Archive for Investing

Lenders Manage Tiny Profits in 2018 Despite Rate Hikes, Inventories; Europe Helping Bonds; Don’t Count Chickens

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

Read more here: Lenders Manage Tiny Profits in 2018 Despite Rate Hikes, Inventories; Europe Helping Bonds; Don’t Count Chickens

Category: businessNews

Tax Changes May be Hurting Housing; Purchase Volume Improves; Rates at 1-Mo Highs

Mortgage rates continued higher for the 5th day in a row today. This brings the average lender to the highest levels in exactly one month. At issue: a series of stronger economic reports at home and abroad have eased concerns about global growth. Not only is a strong economy associated with higher rates in general, but those “concerns” were a big part of the Federal Reserve’s decision to be more bond-friendly back in March. With concerns arguably lessened by recent data, investors may be assuming the Fed won’t be quite as bond friendly going forward. All that having been said, the Fed is NOT likely to make any big changes after one solid month of global economic data. The most immediate cause for pressure toward higher rates came overnight in the form of Chinese economic data. Along with Europe …read more

Read more here: Tax Changes May be Hurting Housing; Purchase Volume Improves; Rates at 1-Mo Highs

Category: businessNews

More Buyers, But Builders Remain Cautious; Highest Rates in Nearly a Month

Mortgage rates rose again today, albeit at a slightly slower clip compared to yesterday. Still, that’s little consolidation considering this is the 4th straight day spent moving in that unfriendly direction. The average lender is now back to levels not seen since March 19th. On the bright side, March 19th’s rates were the lowest in more than a year at the time. So what’s going on? In general, the month of March saw the confluence of 2 great things for rates. Not only was there a generally high level of concern/uncertainty surrounding the global economic outlook, but the Fed was also surprisingly helpful. This was a bit of a double-edged sword because the Fed’s helpfulness was predicated on that same sort of concern/uncertainty. In other words, if events unfold in such a way as to ease that …read more

Read more here: More Buyers, But Builders Remain Cautious; Highest Rates in Nearly a Month

Category: businessNews

Non-Bank Lender on Perils of Non-Bank Lending; Rates Rise; Appraisal Delusions

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 0.78 percent lower than 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

Read more here: Non-Bank Lender on Perils of Non-Bank Lending; Rates Rise; Appraisal Delusions

Category: businessNews

Mortgage Rates End Week at Highest Levels as Bonds Defend Important Ceiling

Mortgage rates rose fairly quickly on Friday, depending on the lender and the scenario. Bonds (which dictate mortgage rates and interest rates in general) weakened overnight on a variety of foreign and domestic data. While we can’t necessarily be sure that one particular development was more responsible for the move than another, we can observe that most of the damage followed news of surprisingly strong credit growth in China. This could stand to reason given that China and Europe are central to the cautionary economic stance taken by the likes of the Fed. In general, uncertainty about the global economy would be associated with lower interest rates. Actually a downbeat economy is even better than an uncertain one! With Chinese GDP and several European metrics hitting long term lows in the …read more

Read more here: Mortgage Rates End Week at Highest Levels as Bonds Defend Important Ceiling

Category: businessNews, FDA

2018 Set Record for Commercial/Multifamily Lending; Rates Stay Flat; Brexit Punt Delays Game

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

Read more here: 2018 Set Record for Commercial/Multifamily Lending; Rates Stay Flat; Brexit Punt Delays Game

Category: businessNews

Mortgage Delinquencies Down, Other Consumer Debts Creep Up; Rates Edge Higher

CoreLogic says mortgage delinquencies in January were the lowest for that month in 20 years . Meanwhile, in a separate report, they note that non-mortgage consumer debt has been edging up, due in part to a deterioration in lending standards. The company’s Loan Performance Insights Report for January puts the national delinquency rate (the percentage of outstanding mortgage loans that were 30 or more days past due including loans in foreclosure) at 4.0 percent, down from 4.9 percent in January 2018. In 2010, at the height of the financial crisis, the January delinquency rate hit a peak of 12.0 percent. This continues a trend that started last March. CoreLogic says that since then the monthly delinquency rate has been lower than the corresponding months during 2000 to 2006, before the start of …read more

Read more here: Mortgage Delinquencies Down, Other Consumer Debts Creep Up; Rates Edge Higher

Category: businessNews

Home Buyers (And Sellers) Much More Upbeat; Rates Flat, But New Challenges on Horizon

A few couple of warm days, the appearance of a few tulips, and wham, homebuyer sentiment goes through the roof. At least the results from the March National Housing Survey (NHS) seem to support that theory. Net positive responses to whether it is currently a good time to buy and/or sell a home shot up 7 and 13 percentage points respectively in March, driving Fannie Mae’s Home Purchase Sentiment Index (HPSI) up by 5.5 points. The Index rose to 89.8 percent, 1.5 points higher than in March 2018 after a winter of relative consumer pessimism. The index plunged 12 points to an all-time survey low of 83.5 in December and had risen only slightly since then. The March recovery was also aided by survey responses reflecting slowing appreciation in home prices and newly low interest rates. The HPSI distills …read more

Read more here: Home Buyers (And Sellers) Much More Upbeat; Rates Flat, But New Challenges on Horizon

Category: businessNews

Mixed Signals in Jobs Data Forces Bonds to Punt; Rates Back to Week’s Lows

The tale of two ranges continued in grand fashion overnight as 10yr yields made it all the way to the top of the lower, better range seen since the March 20th Fed announcement. Granted, they were already closing in on those levels by yesterday, but fresh US/China trade headlines were good for another few bps of higher yields. Arriving at the crossroads between ranges carries a certain amount of significance all on its own, but that significance was amplified by the fact that it was NFP Friday. Point being: NFP always has the power to cause bigger-than-average movement. If that movement happened right at a range boundary, it would carry a strong technical signal in favor of the prevailing range. As it happened, however, neither range prevailed. 10yr yields finally made up their mind after a …read more

Read more here: Mixed Signals in Jobs Data Forces Bonds to Punt; Rates Back to Week’s Lows

Category: businessNews

Jumbo Credit Access Benefits From Recent Drop in Rates; Big Risks With Tomorrow’s Jobs Report

Borrowers had a bit of an easier time getting a loan in March, especially those looking for Jumbo products. The Mortgage Bankers Association’s (MBA’s) Mortgage Credit Availability Index (MCAI) rose 1.1 percent from February to a reading of 182.1. A decline in the index indicates that lending standards are tightening while an increase means a loosening of credit. The Total MCAI has component indices representing various loan types. The Conventional MCAI increased 3.6 percent while the Government version was down 1.2 percent. The two sub-indices within the Conventional MCAI both moved higher. The Jumbo index increased 5.2 percent and the Conforming MCAI was up 1.4 percent. Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting explained, “Credit availability increased in …read more

Read more here: Jumbo Credit Access Benefits From Recent Drop in Rates; Big Risks With Tomorrow’s Jobs Report

Category: businessNews

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