Mortgage Rates Steady; October Mortgage Insurance Activity

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Nov 30, 2011 3:10PM

Mortgage Rates Steady Again Despite Rising Treasury Yields

Much like yesterday, Mortgage-Backed-Securities (MBS), began the day in weaker territory and rallied in the latter part of the day. Improving MBS are usually good for Mortgage Rates and today is no exception. But the benefits to rates were only enough to get things back to similar territory as yesterday. No major day-over-day improvements. Some lenders are slightly better, some are slightly worse, but on average, the Best-Execution Rates are unchanged. Also similar to yesterday is the phenomenon…

Nov 30, 2011 4:20PM

DeMarco asked for Proof of Authority for Loan Decisions

Sixteen House Democrats have asked the Federal Housing Finance Agency to justify its position on reducing principal on loans owned by Freddie Mac and Fannie Mae . Elijah Cummings (D-MD), ranking member of the House Committee on Oversight and Government Reform and the 16 Democratic members of the committee sent a letter to FHFA Acting Director Edward DeMarco Wednesday seeking documents he promised the Committee regarding his analysis of programs to reduce mortgage principle. DeMarco allegedly told…

Micro News

12:15 PM:

Fed: Statement on Coordinated Central Bank Action

11:51 AM:

Positive Reprice Potential Increasing as MBS Hold Gains

10:26 AM:

Fed: Michael S. Gibson appointed director of Division of Banking Supervision and Regulation, effective January 1, 2012

10:05 AM:

NAR: Pending Home Sales Jump in October

9:58 AM:

ECON: Midwest Business Barometer Rises in November

9:53 AM:

ECON: ADP Employment, Productivity/Costs, MBA Apps

8:30 AM:

MBA: Mortgage Applications Decreased 11.7%

8:29 AM:

Uneventful Overnight Session Meets Morning Tape-Bombs

Around the Web

Video News

Housing: Signed Contracts Soaring

LA Police Remove Occupy Wall Street Protesters

S&P Downgrades Bank of Israel

Today’s Comments

Frank Ceizyk

“Maybe the proper headline should be “Strong Rental Market is turning speculators into investors…certainly a welcome piece of news…”

Robert Strupp

“We saw a similar phenomenon when house prices began plummeting. Investors who bought to sell were left stuck with the houses, unfamiliar and unprepared…”

Jana Holmstrup

“Any news on when HUD will announce the new loan limits?”

Today’s Q&A

“What happened to TDI rates?”

“Retirement community buying “itself” from owners. Do I buy a “share”? “

“Second Home Mortgage Question”

<!–

Today’s Forum Discussions

Jim Begley

“Loan Scenario View All Post A Scenario Loan State: Utah Loan County: — Loan Type: Cash Out Refinance Loan Amount: $119,000 Property Value: $170,000 LTV…”

Luis  Monterroso

“I currently Have a 30Yr fixed @6.125 with a balance of $395,000 & a HELOC with a balance of $77,000. Trying to refinance with a bank, but home property…”

James Rickard

“Here are the details: Home value: +/- $425,00 First mortgage: $365,000 HELOC: $50,000 Currently have a 30 yr. fixed rate at 5.5% Credit score is 750+ Bought…”

–>

[MND NewsWire] – DeMarco asked for Proof of Authority for Loan Decisions

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DeMarco asked for Proof of Authority for Loan Decisions

Posted to: MND NewsWire
Wednesday, November 30, 2011 1:23 PM

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Sixteen House Democrats have asked the Federal Housing Finance Agency to justify its position on reducing principal on loans owned by Freddie Mac and Fannie Mae.  Elijah Cummings (D-MD), ranking member of the House Committee on Oversight and Government Reform and the 16 Democratic members of the committee sent a letter to FHFA Acting Director Edward DeMarco Wednesday seeking documents he promised the Committee regarding his analysis of programs to reduce mortgage principle. 

DeMarco allegedly told members of the Committee at a hearing on November 16 “We have been through the analytics of the underwater borrowers at Fannie and Freddie, and looked at the foreclosure alternative programs that are available, and we have concluded that the use of principal reduction within the context of a loan modification is not going to be the least-cost approach for the taxpayer.”  When a committee member pointed out that several banks are already implementing principal reduction programs in an attempt to help delinquent or underwater homeowners and citing specific examples, DeMarco said “I believe that the decisions that we’ve made with regard to principal forgiveness are consistent with our statutory mandate.”   DeMarco then committed to providing documentation of that statutory authority to the Committee.

In a letter sent to DeMarco on Wednesday, the Cummings essentially reminded DeMarco of his agreement to provide the Committee with  “(1) the specific statutory provision you believe prohibits the Federal Housing Finance Agency (FHFA) from allowing Fannie Mae and Freddie Mac to reduce mortgage principal in all cases; and (2) the analysis you conducted, including the data you examined, demonstrating that principal reduction never serves the long-term interests of the taxpayer when compared to foreclosure.”  DeMarco was asked to provide the information no later than December 9.   

The letter cites specific instance of bank programs providing principal reduction.  One program at Ocwen allows a servicer to reduce a loan to 95% of a home’s fair market value, forgiving the excess principal over three years as long as the homeowner remains current on mortgage payments.  When the home is sold or refinanced Ocwen receives a 25 percent share of any appreciated value.  Wells Fargo has reportedly reduced the balances of 73,000 mortgages by an average of $51,000.  Other banks cited as having principal reduction programs are JP Morgan Chase, Ally Financial and Bank of America. 

Cummings said of the Committee members’ request, “For too long now we have heard superficial excuses about why principal reduction programs are not feasible at Fannie Mae and Freddie Mac, despite a growing chorus of economists and other experts who believe these programs serve the long-term interests of taxpayers.  Even though commercial banks have implemented their own principal reduction programs, FHFA stubbornly continues to favor massive waves of foreclosures.  It’s high time to see the actual data and analyses behind this policy, and to work towards new approaches that finally put American homeowners and our nation’s economy first.”

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[MBS Commentary] – MBS RECAP: 11/30/2011

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MBS RECAP: 11/30/2011

Posted to: MBS Commentary
Wednesday, November 30, 2011 4:20 PM

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MBS Live: MBS RECAP
Open MBS Live Dashboard
FNMA 3.5
101-27 : -0-04
FNMA 4.0
104-04 : +0-00
FNMA 4.5
105-22 : +0-03
FNMA 5.0
107-15 : +0-05
GNMA 3.5
103-18 : -0-05
GNMA 4.0
106-19 : -0-03
GNMA 4.5
108-21 : +0-01
GNMA 5.0
110-02 : +0-02
FHLMC 3.5
101-21 : -0-04
FHLMC 4.0
103-31 : +0-00
FHLMC 4.5
105-08 : +0-03
FHLMC 5.0
106-27 : +0-04
Pricing as of 4:00 PM EST
Afternoon Market Updates
A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBS Live Dashboard.
11:51AM  :  ALERT: Positive Reprice Potential Increasing as MBS Hold Gains

MBS are currently responding favorably to a supportive event in benchmark 10’s. The fact that 10yr yields (so far) appear to be holding the line just under 2.10 this morning is a positive sign in terms of overall volatility. Fannie 3.5’s had been trading a narrowing range until 10yr yields broke positively out of their own narrowing range. After that, MBS did the same and continue trading over the 101-26 technical (also the scene of the breakout). The longer this phenomenon plays out, the more likely it becomes that we’d see the characteristically early-to-act lenders repricing for the better, even if only by small token amounts. More time and better gains would be needed before positive reprices would be seen by a majority of lenders.

Featured Market Discussion
A recap of the featured comments from the Live Discussion on the MBS Live Dashboard.
John Rodgers  :  REPRICE: 3:28 PM – Chase Better
Matthew Graham  :  “great question. Couldn’t say for sure. Although, I think we probably just learned from MBS Twist to expect less than we think we should in terms of MBS outperformance”
Matthew Graham  :  “MBS weakened and came back, and here we are”
Matt Hodges  :  “So, MG – how does QEIII in actuality vs. anticipation differ from QE and QEII with MBS buys”
Matthew Graham  :  “and one more fundamental piece supporting all that is the ongoing and perhaps building consensus that the next QE effort will include new money for MBS. “
Matthew Graham  :  “there’s also technical considerations on MBS spreads making them look like they are doing a classic retracement pattern (long explanation, suffice to say, technically supportive spread levels were reached. traders are buyers vs tsys for now)”
Matthew Graham  :  “there’s a fairly strong contingent of “month-end” factors that tend to benefit MBS versus Treasuries in general this week (I think I have a link for you on that)”
Matthew Graham  :  “Treasuries, of late, have been pulled higher in huge swings by porpoising with german bund yields after the failed auction”
Matthew Graham  :  “relative to each other, MBS began underperforming treasuries quite a bit earlier this month and a lot of the 2nd half of the month has been “catch up.” “
Matthew Graham  :  “The main reason that MBS can be green today while treasuries are so deep in the red is several-fold…”
Bert Swyers  :  “how are we green right now?”
Joe Bydzovsky  :  REPRICE: 2:35 PM – Fifth Third Mortgage Better
Jay Bridges  :  REPRICE: 1:01 PM – Met-Life Better
Michael Tadros  :  REPRICE: 12:39 PM – Interbank Better
Michael Tadros  :  REPRICE: 12:18 PM – Provident Funding Better
Thomas Quann  :  REPRICE: 12:12 PM – Sierra Pacific Better
Matthew Graham  :  “particularly interesting S&P chart in this post, as well as a paragraph on how things sometimes go after triangle breakouts: http://www.mortgagenewsdaily.com/mortgage_rates/blog/237831.aspx
BVG  :  “”The short app loan application is the latest customer-inspired feature in our lending solution,” said J.P. Kelly, president, OpenClose. “We feel the best enhancements come from listening to our clients. This short app was something our credit union and community banks were asking for since many of their employees are untrained in the mortgage process.”
BVG  :  “Interesting in a bad way: West Palm Beach, Fla. November 30, 2011 – OpenClose mortgage software developers have added a shortened loan application to its loan origination software. The trend for community banks and credit unions to attract more mortgages continues and the new “short app” was developed to easily initiate the loan process and/or create a home equity line of credit (HELOC). Rather than struggling with the complex 1003 form, employees untrained in the mortgage process can quickly an”
Matthew Graham  :  “ok, so this is relatively important. Rehn is “up there,” and is saying what many are thinking (and some have said), that the EU either needs to move toward a fiscal union or call the whole thing off. “
Matthew Graham  :  “RTRS- EU’S REHN SAYS: EUROPEAN INTEGRATION CAN ONLY BE ACHIEVED BY A SINGLE LEGAL FRAMEWORK OF ONE UNION “
Matthew Graham  :  “RTRS- EU’S REHN TELLS EU PARLIAMENT EURO ZONE WILL EITHER UNDERGO DEEPER INTEGRATION OR WILL HAVE TO ACCEPT GRADUAL DISINTEGRATION “
Matthew Graham  :  “RTRS- EU’S REHN SAYS: WE MAY HELP TO PREVENT A FUTURE CRISIS BY CREATING A REAL STABILITY UNION “
Matthew Graham  :  “RTRS- EU’S REHN SAYS TREATY CHANGE CANNOT OFFER AN IMMEDIATE SOLUTION TO CURRENT CRISIS “

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[MND NewsWire] – October Mortgage Insurance Activity Increases

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October Mortgage Insurance Activity Increases

Posted to: MND NewsWire
Wednesday, November 30, 2011 2:08 PM

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Mortgage Insurance Companies of America (MICA), the trade group representing the largest private mortgage insurance (PMI) companies has issued a statistical report of PMI activities for the month of October. 

Member companies which include Genworth Mortgage Insurance Corporation, Mortgage Guaranty Insurance Corporation, Radian Guaranty, and Republic Mortgage Company, wrote policies during the month covering $5,149 million in conventional mortgage loans, an increase of 223.2 million over the value of policies written in September.  The policies covered 26,293 borrowers, up from 24,885 in September, and were the result of 29,508 applications filed.  There were a reported 37,547 defaults and 29,871 cures in October.

The member companies have $474,278 million in primary insurance in force in October, down from $477,186 million in September.  Prior to September when the company was seized by Arizona regulators and subsequently filed bankruptcy, PMI Corporation was included in MICA statistics.  In August the total insurance in force among members including PMI was $598,641million…

 

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[Mortgage Rate Watch] – Mortgage Rates Steady Again Despite Rising Treasury Yields

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Mortgage Rates Steady Again Despite Rising Treasury Yields

Posted to: Mortgage Rate Watch
Wednesday, November 30, 2011 3:10 PM

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Much like yesterday, Mortgage-Backed-Securities (MBS), began the day in weaker territory and rallied in the latter part of the day.  Improving MBS are usually good for Mortgage Rates and today is no exception.  But the benefits to rates were only enough to get things back to similar territory as yesterday.  No major day-over-day improvements.  Some lenders are slightly better, some are slightly worse, but on average, the Best-Execution Rates are unchanged.  

Also similar to yesterday is the phenomenon where Treasury yields rose while mortgage rates held steady.  This is more of an “FYI” than anything, or perhaps a reminder that it can happen, and just did.  Yesterday we said that the increased availability of 3.875% had us feel even more like locking, and the fact that 4.0% Best-Execution continues to prevail just keeps reiterating that sentiment.  On the secondary market, MBS have been so insanely focused on a narrow band of prices that it really won’t make any sense to bet on the market moving until we’re firmly out of that band of prices (the prices in question equate to the 4.0% Best-Execution level by the time one extrapolates MBS prices to lender rate sheet offerings). 

That would seem to suggest that you could float just as easily as you could lock and face minimal risks.  While that’s partly true, the main point about all the ongoing guidance below is that EVEN IF rates improve from a 4.0% best-execution level, they wouldn’t be going any lower than 3.75% any time soon, and even that would be a fairly fleeting event.

Today’s BEST-EXECUTION Rates

  • 30YR FIXED –  4.0%, increasing amount of 3.875’s.
  • FHA/VA – 3.75%, fewer 3.875’s
  • 15 YEAR FIXED –  3.375%-3.5%
  • 5 YEAR ARMS –  low 3% range, huge variations from lender to lender.

Guidance:

In a fundamental sense, we’re well aware of the fact that European drama continues to help domestic bond markets.  Technically, we’re impressed that mortgage rates have been this flat for this long.  The “batting cage” metaphor or the chart below it if you prefer, continue to be the best guidance we can offer in this uncertain environment.  With the ongoing sideways movement of Best-Execution around 4%, the chances increase that the next move will carry a bit of momentum with it (as if the current calm is akin to “storing energy”).  If it goes in a mortgage rate-friendly direction, there’s limited benefit (an eighth to a quarter of a point of improvement) versus the damage that could result from it going the other way.  Fortunately, neither of those eventualities appear to be happening at the moment, so it’s hard to go wrong.  We’ll let you know the day that changes.

Batting Cage Metaphor:

(this can be applied to any endeavor where you’re trying to “go out on a high note”).   Rate offerings from lenders over the past month have been like a temperamental pitching machine in a batting cage-generally getting the ball across the plate, but with no really juicy pitches.  But recently, we’ve seen some more consistently good pitches (best-ex around 4.0% instead of 4.25%).  Sure… you’ve seen better, but not by much (3.875% and RARELY 3.75%).  How many more will you count on before calling it a day?  Personally, I’d like to end my batting cage session with a nice hit.  The more “pitches” you wait for with rates already at a 4.0%, the greater the risk that the next pitch will be a curve-ball.  To drop the metaphor, although rates this low CAN go slightly lower, the improvements are fairly minimal compared to how much higher they could go.  Still, if you’re not in any particular need to refinance and are operating on a longer-term perspective, we continue to feel good about that “wall” at a 4.25% best-execution level as a good stop-loss point for inclined floaters.  Ask us to explain more about that if it doesn’t make sense. 

Another way of looking at the lock/float spectrum based on the lowest MBS coupon actively trading and being produced in the secondary mortgage market:

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[MBS Commentary] – Concrete Ceiling Now Becoming The Concrete Playground for MBS

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Concrete Ceiling Now Becoming The Concrete Playground for MBS

Posted to: MBS Commentary
Wednesday, November 30, 2011 11:31 AM

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MBS are currently responding favorably to a supportive event in benchmark 10’s. The fact that 10yr yields (so far) appear to be holding the line just under 2.10 this morning is a positive sign in terms of overall volatility. Fannie 3.5’s had been trading a narrowing range until 10yr yields broke positively out of their own narrowing range. After that, MBS did the same and continue trading over the 101-26 technical (also the scene of the breakout). The longer this phenomenon plays out, the more likely it becomes that we’d see the characteristically early-to-act lenders repricing for the better, even if only by small token amounts. More time and better gains would be needed before positive reprices would be seen by a majority of lenders.

Here’s a shot at how this began to play out on the MBS Live Dashboard:

Since that video was snapped, the rally has progressed somewhat.  In terms of benchmark 10’s, the prevailing range was broken this morning and yields are now trying to get back under the 2.07 level.  Here’s what the longer term chart looks like:

Despite the huge rally in stocks overnight and earlier this morning, the levels at which S&P’s seem to be having second thoughts are fairly interesting.  Not only are they hitting the downtrend line from the epic triangle we’d been tracking for a while, but they’re also in line with the levels at which the uptrend line was broken.  This is fairly common when competing trends are resolved.  One one hand, the bounce against the older downtrend line is just a reiteration that that was the victorious trend.  On the other hand, the spot where the triangle breakout occurred suggests it could be used as a horizontal level to assess a sideways trend.  The fact that both of those lines intersect right where S&P’s are running out of steam today suggests stocks that either a sideways or downtrend is STILL intact, until trading levels prove otherwise.

Last but not least, our beloved MBS…  Simply going about their business, capitalizing on any and all hints of stability from benchmarks, continuing to trade a mostly flat, but perhaps slightly conical range, consolidating around the 101-26 level.  Looks like the concrete ceiling/floor have become the concrete playground.

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[Pipeline Press] – Refi Percentage Dropping; S&P Downgrades Banks; HARP Contact Info for Borrowers; MBA Classes for Originators

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Refi Percentage Dropping; S&P Downgrades Banks; HARP Contact Info for Borrowers; MBA Classes for Originators

Posted to: Pipeline Press
Wednesday, November 30, 2011 9:06 AM

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According to a recent survey by the National Association of Realtors (NAR), the typical U.S. homebuyer spent less and borrowed less in 2011. NAR’s annual Profile of Home Buyers and Sellers, which due to methodology tends to under-represent investors versus owner-occupied properties, reported that “first time buyers, who made up 37% of the market, down from an historic 40% share, had a median age of 31 and income of $62,400, up from $59,900 in the 2010 study.  This buyer typically bought a 1,570 square foot home for $155,000, taking on a median monthly mortgage principal and interest payment of $794. The typical repeat buyer was 53 years old, earned $96,600 (up from $87,000 reported last year) and purchased a 2,100 square foot home for $219,500 with a median payment of $1,006.” Most purchased a SFR (77%), 9% a condo, 8% a town or row house and 6% some other kind of housing. The median down payment for all buyers was 11%, however for first-time buyers it was 5% and for repeat buyers 15%.  In both cases the median was a full percentage point higher than in 2010. Fifty-four percent of first-time buyers financed with a low-down payment FHA mortgage, and 6% used the VA loan program which requires no down payment.”

S&P, who brought us the downgrade of the United States earlier this year (which certainly didn’t move Treasury rates any higher) but who, along with the other major rating agencies at that time somehow miss-rated billions of dollars of mortgage debt, has now downgraded several banks around the world. These include the six largest U.S. banks: http://www.bloomberg.com/news/2011-11-29/s-p-cuts-bank-of-america-citigroup-goldman-ratings-in-industry-revision.html. And folks wonder why banks are holding on to capital, and continue high documentation and strict residential mortgage underwriting guidelines?

Speaking of bank problems, under the category of “Why should BofA be all alone in dealing with problems created by previous acquisitions?” the National Credit Union Administration is suing Wells Fargo over $200 million in soured MBS’s. NCUA reached a settlement over soured mortgage investments earlier this month, but it alleges that Wachovia’s two capital markets businesses sold faulty mortgage-backed securities to U.S. Central Federal Credit Union and Western Corporate Federal Credit Union, both of which were liquidated in 2009.

In a comment about life in the secondary markets, an exec from the West Coast wrote, “”Rob, what am I supposed to do with my loans? Does Wells Fargo have any competition? Citi, Chase, and GMAC all have one foot on a banana peel and my staff in Secondary is always waiting for another shoe to drop. SunTrust, Flagstar, US Bank, Franklin American, PHH, BB&T, Affiliated, and so on wouldn’t know an AOT or a bulk mandatory if it came up and slapped them on the “rump” and called them Shirley. It costs a large amount of capital to sell loans to Fannie or Freddie. This is my nightmare scenario – wake me up when it is over.” (Hey, not my quote!)

Well, as it turns out, lots of originators out there have applications in with Fannie & Freddie, both of whom are busy dealing with HARP questions. And of course it is necessary for borrowers, and/or their LO’s, to figure out if Freddie or Fannie actually own or guarantee their mortgage if they have any hope for HARP. The sites & phone numbers are, for Fannie, http://www.fanniemae.com/loanlookup/ or 800-372-6643, and for Freddie, https://ww3.freddiemac.com/corporate/ or 800-373-3343. And remember that not only do primary residences qualify, but also investment properties and second homes do as well.

Turning to another government agency, “they” say a series of rule revisions by the FHA has caused thousands of condo projects to become ineligible for FHA mortgages. This, in turn, has abruptly shut off loan money for would-be condo buyers and refinancers, forcing them to pursue conventional bank loans requiring much higher down payments (20% versus 3.5%): http://therealdeal.com/newyork/articles/new-fha-rules-ittle-publicized-switch-in-federal-mortgage-policy-cause-condo-headaches-says-ken-harney.

Regarding the news out of Washington, I received this note from Idaho: “Replacing Barney Frank with Maxine Waters? Be careful what you wish for! Maxine has shown little or no empathy for banks or financial institutions, and, in fact, according to people I know who have met her, is openly disdainful of ‘bankers.’ And Barney is not to blame for everything that happened: http://www.washingtonpost.com/blogs/ezra-klein/post/barney-frank-didnt-cause-the-housing-crisis/2011/11/28/gIQANqLH5N_blog.html.”

The MBA offers all kinds of classes for originators, whether it is increasing one’s production or using social media. There usually is a cost, less for members of the MBA than for non-members, but heck, if it helps an LO close an extra loan it’s more than worth it. Start at: http://www.campusmba.org/PublicCalendar.htm.

Turning to lender/investor news, HSOA spread the word to brokers that “USDA Purchase transactions may close; refinances remain on hold…While the appropriations budget was passed on 11/18 and signed by the president for FY 2012, the next step is for the Budget office to allocate the program funds to the USDA. This usually takes a few weeks. In the interim, USDA has unused funding authorizations available for purchase transactions, but not for refinances.”

PHH came out with a first round of HARP updates. It is fairly extensive, but some changes roll into place tomorrow. Both the FNMA DU REFI PLUS program and FHLMC RELIEF REFI programs have been extended until December 31, 2013.  It “expanded the list of acceptable borrower benefits to include a reduction to the monthly P&I payment liabilities – The overlay for the maximum number of mortgage delinquencies has been removed for new registrations. LP will assess mortgage payment history to determine eligibility for the FHLMC Relief Refinance…”

“Systems will not be updated to support the use of the mortgage proceeds guidelines until a future release. In the interim, loans will need to be manually conditioned to reflect the correct terms based on the LTV.”

Where do the experts think home values are heading? “Nobody should be surprised by further home value losses in the remaining balance of this year and into next year,” said Zillow Chief Economist Stan Humphries. “Despite record high affordability of real estate, the psychology of home buyers is still being weighted down by economic uncertainty, keeping them on the fence when it comes to buying homes. Moreover, we do expect foreclosure liquidation rates to increase in the coming months as banks try to unload their backlog of foreclosures accumulated in the post robo-signing period. This will also put downward pressure on home values. The good news is that we expect these remaining home value losses to be relatively minor in comparison to the declines from the market peak to current levels.”

This was supported by, or was said to support, the S&P/Case-Shiller index of property values that came out yesterday showing that values in 20 cities dropped 3.6% in September from the same month in 2010 after decreasing 3.8% in the year ended August. On the flip side, the FHFA’s House Price Index increased 0.2% in Q3 from Q2; year over year prices were off 3.7%. For the month of September, however, prices increased 0.9% from August from a downwardly revised -0.2% that was previously reported at -0.1%. Consumer Confidence jumped to “56” from a revised 40.9 reading in October, the biggest monthly gain in eight years as people grew more upbeat about employment and income prospects. And headlines blared, “Treasuries Fall on Speculation ECB, IMF Will Move to Support Italian Debt” which pushed the 10-year T-note yield higher for a third straight day – it closed at 1.99% Tuesday. But MBS prices closed higher (improved) on the strong demand.

Today we have already had a large amount of news, scheduled and unscheduled. The MBA reported that last week’s applications dropped for the third week in a row. Apps dropped nearly 12% – but don’t forget that it was a holiday week. Refinancing applications dropped 15%, the biggest decrease in more than a month per the MBA, and purchases were down about 1%. And the refinance share of total mortgage activity eased to about 74%, down from 76% the prior week.

The final Q3 reading for Productivity and Unit Labor Costs was reported (+2.3% and -2.5% respectively) and the ADP private employment numbers came in much stronger than expected, +206k with job gains across most sectors. Today we also have the Chicago PMI (Nov), which is projected unchanged at 58.4, the Pending Home Sales Index (Oct), and the Fed release of its Beige Book with economic anecdotes from the 12 Districts in preparation for the December 13 FOMC meeting. But what is really pushing the markets today is the news that the Fed and world banks announcing measures to boost liquidity in order to “ease” situation in Europe. The 10-yr is up to 2.07% and MBS prices are worse by roughly .250.  – MBS Prices

Who was the first person to look at a cow and say, ‘I think I’ll squeeze these dangly things and drink whatever comes out’?
If Jimmy cracks corn and no one cares, why is there a song about him?
Why does your OB-GYN leave the room while you get undressed as if they are not going to look up there anyway?
If quizzes are quizzical, what are tests?
If corn oil is made from corn, and vegetable oil is made from vegetables, then what is baby oil made from?
Do illiterate people get the full effect of Alphabet Soup?
Does pushing the elevator button more than once make it arrive faster?
Why doesn’t glue stick to the inside of the bottle?
Do you ever wonder why you gave me your email address?

If you’re interested, visit my twice-a-month blog at the STRATMOR Group web site located at http://www.stratmorgroup.com . The current blog reminds everyone about how government intervention in the housing market is nothing new. If we forget history, we are doomed to repeat it, and it is important to know the last 15 years of the history of the agencies. If you have both the time and inclination, make a comment on what I have written, or on other comments so that folks can learn what’s going on out there from the other readers.

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