Posts Tagged ‘Treasury’

May 5 (Bloomberg) -- William O'Donnell, head U.S. government bond strategist at RBS Securities Inc., talks about the outlook for U.S. Treasury yields. O'Donnell also discusses the outlook for tomorrow's non-farm payrolls report and the U.S. budget deficit. He speaks with Tom Keene on Bloomberg Television's "Surveillance Midday." (Source: Bloomberg)

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The following commentary was written by Tim Massad, Acting Assistant Secretary of the Treasury for Financial Stability, in defense of HAMP...

The U.S. House of Representatives is considering legislation that would terminate the Home Affordable Modification Program (HAMP) and deny critical assistance to struggling homeowners. During the debate over this issue, a number of pieces of misinformation have made their way through the halls of Congress and onto the airwaves.

We want to set the record straight on a few key points and share five things that you may not know about HAMP.

1. Currently, about 25,000-30,000 additional homeowners receive a permanent HAMP modification every month. HAMP is continuing to provide critical assistance to struggling Americans who are trying to keep their homes. To date, more than 600,000 homeowners have received a permanent HAMP mortgage modification, and tens of thousands of additional Americans are joining their ranks each month. These homeowners benefit from a median reduction in their mortgage payments of 37 percent – or $500 every month.

2. HAMP provides assistance only to those homeowners who meet prudent eligibility criteria. HAMP wasn’t designed to prevent every foreclosure. The program does not pay for mortgage modifications for investment properties, vacant homes or jumbo loans. HAMP is not designed to help those who can afford to make reasonable payments on their existing mortgage, and it is not designed for those who are unlikely to sustain a modified mortgage even with government help.

3. Money only goes out the door if a homeowner demonstrates that they can make their modified mortgage payments. HAMP uses a “pay-for-success” model to protect the interests of taxpayers. Money is only spent after a homeowner completes a trial period and demonstrates that they can make their modified mortgage payments on time. As a result, terminating the program would simply deny assistance to homeowners who have successfully shown that they are determined to keep their homes and can meet their obligations.

4. HAMP modifications are outperforming industry norms. Data has shown that HAMP modifications are among the most sustainable in the mortgage market. The Office of the Comptroller of the Currency reports that, for the financial institutions that they regulate, the re-default rate for HAMP permanent modifications at six months was about half that of other modifications. Nearly 85 percent of homeowners who received a permanent HAMP modification remain in their modification one year later.

5. HAMP has created needed protections for homeowners seeking assistance from their mortgage company. HAMP established new safeguards for struggling homeowners. To ensure that homeowners have every opportunity to keep their homes, HAMP requires participating mortgage servicers to evaluate homeowners for a mortgage modification before referring them to a foreclosure sale. HAMP requires servicers to adhere to clear timelines when evaluating homeowners for HAMP modifications and established a process for homeowners to dispute their servicer’s decision when they believe that they have been unfairly denied a modification.

MND COMMENT: The funny thing is...

Even if the HAMP Termination Act of 2011" (H.R. 839) is passed in the Republican dominated House, it must still pass the Democratically controlled Senate. And then it need's President Obama's signature. The White House has already indicated it would veto the bill if it somehow gained Senate approval, which is unlikely.

The House of Representatives is scheduled to vote on H.R. 839 tomorrow.

 

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The following commentary was written by Tim Massad, Acting Assistant Secretary of the Treasury for Financial Stability, in defense of HAMP...

The U.S. House of Representatives is considering legislation that would terminate the Home Affordable Modification Program (HAMP) and deny critical assistance to struggling homeowners. During the debate over this issue, a number of pieces of misinformation have made their way through the halls of Congress and onto the airwaves.

We want to set the record straight on a few key points and share five things that you may not know about HAMP.

1. Currently, about 25,000-30,000 additional homeowners receive a permanent HAMP modification every month. HAMP is continuing to provide critical assistance to struggling Americans who are trying to keep their homes. To date, more than 600,000 homeowners have received a permanent HAMP mortgage modification, and tens of thousands of additional Americans are joining their ranks each month. These homeowners benefit from a median reduction in their mortgage payments of 37 percent – or $500 every month.

2. HAMP provides assistance only to those homeowners who meet prudent eligibility criteria. HAMP wasn’t designed to prevent every foreclosure. The program does not pay for mortgage modifications for investment properties, vacant homes or jumbo loans. HAMP is not designed to help those who can afford to make reasonable payments on their existing mortgage, and it is not designed for those who are unlikely to sustain a modified mortgage even with government help.

3. Money only goes out the door if a homeowner demonstrates that they can make their modified mortgage payments. HAMP uses a “pay-for-success” model to protect the interests of taxpayers. Money is only spent after a homeowner completes a trial period and demonstrates that they can make their modified mortgage payments on time. As a result, terminating the program would simply deny assistance to homeowners who have successfully shown that they are determined to keep their homes and can meet their obligations.

4. HAMP modifications are outperforming industry norms. Data has shown that HAMP modifications are among the most sustainable in the mortgage market. The Office of the Comptroller of the Currency reports that, for the financial institutions that they regulate, the re-default rate for HAMP permanent modifications at six months was about half that of other modifications. Nearly 85 percent of homeowners who received a permanent HAMP modification remain in their modification one year later.

5. HAMP has created needed protections for homeowners seeking assistance from their mortgage company. HAMP established new safeguards for struggling homeowners. To ensure that homeowners have every opportunity to keep their homes, HAMP requires participating mortgage servicers to evaluate homeowners for a mortgage modification before referring them to a foreclosure sale. HAMP requires servicers to adhere to clear timelines when evaluating homeowners for HAMP modifications and established a process for homeowners to dispute their servicer’s decision when they believe that they have been unfairly denied a modification.

MND COMMENT: The funny thing is...

Even if the HAMP Termination Act of 2011" (H.R. 839) is passed in the Republican dominated House, it must still pass the Democratically controlled Senate. And then it need's President Obama's signature. The White House has already indicated it would veto the bill if it somehow gained Senate approval, which is unlikely.

The House of Representatives is scheduled to vote on H.R. 839 tomorrow.

 

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Last week the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity voted to eliminate two programs designed to mitigate the impact of the housing meltdown. 

Republicans on the Committee voted unanimously to shut down the Emergency Homeowner's Loan Program (EHLP) and FHA's Short-Refinance Option.  EHLP is not scheduled to go into operation until next month and the Short-Refi program got off to a slow start and has, as yet assisted only a few homeowners but also has cost $0 in federal monies. 

The next two housing recovery efforts on the chopping block: HAMP and the Neighborhood Stabilization Program. With the Committee scheduled to vote Wednesday on the fate of both programs, supporters are beginning to fight back. 

Last week representatives of the Administration testified to the Committee as to the importance of the Home Affordable Modification Program (HAMP), a joint program operated by Departments of Treasury and Housing and Urban Development.   While HAMP has been plagued with problems, at last count it had moved 600,000 borrowers into permanent loan modifications while another 126,000 are in the required three month trial modification period.  The so-called "HAMP Termination Act of 2011" (H.R. 839) would prohibit the Secretary of the Treasury from providing any further assistance to the program but would allow assistance to continue where a homeowner was in process with an offer to participate in the program.

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Mortgage rates continue to enjoy a period of relief after rising rapidly in recent weeks.  The extent to which this relief period matures into a more extended and stable mortgage rate rally is still undecided, but at least now it's possible.  Those looking to stay as protected as possible even during potentially more favorable times still need to keep an eye out for the risks that crop up along the way.  We discuss the current risks in the "New Guidance" section below.

CURRENT MARKET: The "Best Execution" conventional 30 year fixed mortgage rate is 5.00%.  There is an opportunity to lock 4.875% for those who wish to buy down their rate, but this quote carries higher closing costs than 5.000%. The upfront cost of permanently buying down your rate from 5.000 to 4.875% may not be worth it to every applicant. We would generally advise the permanent floatdown if you plan to hold your new mortgage for longer than the next 5 years.  Ask your loan officer to run a breakeven analysis on any origination points they might require to cover permanent float down fees. On FHA/VA 30 year fixed "Best Execution" is 4.75%. 15 year fixed conventional loans are best priced between 4.125% and 4.25%. Five year ARMS are best priced between at 3.625 and 3.75%.

PREVIOUS GUIDANCE:  A flight to safety* poured into the bond market today. This allowed lenders to improve loan pricing on first releases of rate sheets. Positive progress lasted throughout the day and many lenders were able to reprice for the better.  As a result "Best Execution" mortgage rates have moved lower.   Although we remain defensive, we are seeing signs that imply mortgage rates are due further improvements. The secondary mortgage market rally is however still quite immature and our confidence level has only improved modestly. READ MORE <--- You must read this post if you are thinking about floating for lower mortgage rates.

NEW GUIDANCE: Despite some weakness in the overall bond market, mortgage rates were able to maintain the improvements seen yesterday.  This is a positive sign considering a relatively weak Treasury auction occurred today, and that would normally have a negative impact on the rates outlook.  The market is certainly THINKING about shifting back into a more rate-friendly stance, but that remains up-in-the-air to a certain extent.  Additionally, there is another treasury auction tomorrow, and if that goes as poorly as today's did, we'd likely lose a bit of ground in the form of increasing closing costs to obtain a similar best execution rate.

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Average Mortgage Rates   TODAY YESTERDAY CHANGE 30 Yr FRM 5.11 5.14 -0.03% 15 Yr FRM 4.30 4.33 -0.03% FHA 30 Year 4.96 4.99 -0.03% Jumbo 30 Year 5.82 5.86 -0.04% 5/1 Yr ARM 3.70 3.72 -0.02% » View Current Mortgage Rates » Compare Mortgage Rates Updated: 2/9/11 4:48 PM Feb 9, 2011 5:54PM Mortgage Rates: Bleeding Stopped This is gonna be one of those "GOOD NEWS/BAD NEWS" sorta days. The good news is... The mortgage rate losing streak has come to an end at 5 days. Celebrations are acceptable. Even if it's just a fist pump. Nervous tensions were moderately relieved in the secondary mortgage market today. We've backed away from a ledge. For now. Reprices for the better were reported today! (Repricing for the better = improved borrowing costs) The bad news is.... There was a 5 day losing streak in mortgage rates. Stopping... Read More More From MND Snowball Selling Avoided for Now. More Relief Rally Needed MBS RECAP: Total Reversal After Treasury Auction Bernanke Handles Congressional Questioning. Offers Clear Explanations 10-Year Treasury Auction Sees Huge Demand from Indirect Bidders MBS MID-DAY: Prices Falling Before Treasury Auction Snowball Selling a Real Threat. Short Sellers Book Profit Before Bernanke The Day Ahead: Bernanke, $24 Billion 10s, GSE Reform Hearing View: Front Page | Headline Viewer Video News Reacting to Bernanke Banks May Need More Capital Big Housing Changes Afoot? »View More Video News Follow Rates Daily On: RSS Twitter Facebook Mobile Apps Helpful Links Current Mortgage Rates Daily Rate Movements Historic Mortgage Rates Tools Bank Strength Ratings Mortgage Rate FAQ's Mortgage Calculator Forward Know someone who might be interested in this email? Forward it. Subscribe Would you like to receive our Daily Rate Update by Email? Subscribe Now. Front Page | Headline Viewer | Video | Forums | Q&A | Market Data | Rates | Marketplace : Consumer - Industry © 2011 Brown House Media, Inc. All rights reserved. Brown House Media Inc. - 19706 One Norman Blvd - Cornelius, NC 28031 This information is not an advertisement to extend consumer credit as defined by Section 226.2 of Regulation Z. This is not an offer to enter into an agreement regarding interest rates. The rates quoted do not include discount points, origination points, or loan level risk based price adjustments.  Rates and terms are subject to change without notice.

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The market's confidence in China’s decision to loosen its peg to the U.S. dollar ended up fizzling out before the close yesterday, leaving stocks flat at the end of the session. Overnight, excitement continued to dampen, causing global equities to fall and the yuan to lose half of its gains against the dollar. Two hours before the opening bell, Dow futures are down 23 points to 10,373 and S&P 500 futures are off 3.10 points to 1,107.50. Light crude oil is down 1.57% and Gold prices are 0.07% lower at $1,238.80 per ounce. The US dollar index is up 17 basis points to 86.10. Key Events Today: The nation's first "comprehensive strategy to prevent and end homelessness" will be released by the U.S. Interagency Counsel on Homelessness (USICH). The council is an independent...(read more)

Equity futures are once again indicated higher this morning. The question is whether stocks will maintain momentum throughout the day, or fizzle out just as they did yesterday. Ninety minutes before the opening bell, Dow futures are up 54 points to 10,202 and S&P 500 futures are up 4.25 points to 1,090.50. The 2-year Treasury note yield is 1 basis point higher at 0.738% and the benchmark 10-year Treasury note yield is less than 1 basis point higher at 3.264%. The NYMEX crude oil futures contract is up 0.44 to 75.56 while Gold futures are up $1.20 at $1,225.70. Yesterday, equity prices rose as much as 1.55% before tumbling back in the final hours. The S&P closed down 0.18% and the Dow fell 0.20%. Key Events Today: 6:15 ― James Bullard , president of the St. Louis Federal Reserve, speaks...(read more)

Ahead of what should be a busy day in the markets, equity futures are looking to build upon the broad-based surge on Thursday. Ninety minutes before the opening bell, Dow futures up 15 points to 10,161 and S&P 500 futures are up 1.25 points to 1,085.00. Yesterday, the Dow jumped 2.76% and the S&P jumped leapt 2.95%. The 2-year Treasury note yield is 1.6 basis points lower at 0.778% and the benchmark 10-year Treasury note is 2.6 basis points lower at 3.299%. The NYMEX crude contract is off $0.31 to $75.17, and COMEX Gold is up $2.20 at $1,223.0. The US dollar index is down nine basis points to 87.07, after the surge in US equities yesterday prompted global gains extending to foreign stocks and currencies. The Day Ahead: 8:20 ― Charles Plosser , president of the Philadelphia Fed, discusses...(read more)

Global markets were mixed overnight but domestic stock futures are higher as investors wait for the latest economic assessment from Federal Reserve chairman Ben Bernanke. Ninety minutes before the opening bell, Dow futures are up 51 points to 9,965 and S&P 500 futures are 7.50 points higher at 1,066.75. The 2-year Treasury note is 2 basis points higher in yield at 0.766% while the benchmark 10-year note yield up 3.1 basis points to 3.222%. WTI crude oil is up $0.82 to $71.81 per barrel, but Spot Gold is down $0.48 to $1,236.07. China’s Shanghai index closed up 2.78%, but Japan’s Nikkei fell 1.04%. In Europe, stocks are mostly higher with London’s FTSE 100 up 0.28%, the CAC up 0.86%, and the DAX +0.90% Last night, Kansas City Fed President Thomas Hoenig said the central...(read more)