Banks are sitting on huge amounts of cash. The reasons for this include reserves held for bad loans, the inability to find credit-worthy lending outlets, and the continued threat of mortgage buybacks by government agencies. American Banker reports that loan repurchase requests from Fannie Mae and Freddie Mac are finally tapering off but that the
FHA
Some look forward to Sports Illustrated’s Swimsuit Edition or Time’s Man of the Year. I don’t think that the FDIC’s Supervisory Insights: Foreclosure Edition will garner the same attention, but it is useful to banks who service loans nonetheless because it outlines the FDIC’s position on foreclosure practices. This FHA foreclosed inventory report from HUD
Writing daily market commentary can make one feel like a robot, but I’ll be so bold as to say a computer can’t do it better because market participants have too many differing agendas. That said, a robot writer just bested a sports writer. So to the financial writers linked below: watch your backs. Bleep, blorp.
According to Bureau of Labor Statistics data, mortgage industry jobs are down 50% in the past five years. The industry hit a peak in early 2006 at 505,000 but is now at 248,000. Granted, many who shouldn’t have been in the business have left and there was excess manpower 5 years ago, but the stat
Rates ended last week down .125% after mortgage bonds rallied huge Friday (FNMA 30yr 4% coupon +62 basis points) on tame March consumer inflation (CPI) data. Rates drop when bond prices rise on such a rally, and perception of low inflation encourages bond buying. But that perception is likely to be short-lived because, as discussed
Yesterday I mentioned FHA mortgage insurance increases coming this Monday, and had the following explanation of private mortgage insurance, which was then clarified (also below) by an account rep from a big mortgage insurance provider. “Usually MI covers mortgage payments for periods of between 12 months and 5 years, though terms between three and five
Monday April 18 is the day mortgage insurance (MI) increases for FHA loans, a move that may drive more home loan borrowers with less than 20% equity into private mortgage insurance products which may end up being cheaper. Consumers need to talk to their mortgage advisors to explore which option—FHA or private mortgage insurance—is most
FHA Commissioner David Stevens resigned Thursday and will vacate his post end-of-April. Former mortgage banker Stevens stepped in July 2009 and helmed the FHA during a tricky time: FHA-insured home loans were jolted back into relevance when Congress drastically increased FHA loan limits to (regional caps of) $729,750. But this increase happened in a crisis
In the latest update on our series about a post-Fannie/Freddie lending world, we strongly recommend this post from NakedCapitalism: GSE 2.0 Scare Tactics: False Claim That No Government Guarantee = No 30yr Mortgage. Below is an excerpt about rates for non-Fannie/Freddie (aka jumbo) mortgages, and this follows our Part 1 and Part 2 discussions of
Currently 95% of home loans are controlled by the government using Fannie Mae, Freddie Mac, and FHA, but U.S. Congress is reviewing 3 options to overhaul home financing in this country. Below we examine how this will materially change loans and rates available to you in the future. This is part 2 in a series,
Why Banks Fail Why is a man like a zero coupon bond? They pay little interest, and have no maturity! And roughly 85% of bank deposits have a maturity of 3 months or less. Given that, banks must carefully watch the amount of fixed rate loans and fixed rate securities going onto the books to
Investors Ramp Up Mortgage Plans Expecting Fannie, Freddie, FHA Market Share To Drop From 95% to 50%
Some confusion may end on Friday, when Treasury Secretary Tim Geithner present Congress with three options for reducing the government’s role in home finance. Pundits suggest that the US will have an 8-10 year period to reduce Fannie & Freddie portfolios. Look for a reduction in the maximum loan amount to $625,500, a gradual increase
Investors Ramp Up Mortgage Plans Expecting Fannie, Freddie, FHA Market Share To Drop From 95% to 50%
Some confusion may end on Friday, when Treasury Secretary Tim Geithner present Congress with three options for reducing the government’s role in home finance. Pundits suggest that the US will have an 8-10 year period to reduce Fannie & Freddie portfolios. Look for a reduction in the maximum loan amount to $625,500, a gradual increase
Elizabeth Warren on Consumer Protection For some reason the mortgage industry already doesn’t seem to like presidential and Treasury advisor Elizabeth Warren, who’s also tasked with setting up the new Consumer Financial Protection Bureau (or Agency). Here’s the Treasury’s ‘5 Questions’ interview with Warren, which is posted on ‘Treasury Notes’ the blog that Treasury announced
MBA Outlook: Mortgage Activity Down 30% In 2011 The Mortgage Banker’s Association thinks loan production volume will drop almost 30% from about $1.4 trillion this year to about $1 trillion in 2011. Their rationale is a sluggish economy, tough credit guidelines, and expectations that rates will creep higher during 2011. Yesterday’s loan application data suggests
A mortgage borrower with less than 20% down must pay for either FHA government mortgage insurance or private mortgage insurance (PMI). FHA mortgage insurance is increasing Monday October 4 which could mean a shift to PMI, but read this primer before doing anything. The mortgage insurance hike means higher monthly cost if you don’t have
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