Archive for the ‘Mortgage News Daily’ Category

Mortgage rates fell moderately today, helping them move part of the way back down toward their lowest levels in more than 3 months (seen back on Friday).  The average lender continues quoting rates that are roughly 3/8ths of a percentage point lower than the highs from early November.  

Last Friday's low rates marked the culmination of the strongest winning streak for rates of 2018.  We've been in a bit of a holding pattern since then, with next week's scheduled announcement from the Federal Reserve likely serving as the motivation for the next (and probably last) big wave of momentum for the year.  "Big wave" is more of a relative term, perhaps.  It may only end up being "big" relative to the current, fairly flat week leading up to it.

The Mortgage Bankers Association (MBA) added a little more evidence to the pile indicating a rather rapid slow-down in the housing market.  MBA's Builder Application Survey (BAS) data for November shows mortgage applications for newly constructed home purchases falling by 14 percent compared to October.  The MBA data is not adjusted to account for seasonal variations, and while sales nearly always decline this time of year, applications were also down 11 percent compared to November 2017. Based on the survey data and assumptions about market coverage and other factors, MBA estimates new home sales were running at a seasonally adjusted annual rate of 627,000 units in November. 

Mortgage rates rose more noticeably today as a part of a 3 day bounce after hitting the lowest levels in roughly 3 months at the end of last week.  Whereas yesterday's increases weren't really worth mentioning, today's hurt--depending on the scenario. 

In general, this bounce was to-be-expected.  Granted, we can't ever know exactly how big such bounces will be or how long they'll last, but when rates improve for as many days in a row as they recently had, a bounce is increasingly inevitable. So how bad is this one?

Lenders continue to be pessimistic about their profit outlook as 2018 draws to an end.  Fannie Mae said its fourth quarter 2018 Mortgage Lender Sentiment Survey found the profit outlook reported by respondents at an all-time survey low.  This was true whether they were talking about purchase or refinance mortgages or about GSE-eligible, non-GSE-eligible, or government loans. It was the ninth consecutive quarter that lender outlook has declined. Smaller slices of a shrinking pie sums up the reasons given by lenders for their lowering outlook, especially for refinancing. 

Almost exactly 10 years after he helped pass the legislation that established the Federal Housing Finance Agency (FHFA), Mark Anthony Calabria has been nominated by the White House to be its director.  If his nomination is confirmed by the Senate, Calabria, currently the Chief Economist in the Office of the Vice President, will succeed Melvin Watt whose five-year term expires in January. Calabria has a long history in housing and housing finance.  He was a senior aide to the Senate Banking Committee in 2008, helping to draft the Housing and Economic Recovery Act of 2008 (HERA), which created the Federal Housing Finance Agency and was a Deputy Assistant Secretary at the Department of Housing and Urban Development during the second Bush administration. 

Borrower activity continued to pick up last week as interest rates retreated to September levels and mortgage applications extended their recent winning streak. The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of application volume, increased 1.6 percent on a seasonally adjusted basis during the week ended December 7.  On an unadjusted basis, the Index lost 1 percent from the previous week's level. The Refinance Index rose 2 percent compared to the week ended November 30, and the share of applications that were for refinancing bettered the previous week's 9 month high of 40.4 percent, rising to 41.5 percent.  The seasonally adjusted Purchase Index increased for the fourth straight week, this time by 3 percent. 

Mortgage rates rose almost imperceptibly today, with a few lenders not showing any detectable changes from yesterday.  Still, it was the first time since November 30th that rates were higher than the previous day (on average).  Today's move was so small that most lenders accounted for it in the form of upfront costs.  This means that borrowers would be quoted the same rate as yesterday, but with a small increase in upfront costs. For those who read yesterday's commentary (which said we may have just seen temporary lows in rates as the current move was running out of steam), none of this should come as a surprise.  In fact...

CoreLogic reports that mortgage delinquency rates were little changed in September.  The percentage of mortgage loans that were 30 or more days delinquent and including those in the process of foreclosure declined by 0.6 percentage point on an annual basis, to a national rate of 4.4 percent. Early delinquencies, those 30 to 59 days past due were down from 2.4 percent in September 2017 to 2.2 percent.  Other delinquency rates are reflected in the graphic below. Serious delinquencies, those more than 90 days past due or in foreclosure were either down or unchanged in every state.  Rates however increased in 10 metro areas.

First things first: the average mortgage lender improved modestly today, compared to last Friday's levels. This leaves mortgage rates at their lowest levels in several months.  That's great news and indeed, the last few weeks have been the best few weeks we've seen in more than a year.  That having been said, we're now reaching the stage where the strong move in underlying financial markets may be running out of steam.

"Running out of steam" could mean one of several things.  In the best case, this is just the obligatory pause that almost all such market movements encounter before ultimately continuing in the same direction.  The less pleasant eventuality would be that today could mark the lowest rates we'll see for a while.  There's no way to know which variety we'll get, but history suggests sprinkling a bit more caution into your strategy if you're in a position to lock a loan.

Both Freddie Mac and Fannie Mae have announced the suspension of eviction lockouts for single-family and two- to four-unit properties for the holiday season.  The moratorium will begin December 17 and end January 2. Fannie Mae said it will allow legal and administrative proceeding for evictions to proceed during the 16-day period, but families will be allowed to remain in the home.  "We believe it is important to extend the timeline of help for struggling borrowers during the holidays," said Jacob Williamson, Vice President of Single-Family Real Estate at Fannie Mae. "We encourage homeowners who may be struggling with their mortgage or facing possible foreclosure to reach out to Fannie Mae or your servicer to get help. We want to help pursue those options whenever possible."