Once more there was little movement in the mortgage markets during the week ended May 10, especially for fixed rate mortgages (FRM).

The 30-year FRM averaged 6.15 percent with 0.5 point compared to 6.16 percent and 0.5 point the previous week while the 15-year FRM was unchanged at 5.87 percent and 0.5 points. 

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs averaged 5.89 percent, an increase of two basis points. Fees and points were unchanged at 0.6.

One-year Treasury indexed ARM’s averaged 5.48 percent with 0.7 points. During the week ended May 13 the average was 5.42 percent with 0.7 point.

“Low employment growth in April - the slowest pace since November 2004 - and downward revisions to both February and March job growth tempered market concerns of future increases in the rate of inflation,” said Frank Nothaft, Freddie Mac vice president and chief economist. “As a result, mortgage rates were little changed this week.” Read more

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Sales in southern California neighborhoods that offer affordable housing and cater to first-time buyers are in freefall because of tougher mortgage loan standards, which is shrinking the pool of buyers.

Meanwhile, sales of houses in neighborhoods where prices are higher than $600,000 continue to be relatively brisk, according to an analysis of sales data by DataQuick Information Systems.
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Bank of America on Tuesday will begin offering nationally a no-fee mortgage, which will eliminate most of the charges that add a few thousand dollars to every closing.

Bank of America, which is the nation’s second largest lender by assets, has been offering this mortgage in Washington state since September. In February, it expanded the program to eight additional states. Tomorrow, it will begin advertising the “No Fee Mortgage Plus” nationally.

The loan also eliminates private mortgage insurance and the bank is guaranteeing its customers the best deal on interest rates and an on-time closing. Borrowers must put down at least 5 percent. The loans aren’t available to sub-prime customers. Read more

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The U.S. House Financial Services Committee on Thursday passed legislation allowing the Federal Housing Administration to offer borrowers a safer alternative to risky mortgage products and to help many home owners facing foreclosure.

The NATIONAL ASSOCIATION OF REALTORS®, a strong advocate of FHA modernization legislation, says the bill will bring about more stability to local real estate markets and economies.

“FHA can once again be a leader in providing safe loan products and preventing foreclosures by authorizing lenders to assist borrowers who are in default,” says NAR President Pat V. Combs. “This ability will make a substantial difference for many families that may otherwise face foreclosure.”

The legislation — titled the Expanding American Homeownership Act of 2007 — would increase loan limits, eliminate the statutory 3 percent minimum cash down payment, and give FHA flexibility to provide risk-based pricing. The bill will next go before the full House of Representatives for a vote. Read more

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To use the word “drift” in conjunction with the mortgage market the past week would be suggesting too much energy in mortgage rates and in the market.

According to Freddie Mac’s Primary Mortgage Market Survey for last week, fixed rate mortgages (FRM) inched down a maximum of two basis points and ARMs a maximum of four.

To be specific, the 30-year FRM averaged 6.16 percent with 0.5 point compared to 6.17 with 0.5 point the previous week while the 15-year FRM had an average contract interest rate of 5.87 percent, down two basis points from last week’s average of 5.89 percent. Fees and points both weeks averaged 0.5. Read more

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Soothing news about inflation was reflected by declining mortgage interest rates last week, although Freddie Mac and the Mortgage Bankers Association were in substantial disagreement about the scale of the changes.

According to Freddie Mac’s Primary Mortgage Market Survey, the 30-year fixed-rate mortgage (FRM) averaged 6.17 last week with an average 0.5 point. During the week ended April 12 the 30-year averaged 6.22 percent with 0.4 point.

The 15-year FRM declined one basis point to 5.89 percent while fees and points increased from 0.4 to 0.5.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) slipped very slightly from 5.93 percent with 0.5 point to 5.92 percent with 0.6 point. The one-year Treasury-indexed ARM averaged 5.45 percent with 0.7 point compared to 5.47 percent with 0.5 point the previous week. Read

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With rates moving down slightly and spring in the air, the mortgage business improved last week compared with the previous week and with the same time a year ago.

According to the Mortgage Bankers Association Weekly Applications Survey, mortgage loan volume rose 3.6 percent to 653.3 on a seasonally adjusted basis. It was up 18.2 percent compared with the previous year.
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The number of mortgage borrowers with down payments of less than the standard 20 percent who opted for private mortgage insurance rose to 118,214 in February, up from 108,980 in January and 104,146 year over year.

During the housing boom, many borrowers sidestepped mortgage insurance by combining a first loan with a “piggyback” home-equity loan or line of credit that served as the down payment. But rising interest rates have made these variable-rate second mortgages less attractive to borrowers, and some are choosing to pay mortgage insurance simply to avoid having to sign two sets of loan documents. Read more

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The chief executives of both Freddie Mac and Fannie Mae as well as the Chairman of the Federal Deposit Insurance Corporation and the Federal Housing Commissioner and Assistant Secretary of the Department of Housing and Urban Development testified last week in a hearing before the U.S. House Committee on Financial Services about solutions to the current subprime mortgage turmoil.

Each of the four had some interesting things to say about what their organizations/agencies are doing or could be doing to resolve the situation and we will, in a couple of installments, cover them all.

Fannie Mae’s Daniel H. Mudd, in a statement prepared for delivery said that his corporation sounded the alarm about the impending subprime crisis in early 2005 as they recognized the dangers of “layered-risk” lending and decided that the products that offered borrowers a mix of teaser rates, interest-only, negative amortization, and payment option and low-doc requirements coupled with adjustable rate loans were for more sophisticated buyers. The corporation decided then that it made no sense for borrowers to take on risks that they might not be aware of; to set them up for failure. Read more

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Mortgage insurers are having a great year, thanks to borrowers who want to avoid piggyback mortgages with a variable rate, according to David H. Katkov, president and chief operating officer of PMI Mortgage Insurance Co.
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