Today's Real Estate News - April 14th, 2010

Loan Delinquency Rate Takes a Notable Dip
The percentage of delinquent mortgages declined to 6.57 percent in the first quarter from 6.60 in the last quarter of 2009, according to Equifax and Moody’s Economy.com.

This is the first decline in the delinquency rate since the first quarter of 2006.

"It portends a peaking of the foreclosure crisis," says Mark Zandi, chief economist for Moody’s.

Reasons for the decline include tougher lending standards, mortgage modification efforts and a more stable job market, economists say.

Source: USA Today, Stephanie Armour (04/14/2010)

Daily Real Estate News | April 14, 2010 |

Mortgage Applications Fall Sharply
Applications for mortgages to purchase properties declined 10.5 percent last week compared to the previous week on a seasonally adjusted basis, according to the weekly mortgage applications survey released by the Mortgage Bankers Association.

On an unadjusted basis, the purchase index was down 10.5 percent compared to the previous week and fell 17.5 percent compared to the same week a year ago.

Application volume was affected by the rising cost of FHA mortgage insurance premiums, the bankers said. Applications for conventional mortgages also were down, driven by an increase in rates, said Mike Fratantoni, the association’s vice president of research and economics.

Overall, applications for both purchases and refinances decreased 9.6 percent on a seasonally adjusted basis. Interest rates actually decreased compared to the previous week:

• 30-year fixed-rate mortgages decreased to 5.17 percent from 5.31 percent.
• 15-year fixed-rate mortgages decreased to 4.45 percent from 4.54 percent.
• 1-year ARMs decreased to 7.02 percent from 7.03 percent.

Source: Mortgage Bankers Association (04/14/2010)

Daily Real Estate News | April 14, 2010 |
Lenders Push Back on 2nd-Lien Cuts
Executives representing major lenders told lawmakers that principal reductions on second mortgages may not be enough to heal the housing crisis and should not be their sole option for modifications.

They warned that forcing write-downs on second liens could rattle the markets, inflate downpayment requirements, tighten credit criteria more, and boost risk premiums for mortgage credit.

Executives also noted that they have been able to modify first-lien loans without also modifying second-lien loans.

Source: American Banker, Donna Borak (04/14/2010)

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Daily Real Estate News | April 14, 2010 |

Affordable Housing Goals Didn't Doom Fannie
Federal affordable housing goals weren’t responsible for the collapse of Fannie Mae and Freddie Mac, Assistant Treasury Secretary Michael Barr said Tuesday in a speech to the Mortgage Bankers Association.

“This claim simply is not supported by the facts,” Barr said.

Instead, Barr said management’s decision to lower standards in order to compete with Wall Street for profitability drove Fannie and Freddie to risk too much on poorly underwritten loans and the sale of questionable securities.

Fannie and Freddie “relaxed standards for the same reasons other market participants relaxed standards: old-fashioned greed and flawed regulation,” Barr said.

Source: The Wall Street Journal, Nick Timiraos (04/13/2010)

More Single Buyers Opt for Suburbs
More singles are buying homes in suburbia, reports Coldwell Banker, which conducted a nationwide survey of single home owners on the factors that motivated them to buy.

Here are some figures that reflect the reasoning behind their choices:

• 52 percent chose the suburbs over urban or rural areas.
• 53 percent of single home owners said they purchased a home because it was a better deal than renting.
• 68 percent chose a home priced lower than they could afford.
• Of the 13 percent who own their home jointly with another person, 49 percent made the purchase with their parents.
• 55 percent have less than a 30-minute commute to work.
• 40 percent live within 30 minutes of their parents or extended family.
• 27 percent of women thought the number of bedrooms were important, while only 18 percent of men felt the same way.
• 38 percent of men would consider buying a foreclosure, while only 29 percent of women would consider one.

Source: Coldwell Banker (04/14/2010)