There are millions of clever folks out there, and believe it or not some aren’t even in mortgage banking! The website name says it all, but anyone who likes cats, and especially those that don’t, should check out this site.
Goldman Sachs came out with a great research piece reminding us how the increases in food and energy prices impact the poor. Last week’s CPI report showed that over the past year food prices have now increased by more than 5% and energy prices over 16%. The total effect of food and energy inflation is most severe on lower and lower-middle income households, since poorer families spend a greater share of their income on food, and specifically food at home. In contrast, spending on gasoline follows an inverted “U” across income brackets so the middle class loses most from rising gasoline prices. Goldman believes that tax rebates will offset these effects in the near term, but they will emerge later this year once the rebates have been spent. At that point, the resulting drag on spending will be particularly pronounced among middle and lower income households.
I was reminded on Friday that GMAC can still do Piggybacks in correspondent assuming they get the first. In California, Kinecta does piggbacks (with restrictions) for wholesale, although they suspended standalone 2nds earlier this month. In Texas Encore Bank is doing a brisk business doing piggybacks without making the first. However, most, if not all, warehouse banks are staying away from advancing funds for these types of loans, and few mortgage banks are excited about offering products that are purchased by only one investor.
Fannie Mae announced (and lets hope investors, MI companies, and warehouse banks follow!) that they are expanding the jumbo-conforming eligibility to include the following transactions and products: For all Occupancy Types: Fixed-rate interest-only mortgages with a 10-year interest-only period, 30-year term, 7/1 and 10/1 fully amortizing ARMs, LIBOR index, 5/2/5 caps, 30-year term, 7/1 and 10/1 interest-only ARMs with a 10-year interest-only period, LIBOR index, 5/2/5 caps, 30-year term. For Principal Residence Transactions Only: Cash-out refinances with loan-to-value (LTV), combined LTV (CLTV), and home equity CLTV (HCLTV) ratios up to 75 percent (maximum $100,000 cash-back to the borrower), Increased ARM LTV, CLTV, and HCLTV ratios for purchase money transactions up to 90 percent, and increased LTV ratios for limited cash-out refinances to 90 percent (and reduced CLTV and HCLTV from 95 to 90 percent).
Treasury prices are up (so rates are better) slightly this morning, with mortgages better by .125. Today we have April’s Leading Economic Indicators (expected unchanged) and tomorrow we have April’s Producer Price Index. The minutes from the April 29-30 FOMC meeting follow on Wednesday and Thursday brings both weekly initial unemployment claims and the Q1 US house price index, and then on Friday we have April’s Existing Home Sales.
ING Groep NV, the largest Dutch financial-services company, offered to buy Interhyp AG (Germany’s largest independent mortgage broker) for $649 million. Munich-based Interhyp offers residential mortgages from more than 50 banks, mostly via the internet and by telephone, with a distributed mortgage volume of 5.7 billion euros in 2007.
SunTrust, rumored to be eliminating HELOC’s entirely from their product line-up, instead updated their Flex Equity Line product. They increased their geographic restrictions (“the following states are no longer eligible for Flex Equity: Arizona, California, Colorado, Illinois, Massachusetts, Michigan, Nevada, and Ohio.) and restricted their occupancy and property types (second home condominium transactions are no longer eligible with the Flex Equity Line, new condominiums in the state of Florida are not eligible, etc.).