If the latest Mortgage Bankers Association application survey results are any indicator, the refinance business has not started to dissipate, and one observer believes it will stay strong for some time to come. For the second consecutive week, refis are driving the increase in application volume, this time up 4.8% on a seasonally adjusted basis for the week ended April 12.
However, purchase applications also had a strong week as well.
The unadjusted Refinance Index increased 5% and is at its highest level since mid-January. The seasonally adjusted Purchase Index increased 4% from one week earlier and it is at its highest level since May 2010. The MBA noted that conventional application volume increased 3% to its highest level since October 2009. On an unadjusted basis, purchase applications are up 20% when compared with the same week in 2012.
Quicken Loans chief economist Bob Walters commented, “Projections of declining refinance activity seem to be premature as rates dipped amid the Bank of Japan moving into quantitative easing, causing a rally in the bond market. Look for refinance volume to stay strong driven by historically low rates and aided by the millions of HARP-eligible underwater homeowners who still could benefit from refinancing.”
Don’t expect rates to rise anytime soon. Zillow said on Tuesday afternoon that on a real-time basis it found the average 30-year fixed rate being offered through Zillow Mortgage Marketplace fell one basis point from last week to 3.34%.
The 30-year FRM hovered between 3.41% and 3.32% for the majority of the week.
"Rates fell slightly this past week after lower-than-expected retail sales numbers raised concerns about softening consumer confidence," said Erin Lantz, director of Zillow Mortgage Marketplace. "We expect mortgage rates will remain depressed this week due to apprehension related to the Boston Marathon bombing and threats from North Korea."
The MBA said the share of refi applications remained at 75%.
The average contract rate for the 30-year conforming FRM (MBA defines this as a loan with a balance of $417,500 or under) for the survey period decreased one basis point to 3.67%. Federal Housing Administration-insured loans had an average contract rate for the week of 3.37%, a drop of six basis points from the previous week.
Jumbo 30-year FRMs saw its average contract rate decrease two basis points to 3.77%. The MBA said the rate for the 15-year FRM fell by one basis point to 2.91%.
The share of adjustable-rate mortgages remains at 5% of the week’s loan applications; the average contract rate for the 5/1 ARM decreased by one basis point to 2.57%.
Apr 18, 2013
Mar 24, 2013
Mar 22, 2013
Data show that 10.4 million, or 21.5% of all residential properties with a mortgage were still in negative equity at the end of the fourth quarter of 2012, down from 10.6 million (22%) in the third quarter.
Feb 19, 2013
As per USA Today ,A sharply divided Congress isn't likely to jump at President Barack
Obama's challenge for quick passage of a mortgage refinancing bill that
supporters say could help millions of homeowners save big each year and
boost the economy.
Obama praised the legislation in his State of the Union speech last week, saying the proposal would help more homeowners with mortgages backed by Fannie Mae and Freddie Mac take advantage of low interest rates and refinance their loans.
"That's holding our entire economy back, and we need to fix it," the president said. "Right now, there's a bill in this Congress that would give every responsible homeowner in America the chance to save $3,000 a year by refinancing at today's rates. Democrats and Republicans have supported it before."
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The economy's slow recovery from the recession gives the idea urgency, Obama said. "Send me that bill," he told members of Congress listening to his speech in the House chamber.
The proposal is part of a push by Democrats and the White House to help homeowners take advantage of low interest rates as a way to help the housing market recover and to give the economy a shot in the arm.
While the bill could gain traction in the Democratic-controlled Senate, it faces a rough road in the GOP-run House, where many Republicans favor scaling back the government's role in the housing market as a way of aiding the economy. Similar versions of the measure died in the House and Senate's lame duck sessions last year.
"At the moment, it's an uphill battle," said Rep. Peter Welch, D-Vt., who plans to file the House version of the bill.
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Welch said he will reach out to Republicans this year in hopes of building more support, but the bill's association with the government-controlled Fannie Mae and Freddie Mac, the federal housing agencies partly blamed for the collapse of the housing market, hurts its support base among GOP lawmakers.
"The American taxpayers have already sunk $190 billion dollars into the operations of Fannie and Freddie," said Rep. Randy Neugebauer, R-Tex., a member of the House Financial Services Committee. "It's time that we wind their operations down instead of using them as a piggy bank for failed programs that further delay the housing recovery.
"In the Senate, Democrats Bob Menendez of New Jersey and Barbara Boxer of California have legislation to aid borrowers who are current on their loans backed by Fannie Mae and Freddie Mac, but who are not able to refinance because their home values have declined too much.
Nearly 12 million homeowners have Fannie Mae and Freddie Mac loans and stand to benefit refinancing, the two senators said. Many can't refinance at a lower rate because of red tape and high fees. The red tape has reduced competition among banks, so borrowers pay higher interest rates than they would if they were able to shop around more, according to the senators.
The bill also would reduce up-front fees that borrowers pay on refinances and eliminate appraisal costs for all borrowers. The measure seeks to expand the Obama administration's Home Affordable Refinancing Program, which saves an average homeowner about $2,500 per year, they said.
"Homeowners will have more money in their pockets, Fannie and Freddie will see fewer foreclosures, and the housing market and economy will continue building momentum," Boxer said.
Among the bill's supporters are the Mortgage Bankers Association, the National Association of Realtors and the National Association of Home Builders.
"It is another tool that can be out there to help stabilize the housing market and kick start the economy if consumers can, in fact, put another $100 bucks in their pockets every month," said John Hudson, government affairs chairman of the Association of Mortgage Professionals.
Similar proposals by Boxer and Menendez last year got bogged down in the Senate Banking, Housing and Urban Affairs Committee. Republican attempts to add amendments on other housing issues beyond refinancing led to a stalemate.
Twenty Senate Democrats are co-sponsors of this year's bill, but no Republicans have signed on."I support finding ways to smartly streamline the refinance process, but I'm not sure that eliminating all documentation requirements makes sense," said GOP Sen. Bob Corker of Tennessee, a committee member. "I also think we need to quickly move beyond short-term stimulus and start focusing on the structural issues in our housing finance system."Sen. Mike Crapo, the committee's top Republican, declined through a spokeswoman to comment on the bill.Welch's House bill also died during the last Congress. Welch accused Republicans of not wanting to give Obama an election-year boost by passing the mortgage refinance measure.
"Last year was even tougher because it was an election year," said Welch. "The Republican leadership wanted Obama to fail."