TEAM EMPOWERMENT MORTGAGE CHATTER: March 11; News & Headlines; Demand for Loans; Home-Prices Decline; Foreclosures at 3 Yr-Low; House Votes on FHA Short Refi’s; Will I Get More Money If I Wait? Today’s Rates

 “Amongst The Busy Day We All Experience – Take A Moment To Appreciate The Beautiful Days We Get To See.  Mt. Diablo Today”











 “The secret to productive goal setting is in establishing clearly defined goals, writing them down and then focusing on them several times a day with words, pictures and emotions as if we’ve already achieved them.”   Denis Waitley 


In a story that first broke in Mortgage News Daily (MND), Dave Stevens resigned his position as FHA commissioner. Stevens is expected to end his stint as FHA commissioner by the end of April and return to “the private sector.” He was nominated about two years ago and sworn in during July, 2009.

Monday we learned that NAIHP filed a suit focused on TILA changes, and yesterday, moments after the commentary went out, news came out that NAMB Files Lawsuit Against the Federal Reserve to prevent the April 1st implementation of the LO compensation rule. The NAMB suit seeks temporary and preliminary restraints that would enjoin the implementation of a specific section of the Federal Reserve Board’s Final Rule on loan originator compensation, Regulation Z; Docket No. R-1366, Truth-in-Lending. “This section, if implemented, would prohibit mortgage brokers from paying their loan officers commissions based on fees paid by the consumer.” One simple sentence leading to one huge mass of confusion.

For a variety of reasons fixed-income and MBS prices improved yesterday, not the least of which is the lack of supply of MBS’s in the market. Watch for this in the applications figure next week. The 30-yr bond auction went pretty well, and stock markets were down (not that bonds always go up when stocks go down!), and the yield on the 10-yr went below 3.40%. By the end of the day MBS prices had improved between .5-.625.

Today is a new day, but the trend is continuing. The massive earthquake in Japan added to the global uncertainly and turmoil that has rattled markets recently. The 8.9 magnitude quake, and aftershocks, was followed by a tsunami. Bonds are obviously rallying, but insurance company stocks are leading stocks lower. The Yen is rallying on expectations of repatriation flows. The film clips of the event in Japan are truly amazing. Here in this country, Hawaii and the low-lying areas of the West Coast will be dealing with a tsunami warning. Retail Sales, almost an after-thought, came in roughly as expected, and we find the 10-yr this morning around 3.37% and MBS prices are chopping around unchanged.


Applications for purchase mortgages jumped last week to the highest level of the year as the job market improved and mortgage rates remained below 5 percent, the Mortgage Bankers Association said in releasing the results of its latest Weekly Mortgage Applications Survey.

A separate survey by Freddie Mac showed mortgage rates were largely unchanged this week, with rates on 30-year fixed-rate loans below 5 percent for the third week in a row.

 U.S. home prices fell for the sixth straight month in January as negative equity limited the mobility of homeowners, and weak demand and an overhang of shadow inventory continued to pressure home prices, data aggregator CoreLogic said today.

A home-price index compiled by CoreLogic showed national home prices down 5.7 percent from a year ago — an even steeper decline than the 4.7 percent year-over-year drop seen in December.

January’s decline brought the drop in home prices from their April 2006 peak to 32.8 percent, CoreLogic said.

RealtyTrac said 225,101 homes were subjected to a default notice, auction notice or bank repossession in February — a three-year low that the company attributed to continued fallout from the robo-signing controversy.RealtyTrac CEO James Saccacio noted that February is a short month, and that a small part of the decrease could also be attributed to bad weather.


In a largely symbolic move given the Obama administration’s veto warnings, the House of Representatives has voted to kill the Federal Housing Administration’s short refinancing program.HR 830, The FHA Refinance Program Termination Act, was approved by the House in a 256-171 vote, with 18 Democrats joining 238 Republicans in favor of ending the program.

Critics say the program — which allows underwater borrowers who are current on their loans to refinance into an FHA-insured mortgage if their lender agrees to write off at least 10 percent of their principal — has gotten off to a slow start. Taxpayers may be on the hook for up to $8 billion to reimburse lenders for a share of their potential losses on the loans, critics say.

Democrats who dissented from last week’s 33-22 vote to move the bill out of the Financial Services Committee for a floor vote said that while Troubled Asset Relief Program (TARP) funds for the program have been capped at $8 billion, actual expenditures will depend on program use.

Critics of the program “can’t have it both ways” by arguing that no one is using the program and that it will have a big price tag, Democrats said.

If the FHA ends up insuring only a few short refis, then shutting down the program now would have no or very limited cost savings, supporters of the program said.

If the short refi program gains traction and is more widely used, there may be a “modest cost,” which supporters characterized as an “investment in reducing foreclosures, rightsizing homeowners’ payment obligations and underwater loan status, and complementing other federal programs which work to address our nation’s housing problems. Either way, shutting down the program at this time makes no sense.”

FHA Commissioner David Stevens told the committee that while only 245 applications have been submitted and 44 loans approved since the program launched in September, 23 lenders were participating in the program.

The Obama administration said this week that it “strongly opposes” the bill and another approved by the Financial Services Committee last we ek, HR 836, which would eliminate the Department of Housing and Urban Development’s Emergency Homeowners Loan Program (EHLP).


Sellers in any real estate market are looking to get the best possible price. If you are looking to sell in the next year, today’s price may well be the best price. Home values stabilized somewhat in 2010. Many hoped that was a sign that values had bottomed out and we would see price appreciation in 2011. Studies released this week have painted a different picture.

If we look at CoreLogic’s January Home Price Index (HPI), we see that prices are again beginning to decline: declined by 5.7 percent in January 2011 compared to January 2010…  

 Mark Fleming, chief economist with CoreLogic, said, “A number of factors continue to dampen any recovery in the housing market. Negative equity, which limits the mobility of homeowners, weak demand and the overhang of shadow inventory all continue to exert downward pressure on housing prices. We are looking out for renewed demand in the coming months as the spring buying season gets underway to hopefully reduce the downward pressure.”

 They are not talking about the spring market increasing or even stabilizing prices. They hope it will “reduce” the pressure to drive prices lower.


Radar Logic’s RPX Composite Price comes to virtually the same conclusion:  under a severe supply overhang that includes a large and growing “shadow inventory” of homes in default or foreclosure.”

Radar Logic believes the RPX Composite price will continue to exhibit year-on-year declines throughout 2011 due to a growing supply of homes for sale and in the inventories of financial institutions, and weakening demand due to the reduction of government incentives for home buyers. Moreover, banks are facing uncertainty over whether they will be forced by regulators to expand mortgage modifications, and may reduce lending and tighten standards as a result.

“No matter what you call it, a “double dip” or the continuation of a long process of deterioration, the current trend in home prices is evidence that housing markets are continuing to languish,” said Quinn Eddins, Director of Research at Radar Logic. ” We expect the negative trend to continue under a severe supply overhang that includes a large and growing “shadow inventory” of homes in default or foreclosure”

Bottom Line

It seems that prices have again begun to fall nationally. With the overhang of existing and shadow inventory, prices will probably continue to decline throughout most of 2011. If you’re thinking of selling, now might be the best time. Check with a local real estate professional to see how this might impact your area.






Foreclosure-related filings against U.S. homes fell 14 percent from January to February and were down 27 percent from a year ago — the biggest year-over-year drop recorded by data aggregator RealtyTrac since it began issuing reports in 2005.

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