Tag Archives: Freddie Mac

There seems to be no bottom in sight for mortgage rates. Already at their lowest level in a half-century, they dropped to new record lows again this week. Analysts say we have the weak economy to thank, but that same trigger is also thwarting what would be the ideal upshot - enticing would-be buyers to put a dent in the ballooned housing supply. Freddie Mac reports 30-year mortgages are now averaging 4.32 percent; 15-year rates have dropped to 3.83 percent. Bankrate says the larger jumbo 30-year fixed rate fell to a new low of 5.17 percent.

Neighborhoods across the country are riddled with empty bank-owned homes and unoccupied foreclosures that erode neighboring property values and open the door for blight and criminal activity. The nation's glut of vacant REOs took center stage in Washington Wednesday. HUD announced a new nationwide REO ""First Look"" program, in partnership with the nation's largest mortgage lenders, and it was the first of a two-day Federal Reserve summit to examine the community impacts of foreclosed and vacant properties.

Freddie Mac released the results of its second quarter Conventional Mortgage Home Price Index (CMHPI) Monday. The index measures property values based on home loans originated in Q2 and purchased by Freddie and its sibling mortgage financier Fannie Mae. The CMHPI Purchase-Only Series for the United States registered a 3.1 percent increase in the second quarter relative to the first quarter. For the first time since the second quarter of 2009, prices rose in all nine Census divisions.

Mortgage interest rates are already at their lowest level in decades, and this week, they headed even lower. The descent was prompted largely by fears that another housing downturn could hamper the economic recovery, after July's home sales took a deeper plunge than expected. Freddie Mac reports that 30-year fixed-rate mortgages are now averaging 4.36 percent, and 15-year mortgages are at 3.86 percent. Bankrate says the larger jumbo 30-year fixed rate also slipped to a new record low of 5.22 percent.

Home prices in the U.S. rose in the second quarter of 2010, according to the Federal Housing Finance Agency (FHFA). The regulator's purchase-only house price index (HPI) is calculated using sales price data from Fannie Mae- and Freddie Mac-acquired mortgages, and last quarter was the first time since Q2 2007 that the HPI posted a quarterly increase. The index was 0.9 percent higher on a seasonally adjusted basis in the second quarter than in the first quarter of 2010.

Taxpayers' tab for the government's $700 billion dollar bailout program continues to drop. New estimates from the Congressional Budget Office (CBO) put the cost of the controversial Troubled Asset Relief Program (TARP) at $66 billion. That's nearly $45 billion less than the agency's projection just five months ago. The agency's estimates for the bailout of Fannie Mae and Freddie Mac improved as well. Outlays for the two GSEs are expected to fall from $96 billion in 2009 to $41 billion this year.

Despite the continued efforts of mortgage giants Fannie Mae and Freddie Mac to find sustainable workouts for delinquent borrowers, the analysts at Standard & Poor's expect the GSEs' foreclosure inventories to continue to swell. The two companies have each already completed about 40 percent more workout volume during the first half of 2010 than they did in all of 2009. Still, the ratings agency says annualized loan workout activity (as a percentage of existing delinquent loans) remains less than half at both institutions.

Members of the U.S. House of Representatives are calling on President Obama and the GSEs' regulator to ""use all of [their] powers to recover money"" from companies that shifted losses on to Fannie Mae and Freddie Mac. They say legal action should be used to recoup funds from the underwriters of faulty mortgages and the issuers of underwater securities that have saddled Fannie and Freddie with hundreds of billions of dollars in bad loans and cost taxpayers almost $150 billion to date.

About 50 percent of the loans held by Fannie Mae and Freddie Mac come from the nation's four largest banks - Bank of America, JPMorgan Chase, Wells Fargo, and Citi. Lately, the GSEs have become more aggressive in forcing originators to buy back bad loans. Based on Fannie and Freddie's current ""distressed"" numbers (a combined $354 billion in delinquent mortgages and REOs), Fitch Ratings estimates that the big four could be on the hook to repurchase as much as $180 billion in nonperforming assets.

Mortgage interest rates dropped again this week, according to data released Thursday by Freddie Mac. The GSE says for yet another week, fixed-rate mortgages reached new record lows. Rates for 30-year mortgages are now averaging 4.42 percent, while 15-year fixed mortgages are at 3.90 percent. Amy Crews Cutts, Freddie Mac's deputy chief economist, says investors in long-term bonds appear confident that inflation will remain in check, which in turn has helped to push mortgage rates even lower.