California Home Mortgage

The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury have released the August edition of the Obama Administration's Housing Scorecard . The August 2010 Scorecard was marked primarily by how few changes were evidenced since the July Report. Housing prices have been relatively flat on a month to month basis since January 2009 when they ended their 30 month decline. Historic low interest rates continued to promote home affordability and refinancing options for the nation's families, but few people were taking advantage of it either to purchase a home or refinance their existing one. Overall, the market remains fragile with foreclosure starts showing a slight increase and serious delinquencies continuing to work through the pipeline. MND has…(read more)

The Federal Housing Finance Agency (FHFA) took a step last week that may effectively end private transfer fees before the end of the year. The agency announced a public comment period on new regulations that would restrict Fannie Mae, Freddie Mac, and the Federal Home Loan Banks (FHLBanks) from investing in mortgages with private transfer fee covenants. The proposed "Guidance" would extend to mortgages and securities purchased by FHLBanks or acquired by them as collateral for advances, and to mortgages and securities purchased or guaranteed by the Enterprises. Transfer fees are enabled by covenants on a deed which require a payment to a third party every time property ownership is transferred and are typically 1 percent of the amount of the sale. For example: a developer of a condominium…(read more)

The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending August 13, 2010. The MBA's loan application survey covers over 50% of all U.S. residential mortgage loan applications taken by retail mortgage bankers, commercial banks, and thrifts. The data gives economists a snapshot view of consumer demand for mortgage loans. In a low mortgage rate environment, a trend of increasing refinance applications implies consumers are seeking out a lower monthly payment. If consumers are able to reduce their monthly mortgage payment and increase disposable income through refinancing, it can be a positive for the economy as a whole (creates more consumer spending or allows debtors to pay down personal liabilities like credit cards). A falling trend…(read more)

The U.S. Census Bureau and the Department of Housing and Urban Development have released New Residential Construction statistics for July 2010. 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 as it accounts for 70-80% of total home building. Building Permits data provides an estimate on the number of homes planning on being built. This indicator basically tracks how much future construction activity…(read more)

Freddie Mac has announced that it will be requesting an additional $1.8 billion cash infusion from the Treasury Department based on the results of its Second Quarter 2010 financial statement released on Tuesday. The government sponsored enterprise (GSE) reported a net loss attributable to common stockholders of $6.0 billion, or $1.85 per diluted common share compared to a net loss attributable to common stockholders of $8.0 billion, or $2.45 per diluted common share, for the first quarter of 2010. The total reflected a $1.3 billion stock dividend payable to the U.S Treasury under the terms of its Senor Preferred Stock Purchase Agreement. The net loss attributable to Freddie Mac of $4.7 billion for the quarter compared to $6.7 billion in Quarter One. The company said that the net loss during…(read more)

RealtyTrac reported that a total of 325,229 properties were the subject of some form of foreclosure filing during July. This is a 4 percent increase over the 313,841 filings reported in June but is down 10 percent from the number in July 2009. The July figure equates to a filing for one in every 397 housing units in the country. The Irvine California company which issues a monthly U.S, Foreclosure Market Report tracks documents filed in all three phases of foreclosure: Notice of Default (NOD) and Lis Pendens (LIS). This is the first legal notification from a lender that the borrower on a mortgage loan has defaulted under the terms of their mortgage and the lender intends to foreclose unless the loan is brought current. Auction – Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and…(read more)

The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending August 6, 2010. The Market Composite Index, a measure of mortgage loan application volume, increased 0.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 0.4 percent compared with the previous week. The four week moving average for the seasonally adjusted Market Index is up 1.2 percent. The Refinance Index increased 0.6 percent from the previous week. The four week moving average is up 1.0 percent for the Refinance Index. The refinance share of mortgage activity increased to 78.1 percent of total applications from 78.0 percent the previous week. The seasonally adjusted Purchase Index increased 0.3 percent from one week earlier…(read more)

Using the farm crisis of the early 1980s as a model, two economists have refuted several of the arguments against legislation that would permit bankruptcy judges to cramdown or stripdown of mortgage loans. Thomas J. Fitzpatrick IV and James B Thomson, economists with the Federal Reserve Bank of Cleveland, published their paper, Stripdowns and Bankruptcy: Lessons from Agricultural Bankruptcy Reform in the bank's Economic Commentary on its website. Allowing stripdowns of mortgages during Chapter 13 bankruptcy reorganization has been suggested as one way to deal with the housing crisis. If such legislation were passed, bankruptcy judges would be allowed to reduce the outstanding balance on a mortgage loan to the actual value of the underlying collateral, turning the remaining balance of the…(read more)

Fannie Mae has released their Q2 earnings report. The government sponsored enterprise (GSE) announced a shortfall of $1.2 billion, in the second quarter. a vast improvement over the $11.5 billion lost in the first quarter of the year and $20.4 billion in the second quarter of 2009. The Q2 losses amount to .55 per share compared to $2.29 per share in the previous period and $2.67 per share a year earlier. Based on the figures, the Acting Director of the Federal Housing Finance Agency, conservator of Fannie Mae, requested an additional $1.5 billion from the U.S. Treasury under the terms of the preferred stock purchase agreement between the two entities. The funds were requested to eliminate the company's net worth deficit as of June 30. Last quarter FHFA received $8.4 billion to cure the…(read more)

FHA Commissioner David Stevens wrote to the industry yesterday to provide a timeline on the implementation of new annual and upfront mortgage insurance premiums. Below are his comments. I called attention to specific points of interest… BACKGROUND CONTENT: FHA Increases Upfront MIP Fee; Raises Credit Score Requirement; Reduces Seller Concessions BACKGROUND CONTENT: FHA Gets OK to Raise Annual Mortgage Insurance Premium ————- 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…(read more)