Archive for the 'Mortgage News' Category
MBA Mortgage applications see biggest increase in 4 months: Composite Index jumped 15.5%, Refinance Index soared 23.1%, and Purchase Index fell 0.1%. The refinance share of mortgage activity rose to 70.1% of total applications from 65.6% the week before, and the fixed 30-year mortgage rates averaged 4.54%, easing from 4.55%.
NAR: June Existing-Home Sales Slip 0.8% on Contract Cancellations, but Prices Stabilize. The national median existing-home price for all housing types was $184,300 in June, up 0.8% from June 2010, and distressed homes (foreclosures and short sales) accounted for 30% of sales in June, compared with 31% in May and 32% in June 2010. Total housing inventory rose 3.3% to 3.77 million, which represents a 9.5-month supply at the current sales pace, up from a 9.1-month supply in May. NAR chief economist Lawrence Yun said “Home sales had been trending up without a tax stimulus, but a variety of issues are weighing on the market including an unusual spike in contract cancellations in the past month,” “The underlying reason for elevated cancellations is unclear, but with problems including tight credit and low appraisals, 16 percent of NAR members report a sales contract was cancelled in June, up from 4 percent in May, which stands out in contrast with the pattern over the past year.”
Treasuries Decline as Improved Earnings Boost Investors’ Appetite for Risk as hope increases for some solutions to the debt problems on both sides of the Atlantic. The 10yr UST is down 9/32 yielding 2.91% at 10AM, and MBS TBA prices are down 2/32 on par coupons. 30yr UST bond yields, which tumbled 12 basis points yesterday, increased to 4.23%.
Debt Compromise Pressure Intensifies in U.S. A bipartisan Senate proposal for a $3.7 trillion debt-cutting plan praised by President Barack Obama faces resistance from House Republicans, as lawmakers intensify efforts for a compromise on government spending less than two weeks before a threatened default.
U.S. trade deficit surged 15.1% in May to $50.23 billion, its highest level in over two and a half years, as a spike in oil prices drove up imports and exports declined. Trade helped damp the first quarter’s economic slowdown, contributing 0.14 percentage point to gross domestic product. A weaker U.S. dollar and growing economies overseas may keep bolstering demand for American-made products.
Treasuries Advance as Lagarde Says IMF Not Yet in Talks on Greece Bailout. 10-year UST yields touched a seven- month low of 2.87%this morning on concern Europe’s debt crisis may spread to Spain and Italy, economies/countries too big to rescue. The US bond market will have additional supply to absorb this week as the Treasury is scheduled to sell $66 billion of U.S. notes and bonds, including $32 billion of three-year notes today, $21 billion in 10-year notes Wednesday and $13 billion of 30-year bonds Thursday.
Jobless Claims Rose 10,000 to 418,000 in the week ended July 16, the first increase in 3 weeks. Claims have been above 400k every week since April 9th. Economists generally think the economy is adding more jobs if the weekly claims figure falls below 400,000. Continuing unemployment benefit claims declined by 50,000 to 3,698,000.
FHFA Home Price Index Rose 0.4% in May, the second consecutive monthly increase and better than the expected 0.1% increase. April’s results were revised downward to a 0.2% increase from an initial estimate of a 0.8% increase. Year over year, home prices were still down 6.3%. Despite the monthly increase, the ailing U.S. housing market remains one of the major weak spots for the economy. The index remains 19.6% below its peak in April 2007 and roughly equal to the level of January 2004.
Philly Fed Business Outlook: Manufacturing remain weak but did increase to 3.2%, recovering somewhat from -7.7. “Firms indicated that employment grew modestly while the average workweek lessened. Indexes for prices show a continuing trend of moderating price pressures. The broadest indicator of future activity improved markedly this month, rebounding from its lowest reading in 31 months in June.”
Treasuries Fall Amid Speculation Greek Bonds Will Get European Guarantee. Investors sold out of safe-haven Treasurys Thursday, sending benchmark 10-year yields back above the much-watched 3.0% level, on optimism about the progress being made in the Greece bailout.
Euro Zone Moves Toward Greek Deal. Details emerged for today’s emergency Euro – zone summit meeting of a draft proposal included more flexibility for the European Financial Stability Facility to buy bonds in the secondary market and aid to Greece. European negotiators were homing on ways to reduce Greece’s debt burden while containing the possible knock-on effects to other weak economies in the 17-nation euro zone.
Debating Dodd-Frank:Is ‘Too Big to Fail’ Gone? The Dodd-Frank financial overhaul was designed to end the prospect that the U.S. would ever again step in to save a large, failing financial firm. One year later, a debate is raging as to whether the legislation has achieved that core goal.
Obama Seeks Grand Bargain on Deficit, and pushed back against Republican efforts to focus on a scaled-down deficit deal, arguing for a broader package of spending cuts and tax increases to put the U.S. on a sounder long-term fiscal footing. The Treasury has said the debt ceiling must be raised by August 2 and credit rating agencies have threatened to downgrade U.S. debt if there is a risk of default. Geithner warned that if credit rating agencies downgrade U.S. debt for the first time in history, “you’re going to see catastrophic damage across the American economy and across the global economy.”
U.S. Tackles Housing. The Obama administration is ramping up talks on how to revive the housing market, which is weighing on the economic recovery—and possibly the president’s re-election in 2012. Housing “hasn’t bottomed out as quickly as we expected,” President Barack Obama said and that housing remained the “most stubborn” problem facing the country and conceded that a raft of federal mortgage-aid programs were “not enough, and so we’re going back to the drawing board.” Policy ideas include having Fannie Mae and Freddie Mac relax their rules for loans to investors, allowing those buyers to absorb excess housing inventory easier. In certain markets, Fannie and Freddie could hold some foreclosed homes off the market and rent them out to ease the property glut. Other incentives may be for banks to reduce loan balances for borrowers who are underwater, or owe more than their homes are worth.
Italy Seeks Swift Austerity Approval. The Italian parliament is working on approving a $40 billion austerity plan by Sunday, to keep Europe’s debt crisis from infecting the continent’s third-largest economy.
Not a bad deal! The key is purchasing a property owned by Fannie Mae through it’s HomePath program. These homes are eligible for special financing terms that are available no where else.
Financing Benefits to You
- 3% down payment – can be your own funds or a gift from a qualified person or organization
- No mortgage insurance (unlike FHA financing which requires both up-front mortgage insurance (MI) premiums and also monthly MI payments)
- No appraisal required – that’s a biggie, just ask your real estate agent!
- The Seller can also contribute to your closing costs
There are many HomePath properties available in the San Diego and Riverside county areas. Contact your local Real Living Lifestyles agent (WWW.RLLIFESTYLES.COM) for information on HomePath homes available in your area. I’ll be happy to discuss your HomePath financing options with you as well!
Paul Gonzales, Countywide Mortgage Lending (760) 746-7388 [email protected], NMLS #CA-DOC290493
Treasuries Fall as Stock-Index Futures Erase Drop; 10-Year Yield at 3.02% . Treasury prices are lower Monday, pushing yields up from the lowest in six months, as investors eye this week’s supply of government-debt auctions of 3-year and 10-year notes and 30-year bonds on Tuesday, Wednesday and Thursday. Economic data releases this week will be minimal, leaving more focus on Federal Reserve buybacks and auctions. Yields on 10-year notes turned up 3 basis points to 3.02%, after slipping to 2.98% during the European session.
Moody’s Vows to Cut U.S. Credit Rating Without Debt-Limit Action. Credit ratings agency Moody’s said “Although Moody’s fully expected political wrangling prior to an increase in the statutory debt limit, the degree of entrenchment into conflicting positions has exceeded expectations. The heightened polarization over the debt limit has increased the odds of a short-lived default. If this situation remains unchanged in coming weeks, Moody’s will place the rating under review.”
Parties maneuvering on debt and Medicare. The threat of a first-ever default by the U.S. government is pushing President Barack Obama and Republicans toward an agreement to cut government spending and increase the Treasury’s borrowing authority.
Fed’s Plosser: Bar for QE3 ‘Pretty High’, and the May employment report was “disappointing, but the fundamentals of the economic recovery remain the same. Most of the weakness we are seeing is transitory.” We have a fiscal problem. The real challenges are long-term, spending, debt.” Policy makers need to act in a consistent way, Plosser said.
Slowing U.S. Growth Prompts Optimists to Question Durability of Recovery. A string of disappointing economic data capped by last week’s jobs report is prompting even some of the more optimistic economists to question the durability of the U.S. recovery.
Plosser: Fed Exit Should Start Before Jobs Firm. Federal Reserve Bank of Philadelphia President Charles Plosser said an exit from stimulus measures should start “long before” a recovery in the U.S. jobs market is assured.
HEADS UP! The cost of real estate financing may be going up, and the size of cheaper loans may be going down – all very shortly! Since I last reported on this in April, the Federal government has done nothing to change either of these two prospects.
On June 30th the Federal Reserve is scheduled to end its subsidy of interest rates including mortgages, by terminating its purchase of U.S. Treasuries. While arguments abound about whether this program, known as “Quantitative Easing” or “QE2” has helped or hurt the economy, many analysts are concerned that the ending of this program could put upward pressure on interest rates, particularly mortgage loans.
More Costly Loans
The current “jumbo” or high-balance loan limits for both conventional (Fannie Mae and Freddie Mac) and FHA loans are scheduled to be rolled-back to considerably lower loan amounts on October 1st. The Obama Administration has signaled that it does not intend to press Congress to extend the current (higher) loan amounts beyond that date. This may not be an issue in the Midwest but could impact real estate markets such as Southern California. In San Diego County that will likely mean the maximum conventional and FHA loan limits could drop from $697,500 to below $600,000 depending on what formula HUD uses to compute the new lower limits. Loan amounts above the new limits will fall into the more expensive, higher interest rate and tighter underwriting rules for true jumbo loans.
Home Buyer or Home Seller?
For either party with an interest in real estate today, these two events should prompt urgency in buying or selling that home. Whether you are shopping for or looking to sell that home, you may be well served by being proactive and getting ‘er done. Contact your Real Living Lifestyles agent today, get the facts and get moving now!
For more information – Paul Gonzales, Countywide Mortgage Lending (760) 746-7388 [email protected], CA-DOC290493
Related Posts: Area Information, Buyers, Coastal Living, CW Mortgage, Escondido, Home Loans, homes for sale, Interest Rates, Investment Properties, Lifestyle, Mortgage News, Real Estate News, Real Living, Real Living Lifestyles, San Diego
The Mortgage Bankers Association’s Weekly Mortgage Applications Survey The Market Composite Index increased 1.1%, Refinance Index increased 0.9%, and the Purchase Index increased 1.5%. The refinance share increased to 66.8%, the highest refinance share since January 28, 2011, and the ARM share decreased to 5.8%. The average 30-year rate increased to 4.69% from 4.60%, and the average 15-year rate increased to 3.78% from 3.75%.
Durable Goods Orders fell 3.6% in April, a larger than expected decline, as transportation as motor vehicle and parts production was held back by Japan-related supply chain disruptions. Excluding transportation, new orders fell 1.5%. Total shipments fell 1%, while inventories were up 0.9%. The details of the report were weak; core capital orders fell 2.6%, while shipments declined 1.7%.
Treasury 10-Year Yields Touch Level Below 200-Day Average as Economy Slows. The 2ys UST auction was met with decent demand yesterday, lifting the bond market into positive territory following the 1PM auction. At 1:00PM EST today, the Treasury will auctions $35 billion 5-year notes and $29 billion in seven-year notes Thursday.
Fannie Mae, Freddie Mac Join List of Reverse Repo Counterparties The New York Fed has added Fannie Mae, Freddie Mac as buyers that would essentially lend cash to the Fed, removing reserves from the system. This is expected to be a key tool the Fed will use to exit from the accommodative policy stance it has been in since the financial crisis hit in 2008. The criteria set forth Tuesday would allow U.S. government-sponsored enterprises like Fannie Mae and Freddie Mac to apply to participate in reverse-repurchase agreements, in which the central bank sells securities from its portfolio to counterparties with an agreement to buy them back later.
Europe’s Dispute on Debt Intensifies. Europeans central bankers and politicians debates are intensifying over how to deal with Greece’s worsening financial problems . A top European Central Bank’ official rejected calls by Germany and other euro-zone states for a restructuring of Greek debt—calling it a “horror scenario.”
Republicans, Realtors To Spar Over FHA Loans. A draft bill to be discussed at a House subcommittee hearing today would raise the minimum down payment to 5% and would also make a significant cut to the maximum size of loans backed by FHA in many parts of the country. The maximum FHA loan size in expensive parts of the country is already scheduled to go to $625,500 from $729,750 on Oct. 1. However, in areas where home prices are more modest, that limit is scheduled to fall as low as $271,050. The bill would allow those limits to fall even more—to 125% of a county’s median home price.
Banks Face $17 Billion in Foreclosure Suits. State attorneys general told the nation’s five largest banks they face a potential liability of at least $17 billion in civil lawsuits if a settlement isn’t reached to address improper foreclosure practices.