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15-Year Mortgage Rate Hits Record Low
Boston Herald (11/20/09) Grillo, Thomas
Rates for 30-year mortgages approached the all-time low of 4.78 percent again this week, falling to 4.83 percent from an average of 4.91 percent a week ago. The 15-year rate did reach a new bottom, dipping from 4.40 percent to 4.32 percent -- the lowest level since Freddie Mac began tracking rates in 1991. Wellesley College economist Karl Case says the Federal Reserve's efforts to purchase mortgage-backed securities from Fannie Mae and Freddie Mac is lowering rates on home loans.
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Problem Mortgages Hit New High at 14 Percent
Washington Post (11/20/09) P. A17; Merle, Renae>
Approximately 14 percent of mortgages were delinquent or in foreclosure during the third quarter -- a record high, according to the Mortgage Bankers Association, which attributed the gain mainly to rising unemployment. Nationally, the delinquency rate was 9.6 percent and the foreclosure rate was 4.5 percent, with 43.4 percent of foreclosures in California, Nevada, Arizona and Florida alone. According to MBA chief economist Jay Brinkmann, "The outlook is that delinquency rates and foreclosure rates will continue to worsen before they improve."
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Credit Seen Key to Commercial Property Revival
Investor's Business Daily (11/20/09) P. A8; Howell, Donna
Jones Lang LaSalle does not expect the commercial property market to begin a recovery until the second half of next year. However, for any sustained and meaningful rebound to occur, the National Association of Realtors insists that credit availability must improve. JLL's Josh Gelormini observes that lending markets have begun to relax, although "cash will still be king in 2010. We think high net worth individuals and foreign capital will be a significant source of investment." NAR's gauge of commercial brokerage activity climbed 0.9 percent in this year's third quarter from the April-through-June period but is off 11.1 percent off 2008's pace year to date.
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Reverse Mortgage Lenders Fear 2nd Cut
American Banker (11/20/09) P. 11
The FHA is expected to announce another cut in "principal limit factors" on reverse loans shortly after Thanksgiving, after reducing them 10 percent on Oct. 1. The factors in the matrix used to determine what percentage of a property's value is available to a senior borrower depend on the individual's age and the loan's interest rate, and the Office of Management and Budget's assessment of home prices impacts changes in the matrix. The National Reverse Mortgage Lenders Association says the Oct. 1 changes would have prevented 20 percent of borrowers from qualifying had they been in effect the entire year because the homeowners would have owed more than their amount of available equity.
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Panel Votes to Broaden Oversight of the Fed
New York Times (11/20/09) P. B1; Andrews, Edmund L.
The House Financial Services Committee has voted to allow Congress to carry out new and far-reaching oversights of the Federal Reserve's operations and policy decisions. The approved measure would allow Congress to order audits of all the central bank's lending programs and its decisions to set monetary policy by raising or lowering interest rates. If the measure is signed into law, the Fed would be subjected to considerably more political pressure than it has faced in decades. The Fed remains opposed to the measure, arguing that it would greatly undermine its credibility as a defense against inflation.
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