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Monday, September 30, 2013

Rate Update

Mortgage Rates Fall to Nine-Week Low

The average rate for a 30-year fixed-rate mortgage fell to 4.32 percent from last week’s rate of 4.50 percent, Freddie Mac said yesterday. At this time in 2012, the 30-year FRM rate averaged 3.40 percent

Monday, September 23, 2013

More Americans Pay Mortgage First, Then Credit Cards

Financially distressed borrowers are beginning to make their mortgage payments before paying their credit card bills, according to a study released Thursday by Transunion, marking the reversal of a trend that emerged after the housing market crashed. The credit information provider said this is a positive development, reflecting the rebound in U.S. home prices and fewer borrowers stuck with mortgages valued more highly than their homes. In 2009, credit cards were 30 days delinquent at a rate of 2.82 percent versus a rate of 3.83 percent for mortgages. These rates dropped to 1.82 percent and 1.91 percent, respectively, as of 2012, according to Transunion.

From "More Americans Pay Mortgage First, Then Credit Cards"
CNN Money (09/19/13) Tseng, Nin-Hai

Thursday, September 19, 2013

Lending Levels

Mortgage Lending Reaches 5-Year High

Mortgage lending surged to a five-year high in 2012, driven by a steep rise in refinancing as borrowers took advantage of the lowest mortgage rates in at least six decades, according to a new report from the Federal Reserve. The analysis, released Wednesday, found that lenders originated nearly 9.8 million mortgages last year, up 38 percent from 7.1 million in 2011.

From "Mortgage Lending Reaches 5-Year High"
Wall Street Journal (09/18/13) Timiraos, Nick

Wednesday, September 18, 2013

St Casimirs Remains Stable

Forget Too Big to Fail: Some Banks Now Too Small to Succeed

While too-big-to-fail banks are getting even bigger thanks to help from Uncle Sam, smaller community bankers are finding it more difficult to survive, in part because they allocate more of their limited resources to meeting the new regulations stemming from the global financial crisis. Now almost too small to succeed, these community banks say they are facing increased pressure to sell out to their larger brethren. At the end of 2007, at the onset of the financial crisis, the government insured 8,534 commercial banks and savings institutions -- down 52 percent from 1984 -- and as of Tuesday that number was down to 6,926, a 19 percent drop since the crisis began.

From "Forget Too Big to Fail: Some Banks Now Too Small to Succeed"
Los Angeles Times (09/17/13) Reckard, E. Scott

Monday, September 16, 2013

Monday Updates

Mortgages Dwindling

The Mortgage Bankers Association said Wednesday that mortgage applications fell by 13.5 percent in the week ended Sept. 6 from the previous week, reflecting a 20 percent drop in refinancing and a 3 percent decline in purchase loans. Interest rates on 30-year fixed-rate mortgages, meanwhile, rose to 4.8 percent from 4.73 percent during the same time period. Refinancings have taken the biggest hit from the rate jump, and are down 71 percent from a recent peak in May -- their lowest level since June 2009.

From "Home-Loan Ebb Is a Blow to Banks"
Wall Street Journal (09/11/13) Sidel, Robin; Zibel, Alan; Timiraos, Nick

Cordray Tries to Ease Industry Concerns on Mortgage Rules

Richard Cordray, Director of the Consumer Financial Protection Bureau (CFPB), said Wednesday that his agency has worked to craft new mortgage-lending rules so they do not exacerbate today's tight lending standards. The agency at the beginning of this year issued an in-depth set of rules to implement a component of the 2010 Dodd-Frank financial law that holds them accountable for ensuring a borrower's ability to repay a mortgage. Cordray said more than 95 percent of the loans written today will meet the CFPB's criteria but implored lenders to continue making loans that fall outside the government's definition.

From "Cordray Tries to Ease Industry Concerns on Mortgage Rules"
Wall Street Journal (09/11/13) Zibel, Alan

Wednesday, September 11, 2013

FHA Mortgage Insurance Never Goes Away Now

Changes to Mortgage Insurance Premiums

FHA will increase its annual mortgage insurance premium (MIP) for most new mortgages by 10 basis points or by 0.10 percent. FHA will increase premiums on jumbo mortgages ($625,500 or larger) by 5 basis points or 0.05 percent, to the maximum authorized annual mortgage insurance premium. These premium increases exclude certain streamline refinance transactions.

FHA will also require most FHA borrowers to continue paying annual premiums for the life of their mortgage loan
. Commencing in 2001, FHA cancelled required MIP on loans when the outstanding principal balance reached 78 percent of the original principal balance. However, FHA remains responsible for insuring 100 percent of the outstanding loan balance throughout the entire life of the loan, a term which often extends far beyond the cessation of these MIP payments. FHA’s Office of Risk Management and Regulatory Affairs estimates that the MMI Fund has foregone billions of dollars in premium revenue on mortgages endorsed from 2010 through 2012 because of this automatic cancellation policy. Therefore, FHA will once again collect premiums based upon the unpaid principal balance for the entire period for which FHA is entitled. This will permit FHA to retain significant revenue that is currently being forfeited prematurely.

Monday, September 9, 2013

Loan Size to Be Cut for Fannie, Freddie

The Federal Housing Finance Agency (FHFA) is planning to reduce the maximum size of home-mortgage loans eligible for backing by Fannie Mae and Freddie Mac, which the agency regulates. The proposed move to cap loans -- FHFA has not yet announced how far it will lower the loan limits, which take effect Jan. 1, 2014 -- is intended to wean the mortgage market off federal support and let the market for non-government-guaranteed mortgages assume a larger role. But critics argue that any such move will shrink the pool of eligible home buyers, thus curbing the country's housing recovery.

From "Loan Size to Be Cut for Fannie, Freddie"
Wall Street Journal (09/08/13) Timiraos, Nick

Thursday, September 5, 2013

CFPB May Crush Your Mortgage Hopes, But Will Also Help Your Disputes

CFPB Warns of Crackdown if Credit-Report Errors Aren't Fixed

The Consumer Financial Protection Bureau (CFPB) told financial firms on Wednesday they must improve their responses to disputes about credit reports. The agency said lenders must conduct a thorough review of documents submitted by consumers to contest any mistakes, and report any mistakes to credit-reporting firms. The CFPB said the three largest credit-reporting firms -- Equifax Inc., Experian PLC, and TransUnion LLC -- have improved the dispute process after a previous scolding from the regulator but said other industry players must do more.

From "CFPB Warns of Crackdown if Credit-Report Errors Aren't Fixed"
Wall Street Journal (09/04/13) Zibel, Alan

Wednesday, September 4, 2013

Will the CFPB ruin your chance for a mortgage?

By Richard Satran | U.S. News – Fri, Aug 30, 2013

Five years after the housing collapse, the new Consumer Financial Protection Bureau is closing the barn door on the loose lending that caused the crisis. But as homebuyers struggle to get financing for new homes, some critics fear the door could be permanently nailed shut for many people seeking affordable housing.

The new lending rules will limit people from taking out a mortgage or refinancing an existing one that puts their overall household borrowing at more than 43 percent of their income. That new debt cap also includes a wide swath of common forms of debt that count toward the total, including student loans, most fees and points related a home purchase, and property taxes. It also tightens rules on documentation, and lenders who improvise to give customers easier terms will be open to consumer lawsuits if the loans go bad.

"It will tighten things further. The largest constraint is the 43 percent threshold," says Sam Khater, senior economist at housing data provider CoreLogic. "It will hit more refinances than purchases because a lot of them use a high debt-to-income ratio. It will also hurt home borrowers in distressed environments."

Mortgage lenders say the rules could make loans especially elusive for some classes of borrowers, even those with strong credit scores. Baby boomers entering retirement and young adults will feel a disproportionate impact because of their lower income levels. (Related on Why Even Rich People Are Having Trouble Getting Mortgages.)

Based on interviews with mortgage lenders, real estate trade groups and market research firms, these groups are most likely to find borrowing more difficult when the rules take effect Jan. 10, 2014:

• First-time homebuyers, especially those who are carrying college loans that count toward the debt limit.

Read the rest here.

Monday, September 2, 2013

Happy Labor Day

St Casimirs will be closed today in honor of Labor Day. Have a safe and pleasant day.