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The Mortgageland Journal - our latest newsletter - September 2010
| The Mortgageland Journal™
| Insights, Opinions, News & Commentary
| | September 1st 2010 - 84th Monthly Edition |
| | MBA: Delinquencies and Foreclosures Decline Again | Residential delinquencies and foreclosures on all mortgages fell in the second quarter on a sequential basis for the period ending June 30, but the elevated level of late payments has the industry grappling with $963 billion worth of troubled loans. The Mortgage Bankers Associated reported last Thursday that the national delinquency rate fell to 9.85% at June 30 compared to 10.06% at March 31. A year ago delinquencies stood at 9.24%. Foreclosures started during the quarter fell to 1.11% of outstanding loans, an improvement over the March 31 reading (1.23%) as well as the year ago figure of 1.36%. It is estimated that consumers owed $9.85 trillion on their home mortgages at June 30. Based on the MBA's delinquency number, that means $963 billion of all home mortgages are in some stage of delinquency, be it 30-, 60-, or 90-days late or in foreclosure. The improvement in late payments is a positive sign for mortgage bankers and MBS investors, but lenders continue to be concerned about high unemployment and future layoffs at U.S. firms. Loan modifications are being credited with the improvement in the delinquency figures, but a new report from CoreLogic found that 11 million or 23% of all residential properties with a mortgage on it had negative equity at June 30. According to MBA, subprime delinquencies account for the worst reading among different mortgage types with 27.02% of outstanding loans in arrears. Roughly 7.10% of prime loans were late at June 30. But there was some bad news in the report concerning Federal Housing Administration backed mortgages: the percentage of loans in arrears rose to 13.29% at June 30, up from 13.15% at March 31. However, a year ago the FHA delinquency rate was higher a 14.42%. Nobody said there wasn't gonna be any math! Pop quiz in 2 weeks! Be Ready.
US LTV 70%
The nation's collective loan-to-value ratio is 70 percent, according to a report released by CoreLogic. The loans represented about 85 percent of all U.S. mortgages. The collective value of the financed properties was $12.7 trillion based on CoreLogic's automated valuation models. Borrower equity was a collective $3.8 trillion. Bet you wish you had a friendly lender that wasn't a train-wreck that offered a higher LTV - LOOK at how much production is waiting for YOU.
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6). You're a small shop owner right now, and need to grow to the next step - hire personnel, etc.
7). You just got your Mortgage Broker's license and want to learn how to set up shop.
8). An experienced LO thinking about making the move to becoming a Mortgage Broker and need to know what else you should know besides 'sales.'
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| | | | Bernanke: Tight Credit, Consumer Caution Hurting Housing
Tight mortgage credit and "cautious" consumers are working to keep the housing market at depressed levels, according to Federal Reserve Board chairman Ben Bernanke. Speaking at an economic forum in Jackson Hole, Wyo., the Fed chief said consumers have become more "more cautious" in their spending and economic outlook than the Fed expected. "Household finances and attitudes bear heavily on the housing market, which has generally remained depressed," Bernanke said. He noted that record-low mortgage rates and affordable prices would normally boost demand for housing. "However, the overhang of foreclosed-upon and vacant housing and the difficulties of many households in obtaining mortgage credit are likely to continue to weigh on the pace of residential investment for some time," Bernanke said.The central banker also noted the Federal Reserve could see $400 billion of its $1.1 trillion portfolio of agency mortgage-backed securities run off due to refinancings and other prepayments by the end of 2011. While the Fed has decided to purchase long-term U.S. Treasuries not MBS to maintain the size of its securities portfolio, Bernanke said, "We do not rule out changing the reinvestment strategy if circumstances warrant.” Did you get all that?
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