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Brent Rasmussen
President
Office: 800-519-1870
Cell: 402-578-0008
brent@mtg-specialists.com
8420 W Dodge Rd, Ste 113
Omaha, NE 68114
www.mtg-specialists.com
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September 3rd, 2010
By KEVIN KINGSBURY, The Wall Street Journal | Real Estate
WASHINGTON—Average mortgage rates hit another record low even as Treasurys sold off, according to Freddie Mac’s weekly survey of mortgage rates.
Mortgage rates have been slumping for months as investors buy Treasurys—pushing down their yields—amid U.S. economic uncertainty. Some of the price gains on Treasurys were lost in recent days after the 10-year note last week retreated from levels last seen in early 2009. Yields, which move inversely to prices, are generally tracked by mortgage rates.
But the 30-year fixed-rate mortgage averaged 4.32% for the week ended Thursday, down from the prior week’s 4.36% average and 5.08% a year earlier. It has set or matched a record low for 11 weeks in a row; Freddie started keeping track of such rates in 1971.
Rates on 15-year fixed-rate mortgages were 3.83%, a new low and down from 3.86% and 4.54%, respectively. Five-year Treasury-indexed hybrid adjustable-rate mortgages were 3.54%, compared with 3.56% a week earlier and 4.59% last year. That loan type hasn’t had such a low average rate since Freddie started tracking it in 2005.
One-year Treasury-indexed ARMs were at 3.50%, down from 3.52% and 4.62%, respectively.
To obtain the rates, the 30- and one-year required payment of an average 0.7 point, with the 15- and 5-year having an average 0.6 point. A point is 1% of the mortgage amount, charged as prepaid interest.
Tags: 30-year fixed-rate, ARMs, Freddie Mac, MBS, Mortgage Rates
Posted in Mortgage backed securities | No Comments »
September 3rd, 2010
By STEVE BROWN / The Dallas Morning News
stevebrown@dallasnews.com
A Memphis , Tenn., company that just bought a McKinney apartment and retail complex got one heck of a deal.
Mid-America Apartment Communities paid $31.25 million for the new Times Square development in Craig Ranch. It’s one of several multifamily housing projects the real estate investment trust has just purchased.
Times Square has more than 300 luxury apartments and 88,000 square feet of retail space and cost about $52 million to build.
The lender that sold the foreclosed property – Bank of America – had lent more than $45 million on the development.
Mid-America got the mixed-use project at almost a 40 percent discount from construction cost.
Such markdowns of new commercial properties aren’t unheard of in North Texas. And investors are eager to sign up for more such deals.
But they’d better hurry.
The latest industry barometers indicate the commercial property price plunge may have bottomed out.
Nationwide, commercial property transaction prices jumped by a near record 17 percent in the second quarter from a year earlier, according to the latest quarterly index from the MIT Center for Real Estate.
The last time commercial real estate values rose that much was five years ago, during the boom.
Even with the recent sharp gain, MIT researchers point out that prices remain more than 30 percent lower than they were in mid-2007.
MIT’s research director David Geltner said that while commercial prices are bottoming, “it’s a rocky bottom, and a precarious bottom as well, because pricing could head down again, especially if we go into a double-dip recession.
“We won’t have really solid pricing until we get stronger trading volume.”
MIT also found that investor demand for commercial real estate is up more than 20 percent from 2009.
But sellers are still reluctant.
“Property owners are still largely holding properties off the market, not wanting to sell at prices that they still view as depressed, or anyway not wanting to move money from real estate to stocks or bonds in the current economic climate.”
There’s also some indication that the flow of failed deals to lenders may be slowing.
Commercial mortgage delinquencies at banks – while still at a high rate – were flat in the second quarter, the Mortgage Bankers Association reports. Just over 4 percent of banks commercial property loans were 90 days or more behind in payments at the end of June.
Delinquency rates for commercial mortgage-backed securities debt were still rising at mid-year – up to the highest level since records have been kept.
More than 8 percent of deals financed by commercial mortgage-backed securities were in the tank in the second quarter, the Mortgage Bankers say.
Life insurance companies have the lowest late loan rates.
In the second quarter, less than a third of 1 percent of their borrowers were behind in payments.
“Performance across all investor groups will continue to depend on economic growth and its ability to generate demand for commercial real estate space,” said Jamie Woodwell, the MBA’s vice president of commercial real estate research.
Tags: banks, Commerical Property, MBS, Real Estate
Posted in Mortgage backed securities | No Comments »
August 31st, 2010
By Brad Finkelstein
According to a recent FICO study, over one-fourth (25.5%) of Americans have poor credit. Nearly 43.4 million people now have a credit score of 599 or below. LowCards.com, which provided this information, said that number is expected to grow as households continue to struggle through unemployment, credit card debt and foreclosures.
It took years of overspending, overlending and poor regulating to create these problems. Lenders, and even the government, share some of the blame, says Bill Hardekopf, CEO of LowCards.com.
Among the things he says are causing lower credit scores are increases in consumers’ debt-to-payment ratio. A higher debt-to-credit ratio is considered a higher risk and can result in a drop of about 20 points.
A few late payments on a credit card or other loans can lower your score by as much as 100 points if you have a good score, or 80 points for someone with an average score. Defaulting on a loan or a foreclosure may lower a score by as much as 200 points.
The good news is that the older the negative item, the less impact it will have on the credit score. A collection that is five years old will hurt much less than a collection that is five months old.
“When consumers have made poor financial choices and have damaged their credit score, they are on their own to fix it. There is no federal bailout or TARP fund that will rescue them,” says Hardekopf.
There are ways for consumers to increase their credit score, but it takes time and there is no quick fix.
First, have the consumer get a copy of their credit report from all three major repositories. If any of the information on a report is incorrect, contact the agency to correct it.
The next change is behavioral, namely paying bills on time, even if it is only the minimum. This is the single most important factor in the credit score, he says.
Pay off debt because high balances and high debt ratios drag down credit scores. A consumer’s debt balance should be less than 35% of available credit.
A long history of good payments on a car loan, a mortgage, or a credit card increases the credit score. Keep older credit card accounts open, even if they are not being used, because the algorithm rewards a long, positive credit history. If there are many accounts that are not being used, close the newest ones first.
Limit the new credit applications being made, because too many new accounts can lower the score. The exception is shopping for a mortgage or a car loan, as multiple inquiries for the same purpose in a reasonable period are considered a single inquiry.
If they don’t already have one, the consumer should open a checking and a savings account. They should not co-sign for a loan for someone else. Finally, if they can’t pay their bills, contact the creditors or see a legitimate credit counselor.
Orginal Post –>
Tags: credit score, FICO, TARP
Posted in Credit Score | No Comments »
August 30th, 2010
CoreLogic reported that the number of American homes that are “underwater” fell last quarter. A home is considered “underwater” when the owner owes more on their mortgage(s) than the home’s present value. The data fell from 24% in the first quarter to 23% in the second quarter. While this is not a huge decrease – given the high unemployment levels, any improvement is welcomed. How does our state stack up? Check out the chart below to see:
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +22 basis points last week causing 30 year fixed rates to decrease. MBS reached a new all-time best pricing level on Thursday. After we reached those great levels, we pulled back -53 basis points by Friday. The gains in mortgage backed securities (the only thing 30 year conventional mortgage rates are based on) were primarily the result of continued concerns about a very fragile economy and the perception of an increased probability of a “double-dip” recession. Our huge pull back on Friday (which caused mortgage rates to increase) was due to the release of the revised 2nd QTR GDP numbers. It was revised from 2.4% growth down to only 1.6% growth but the markets expected an even bigger downward correction. Since the data was better than market expectations, MBS sold off causing us to lose the lowest rates we have ever seen.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
| Date |
ET |
Release |
For |
| 30-Aug |
8:30 |
Personal Income |
July |
| 30-Aug |
8:30 |
Personal Spending |
July |
| 30-Aug |
8:30 |
PCE Prices – Core |
July |
| 31-Aug |
9:00 |
Case-Shiller 20-city Index |
June |
| 31-Aug |
9:45 |
Chicago PMI |
Aug |
| 31-Aug |
10:00 |
Consumer Confidence |
Aug |
| 31-Aug |
14:00 |
Minutes of FOMC Meeting |
10-Aug |
| 1-Sept |
8:15 |
ADP Employment Change |
Aug |
| 1-Sept |
10:00 |
Construction Spending |
July |
| 1-Sept |
10:00 |
ISM Index |
Aug |
| 1-Sept |
10:30 |
Crude Inventories |
28-Aug |
| 1-Sept |
10:00 |
Auto Sales |
Aug |
| 1-Sept |
14:00 |
Truck Sales |
Aug |
| 2-Sept |
8:30 |
Initial Claims |
28-Aug |
| 2-Sept |
8:30 |
Continuing Claims |
21-Aug |
| 2-Sept |
8:30 |
Productivity-Rev. |
Q2 |
| 2-Sept |
8:30 |
Unit Labor Costs |
Q2 |
| 2-Sept |
10:00 |
Factory Orders |
July |
| 2-Sept |
10:00 |
Pending Home Sales |
July |
| 3-Sept |
8:30 |
Nonfarm Payrolls |
Aug |
| 3-Sept |
8:30 |
Nonfarm Payrolls – Private |
Aug |
| 3-Sept |
8:30 |
Unemployment Rate |
Aug |
| 3-Sept |
8:30 |
Hourly Earnings |
Aug |
| 3-Sept |
8:30 |
Average Workweek |
Aug |
| 3-Sept |
10:00 |
ISM Services |
Aug |
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Tags: MBS
Posted in Market Update, Mortgage backed securities | No Comments »
August 23rd, 2010
BY AMY LAVALLEY, POST-TRIBUNE CORRESPONDENT
Mortgage rates continue their historic downward spiral, hitting new lows on a weekly basis.
This past week, the average rate for a 30-year fixed loan was 4.42 percent, and 3.9 percent for a 15-year fixed loan, according to mortgage buyer Freddie Mac’s website, www.freddiemac.com.
Whether that transfers to a surge in home sales in the region remains to be seen, according to those in the real estate field, as concerns about jobs and the economy at large may be holding back potential homebuyers.
The effect of the low interest rates is “obviously something hard to quantify,” said Pete Novak, chief executive officer of the Greater Northwest Indiana Association of Realtors, which serves Lake, Porter, LaPorte, Newton and Jasper counties.
Homebuyers typically don’t say why they may be purchasing a home, so how the interest rates play into that decision remains an unknown, he said.
“Clearly it’s having a positive impact on the market, but it’s hard to say because there are so many negative influences on the market,” Novak said.
It also can take time to see what such a change may mean for the market. The tax credit for first-time homebuyers offered earlier this year upped spring sales, but that offer has run its course for the most part, and it will take a couple of months to measure its effect on housing sales, Novak said.
The impact of the low interest rates “depends on the price range” of the homes, said Dawn Bernhardt, an associate broker with Coldwell Banker Residential Brokerage in Valparaiso, whose market concentration is in Porter County.
“In the upper price range, a lot of people have refinanced because of the lower rates,” she said, adding the high-end housing market is still moving slowly because of the economy. “As far as just moving up, most of (homebuyers) are being very cautious.”
The interest rates are good, she said, but not enough to overcome economic concerns.
Wes Morin, an associate broker with Century 21 Heritage Inc. based in Merrillville, said he saw “a lot of activity” earlier this year but things have since slowed down. He’s not sure if that’s because of the market’s ups and downs, or if it’s because of ongoing concerns about unemployment.
“I would think with rates as low as they are, there would be more buyers,” said Morin, whose business focuses on new home sales, mostly in Lake County. “We are seeing more buyers trying to take advantage of interest rates, but not as many as you would think — and I would be surprised if the rates go lower.”
One of the factors holding folks back, Morin said, may be that banks have tightened the reins on lending, so potential buyers who might have qualified a few years ago aren’t making the cut now.
Job uncertainty isn’t helping. “People are afraid to invest anything anyway,” Morin said.
Even a 2 percent interest rate on home loans won’t spur buyers who are worried about their jobs, Novak said, adding that clearly remains the biggest factor holding back home sales.
“For those who are willing, ready and able to buy, the interest rate is an enticement,” Novak said, adding for those concerned about job security, “they’re not going to be enticed by 5 percent, 4 percent, even 3 percent or 2 percent.”
The low interest rates “are a good thing,” Morin said, but aren’t what’s driving the market. Nor, he added, are housing prices, since Northwest Indiana hasn’t seen the dramatic highs and lows witnessed in other parts of the country.
Still, Novak said prices are stable or increasing in the region, and demand for homes seems to be up.
“Listings have quite frankly gone down because more homes are being purchased,” he said. “Indications are positive. There’s just that big underlying question mark of whether it’s tax credit driven.”
Orginal Post –>
Tags: Freddie Mac, Mortgage Rates
Posted in Low Mortgage | No Comments »
August 23rd, 2010
A new survey by Trulia.com found that 72% of all renters wish to eventually own their own home.
Of those that want to own their own home, one third are ready to buy now and two thirds say that they will wait two years or more. One-third is a very sizable number and combined with consistently low mortgage rates at or near their historic lows, the stage is set for entry-level home sales to continue to surge. As the entry-level market continues to improve, that provides demand for those that are moving up to the next price level. While renters are eager to own, they are concerned about the unemployment picture, the economy, and down payment options.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) lost -19 basis points last week causing 30 year fixed rates to rise. MBS neared their best all-time pricing levels on Thursday. After we reached those great levels, we pulled back -47 basis points by Friday. The gains in mortgage backed securities (the only thing 30 year conventional mortgage rates are based on) were primarily the result of very weak Initial Jobless Claims and Philadelphia Fed Manufacturing data. We pulled back from our best pricing on Friday due mainly for profit taking as no one wanted to hold MBS at their highs.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
| Date |
ET |
Release |
For |
| 24-Aug |
10:00 |
Existing Home Sales |
July |
| 25-Aug |
8:30 |
Durable Orders |
July |
| 25-Aug |
8:30 |
Durable Goods -ex Transportation |
July |
| 25-Aug |
10:00 |
New Home Sales |
July |
| 25-Aug |
10:30 |
Crude Inventories |
21-Aug |
| 26-Aug |
8:30 |
Initial Claims |
21-Aug |
| 26-Aug |
8:30 |
Continuing Claims |
14-Aug |
| 27-Aug |
8:30 |
GDP – Second Estimate |
Q2 |
| 27-Aug |
8:30 |
GDP Deflator – Second Estimate |
Q2 |
| 27-Aug |
9:55 |
U Michigan Consumer Sentiment – Final |
Aug |
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Tags: MBS, Renters
Posted in Market Update, Mortgage backed securities | No Comments »
August 16th, 2010
A significant decline in jumbo mortgage rates (loans above $417,000) are helping to move some of the highest-end inventory. Sales volumes of homes worth more than $1 million across the country are up more than 35% from this time last year according to the National Association of Realtors. They also stated that homes between $700,000 and a million were up 29% from last year.
There is no question that high unemployment and concern about the economy is pressuring the housing market at all price points, but it is clear that the ultra-low mortgage rates are having a dramatic impact on the highest end of the price spectrum.
Conventional lenders (Fannie Mae and Freddie Mac) do not make jumbo loans. Those loans usually are held by banks. These banks are becoming more comfortable making higher end loans these days and are looking to take advantage of a premium that they just can’t earn with a conventional mortgage where their margins are simply too thin.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) lost -3 basis points last week but reached their best all-time pricing levels on Tuesday. After we reached those great levels, we pulled back -31 basis points by Friday. The gains in mortgage backed securities (the only thing 30 year conventional mortgage rates are based on) were primarily the result of the Federal Open Market Committee (aka ”The Fed”) rate decision and policy statement on Tuesday afternoon. While they did leave their rates alone, their downwardly revised economic outlook and decision to reinvest their profits from maturing mortgage backed securities into Treasuries drove down rates.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
| Date |
ET |
Release |
For |
| 16-Aug |
8:30 |
NY Fed – Empire Manufacturing Index |
Aug |
| 16-Aug |
9:00 |
Net Long-Term TIC Flows |
May |
| 16-Aug |
10:00 |
NAHB Housing Market Index |
Aug |
| 17-Aug |
8:30 |
Housing Starts |
July |
| 17-Aug |
8:30 |
Building Permits |
July |
| 17-Aug |
8:30 |
PPI |
July |
| 17-Aug |
8:30 |
Core PPI |
July |
| 17-Aug |
9:15 |
Industrial Production |
July |
| 17-Aug |
9:15 |
Capacity Utilization |
July |
| 18-Aug |
10:30 |
Crude Inventories |
14-Aug |
| 19-Aug |
8:30 |
Initial Claims |
14-Aug |
| 19-Aug |
8:30 |
Continuing Claims |
7-Aug |
| 19-Aug |
10:00 |
Leading Indicators |
July |
| 19-Aug |
10:00 |
Philadelphia Fed |
Aug |
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Tags: MBS, Sales Surge
Posted in Market Update | No Comments »
August 9th, 2010
An “underwater mortgage” is when a homeowner owes more on their current mortgage(s) than what the home is currently worth and obviously is a big concern for the housing market.
According to Zillow.com, the rate of underwater mortgages fell last quarter. The percentage of single-family homes with negative equity fell to 21.5 percent in the second quarter. Many see this as an indicator that default and foreclosure rates could slow from current levels and is reflective of some stability in home values and stronger demand for housing with all-time low mortgage rates still driving up demand.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +50 basis points last week which caused 30 year fixed rates to decrease for both government and conventional loans. The gains in mortgage backed securities (the only thing 30 year conventional mortgage rates are based on) were the result of a weaker than expected Unemployment report. The Unemployment Rate remained unchanged at 9.5% but market participants were very disappointed with the growth levels of the Non-Farm Payrolls in the private sector.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
| Date |
ET |
Release |
For |
| 10-Aug |
8:30 |
Productivity-Prel |
Q2 |
| 10-Aug |
8:30 |
Unit Labor Costs |
Q2 |
| 10-Aug |
10:00 |
Wholesale Inventories |
June |
| 10-Aug |
14:15 |
FOMC Rate Decision |
10-Aug |
| 11-Aug |
8:30 |
Trade Balance |
June |
| 11-Aug |
10:30 |
Crude Inventories |
7-Aug |
| 11-Aug |
14:00 |
Treasury Budget |
July |
| 12-Aug |
8:30 |
Initial Claims |
7-Aug |
| 12-Aug |
8:30 |
Continuing Claims |
31-Jul |
| 12-Aug |
8:30 |
Export Prices ex-ag. |
July |
| 12-Aug |
8:30 |
Import Prices ex-oil |
July |
| 13-Aug |
8:30 |
CPI |
July |
| 13-Aug |
8:30 |
Core CPI |
July |
| 13-Aug |
8:30 |
Retail Sales |
July |
| 13-Aug |
8:30 |
Retail Sales ex-auto |
July |
| 13-Aug |
9:55 |
Mich Sentiment |
Aug |
| 13-Aug |
10:00 |
Business Inventories |
June |
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
Tags: MBS, Underwater Mortgages
Posted in Market Update | No Comments »
August 5th, 2010
The Senate approved legislation giving the Secretary of the US Department of Housing and Urban Development the ability to increase annual premiums for single family loans insured by the Federal Housing Administration late Wednesday night.
HR 5981permits FHA to increase its annual premiums for “forward” loans from from 0.55 percent to 1.55 percent. The agency also said it plans to raise annual premiums for HECM loans from 0.50% to 1.25%.
“While premium increases are never ideal, this bill was necessary to help improve the strength and stability of FHA’s single family programs,” said Robert E. Story, Jr., CMB, Chairman of the Mortgage Bankers Association. ”We are encouraged that FHA Commissioner Stevens has indicated he may not need to raise premiums to the maximum, and we believe that that a small increase in the annual premium, coupled with a decrease in FHA’s upfront premium, will help stabilize FHA while lowering closing costs for many borrowers.”
The could also give HUD the ability to adjust premiums for a two reverse mortgage product approach outlined by Colin Cushman, Director of Portfolio Analysis at HUD earlier this year during a conference in Washington, DC.
The proposal includes the current HECM product with higher annual premiums and the “HECM Saver” would provide borrowers with less in proceeds but without an upfront premium. Designed to be a pay as you go product, Cushman said it would help lower the risk to the FHA insurance fund and offer borrowers an additional option not currently available.
According to the National Reverse Mortgage Lenders Association, it’s awaiting confirmation from HUD’s Office of General Counsel that the language in the bill does in fact provide the flexibility needed to implement the HECM Saver. “Early indications are that it does, but we await official confirmation,” said the association.
The bill passed the House last week and now heads to President Barack Obama who is expected to sign the bill into law.
Letter From David H. Stevens:
Over the past week, Congress has taken quick action and passed H.R. 5981. The bill gives FHA the authority to adjust its annual mortgage insurance premium, yielding approximately $300 million per month in value to the FHA Mutual Mortgage Insurance Fund at a time when its reserves are perilously low.
As I have previously stated in my testimony before Congress, FHA will lower its upfront premium simultaneously with the increase to the annual premium¹. It is our intention that effective on September 7, 2010, FHA’s upfront mortgage insurance premium will be adjusted down to 100 basis points on all amortization terms and the annual mortgage insurance premium will increase to 85-90 basis points on amortization terms greater than 15 years². A Mortgagee Letter will be forthcoming once President Obama signs the bill into law, but with today’s passage of H.R. 5981 and our expedited implementation schedule, I wanted to immediately inform the industry of our plans so the lending community can begin preparing for the operational and system changes required to implement FHA’s new mortgage insurance premium structure on all new case numbers by September 7, 2010.
With this authority, FHA is in a better position to address the increased demands of the marketplace and return the MMI fund to congressionally mandated levels without disruption to the housing market.
While we appreciate and applaud this recent action, there is still work to be done. HUD remains steadfast in its commitment to comprehensive FHA reform legislation, similar to the FHA Reform Act passed earlier this year by the House, which would further enhance FHA’s lender enforcement capabilities and risk management efforts. We hope Congress will take swift action to pass a broader FHA reform bill when they return from the August recess. FHA’s risk management efforts will not be complete without the ability to monitor lender performance and ensure compliance with our rules.
Although the transition timeframe is short, implementation by September is critical. Thank you in advance for the efforts of you and your organization to make this change happen on such short notice. We appreciate your hard work and continued partnership.
Over the past week, Congress has taken quick action and passed H.R. 5981. The bill gives FHA the authority to adjust its annual mortgage insurance premium, yielding approximately $300 million per month in value to the FHA Mutual Mortgage Insurance Fund at a time when its reserves are perilously low.As I have previously stated in my testimony before Congress, FHA will lower its upfront premium simultaneously with the increase to the annual premium¹. It is our intention that effective on September 7, 2010, FHA’s upfront mortgage insurance premium will be adjusted down to 100 basis points on all amortization terms and the annual mortgage insurance premium will increase to 85-90 basis points on amortization terms greater than 15 years². A Mortgagee Letter will be forthcoming once President Obama signs the bill into law, but with today’s passage of H.R. 5981 and our expedited implementation schedule, I wanted to immediately inform the industry of our plans so the lending community can begin preparing for the operational and system changes required to implement FHA’s new mortgage insurance premium structure on all new case numbers by September 7, 2010.
With this authority, FHA is in a better position to address the increased demands of the marketplace and return the MMI fund to congressionally mandated levels without disruption to the housing market.While we appreciate and applaud this recent action, there is still work to be done. HUD remains steadfast in its commitment to comprehensive FHA reform legislation, similar to the FHA Reform Act passed earlier this year by the House, which would further enhance FHA’s lender enforcement capabilities and risk management efforts. We hope Congress will take swift action to pass a broader FHA reform bill when they return from the August recess. FHA’s risk management efforts will not be complete without the ability to monitor lender performance and ensure compliance with our rules.
Although the transition timeframe is short, implementation by September is critical. Thank you in advance for the efforts of you and your organization to make this change happen on such short notice. We appreciate your hard work and continued partnership.
_______________________________________
¹ The upfront and annual premium changes do not apply to the following FHA Programs: Title I, HECM, HOPE for Homeowners (H4H), Section 247 (Hawaiian Homelands), Section 248 (Indian Reservations), Section 223 (e) (declining neighborhoods), Section 238(c) (Military Impact areas in Georgia and New York).
² LTV’s <= 95% will increase to 85bps and LTV > 95% will increase to 90 bps
Tags: FHA, News, Reverse Mortgage
Posted in Politics | No Comments »
August 2nd, 2010
Single-family home prices rose more than expected in May according to the new release of the Standard and Poor’s/Case Chiller home price index.
The 20-city composite price index rose 0.5% in May and April was upwardly revised to an increase of 0.6%. Economists had been expecting a smaller gain in the range of 0.2%. While these monthly increases appear small, they do indicate a trend towards housing stability after the bottom in 2009. The index showed a 4.5% increase on a year-over-year basis and it is the 14th straight month of improvement in this report.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +66 basis points last week which caused 30 year fixed rates to decrease for both government and conventional loans. The gains in mortgage backed securities (the only thing 30 year conventional mortgage rates are based on) were the result of concerns about the stability of our economic recovery. While we had a week of stronger than expected housing data across the board, the market reacted to a lower than expected economic growth rate (GDP) and deflationary concerns.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
| Date |
ET |
Release |
For |
| 2-Aug |
10:00 |
Construction Spending |
June |
| 2-Aug |
10:00 |
ISM Index |
July |
| 3-Aug |
8:30 |
Personal Income |
June |
| 3-Aug |
8:30 |
Personal Spending |
June |
| 3-Aug |
8:30 |
PCE Prices – Core |
June |
| 3-Aug |
10:00 |
Factory Orders |
June |
| 3-Aug |
10:00 |
Pending Home Sales |
June |
| 3-Aug |
14:00 |
Auto Sales |
Jul |
| 3-Aug |
14:00 |
Truck Sales |
Jul |
| 4-Aug |
8:15 |
ADP Employment Change |
Jul |
| 4-Aug |
10:00 |
ISM Services |
Jul |
| 4-Aug |
10:30 |
Crude Inventories |
31-Jul |
| 5-Aug |
8:30 |
Continuing Claims |
24-Jul |
| 5-Aug |
8:30 |
Initial Claims |
31-Jul |
| 6-Aug |
8:30 |
Nonfarm Payrolls |
July |
| 6-Aug |
8:30 |
Nonfarm Payrolls – Private |
July |
| 6-Aug |
8:30 |
Unemployment Rate |
July |
| 6-Aug |
8:30 |
Hourly Earnings |
July |
| 6-Aug |
8:30 |
Average Workweek |
July |
| 6-Aug |
15:00 |
Consumer Credit |
June |
Tags: home prices, MBS
Posted in Market Update, Mortgage backed securities | No Comments »
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Mortgage Specialists, LLC
8420 W. Dodge Rd, Suite 113, Omaha NE, 68114
Phone: 800-519-1870
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