The Mortgage Bankers Association reported a large drop in mortgage applications last week, though the drop was driven heavily by a 48% drop in the interest rate sensitive refinance applications after mortgage rates broke their down trend the week before. Purchase applications fell 2.9%. Both the Mortgage Bankers Association and Freddie Mac reported 30-year Fixed Rate Mortgage (FRM) rates just above 5% and 15-year FRM rates below 5%. At the current rates an 8.5% 30-year mortgage could be refinanced into a 15-year mortgage at roughly the same payment – reason enough to refinance for anyone with 3 to 5 years on a subprime loan who can qualify now for prime rates.

Housing affordability is very strong, putting some legs under the market going forward, when employment stabilizes. According to Frank Nothaft, Freddie Mac chief economist:

Both the S&P/Case-Shiller® 20-city composite index, which registered an 18 percent annual decline through November, and the National Association of Realtors® (NAR) sales data, down 15 percent in December from a year ago, indicate sharply lower house prices across many U.S. metropolitan areas. At the same time, interest rates for 30-year fixed-rate mortgages reached a 50-year low toward the end of December. These two factors contributed to housing affordability reaching its highest level since 1973, as measured by the NAR’s monthly affordability index and help to explain the 7.0 percent increase in existing home sales in December.

Mortgage Bankers Association Average Mortgage Rates

30-year FRM: 5.22%, 1.05 points*
15-year FRM: 4.98%, 1.13 points
1-year ARM: 5.96%, 0.06 points

Freddie Mac Conforming Rates At a Glance

• 30-year FRM: 5.10%, 0.7 point
• 15-year FRM: 4.80%, 0.7 point
• 5-year hybrid ARM: 5.27%, 0.6 point
• 1-year ARM: 4.9%, 0.6 point

* Points reported by Mortgage Bankers Association in this survey include origination fees as well as traditional discount points. Average rates are based on an 80% LTV loan. This means a loan amount no more than 80% of the property value as determined by the lower of the purchase price or appraised value. Typically this means a 20% down payment, though an 80% loan can also be achieved with a second mortgage carried by the seller or a third party lender for the difference between the actual down payment and 20%.

Technorati Tags: housing market, mortgages, mortgage market, mortgage rates, conforming loans, subprime

MORTGAGE RATES HOLD STEADY ACCORDING TO FREDDIE MAC’S WEEKLY SURVEY

“Mortgage rates held steady this week,” said Frank Nothaft, Freddie Mac vice president and chief economist. “The index of leading indicators rose 0.3 percent in December, the first increase in 6 months, fueled by an expansion in the money supply. However, the Federal Reserve acknowledged in its January 28th policy committee statement that since December the economy has weakened further.
“Both the S&P/Case-Shiller® 20-city composite index, which registered an 18 percent annual decline through November, and the National Association of Realtors® (NAR) sales data, down 15 percent in December from a year ago, indicate sharply lower house prices across many U.S. metropolitan areas. At the same time, interest rates for 30-year fixed-rate mortgages reached a 50-year low toward the end of December. These two factors contributed to housing affordability reaching its highest level since 1973, as measured by the NAR’s monthly affordability index and help to explain the 7.0 percent increase in existing home sales in December.”

Mortgage Applications Fall In Latest MBA Weekly Survey

WASHINGTON, D.C. (January 28, 2009) — The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending January 23, 2009.  The Market Composite Index, a measure of mortgage loan application volume, was 732.1, a decrease of 38.8 percent on a seasonally adjusted basis from 1195.3 one week earlier.  This week’s results included an adjustment to account for the shortened week due to the Martin Luther King Jr. holiday. On an unadjusted basis, the Index decreased 46.5 percent compared with the previous week and 40.4 percent compared with the same week one year earlier.
The Refinance Index decreased 48 percent to 3373.9 from 6491.8 the previous week and the seasonally adjusted Purchase Index decreased 2.9 percent to 294.3 from 303.1 one week earlier.  The Conventional Purchase Index decreased 7.8 percent while the Government Purchase Index (largely FHA) increased 8.8 percent.
 
The four week moving average for the seasonally adjusted Market Index is down 10.5 percent.  The four week moving average is down 2.1 percent for the Purchase Index, while this average is down 12.7 percent for the Refinance Index.
The refinance share of mortgage activity decreased to 72.8 percent of total applications from 83.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 2.4 from 1.5 percent of total applications from the previous week.

The Mortgage Bankers Association reported a drop in refinance applications last week after Fixed Rate Mortgage (FRM) rates rose more than three-tenths of a percent and Freddie Mac’s Primary Mortgage Market Survey also showed an increase in rates, though only about half as large. The reports on Adjustable Rate Mortgage (ARM) rates were mixed. Despite the increase in rates, the Mortgage Bankers Association reported a 2.5% increase in purchase mortgage applications.

There’s bad news on the credit availability front for homeowners looking to refinance out of bad situations. Eric from Dream Home Financing reported that:

Although refinance applications have increased, many borrowers no longer qualify or the rate adjustments due to their new credit situation have resulted in little benefit to refinance.

Ditech Home Loans puts more specific numbers to the situation for refinances:

Fall out for refinance applications are estimated at 50% to 65%, because of low appraisals and qualifying issues. The new Fannie Mae and Freddie Mac appraisal code may contribute to more fall out, as well as FHA’s 2 appraisal requirement for cash out refinancing over 85%.

Freddie Mac Conforming Rates At a Glance

• 30-year FRM: 5.12%, 0.7 point
• 15-year FRM: 4.8%, 0.7 point
• 5-year hybrid ARM: 5.24%, 0.6 point
• 1-year ARM: 4.92%, 0.7 point

Average Mortgage Rates

30-year FRM: 5.24%, 1.16 points*
15-year FRM: 4.99%, 1.20 points
1-year ARM: 5.89%, 0.07 points

* Points reported by Mortgage Bankers Association in this survey include origination fees as well as traditional discount points. Average rates are based on an 80% LTV loan. This means a loan amount no more than 80% of the property value as determined by the lower of the purchase price or appraised value. Typically this means a 20% down payment, though an 80% loan can also be achieved with a second mortgage carried by the seller or a third party lender for the difference between the actual down payment and 20%.

Technorati Tags: housing market, mortgages, mortgage market, mortgage rates, subprime

LONG-TERM MORTGAGE RATES RISE THIS WEEK, REVERSING 11-WEEK TREND

“Fixed-rate mortgages followed bond yields and edged up this holiday week,” said Frank Nothaft, Freddie Mac vice president and chief economist. “However, over the first three weeks of 2009, 30-year fixed-rate mortgages averaged 0.25 percentage points below its monthly average for December 2008. As a result, the number of mortgage applications for refinancing was roughly about 86 percent of all conventional loans over the same time period.
“New housing construction continues to thin due to foreclosures and an abundance of unsold homes. Housing starts for 1-family homes fell 13.5 percent in December 2008 to an annualized pace just under 400,000 houses, the slowest pace since the data were collected in January 1959. In addition, homebuilder confidence fell to a record low in January since history began in January 1985.”

Mortgage Applications Decrease in Latest MBA Weekly Survey

The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending January 16, 2009.  The Market Composite Index, a measure of mortgage loan application volume, was 1195.3, a decrease of 9.8 percent on a seasonally adjusted basis from 1324.8 one week earlier.  On an unadjusted basis, the Index decreased 10.3 percent compared with the previous week and increased 23.1 percent compared with the same week one year earlier.
The Refinance Index decreased 12.4 percent to 6491.8 from 7414.1 the previous week and the seasonally adjusted Purchase Index increased 2.5 percent to 303.1 from 295.8 one week earlier.  The Conventional Purchase Index increased 2.8 percent while the Government Purchase Index (largely FHA) increased 1.8 percent.
 
The four week moving average for the seasonally adjusted Market Index is down 1.0 percent.  The four week moving average is down 1.0 percent for the seasonally adjusted Purchase Index, while this average is down 1.0 percent for the Refinance Index.
The refinance share of mortgage activity decreased to 83.3 percent of total applications from 85.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 1.5 percent from 1.1 percent of total applications from the previous week.

S&P reported another big drop in its Case Shiller Home Price Index, which covers the top 20 metropolitan areas in the US and the Conference Board reported that US consumer confidence fell to a record low. 14 of the 20 cities indexed had annual declines of more than 10% from October 2007 to October 2008. All the cities except Detroit were above 2000 price levels, the top 10 were at 169.78% of 2000 levels, all 20 were at 158.16% of 2000 levels. The indexes peaked in July 2006; the Composite 10 is down 25% from that level and the Composite 20 is down 23.5%.

Several points worth noting:

• No city except Detroit is below the year 2000 price level, the year that began the housing boom.
• On average, homes have appreciated more than 50% in 8 years even after the declines.
• Charlotte, NC rose to a peak of 127.96% of the 2000 level and is now at 127.08% of the 2000 level.
• The cities with the biggest gains have fallen the farthest.
• New York, Portland, Dallas and Seattle have also maintained home prices fairly well with New York at 190% of 2000 levels.
• The variation is huge. All real estate is local. Location, location, location.

Read the full reports at EconoIndicators:

Case-Shiller Index

Consumer Confidence Index

Freddie Mac and the Mortgage Bankers Association are both reporting 30-year rates near 5% and 15-year Fixed Rate Mortgage (FRM) rates below 5% for a second week. Buyers have responded aggressively to the lower rates, with mortgage applications for home purchases up more than 10% last week.

With prices dropping in both the existing home and new home markets according to reports released earlier in the week and consumers real disposable income rising last month, housing affordability is considerably improved – a good sign for sales early next year. According to Frank Nothaft, Freddie Mac chief economist:

Interest rates on 30-year fixed-rate mortgages eased for the eighth straight week and set another record low since Freddie Mac’s survey began in 1971.

Freddie Mac Conforming Rates At a Glance

• 30-year FRM: 5.14%, 0.8 point
• 15-year FRM: 4.91%, 0.7 point
• 5-year hybrid ARM: 5.49%, 0.6 point
• 1-year ARM: 4.95%, 0.6 point

Average Mortgage Rates from Mortgage Bankers Association

30-year FRM: 5.04%, 1.17 points*
15-year FRM: 4.91%, 1.03 points
1-year ARM: 6.36%, 0.28 points

* Points reported by Mortgage Bankers Association in this survey include origination fees as well as traditional discount points. Average rates are based on an 80% LTV loan. This means a loan amount no more than 80% of the property value as determined by the lower of the purchase price or appraised value. Typically this means a 20% down payment, though an 80% loan can also be achieved with a second mortgage carried by the seller or a third party lender for the difference between the actual down payment and 20%.

Technorati Tags: housing market, mortgages, mortgage market, mortgage rates, subprime

Near Record Low Mortgage Rates Boost Mortgage Applications

WASHINGTON, D.C. (December 24, 2008) — The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending December 19, 2008.  The Market Composite Index, a measure of mortgage loan application volume, was 1245.4, an increase of 48.0 percent on a seasonally adjusted basis from 841.4 one week earlier.  On an unadjusted basis, the Index increased 50.2 percent compared with the previous week and was up 124.6 percent compared with the same week one year earlier.
The Refinance Index increased 62.6 percent to 6758.6 from the previous week and the seasonally adjusted Purchase Index increased 10.6 percent to 316.5 from one week earlier.  The Conventional Purchase Index increased 17.7 percent while the Government Purchase Index (largely FHA) decreased 3.4 percent.
 
The four week moving average for the seasonally adjusted Market Index is up 28.8 percent.  The four week moving average is up 4.5 percent for the seasonally adjusted Purchase Index, while this average is up 42.0 percent for the Refinance Index.
The refinance share of mortgage activity increased to 83.2 percent of total applications from 76.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 0.8 percent from 1.1 percent of total applications from the previous week.
LONG-TERM RATES FALL FOR EIGHTH CONSECUTIVE WEEK SETTING ANOTHER NEW LOW
Shorter-Term Rates Are Mixed
McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 5.14 percent with an average 0.8 point for the week ending December 24, 2008, down from last week when it averaged 5.19 percent. Last year at this time, the 30-year FRM averaged 6.17 percent. The 30-year FRM has not been lower since Freddie Mac started the Primary Mortgage Market Survey in 1971.

“Interest rates on 30-year fixed-rate mortgages eased for the eighth straight week and set another record low since Freddie Mac’s survey began in 1971,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Real GDP growth fell 0.5 percent in the third quarter of the year, pulled down by the largest drop in consumer spending since the second quarter of 1980. The market consensus calls for an even larger decline in the last three months of the year.
“The housing market, meanwhile, continues to contract. Existing home sales (excluding condominiums and co-ops) fell 8.6 percent in November to 4.0 million houses (annualized) in November, representing the slowest pace since July 1997. Moreover, the median sales price fell 12.8 percent from November 2007, the largest 12-month decline since records began in January 1968, according to the National Association of Realtors®.”

New Home Sales

Existing Home Sales

The Mortgage Bankers Association and Freddie Mac both reported good news for those needing to refinance mortgages and those with resetting ARMs with the MBAA reporting an average 15-year Fixed Rate Mortgage (FRM) rate below 5% and Freddie Mac reporting a 1-year ARM rate below 5% and 15-year FRM rates below 5%. Even 30-year FRM rates are flirting with 5% according to both reports. The Mortgage Bankers Association reported an increase in refinance activity and a small drop in purchase applications last week.

In other housing news, the National Association of Homebuilders reported that builder sentiment held steady at a record low in November and the Commerce Department reported another drop in housing starts. With new home inventories still in the 10 month range, the drop in housing starts to a level a little over half the November 2007 level is good news for homeowners, but bad news for construction workers, building suppliers and for home buyers who wait too long to buy. NAHB Chairman Sandy Dunn blames sales conditions for the negative sentiment:

While builders are doing everything we can in the way of price and non-price incentives to move new homes off the books, buyers are afraid to move forward, and in any case there is almost no way to compete with the cut-rate product that is continually flooding the market from mounting foreclosures.

Buyers need to, carefully of course, take advantage of the real bargains that are starting to pile up whether it’s from foreclosures or builder incentives, as with building slowing this much and mortgage freezes in place inventories are going to drop and when they do the bargains will dry up.

Mortgage Bankers Association Average Mortgage Rates

30-year FRM: 5.18%, 1.13 points*
15-year FRM: 4.93%, 1.34 points
1-year ARM: 6.63%, 0.3 points

Freddie Mac Conforming Mortgage Average Rates

• 30-year FRM: 5.19%, 0.7 point
• 15-year FRM: 4.92%, 0.7 point
• 5-year hybrid ARM: 5.6%, 0.6 point
• 1-year ARM: 4.94%, 0.5 point

* Points reported by Mortgage Bankers Association in this survey include origination fees as well as traditional discount points. Average rates are based on an 80% LTV loan. This means a loan amount no more than 80% of the property value as determined by the lower of the purchase price or appraised value. Typically this means a 20% down payment, though an 80% loan can also be achieved with a second mortgage carried by the seller or a third party lender for the difference between the actual down payment and 20%.

Builder Confidence Remains At Record Low In December

December 15, 2008 - Builder confidence in the market for newly built single-family homes held at a record low in December as deepening economic turmoil, a deteriorating job market, and an ongoing flow of foreclosed homes onto the market continued to negatively impact sales conditions. The National Association of Home Builders/Wells Fargo Housing Market Index (HMI) did not budge this month from November’s all-time low reading of 9, with two out of three component indexes losing further ground.
 
“The crisis continues,” said NAHB Chairman Sandy Dunn, a home builder from Point Pleasant, W. Va. “While builders are doing everything we can in the way of price and non-price incentives to move new homes off the books, buyers are afraid to move forward, and in any case there is almost no way to compete with the cut-rate product that is continually flooding the market from mounting foreclosures. Congress and the Administration must step in with substantial incentives to bring qualified buyers back to the table as well as effective foreclosure relief programs if we are to end this negative spiral that is weighing so heavily on our national economy.”
 
“We have seen no improvement over the past month in terms of sales conditions for new homes,” said NAHB Chief Economist David Crowe. “In fact, certain factors have gotten progressively worse, not the least of which is the job market, where massive layoffs are having a devastating effect on consumer confidence. At this point it will take definitive government action to stop the slide in home values and turn the tide of consumer sentiment. Expanding the first-time buyer tax credit and providing government action to reduce mortgage rates would go a long way toward arresting this downward spiral, just as a combination of similar moves worked in the 1970s to boost the housing market and economy.”
 
Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.
 
Two out of three of the HMI’s component indexes registered some further deterioration in December. The index gauging current sales conditions and the index gauging sales expectations for the next six months each declined to new record lows, falling one point to 8 and two points to 16, respectively. The index gauging traffic of prospective buyers held at a record low of 7 for the month.
 
Two out of four regions posted declining builder confidence readings in December, with the Midwest and South edging down one point and two points, to 6 and 10, respectively. The Northeast held even with the previous month’s 11 reading, while the West posted a one-point gain to 7. 

Mortgage Applications Increase, Driven by Refinances in Latest MBA Weekly Survey

WASHINGTON, D.C. (December 17, 2008) — The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending December 12, 2008.  The Market Composite Index, a measure of mortgage loan application volume, was 841.4, an increase of 2.9 percent on a seasonally adjusted basis from 817.7 one week earlier, which was revised from 796.8.*  On an unadjusted basis, the Index increased 2.9 percent compared with the previous week and was up 37.3 percent compared with the same week one year earlier.
The Refinance Index increased 6.5 percent to 4156.0 from the previous week and the seasonally adjusted Purchase Index decreased 4.5 percent to 286.1 from one week earlier.  The Conventional Purchase Index decreased 6.7 percent while the Government Purchase Index (largely FHA) was virtually unchanged.
 
The four week moving average for the seasonally adjusted Market Index is up 17.9 percent.  The four week moving average is up 3.2 percent for the seasonally adjusted Purchase Index, while this average is up 28.1 percent for the Refinance Index.
The refinance share of mortgage activity increased to 76.9 percent of total applications from 74.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity remained unchanged at 1.1 percent of total applications from the previous week.

30-YEAR FIXED RATE FALLS TO AT LEAST A 37-YEAR LOW
McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®): “Interest rates for 30-year fixed-rate mortgage rates fell for the seventh consecutive week, moving these rates to the lowest since the survey began in April 1971,” said Frank Nothaft, Freddie Mac vice president and chief economist. “The decline was supported by the Federal Reserve announcement on December 16th, when it cut the federal funds target to a record low and stated it stood ready to expand its purchases of mortgage-related assets as conditions warrant.”

With home prices falling in many parts of the country, sales slower than normal in other parts and mortgage standards higher than any time since the late ’80s, buyers and sellers can both benefit from creative financing - owner finance, lease options, lesser known grant and loan programs, and more. Buyers stand to benefit by taking advantage of bargains in the market that may be gone when mortgage markets start functioning better and federal money starts inflating home prices again. Sellers who offer creative financing in this market will really stand out to buyers who need to purchase and are cut off by a bad mortgage market; trying to sell in this market means going all out with your marketing and creative financing can be a part of that.

Both buyers and sellers need two things:

• Agents experienced with creative finance. This almost always means agents with experience before 2001 when the “subprime” loan market made much creative financing obsolete - for a few years.
• Good information.

Over the next few weeks I’ll be updating this site to provide these two things. I’m reposting here my old “Low Down and No Down Real Estate!” guide updated with current information. I’m inviting real estate agents with creative financing experience to contact me for inclusion in a referral database and buyers to contact me for referral to an agent near you. Finally, I’ll be linking to the best literature available elsewhere on the topic to help with the details of your transactions.

This week brought more muddled news for the housing market. Both Freddie Mac and the Mortgage Bankers Association reported drops in Fixed Rate Mortgage (FRM) rates and increases in Adjustable Rate Mortgage (ARM) rates this week. Last Friday, the Mortgage Bankers Assocation reported mortgage delinquency rates at an all time high, two days after reporting an all time increase in mortgage applications; this week, the MBA reported a small drop in mortgage applications. The National Assocation of Realtors reported a small monthly drop in the Pending Home Sales Index on Tuesday, but the previous month’s index was revised upward and the index came in well above Wall Street economist’s expectations.

NAR chief economist Lawrence Yun noted that the index has remained fairly stable for the last year, spiking upward when mortgage rates improved in August:

We did see a spike in August when mortgage conditions temporarily improved, which underscores two things – there is a pent-up demand, and access to safe, affordable mortgages will bring more buyers into the market

The large pent up demand has been noted here frequently.

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Freddie Mac Conforming Rates At a Glance

• 30-year FRM: 5.47%, 0.7 point
• 15-year FRM: 5.2%, 0.7 point
• 5-year hybrid ARM: 5.82%, 0.6 point
• 1-year ARM: 5.09%, 0.4 point

Average Mortgage Rates from the Mortgage Bankers Association

30-year FRM: 5.45%, 1.23 points*
15-year FRM: 5.09%, 1.26 points
1-year ARM: 6.76%, 0.26 points

* Points reported by Mortgage Bankers Association in this survey include origination fees as well as traditional discount points. Average rates are based on an 80% LTV loan. This means a loan amount no more than 80% of the property value as determined by the lower of the purchase price or appraised value. Typically this means a 20% down payment, though an 80% loan can also be achieved with a second mortgage carried by the seller or a third party lender for the difference between the actual down payment and 20%.

Technorati Tags: housing market, mortgages, mortgage market, mortgage rates, subprime

WASHINGTON, D.C. (December 10, 2008) — The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending December 5, 2008.  The Market Composite Index, a measure of mortgage loan application volume, was 796.8, a decrease of 7.1 percent on a seasonally adjusted basis from 857.7 one week earlier.  On an unadjusted basis, the Index increased 32.7 percent compared with the previous week and was up 2.2 percent compared with the same week one year earlier. Most categories of the survey declined from the previous week’s results, which were adjusted to account for the shortened week due to the Thanksgiving holiday.
The Refinance Index decreased 0.9 percent to 3767.3 the previous week and the seasonally adjusted Purchase Index decreased 17.4 percent to 298.1 from one week earlier. The Conventional Purchase Index decreased 15.5 percent while the Government Purchase Index (largely FHA) decreased 21.3 percent.
 
The four week moving average for the seasonally adjusted Market Index is up 17.8 percent.  The four week moving average is up 1.2 percent for the seasonally adjusted Purchase Index, while this average is up 33.2 percent for the Refinance Index.
The refinance share of mortgage activity increased to 73.7 percent of total applications from 69.1 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 1.1 percent from 1.4 percent of total applications from the previous week.

EMPLOYMENT REPORT ALLOWS BOND YIELDS TO FALL
Long-Term Rates Follow As Short-Term Rates Rise
McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®)…
“Following the release of the November employment report, which showed the largest monthly decline in jobs since December 1974, bond yields fell slightly this week allowing fixed-rate mortgage rates room to ease back a little further,” said Frank Nothaft, Freddie Mac vice president and chief economist.
“The housing market still hangs in the balance, however,” continued Nothaft. “On a year-over-year basis, after rising in both August and September, pending existing home sales fell 1.0 percent in October, based on figures from the National Association of Realtors®. Meanwhile, conventional mortgage applications for home purchases over the week ending December 5th were up 2.0 percent from four weeks prior, but were still 51 percent below the same period last year, according to the Mortgage Bankers Association.”
WASHINGTON, D.C. (December 5, 2008) — The delinquency rate for mortgage loans on one-to-four-unit residential properties stood at 6.99 percent of all loans outstanding at the end of the third quarter of 2008, up 58 basis points from the second quarter of 2008, and up 140 basis points from one year ago on a seasonally adjusted basis, according to the Mortgage Bankers Association’s (MBA) National Delinquency Survey. 
Top Line Results
The delinquency rate includes loans that are at least one payment past due but does not include loans somewhere in the process of foreclosure.  The percentage of loans in the foreclosure process at the end of the third quarter was 2.97 percent, an increase of 22 basis points from the second quarter of 2008 and 128 basis points from one year ago. The percentage of loans in the process of foreclosure set a new record this quarter.
The percentage of loans on which foreclosure actions were started during the third quarter was 1.07 percent, down one basis point from last quarter and up 29 basis points from one year ago on a non-seasonally adjusted basis. 
The seasonally adjusted total delinquency rate continues to be the highest recorded in the MBA survey.  The increase in the overall delinquency rate was driven by increases in the number of loans 90 or more days past due, primarily in California and Florida.  The 30 day delinquency percentage remains below levels seen as recently as 2002.
The foreclosure starts rate differed greatly by loan type.  For prime loans, foreclosure starts on fixed rate loans were 0.34 percent, unchanged from last quarter, while prime ARM foreclosure starts fell five basis points to 1.77 percent. For subprime loans, fixed rate foreclosure starts increased 16 basis points to 2.23 percent and subprime ARM foreclosure starts decreased 16 basis points to 6.47 percent. FHA foreclosure starts were unchanged at 0.95 percent and VA foreclosure starts increased two basis points to 0.59 percent, all on a non-seasonally adjusted basis.
Nine states had rates of foreclosure starts that were above the national average: Nevada, Florida, Arizona, California, Michigan, Rhode Island, Illinois, Indiana, and Ohio.  The remaining 41 states plus the District of Columbia were below the national average.
Job Losses to Drive Mortgage Delinquencies
Jay Brinkmann, MBA’s Chief Economist and Senior Vice President for Research and Economics said, “An initial look at the number of foreclosure starts would seem to indicate at least a leveling off of foreclosures. These numbers, however, are being influenced by several factors including various moratoria on foreclosure filings and by mortgage companies holding loans in the 90+ day bucket during the modification and workout process. Evidence of this can be seen in the large increase in loans 90 days or more past due but not yet in foreclosure.  This rate jumped by 45 basis points, the highest increase in this category ever recorded in the MBA survey and far above the average 4 basis point jump we would expect to see.  While 20 states showed declines in the rate of foreclosure starts between the second and third quarters, every state showed an increase in the 90 days or more delinquent category with the exception of Alaska and all of the increases were greater than what we would expect due to normal seasonal factors.”
“As for what is driving the national numbers, it is still a case of product and location.  Prime and subprime ARMs continue to have the highest share of foreclosures and California and Florida have about 54 percent and 41 percent of the prime and subprime ARM foreclosure starts respectively.  Until those two markets turn around, they will continue to drive the national numbers,” continued Brinkmann.
“While much of the mortgage problem in some states continues to be overbuilding, poor underwriting and incorrect credit pricing, fundamental economic factors are becoming more important.  The 30-day delinquency rate is still lower than it was in the 2001 recession, but job losses are mounting. We have not gone into past recessions with the housing market as weak as it is now so it is likely that a much higher percentage of delinquencies caused by job losses will go to foreclosure than we have seen in the past.
“Until recently, it was job and population losses that were the problems in states like Michigan and Ohio, whereas the problems in California and Florida were a combination of too many houses, speculation and weak underwriting.  Economic fundamentals are now deteriorating in California and Florida.  Over the past year, Florida led the nation in job losses at 156,200, with California losing 101,300, as compared with Michigan job losses at 71,200 and Ohio at 17,300.
“In the last quarter we saw about 575,000 foreclosure actions started, compared with an estimated 580,000 in the second quarter and 535,000 in the first quarter.  At this rate we are looking at finishing 2008 at about 2.2 million foreclosure actions started.  Absent a recession, the 2009 number would likely have fallen by several hundred thousand but the effects of job losses and general economic deterioration make the 2009 outlook worse, particularly if mortgage problems become more widespread,” Brinkmann said.
Change from last quarter (second quarter of 2008)
The seasonally adjusted delinquency rate increased 41 basis points to 4.34 percent for prime loans, increased 136 basis points to 20.03 percent for subprime loans, increased 29 basis points to 12.92 percent for FHA loans, and increased 46 basis points to 7.28 percent for VA loans.
The percent of loans in the foreclosure process increased 16 basis points to 1.58 percent for prime loans, and increased 74 basis points for subprime loans to 12.55 percent. FHA loans saw an eight basis point increase in the foreclosure inventory rate to 2.32 percent, while the foreclosure inventory rate for VA loans increased 13 basis points to 1.46 percent.
The non-seasonally adjusted foreclosure starts rate remained unchanged for prime loans at 0.61 percent and decreased three basis points for subprime loans to 4.23 percent. The rate was unchanged for FHA loans at 0.95 percent and increased two basis points for VA loans to 0.59 percent.
The seriously delinquent rate, the non-seasonally adjusted percentage of loans that are 90 days or more delinquent, or in the process of foreclosure, was up from both last quarter and from last year. This measure is designed to account for inter-company differences on when a loan enters the foreclosure process.
Compared with last quarter, the seriously delinquent rate increased for all loan types. The rate increased 52 basis points for prime loans to 2.87 percent, increased 171 basis points for subprime loans to 19.56 percent, increased 62 basis points for FHA loans to 6.05 percent, and increased 45 basis points for VA loans percent to 3.45 percent.
Change from last year (third quarter of 2007)
On a year-over-year basis, the seasonally adjusted delinquency rate increased for all loan types, except FHA loans. The delinquency rate increased 122 basis points for prime loans, increased 372 basis points for subprime loans, and increased 70 basis points for VA loans. The seasonally adjusted delinquency rate was unchanged for FHA loans on a year over year basis.
The percent of loans in the foreclosure process increased 79 basis points for prime loans and 566 basis points for subprime loans. The rate increased 10 basis points for FHA loans and 43 basis points for VA loans.
The non-seasonally adjusted foreclosure starts rate increased 29 basis points overall, 25 basis points for prime loans, 105 basis points for subprime loans, one basis point for FHA loans, and 20 basis points for VA loans.
The seriously delinquent rate was 156 basis points higher for prime loans and 818 basis points higher for subprime loans. The rate also increased 51 basis points for FHA loans and 89 basis points for VA loans.

Pending Home Sales Index at EconoIndicators

The Mortgage Bankers Association reported a record weekly increase in mortgage applications as rates fell on long term Fixed Rate Mortgages (FRM) last week. Freddie Mac reported rates down for the week ending December 3, as well, though the rates were higher than the MBAA reported rates from the week ending November 28, possibly indicating a minor increase in rates early this week. (The rates are not the same because the MBAA rates include jumbo mortgages and others that don’t conform to Freddie Mac standards. This usually means MBAA reports higher rates.)

According to Freddie Mac’s chief economist Frank Nothaft:

This week’s decline was the largest since the week of November 27th, 1981, and 30-year FRM rates are now almost a full percentage point lower since the last week in October.

As noted here before, there have been signals that there was plenty of pent-up demand in the housing market waiting for rates to drop or some signals of stability in the market. The big increase in rates confirms that again. According to Orawin Velz, Associate Vice President of Economic Forecasting of the Mortgage Bankers Association many buyers had been sidelined since rates rebounded after falling in August:

Many borrowers missed an opportunity to take advantage when rates dropped sharply for a brief period when the GSEs were placed under conservatorship. When rates plummeted following the Fed’s announcement that it would buy GSE debt and MBS, many of those on the sidelines decided to quickly jump in and take advantage of lower rates before they began to rebound.

Freddie Mac Conforming Rates At a Glance

• 30-year FRM: 5.53%, 0.7 point
• 15-year FRM: 5.33%, 0.7 point
• 5-year hybrid ARM: 5.77%, 0.6 point
• 1-year ARM: 5.02%, 0.5 point

Mortgage Bankers Association Average Mortgage Rates

• 30-year FRM: 5.47%, 1.16 points*
• 15-year FRM: 5.13%, 1.28 points
• 1-year ARM: 6.61%, 0.52 points

* Points reported by Mortgage Bankers Association in this survey include origination fees as well as traditional discount points. Average rates are based on an 80% LTV loan. This means a loan amount no more than 80% of the property value as determined by the lower of the purchase price or appraised value. Typically this means a 20% down payment, though an 80% loan can also be achieved with a second mortgage carried by the seller or a third party lender for the difference between the actual down payment and 20%.

Mortgage Applications Surge with Large Drop in Rates in Latest MBA Weekly Survey

WASHINGTON, D.C. (December 3, 2008) — The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending November 28, 2008, which was a shortened week due to the Thanksgiving holiday.   The Market Composite Index, a measure of mortgage loan application volume, was 857.7, an increase of 112.1 percent on a seasonally adjusted basis from 404.4 one week earlier.  On an unadjusted basis, the Index increased 51.4 percent compared with the previous week and was down 21.9 percent compared with the same week one year earlier.
“Many borrowers missed an opportunity to take advantage when rates dropped sharply for a brief period when the GSEs were placed under conservatorship,” said Orawin Velz, Associate Vice President of Economic Forecasting. “When rates plummeted following the Fed’s announcement that it would buy GSE debt and MBS, many of those on the sidelines decided to quickly jump in and take advantage of lower rates before they began to rebound.”
The Refinance Index increased 203.3 percent to 3802.8 from the previous week and the seasonally adjusted Purchase Index increased 38.0 percent to 361.1 from one week earlier.  The Conventional Purchase Index increased 37.4 percent while the Government Purchase Index (largely FHA) increased 39.2 percent. All results include an adjustment to account for the Thanksgiving holiday. 
 
The four week moving average for the seasonally adjusted Market Index is up 29.7 percent this week.  The four week moving average is up 9.5 percent for the seasonally adjusted Purchase Index, while this average is up 56.1 percent for the Refinance Index.
The refinance share of mortgage activity increased to 69.1 percent of total applications from 49.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 1.4 percent from 3.0 percent of total applications from the previous week.

LONG-TERM MORTGAGE RATES PLUMMET
Short-Term Rates Fall But Not So Dramatically

“After Federal Reserve actions to increase liquidity in the mortgage market, interest rates for fixed-rate mortgages (FRMs) took a dive,” said Frank Nothaft, Freddie Mac vice president and chief economist. “This week’s decline was the largest since the week of November 27th, 1981, and 30-year FRM rates are now almost a full percentage point lower since the last week in October.
“The recent plunge in rates contributed to the nearly 150 percent jump in conventional mortgage applications over the Thanksgiving week, led by almost a 300 percent surge in refinances, according to the Mortgage Bankers Association. Roughly three out of four mortgage applications were for refinance transactions, up from around half during the prior week.”

The housing news this week has been a mixed bag, with good news on interest rates and a decline in new housing starts offset by a drop in new mortgage applications and with Freddie Mac and Fannie Mae following the lead of Citigroup, JP Morgan Chase and Bank of America in announcing a foreclosure freeze.

Thursday Freddie Mac and Fannie Mae followed the lead of many large private lenders and announced a 6-week moratorium on foreclosures and evictions of occupied homes, which will provide some temporary relief to the fire sale mentality in some districts. The move is practical as well as humanitarian as it will provide an opportunity for some of these homeowners to qualify for housing bailout refinance loans and for the lender’s workout departments to help avert some foreclosures in other ways. For more information about workout options and avoiding foreclosure see this page.

The Mortgage Bankers Association reported Fixed Rate Mortgage (FRM) rates down and 1-year Adjustable Rate Mortgage (ARM) rates up for the week ending November 14 and Freddie Mac reported rates down across the board for the week ending November 20. The Mortgage Bankers Association also reported a 12.6% drop in new applications for home purchase mortgages. Refinance applications rose 2.6%.

Housing starts fell last month as builder sentiment hit another record low with Wells Fargo/National Association of Homebuilders reporting its Housing Market Index at 9. The index of sales expectations held steady.

Freddie Mac attributed the drop in interest rates to continued signs of economic weakness, which reduce bond market inflation fears, and noted that:

the Federal Reserve during its October 28-29 committee meeting lowered its economic growth forecasts for 2008 and 2009, according to its minutes released this week.

Possibly one of the best signs for the mortgage market and, eventually by extension, the housing market has been the recent narrowing of the gap between the Freddie Mac conforming 1-year ARMs and the Mortgage Bankers Association’s 1-year ARM average, which includes jumbos and other non-conforming mortgages. The MBAA rate had been reported above 7% even as the longer term rates were under 6%. Though the rate is still higher than the long term rates, there’s been a significant drop that indicates some improvement in the market for these loans.

Mortgage Bankers Association Average Mortgage Rates At a Glance

30-year FRM: 6.16%, 1.24 points*
15-year FRM: 5.87%, 1.24 points
1-year ARM: 6.80%, 0.63 points

Freddie Mac Conforming Rates At a Glance

• 30-year FRM: 6.04%, 0.7 point
• 15-year FRM: 5.73%, 0.7 point
• 5-year hybrid ARM: 5.87%, 0.6 point
• 1-year ARM: 5.29%, 0.5 point

* Points reported by Mortgage Bankers Association in this survey include origination fees as well as traditional discount points. Average rates are based on an 80% LTV loan. This means a loan amount no more than 80% of the property value as determined by the lower of the purchase price or appraised value. Typically this means a 20% down payment, though an 80% loan can also be achieved with a second mortgage carried by the seller or a third party lender for the difference between the actual down payment and 20%.

Technorati Tags: housing market, mortgages, mortgage market, mortgage rates, subprime

LONG-TERM MORTGAGE RATES DOWN FOR THIRD CONSECUTIVE WEEK

McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 6.04 percent with an average 0.7 point for the week ending November 20, 2008, down from last week when it averaged 6.14 percent. Last year at this time, the 30-year FRM averaged 6.20 percent.
The 15-year FRM this week averaged 5.73 percent with an average 0.7 point, down from last week when it averaged 5.81 percent. A year ago at this time, the 15-year FRM averaged 5.83 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.87 percent this week, with an average 0.6 point, down from last week when it averaged 5.98 percent. A year ago, the 5-year ARM averaged 5.88 percent.
One-year Treasury-indexed ARMs averaged 5.29 percent this week with an average 0.5 point, down from last week when it averaged 5.33 percent. At this time last year, the 1-year ARM averaged 5.42 percent.
(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)
“Long- and short-term mortgage rates fell for the third consecutive week amid continuing signs of a slowing economy,” said Frank Nothaft, Freddie Mac vice president and chief economist. “Retail sales fell for the fourth straight month in October and consumer sentiment remained near a 28-year low in November.
“In fact, the Federal Reserve during its October 28-29 committee meeting lowered its economic growth forecasts for 2008 and 2009, according to its minutes released this week.”

FREDDIE MAC SUSPENDS ALL FORECLOSURE SALES OF OCCUPIED HOMES FROM DAY BEFORE THANKSGIVING UNTIL JANUARY 9, 2009
McLean, VA – Freddie Mac (NYSE: FRE) today announced it has ordered its national network of mortgage servicers and foreclosure attorneys to suspend all foreclosure sales and evictions involving occupied single family and 2-4 unit properties with Freddie Mac-owned mortgages between November 26, 2008 and January 9, 2009. The suspension will help servicers implement the Streamlined Modification Program recently announced by Freddie Mac, Fannie Mae, the Federal Housing Finance Agency (FHFA), HOPE Now and 27 mortgage servicers. The temporary suspension is also expected to give servicers more time to help borrowers avoid foreclosure.
Specifically, Freddie Mac servicers and foreclosure attorneys were told to contact as quickly as possible an estimated 6,000 borrowers with foreclosure sales scheduled between November 26, 2008 and January 9, 2009. If the property is occupied, the servicers and foreclosure attorneys will halt the sale. This temporary suspension of foreclosure sales will not apply to vacant single family properties. Additionally, no evictions will be completed between November 26 and January 9.
“By working closely with FHFA and our servicers, Freddie Mac is on track to help three out of every five troubled borrowers with Freddie Mac-owned loans avoid foreclosure this year,” said Freddie Mac Chief Executive Officer David M. Moffett. “Today’s announcement builds on this momentum and provides a new measure of certainty to many of these families during the holidays.”
Moffett said that by delaying these foreclosure sales, the nation’s servicers will have the opportunity to work with more borrowers who could qualify for a modification under the new Streamlined Modification program scheduled to begin by December 15.
“Today’s announcement has the potential to enable more families struggling in these extraordinary times to take advantage of this vital new initiative developed with FHFA, the Treasury Department and the mortgage finance industry,” said Moffett.
Moffett also emphasized that lenders servicing Freddie Mac-owned mortgages will continue to work with borrowers to consider all workout options Freddie Mac employs to help distressed borrowers who can and want to stay in their homes, such as permanent rate reductions and mortgage term extension modifications.
This year, Freddie Mac expects to approve 84,000 workouts for the estimated 140,000 who are delinquent on Freddie Mac-owned mortgages.
Freddie Mac’s temporary suspension of foreclosure sales is the latest in a series of efforts to help troubled borrowers. Other recent initiatives have included, delegating expanded workout authority to servicers, doubling the amount of money servicers are paid for successful workouts, and paying non-profit organizations to reach out to worried borrowers.
Builder Confidence Plummets; Congress Needs To Act
November 18, 2008 - Builder confidence in the market for newly built single-family homes plunged in November as worsening problems in the financial markets, job market weakness and overwhelming uncertainty about the economy continued to negatively impact consumer behavior, according to the National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today.  The HMI sank five points to 9, the lowest level recorded since the series was created in January of 1985.
 
“Today’s report shows that we are in a crisis situation. If there’s any hope of turning this economy around, Congress and the Administration need to focus on stabilizing housing,” said NAHB Chairman Sandy Dunn, a home builder from Point Pleasant, W.Va.. “Tremendous economic uncertainties have driven consumers from the housing market, and it’s going to take some major incentives to bring them back. Beyond the work that is being done to help reduce foreclosures, Congress must immediately incorporate such incentives for qualified buyers in a new economic recovery package.”
 
“The housing downturn has already cost America three million jobs in construction and related industries, and this downward momentum cannot be stemmed without substantive government intervention,” agreed NAHB’s new Chief Economist, David Crowe. “Congress should consider significant consumer incentives such as expanding the first-time home buyer tax credit and providing a government buy-down of mortgage interest rates for home purchasers. Both policies were successfully combined in the ‘70s to stimulate home buyer demand, and could get housing and the national economy moving again.”
 
Derived from a monthly survey that NAHB has been conducting for more than 20 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.
 
Two out of three of the HMI’s component indexes declined in November. The index gauging current sales conditions fell six points to 8, which was a new record low. Likewise, the index gauging traffic of prospective buyers fell four points to 7 – also a record low. Meanwhile, the index gauging sales expectations in the next six months held firm from the previous month at its record low of 19.
 
Every region posted declines in builder confidence in November. The Northeast, South and West each registered five-point declines to 11, 11 and 6, respectively, while the Midwest registered a six-point decline to 7.

Mortgage Applications Decrease in Latest MBA Weekly Survey

WASHINGTON, D.C. (November 19, 2008) — The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending November 14, 2008.  The Market Composite Index, a measure of mortgage loan application volume, was 398.6, a decrease of 6.2 percent on a seasonally adjusted basis from 425.0 one week earlier.  On an unadjusted basis, the Index decreased 7.2 percent compared with the previous week and was down 41.3 percent compared with the same week one year earlier.
The Refinance Index increased 2.6 percent to 1281.2 from the previous week and the seasonally adjusted Purchase Index decreased 12.6 percent to 248.5 from one week earlier.  The Conventional Purchase Index decreased 15.3 percent while the Government Purchase Index (largely FHA) decreased 6.5 percent.
 
The four week moving average for the seasonally adjusted Purchase Index is down 2.7 percent, while this average is up 2.5 percent for the Refinance Index.
The refinance share of mortgage activity increased to 49.9 percent of total applications from 45.1 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 2.6 percent from 2.3 percent of total applications from the previous week.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 6.16 percent from 6.24 percent, with points increasing to 1.24 from 1.17 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.87 percent from 5.90 percent, with points increasing to 1.24 from 1.12 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for one-year ARMs increased to 6.80 percent from 6.77 percent, with points increasing to 0.63 from 0.43 (including the origination fee) for 80 percent LTV loans.

Fannie Mae To Suspend Foreclosures Until January 2009 While Streamlined Modification Program is Implemented
WASHINGTON, DC — In order to support the streamlined modification program announced on November 11, 2008, Fannie Mae (NYSE:FNM) today issued a notice to its loan servicing organizations and retained foreclosure attorneys directing them to suspend foreclosure sales on occupied single-family properties as well as the completion of evictions from occupied single-family properties scheduled to occur from November 26, 2008 until January 9, 2009.
The temporary suspension of foreclosures is designed to allow affected borrowers facing foreclosure to retain their homes while Fannie Mae works with mortgage servicers to implement the streamlined modification program scheduled to launch December 15. Foreclosure attorneys and loan servicers will be instructed to use the additional time to reach out to borrowers who have defaulted on their loans and continue to pursue workout options. The initiative applies to loans owned or securitized by Fannie Mae.
The streamlined modification program is aimed at the highest risk borrower who has missed three payments or more, owns and occupies the primary residence, and has not filed for bankruptcy. The program creates a fast-track method for getting troubled borrowers into an affordable monthly payment through a mix of reducing the mortgage interest rate, extending the life of the loan or even deferring payments on part of the principal. Servicers have flexibility in the approach, but the objective is to create a more affordable payment for borrowers at risk of foreclosure.
“The streamlined modification program by Fannie Mae, Freddie Mac, Hope Now and 27 mortgage servicers is an important step forward in addressing the systemic issues driving the increase in foreclosures,” said Fannie Mae President and Chief Executive Officer Herb Allison. “Until the streamlined modification program is fully implemented, we felt it was in the best interest of both borrowers and Fannie Mae to take this extra step to ensure that homeowners with the desire and ability to prevent a foreclosure have an opportunity to stay in their homes. We encourage other servicers of non-GSE mortgages to participate in the streamlined modification program to bolster our collective efforts to stem the foreclosure crisis.”
Fannie Mae will be working with foreclosure attorneys and servicers to reach out to the more than 10,000 borrowers the company estimates would be affected during this period. Borrowers who have Fannie Mae loans that are scheduled for foreclosure between November 26, 2008 and January 9, 2009, will be contacted directly by the attorney handling the foreclosure. If the home is occupied, Fannie Mae has instructed servicers and attorneys to suspend the foreclosure.
Allison also said Fannie Mae’s loan servicers are prepared to work with borrowers during this period, even if previous workout efforts have been unsuccessful. As part of the company’s “Second Look” initiative, Fannie Mae personnel have been reviewing seriously delinquent loans to determine if the borrower has been contacted and all workout options have been exhausted.
The streamlined modification program and temporary suspension of foreclosures are two of a series of steps Fannie Mae has taken to expand its foreclosure prevention efforts, which are designed to give loan servicers and foreclosure attorneys tools to find the best solution for a borrower in financial trouble. Fannie Mae and its many partners in the housing industry urge borrowers in financial difficulty to reach out to their loan servicers, regardless of whether they are facing imminent foreclosure. Solutions may be available that could make an existing mortgage more affordable.
“Fannie Mae is committed to working with FHFA to implement the streamlined modification program as quickly as possible to help prevent unnecessary foreclosures,” Allison said. “We must and will do more.”

Both the Mortgage Bankers Association and Freddie Mac reported a drop in Fixed Rate Mortgage (FRM) rates in their latest surveys, with Freddie Mac reporting an increase in 1-year Adjustable Rate Mortgage (ARM) rates and the Mortgage Bankers Association reporting a drop. The Mortgage Bankers Association also reported that new mortgage applications rose last week, 9% for purchases and 16% for refinances.

Freddie Mac’s chief economist attributed the drop in rates to signs that the overall economy is weakening and noted that

the actions of the Fed in recent weeks to assist commercial paper markets appear to be thawing part of the credit freeze that has gripped capital markets in the U.S., giving banks some breathing room. This is the second week that rates have come down for fixed-rate mortgages

Average Mortgage Rates from the Mortgage Bankers Association

30-year FRM: 6.24%, 1.17 points*
15-year FRM: 5.9%, 1.12 points
1-year ARM: 6.77%, 0.43 points

Average Mortgage Rates from Freddie Mac

30-year FRM: 6.14%, 0.7 points
15-year FRM: 5.81%, 0.7 points
5-year Treasury Indexed hybrid ARM: 5.98%, 0.6 points
1-year ARM: 5.33%, 0.5 points

* Points reported by Mortgage Bankers Association in this survey include origination fees as well as traditional discount points. Average rates are based on an 80% LTV loan. This means a loan amount no more than 80% of the property value as determined by the lower of the purchase price or appraised value. Typically this means a 20% down payment, though an 80% loan can also be achieved with a second mortgage carried by the seller or a third party lender for the difference between the actual down payment and 20%.

Technorati Tags: housing market, mortgages, mortgage market, mortgage rates, subprime

Mortgage Applications Increase In Latest MBA Weekly Survey

WASHINGTON, D.C. (November 13, 2008) — The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending November 7, 2008.  The Market Composite Index, a measure of mortgage loan application volume, was 425.0, an increase of 11.9 percent on a seasonally adjusted basis from 379.9 one week earlier.  On an unadjusted basis, the Index increased 10.5 percent compared with the previous week and was down 40.0 percent compared with the same week one year earlier.
The Refinance Index increased 16.1 percent to 1248.4 from the previous week and the seasonally adjusted Purchase Index increased 9.0 percent to 284.4 from one week earlier.  The Conventional Purchase Index increased 6.5 percent while the Government Purchase Index (largely FHA) increased 15.3 percent.
 
The four week moving average for the seasonally adjusted Market Index is down 3.7 percent.  The four week moving average for the seasonally adjusted Purchase Index is down 2.5 percent, while this average is down 5.1 percent for the Refinance Index.
The refinance share of mortgage activity increased to 45.1 percent of total applications from 42.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 2.3 percent from 2.5 percent of total applications from the previous week.
The average contract interest rate for 30-year fixed-rate mortgages decreased to 6.24 percent from 6.47 percent, with points decreasing to 1.17 from 1.19 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.90 percent from 6.14 percent, with points decreasing to 1.12 from 1.22 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for one-year ARMs decreased to 6.77 percent from 6.86 percent, with points increasing to 0.43 from 0.42 (including the origination fee) for 80 percent LTV loans.

MORTGAGE RATES DOWN FOR SECOND WEEK RUNNING
McLean, VA – Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 6.14 percent with an average 0.7 point for the week ending November 13, 2008, down from last week when it averaged 6.20 percent. Last year at this time, the 30-year FRM averaged 6.24 percent.
The 15-year FRM this week averaged 5.81 percent with an average 0.7 point, down from last week when it averaged 5.88 percent. A year ago at this time, the 15-year FRM averaged 5.88 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 5.98 percent this week, with an average 0.6 point, down from last week when it averaged 6.19 percent. A year ago, the 5-year ARM averaged 5.96 percent.
One-year Treasury-indexed ARMs averaged 5.33 percent this week with an average 0.5 point, up from last week when it averaged 5.25 percent. At this time last year, the 1-year ARM averaged 5.50 percent.
(Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage.)
“Long-term mortgage rates fell slightly this week as signs the overall economy is weakening brought interest rates down market-wide,” said Frank Nothaft, Freddie Mac vice president and chief economist. “In addition, the actions of the Fed in recent weeks to assist commercial paper markets appear to be thawing part of the credit freeze that has gripped capital markets in the U.S., giving banks some breathing room. This is the second week that rates have come down for fixed-rate mortgages.
“Mortgage applications for home purchase loans fell during the final week in October to the slowest pace since the week of December 29, 2000, based on figures published by the Mortgage Bankers association. Meanwhile, the National Association of Realtors® (NAR) reported that pending existing home sales fell 4.6 percent in September, below the market consensus; however, the index was 1.6 percent above that of the same period last year.”