This is pretty interesting because this is the other direction than what the experts thought Operation Twist would have on the market. John Murphy pointed this out earlier on his post, then tonight I saw the St Louis Fed had updated their 30year mortgage average rates.
There are 2 things I find really interesting here but can’t explain.
1) the spread gets larger between the mortgage rates and the 10 year treasury the lower the treasury goes.
2) the 10 year treasury is going up, when most thought it would go down as a result of Operation Twist.
Note: the 30 year mortgage is updated as of 10/13/2011. The 10 year treasury is updated as of 10/11/2011 at 2.18%
Just curious what Edina Realty Mortgage rates are today… Looks like they are heading up.
Image via CrunchBase
WOW! This puts things into perspective a bit. We all complain about the banks on their underwriting and that they are “not lending” now. I knew they were pummeled with new regulations but had no idea to what extent.
The nation’s 11th largest mortgage servicer and 13th largest mortgage originator is getting out of the business due to excessive regulations according to HousingWire. If a company can walk away from a$115.9billion servicing business it has to be bad…
MetLife Bank, a division of insurer MetLife Inc. (MET: 31.75 0.00%), is selling the bank’s mortgage business, citing uncertainty in the marketplace and a regulatory environment that requires excessive resources.
…In 2010, MetLife Home Loans ranked as the 11th largest mortgage servicer in the U.S., with its servicing business valued at $115.9 billion in the fourth quarter. The company also ranked 13th on the list of mortgage originators, holding 1.4% of the market and originating roughly $22 billion in mortgages last year.
Read Full Article
This not the direction we should be heading in to improve the housing market. Having more banks lending would be helpful, not banks walking away from the business…
Bill allows tax-free use of retirement funds for mortgage payments.
This is interesting, a bill that would allow a homeowner to tap into their retirement funds without the normal 10% penalty to cover their mortgage payments. Interesting how it is only for Fannie Mae and Freddie Mac mortgages…
We will have to see if this bill becomes law.
Image by Rev Dan Catt via Flickr
Still watching the 10 Year Treasury to see if there is any indication that rates might come down. Today the Dow soared 272 points to close over 11,000. This is great news by itself…
The 10 Year Treasury rose 5.31% closing at 1.9040. Keep in mind, even though it increased – it is still extremely low.
The 10 Year Treasury is heading in the wrong direction to bring mortgage rates even lower, but as you can see the 10 year Treasury moves a lot more than the mortgage rates do. The 10 Year treasury may yet drop and bring the mortgage rates down. Time will tell. As of today, the 10 year treasury is going up and the mortgage rates have not changed: (oh bummer, we appear to be stuck at record low interest rates.)
Wow, OMG, WTF, how many other 3 letter words could describe this?
I was reading this article from HousingWire and the numbers are staggering. If these numbers prove to be accurate I will be eating my words that “I think we have weeded a lot of our shadow inventory by Short Sales“. 10 Million – that is only 200,000 more mortgage defaults per State! (and I hardly think North and South Dakota will have that many mortgage defaults, that’s more than half their population! Sorry Dakotan’s – couldn’t resist!) Good thing we have managed to sell off that excess 10,000 in inventory over the last 3.5years, looks like we have another 60.5 years in inventory to sell off!
Thought I would pass this along. I am a little skeptical of these figures because these are figures being used to “get Congress to act” and quite often that kind of stuff involves Hockey Stick charts and such. I do know there is a big number in shadow inventory. I have been reading numbers more in line with 1.5million to 2million in Shadow Inventory and no one seems to really pin-point a number just taking estimates based on late payments. But 10 million, that is a BIG number!
Any opinions on this? Do you believe these numbers are for real? 1 in 5 outstanding home loans? That tells me that the unemployment and under-employment are far bigger problems than we are being told…
Roughly 10.4 million mortgages, or one in five outstanding home loans in the U.S., will likely default if Congress refuses to implement new policy changes to prevent and sell more foreclosures, according to analyst Laurie Goodman fromAmherst Securities Group….
…”Many analysts looking at the housing problem mistakenly assume it is limited to loans that are currently non-performing (or 60-plus days past due). Such borrowers have a high probability of eventually losing their homes. However, the problem also includes loans with a compromised pay history; these are re-defaulting at a rapid rate,” Goodman told a Senate subcommittee Tuesday.
Read Full Article
Image via Wikipedia
It is news like this that makes it near impossible to predict the market correction. Depending on what happens here, it could either mean the mortgage business gets cleaned up or that it will shut all mortgage lending down – thus sending us into further housing slump… Or it could just be a blip on the radar and not have any real impact.
We just spent Billions on bailing these banks now, now our Government is suing them? Will we then need to bail these banks out after the lawsuit?? I don’t get it…
We are in uncharted waters here and I am not sure how this will play out… I’ve got a gut feeling this is not going to help anyone out. If we are not careful through this mess, we are heading in the direction where the only way you can get a mortgage is if the Government grants you one. (technically you give the mortgage lien on the property and receive the money or the note…)
The Federal Housing Finance Agency is ready to file suit against the nation’s largest banks, accusing the financial institutions of misrepresenting the quality of mortgage backed-securities sold in the run-up to the 2008 financial meltdown, The New York Times reported Thursday.
According to the article, the FHFA lawsuits will target Bank of America (BAC: 7.33 -7.33%), JPMorgan Chase (JPM: 34.92 -3.80%), Goldman Sachs (GS: 106.69 -4.88%) andDeutsche Bank (DB: 37.00 -4.15%) among other large MBS players.
Read Full Article from HousingWire
The FHFA alleges these institutions, their executives and some lead underwriters violated federal securities laws, violated common law, failed to conduct proper due diligence and provided allegedly false information when selling these products.
What the FHFA seeks in recovery will not equal what the GSEs paid for the MBS sold. However, in each suit, the FHFA disclosed how much Fannie and Freddie bought from each particular bank and subsidiary in the case of BofA.
- JPMorgan Chase: $33 billion
- RBS: $30.4 billion
- Countrywide: $26.6 billion
- Merrill Lynch: $24.8 billion
- Deutsche Bank: $14.2 billion
- Credit Suisse: $14.1 billion
- Goldman: $11.1 billion
- Morgan Stanley: $10.5 billion
- HSBC: $6.2 billion
- Bank of America: $6 billion
- BarCap: $4.9 billion
- Citi: $3.5 billion
- Nomura: $2 billion
- Société Générale: $1.3 billion
- First Horizon: $883 million
If this doesn’t make a statement about the regulations these banks are under, I don’t know what does…
From the Wall Street Journal:
Main Street Bank lends most of its money to small businesses and is earning decent profits. But the Kingwood, Texas, bank is about to get out of the banking business.
In an extreme example of the frustration felt by many bankers as regulators toughen their oversight of the nation’s financial institutions, Main Street’s chairman, Thomas Depping, is expected to announce Wednesday that the 27-year-old bank will surrender its banking charter and sell its four branches to a nearby bank.
Mr. Depping plans to set up a new lender that will operate beyond the reach of banking regulators—and the deposit-insurance safety net. Backed by the private investment firm of Microsoft Corp. co-founder Paul Allen, the company won’t be able to call itself a bank, but it will be able to do business the way Mr. Depping wants.
“The regulatory environment makes it very difficult to do what we do,” says Mr. Depping, who last summer saw his bank hit with an enforcement order from the Federal Deposit Insurance Corp. READ MORE…