Secondary Market

With a swipe at both the President and Congress and concerns about ""downside risks"" to the economy, the Federal Open Market Committee (FOMC) voted 11-1 Wednesday to leave interest rates unchanged and to continue its program of purchasing agency mortgage backed securities and longer term Treasury securities. The FOMC explained the actions should ""maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative."" Kansas City Fed President Esther George, cast the lone negative vote.

The Market Composite Index in the Mortgage Bankers Association's (MBA) weekly applications survey rose a seasonally adjusted 1.8 percent for the week ending April 26, the group reported. Unadjusted, the index was up 2 percent week-over-week. The Refinance Index increased 3 percent from the previous week, rising to its highest level since the week ending January 18. The share of refinance applications done under the Home Affordable Refinance Program (HARP) increased to 34 percent, its highest recorded level.

An Oklahoma State District judge dismissed a class action recording fee suit filed on behalf of Cleveland County and ruled in favor of MERSCORP Holdings, Inc. The Cleveland County Board of County Commissioners filed the suit, which asked for defendants to record mortgage assignments (both past and present) and pay associated fees.

Fannie Mae made available loan-level credit performance data for single-family mortgages delivered to the GSE from January 1, 2000 to March 31, 2012. The release of the new data marks a step toward greater transparency. Through the data, investors can model the credit performance of Fannie Mae loans and analyze potential risk sharing transactions. In a statement, FHFA applauded Fannie Mae's release, explaining it ""represents an important step toward returning private capital to the mortgage market.""

The number of households owning homes fell 698,000 to 74,511,000 in the first quarter, the first decline in almost two years, according to a Census Bureau report Tuesday. At the same time, the nation's homeownership rate fell to 65 percent (seasonally adjusted), the lowest level since the fourth quarter of 1995. The Census data paints a grim picture for the home sales market, which has already been struggling against mortgage restrictions and weak inventory.

Despite weakness in the Midwest, home prices posted their strongest year-over-year gain in almost seven years in February, according to the Case-Shiller 10- and 20-city Home Price Indices released Tuesday. Home prices rose year-over-year in all 20 of the cities in the Case-Shiller survey. Month-over-month, the 10-city index improved 0.4 percent in February, while the 20-city index was up 0.3 percent. On a yearly basis, the 10-city index was up 8.6 percent, and the 20-city index rose 9.3 percent.

In the Federal Housing Finance Agency's (FHFA) Conservatorship Priorities for 2013, delivered in early March, Acting Director Edward DeMarco discussed his goal of creating a common securitization platform for the GSEs. As FHFA and the GSEs take the first steps toward developing this platform, Freddie Mac's SVP of conservatorship and corporate initiatives, Stephen Clinton, outlined some of the positive impacts the platform could have on the market.

The Pending Home Sales Index (PHSI) rose 1.5 percent to 105.7 in March, the highest level in almost three years, the National Association of Realtors reported Monday. Economists had expected a 0.7 percent increase to 105.5 from February's originally reported 104.8. The February index reading was revised to 104.1. With the month-over-month improvement, the PHSI is 7.0 percent above March 2012, slightly below the 7.7 percent year-over-year gain in February. The index registered double-digit percent gains from April through October last year so the dip--on the eve of the homebuying season--is less than encouraging.

The Idaho Supreme Court dismissed a plaintiff’s wrongful foreclosure complaint against Mortgage Electronic Registration Systems, Inc. (MERS) and defendants, affirming a district court ruling. The plaintiff in Edwards v. MERS et. al brought action against the defendants to stop a non-judicial foreclosure and argued MERS, the named beneficiary, could not legally act as the beneficiary.

Fitch Ratings found cumulative U.S. CMBS defaults moved higher in the first quarter as the office sector struggled. The U.S. CMBS cumulative default rate for fixed-rate CMBS rose to 13.6 percent in Q1 2013, up 18 basis points from the previous quarter, according to the rating agency.