Refi Applications Lowest Since August, Rates Better On Greece Woes and OK 3yr Note Auction
Mortgage Applications Drop Last Week, Loan Profitability OK
The MBAA reported that mortgage applications in the U.S. declined 11% last week. Refinancing dropped 17% but purchases increased .2%. In fact, the share of applicants seeking to refinance fell to 58.7%, the lowest since August, from 63.2% the week before.
Those loans are still profitable, however, or at least in the 4th quarter they were. The MBAA released its latest study on loan profitability, and independent mortgage bankers and subsidiaries made an average profit of $890 on each loan they originated in the fourth quarter of 2009, down from $902 per loan in the third quarter of 2009, but up from $296 in the fourth quarter of 2008. Apparently strong servicing rights valuations and secondary marketing gains helped profits. But looking ahead, the MBAA believes that “provision expense for repurchase demands may weaken profitability in upcoming quarters. We saw the expense provision double to over 6 basis points from the fourth quarter of 2008.”
Another Lender Fraud Report
Fraud, in Brooklyn and New York? Say it ain’t true!
Rates Better On Greece Woes
Rates improved yesterday – all rates. It appears that Greece “isn’t keen on the IMF being involved in any bailout” which pushed Greek bonds down and caused a bit of a flight to quality here in the US. Say what you will about the credit quality of our debt, on a relative basis it is still safer and more liquid than most. The $40 billion 3-yr note auction went ok, and in fact the market overwhelmingly believes that overnight rates (set by the Fed) will remain near 0% through August. With origination dropping, and buyers buying, mortgage spreads are behaving themselves in spite of a little volatility. Selling is coming from originators, hedge funds, and money managers, but buying is coming from other hedge funds, pension funds, and small & mid-tier banks. In the absence of much news, the 10-yr is steady at 3.95% and mortgage prices are, once again, better by .250-.375 depending on coupon.
Daily Humor
AMAZINGLY SIMPLE HOME REMEDIES (That Really Work!)
1. AVOID CUTTING YOURSELF WHEN SLICING VEGETABLES BY GETTING SOMEONE ELSE TO HOLD THE VEGETABLES WHILE YOU SLICE.
2. AVOID ARGUMENTS WITH THE FEMALES ABOUT LIFTING THE TOILET SEAT BY USING THE SINK.
3. FOR HIGH BLOOD PRESSURE SUFFERERS ~ SIMPLY CUT YOURSELF AND BLEED FOR A FEW MINUTES, THUS REDUCING THE PRESSURE ON YOUR VEINS. REMEMBER TO USE A TIMER.
4. A MOUSE TRAP PLACED ON TOP OF YOUR ALARM CLOCK WILL PREVENT YOU FROM ROLLING OVER AND GOING BACK TO SLEEP AFTER YOU HIT THE SNOOZE BUTTON.
5. IF YOU HAVE A BAD COUGH, TAKE A LARGE DOSE OF LAXATIVES. THEN YOU’LL BE AFRAID TO COUGH.
6. YOU ONLY NEED TWO TOOLS IN LIFE – WD-40 AND DUCT TAPE. IF IT DOESN’T MOVE AND SHOULD, USE THE WD-40. IF IT SHOULDN’T MOVE AND DOES, USE THE DUCT TAPE.
7. IF YOU CAN’T FIX IT WITH A HAMMER, YOU’VE GOT AN ELECTRICAL PROBLEM.