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The Mortgage Refinancing Boom Is Evaporating Before Our Eyes Mamta Badkar and Matthew Boesler June 14, 2013, 1:29 PM Mortgage rates have been climbing for five straight weeks, and the latest data from the Mortgage Banker's Association shows that the average 30-year fixed rate is now at 4.15%, up from 3.59% in the first week of May. Meanwhile, the MBA's refinancings index is down 36% from its peak at the beginning of May. The rise in mortgage rates has been driven by concerns about when the Federal Reserve will begin to slow its $85-billion-a-month bond purchase program, which is designed...

Fannie And Freddie Are Getting Smoked — Down 40% Today Sam Ro May 29, 2013, 11:48 AM Shares of Fannie Mae and Freddie Mac are getting destroyed today. Stifel Nicolaus' Dave Lutz points us to reports that Senator Bob Corker will push to wind down Fannie and Freddie as part of housing finance reform. Fannie and Freddie are government sponsored enterprises (GSE) that were created to boost liquidity in the mortgage markets buy packaging mortgages and selling them off to investors as bonds (or mortgage-back securities). These MBS also came with implicit guarantees, which got the them into trouble when...

Cash And Tarry: Mortgage Applications Plunge At Fastest Rate Since 2009 Tyler Durden 05/29/2013 09:47 -0400 In the 'old normal' a spike in interest rates would have sparked an avalanche of 'rational' home-buyers and refinancers to apply for mortgages for 'fear' of the 'never-to-be-seen-again' rates disappearing. It seems, however, courtesy of a Bernanke-trained market, that this surge in rates has pushed many to the sidelines (mortgage applications slipped 8.8% WoW and -23% in the last 3 weeks), we presume waiting for the omnipotent-one to save the day yet again. The year-to-date shift in mortgage applications is now the worst since...

Sheila Bair, former FDIC Commission, and Barney Frank, former Congressman, penned a misleading op-ed in Fortune/CNN Money entitled “Watch out. The mortgage securities market is at it again“. Here is the misleading sentence: Big, ugly giants with names like Countrywide Financial and New Century packaged huge pools of mortgages, sliced them up into securities, and sold them to investors, who now bore the risk if the loans defaulted. It turns out that “big, ugly giants” with names like Fannie Mae and Freddie Mac did exactly the same thing. They packaged huge pools of mortgages, sliced them up into securities, and...

A friend of mine is trying to sell a 5 acre lot in Las Vegas and has been trying since 2009. But recently, he has received 3 offers at above the asking price; he has turned all offers down. Why? He thinks The Fed will continue rolling the dice on easy money policies. Reuters had an interesting piece on the Las Vegas “rebound” entitled “Special Report: Cheap money bankrolls Wall Street’s bet on housing.” According to the Reuters article, The Vegas market has unsteady legs. Statistics compiled by the University of Nevada at Las Vegas show some 40,000 homes are...

The Federal Housing Finance Agency (FHFA) announced today that it is directing Fannie Mae and Freddie Mac to limit their future mortgage acquisitions to loans that meet the requirements for a qualified mortgage, including those that meet the special or temporary qualified mortgage definition, and loans that are exempt from the “ability to repay” requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). In January, the Consumer Financial Protection Bureau (CFPB) issued a final rule implementing the “ability to repay” provisions of Dodd-Frank, including certain protections from liability for loans that meet the criteria of a qualified...

The Federal Housing Finance Agency (FHFA) today released its January 2013 Refinance Report, which shows that refinance volume remained high through the first month of this year. There were nearly 470,000 refinances in January, with roughly 97,600 completed through the Home Affordable Refinance Program (HARP). This brings total HARP refinances to more than 2.2 million since the program’s inception in April 2009. • Borrowers in January with loan-to-value ratios greater than 105 percent accounted for 47 percent of the HARP refinance volume. • The number of completed HARP refinances for deeply underwater borrowers continued to represent a significant portion of...

There’s something macabre about an imminent train wreck, you know exactly what is coming but you can’t help but watching. Now imagine that instead of watching that train wreck from atop a building a safe distance away, you’re standing right between the train and the tanker truck that has stalled on the tracks. That’s a different story all together. At that point, rather than being a mere fascination it’s a matter of life or death. You’ve seen the damage a train wreck can do. That’s why it was fascinating in the first place. The difference now of courses is that...

While flying back to Washington DC from Dallas (mercifully American Airlines has Wifi!), I saw this article in the Financial Times: “Fed warned to rein in QE.” Essentially, Blackrock’s Rick Rieder warns that The Fed’s unorthodox approach to stimulating the economy (or at least the stock market). “Fed policy has had a distorting effect on capital allocation decisions of all kinds at virtually every level of the economy,” he told the Financial Times. “It is a very large and dull hammer for markets.” I wonder if Fed Chairman Ben Bernanke sings “If I had a (dull) hammer,” Thanks to Bernanke’s...

<p>The Obama administration is engaged in a broad push to make more home loans available to people with weaker credit, an effort that officials say will help power the economic recovery but that skeptics say could open the door to the risky lending that caused the housing crash in the first place.</p>

Yes, we have yet another government mortgage modification program. This makes the 15th government mortgage modification program to go along with HAMP, HARP, the Attorneys General Settlement and their various contortions. The Federal Housing Finance Agency (FHFA) today announced that Fannie Mae and Freddie Mac will offer a new, simplified loan modification initiative to minimize losses and to help troubled borrowers avoid foreclosure and stay in their homes. Beginning July 1, servicers will be required to offer eligible borrowers who are at least 90 days delinquent on their mortgage an easy way to lower their monthly payments and modify their...

According to the Mortgage Bankers Association, mortgage applications fell -7.11% from the preceding week. Mortgage purchases applications fell -3.87%. They remain in a rut since the April 30, 2010 spike. Sustainable? Yes. Does it help the housing rally? Of course not. Mortgage refinancing applications fell -8.01% from the previous week. This is not surprising since mortgage rates have remained low for so long that the pool of borrowers wanting to refinance their mortgages is thinning out. Unless, of course, the Federal government (or FHFA) changes the requirements for negative equity refis. Yield Curves Of course, one of the most important...

Radio Talk Show Host Charged with Mortgage Fraud Warren Ballentine, 41, Durham, North Carolina, and formerly of Country Club Hills, Illinois, a lawyer who hosts a national radio talk show, was indicted on federal charges for allegedly engaging in two mortgage fraud schemes that defrauded lenders of a total of approximately $9.7 million. The defendant allegedly schemed with others to obtain more than two dozen fraudulent mortgage loans and represented buyers at multiple closings, knowing that they were fraudulently qualified for loans to purchase homes in Chicago, Illinois, and various southern suburbs. Ballentine owns the Law Office of Warren Ballentine,...

I wrote Tuesday about the hypocrisy and perhaps vindictiveness of the Department of Justice’s lawsuit against ratings agency Standard & Poor’s for rating toxic mortgage-backed securities and their derivatives highly before the housing bubble popped. Apparently I wasn’t tough enough on … the DoJ. Bloomberg’s Jonathan Weil explains why the lawsuit isn’t just ill-considered, but downright silly: Oh, the poor suckers at Citigroup Inc. and Bank of America Corp., fooled about the stench of their own garbage by those sneaky credit raters at Standard & Poor’s.The U.S. Justice Department made some peculiar allegations in its lawsuit this week against S&P...

It’s 100% financing—the same strategy that pushed many homeowners into foreclosure during the housing bust. Banks say these loans are safer: They’re almost exclusively being offered to clients with sizable assets, and they often require two forms of collateral—the house and a portion of the client’s investment portfolio in lieu of a traditional cash down payment. In most cases, borrowers end up with one loan and one monthly payment. Depending on the lender and the borrower, roughly 60% to 80% of the loan can be pegged to the home’s value while the remaining 20% to 40% can be secured by...

What is your prediction on mortgage spreads after the private sector almost vanished by 2008? The red line denotes non-GSE market share and the green line denotes GSE market share (e.g., Fannie Mae, Freddie Mac, etc.). The government essentially became a monopolist (although the government entities including the FHA compete with each other for market share). There are barriers to entry that would promote competition with Uncle Sam – it is called Dodd-Frank and the Consumer Financial Bureau. The vast majority of residential mortgages will continue to be purchase and/or insured by the Federal government. But after the effective nationalization...

The second person, a former housing industry executive intimately familiar with of Fannie Mae's operations, agreed that Donilon was at the head of an unceasing anti-regulatory campaign that the company waged throughout his tenure. The former housing executive said that on political issues, especially regulatory oversight, Donilon was the right-hand man to Fannie Mae chairman and CEO Franklin Raines.

WASHINGTON (Reuters) – President Barack Obama will name close aide Tom Donilon as his new national security adviser on Friday in a move that could have implications for the struggli

Policy-wise, this is an oldie but a goodie, I guess, even though we’re still spending tons of money on Freddie Mac and Fannie Mae more than four years after the crash. Wells Fargo CEO Robert Kovacevich can't believe that we haven't learned the lesson from 2008 and gotten the government out of the home mortgage industry, and tells CNBC's Squawk Box that the two organizations made that crash exponentially worse than it needed to be: CLICK ABOVE LINK FOR THE VIDEO Fannie Mae and Freddie Mac exacerbated the 2008 mortgage crisis, and that’s why the U.S. government should get out...

The radio show “Marketplace” wanted to chat this morning about the news that the Obama administration might extend its mortgage-refinancing programs to include borrowers whose mortgages aren’t backed by the government. It’s one thing for the Administration to pressure loan modifications (with Congress’ blessing) for the FHA insured mortgages. It is even a bigger stretch for the Administration to pressure Fannie Mae, Freddie Mac and FHFA to perform loan modifications (specifically principal writedowns since Fannie Mae and Freddie Mac are private corporations … in conservatorship. But it quite another thing for the Administration to pressure non-government entities to make principal...