Thursday

 

Mortgage refinancings tumble again

Mortgage refinancings

Overall mortgage applications dropped 6.6 percent last week on a seasonally adjusted basis from the week before, with mortgage refinancings taking the biggest hit, according to the Mortgage Bankers Association's weekly survey.

The seasonally adjusted purchase index decreased by 3.4 percent to 483.1 from 500.3 the previous week, while the refinance index decreased by 10.5 percent to 2,106.6 from 2,353.7 one week earlier.

The refinance share of mortgage activity decreased to 43.9 percent of total applications from 45.6 percent the previous week. The adjustable-rate-mortgage share of activity decreased to 28.8 percent of total applications from 29.8 percent the previous week.

The average contract interest rate for 30-year fixed-rate mortgages increased to 5.85 percent from 5.81 percent one week earlier. Points including the origination fee decreased to 1.19 from 1.21 for 80 percent loan-to-value ratio loans.

The average contract interest rate for 15-year fixed-rate mortgages increased to 5.44 percent from 5.38 percent one week earlier. Points including the origination fee decreased to 1.23 from 1.25 for 80 percent loan-to-value ratio loans.

The average contract interest rate for one-year adjustable-rate mortgages increased to 5.02 percent from 4.94 percent one week earlier. Points including the origination fee increased to 1.01 from 1 for 80 percent loan-to-value ratio loans.

The mortgage refinancing survey covers approximately 50 percent of all U.S. retail residential mortgage originations, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.

Wednesday

 

Interest only loans, ARM safe

Home Loans

The COO of Freddie Mac's on Monday said some new home loans such as adjustable-rate mortgages that have prompted concern about a housing bubble appear safer than more traditional mortgage loans.

Eugene McQuade, speaking at a Bank of America conference in San Francisco, said government-sponsored enterprise Freddie Mac is not too heavily exposed to adjustable-rate mortgages, or ARMs, which can offer borrowers lower rates early, but higher rates later.

He also downplayed potential concern about loans where borrowers pay only the interest due, known as interest-only loans, or less than the interest due, known as "negative amortization" loans because principal amounts due increase, reports said.

On the interest-only and the negative amortization, on the stuff that we have seen come through us, the credit quality is actually higher than on the 15- and 30-year fixed, said the COO of the No. 2 U.S. mortgage financier.

As of the end of June, 59 percent of McLean, Va. based Freddie Mac's $1.3 trillion loan portfolio was in 30-year fixed-rate mortgages and 27 percent was in 15-year fixed-rate mortgages. One percent was in interest-only loans and another 10 percent was in various adjustable-rate mortgages.

Newer-style home loans have allowed thousands of home buyers to cut initial monthly payments, letting them buy more expensive homes and, some say, drive up prices.

Freddie Mac is likely to see some impact to third-quarter results from Hurricane Katrina, but the company is very well positioned to handle it. Less than one quarter of one percent of Freddie Mac's guaranteed mortgages are in the three hardest-hit parishes in the New Orleans area.

Thursday

 

Mortgage refinancing trips over

Mortgage refinancing

Overall mortgage applications slid 1.4 percent last week on a seasonally adjusted basis from the week before, fueled by a significant drop in mortgage refinancings, according to the Mortgage Bankers Association's weekly survey.

The seasonally adjusted refinance index decreased by 6.7 percent to 2,198.7 from 2,357.1 one week earlier, while the purchase index increased by 2.9 percent to 513.4 from 499.1 the previous week.

The refinance share of mortgage activity decreased to 42.9 percent of total applications from 44.8 percent the previous week. The adjustable-rate-mortgage share of activity increased to 28.2 percent of total applications from 26.5 percent the previous week.

The average contract interest rate for 30-year fixed-rate mortgages increased to 5.72 percent from 5.64 percent one week earlier. Points including the origination fee increased to 1.18 from 1.13 for 80 percent loan-to-value ratio loans. The average contract interest rate for 15-year fixed-rate mortgages increased to 5.29 percent from 5.18 percent one week earlier. Points including the origination fee increased to 1.31 from 1.14 for 80 percent loan-to-value ratio loans. The average contract interest rate for one-year adjustable-rate mortgages increased to 4.82 percent from 4.81 percent one week earlier. Points including the origination fee decreased to 1.04 from 1.05 for 80 percent loan-to-value ratio loans.

The mortgage refinancing survey information covers approximately 50 percent of all U.S. retail residential mortgage originations, and has been conducted weekly since early 1990. Respondents include mortgage bankers, commercial banks and thrifts.


Saturday

 

Katrina creates Louisiana realtor upsurge

BATON ROUGE, Louisiana Real Estate

Baton Rouge Louisiana realtors are finding gold in those capitol grounds. Real Estate in the city of Baton Rouge has essentially doubled in a matter of a week and realtors are scrambling to get a share of the buy, sell and lease.

Many individuals are buying real estate homes, some putting down all cash even though they have no idea if there is a job in sight.

The real estate inventory is so tight that many are wondering if the city’s economy can sustain the surge with jobs especially with communities eventually opening in southern Louisiana. Baton Rouge has traditionally been a college town with a major government employee base. However, it is strategically positioned to be the main hub of the state.

 

Forclosed homes for Katrina survivors

Foreclosed Homes

The U.S. Department of Housing and Urban Development is setting aside about 5,000 foreclosed homes on the market in 11 states for Katrina survivors.

The agency normally sells the homes to consumers and investors. Spokesman Brian Sullivan said Friday that the houses will be "held off the market indefinitely until we can get past this business."

Earlier this week, HUD began notifying real estate agents and potential buyers that the properties were being pulled off the market.

Foreclosed homes that are in poor condition and can't be easily repaired won't be included in the plan. But HUD plans to spend up to $10,000 on repairs on each house. The HUD relief program also includes about 5,600 public housing units within 500 miles of storm-damaged areas.

Friday

 

California hits record low housing affordability

California Real Estate

The percentage of households in California able to afford a median-priced home fell to 16 percent in July, down 3 percentage points from a year ago, while affordability in three regions fell to new lows, according to a California Real Estate report released today by the California Association of Realtors.

The July Housing Affordability Index was unchanged from June, when it also stood at 16 percent.

The state's regions with record-low affordability conditions in July included Los Angeles, with just 14 percent of households there able to buy a median-priced home of $543,890; Riverside/San Bernardino, with 15 percent able to afford a $384,910 price tag; and the High Desert, with 30 percent able to buy a $298,950 home.

The minimum household income needed to purchase a median-priced real estate home at $540,900 in California in July was $125,670, based on an average effective mortgage interest rate of 5.73 percent and assuming a 20 percent down payment. This income figure was up from $109,170 in July 2004, when the median price of a home was $461,760 and the prevailing interest rate was 5.93 percent.

By contrast, the minimum household income needed to purchase a median-priced home at $218,000 in the United States in July was $50,650.

At 30 percent, the High Desert region was the most real estate affordable in the state, followed by the Sacramento region at 20 percent. The Santa Barbara and Northern Wine Country regions were the least affordable in the state at 7 percent.

Thursday

 

Mortgage applications climb

Overall mortgage applications climbed 6.8 percent last week on a seasonally adjusted basis from the week before, according to the Mortgage Bankers Associations weekly survey.

The seasonally adjusted purchase index increased by 6.1 percent to 499.1 from 470.6 the previous week, while the refinance index increased by 7.7 percent to 2,357.1 from 2,187.8 one week earlier.

While the volume of both ARM applications and fixed-rate applications increased from last week, 0.4 percent and 7.4 percent, respectively, the year-over-year trend is a different story according to the director Mortgage Bankers Associations. Compared with one year ago, the volume of ARM applications is down 9.9 percent, whereas the number of fixed-rate mortgage applications is up 22.5 percent.

The refinance share of mortgage activity increased to 44.8 percent of total applications from 43.8 percent the previous week. The adjustable-rate-mortgage share of activity decreased to 26.5 percent of total applications from 27.8 percent the previous week. The average contract interest rate for 30-year fixed-rate mortgages decreased to 5.64 percent from 5.73 percent on week earlier. Points including the origination fee decreased to 1.13 from 1.21 for 80 percent loan-to-value ratio loans.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.18 percent from 5.36 percent one week earlier. Points including the origination fee decreased to 1.14 from 1.19 for 80 percent loan-to-value ratio loans. The average contract interest rate for one-year adjustable-rate mortgages decreased to 4.81 percent from 4.88 percent one week earlier. Points including the origination fee decreased to 1.05 from 1.06 for 80 percent loan-to-value ratio loans.

Saturday

 

US real estate price growth hits 25 year high

US real estate

The average price for a US real estate home increased 13.4 percent from the second quarter of 2004 through the second quarter of 2005, the Office of Federal Housing Enterprise Oversight, or OFHEO, announced Thursday.

The new data represent the largest four-quarter increase since the second quarter of 1979, according to OFHEO's House Price Index. According to the report, average home prices increased 3.2 percent during the April-to-June period alone, or an annualized rate of 12.8 percent.

The report said the Pacific Census Division continues to exhibit the fastest appreciation, while the slowest-growing area continues to be the West South Central division, which includes Texas, Oklahoma, Arkansas and Louisiana. Arizona and Nevada continue to exhibit striking appreciation rates.

Information highlighted :

Nevada continues to have the highest appreciation of all states; house prices increased 28.1 percent over the past year and 5.5 percent for the quarter. However, for the first time since the fourth quarter of 2003, Las Vegas is not on the OFHEO list of the 20 fastest-growing Metropolitan Statistical Areas (MSAs).

The second-greatest annual price growth was in Arizona. Over the second quarter alone, Arizona house prices grew 9.7 percent – far surpassing every other state. Arizona's annual growth rate rose from 20.4 percent in the first quarter of 2005 to 27.8 percent in the second quarter of this year.

Thirty of the 265 ranked MSAs had four-quarter appreciation exceeding 25 percent.

For the first time, Naples-Marco Island, Florida, topped the list of ranked MSAs with the highest appreciation. Bakersfield, California, was second.

Florida, California, Nevada and Arizona are no longer the only states represented in the top 20 MSA list. MSAs in Idaho and Utah have now entered the list.

Twenty-five states (including the District of Columbia) exhibited double-digit annual price growth, and eight states had price increases exceeding 20 percent.

Four-quarter appreciation rates in Maryland and Virginia (along with Arizona and Florida) were at their highest levels over the 30-year history of the OFHEO HPI.

There is no evidence here of prices topping out according to Chief Economist of OFHEO . On the contrary, house-price inflation continues to accelerate, as some areas that have experienced relatively slow appreciation are picking up steam. However, (the price gains) are likely unsustainable given the underlying inflation rate, income growth and other factors.

Thursday

 

Freddie Mac helps borrowers affected by Hurricane Katrina

Freddie Mac has extended its mortgage relief policies for borrowers affected by Hurricane Katrina in locations declared Major Disaster Areas by President Bush. Freddie Mac also announced today that it is donating $50,000 to the American Red Cross to support hurricane relief efforts. In addition, the Freddie Mac Foundation is matching Freddie Mac employee donations to relief efforts and will double the match if donations support Habitat for Humanity's hurricane relief efforts.

"Our goal is to help families affected by Hurricane Katrina to keep their homes," said Richard F. Syron, Freddie Mac Chairman and CEO. "We also want to ensure that families who are displaced from their homes receive the assistance they need."

Freddie Mac's disaster relief policies provide a number of ways for mortgage servicers to provide borrowers with relief that can help protect their credit ratings and financial interests in their homes. A mortgage servicer is the company to which borrowers send their monthly mortgage payments.
Freddie Mac's disaster relief policies also strongly encourage servicers to extend several other measures to help affected borrowers with Freddie Mac-owned loans. These include:


Expediting the release of insurance proceeds to help borrowers secure materials, labor and other resources to repair their homes;
Waiving assessments of penalties or late fees against borrowers with disaster-damaged homes; and,

Not reporting forbearance or delinquencies caused by the disaster to the nation's credit bureaus.
Freddie Mac allows servicers additional discretion to reduce or suspend mortgage payments for up to 12 months for borrowers with Freddie Mac-owned mortgages in the declared major-disaster areas. Each case must be individually assessed to determine which alternative will best fit the homeowner's circumstances.

Freddie Mac and the nation's mortgage servicers are working together to help families affected by Hurricane Katrina receive mortgage relief so they can focus their energies on putting their lives and homes back together. These mortgage relief provisions are intended to expedite the release of insurance proceeds to help borrowers secure materials, labor and other resources to get the home repair process underway.

Mortgage servicers working with Freddie Mac have helped an estimated 100,000 families over the past two years from losing their homes due to financial difficulties.


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