Keyword: mortgages
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Bank of America said it is now offering first-time homebuyers in a select group of cities zero down payment, zero closing cost mortgages to help grow homeownership among Black and Hispanic/Latino communities. The option will first become available in certain neighborhoods in Charlotte, Dallas, Detroit, Los Angeles and Miami. The new mortgage, called the Community Affordable Loan Solution, aims to help eligible individuals and families obtain an affordable loan to purchase a home, the bank said. Applicants do not have to be Black or Hispanic to qualify for the product, a bank representative said. “Homeownership strengthens our communities and can...
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Bank of America today announced a new zero down payment, zero closing cost mortgage solution for first-time homebuyers, which will be available in designated markets, including certain Black/African American and/or Hispanic-Latino neighborhoods in Charlotte, Dallas, Detroit, Los Angeles and Miami. The Community Affordable Loan Solution™ aims to help eligible individuals and families obtain an affordable loan to purchase a home. The Community Affordable Loan Solution is a Special Purpose Credit Program which uses credit guidelines based on factors such as timely rent, utility bill, phone and auto insurance payments. It requires no mortgage insurance or minimum credit score. Individual eligibility...
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Biden’s new campaign theme for the midterms: economic darkness, darkness. Well, this is one way to get inflation under control … crash the economy. And inflation fears growing, we are seeing mortgage rates declining and mortgage applications increasing. Mortgage applications decreased 5.4 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending July 1, 2022. This week’s results include a holiday adjustment to account for early closings the Friday before Independence Day. The seasonally adjusted Purchase Index decreased 4 percent from one week earlier. The unadjusted Purchase Index...
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Slippin’ Into Darkness! Despite what Biden and his muppets say, there is a good chance that the US will slip into recession over the next 24 months. And with that, we are seeing a slight drop in US mortgage rates. Inflation is surging, and The Fed seems intent on “inflation fighting” but may have to pause that fight the impending recession. This is called a “U-turn” although Powell didn’t mention that is his testimony yesterday. According to Mortgage News Daily, the 30-year fixed dropped below 6% to 5.88%. Europe is signaling their u-turn to recession fighting as 10-year sovereign yield...
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JP Morgan Chase is laying off hundreds of employees in its home-lending business and reassigning hundreds more this week, Bloomberg News reported Wednesday, citing people familiar with the matter. More than 1,000 employees will be affected, the report said, and about half of them will be moved to different divisions with the bank. “Our staffing decision this week was a result of cyclical changes in the mortgage market,” a spokesperson for the bank said. JP Morgan has 273,948 employees worldwide, according to its latest quarterly filing with the Securities and Exchange Commission.
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"I would say if you’re a home buyer, you need a bit of a reset," Fed Chairman Jerome Powell said yesterday.U.S. mortgage rates surged the most in more than 36 years this week, data from Freddie Mac indicated Thursday, as house buying costs continue to track the Federal Reserve's interest rate path amid the ongoing surge in domestic inflation. Freddie Mac, the biggest individual mortgage loan buyer in the country, said 30-year fixed mortgage rates surged to 5.78%, a half-point increase from last week and the biggest increase since 1987. The headline rate, Freddie Mac said, is the highest since...
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I remember this headline from CNBC from THU, OCT 14 2021: Foreclosures are surging now that Covid mortgage bailouts are ending, but they’re still at low levels. But the foreclosure surge never materialized. If we look at 90+ days late for mortgages (yellow line), we see that the surge in unemployment with the Covid outbreak and subsequent government shutdowns (red line) did not lead to a surge in mortgage foreclosures. This situation is quite unlike 2008 when collapsing home prices and the subsequent surge in the unemployment rate led to a 90+ days late surge on mortgages (yellow line). Difference...
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As The Federal Reserve tries to fight inflation (it can’t thanks to Federal energy policies and bottlenecks), it is causing a disconnect between mortgage current coupon rate and the MBS index coupon. The disconnect is so bad that it is back to 1985 levels. The Fed can certainly try to cool inflation, but Biden is intent on raising energy prices (leading to food price increases, and everything else) to shift us to electric cars. So, Biden is unlikely to back off. So, The Fed is left trying to fight a war against inflation that only Biden can fight. Meanwhile, the...
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The Freddie Mac 30-year mortgage rate is rising faster than a SpaceX moonshot! I’m telling your now that The Fed is killing the dreams of millions of Americans by pricing them out of the housing market. Home price growth is lethal as is the increase in mortgage rates. Do The Feddy!
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Well, the Fed’s talking heads have been saying a 50 basis point hike was coming in May … and it appeared! And it looks like 9 rate hikes are a comin’ by February 2023. The Fed’s Dot Plots shows a cooling of Fed rate hikes by 2024 and beyond. The US Treasury actives curve is up by 14 bps at the 10-year tenor and up 17 bps at the 2-year tenor. I could read the Fed’s speech on their decision, but since The Fed has been so highly politicized, I don’t really care what they say. Only what they do.
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The U.S. Treasury market is showing signs of stress that may have implications for whether the curve keeps steepening. Over the past month the curve has retraced from an inversion to a steepening driven by a surge in yields on benchmark 10-year bonds. That has led to interesting outlier indications, as traders weigh the outlook for Federal Reserve interest rate increases and inflation. The US Treasury yield curve has settled-in at 20.383 bps (effectively zero) as The Fed continues its war on inflation. On the SOFR front, we see SOFR Coupons being slow to benefits from Fed rate hikes. So,...
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We have Federal Reserve of St Louis President James “Bully” Bullard saying that The Fed could raise rates by 75 basis points in May, the Japanese Yen to Dollar is crashing as mortgage rates continue to soar. Here is a nice summary of The Fed’s massive balance sheet expansion in reaction to Covid (orange line) and the resulting soaring of home prices. Then The Fed signals that they will remove the “punchbowl” and mortgage rates have boomed. And not in a good day. Today we have the US housing starts report. In a nutshell, 1-unit housing starts (single-family detached) declined...
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The book and movie “The Big Short” revolved around the 2005-2007 housing bubble driven by lending to borrowers with subprime credit (and little or no underwriting). As we know, Bear Stearns, Lehman Brothers and other investment banks too large positions in subprime asset-backed securities (SABS) that became highly toxic once the demand for high-yield subprime ABS dried up. Fast forward to today. Mortgage originations by credit scores of 620 or less have shriveled while home price growth YoY is even higher than the subprime mortgage crisis of 2005-2007. So, is the US facing another “Big Short” scenario? Yes and no....
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Mortgage interest rates continue their meteoric rise (along with home prices), the result of which is a tanking of consumer confidence in home buying. The University of Michigan survey of consumers about buying conditions for housing remains depressed due to rising mortgage rates and surging home prices. Bankrate’s 30Y mortgage rate is down slightly today to 5.06% as the 2-year Treasury yield declines and the anticipated rate hikes have fallen to 9.19. As I mentioned earlier, mortgage credit availability hasn’t recovered from the “China Covid Correction.”
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The housing and mortgage markets are addicted to gov. MarketWatch had an interesting piece on mortgages entitled “Here’s how much a 40-year mortgage would save you each month vs. a 30-year loan. And the ultimate cost.” To make a long story short, a 40-year mortgage, by stretching the payment out from 30 to 40 years, means that the mortgage mortgage payment declines from $1,687 to $1,504. But with The Fed planning on taking away the monetary punchbowl, mortgage rates are rising making housing even more unaffordable. But most things are not equal. The 40-year mortgage results in a slower paydown...
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Its official! I submitted my resignation from George Mason University effective June 1, 2022. I will miss teaching the students, past and present. But back to the US Treasury yield curve. It remains in reversion (meaning shorter-term Treasuries have higher yields than longer-term Treasuries, usually a sign of impending recession. The Fed has actually started quantitative tightening (QT) and the growth rate of Treasury note and bond purchases has slowed to a crawl. Meanwhile, Bankrate’s 30-year mortgage rate rose slightly to 4.91%. Meanwhile, President Joe “The Big Guy” Biden has ordered carmakers to increase their average fuel economy to about...
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New data revealed a major increase between Dec. 2021 and Jan. 2022 in loans sent to foreclosure. This shows they’re on the rise. A report from Black Knight shows that lenders took back over 2,634 homes in February 2022. That was a 70% more than 2021.
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The US Treasury 10Y-5Y curve (aka, the belly of the Treasury beast) has inverted. It is more about the 10Y Treasury yield rising more slowly than the 5Y yield. Freddie Mac’s 30Y mortgage commitment rate rose to 4.42%. Today’s initial jobless claims came in at 187k, the lowest in modern history!! Overheated much? More fuel on The Fed Fire to raise rates above 0.50%. Fixed-income trading floors:
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The federal government is about to back mortgages of nearly $1 million for the first time. The maximum size of home-mortgage loans eligible for backing by Fannie Mae and Freddie Mac are expected to jump sharply in 2022, a reflection of the rapid appreciation in home prices nationally over the past year. The increase may make it easier and cheaper for some borrowers to buy a home, particularly in more expensive areas of the country, but the higher limits are also likely to elevate debate about how big of a mortgage is too big to be backed by the government....
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President Joe Biden has fired the head of the Federal Housing Finance Agency after the Supreme Court handed him the power to do so on Wednesday. Director Mark Calabria's firing will be effective at 6 p.m. on Wednesday, the Washington Examiner has learned. Calabria, a staunch free-market advocate, was appointed by President Donald Trump to lead the FHFA in 2019. The FHFA is the federal agency responsible for managing the Federal Home Loan Mortgage Corporation, also known as Freddie Mac, and the Federal National Mortgage Association, also known as Fannie Mae — meaning it has far-reaching power over mortgage markets....
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