Mortgage News

Study Sees FHA Taking More Risk
By Nick Timiraos
The Wall Street Journal
March 5, 2010

The federal government's mortgage-insurance agency is understating how much risk it has taken on, says a group of economists from the New York Federal Reserve and New York University, increasing the likelihood the agency may need taxpayer funds.

The economists warn that the Federal Housing Administration—which has jumped to fill the void left by the collapse of the private mortgage market—is overlooking factors that signal higher losses, according to a working paper released Thursday.

Banks shuttered in Fla., Ill., Md., Utah
By Ieva M. Augstums and Marcy Goron
Associated Press
March 6, 2010

Regulators on Friday shuttered banks in Florida, Illinois, Maryland and Utah, boosting to 26 the number of bank failures in the U.S. so far this year following the 140 brought down in 2009 by mounting loan defaults and the recession.

Mortgage Rates Fall With Home Demand
By Joan E. Solsmman
The Wall Street Journal
March 05, 2010

Mortgage rates generally declined this week, with the average rate on 30-year fixed-rate mortgages retreating below 5%, according to Freddie Mac's weekly survey of mortgage rates.

Demand for new and used homes strengthened last year, but has dropped in recent months because of cold weather and continuing joblessness. New-home sales unexpectedly hit a record low in January, the Commerce Department said last week, while existing-home sales slumped.

Treasury yields were generally flat in the past week; mortgage rates tend to follow the yields.

Banks Begin to Withdraw From Their Branch Boom
By Robin Sidel
The Wall Street Journal
March 3, 2010

Say goodbye to the decadelong building boom that made it seem like there was a bank branch on every corner.

The total number of retail branches in the U.S. is on pace to decline this year for the first time since at least 2002, according to SNL Financial, a Charlottesville, Va., research firm that tracks branch data filed with banking regulators.

Borrowers Miss Out on Billions in Savings
By Nick Timiraos
The Wall Street Journal
March 2, 2010

The Federal Reserve has pushed mortgage rates to near half-century lows, but millions of U.S. homeowners haven't benefited from that because they can't—or won't—refinance.

Falling home prices have left many owners with little or no equity, making it harder to qualify for refinancing. Moreover, stricter lending standards and higher fees by banks and mortgage giants Fannie Mae and Freddie Mac and declining incomes have made it tougher and less attractive for borrowers to seek new loans.

Commercial Mortgages Ailing in February
By Prabha Natarajan
The Wall Street Journal
February 23, 2010

The performance of loans bundled in commercial mortgage-backed securities deteriorated sharply in February, raising fears that the coming wave of distressed loans may be much higher than expected.

As of the end of last week, 30-day delinquencies surged to 6.93% from 6.4% in January, according to Barclays Capital. That is well above the normal level of less than 1%, and a key indicator of future delinquencies suggest that they may rise even further soon.

Proposal Calls for Fannie, Freddie to Be U.S.-Owned Nonprofits
By Nick Timiraos
The Wall Street Journal
February 23, 2010

An influential real-estate trade group is calling for the government to convert Fannie Mae and Freddie Mac into federally owned nonprofit corporations that would largely leave the mortgage-finance giants intact.

Mortgage Rates Rise; 30-Year Crests 5%
By Joan E. Solsman
The Wall Street Journal
February 26, 2010

Home-mortgage rates mostly rose this week, with the average rate on 30-year fixed-rate mortgages jumping back above 5%, according to Freddie Mac's weekly survey.

Freddie's chief economist, Frank Nothaft, said rates for 30-year fixed mortgages followed long-term bond yields higher as data about the housing market's recovery remained choppy. Mortgage rates tend to follow the yields.

Less Red Ink at Freddie in '09
By Nick Timiraos and Michael R. Crittenden
The Wall Street Journal
February 25, 2010

Freddie Mac posted a smaller loss last year than in 2008 and said for the third consecutive quarter that it won't need to ask the government for additional bailout funds. But the company says conditions could worsen as foreclosures pick up later this year.

The mortgage company posted a net loss of $6.5 billion in the fourth quarter of 2009 and $21.6 billion for the full year, excluding dividends paid to the government. While those losses remain daunting, they are an improvement from 2008, when the company posted a loss of $23.9 billion in the year ago fourth quarter and $50.1 billion for all of 2008.

Take Three: Will Congress Extend the Home Buyer Tax Credit?
By Nick Timiraos
The Wall Street Journal
February 22, 2010

It’s that time of year again: time for lobbyists to convince Congress to extend the home buyer tax credit.

The National Association of Realtors and other industry groups are beginning to make the rounds on Capitol Hill to press their case, which goes something like this: We know you’ve extended the tax credit two times already, but the housing market is still fragile, the tax credit is working, and don’t forget– you’re up for re-election soon. In other words, do you really want to own the next leg down in home prices?