Federal Housing Administration will "soon" increase its annual premium on jumbo mortgages by 25 basis points, according to government budget documents released Monday morning.
The Home Affordable Refinance Program (HARP) was exanded on Monday. New guidelines were promised that should allow more people to refinance.
I'm encouraged by the details of HARP II. The changes will allow more homeowners to refinance. However, until final details are disseminated by FNMA & FHMLC, it's impossible to know if all segmenst of the mortgage origination channel will have access to the changes.
Many of my colleagues are expressing doubts that they will be able to participate in originating these loans. When the original HARP program was announced, many features within the program were only available to the current servicer of the loan.
This left third party mortgage originators excluded from originating to the same standard as the current servicer. It's easy to understand why the numbers of homeowners taking advantage of the HARP program to date have been low.
Of primary interest to us will be the changes around mortgage insurance. Until now, borrowers with mortgage insurance (loans typically over 80% LTV) have been unable to take advantage of current low interest rates. The changes announced yesterday purport to address these issues.
We currently have two separate transactions on-hold as a result of low appraisals. One in particular has been in the same home for 15+ years and has a monthly household income of less than $3,500. For them, having a solution on the horizon will be welcome news.
The bottom line is that these changes mean more loans for people that currently can't get one. Before we get too excited, we'll have to wait and see how the changes are implemented and how much of the industry is given access to these loans. Until thne, it's difficult to speculate on the overall success or effectiveness of this announcement.
As always, if you have any questions or need anything, give us a call at 970.455.4131. ~ Regards, JB
It's always a good idea for real estate professionals to spend a little time each week browsing the state of real estate in other parts of the country. It helps shape your own personal views on where things have been and where they might be going.
A few links that caught my eye this morning...
Things are selling but prices are easing down from 12 months ago. Personally, I think it's going to take 3% 30 year fixed rates for at least half a year to get this housing market really moving.
Have a great week folks. Interest rates inched up last week. This Monday morning is starting off with a slight improvement but we have a way to go to get back to the record lows seen two weeks ago.
We'll post an economic report tomorrow. As always if you have any questions, give us a holler at 970.455.4131. ~ JB
Here's the latest economic news as provided by our monitoring service. The trend the past 7 sessions in the bond market has been negative. Things are settling down across the pond which is bringing stability back to the stock market. For the time being, the best strategy is to get your applications in, consider options, and be ready to pounce the next time rates correct.
If we can help, give us a call at 970.455.4131. ~ JB
"The Institute for Supply Management reported that the monthly composite index of manufacturing activity unexpectedly rose to 51.6 in September after a reading of 50.6 in August. A reading above 50 signals expansion.
It was the 26th straight month of expansion. Total construction spending rose 1.4% to $799.1 billion in August, following an upwardly revised 1.4% decrease in July. Economists had anticipated a decrease of 0.2% in August.
Factory orders fell 0.2% in August to a seasonally adjusted $451 billion, following a revised 2.1% increase in July. Excluding the volatile transportation sector, orders also fell 0.2% in August.
The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending September 30 fell 4.3%. Refinancing applications decreased 5.2%. Purchase volume fell 0.8%.
The Institute for Supply Management reported that the monthly composite index of non-manufacturing activity fell slightly to 53 in September from 53.3 in August. A reading above 50 signals expansion. It was the 22nd straight month of expansion in the services sector.
Wholesalers increased their inventories 0.4% to $464.3 billion in August. This followed a 0.8% rise in July. Sales at the wholesale level rose 1% to $401.3 billion in August. On a year-over-year basis, sales were 15.2% higher since August 2010.
Initial claims for unemployment benefits rose by 6,000 to 401,000 for the week ending October 1. Continuing claims for the week ending September 24 fell by 52,000 to 3.7 million. The monthly unemployment rate remained unchanged at 9.1% in September.
Upcoming on the economic calendar are reports on international trade on October 13 and retail sales on October 14."
New home sales fell 2.3% in August to a seasonally adjusted annual rate of 295,000 units from a revised rate of 302,000 units in July. Compared to a year ago, new home sales were up 6.1%.
The Standard & Poor's/Case-Shiller 20-city housing price index — on a non-seasonally adjusted basis — rose 0.9% in July after a 1.2% increase in June. On a year-over-year basis, prices fell 4.1% compared with July 2010.
The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending September 23 rose 9.3%. Refinancing applications increased 11.2%. Purchase volume rose 2.6%.
Orders for durable goods — items expected to last three or more years — fell 0.1% in August after a revised 4.1% increase in July. Excluding volatile transportation-related goods, orders posted an identical monthly decrease of 0.1%.
In its third and final report for the second quarter of 2011, the Commerce Department announced that gross domestic product — the total output of goods and services produced in the U.S. — increased at a revised annual rate of 1.3% in the second quarter of 2011, compared to the previous estimate of 1%. This follows a 0.4% pace of growth in the first quarter of 2011.
Pending home sales, a forward-looking indicator based on signed contracts, fell 1.2% in August after a 1.3% increase in July. On a year-over-year basis, pending sales are up 13.1%.
Initial claims for unemployment benefits unexpectedly fell by 37,000 to 391,000 for the week ending September 24. Continuing claims for the week ending September 17 fell by 20,000 to 3.7 million.
Upcoming on the economic calendar are reports on construction spending on October 3 and factory orders on October 4.
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As always if you have any question about where rates are headed, please give us a call at 970.455.4131. Make it a great week.
Since 1993, we have has been helping Colorado homeowners finance real estate. We offer a no-frills approach that results in excellent value, expedient service, & happy customers.
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