The Commerce Department released March New Residential Construction: Building Permits and Housing Starts data this morning. Housing Starts data estimates how much new residential real estate construction occurred in the previous month. New construction means digging has begun. Adding rooms or renovating old ones does not count, the builder must be constructing a new home (can be on old foundation if re-building). Although the report offers up single family housing, 2-4 unit housing, and 5 unit and above housing data… single family housing is by far the most important data as it accounts for the majority of total home building. Building Permits data provides an estimate on the number of homes planned on being built. The number of permits issued gauges how much construction activity we can…(read more)
Foreclosure filings including default notices, scheduled auctions, and bank repossessions rose 7 percent in the first quarter of 2010 compared to the third quarter of 2009 and were up 16 percent from the first quarter one year ago. This information came today in a report from RealtyTrac , the Irvine California company that tracks the foreclosure market. Legal actions were filed against 932,234 properties during the quarter; one in every 138 U.S. housing units received a filing during the period. In March alone there were 367,056 filings, an increase of nearly 19 percent over February and 8 percent above the rate one year earlier. This is the highest monthly total since RealtyTrac issued its first report in January 2005. The pattern of filings, however, offered a glimmer of hope that things…(read more)
The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending April 9, 2010. The survey covers over 50 percent of all US residential mortgage loan applications taken by mortgage bankers, commercial banks, and thrifts. The data gives economists a look into consumer demand for mortgage loans. A rising trend of mortgage applications indicates an increase in home buying interest, a positive for the housing industry and economy as a whole. QUICK RECAP : To quote Mike Fratantoni, MBA's Vice President of Research and Economics:"Applications for government mortgages dropped substantially last week, following the implementation of an increase in FHA mortgage insurance premiums," said "Applications for conventional mortgages also…(read more)
The Special Inspector General for the Troubled Asset Relief Program (SIGTARP) concludes its report to the Treasury Secretary with a number of recommendations for improving the performance of the Home Affordable Modification Program (HAMP); suggesting changes to both policies and administration. One of the primary criticisms the report made of HAMP was its failure to establish goals that were reasonable measures of what it actually was designed to accomplish. Treasury's stated goal of three to four million offers to borrowers to modify their loans was essentially meaningless, according to SIGTARP, because the program could reach or even greatly exceed that goal while still actually helping only a few homeowners. Instead, the report recommends that Treasury rectify the confusion that its…(read more)
Today is Class A Notification Day in the TBA Secondary Mortgage Market The April FN 4.5 MBS coupon has now begun the settlement process. Before the end of the day, the FN 4.5 price is going to fall from where it is currently priced at 100-02 down to 99-21. WHY??? The MBS coupons that determine your rate sheet pricing are traded in the TBA MBS market…. TBA = To be Announced In the TBA MBS market, at the time a trade is made, buyers and sellers agree to a few specific terms like what coupon, the issuing agency (Fannie, Freddie, Ginnie), size of trade, and a buy/sell price….the actual pools of loans are NOT exchanged at the time of this commitment. Instead, the MBS buyer and the seller make an agreement to complete the transaction at a later date. In the MBS market this date is pre-determined;…(read more)
The recession is manifesting itself in family rooms throughout America as many parents find that their nests not quite as empty as they had planned according to a study released today by the Research Institute for Housing America , a division of the Mortgage Bankers Association. "What Happens to Household Formation in a Recession," by Professor Gary Painter of the University of Southern California analyzes the impact of economic and housing conditions on the formation of new households and the subsequent impact on household overcrowding, mobility trends, and vacancies in the rental and single family markets. Michael Fratantoni, MBA's Vice President of Research and Economics said of the study, "We hear stories about young adults remaining in or returning to the nest after…(read more)
The recession is manifesting itself in family rooms throughout America as many parents find that their nests not quite as empty as they had planned according to a study released today by the Research Institute for Housing America , a division of the Mortgage Bankers Association. "What Happens to Household Formation in a Recession," by Professor Gary Painter of the University of Southern California analyzes the impact of economic and housing conditions on the formation of new households and the subsequent impact on household overcrowding, mobility trends, and vacancies in the rental and single family markets. Michael Fratantoni, MBA's Vice President of Research and Economics said of the study, "We hear stories about young adults remaining in or returning to the nest after…(read more)
The Chairman of the Federal Reserve, Ben Bernanke, today gave a speech titled Economic Challenges: Past, Present, and Future The first half of Bernanke's prepared speech revisited the events that led us into the great recession. Ben then reviewed and justified the innovative actions that had to be taken by the Federal Reserve to save the banking system.Overall, nothing new was offered in this portion of the statement, but later on he did provide some insight about the road ahead. Here are a few excerpts and my comments… On Housing: "We have yet to see evidence of a sustained recovery in the housing market. Mortgage delinquencies for both subprime and prime loans continue to rise as do foreclosures. The commercial real estate sector remains troubled, which is a concern for communities…(read more)
In addition to analyzing the factors that have constrained the success of the Home Affordable Modification Program (HAMP) the Solicitor General for the Toxic Asset Relief Program (SIGTARP) also looked at factors that might impede HAMP's success going forward. As was explained in the first piece of this commetary , SIGTARP evaluated the HAMP program in an effort to find why HAMP has, thus far at least, fallen below expectations for putting distressed homeowners into permanent loan modifications. The study found, that among other factors, the HAMP program had not clearly articulated the goals for the program nor had it clearly stated the guidelines for the program until after participating servicers had already began program implementation. It also faulted the program for inadequately marketing…(read more)
More than a year after the creation of the Home Affordable Modification Program (HAMP) "disappointing results have raised questions about program effectiveness" according to a new report by the Special Inspector General for the Troubled Asset Relief Program (SIGTARP.) The report was sent to Treasury Secretary Timothy Geithner last week over the signature of SIGTARP Neil M. Barofsky. The report, which is the first of several which will be issued, addresses HAMP's status and whether the program has met participation goals thus far and what conditions the Treasury Department has faced and will face in the future in implementing the program. In conducting the audit, SIGTARP reviewed HAMP program policies, procedures, and marketing materials from Treasury and other government agencies…(read more)
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