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| Approach mortgage REITs with caution and an eye on the Fed Chicago Sun-Times Because the Fed has said it will keep rates at zero for the next two years, would you buy some of the mortgage REITS that yield 13 to 25 percent? Which REITs would you buy? And since the Fed has raised the debt ceiling and will raise it again soon, … See all stories on this topic » |
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| Mortgage rates now below even lows of early 1950s The Associated Press WASHINGTON (AP) — Mortgage rates have skated near record lows for weeks. But now it can finally be said: Long-term rates in the United States have never been lower. This week, the average rate on a 30-year fixed mortgage fell to 4.01 percent, … See all stories on this topic » |
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| Higher US mortgage rates coming for costlier homes Reuters "The housing market is beginning to bottom out and mortgage interest rates are at historic lows," Obama said in a radio interview on Friday. "Home ownership is still going to be a central part of the American dream, and we want to encourage that. … See all stories on this topic » |
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Mortgage Rates continued to improve today, adding on to yesterday’s already impressive gains. Best-Ex moved solidly down to lower of the two rates it had been straddling.
That brings mortgage rates back even with or within an eighth of all time lows (depending on your scenario). And with the Fed set to begin a new round of MBS (Mortgage-Backed-Securities) buying on Monday, AND with month/quarter-end trading factors out of the way, there’s a good chance that we’ll see more all time lows in the coming weeks.
Today’s Rates:
GUIDANCE: Today’s gains bring rates back down to the lower end of their expected range. Think of that range as having 4 levels. When the cream-of-the-crop best-execution rate is as 4.125, the range is on one end of the spectrum, and when Best-Ex is at 3.75, that’s the other end. 3.875 and 4.0 are the two rates in between for a total of 4 available rates in this range. Keep in mind that your quoted rate could be different depending on your scenario, but in terms of Best-Execution rates for the best qualified scenarios, this is the range. So being at 3.875 is like being 3/4’s of the way to “as good as it gets,” Whereas yesterday at 2/4 would be more of a toss up. If you’ve noted our tone recently shifting to be slightly more tolerant of floating, and you floated for the past few days, now it’s time to lock in those gains from a risk-reward standpoint. We lean more heavily toward locking when Best-Ex is under 4.0 these days. While we’re optimistic that there are a few more gains in store for MBS with the beginning of new Fed Buying, we’d hate to see 3.875 unexpectedly evaporate on some surprise headline out of Europe or turning point in economic data.
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In yesterday’s commentary, we noted that the stock lever has been well-connected and that the same could be true of today. As you’ll see in the chart below, it is. You’ll also see the biggest volume spike of the day at 3pm (those are 10yr futures contracts for the record). That’s not because some major economic event or headline came across the wires, but rather because 3pm is day/week/month and quarter-end for bond markets. Who knows what positioning intentions lurk in the hearts of traders leading up to such a moment! (Actually, looks pretty simply like a bunch of quick, last-minute profit-taking. Money flow decreased, indicating the closing out of positions, yields rose, but a willing buyer or two was waiting in the wings to bring things back to reality)
Speaking of reality, the 3pm quarter-end marks for 10yr yields confirm that the downtrend channel we’ve been following is very real indeed. Yields sought out the mid-point of this trend channel:
The fact that benchmarks bounced so nicely near the top of that trend channel and rallied to confirm the bounce has been great for MBS staging their own version of the bounce. As it turns out the “concrete ceiling” we thought was broken is actually very much intact, but somehow–teleportation maybe–we’re on the other side and just took a big old bounce on it. Once again, here’s an ongoing look at the confirmation process of MBS’s bounce off what may turn out to be the new “Concrete Floor.”
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| Higher US mortgage rates coming for costlier homes Reuters The average interest rate for a 30-year-fixed rate mortgage for a non-jumbo loan is 4.05 percent, compared with 4.81 percent for a jumbo loan, according to Bankrate.com. "It will reduce the buying power," said Dan Laytham, a real estate agent for Long … See all stories on this topic » |
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| BMO Canadian Housing Outlook: Tailwinds and Headwinds Point To Soft Landing MarketWatch (press release) – Tailwinds include low mortgage rates, relatively low unemployment and strong immigration, while high prices, elevated household debt and slowing employment are cause for concern. – More buyers are turning to variable rate mortgages on expectations … See all stories on this topic » |
The passion Adam Quinones has for improving the entire landscape of housing finance is undeniable. I’ve never met anyone who has cared more about where we are and where we’re going as an industry. Adam’s made great strides toward bridging the gap between primary and secondary mortgage market professionals in his 3 years as the Managing Editor at MND
But as of this week, Adam Quinones left MND to join the Fixed Income Markets Division of Thomson Reuters as their new Structured Cash-Flow Products Manager. In this role AQ will use his wide range of industry knowledge to enhance existing Thomson Reuters MBS/ABS products and channel his creativity toward the development of new products.
Although we’re sad to see AQ go, we’re happy that his new position will allow him to maintain a presence within the MND community. My market dialogue with AQ has been very important to me over the years. Because of Thomson Reuters relationship with MND, I look forward to being able to continue that dialogue.
Frank Ceizyk, one of the founding members of MND’s MBS community summed up the situation best when he said, “I’m excited about Adam’s new position. He is moving into a role that only enhances his panoramic vision of all things related to housing finance. Great things lie ahead for him.”
Glenn Setzer, President and Founder of MND added, “I believe I can speak for everyone in saying thank you to Adam for his contributions to this publication, this community and this industry, all of which have benefited from his knowledge. We wish you the best.”
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The eight national banks and single federal savings association servicing the largest loan portfolios reported that first mortgage performance declined across all categories of delinquencies during the second quarter of 2011. The information is part of the Office of Comptroller of the Currency (OCC) Mortgage Metrics Report released on Thursday which covers 63 percent of all outstanding first mortgages in the nation.
According to the report, current and performing loans represented 88.6 percent of the banks’ portfolios in the first quarter but declined to 88 percent by the end of the second quarter. This is still an improvement from the second quarter of 2010 when 87.3 percent of the loans in the portfolios were current.
Similar to the overall portfolio of mortgages, the performance of mortgages held by reporting banks and thrift declined in the second quarter of 2011 to an 80.3 percent ratio of current and performing loans, down from 80.4 percent the previous quarter but up from 77.2 percent a year ago. The percentage of performing government guaranteed mortgages decreased to 85.7 percent from 87.0 percent in Q1 but was improved from 85.3 one year ago. Freddie Mac and Fannie Mae mortgages perform better than the overall portfolio because of a higher percentage of prime loans. Current and performing loans constituted 93.1 percent at the end of Q2 compared to 93.2 percent at the end of Q1 and 92 percent in Q1 2010.
Early stage delinquencies, i.e. mortgages that are 30 to 59 days delinquent, increased from 2.6 percent of the portfolio in the first quarter to 3 percent, reflecting seasonal effects in addition to the sluggish economy and elevated unemployment. Seriously delinquent mortgages – those over 60 days delinquent and delinquent mortgages held by bankrupt borrowers, increased one basis point to 4.9 percent of the portfolio, ending five straight quarters when this category trended down. Both early stage and serious delinquencies were down from a year earlier by .9 percent and 19.9 percent respectively.
The percentage of mortgages in the process of foreclosure was unchanged at 4 percent of the total portfolio and while completed foreclosures increased 1.2 percent quarter-over-quarter, the numbers were down more than 30 percent from the second quarter of 2010. While the yearly decrease was significant, OCC warned that completed foreclosures may continue to increase in future quarters as a large number of delinquent loans work through the process and borrowers exhaust other alternatives.
Short sales increased by 12.6 percent during the second quarter and now represent 31 percent of all home forfeiture actions. Deeds-in-lieu increased by almost 50 percent but still represent less than 1 percent of home forfeitures.
Servicers implemented 456,397 home retention actions during the quarter, nearly twice the 287,145 new foreclosure proceedings. Most of these actions were under the Home Affordable Modification Program (HAMP) which increased by 31.6 percent during the quarter while other actions were down. The net result was a decrease of 18.1 percent in new retention actions compared to the first quarter. Servicers have modified 2,083,464 mortgage loans from the beginning of 2008 through the end of the first quarter of 2011.
There has been increasing success with these modification efforts. Mortgages modified in recent quarters have improved steadily over earlier modifications and have performed consistently better than has been historically the case for such loans. At the end of the second quarter of 2011, 51.3 percent of modifications remained current or had been paid off. Another 9.2 percent were 30-to-59 days delinquent, and 18.2 percent were seriously delinquent. More than 10 percent were in the process of foreclosure and 5.3 percent had completed the foreclosure process. Of the 938,180 modifications implemented during 2010, 62.4 percent were current or paid off. Another 10.4 percent were 30-to-59 days delinquent, 15.2 percent were seriously delinquent, and 8.4 percent were in the process of foreclosure or had completed the foreclosure process. The table below shows the steadily improving performance metrics of modified loans over the last five quarters.
The on-going emphasis on sustaining the modifications by lowering the monthly payment is apparently paying off in reduced defaults. As the figure below shows, as the amount of the payment reduction increases, the default rate consistently goes down.
Modifications done under HAMP are performing much better than those done under other auspices. A chart comparing the performance of HAMP modifications with other modifications done in the last five quarters at three month intervals results in 14 cohorts. HAMP modifications significantly outperformed other modifications in all but the three month data point for loans modified in Q4 2010. That deficiency was overcome three months later.
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| US mortgage rates drop to new lows Bizjournals.com Long-term mortgage rates fell to all-time lows this week, one week after the Federal Reserve 's Operation Twist, aimed at lowering long-term interest rates. Thirty-year fixed-rate mortgages fell to an average of 4.01 percent in the week ending Sept. … See all stories on this topic » |
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| Downgrade may push mortgage rates New Zealand Herald By Christopher Adams The downgrade of New Zealand's economy by two ratings agencies could result in mortgage rate rises, Finance Minister Bill English said yesterday. But economists say the move should not cause a big rise in borrowing costs … See all stories on this topic » |
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| As Mortgage Rates Dip Lower, Homeowners Should Consider Refinancing, Says … MarketWatch (press release) CALABASAS, CA, Sep 30, 2011 (MARKETWIRE via COMTEX) — Rates were already low at the start of the quarter, but following the Fed's announcement last week, the national average rate on a traditional 30 year fixed rate mortgage has inched lower. … See all stories on this topic » |
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| Forget Coupons and Group Buying Websites, Here's How You Can REALLY Save MarketWatch (press release) In three simple steps homeowners with a $300000 mortgage can save $65541 over 25 years. It's all laid out in this handy infographic: After looking at over a year of data, RateSupermarket.ca found that the mortgage rates listed on their site from … See all stories on this topic » |
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| Five Housing Trends in Fall 2011 Fox Business By Polyana da Costa If you want to buy a home and you qualify for a mortgage, this is your time. With mortgage rates at historically low levels, falling home prices and plenty of distressed properties for sale, buyers will be able to find … See all stories on this topic » |
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The Thomson Reuters/University of Michigan’s final September reading of the overall index on consumer sentiment stood at 59.4, up from 57.8 earlier this month. Economists had expected no change from the initial September reading.
The index finished at 55.7 in August. “The data indicate that consumers have shifted from anticipating deeper declines to the growing belief that the economy will stagnate at its currently depressed level,” survey director Richard Curtin said in a statement.
The survey’s barometer of current economic conditions rose to 74.9 from 74.5 in early September and 68.7 in August. Analysts had expected no change from the early September figure.
The survey’s gauge of consumer expectations edged up to 49.4 from 47.0 in early September and 47.4 in August. Analysts had expected no change from the earlier reading.
The survey’s one-year inflation expectation fell to 3.3 percent from 3.7 percent earlier this month and 3.5 percent in August, while the survey’s five-to-10-year inflation outlook dipped to 2.9 percent from 3.0 percent in early September and was unchanged from 2.9 percent in August. (Reporting by Richard Leong; Editing by James Dalgleish)
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Funding! Home Loans, Reverse Mortgage, Grants, Business Loans. 