Mortgage applications rise 2.8% after weeks of low interest rates Refinance share continues to grow hitting 56%

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Mortgage applications increased 2.8% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending August 22, 2014.  

The Market Composite Index, a measure of mortgage loan application volume, increased 2.8% on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index increased 2% compared with the previous week. 

 “Buyers made a late summer push, in this season that never reached its full potential. More homeowners also refinance last week, taking advantage of these historically low rates that won’t be around forever,” said Quicken Loans vice president Bill Banfield. “Nearly a million more homeowners can still benefit of the HARP program, but their opportunity will be fleeting when rates start rising.”

The Refinance Index increased 3% from the previous week.  The seasonally adjusted Purchase Index increased 3% from one week earlier. The unadjusted Purchase Index increased 1% compared with the previous week and was 11%  lower than the same week one year ago.

The refinance share of mortgage activity increased to 56% of total applications, the highest level since March 2014, from 55% the previous week.  The adjustable-rate mortgage share of activity remained unchanged at 8.0% of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.28% from 4.29%, with points decreasing to 0.25 from 0.26 (including the origination fee) for 80%  loan-to-value ratio loans.  The effective rate remained unchanged from last week. 

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.22% from 4.18%, with points increasing to 0.28 from 0.23 (including the origination fee) for 80%  LTV loans.  The effective rate increased from last week. 

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.98%, the lowest since June 2013, from 3.99%, with points increasing to 0.13 from 0.03 (including the origination fee) for 80% LTV loans.  The effective rate increased from last week. 

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.47% from 3.44%, with points increasing to 0.34 from 0.30 (including the origination fee) for 80% LTV loans.  The effective rate increased from last week.

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Mortgage applications continue fall with 2.2% drop – Refinancings drop 4% with purchases up 0.2%

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by Trey Garrison

Continuing the long-term trend this year, mortgage applications decreased 2.2% from one week earlier, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending July 25, 2014.  

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.2% on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index decreased 2% compared with the previous week. 

“Despite mortgage backed security issuance being up 38 percent from the first quarter average, the MBA index continues to show declines.  This suggests that there are fundamental shifts occurring in the market where big players (reporting to the MBA) may be giving up market share or perhaps not holding as many loans in portfolio, thereby pushing up the bond issuance,” said Quicken Loans Vice President Bill Banfield. “In either case, the current level of activity for purchases and refinances has been directional stronger in recent months based on actual security issuance.  With home prices stabilizing from a rapid level of appreciation and interest rates either falling or holding steady recently, I expect to see continued improvements in the purchase arena.”

The Refinance Index decreased 4% from the previous week.  The seasonally adjusted Purchase Index increased 0.2% from one week earlier. 

The unadjusted Purchase Index increased 1% compared with the previous week and was 12% lower than the same week one year ago.

The refinance share of mortgage activity decreased to 53% of total applications from 54% the previous week.  The adjustable-rate mortgage share of activity remained unchanged at 8% of total applications.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) remained unchanged at 4.33%, with points increasing to 0.24 from 0.23 (including the origination fee) for 80% loan-to-value ratio (LTV) loans.  The effective rate increased from last week. 

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to 4.22% from 4.21%, with points increasing to 0.23 from 0.20 (including the origination fee) for 80% LTV loans.  The effective rate increased from last week. 

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained unchanged at 4.03%, with points decreasing to 0.00 from 0.15 (including the origination fee) for 80% LTV loans.  The effective rate decreased from last week. 

The average contract interest rate for 15-year fixed-rate mortgages remained unchanged at 3.47%, with points decreasing to 0.25 from 0.28 (including the origination fee) for 80% LTV loans.  The effective rate remained unchanged from last week.

The average contract interest rate for 5/1 ARMs increased to 3.31% from 3.21%, with points increasing to 0.40 from 0.32 (including the origination fee) for 80% LTV loans.  The effective rate increased from last week. 

Banks Complete Consumer Relief Obligations

Author: Colin Robins March 18, 2014 0
 
Banks Complete Consumer Relief Obligations

Joseph A. Smith, Jr., monitor of the National Mortgage Settlement, filed final crediting reports with the U.S. District Court for the District of Columbia on Bank of America, Chase, Citibank, and Wells Fargo.

The reports confirmed that the banks have satisfied their consumer relief and refinancing obligations under the settlement, nearly a full year ahead of schedule.

In a press release, Smith commented, “My reports mark the end of the consumer relief portion of the Settlement. Because of the way this landmark agreement was designed, an unprecedented amount of relief has been provided to consumers quickly and efficiently.”

He continued, “Furthermore, I believe the rigorous testing process should justify public confidence that the banks have fulfilled their relief commitments and that the Settlement has played a part in helping keep struggling borrowers in their homes.”

Remunerations were called for after the banks engaged in widespread signing of foreclosure-related documents outside the presence of a notary public, and without confirmation whether the facts they contained were correct—both illegal actions.

The practice earned the futuristic-sounding sobriquet “robo-signing,” and necessitated 49 state attorneys general and the federal government to correct actions against wronged homeowners, eventually settling with the banks for an initial estimated figure of $25 billion.

Oklahoma was the lone holdout.

Smith noted that among the banks, 37 percent of total credit relief was in the form of first lien principal forgiveness, while second lien principal forgiveness made up 15 percent. Refinancing made up 17 percent of total credited relief, and other relief (including short sales and deeds in lieu of foreclosure) accounted for 31 percent of relief.

Shaun Donovan, secretary of Housing and Urban Development (HUD), commented on a conference call with the media on Tuesday that over 600,000 consumers received on average more than $79,000 in relief.

7 out of every 10 dollars of credit for consumer relief, such as refinancings and principal reductions, came in a form that kept borrowers in their homes, Donovan said on the call.

Donovan added, “This settlement delivered on what we promised.”

The tone of the call between Donovan and Iowa attorney general Tom Miller was mostly laudatory towards the banks, praising them for quick action as well as payments that exceeded initial estimates.

Miller noted that $20 billion in credits and over $50 billion in total homeowner benefits were “well in excess of what we predicted or expected.”

$5.1 billion dollars was required for first lien principal reductions in the initial settlement, but the final figure from bank’s totaled almost $7.6 billion—nearly 50 percent more than what was required.

Miller fired back at detractors of the settlement who cautioned that principal reductions would create a “moral hazard,” encouraging borrowers to default on their loans to avoid payment.

“Many people in the industry … were saying that if there was any principal reduction there would be all this moral hazard, other people would stop paying—that the whole market would be seriously harmed. Well, we’ve had substantial principal reduction, 7.6 billion dollars’ worth, and none of this has happened. None of the problems, none of the concerns, none of the catastrophes that were predicted happened, as we predicted,” Miller said.

He noted that principal reductions were “a tool in the toolkit for dealing with homeowners in default.”

Miller continued, “We knew that there was no single solution, no magic bullet, to turn around the housing market. We knew there had to be pieces, and we thought that this would be one of the pieces, and clearly it has been. This is one of the reason’s the housing market now has turned in the right direction.”

Chase offers no doc refis, principal reduction

By Jon Prior

• August 6, 2012 • 4:45pm

JPMorgan Chase ($37.01 0%) went from fast-tracking foreclosures to rubber stamping and pre-approving some borrowers for refinances and even principal reduction.

The five largest mortgage servicers signed a $25 billion deal with federal prosecutors and 49 state attorneys general in March to settle foreclosure abuses and documentation problems in the past. Chase agreed to provide roughly $4.2 billion in relief to homeowners under the agreement, including principal write-downs, modifications and refinances for underwater borrowers.

Servicers receive more credit for granting the relief within one year, according to the terms of the settlement.

But since the foreclosure crisis first struck five years ago, borrowers have grown weary of the documentation black holes at the major banks. Many have spent hours in front of FAX machines, only to be asked for resubmissions or another piece of paperwork.

To provide relief more quickly under the settlement, Chase executives are addressing the borrower fatigue with a letter sent to borrowers notifying them that their loan was refinanced into a new mortgage with a lower interest rate. No documentation was needed. Chase owned the loan.

Borrowers receiving these letters saved an average of $300 per month on their payments, according to a statement from the bank sent to HousingWire.

Chase is sending different letters to other underwater borrowers. All that is required in order for a principal reduction on their loan is a signature sent back with the included self-addressed stamped envelope the bank provides.

Roughly half of the borrowers targeted by most major servicers for principal write-down consideration agree to the deal. But nearly all of the borrowers who received a letter from Chase, sent it back with a signature, according to the bank.

“Chase is taking a proactive approach to helping homeowners. We are automatically reducing interest rates for eligible customers who are current on their mortgage payment, saving them hundreds of dollars each month,” a Chase spokeswoman said. “For many individuals and families who are struggling with their mortgage, we are lowering their payments by sending them pre-qualified modification offers, which may include principal forgiveness.”

A spokeswoman for Joseph Smith, the monitor of the servicing settlement, declined to comment on the Chase letters.

Marietta Rodriguez, national director of homeownership and lending at NeighborWorks America, a nonprofit housing counseling group, said it’s understandable how fatigued borrowers have become.

“There is a lot of information on a lot of programs being messaged to borrowers right now. It takes a very sophisticated borrower to sort through all the news and solicitations to determine what they’re being offered and what is an appropriate next step,” Rodriguez said.

More servicers are using principal reduction for borrowers who owe more on their mortgage than their house is worth. Roughly 47% of all modifications provided in 2012 included a cut to principal, said Chase securities analysts in a report issued last week.

Executives at Ocwen Financial Corp. ($23.15 0.325%), the largest subprime lender in the country, said in a conference call with investors last week that two-thirds of its modifications now include a write-down.

Chase analysts said the average amount of principal forgiven on mortgages securitized into private-label bonds was $90,000 so far in 2012, up from $66,000 last year.

Not everyone is convinced on the method. The Federal Housing Finance Agency last week refused to allow such write-downs onFannie Mae and Freddie Mac loans.

Roy Oppenheim, a foreclosure defense attorney operating in Florida, said in an interview that the Chase letters do not surprise him. The foreclosure process in Florida is so costly, backlogged and uncertain that many banks are looking for “a less tortuous method.”

This includes even reducing principal and refinancing a risky underwater borrower when they can.

“There are even bigger problems that lie ahead if they go with the foreclosure,” Oppenheim said.

jprior@housingwire.com

@JonAPrior

FHFA: Q1 2012 HARP Refinances Double from Q4 2011

The number of loans refinanced through HARP in the first quarter of 2012 was nearly double the number of refinances in the fourth quarter of 2011, according to the Federal Housing Finance Agency’s (FHFA) March 2012 Refinance Report released Friday.

The report showed that 180,185 loans were refinanced throughHARP during the year’s first quarter, nearly twice the 93,190 refinances in the previous quarter. The month of March alone saw 79,470 loans refinanced with HARP, and nearly one in seven loan refinances in the quarter were done through program.

The FHFA attributed most of this increase to the launch ofHARP 2.0, an enhanced version of the program that eliminated loan-to-value (LTV) ceilings for borrowers who refinance into fixed-rate loans and lowered or eliminated fees for certain borrowers.

Before the program was changed, fixed-rate mortgages had aLTV ceiling of 125 percent. More than 4,400 underwater loans with LTVs greater than 125 percent were refinanced in the first quarter of 2012.

Other factors contributed to the increase in HARP refinances. Numbers shot up in the first few months of the year with news that mortgage rates were falling to historically low levels. February marked a new low record for mortgage rates and was the start of a sharp spike in refinance activity. As the year’s second quarter goes on, mortgage rates continue to fall.

More than 1.2 million loans have been refinanced throughHARP since the program began in 2009. Only loans that are guaranteed by Fannie Mae or Freddie Mac are eligible to participate in HARP. The full refinance report can be found at this link.

FHA to Reduce Premiums for Certain Loans

Through a streamline refinance program, borrowers with FHA-endorsed loans may find it easier to lock in lower interest rates while paying less in fees.

Beginning June 11, 2012, FHA will lower upfront mortgage insurance premiums to .01 percent and reduce annual premiums to .55 percent for certain FHA borrowers, Carol Galante, acting FHA commissioner, announced today.

To be eligible, borrowers must to be current on their FHA-insured loans, which need to have been endorsed on or before May 31, 2009.

“This is one way that FHA can make a real difference to help homeowners who are doing the right thing, paying their bills on time and want to take advantage of today’s low interest rates,” said Galante. “By significantly reducing costs for these borrowers, we can make certain they cut their monthly mortgage burden which will benefit the housing market and the broader economy in the process.”

Currently, 3.4 million mortgages endorsed on or before May 31, 2009 pay more than a five percent in interest. The average FHA-insured borrower is estimated to save approximately $3,000 a year or $250 per month.

The streamlined process may also allow many borrowers to refinance without requiring additional underwriting. FHA-insured homeowners should contact their existing lender to determine eligibility.

Late last month, the FHA also announced plans to increase upfront and annual premiums on most other loans insured by FHA beginning in April to raise capital. Upfront premiums will increase to 1.75 percent from 1 percent, and annual premiums will increase 10 basis points and 35 basis points on mortgages higher than $625,500.

FHA estimates that the increase to the upfront premium will cost new borrowers an average of approximately $5 more per month.

California may not participate in Ag Settlement making refinancing in California a continued difficulty.

While the attorneys general working toward a settlement with the nation’s largest servicers may be able to strike a settlement without California, it may cost them.

A deal that seemed likely imminent as of the end of October would have required $25 billion from the banks – $5 billion in cash penalties and $20 billion in refinancings and modifications, including principal reductions.

The $25 billion settlement could be reduced to $18.5 billion, according to unnamed sources referenced in a Wall Street Journal article.

Many thought a settlement without California would be impossible. In fact, the LA Times stated earlier this week, “Without California’s participation, of course, the banks would never assent to a deal.”

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