Secondary Market

The June 6 edition of HVF's ""Lessons from the Data"" showed that rent-to-value ratios, also called rental yields, tend to be highest in areas with elastic markets, such as Las Vegas. In areas of the city where the ease of adding new housing keeps home prices low, rental yields in certain neighborhoods climbed to 14 percent or higher. On the other hand, areas with restrained housing markets (like many neighborhoods in the New York metro) see yields lower than 2 percent.

The economy expanded at a modest to moderate pace from early April to the end of May, the Federal Reserve reported Wednesday in its periodic Beige Book. The assessment reflected a weakening from the report in April when the expansion was characterized as moderate. Economic outlooks, according to the report, ""remain positive, but contacts were slightly more guarded in their optimism."" Activity in the New York, Cleveland, Atlanta, Chicago, Kansas City, Dallas, and San Francisco districts was described as moderate, while the Richmond, St. Louis, and Minneapolis districts noted modest growth.

The board of directors for Fannie Mae announced Tuesday the appointment of Timothy J. Mayopoulos, 53, as president and CEO beginning June 18. Mayopoulos will replace current chief executive Michael J. Williams, who announced his resignation in January. Currently, Mayopoulos serves as EVP, chief administrative officer, and general counsel for Fannie. He has spent more than 25 years in the financial services sector, holding senior-level posts with Bank of America, Deutsche Bank, and Credit Suisse First Boston.

Congress has already approved of raising Fannie Mae and Freddie Mac guarantee fees to support non-housing related initiatives once before. Now, lawmakers are contemplating the use of GSE guarantee fees to fund student loan relief. In response to this, officials from Nationwide Title Clearing sent a release asking Congress not to raid the real estate piggy bank, stating an increase will lead to higher interest rates.

The Community Mortgage Lenders of America (CMLA) released a white paper outlining its policy suggestions for the future of Fannie Mae and Freddie Mac. Shrinking the GSEs role in the secondary market to 30-35 percent and preventing them from securitizing or investing into risky mortgages were among the ideas the trade group endorses. Still, the CMLA said it wants to see the GSEs remain intact due to uncertainty in the markets and to ensure further destabilization does not occur.

Tuesday's report showed that during the first quarter of 2012, the 60+ day delinquency rate for commercial and multifamily mortgages held in life insurance company portfolios decreased 0.03 percentage points to 0.14 percent. The 60+ day rate for multifamily loans held or insured by Fannie Mae also decreased, falling 0.22 percentage points to 0.37 percent. The 90+ day delinquency rate for loans held by FDIC-insured banks and thrifts dropped 0.13 percentage points to 3.44 percent.

According to the GSE's monthly summary, its gross mortgage balance fell with a decrease in sales and purchases. The 13.8 percent shrinkage rate was greater than March's 7.3 percent and the highest since January, when it was 14.3 percent. The negative growth rate year-to-date in April was 10.3 percent.These falling values led to shrinkage in Fannie Mae's Book of Business, with an annualized rate decrease of 8 percent for April. This was a marked fall from March's positive 9.3 percent growth and brings the year-to-date rate growth to negative 0.3 percent.

The number of loans refinanced through HARP in the first quarter of 2012 was nearly double the number of refinances in the fourth quarter of 2011, according to the Federal Housing Finance Agency's (FHFA) March 2012 Refinance Report. The report showed that 180,185 loans were refinanced through HARP during the year's first quarter, nearly twice the 93,190 refinances in the previous quarter. The month of March alone saw 79,470 loans refinanced with HARP, and nearly one in seven loan refinances in the quarter were done through program. The FHFA attributed most of this increase to the launch of HARP 2.0, an enhanced version of the program that eliminated loan-to-value (LTV) ceilings for borrowers.

The economy added just 69,000 jobs in May compared with a revised 77,000 in April down from the originally reported 115,000, the Bureau of Labor Statistics reported Friday. The closely watched unemployment rate inched up to 8.2 percent - a function of an increase in the nation's labor force to the highest level ever. Economists surveyed by Bloomberg had expected the number of jobs to increase by 150,000 and the unemployment rate to remain at 8.1 percent.

First time claims for unemployment insurance rose to 383,000 up from the prior week's 373,000, revised up from the previously reported 370,000, the Labor Department reported Thursday. Economists had expected the report would be unchanged at 370,000 initial claims.