Tag Archives: Refinance

When it comes to next year's regulatory obstacles, CEOs and senior executives from the mortgage industry's biggest players agree on one thing: Education will be key to keeping business going smoothly. In a panel at the 2013 Realtors Conference and Expo, high-level names from Quicken Loans, Wells Fargo Home Mortgage, JPMorgan Chase, and Bank of America discussed the qualified mortgage (QM) guidelines, which go into effect in January 2014.

Seventy-one percent of single-family homes in the United States were built before 1990, according to a new industry report. So far this year, 60 percent of residential transactions involved homes built prior to 1990. This older housing stock comes with less competition from other buyers and lower price points, and the Federal Housing Administration's 203(k) program allows owner-occupants to roll the cost of minor and major renovations into the financing for a home purchase or a mortgage refinancing.

With third-quarter numbers from most of the industry's heavy-hitters in, analysts with FBR Capital Markets say their forecasts--$1.6 billion in mortgage volume for 2013 followed by $1.4 billion in 2014--are still well within reach, even though they argue that declining interest rates and lower overall loan volume translated to disappointing mortgage numbers last quarter.

Mortgage rates broke their streak of declines this week. Analysts say while the potential drag from the government shutdown and looming debt ceiling deadline had pulled rates lower in recent weeks, hopes that a promising deal was in the works served to ease those concerns and push rates higher. Freddie Mac reports the 30-year rate rose from 4.23 percent to 4.28 percent over the last week.

Bank of America exhibited healthy growth during the third quarter despite an expected weakening in its mortgage banking operations, according to the company's Q3 earnings report released Wednesday. BofA's third-quarter net income was $2.5 billion, a significant increase compared to $340 million reported for Q3 2012. Its consumer real estate services division, though, reported a net loss of $1 billion.

Fixed mortgage rates held more or less steady this week as Capitol Hill remained locked in debate over budgetary concerns. According to data in Freddie Mac's Primary Mortgage Market Survey, the 30-year fixed-rate mortgage averaged 4.23 percent for the week ending October 10, and the 15-year fixed rate came in at 3.31 percent.

FBR Capital Markets on Wednesday raised its projection for new mortgage volume in the third quarter to $400-$420 billion, largely due to more activity from special servicers as larger banks relinquish market share. FBR anticipates strong performance from these specialty servicers, partly because of their ability to effectually mine acquired portfolios for refinancing opportunities.

The number of homeowners eligible for refinancing has shrunk from about 10 million in December 2012 to about 5.7 million as of August, according to Lender Processing Services' (LPS) latest Mortgage Monitor report. LPS cites heightened refinance activity over the past few years and rising interest rates as reasons for the decline and sees a market ripe for home equity lines of credit as a result of rising prices.

Investment bank FBR Capital Markets released its preview of third-quarter earnings for major U.S. banks Monday, with a cloudy outlook for mortgage banking. In general, bank stocks have underperformed the broader market by about 2 percent over the third quarter; and zeroing in on the mortgage market, FBR is not optimistic about Q3 results.

As mortgage rates climb, refinances are on the decline. However, refinances through the government's Home Affordable Refinance Program (HARP) remain elevated compared to last year's volumes, according to the Federal Housing Finance Agency's (FHFA) Refinance Report for the second quarter of 2013. HARP refinances totaled about 280,000 for the quarter, down slightly from about 290,000 in the first quarter of this year, FHFA reported.