Lower Rates Have Slight Impact on New Loan Stats

Posted To: MND NewsWire

Continuing declines in interest rates had some impact along the margins of loan originations in March. Ellie Mae’s Origination Insight Report for March reports that 30-year fixed-rate mortgages originated during the month had an average interest rate of 4.77 percent , down from 4.86 percent in February and 5.01 percent in January. The company reported that the share of originations that were for refinancing ticked up 1 percentage point to 35 percent during the month while the share among FHA loans jumped 3 percentage points to 23 percent. FHA’s share of all originations also rose 1 point to 20 percent. The share of conventional and VA loans remained at 64 percent and 11 percent of the total respectively. Another possible impact of lower rates, the percentage of adjustable rate mortgages (ARMs…(read more)

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Lower Rates Have Slight Impact on New Loan Stats
Lower Rates Have Slight Impact on New Loan Stats

Lenders Manage Tiny Profits in 2018 Despite Rate Hikes, Inventories

Posted To: MND NewsWire

Despite their fourth quarter loss reported last month, independent mortgage banks and bank mortgage subsidiaries still managed, albeit barely, to stay in the black last year. The Mortgage Bankers Association (MBA) said that banks responding to its survey made an average profit of $367 on each loan they originated last year, down from $711 per loan in 2017. They lost an average of $200 per loan in the last quarter of the year, only the third quarterly loss since MBA began collecting the data in 2008. “Despite a healthy economy in 2018, the mortgage market suffered, as rate hikes hurt refinancing volume and low housing inventories priced some potential homebuyers out of the purchase market,” said Marina Walsh, MBA’s Vice President of Industry Analysis. “For mortgage companies, there was the perfect…(read more)

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Lenders Manage Tiny Profits in 2018 Despite Rate Hikes, Inventories
Lenders Manage Tiny Profits in 2018 Despite Rate Hikes, Inventories

New Tax Rules May Have Added to Housing Slowdown

Posted To: MND NewsWire

Two New York Federal Reserve Bank economists are asking whether the tax reform act that went into effect at the beginning of 2018 is playing a role in the decline of home sales. Richard Peach and Casey McQuillan, writing in Liberty Street Economics , say that the broad-based slowing in housing market activity coincided with a roughly 70 basis point rise , from 3.9 percent to 4.6 percent, in the thirty-year fixed-rate mortgage. During the period in which rates were increasing, from the fourth quarter of 2017 to the third quarter of 2018, new home sales declined 7.6 percent and sales of existing homes dropped 4.6 percent. The two point out, however, that those declines in sales were larger than in the two previous periods of significant rate increases. They theorize that provisions in the Tax…(read more)

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New Tax Rules May Have Added to Housing Slowdown
New Tax Rules May Have Added to Housing Slowdown

Purchase Volume Continues Higher Despite Rising Rates

Posted To: MND NewsWire

It would appear that Refis’ time in the sun is listing back towards purchases, as mortgage rates increased for the second straight week and application volume retreated further . The Mortgage Bankers Association’s Market Composite Index, a measure of that volume, decreased 3.5 percent on a seasonally adjusted basis from the week ended April 5. On an unadjusted basis, the Index was down 3 percent. The Refinance Index decreased 8 percent from the previous week and the share of applications that were for refinancing dropped from 44.1 percent down to 41.5 percent. Falling interest rates had driven the refinancing share over 47 percent at the end of March. Meanwhile the volume of purchase applications continues to grow, up 1 percent from the previous week on a seasonally adjusted basis and 2 percent…(read more)

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Purchase Volume Continues Higher Despite Rising Rates
Purchase Volume Continues Higher Despite Rising Rates

Buyer Traffic Improves, Builders Still Leery of New Home Market

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Builder confidence levels as reported by the National Association of Home Builders (NAHB) remained in the low 60s in April, a space it has now occupied for three months. The NAHB/Wells Fargo Housing Market Index (HMI) a measure of confidence in the market for new homes, rose 1 point to 63, continuing to slowly recover from the three year low of 56 it reached in December. “Builders report solid demand for new single-family homes but they are also grappling with affordability concerns stemming from a chronic shortage of construction workers and buildable lots,” said NAHB Chairman Greg Ugalde. “Ongoing job growth, favorable demographics and a low-interest rate environment will help to modestly spark sales growth in the near term,” said NAHB Chief Economist Robert Dietz. “However, supply-side headwinds…(read more)

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Buyer Traffic Improves, Builders Still Leery of New Home Market
Buyer Traffic Improves, Builders Still Leery of New Home Market

Non-Bank Lender CEO on Why Companies Like His Could Cause Next Crisis

Posted To: MND NewsWire

In an opinion piece published by MarketWatch , the president of the nation’s third largest non-bank lender says institutions such as his could find themselves in a tough situation should liquidity dry up. So tough, in fact, it could endanger the entire financial system. Sanjiv Das, CEO of Caliber Home Loans, says rising home prices which have made owning a home less affordable has also made life difficult for mortgage lenders. Originations have fallen, and after lenders reduce costs then “they are faced with the decision of whether to lower margins or credit standards . A “race to the bottom” such as occurred before the housing crisis isn’t the only danger Das sees. Another is liquidity risk, the inability of a firm to meet short-term financial obligations such as a payroll. This risk is particularly…(read more)

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Non-Bank Lender CEO on Why Companies Like His Could Cause Next Crisis
Non-Bank Lender CEO on Why Companies Like His Could Cause Next Crisis

Homeowners Expecting Higher Appraisals than They Get

Posted To: MND NewsWire

Homeowners are and should be proud of their homes, but that often leads them to think it has a higher value than does an appraiser and the difference between the two opinions increased significantly in March. Quicken Loans says the gap in its Home Price Perception Index grew by 25 percent compared to February. Part of the difference might be accounted for by a decline in home prices of 0.20 percent during the month although prices rose 3.37 percent over the previous 12 months. Nationwide, appraised values came in at 0.78 percent of what homeowners expected compared to 0.50 percent in February. Quicken Loans Executive Vice President for Capital Markets Bill Banfield said that there’s more than one reason behind this sudden increase in the gap between estimates and values. “This month’s fluctuation…(read more)

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Homeowners Expecting Higher Appraisals than They Get
Homeowners Expecting Higher Appraisals than They Get

2018 Set Record for Commercial/Multifamily Lending

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Multifamily properties led the list of investments in what was a record year of of commercial and multifamily lending in 2018. Commercial and multifamily mortgage bankers closed $573.9 billion in loans during the year according to results from a Mortgage Bankers Association (MBA) survey. The total represents an 8 percent increase from the volume in 2017. Multifamily lending accounted for $266.4 billion in lending volume . This category was followed by office buildings, retail properties, industrial, hotel/motel and health care. Ninety-six percent of the volume was in senior lien lending. The largest source of funding at $174.0 billion was commercial bank portfolios followed by the government sponsored enterprises (GSEs). Fannie Mae and Freddie Mac were responsible for $142 billion. Remaining…(read more)

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2018 Set Record for Commercial/Multifamily Lending
2018 Set Record for Commercial/Multifamily Lending

Builder Applications Hint at Strong Spring New Home Sales

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Applications for financing new home purchases were up significantly in March. The Mortgage Bankers Association (MBA) reports that Builder Application Survey (BAS) data for the month shows a 7 percent increase in those applications compared to March 2018 and a 19 percent gain over February . The application data is not adjusted for seasonal variations. “With a strong job market, rising wages and lower mortgage rates, housing demand remains strong, as shown by the solid 7 percent growth in new home purchase applications in March,” said Mike Fratantoni, MBA Senior Vice President and Chief Economist. “The confluence of declining mortgage rates with the spring buying season is supporting stronger housing demand and activity. Additionally, the drop in average loan size suggests that builders are…(read more)

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Builder Applications Hint at Strong Spring New Home Sales
Builder Applications Hint at Strong Spring New Home Sales

Higher Rates Hit Mortgage Apps After Last Week's Epic Run

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The rally in mortgage application volume that sent several of the Mortgage Bankers Association’s (MBA’s) metrics to recent highs at the end of March faded last week as interest rates reversed course. The unexpected boom in refinancing ratcheted down, and purchase applications returned to more modest gains. MBA said its Market Composite Index, a measure of loan application volume, declined by 5.6 percent on a seasonally adjusted basis during the week ended April 5, erasing the about a third of the previous week’s gains. The index was down 5 percent on an unadjusted basis. The Refinance Index, which had risen a nearly unprecedented 39 percent the prior week, pulled back by 11 percent and the share of total applications that were for refinancing declined to 44.1 percent from 47.4 percent the week…(read more)

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Higher Rates Hit Mortgage Apps After Last Week's Epic Run
Higher Rates Hit Mortgage Apps After Last Week's Epic Run