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Tag Archives: Federal Reserve

Mortgage Rates Set New Record Lows in Freddie Mac Survey

Interest rates on home loans sunk to new lows this week, according to figures released by Freddie Mac Thursday. The GSE surveyed 125 lenders across the country and found that rates on 30-year mortgages are now averaging 4.17 percent, while the average rate for 15-year loans dropped to 3.57 percent. The GSE's chief economist expressed concern that although rates are at their lowest level in more than a half century, they've done little to pull would-be buyers from the sidelines as the housing recovery continues to slow.

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Mortgage Applications Increase for Both Purchases and Refinances

The number of applications submitted by consumers for mortgage loans rose last week, as interest rates held low. The Mortgage Bankers Association (MBA) reported that applications for home purchases were up 5.5 percent from one week earlier, marking their third consecutive weekly increase. MBA's index for refinance applications also rose, jumping 6.0 percent from the previous week.

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Current Mortgages Turning Delinquent Rises for First Time in a Year

During the third quarter, 2.7 percent of current mortgage balances transitioned into delinquency, according to the New York Federal Reserve. That's up from 2.6 percent that became newly delinquent in the second quarter. Fed officials called the increase ""slight"" but noted that the rise follows a full year of declines in new delinquencies. According to the federal bank's report, about 457,000 individuals received home foreclosure notices on their credit reports between July 1 and September 30, 2010.

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MBA and Others Send Letter to Fed Regarding Consumer Disclosures

The Mortgage Bankers Association and six other industry groups sent a letter to Federal Reserve Chairman Ben Bernanke Monday, voicing their concern that the Fed, which has jurisdiction over the Truth in Lending Act (TILA), and HUD, which oversees the Real Estate Settlement Procedures Act (RESPA), will create regulatory rules that overlap. The Dodd-Frank Act created the Consumer Financial Protection Bureau, which will be overseen by yet another agency, the Treasury, and will have regulatory authority over consumer disclosures.

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Credit Crunch Easing, but Lending Standards Still Tight for Mortgages

The Federal Reserve says both large and small banks are beginning to ease back on their credit requirements for ""some categories of loans"" to households and businesses. However, standards continue to tighten on prime mortgages and home-equity loans, particularly at smaller institutions. According to the Federal Reserve's study, consumer demand for residential mortgages decreased during the three months ending in October compared to earlier survey periods, with the falloff again most evident at smaller banks.

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Industry’s Mortgage Rate Reports Show Mixed Results

Freddie Mac's report on mortgage interest rates this week says long-term 30-year rates rose slightly, while 15-year rates eased and short-term adjustable-rate mortgages set new lows. A separate study from Bankrate claims mortgage interest rates dropped across the board to record lows. On Wednesday, the Federal Reserve announced another injection of $600 billion into the nation's sluggish economy, but it remains to be seen if this is enough to push Treasury yields and mortgage rates lower, and if so, by how much.

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Fed to Buy $600B in Securities to Hold Interest Rates Low

The Federal Reserve decided Wednesday to pump another $600 billion into the economy in the hopes of bolstering what it called a ""disappointingly slow"" recovery. The capital injection will come in the form of purchases of long-term Treasury securities by the central bank, about $75 billion a month between now and the end of June 2011. The goal is to buoy economic growth by inducing banks to lend more while keeping interest rates low. If it plays out correctly, the move is expected to spur spending, foster job creation, and keep deflation in check.

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HAMP-Bashing Persists from Watchdogs and Regulators

Treasury's latest report on the administration's Home Affordable Modification Program (HAMP) shows that over half of the trial plans started have been canceled and 11 percent of borrowers have re-defaulted on their new loan. The TARP special inspector general told Congress that HAMP is ""failing to meet its goal of preserving homeownership"" and risks igniting public anger and mistrust. A Fed economist says HAMP is a reflection of the Obama administration's ""failed policies,"" and the government must be prepared to ""pay lenders a lot of money"" to modify loans.

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Study: Shadow Inventory to Keep REO Supply Elevated for Several Years

An estimated 4.1 million borrowers are in the process of foreclosure or are more than 90 days delinquent. Their homes make up what's been termed the shadow inventory -- a pent up supply of REOs that could drive down home prices and perhaps cause another wave of defaults. Guhan Venkatu, an economist at the Federal Reserve Bank of Cleveland, says even under the most benign projections, the stock of REO properties is likely to remain elevated for the next several years.

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Fed Beige Book Shows Modest Growth but Weak Real Estate Conditions

The Federal Reserve's popular Beige Book released this week suggests economic activity across most of the nation is showing signs of ""modest"" growth, but it's not enough to improve the anemic jobs picture. Housing markets remained weak with most of the 12 regional districts reporting sales below year-ago levels. But the central bank says its seeing stability in home prices. Conditions in the commercial real estate sector were soft, while overall lending activity was described as stable in most districts.

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