 'GSEs' Category
Mortgage Rates Hit 4.15 Percent, Lowest Mark in Five Decades
August 18th, 2011
Written by Frost Mortgage
Freddie Mac released the results of its Primary Mortgage Market Survey (PMMS), showing mortgage rates, fixed and adjustable, reaching all-time record lows providing further incentive for those homeowners looking to refinance. The 30-year fixed-rate mortgage (FRM) averaged 4.15 percent with an average 0.7 point for the week ending Aug. 18, 2011, down from last week when it averaged 4.32 percent. Last year at this time, the 30-year FRM averaged 4.42 percent. The 30-year fixed average of 4.15 percent, breaks the previous record low of 4.17 percent set on Nov. 11, 2010.
Thu, 2011-08-18 10:32 — NationalMortgag…
Discussion: No Comments »
Home Loan Rates Hover Near Lows
June 24th, 2011
Written by Frost Mortgage
Freddie Mac reports that average interest on 30-year fixed mortgages was flat at 4.50 percent this week, while 15-year fixed loans rose from a 2011 low of 3.67 percent a week ago to 3.69 percent. The 30-year loan fell to a yearly low of 4.49 percent two weeks ago. Meanwhile, average interest on five-year adjustable-rate mortgages slid from 3.27 percent to 3.25 percent – its lowest level since researchers began tracking the statistic in 2005.
Modesto Bee (CA) (06/24/11) Wagner, Daniel
Discussion: No Comments »
Fannie Mae: Industry Originations Up
June 22nd, 2011
Written by Frost Mortgage
Fannie Mae has revised its mortgage origination outlook for 2011 upward by nearly 3 percent due to higher refinancing activity in the second quarter. In May, chief economist Doug Duncan estimated that $108 billion in home loans would be refinanced during those three months; but he has raised the firm’s refi projection for the quarter to $187 billion as a result of a decline in mortgage rates over the past two months. Duncan expects refis to account for 53 percent of the residential loan market this year.
American Banker (06/22/11) P. 2 Collins, Brian
Discussion: No Comments »
Mortgage Rates Hold Steady
June 17th, 2011
Written by Frost Mortgage
Freddie Mac reports that the 30-year fixed mortgage rate drifted up to 4.50 percent in the week ended June 16 from 4.49 percent a week earlier. Meanwhile, rates on 15-year fixed loans dipped to 3.67 percent from 3.68 percent over that same time span. Frank Nothaft, Freddie Mac’s chief economist, said rates held steady as market participants shrugged off recent reports that inflation was trending up.
Wall Street Journal (06/17/11) P. C9 Fitzgerald, Drew; Kell, John
Discussion: No Comments »
Mortgage Rates Decline
April 29th, 2011
Written by Frost Mortgage
Borrowing costs on mortgages dipped in the week ended April 28, reports Freddie Mac. The firm said that interest on 30-year fixed loans settled at 4.78 percent, down from 4.8 percent a week earlier and 5.06 percent a year ago. The average for 15-year fixed mortgages, meanwhile, dropped down to 3.97 percent from 4.02 percent last week and 4.39 percent during the comparable period of 2010.
Wall Street Journal (04/29/11) Becker, Nathan
Discussion: No Comments »
Falling U.S. Rates Give Borrowers Reprieve
March 18th, 2011
Written by Frost Mortgage
The 30-year, fixed loan settled at 4.76 percent for the week ended March 17, compared to 4.88 percent last week and 4.96 percent a year ago, reports Freddie Mac, as investors sought low-risk U.S. Treasuries in response to uncertainty in Japan. Chief economist Frank Nothaft says economic growth could brake in the near term, which is important for residential lending. Some analysts believe lower rates will drive more borrowers to refinance, but others say banks must make credit more accessible to spur a housing recovery.
Financial Times (03/18/11) Kapner, Suzanne
Discussion: No Comments »
IT’S THE LOAN PROGRAM, STUPID……
March 8th, 2011
Written by Greg Frost
As I listen to the talking heads and government policy experts in Washington discuss mandating 20% down payments for future mortgage programs I get sick to my stomach. Aren’t any of these people doing their research before suggesting such a draconian response? Are they not aware that FHA, VA, and USDA have been insuring high ratio (96.5%, 100%, and103%) loans for over 70 years? Are they not aware that, barring a short period of time in 2007-2008, when sub prime lenders successfully crammed some of their loan products into the FHA programs, that these government insured loan programs performed admirably?
Please note, on the attached graph, the default rates, during the 10 years preceding 2007, before the wheels came off the economy. Note how well the Prime Fixed Rate and Prime Arm Mortgages (Fully Documented) performed during that entire decade compared to all other mortgage instruments.
So why doesn’t Washington recognize that it was very specific and easily identifiable loan types that were toxic; eliminate them; and stop trying to make us and our industry out to be outlaws? Their own Federal Reserve Bank of Kansas City shows, in the attached report, that it is the loan program that was the culprit.
I can’t find any of my counterparts who designed those toxic loan programs. We just originated them. So who are the culpable “outlaws”?
The government’s attack on our industry is unprecedented. Why isn’t the government going after the car salesmen who sold all those Toyota’s that wouldn’t stop? Why aren’t they attacking Standard & Poor’s, Moody’s and Fitch who rated the securities filled with those toxic loans AAA? Why didn’t they attack the contractors who installed all the asbestos, or the painters who once used lead based paint? Again, what they are doing to us is patently unfair and unprecedented in scope.
We sell mortgages, we don’t design them. We sold what the mortgage industry, with congressional oversight, provided us to sell. Remember Barney Frank stumping for relaxed guidelines?
Admittedly, during that period of time, most mortgage brokers did not have access to FHA and VA loan products so they sold what they had, which in many cases was not the best product for their customers. Therein lies the biggest problem. The toxic loan programs were so “fast and easy” that mortgage brokers and mortgage bankers alike, shied away from traditional full documentation products in order to facilitate faster approvals, minimize documentation requirements and increase throughput.
When the smart guys who were designing loan programs for, and within our industry, allowed a W-2 employee to use a ”stated income” loan program, they established a scenario for lying or fraud. Remember, how we referred to those mortgage products as “liar loans”?
Why on earth were these loans designed and thrust upon our industry?
To facilitate the Executive Branch of our government’s goal of increasing home ownership, that’s why. The Executive Branch, during the Clinton administration pressured HUD, FNMAE and Freddie Mac to come up with loan programs that would utilize the stated income feature of the Acorn loan, that was being originated by Commercial Bankers, to meet their CRA lending requirements. That Acorn loan program was the magic product that brought sub prime lending into the mortgage mainstream.
The attached Federal Reserve Bank of Kansas City chart is so important because it shows how things were, prior to the economic melt down. It categorically shows that the full doc, 30 year mortgage (Prime ARM & Prime FRM) were loan programs that lenders, bankers, investors, along with domestic and international investors could count on to perform.
We were enticed, by our industry leaders and regulators, and enabled by the securitization efforts of Wall Street, to substitute the loan programs that we prime lenders had originated for our entire careers, with the “fast and easy” loan programs that were now considered to be “main stream”, and thus replace the exceptionally well performing industry standard loan programs that clients demanded and we originated in order to remain competitive in our markets.
We all participated. We all were drawn into the mess in order to be competitive. And now we’re all suffering, as our industry is targeted by our government and made the scapegoat for most all that went wrong with the national financial system and our economy.
If I, with my insignificant B.S. in Business from a mid major university can see what happened, why can’t those learned leaders of ours? There is an old saying….”don’t throw the baby out with the bath water”. I find, as I grow older, that those old sayings are around for a reason….they are forever relevant.
This baby is tired of the bath, the bath water and the mis-guided and unfair efforts of my government officials, many of whom I helped elect, all of whom I support with my tax dollars, who are trying to make me and my industry the fall guy for a political agenda that was ill conceived, short sighted and mismanaged.
The toxic loan programs are gone. The investors got rid of them, not the government. The investors realized, after poor performance, that they were not good investments. We don’t need the politicians to show us the folly of deviating from the previous industry accepted risk assessment standards. We all did what we were encouraged to do, and we all have suffered, as a result.
I implore my government to get back to what we elected you to do. Stop the wars and balance the budget. And for God’s sake, stop trying to tell me how I can or can’t pay one of my employees for the services he or she renders my company. My company is not trillions of dollars in debt. I know what I’m doing.
Discussion: 2 Comments »
New-Home Recovery Seen as Post-Super Bowl Selling Season Starts
February 8th, 2011
Written by Frost Mortgage
New home sales may bounce back this spring, and the rebound could last through at least 2012, predict market watchers. The Mortgage Bankers Association forecasts a 10 percent jump in volume; while Fannie Mae and the National Association of Home Builders project gains of 18 percent and 20 percent, respectively. The groups are optimistic despite tighter underwriting, the absence of a home buyer tax credit and stiff competition from bargain-priced foreclosure properties.
Business Week (02/08/11) Howley, Kathleen M.
Discussion: 1 Comment »
Low Rates Prompting More ‘Cash-in’ Refinances
February 2nd, 2011
Written by Frost Mortgage
Freddie Mac reports that “cash-ins,” which entail borrowers bringing money to the table when they refinance, accounted for 46 percent of refis in the fourth quarter — a record high. Homeowners are seeking more affordable terms and paying down balances in order to lower monthly payments, avoid private mortgage insurance or meet conforming loan limits. Interest on 30-year loans remains under 5 percent, and buyers are rushing to refinance before rates rise this year.
Washington Post (02/02/11) P. A12 ElBoghdady, Dina
Discussion: 1 Comment »
Realtors seek easing of loan standards as mortgage rates continue slide
November 9th, 2010
Written by Frost Mortgage
The nation’s chief real estate industry trade group, worried that even the most creditworthy borrowers are finding it hard to get loans, has called on the three big mortgage guarantors to ease underwriting standards for creditworthy borrowers. Those borrowers will find today’s mortgage rates attractive as their downward slide continues.
At its annual national conference in New Orleans, the National Association of Realtors called on the Federal Housing Administration, Fannie Mae and Freddie Mac to relax the underwriting rules they currently impose on mortgages for qualified buyers. The three government-related entities together underwrite 90% of the mortgages issued in the United States, and most lenders will not make home loans unless either the FHA guarantees them or Fannie or Freddie buys them.
The Realtors group also announced that it would work with the mortgage underwriters, lenders and Federal regulators to both encourage regular reassessment of credit policies. The group said it would also work with Fair Isaac Corporation, owner of the FICO credit score algorithm, and lenders to get them to revise their rules on how negative credit events affect future home purchases and examine the effects of credit policies on underserved groups.
Sandy Smith on 2010-11-09
Discussion: 1 Comment »
