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Mortgage Rates Ease After Recent Run-Up
Spokane Spokesman-Review (WA) (06/19/09)
Coming down from a seven-month high of 5.59 percent a week ago, rates on 30-year fixed home loans settled at 5.38 percent this week. Freddie Mac reports that interest on 15-year fixed mortgages was lower as well, slipping to 4.89 percent from 5.06 percent over the same period. An upward trend in borrowing costs over the past three weeks was linked to rising yields on long-term government debt, sparked by investor concerns over inflation. New data suggest, however, that inflation is under control.
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Federal Housing Administration to Play Expanded Role
Philadelphia Inquirer (06/19/09) Heavens, Alan J.
Although HUD Secretary Shaun Donovan would like to see the private sector take more initiative in righting "a financial system that's broken," he applauds the Federal Housing Administration for stepping up and doing its part. Not only is it allowing qualified first-time home buyers to use an $8,000 federal income tax credit for down payments or closing costs--a move that will translate into 160,000 sales by the end of 2009, when the incentive expires--it also is seeking an additional $400 billion for the FHA insurance program. If the funding request is honored, Donovan said HUD can be expected to back 2.25 million home loans next year. He noted that FHA's share of the mortgage origination market already has surged to 24 percent, and growing, from less than 2 percent in 2006.
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Searching for a Bottom in the Housing Market
CNNMoney (06/19/09) Morrissey, Janet
Although a rise in consumer confidence, housing starts and existing-home sales may indicate stabilization in the residential property market, experts expect prices to continue to fall through the middle of next year; and some believe they will not bottom out until 2013. Many are raising concerns about a substantial number of option adjustable-rate mortgages and Alt-A mortgages poised to undergo rate resets over the next 18 to 24 months at a time when unemployment continues to increase. The result likely would be a new wave of foreclosures, which would only deepen price declines--likely by at least another 20 percent.
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Fannie, Freddie Were at Center of Financial Crisis But Are Not Included in Obama's New Financial Regulations
CNSNews.com (06/19/09) Cover, Matt
Fannie Mae and Freddie Mac, the mortgage giants largely blamed for the subprime lending fiasco that caused a mortgage market meltdown and sent the U.S. economy into a slump, are overlooked in the Treasury's broad revamp of financial regulations. Treasury Secretary Timothy Geithner acknowledged in June 18 testimony before the Senate Banking Committee that the firms were key players in the financial crisis but said time constraints and other legislative priorities put any changes for the federally chartered firms on hold. "We did not believe that we could have, in this time frame, lay out a sensible set of reforms to guide and determine what their future will be," he stated. "We didn't think it was an essential thing to do just now, but we do believe it is an essential thing to do."
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Fannie Mae Tightens Rules on 'Trailing Spouse' Income
Chicago Daily Herald (06/19/09) Harney, Ken
In a move that could affect thousands of home buyers, Fannie Mae will no longer include the income of "trailing spouses"--who accompany their mates in job-related moves but have not secured jobs for themselves in the new location--in its loan eligibility calculations. Because applications will be denied if the main breadwinner's income alone cannot pay the mortgage, Worldwide ERC Vice President Jan Hatfield-Goldman says couples will end buying less home than desired, renting for a prolonged period or putting off relocation altogether. Freddie Mac continues to count the income of trailing spouses, but with many restrictions.
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Home Sales Taking Longer to Finalize Now
Investor's Business Daily (06/19/09) P. A6; Kelly, Brad
The three-year housing slump, coupled with the ongoing credit and financial crisis, has made finalizing home sales more difficult than ever. The National Association of Realtors confirms that the number of existing homes that people have agreed to purchase increased 6.7 percent in April from March--the largest monthly gain since October 2001. However, the group does not keep track of what percentage of deals fall through. NAR chief economist Lawrence Yun states, "The mortgage processing is taking longer than in the past due to document and background checks, inspections, appraisals and the actual underwriting of the loan; any one of these monkey wrenches can derail a closing."
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Loan Demand Overtaxing FHA
Investor's Business Daily (06/19/09) P. A2
HUD Inspector General Kenneth Donohue reports that tightness in the mortgage-finance sector has propelled the FHA's share of the home-loan market to 63 percent so far in 2009--a record high--compared to 24 percent in the fiscal year ended Sept. 30. The spike in volume is overwhelming the agency, he warned, and could erode the integrity of Ginnie Mae mortgage bonds.
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Mortgage Foreclosures Heading Through the Roof
USA Today (06/19/09) Armour, Stephanie
The White House's $75 billion program to reduce foreclosures has been mired in delays and backlogs, with many at-risk homeowners unable to get phone calls returned and others denied help for reasons unknown. The Treasury Department reports that the plan has resulted in offers of more than 190,000 mortgage modifications with lower monthly payments since its debut earlier this year. However, homeowners who apply for workouts find that banks typically take between 45 and 60 days to respond to inquiries. According to NeighborWorks America, some homeowners who applied for mortgage modifications five months ago still have not received a final answer on whether they will be granted smaller monthly payments. Lenders and economists warn that rushing through approvals could do more harm than good.
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Commercial/Multifamily News |
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Franzetti: Smaller Banks Have 'Real Problems'
Joe Franzetti, managing director of debt advisory services at Cohen Financial, Chicago, discusses distressed assets and future loan defaults in the commercial real estate finance markets.
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DealMaker of the Day
JB Matteson a multifamily operator in Redwood City, Calif., and Griffin Capital Corp., El Segundo, Calif., formed a strategic alliance for investment and purchased Waterford at the Lakes, an apartment community in Kent, Wash.
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?If we don't take this opportunity to be proactive and get FHA the resources it needs, the recent reemergence of FHA won't last long. We have a chance to prevent future problems at FHA, but that effort must start today.?
--MBA Chairman David Kittle, CMB, in testimony yesterday before a House subcommittee.
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