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Thursday, April 28, 2016

Banks Are Falling Back in Love With Mortgages


The biggest U.S. banks are taking advantage of improvements in the nation's housing market. The S&P/Case-Shiller Home Price Index, released April 26, indicates that home prices across the United States climbed 5.3 percent in February on a year-over-year basis, and the National Association of Realtors reported a 5.1 percent increase in existing-home sales in March following a decline in February. Banks are responding to the market's gains by making more mortgages and keeping more of them on their books, rather than selling them to Fannie Mae and Freddie Mac. According to the Federal Reserve, U.S. banks held 31.7 percent of outstanding mortgage debt as of October 2015, up from 30.9 percent in October 2014 and marking the highest level since April 2009. This trend appears to have continued into the first quarter of 2016, with the share of mortgages held by JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo up 28 percent on a year-over-year basis. Barclays analyst Jason Goldberg says Chase reported a 37 percent increase in mortgages held, as it has been aggressive in making and retaining jumbo mortgages. Experts say this strategy allows banks to put their deposits to work.

From "Banks Are Falling Back in Love With Mortgages"
Wall Street Journal (04/27/16) P. C12 Back, Aaron

Monday, April 25, 2016

Potential Homebuyers Sidelined Until Their Credit Improves


According to a recent Experian survey, 34 percent of future home buyers believe their chances of owning a home are threatened by their credit scores, and 45 percent have delayed homeownership to work on improving their credit scores. Close to 70 percent of those polled are paying their bills on time, 60 percent are paying off debt, 28 percent are keeping credit card balances low, and 15 percent are protecting their credit information from identity theft and fraud. Twenty percent of those delaying home purchases said they would opt out of the loan process or delay homeownership for another five to 10 years, and 45 percent were holding off to obtain better interest rates. Furthermore, 35 percent of future buyers said they did not know what to do to increase the amount they qualify for, and close to 33 percent said they would purchase a pricier home if they had better credit and a bigger loan amount.

From "Potential Homebuyers Sidelined Until Their Credit Improves"
HousingWire (04/20/16) Ramírez, Kelsey

Friday, April 22, 2016

Friday Rate Update

Mortgage Rates Little Changed 

The rate for a 30-year fixed-rate mortgage was 3.59 percent this week, up slightly from 3.58 the week prior, Freddie Mac said yesterday. At this time last year, the 30-year FRM averaged 3.65 percent.

This week’s 15-year FRM averaged 2.85 percent, down slightly from last week’s average of 2.86 percent. A year ago, the 15-year FRM averaged 2.92 percent.

--ABA Daily Newsbytes

Monday, April 18, 2016

Instruction:  Steps Toward Buying A Home
Essex Community College

Friday, April 15, 2016

Mortgage Rates for 30-Year U.S. Loans Drop to Lowest Since 2013

Freddie Mac reported on April 14 that the average 30-year fixed-rate mortgage dropped to 3.58 percent during the week from 3.59 percent the prior week, marking the lowest level since May 2013. The average 15-year fixed-mortgage fell from 2.88 percent to 2.86 percent over the same period. "The persistent weakness in the global economy has been a boon to mortgage shoppers," says Greg McBride, chief financial analyst at Bankrate.com. "It brought rates lower in a year we widely expected them to go higher." The 30-year rate has been below 4 percent since the start of the year, and experts do not expect mortgage rates to spike anytime soon, as the Federal Reserve announced last month that it would hold interest rates unchanged as it waited to see whether slower growth abroad put a damper on the U.S. economy.

From "Mortgage Rates for 30-Year U.S. Loans Drop to Lowest Since 2013"
Bloomberg (04/14/16) Gopal, Prashant

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Monday, April 11, 2016

Mortgage Rates Plummet to Lows Not Seen in More Than a Year

Freddie Mac reported that the 30-year fixed-rate mortgage dropped to 3.59 percent during the week ending April 7 from 3.71 percent the previous week and 3.66 percent a year ago. The 30-year fixed rate has fallen 42 basis points since the start of the year and now sits at its lowest level since February 2015. Meanwhile, the 15-year fixed-rate mortgage slipped to 2.88 percent from 2.98 percent the previous week and 2.93 percent a year ago, marking the lowest level since May 2013. The five-year adjustable-rate mortgage declined to 2.82 percent from 2.9 percent the previous week and 2.83 percent a year ago. "Mortgage rates this week registered the delayed impact of last week's sharp drop in Treasury yields," said Freddie Mac chief economist Sean Becketti. "Low mortgage rates and a positive employment outlook should support a strong housing market in the second quarter of 2016."

From "Mortgage Rates Plummet to Lows Not Seen in More Than a Year"
Washington Post (04/07/16) Orton, Kathy


Thursday, April 7, 2016

MBA: Refinance Demand Making a Comeback?

The Mortgage Bankers Association reports that during the week ending April 1, mortgage applications rose 2.7 percent from the previous week. Although the purchase index fell 2 percent during that period, the refinance index rose 7 percent. Refinances accounted for 54.5 percent of total applications, up from 52.4 percent during the previous week. The share of applications slipped from 11.5 percent to 11.3 percent for Federal Housing Administration (FHA) loans, from 12.9 percent to 12.2 percent for Veterans Affairs loans, and from 0.9 percent to 0.8 percent for U.S. Department of Agriculture loans. Meanwhile the average contract interest rate fell from 3.94 percent to 3.86 percent for 30-year fixed-rate mortgages with conforming loan balances, from 3.82 percent to 3.76 percent for 30-year fixed-rate mortgages with jumbo loan balances, from 3.76 percent to 3.73 percent for 30-year fixed-rate mortgages backed by the FHA, from 3.19 percent to 3.10 percent for 15-year fixed-rate mortgages, and from 3.07 percent to 2.94 percent for 5/1 adjustable-rate mortgages.

From "MBA: Refinance Demand Making a Comeback?"
HousingWire (04/06/16) Swanson, Brena

Wednesday, April 6, 2016

Is Virtual Reality the Next Big Thing in Banking?


Banks could expand their use of virtual reality technology by next year, according to Deloitte Consulting Chief Technology Officer Bill Briggs. He says banks could offer virtual reality branches, which would allow customers to visit the branch without leaving their homes. They also could use the technology to train financial advisors, among other things. "It's early prototyping, early experimentation [at this point in time]," says Briggs, as banks consider the potential uses of the technology. Wells Fargo has tested both Google Glass and Oculus Rift, with spokesman Josh Dunn noting that "we're looking to re-imagine customer interactions with money within and across channels, including how a customer might use (virtual reality) to manage finances." Ultimately, consumers will drive the adoption of virtual and augmented reality by banks, says Briggs. "Does this become a new mode of interaction that allows a different level of connection and collaboration? If that's the case, then I think any industry that has high customer touch, certainly banks, they're going to be where the customers want to be," he remarks.

From "Is Virtual Reality the Next Big Thing in Banking?"
Charlotte Observer (NC) (04/04/16) Roberts, Deon

Friday, April 1, 2016

Friday Rate Update

 
Thirty-Year Mortgage Rate Unchanged


The rate for a 30-year fixed-rate mortgage was 3.71 percent this week, unchanged from the week prior, Freddie Mac said yesterday. At this time last year, the 30-year FRM averaged 3.7 percent.

This week’s 15-year FRM averaged 2.98 percent, up slightly from last week’s average of 2.96 percent. A year ago, the 15-year FRM averaged 2.98 percent.


--ABA Daily Newsbytes