Free Republic

Americans refinancing their mortgages are taking cash out in the process at levels not seen since the financial crisis. Nearly half of borrowers who refinanced their homes in the first quarter chose the cash-out option, according to data released this week by Freddie Mac. That is the highest level since the fourth quarter of 2008. The cash-out level is still well below the almost 90% peak hit in the run-up to the housing meltdown. But it is up sharply from the post-crisis nadir of 12% in the second quarter of 2012. In a cash-out refi, a borrower refinances an existing...

The August LPS Mortgage Monitor was released this morning. It shows good news and bad news. The good news (if you are Fannie Mae and Freddie Mac). The GSE mortgage share (blue line) has risen since 2011. mtgmktshare The bad news? The percentage of mortgages that are “out of the money” for refinancing has topped 50%. Again. %inmoney The good news? The mortgage pipeline is shrinking rapidly, particularly in judicial foreclosure states. forecpipecl The bad news? Judicial foreclosure states like New York, New Jersey and Hawaii have stubbornly high foreclosure pipeline ratios. For non-judicial foreclosure states, Massachusetts leads the nation....

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...

(snip) A few issues that could have your application earmarked for the ‘Rejected' pile..... 1. Heightened credit score demands (snip) 2. Low appraisal (snip) 3. A home equity line of credit (snip) 4. Condo or co-op troubles (snip) 5. Timeliness requirements (snip)

Sam Chanden from Chanden Economics was quoted in the Wall Street Journal saying that the housing bust is over. Or is it in purgatory? True, Mr. Chandan points to the same data points that many industry analysts point to – 1) all-time low mortgage rates, 2) improving new home sales and 3) improving house prices. All true (sort of). But countering Mr. Chandan’s optimism are some daunting economic facts – 1) the economy continues to slow, 2) mortgage purchase applications are really low by historic standards, 3) much of the new home sales are multifamily, 4) and many Americans cannot...

President Obama’s Senior Advisor, David Plouffe, sent out an email today explaining why loan modifications are “good” and not modifying loans is “bad.” I felt like Denzel Washington from “Philadelphia” saying “All right, Mr. Laird Plouffe, explain this to me like I’m a four-year-old, okay?” Well, here is Plouffe’s “Philadelphia” explanation to Americans. Prepare to be insulted. That presentation by President Obama’s housing adviser was … “Here you go, dimwits, let poppa tell you what to do.” And grossly misleading. How about talking to us like we are adults? Their motto should be “Cry Havoc! And let slip the dogs...

Here is why these investors will lose a lot of money. Currently, Fannie Mae, Freddie Mac and Ginnie Mae (FHA) MBS are selling at what is called a “premium” above par value of 100. Let’s start with GNMA MBS. Notice that GNMA MBS prices are trading at a premium to par and the higher the coupon rate, the larger the premium. For example, the GNMA 6.0% coupon is currently selling for 109-22. That is $9 -22 above par. Why? Premium prices occur when sufficient number of borrowers do not refinance, either due transactions costs or inability to refinance their mortgage....

President Obama is in Fairfax Virginia today at 11am announcing his new mortgage refinancing program. The program is meant to compliment his already existing HARP 2.0 program for borrowers whose loans are not held or insured by Fannie Mae or Freddie Mac. Rather, it is meant to allow mortgage refinancing to 1 out of 3 borrowers who are not eligible for HARP 2.0 which would be an estimated 3.5 million homeowners. That is on top of the anticipated 11 million borrowers who could refinance their loans through Fannie Mae and Freddie Mac. The estimate price tag is $5-10 billion. Here...

Chris Arnold at National Public Radio (NRP) posted this story today: “Freddie Mac Betting Against Struggling Homeowners.” The article quotes Chris Mayer from Columbia University, one of the authors of the Boyce, Hubbard and Mayer (MHM) streamlined mortgage refi plan. Streamlined mortgage refis come at a cost to Fannie Mae, Freddie Mac, pension funds and foreign investors who trusted the U.S. to play be the rules. I don’t really care if the benefits outweigh the costs since I am opposed to massive government intervention into the free market. It never works as expected and usually generates unintended consequences. Why isn’t...

CUTTING RATES TO THE BONE Why Interest Rate Cuts Don't Always Work by Tom Adkins CommonConservative.com 05/16/03 Once again, Alan Greenspan raised interest rates to combat a nonexistent inflation boogieman. And once again, he's cutting those rates to fix the economy he devastated. And once again, it's not working. But why? Aren't rate cuts supposed to spur the economy into the stratosphere? Isn't Alan Greenspan and his Federal Reserve capable of breathing life into any dead economy? No. There are two words that prove this theory wrong: wealth creation. Let's regress a bit. During the first Bush administration, Greenspan jacked...