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Low-Down Loans Aid Lean Condo Market
Investor's Business Daily (12/11/09) Alva, Marilyn
New FHA condominium-loan guidelines went into effect on Dec. 8, hoping to tempt condo buyers back into the market with down payments as low as 3.5 percent. That is what buyers typically put down on FHA-insured mortgages, which account for nearly 33 percent of total loans for home purchases and half those of first-time buyers. Making FHA-backed condo loans a reality has been difficult, though, as many condo complexes have been unwilling or unable to meet the agency's strict guidelines. The new rules loosen some of those restrictions, while a temporary policy relaxes certain requirements through next year.
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House Scales Back Proposed Wall Street Rules
Associated Press (12/11/09) Kuhnhenn, Jim
As House Democrats prepare for a final vote on financial regulatory reform legislation, support for a few provisions remains unclear. One amendment would strike the proposed Consumer Financial Protection Agency from the bill -- a move observers say would eliminate liberals' support. Meanwhile, top Democrats are seeking support for a provision that would allow bankruptcy judges to restructure mortgages to reduce payments -- a measure opposed by the banking industry.
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Mortgage Rates Bounce Off Record Lows
Inman News (12/11/09)
Interest on 30-year fixed mortgages rose to 4.81 percent this week, after last week's fall to a record low of 4.71 percent, reports Freddie Mac. While the Federal Reserve's effort to purchase $1.25 trillion in mortgage-backed securities issued by Fannie Mae, Freddie Mac and Ginnie Mae has helped keep rates attractive, Freddie Mac chief economist Frank Nothaft says they rose because a favorable unemployment report pushed long-term bond yields up slightly. With the Fed program projected to end in March, the Mortgage Bankers Association forecast in October that 30-year fixed mortgages will rise to 5.4 percent next year, increase to 6 percent in 2011 and hit 6.3 percent in 2012.
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Few Homeowners Get Through Mortgage Loan Modification Program
USA Today (12/11/09) Armour, Stephanie
The Treasury Department on Dec. 10 released a list of how many loan workouts individual servicers have made, noting that borrowers with re-worked terms are saving about $550 a month. However, the report showed that only about 4 percent of homeowners participating in the government's modification program -- or 31,382 borrowers -- have been granted permanent workouts since details of the initiative were unveiled in March. Lenders have come under fire for the slow pace and are facing a Dec. 31 deadline for converting about 375,000 trial workouts into permanent ones. More than 728,000 trial modifications are still underway, but about 25 percent of those borrowers already are in default again.
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U.S. Households' Net Worth Rises
Wall Street Journal (12/11/09) P. A8; Reddy, Sudeep
According to the Federal Reserve's quarterly flow-of-funds report, the net worth of U.S. households increased 5 percent from July through September as stock markets continued their steady upward climb. The central bank's data further showed that household mortgage debt contracted at a 3.6 percent annual clip. J.P. Morgan Chase economist Michael Feroli remarked, "The decline in mortgage debt reflects both weak originations, normal amortization, and the added effect of foreclosure reducing the amount of mortgage debt outstanding." As mortgage and credit card borrowing fell in the third quarter, household debt contracted at an annual rate of 2.6 percent --the largest drop on record.
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