Archive for the 'Mortgage News' Category
Selecting FHA Loan Can be a Viable Choice
January 10th, 2012
Written by Frost Mortgage
Discussion: No Comments »
Fixed Rate Mortgages Hit Record Low of 4.01 Percent
September 30th, 2011
Written by Frost Mortgage
Freddie Mac has released the results of its Primary Mortgage Market Survey (PMMS), coming on the heels of the Federal Reserve’s recent announcements as the conventional 30-year fixed-rate mortgage (FRM) averaged an all-time record low at 4.01 percent, with an average 0.7 point for the week ending Sept. 29, 2011, down from the previous week when it averaged 4.09 percent. Last year at this time, the 30-year FRM averaged 4.32 percent.
www.nationalmortgageprofessional.com
Discussion: No Comments »
Mortgage Rates Keep Dropping
August 12th, 2011
Written by Frost Mortgage
Mortgage borrowing costs continued a downward trend this week, according to Freddie Mac, as 30-year fixed rates dipped to the lowest point of the year and 15-year fixed interest fell to an all-time low. Freddie Mac said interest on the former averaged 4.32 percent, while the latter settled at 3.5 percent. The favorable rates sent loan applications up more than 20 percent, the Mortgage Bankers Association indicated, with refinance activity climbing 30 percent.
Los Angeles Times (08/12/11) Reckard, E. Scott
Discussion: No Comments »
Ellie Mae Refocuses on Mortgage Lenders
June 23rd, 2011
Written by Frost Mortgage
The decline of mortgage brokers has had a profound affect on loan origination system provider Ellie Mae. As indicated by the Pleasanton, Calif.-based company’s disclosures to the Securities and Exchange Commission, its customer base has shifted dramatically from broker to lender since 2008.
There were 41,351 lender mortgage professionals who used Ellie Mae’s Encompass origination system at least once during the quarter, up 18% from the first quarter of 2010 and up 4.2% from the fourth quarter of 2010.
Active broker mortgage professionals using the software stood at 11,014 at the end of 2010—down 49% from the same period of 2009—but Ellie Mae did not disclose the number of active brokers during the first quarter of 2011.
In a recent call with analysts, Sig Anderman, the president and chief executive of Ellie Mae, said the number of broker users dropped below 10,000 in first quarter, the result of declining number of mortgage brokers in the industry.
“The broker market is being pretty much decimated out there,” Anderman said. “We’re not focusing at all on brokers. Our entire focus is on lenders because that’s where the future is in this business; it’s pretty clear from virtually every perspective.”
“When I say the brokers are gone, it doesn’t mean the individual who was a broker is gone. The successful guys morphed [into] bankers. So it’s not like if you had a 100-person brokerage shop, they didn’t disappear and turn into book sellers, they became bankers.”
Discussion: No Comments »
Mortgage Applications See Biggest Gain in 3 Months: MBA
June 15th, 2011
Written by Frost Mortgage
Home loan applications rose to the highest level in three months during the week ended June 10, due to pumped-up refinancing demand as the 30-year fixed mortgage rate fell to 4.51 percent. The Mortgage Bankers Association’s index of loan applications rose 13 percent, with refis jumping 16.5 percent and purchase-loan requests advancing 4.5 percent. Refis accounted for 70 percent of mortgage applications.
Reuters (06/15/11) Schnurr, Leah
Discussion: No Comments »
Mortgage Rates Set Fresh 2011 Low After Jobs Report
June 10th, 2011
Written by Frost Mortgage
With employers adding far fewer private-sector jobs than anticipated, the latest Freddie Mac data show home loan rates fell for an eighth consecutive week to a new low for the year. The 30-year fixed mortgage averaged 4.49 percent, down from 4.55 percent last week. Interest on 15-year fixed loans, meanwhile, dipped to 3.68 percent from 3.74 percent. Five-year adjustable-rate mortgages sank to 3.28 percent from 3.41 percent, and one-year ARMs dropped to 2.95 percent from 3.13 percent.
Wall Street Journal (06/10/11) P. C9 Fitzgerald, Drew
Discussion: No Comments »
30-Year Mortgage Rate Again Hits 2011 Low
May 27th, 2011
Written by Frost Mortgage
Fixed mortgage rates have fallen for six straight weeks, with 30- and 15-year loans dipping to their lowest levels since mid-December and late November, respectively. Freddie Mac reports that the 30-year loan averaged 4.60 percent this week, down from 4.61 percent; and the 15-year loan averaged 3.78 percent, down from 3.80 percent. Five-year adjustable-rate mortgages slipped, meanwhile, to 3.41 percent from 3.48 percent in the past week.
Indianapolis Star (05/27/11)
Discussion: No Comments »
World Events Affect Your Mortgage Rate
March 29th, 2011
Written by Frost Mortgage
International events such as the tsunami and subsequent nuclear disaster in Japan, the Libyan revolt and the uprising in Egypt have helped to depress mortgage rates in recent weeks. Investors have been moving money from riskier investments into safer U.S. Treasury bonds and mortgage-backed securities, causing mortgage rates to decline. According to Freddie Mac, mortgage rates averaged 4.81 percent for the week ended March 24, with inflationary pressures leading to the slight increase last week; rates could rise on domestic issues such as the Treasury Department’s selling back mortgage-backed securities. Freddie Mac forecasts a slow increase for rates on the 30-year fixed-rate mortgage to 5.5 percent by the fourth quarter of 2011, which is a historically low level for rates.
MarketWatch (03/29/11) Hoak, Amy
Discussion: No Comments »
Mortgage Market Gains
March 23rd, 2011
Written by Frost Mortgage
Lifted by a 5 percent rise in adjustable-rate activity, new mortgage inquiries were 2 percent higher this week. Mortgage rates improved, refinance share shrank and the jumbo-conforming spread widened.
At 211 for the week ended Friday, the U.S. Mortgage Market Index gained steam from 206 last week. This week’s reading was worse, however than the same week last year when the index was 238.
The recent increase was fueled by adjustable-rate mortgages, with the ARM index edging up to 20 from 19 a week earlier.
The Purchase MMI rose to 110 from 107, and the Refinance MMI edged up to 101 from 99.
Refinance share fell to just under 48 percent from just over 48 percent but was up from 43 percent in the week ended March 10, 2010. This week’s rate-term refinance share was 34 percent, and cashout-share was 14 percent.
The spread between the conforming 30-year fixed-rate mortgage and its jumbo counterpart widened to 73 basis points from 70 BPS last week. But the spread between the 15-year fixed-rate mortgage and the 30-year maintained at 77 BPS.
By MortgageDaily.com staff
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 »
