Graphic Via MSNBC Last Week Inflation, at least according to last week’s PCE/GDP data remains in check, which when combined with the foregone-conclusion of a Fed rate cut this month, sent rates to their lowest levels in nearly two years. Most 30 year fixed now trading at about 6.1%. This Week Friday’s November jobs report looms massive on the calendar. The low unemployment rate and the fact that the economy continues to add jobs has been, in our view, a big reason that interest rates remain above 6%. The markets anticipate about 75k jobs created - also keep one eye on prior months revisions to the jobs numbers - a number significantly below that could move rates down, while a huge “beat” could move them up. Technical factors show mortgage bonds oversold, so an upward move in rates is the path of least resistance if the numbers don’t surprise in either direction. This Week’s Economic Calendar [Barron’s] For more visit Source:www.behindthemortgage.com

Share This

Share This

Local · Ramsey Town Center Bankers Face Indictment [PiPress] · Downtown Whole Foods to Include Apartments [DTJournal] · Homeowners Looking to Cash in on RNC Crowds [PiPress] · Downtown Condos Going Rental, Chaos Ensues [DTJournal] · Five Charged in Universal Mortgage Fraud Scheme [MPR] · New Construction Still Slowing [TCBJ] Bonus: Check out today’s ‘Molecast’ over at The Daily Mole, where we muse with Steve Perry about the say of the local RE Market. [Daily Mole] For more visit Source:www.behindthemortgage.com

Share This

Share This

Local: · New York Times Covers Phillips Neighborhood [NYT] · Judgment Forces Fomer Vikings Owner to Sell $53M Home [Strib] · Reading the Real Estate Market [Strib] · Foreclosures Ripple into Rural MN [Strib] Elsehwere & Otherwise: · Cramer: Fed Needs to Whack Rates for Psych. Impact [The Street] · FHA: Senate Passes Changes to Limits, Down Payment [WSJ] · Liquidity Always Injected? How About Squirting [longorshortcapital] · Get on the Repo Bus [LATimes] · Even Your Classic Christmas Movie is About Sub-Prime Now [pk] For more visit Source:www.behindthemortgage.com

Share This

Share This

Local Bridges of St. Paul: Keeping the Dream Alive [MNPost/Kimball] Tougher Sell at the Whitney [Strib] On the Front Lines of Foreclosure Counseling [Strib] Dolan Media Emerges as Foreclosure Play [MNPost/Beal] Elsewhere & Otherwise Cue the Morrisey: Housing Depressed [WSJ] New Home Sales Up, Prices Drop [WSJ] How to Know if Your Bank Deposits Are Insured [TheStreet] For more visit Source:www.behindthemortgage.com

Share This

Share This

So The Plan’s details can be found over at the American Securitization Forum (PDF here). Exactly as we expected: The Plan Captures a very small slice of Sub-Prime ARM borrowers for relief, and is front page news on each paper. This obviously will be covered to death in the mainstream media, and a lot of the blog coverage will be inside baseball that only mortgage geeks will care to wade through. That stated, there are a couple of points worth understanding, even for the casual observer, that’ll help to illuminate the key underpinnings, and potential impact, of this plan. First, who’s eligible? Who’s the thin slice? The stipulations are a tiny obtuse, with FICO tests, Equity tests, and so on, but Felix Salmon has a nice three sentence summary: If you have good credit and are current on your mortgage, you’re not eligible for the freeze. If you have bad credit and you are behind on your mortgage, you’re not eligible for the freeze. The only way that you can be eligible for the freeze is if you’ve bad credit and you’re current on your mortgage, and it will reset to a higher rate after January 1, and your mortgage servicer determines that you won’t be able to make your mortgage payments after they reset. Further, in most cases, one needs to have less than 3% equity in their home to be eligible. Which brings us to this, from Elizabeth Warren at Credit Slips, who points out that there’s precious little incentive for those who are eligible to actually take the deal: In a falling market, a massive proportion of subprime mortgages are now in the 125% LTV territory–”below water” in the foreclosure parlance. The current “deal” will have homeowners paying off all the mortgage debt or facing foreclosure once again. Whether you think that homeowners ought to pay all of the debt or not, regardless of the value of the property, it doesn’t make much sense from a families’ point of view to do so. Those who can, will walk away. At some point, in some of the worst markets, it is going to become socially acceptable to just mail in the keys. You heard it here second (somebody else has said this, we’ve read it, but can’t recall who.) And no post on major mortgage market news would be complete without Tanta, at Calculated Risk, who sheds some light on why the plan was so narrowly targeted: It is as much about limiting servicer risk, as helping strapped borrowers: None of that is about figuring out whether the borrower “needs” or “deserves” to be helped. It is about figuring out whether the borrower has any realistic option of refinancing, given current contraints in the mortgage market and the [Home Price Appreciation ] outlook. That, in turn, is crucial because to modify a loan that could have refinanced opens up the servicer to liability for contract violations… …I’d state the contracts were the part of this that got the most thorough protection. In my reading of this, giving a deal to a borrower almost seems incidental. At the end of the day, “something” had to be done about the foreclosure problem, and due to the constraints of the market, the structure of this plan represents the only something that could be accomplished. Will it help some homeowners keep their homes? Yes. Will it make a significant dent in the foreclosure problems, and turn the real estate market around? No. For more visit Source:www.behindthemortgage.com

Share This

Share This

Foreclosures, near-North Minneapolis, Via Star-Tribune Foreclosure Map It’s getting hard to keep up with the now daily real-estate-is-going-to-hell in-handbasket data stream, but we wanted to point out a couple of stats from some of the recent coverage that had us pausing mid-read. For instance, from the Pioneer Press, on North Minneapolis, which as you can see from the map above, is Ground Zero for the Twin Cities foreclosure problem: In the Jordan area of North Minneapolis, banks are repossessing homes at a rate of about 200 per half-square mile — the highest rate in the Twin Cities And this, from the Strib, detailing an FBI raid of perhaps the biggest fraud-for-profit outfit yet: “The affidavit indicates that about 150 north Minneapolis properties foreclosed on in one six-month period earlier this year passed through TJ Waconia’s hands. That’s one in every five foreclosed properties in that area in that period,…” Just jaw-dropping stuff. More Trouble in Sight [Pioneer Press] FBI Names Two in Latest Mortgage Fraud Case [Strib] Update: Commenter John Hoff went all Columbo and posted at least a partial list of properties that passed through TJ Waconia and are now in foreclosure. Nice work there. One thing to keep in mind is that these properties aren’t by definition damaged goods - as always there is a market value for any property - its just that the history of values on these properties will have very tiny to do with reality, since they were inflated for fraudulent purposes. Of course, these fraudulent sales distort the market, because they become comparable (albeit inflated) sales for legitmate transactions. Because of the sheer volume of properties involved, it is highly likely that many legit buyers in north paid more than the true market value. This is where mortgage fraud hurts everybody. For more visit Source:www.behindthemortgage.com

Share This

Share This

Perhaps the most useful and succinct description of the Sub-Prime ARM Freeze we’ve seen, from Calculated Risk: [Treasury Secretary] Paulson clearly defined the group of borrowers that are being targeted for modifications: Homeowners with “steady incomes and relatively clean payment histories who could afford the lower introductory mortgage rate but cannot afford the higher adjusted rate”. Whenever the freeze ends, most of the homeowners in the defined group will still face foreclosure. So the purpose of this plan is clear - since the industry lacks the infrastructure to handle the work load, this guideline helps decide which loans to foreclose on now, and which loans to foreclose on later. Emphasis ours. Sounding less like a rescue and “keeping the dream alive” and all that, isn’t it? For more visit Source:www.behindthemortgage.com

Share This

Share This

Graphic via MSNBC Last Week: Though the short week was fairly volatile, most conforming mortgage rates remained unchanged, and still hover at or near the low point for 2007. This Week: A very full economic calendar this week, with a number of reports that’ll give us a glimpse of the say of the economy and of inflation. As for inflation, The GDP chain deflator, and PCE (personal consumption expenditures) index, both key measures of inflation, print on Thursday and Friday, respectively. On the economic front, GDP, consumer confidence, existing and new home sales, and durable goods orders will give the market a lot to digest. Any signs of a weakening economy might help move mortgage rates lower - signs of economic strength, especially if they coincide with rising inflation will move rates up. This Week’s Economic Calendar [Barron’s] For more visit Source:www.behindthemortgage.com

Share This

Share This