Real Estate News

Posted To: MND NewsWire

The Center for Responsible Lending (CRL) has released a brief issues paper voicing objections to HR 1077 , The Consumer Mortgage Choice Act. The bill currently sits in the House Financial Services Committee of which its sponsor Representative Bill Huizenga (R-MI) is a member. The bill amends the Truth in Lending Act (TILA) with respect to disclosures of points and fees for so called "high cost" mortgage loans and has the following key points Excludes from the computation of such points and fees: (1) the amount of any loan level price adjustment payment set by Fannie Mae, Freddie Mac, FHA, or similar government entity, (2) any compensation paid by a mortgage originator to an employee or creditor; and (3) any escrow for future payment of insurance. Modifies the inclusion in the computation of...(read more)

Posted To: MBS Commentary

MBS Live : MBS Afternoon Market Summary MBS took a running start downhill this morning before reaching the edge of the cliff marked by yesterday morning's "ledge" of prices. This was the 102-28 area hit after yesterday's 8:30am economic data, including the weaker-than-expected Jobless Claims figures. MBS would go on to rally further after Philly Fed data at 10am, resulting in their best day of the month by a wide margin. Staring over the precipice of that same cliff (OK, it's not a very epic sort of cliff by the time we get back down to 102-28 from yesterday's highs at 103-10, but we're going for some continuity with the title here!), MBS turned, mouthed the words "it was never about the data..." and took the leap, ultimately making a splash (lots of them) around the important 102-16 waterline...(read more)

Posted To: Mortgage Rate Watch

Mortgage rates moved higher at their fastest pace in two weeks , after having their best day in more than 6 weeks just yesterday. The net effect for rates is not good, leaving them at their highest levels of the week and very close to 2013 highs seen in early March. While 3.625% remains as the best-execution rate for conventional, 30yr fixed loans, the costs associated with that rate (or whatever rate you're considering) are as high as they've been all week. Further increases from here start to shift the balance toward 3.75%. There's no question that the month of May has been exceptionally volatile for mortgage rates, in the context of the past 2 years anyway. Consider the "cost" side of the mortgage rate equation. Every rate has an associated cost implied. The lower the rate, the higher the...(read more)

Posted To: MND NewsWire

Lawrence Yun, chief economist for the National Association of Realtors® (NAR) said Thursday it might be time to " dial down the credit stringency ." If the credit scores required for a mortgage returned to the more normal levels of about 720 for conventional loans and 660 for FHA loans, he said, home sales could be 15 to 20 percent higher than they are. During the past four years the average scores for approved conventional loans have been in the 760 to 770 range. About 51 percent of renters could qualify financially to purchase a home compared to 24 percent in 2005 and 33 percent in 2000. While their credit scores are unknown, "there are about 8 million more renters with the income necessary to buy a home now than in 2000, but they are choosing not to or are unable to become a homeowner...(read more)

Posted To: MND NewsWire

A Texas homebuilder will surrender more than $100,000 to the Consumer Finance Protection Agency under a consent order filed on Friday. Paul Taylor, a principal of Paul Taylor Homes Unlimited and Paul Taylor Corporation was accused of receiving kickbacks for referring homebuyers to Benchmark Bank and to Willow Bend Mortgage Company for their mortgages. Under the agreement Taylor is also prohibited from engaging in future real estate settlement services including mortgage origination. Under the consent order, under which the respondents neither accepted nor denied the CFPB findings, the Bureau contends that Taylor and Benchmark jointly created and owned Stratford Mortgage Services and Willow Bend and Taylor created PTH Mortgage Company. Both companies, which the CFPB contends were shams, operated...(read more)

Posted To: MND NewsWire

Senator Bill Nelson (D-FL has asked for an investigation and possible "crackdown" on the manner in which short sales are impacting consumer credit files . Nelson said that short sales are now often reported to the credit agencies using the same code that designates a completed foreclosure. In letters sent earlier this month to Edith Ramirez, Chairwoman of the Federal Trade Commission (FTC) and Richard Cordray, Director of the Consumer Financial Protection Bureau (CFPB) Nelson called the credit coding practice "disturbing" and said that there are key differences between a short sale and a foreclosure and both have major but different implications for consumers' credit ratings. "If a short sale is reported as a foreclosure, it could unfairly ruin short sellers' credit scores and make it more...(read more)

Posted To: MND NewsWire

The Consumer Finance Protection Agency (CFPB) reminded lenders today that new Truth in Lending Act (TILA) rules banning mandatory arbitration provisions go into effect on June 1, 2013 so all documentation for new loans should be ready to go on that date. Changes to Regulation Z amendments relating to those provisions were contained in CFPB's final rule on loan originator compensation issued last January. The changes ban "terms that require arbitration or any other non-judicial procedures to resolve any controversy or settle any claims arising out of the transaction" for any closed in loan secured by a dwelling. Loans closed before June 1 or for which applications were received after that date are not covered by the new rule , but all lenders must make sure that all loan documents for loans...(read more)

Posted To: Pipeline Press

Among the nation's 30 largest metro areas included in a recent Zillow study, Pittsburgh (39%), Tampa (33%), New York (30%), Cleveland (29%) and Miami (29%) had the highest percentage of free-and-clear homeowners. It appears that areas with lower home values generally have higher outright homeownership rates, as smaller loan amounts are easier to pay back more quickly, but the age and credit rating of primary borrowers also influence free-and-clear homeownership rates. Zillow found that 65- to 74-year-olds are most likely to be free-and-clear (21%), followed by 74- to 84-year-olds (18%). Interestingly, when examining free-and-clear ownership rates as a percentage of homeowners in various age groups, Zillow found 35% of 20- to 24-year-old homeowners are free of debt. And one last unsurprising...(read more)

Posted To: MBS Commentary

MBS Live : MBS Morning Market Summary Here we are again... All but a few days this week have seen morning sell-offs that have required negative reprice alerts for MBS Live subscribers . As previously intimated, such alerts delay the publication of these free recaps and will be reflected in the afternoon recap. It also means that the price table below is quite a bit out-dated at the moment, as it is automatically generated for this morning recap between 11:00am and 11:10am. Prices are quite a bit lower now and I've posted two more alerts since then. Consumer Sentiment wasn't the only culprit here. Rather, the pre-FOMC " range-finding " is probably what accelerated the losses with the Sentiment data merely serving to reinforce yesterday's highs. We've been trending back in the other direction...(read more)

Posted To: MBS Commentary

The bulk of the week's activity has passed, from a calendar standpoint, and this morning's Consumer Sentiment data is all that's left on the domestic agenda. Even in the overnight session, there are no interesting data sets, and really, no data period, unless you consider Canadian CPI interesting (and we'd recommend against such perversion). These days tend to go one of two ways . More often than not, after big sell-offs and moderate bounces like we've seen this week, these Friday's fizzle mostly sideways as long as the data doesn't get any snowballs rolling. Occasionally, however, Sentiment data, and even other headlines can do just that. So I guess that's Fizzle with a chance of snowballs? Here are a few charts to help frame the trading day ahead. First up, take a look at MBS. Fannie 3.0...(read more)

Posted To: MBS Commentary

MBS Live : MBS Afternoon Market Summary Yesterday and again early this morning (before the data), we discussed the potential significance of yesterday's prices failing to make a new low for the first time in 9 days. It's not a common thing for MBS or Treasuries to go that many sessions in a row making new lows, and earlier in the week we noted that sell-off's in Treasuries seldom go more than 8-12 sessions without pausing for at least 2 days. The current sell-off hit it's 9th day yesterday, and the strong bounce at the same highs (yield) seen on Tuesday set the stage for 1.98 to be the high end of the near-term range heading into next Wednesday. The analogous level for MBS would be 102-16. After dipping for a moment to 102-17 this morning, MBS never looked back, though they did lose a little...(read more)

Posted To: Mortgage Rate Watch

Mortgage rates moved lower at their fastest pace in 6 weeks today, erasing most of the losses seen so far this week. Not all lenders have adjusted pricing at the same pace, however, and best-execution is still 3.625% for conventional, 30yr fixed loans. That means today's improvements came in the form of lower borrowing costs or increased lender credit, depending on the scenario. Today's improvements were potentially important in the bigger picture. We began talking about this yesterday, saying that: [Wednesday's] trading had the redeeming quality of NOT making a new low. We can't conclude anything from 1 session, but it does at least introduce the possibility that we're digging in at recent highs to make a range between now and next week's FOMC Minutes. This would look more likely if we see...(read more)

Posted To: MND NewsWire

CoreLogic said today that home prices are projected to increase 3.9 percent on an annualized basis between the fourth quarter of 2012 and the same quarter in 2017. However, a new housing bubble is not likely as market dynamics shift for both supply and demand. Prices rose 7.3 percent in 2012. The CoreLogic Case-Shiller Index report notes that the increase in 2012 was the strongest rate of appreciation in nearly seven years and projected that prices will continue to improve in 2013 and beyond in the more than 380 U.S. markets it tracks. The company's current analysis says that, "Cities at epicenter of housing bubble/crash are clocking highest rate of appreciation, largely driven by investor demand." "Home prices were up in seven out of every 10 metro areas in 2012. By comparison, in 2011 prices...(read more)

Posted To: MBS Commentary

MBS Live : MBS Morning Market Summary Hopefully, in talking about the half point rally in MBS we're not unintentionally "jinxing" it, but yeah--there's a half point rally underway in MBS. This all started out innocently enough as bond markets walked in domestic doors roughly level with yesterday's closing prices. Those prices were roughly mid-point on the day yesterday. That was an important place to be this morning considering yesterday's lows were the first in 9 sessions to NOT fall below the previous sessions lows. That meant that any ground-holding or improvement today would help confirm the case for a medium term range boundary being hit on Tuesday and Wednesday. We've held above those lows and then some, thanks to another round of economic data that has been universally bond-market-bullish...(read more)

Posted To: MND NewsWire

The U.S. Census Bureau and the Department of Housing and Urban Development said today that new housing starts were down in April by 16.5 percent compared to March. Construction began on privately owned residential units at a seasonally adjusted annual rate of 853,000 compared to the revised March estimate of 1,021,000. The original March figure was estimated at 1,036,000 units. April starts were 13.1 percent higher than a year earlier when construction was started on 754,000 units. Single-family construction was begun at a rate of 610,000 units, down 2.1 percent from the March rate of 623,000. Starts in buildings with five or more units was down 38.9 percent to a rate of 234,000 units compared to 376,000 in March. Housing Starts Click and drag to zoom charts. Residential construction permits...(read more)

Posted To: Pipeline Press

"Talent hits a target no one else can hit; genius hits a target no one else can see." Hedge funds and investment banks have a lot of talent, and periodicals note how some prominent hedge funds have been buying preferred shares in Freddie Mac and Fannie Mae . And something tells me those guys don't buy stuff on whims. The preferred shares have been rallying lately as the GSEs post massive profits and the overall housing market improves. But the official stance is that it is unlikely Fannie/Freddie will be recapitalized and sold back to investors. As you would expect, the hedge funds have been lobbying Washington for the government to sell its stake in the firms . Switching gears to the FHA issue and high priced loans, I received this note relating to the FHA/HPML issue from a private mortgage...(read more)

Posted To: MND NewsWire

The median price of homes in California topped $400,000 in April for the first time in five years. The California Association of Realtors® (C.A.R.) said the increases are fueled by high demand and tight inventories of available homes. Completed existing home sales in the state were at a seasonally adjusted annual rate of 423,510 units in April, up 1.3 percent from a revised 417,880 in March. Sales were lower however than a year earlier, down 3.7 percent from the annual rate of 439,770. "California's housing market maintained its momentum in April, getting the spring home-buying season off to a good start ," said C.A.R. President Don Faught. "Southern California regions such as Los Angeles, Orange County, and San Diego led the way in both month-to-month and year-over-year sales increases...(read more)

Posted To: MND NewsWire

RealtyTrac has undertaken a new type of analysis, comparing building permit data from the Department of Housing and Urban Development (HUD) with foreclosure starts for the same time period at the national, state, and city level. It appears that the company is seeking to pinpoint areas where either increased building, increased foreclosures, or both will increase inventories which are at historically low levels in some localities. RealtyTrac reports the following. Building permits were issued in the first quarter at a rate that was 27 percent higher than one year earlier and was the highest first quarter number issued since 2008. Foreclosure starts nationwide decreased by 27 percent on an annual basis to the lowest quarterly level since 2006. Sixty-four percent of the building permits were for...(read more)

Posted To: MBS Commentary

If the presence of greater amounts of economic data was a benefit for bond markets on Wednesday (and we're not sure that it was), then Thursday has even greater potential to confirm or reject that potential correlation. The benefit of Wednesday's economic data can be questioned because bond markets nearly had a melt-down heading into the PM hours, and they weren't saved by data. MBS and Treasuries both caught solid technical support as they revisited their weakest levels from the previous session. For the first time in 9 sessions, MBS did NOT make a new low (even though that seemed like a probability on several occasions)! That's all well and good, but will it continue to be the case today? That depends more on data today than it did yesterday. Yesterday's data didn't really have the same street...(read more)

Posted To: Mortgage Rate Watch

Mortgage rates had a good day, despite the fact that the day-over-day change from yesterday is flat to slightly higher. Part of the reason for the higher average rate (by .01%) today has to do with late day negative reprices yesterday that weren't yet reflected in our daily marks. This helps the best-execution rate for conventional, 30yr fixed loans, stay in it's 3.625% zone. Lower rates continue to be viable options in some scenarios, but are increasingly costly, moving lower from 3.625%. Bond markets, including MBS (the 'mortgage-backed-securities' that most directly affect mortgage rates), have been on the back foot all month, with the latter making a new low every single day since May 1 (when MBS move lower, rates move higher). Today's trading had the redeeming quality of NOT making a new...(read more)

Posted To: MBS Commentary

MBS Live : MBS Afternoon Market Summary It's about 24 hours too soon to start getting excited, but for the very first time in May, MBS did NOT make new lows today! That's not for lack of trying though... Fannie 3.0s were off to another uneventful, positive start--something we've seen several times so far this month, including yesterday--before taking a nosedive heading into 11am. This was an MBS-specific event, best we can tell, with stocks and bonds following suit several minutes after lower MBS coupons began losing bidders. Prices fell quickly from 102-26 to 102-19 and corrected before proceeding to the lows of the day at 102-16. The nice thing about those lows? Not as low as yesterday, by a whole 1/64th of a point! Hey... It's not much, but if we're going to bounce back and make a range...(read more)

Posted To: MND NewsWire

Nearly a quarter million homeowners received mortgage loan modifications through HOPE NOW during the first quarter of 2013. The voluntary private sector alliance of mortgage servicers, investors, mortgage insurers, and non-profit counselors operating under that name modified about 203,000 mortgages through proprietary programs and 42,157 through the Home Affordable Modification Program (HAMP). There were approximately 84,000 short sales transacted through HOPE NOW in the first quarter, a reduction of 22,000 from the fourth quarter. Since HOPE NOW began tracking the statistic in December 2009 it has arranged 1.23 million short sales. Since HOPE NOW was formed in 2007 its members have permanently modified more than 6.32 million mortgages , 5.14 million through proprietary programs and 1.18 million...(read more)

Posted To: MND NewsWire

Nearly half of members responding to a National Association of Federal Credit Unions survey say they are already planning to drop loans from their product line that do not meet Qualified Mortgage (QM) guidelines. Members were asked about a range of impacts anticipated under new Dodd-Frank Act rules being implemented by the Consumer Financial Protection Bureau in a survey conducted for the May Economic and CU Monitor. Respondents said they were getting a head start on complying with the new Ability-to-Repay/QM mortgage rule. A large majority, 92.9 percent, said they have seen regulatory burdens rise under the rule and 88.1 percent reported increasing compliance costs. If the regulatory and compliance issues under Dodd-Frank did not exist, 71.1 percent of the respondents said they could offer...(read more)

Posted To: MND NewsWire

The Federal Housing Finance Agency ( FHFA ) published an interim final rule in the Federal Register on Tuesday which may mean that the long drawn-out saga over compensation for executives of the Federal Home Loan Banks (FHLBanks) and Freddie Mac and Fannie Mae (the GSEs) is drawing a close. The interim rule, four years in the making , is set to go into effect in June and FHFA will accept public comments until July 15 . As background, in June 2009 FHFA published rulemaking with requests for comments on an executive compensation rule . The comment period closed on August 4, 2009. That rule basically set out the authority of the agency and its director to set compensation for executives of the regulated entities that were reasonable and comparable and set out various ways in which that reasonableness...(read more)

Posted To: MND NewsWire

Under Dodd-Frank, the Consumer Finance Protection Bureau ( CFPB ) was required to issue several mortgage rules , ostensibly intended to 'protect consumers.' While the extent to which these rules actually accomplish 'protection' is open to debate, there's no question that they've constituted an additional layer of complication for mortgage markets. In an effort to address problems with the accessibility and tangibility of the information in the rules, and to clear up confusion as to which parts of which rules go into effect on which dates, the CFPB posted a video series to their site. There's one incredibly long video that includes all the rules: Compiled overview of all of the 2013 new mortgage rules ( seen below ) The rules are also broken out individually as follows: ( found here ) Ability...(read more)