Free Republic

According to data released Tuesday by the Census Bureau, 49.2 percent of Americans received benefits from one or more government programs in the fourth quarter of 2011. govtbene And, of course, When Obamacare is fully implemented on Jan. 1, 2014, Americans earning up to 400 percent of the poverty level will qualify for a federal subsidy to buy health insurance. Speaking of more and more people of the government dole, RealtyTrac estimates that 47% of the nation’s foreclosed homes are currently occupied. The percentage actually tops 60% in some hot housing markets, like Miami and Los Angeles. Those still living...

In an abbreviated week (Columbus Day), mortgage applications -0.57% for the week ending October 18, 2013. mbaindice102313 Mortgage purchase applications rose slightly at +0.73%. However, it is slightly disappointing given recent declines in the 30 mortgage rate (in this case, the MBA 30 year effective rate). mbapurch102313 And the long-term trend remains in mortgage lenders’ Grim Fandango. That is, zone of stalled mortgage purchase applications. mbaplt102313 Concerning mortgage refinancing applications, they are increased largely due to the recent decline in mortgage rates. But it is hardly a “refi wave.” More like a ripple in a pond. mbarefi102313 And the Federal...

Kate Berry has a nice article entitled “Lenders’ Dilemma: Invest in Tech or Exit Mortgage Business.“ The cost to originate a home loan is skyrocketing as lenders try to comply with stricter rules to catch problem loans, and some community banks and independent mortgage lenders are now facing a stark choice: invest in technology that would help automate the loan process or exit mortgage lending entirely. Origination costs are expected to rise 11% this year from a year ago, to nearly $5,900 per loan, as lenders scramble to meet tough new requirements from the Consumer Financial Protection Bureau, the Federal...

Poor Spain. The economic news continues to be woeful, even though Spain’s Prime Minister Mariano Rajoy thinks the worst is over. But Spain’s housing and mortgage markets continue to melt down Spain currently has a record high default rate on loans of 12.2%. spainloandelinq101813 And Spain’s number of newly mortgaged properties keep declining. spainmorg8 If we overlay Spain’s continually declining house prices, we get an interesting picture … of continued decline in Spain. spainhpdelinqloans Here is a chart for the US housing and mortgage market. The US also has declining residential mortgages outstanding, but at least has turned the corner...

The climate for mortgage lenders is definitely taking a downward turn. Wells Fargo has released their Q313 Quarterly Supplement which revealed a shrinking mortgage pipeline. WFC Originations_0 (1) Of course, this is not surprising given a rise in mortgage rates starting May 1st (Q2) and declining real household income. rhoinmbrate But the humming dragon lingering in the background is the cost of litigation for originating and servicing mortgage loans. According to JPMorganChase’ Q3 earnings report, they paid a staggering $9.15 billion in pretax legal expenses. JPM Q3 1 addbacks_0 And then there is SunTrust which has been ordered to pay...

As former Reagan adviser David Stockman said about Obamacare, “It is a massive entitlement to end all entitlements.” But housing is an entitlement as well. Last week, no less than 63 members of the House and 13 Senators wrote to Financial Housing Finance Administration chief Ed Demarco demanding that he not lower the maximum loan limit for mortgages guaranteed by Fannie Mae and Freddie Mac. In earlier correspondence to DeMarco, first reported by National Mortgage News, National Association of Realtors (NAR) President Gary Thomas questioned the legality of FHFA reducing the loan limits at this time. “Our nation’s housing market...

I am seeking information from Houston Freepers about real estate there. My daughter moved to Houston 2 years ago from San Diego when her company asked her to temporarily run their Houston office. She now has the opportunity to make the move permanent, and she wants to stay in Texas. Mr. RightField and I are here in Houston for the month of October (visiting in our motorhome). While we are here, we're hoping that local Freepers might point us to a good realtor and a mortgage broker. This will be her first home purchase, and she is looking in the...

spoke at the American Action Forum / Progressive Policy Institute conference “From Recovery to Reform: Building a Sustainable Housing Finance System.” It was a great line-up including Stan Humphries from Zillow, Mark Zandi from Moody’s Analytics, Jim Millsteen, Mark Calabria from Cato and former Minnesota governor Tim Pawlenty. I did mention that any housing reform should consider the continuing decline in labor force participation and declining real median household income, signals that renting may be the preferred option for many and perhaps we should focus on multifamily markets rather than just single-family detached housing finance. lfpmedrealinc An example of my...

The UK is seeing rising mortgage approvals and house prices. The US has flat mortgage purchase applications and slowing house price growth. Difference? UK has a noticeably larger labor force participation rate. U.K. mortgage approvals rose to the highest in more than five years in August as the government prepares to accelerate a home-buying program that’s been criticized for potentially over-stimulating the market. Lenders granted 62,226 mortgages, the most since February 2008, compared with a revised 60,914 the previous month, the Bank of England said in a monthly report in London today. Economists forecast that approvals would gain to 61,500...

It’s official. The FHA is crawling to Treasury for $1.7 billion. That is, more gruel. And the FHA blames senior citizens for their plight. Washington (AP) — A federal housing agency says it needs a $1.7 billion bailout from the Treasury to cover projected losses in a mortgage programs for seniors. At issue are reverse mortgage programs, which allow seniors to borrow against their homes for everyday living expenses. Carol Galante is Federal Housing Administration Commissioner. Galante wrote Congress Friday that her agency will withdraw the money from the Treasury before the fiscal year ends Monday. Congressional approval is not...

The Federal Housing Administration, weighed down by losses on souring loans, will likely need a cash infusion from the U.S. Treasury for the first time in its nearly 80-year history when the current budget year ends, according to sources familiar with the matter. The agency, which offers private mortgage lenders guarantees against homeowner default, has nearly exhausted its reserves for the mortgages it backs, making it necessary for the government agency to turn to the Treasury Department for a cash injection. The FHA has never needed to tap the Treasury before because it has been able to take other actions,...

A bit of good news for the economy. According to the Mortgage Bankers Association, mortgage applications rose from the previous week fr 5.53% while new home sales rose 421k in August. mbaststs0925134 The recent downward trend in the Bankrate 30 year fixed-rate mortgage has help lift sagging mortgage purchase applications by 6.65%. mbapurchbr092513 Mortgage refinancing rose 4.86% with the same decline in the 30 year fixed-rate. The refinance share of mortgage activity was unchanged at 61 percent of total applications from the previous week. The HARP share of refinance applications increased to 41 percent from 40 percent the week before,...

The S&P Case-Shiller house price index was released this morning for July. The seasonally adjusted index rose 0.62% in July versus an expectation of 0.80%. cshp The rate of growth in house prices is slowing down. csmomjuly13 Here is the Case-Shiller 20 city index against the Loan Performance house price index (yellow). csloanhp For the non seasonally adjusted types, Case-Shiller rose 1.8% in July. All 20 metro areas saw gains in house prices. For the SA measure, only Cleveland and Minneapolis had declines. csmtreo092413 And all this despite mortgage purchase applications remaining at 1997 levels. mbaplt091813

Tomorrow at 9am EST, the S&P Case-Shiller house price index will be released. The survey of economists is for a print of +0.80% increase. csfore The high forecast? Lea Tyler from Oxford Economics at +2.50%. The low forecast? E. Green/M. Mulrain at TD Securities at 0.40%. We can look at CoreLogic’s Loan Performance Index for a peak at what CS might do for July. cslp CoreLogic’s house price index rose more than 0.80 for July, so we shall see about Case-Shiller tomorrow. But this continues to be a low mortgage purchase application recovery in prices.

Now, this is a switch. During the housing bubble, regulators were criticized for being asleep at the wheel. Now at least one regulator is assuming the role of consumer activist for mortgage refinancings. A U.S. regulator is starting a campaign to encourage as many as 2 million borrowers with mortgages backed by Fannie Mae and Freddie Mac to refinance with a government program for properties that have lost value. Officials at the Federal Housing Finance Agency convened focus groups this year to find out why borrowers paying interest rates as high as 7 percent hadn’t yet tried to lower their...

Fannie Mae, the mortgage giant in conservatorship, is making a pitch to investors to purchase their risk-sharing bonds. The pitch? Fannie Mae has better standards than it did during the housing bubble. If Fannie Mae standards during housing boom were similar to today, delinquencies would have been as little as a quarter as high, according to data in presentation posted on its website as the company woos investors for new risk-sharing notes. • 12.4% of 2007 vintage Fannie mortgages (in 60-80% LTV category) has ever been 180 days delinquent, excluding loans liquidated or delinquent in first 6 months. • 3%...

The City of Richmond’s move to seize the loans of over-mortgaged homes can continue, U.S. District Court Judge Charles Breyer ruled this week. According to the San Francisco Chronicle, the reason was because “he felt the case, brought by Wells Fargo and Deutsche Bank on behalf of holders of loans on over-mortgaged homes, was not ‘ripe for determination’ since Richmond had not exercised eminent domain and might never do so.” Despite an initial win in federal court, will Richmond first have to prove that loans on over-mortgaged homes in its city are “trapped” to meet the “blight” criteria of California...

The last credit supercycle, the housing bubble and easing of mortgage credit, almost took the US economy out. But of course, nothing ever changes. That was the theme of the classic Bernard Malamud novel “The Natural” where Roy Hobbs strikes out in the climactic moment (Robert Redford hits a titanic home run in the movie to win the game defeating the entire message of the Malamud novel). Take auto loans and student loans, for example. student-debt-is-the-only-kind-of-household-debt-that-rose-during-the-recession-its-now-the-second-largest-consumer-debt-category-after-mortgages The average loan-to-value ratio, or LTV, on vehicle sales to consumers with spotty credit has risen to 114.5 percent this year from about 112...

Wells Fargo Home Mortgage said Wednesday it will cut 332 more jobs at its offices in the Twin Cities. The cuts follow a decline in mortgage refinancing activity throughout 2012 and in early 2013, Peggy Gunn, a Wells Fargo spokeswoman, said in an email Wednesday. The cuts will take place over the next 60 days. The layoffs at Wells Fargo Home Mortgage follow an announcement of 350 job cuts in the same division July 18.

Rapid increases in house prices have spawned unintended consequences. One of the unintended consequences in the return of the shared appreciation mortgage. Jeff Uter would have needed to sell stocks or pull cash out of his consulting business to afford the down payment on a $780,000 home in Orange County, California. FirstRex is seeking to benefit from homebuyers who need extra cash as values climb at about the fastest pace since 2006 and lenders require larger down payments after loose mortgage underwriting helped fuel a global crisis. Instead, he paid half of the 20 percent required and got the other...