Operation Twist – Good For Home Mortgages – Bad For Economy
The Feds Operation Twist could spur home mortgage refinancing but, will be bad for small business and banks. Could this be the corner-stone for a new bank bail-out?
Home Mortgage Applications Drop to 15-year low
home mortgage loans
The Mortgage Bankers Association said today that an index measuring mortgage applications, which are adjusted for seasonal factors, fell 2.4 percent last week from the previous week. Home mortgage applications plunged 5.7 percent to its lowest level since December 1996.
Also, sales of new and previously occupied homes both fell in July. Sales of new homes are on pace to finish the year as the lowest on records dating back to 1963.
The pace of re-sales is shaping up to be the worst in 14 years.
San Diego California real estate
Home Mortgage Applications Fall
Home mortgage applications drop
The Mortgage Bankers Association recently reported that after experiencing a 13% surge in mortgage applications, the mortgage market lost steam with applications dropping 5.9%. While homeowners rushed to refinance earlier in the month, that trend reversed itself, with the refinance index and purchase index falling 7.2% and 2.8%, respectively,
The four-week moving averages for the market index and the refinance index are up 0.4% and 0.8%, respectively, while the seasonally adjusted purchase index is down 0.7%. Refinancing activity cooled as the refinance share of mortgage activity fell to 69.2% of total applications from 70% the previous week. In addition, the adjustable-rate mortgage share of activity fell to 5.9% from 6.1% the prior week.
Home Mortgage Scandal
home foreclosures
Revelations about the sloppy home mortgage re-sale paperwork are emboldening homeowners and law enforcement officials in many states to question whether lenders rightfully hold the mortgage notes underlying foreclosed properties.
Distressed properties, many of which are in foreclosure, make up about a third of all home sales. Foreclosures are now going to slow to a crawl.
Now, Fannie Mae has been sending e-mails to real estate agents about putting off deals and removing houses from the market.
Home Mortgage Loan Demand Drops
home mortgage loans
The Mortgage Bankers Association just reported that its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended September 10 decreased 8.9 percent.
Mortgage applications for home loan refinancing fell for a second straight week, dropping to its lowest level since early August.
Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 4.47 percent, down 0.03 percentage point from the previous week.
San Diego real estate agents
Home Loan Demand Up
home mortgages
Today the Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, increased 1.3 percent in the week ended July 30.This increase was the third week in a row that the average was higher.
The four-week moving average of mortgage applications, was up 0.3 percent. Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 4.60 percent, down 0.09 percentage point from the previous week, the MBA said.
San Diego California real estate agents
Home Mortgage Lending and Government Intervention
home mortgage lending
With all of the toxic assets remaining on the bank books and the prospects of GDP growth looking smaller every day, it’s no wonder home mortgage lending has contracted. Read more 
Home Mortgage Reality
home mortgages
Nearly one-quarter of all homeowners who have mortgages – approximately 27 million people – believe they owe more on their mortgage than the home is worth, according to a recent Harris Poll. Nearly 30 percent of homeowners say they are having either great difficulty (11 percent) or some difficulty (18 percent) paying off their mortgage. Approximately two-thirds of all adults (65 percent) say they are concerned that their incomes will not be enough to cover all their costs and expenses this year, and nearly 70 percent of homeowners have a mortgage that they need to pay off, the study finds.
Home Mortgage Delinquencies Climb
home mortgage delinquencies
Lender Processing Services reported that the national mortgage delinquency rate grew to 9.2% in May, up 2.3% from a month earlier and 7.9% from a year earlier. Home mortgages becoming 30-days delinquent lead the overall uptick, according to the report, while new real estate owned (REO) assets slipped from recent all-time highs. More than 7.3m mortgages in some stage of delinquency or REO. Read more
Home Mortgage Rates Near 40 Year Lows
home mortgage rates
Freddie Mac’s latest weekly report on the cost of financing a home purchase showed 30-year fixed-rate mortgages dropping from 4.69 percent to 4.58 percent, a new record in a data series that goes back almost 40 years.
Fifteen-year mortgage rates have been setting records for more than a month now, last week dropping from 4.13 percent to 4.04 percent.