Why Banks Fail Why is a man like a zero coupon bond? They pay little interest, and have no maturity!

Election Summary Stocks and bonds both rallied yesterday. MBS prices were better by .5 in price on the lower coupons, and .375 in the slightly higher ones on $1.7 billion in origination. The yield on the 10-yr closed at 2.59%. The election results came in after the US markets closed, but were pretty much as [...]

Bank Earnings Banks have virtually doubled 3Q earnings by injecting $8.1 billion into net income from funds they had set aside to cover loan losses. The 18 commercial banks with at least $50 billion in assets earned an adjusted $17 billion in the third quarter – almost half of which came from reducing their loan-loss [...]

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 [...]

Rate/Market Recap Week of September 27 Rates were unchanged last week: 30yr fixed rates were 4.32% with .8 points, which tied a record low set September 2. This figure is the national average for owner-occupied single family home loans up to $417,000.

Everyone in the FHA business knows that Monday is a big day. FHA will lower its upfront mortgage insurance premium (except for HECM’s) while simultaneously increasing the annual premium, which is collected on a monthly basis. This change will affect purchase money and refinance transactions, including FHA-to-FHA credit-qualifying and non-credit-qualifying streamlined refinance loans. Here’s the [...]

Private Mortgage Insurance Improving On the mortgage insurance front, PMI will be increasing its maximum LTV to 97% effective October 8. It is a good sign for many in the industry, and loans must have a minimum 720 credit score, be in non-distressed markets, owner-occupied, conforming, originated only through a retail channel, etc. And it [...]

Bank Failure Update: 125 Failures & Counting A total of six banks were shut down Friday, three in Georgia and one each in New Jersey, Ohio and Wisconsin, thus hitting the 125 mark for U.S. bank failures this year – and we’re not even done with the 3rd quarter. Gone are Bank of Ellijay, First [...]

Rates ended last week even vs. previous week. Record low rates are holding as we head into the September 20 week. Rates and fine-print below. Also below are three topics: (1) Fed meeting and home sales preview, (2) critical alert on FHA loan cost increases, and (3) advice for refinancers.

FHA Loan Fee Increases: Hundreds Per Month For Borrowers Effective for FHA loans October 4, 2010 or later, FHA mortgage insurance (MI) will be increasing on new loans—existing FHA borrowers are unaffected. Using money from MI premiums, the FHA helps troubled borrowers and backs lenders if loans go into foreclosure. Mounting foreclosures in recent years [...]