June 24 average daily rates in Orange County for 30-year fixed loans with one-point fee: Conforming up to 6.078%, Jumbo up to 7.446% and Conforming-Jumbo up to 7.208% (Note: conforming-jumbo rates are for loans from $417,000 to $729,750, while conforming is up to $417,000 -- both types are sold to GSEs. Jumbos here are $730,000 or higher and not sold to GSEs.)
Source: Newspaper Chart Services 
Senate nears deal on mortgage aid
May 15th, 2008, 7:54 am · 12 Comments · posted by Matt Padilla, Register Reporter and Blogger
U.S. senators are close to a deal that would expand a government program to insure hundreds of billions of dollars in refinanced mortgages with an eye to stemming the tide of foreclosures, reports the Wall Street Journal online and Fox Business.
The deal could be finalized later today but the Journal described talks as ‘fragile.’ In its current form, the bill would also overhaul supervision of government-sponsored mortgage giants Fannie Mae and Freddie Mac, as well as the 12 Federal Home Loan Banks. If senators fail to strike a deal, the bill may be dead for at least the remainder of this year, the Journal said.
To read the full story, CLICK HERE, though a paid subscription may be required.
Interestingly, Federal Housing Administration Commissioner Brian Montgomery has criticized the plan, which would expand the role of his agency, according to U.S. News and World Report. Montgomery said: “It throws sound underwriting out the window. It moves us toward a federalization of the mortgage market, forces taxpayers to pay for bad loans, and doubles FHA’s portfolio, adding hundreds of thousands of risky loans in a Byzantine process that will take years to sort out and create a regulatory nightmare.”
Related Links:
- OC Register calls on Bush to veto mortgage bailout
- U.S. House passes $300 billion mortgage bill opposed by Bush
- Pimco’s Gross says slash mortgage balances
- O.C.’s coming wave of prime foreclosures?
- Bush expands FHA, again, to aid subprime borrowers
- Web voices unite against housing bailout
May 15th, 2008 at 12:35 pm
Dubbya already said he was gonna veto it.
This is election year grandstanding by the Senate. Nothing more, nothing less.
May 15th, 2008 at 12:51 pm
the end
this is the end
beautiful friend
the end
of our elaborate plans
the end
no safety or surprise
the end
http://www.iht.com/articles/2008/05/15/business/rtrcol16.php
May 15th, 2008 at 1:41 pm
Another great idea from Washington… let’s use bad underwriting to correct bad underwriting! Throwing bad money after bad money always works!
May 15th, 2008 at 2:31 pm
I don’t know if Brian Montgomery is a Bush appointee, but that has to be the most intelligent statement I’ve heard from anybody concerning a housing bailout. In reality, this is nothing more than a bank bailout that shifts risk from their investors onto the government, i.e you and me.
May 15th, 2008 at 8:14 pm
I hope the Senate keeps the sane parts of Frank’s bill & drops the insanity.
Homeowners who lied to get a loan they can never afford are certainly not worthy of a federal bailout. Let’s not reward irresponsibility.
Sometimes foreclosure is a good thing. If you don’t think so, check out “Bailout bill problems,” our latest post on the Barney (Frank) Bill.
May 15th, 2008 at 9:04 pm
Veto Veto Veto Veto!
Montgomery is exactly right.
May 16th, 2008 at 7:25 am
The only thing the governement could do to stop CA, NV, FL, AZ meltdown is pay peoples mortgages. People that are upside down and losing more and more equity by the day dont care about fixing their rate or lowering their payment - they just want out as they should want out. .
May 16th, 2008 at 9:08 am
Fannie Mae just announced that they’ll accept 3 to 5% down payment loans in a declining market….Here we go again.
May 16th, 2008 at 10:33 am
Ahem… Downey’s Option ARM woes continue…
Non-performing assets continue to mount at California-based Downey Financial Corp. (DSL: 9.39, -4.18%), with the option ARM specialist reporting Thursday afternoon that NPAs had reached 13.24 percent of the bank’s $13.15 billion in total assets — or $1.74 billion — by the end of April.
More troublesome, perhaps, is that efforts by the bank to modify outstanding option ARM mortgages ahead of scheduled recapitalization appear to be losing steam. So-called troubled debt structurings grew by just 10 basis points to 4.59 percent in April versus one month earlier, while more traditional non-performing loans grew by 124 basis points to 8.65 percent (a basis point is one-hundredth of a percent).
May 17th, 2008 at 8:58 pm
Here’s MORE good news about Orange County real estate.
Here is a link to Steven Thomas’ latest market report:
http://www.ouragentspot.com/sthomas/MarketTime-May-15-08.pdf
I’m sure that Lansner & Padilla will have snippets of the report to write about, but this link includes the entire report, INCLUDING graphs & charts.
Thomas is doing this report every two or three weeks and has been SPOT ON, so far this year. NO one else have such an extensive report that focuses strictly on Orange County. Case/Schiller isn’t even close to relevant with their “Southern California metropolitan area report - one of 20 national areas that they’re “reporting” on
For the idiots who claim that Thomas is making this stuff up, look and the charts and graphs - they are extensive, complete, and accurate.
A few bozos here have attempted to ridicule, or minimalize these reports. Until they come up with something better, something more extensive, AND something MORE relevant, they should probably shut their stupid traps. ( The old saying applies: It is far better to keep your mouth shut, and keep people wondering if you’re really stupid, than to open your mouth and prove it to them.)
Stay cool this weekend.
May 17th, 2008 at 10:34 pm
Here are some good news “snippetts” from a lender friend of mine:
So you’ve heard a lot of mortgage ads on the radio this week. Some offer rates below 5.6 percent (“because we’re nice people too…”) while others “won’t bother” if your rate is above X, no matter if you need cash by the way. Some lenders talk about a “4.5% 30 year fixed refinance strategy” (false) and another one says “you can pay off your loan in 7 years without increasing your current monthly payment (kinda true. LL has this financing product by the way). During the good old days of 2004-2006 when homes sold in hours not months, we saw burped up into this industry the worst loan brokers ever. Sure, you could get a stated, stated 100% financing $1,000,000 loan for a person paid minimum wage, but was it the best for the client? Clearly not, since these loans funded by fly by night operators produced the price suppressed market we’re in today. These opportunists have begun to come back out with mailers, ads, and other gimmicks to again take advantage of your buyers and seller. They whisper fantastic tales of loan rates ultimately too good to be true. To quote The Who*…..“Don’t get fooled again”. Make sure your clients don’t chase rate, but get a program and payment they can live with in the house today, and the one you’re going to sell them when they want to move up.
* you know, the ones whose songs start each of the CSI shows… (the only current cultural reference most will recognize for a band that is as old at the Rolling Stones. But I digress)
Home Buyers, Start Your Engines. By Brett Arends, WSJ On Line. May 15, 2008
If you were thinking of buying a home, start looking. The latest data from the housing market shows that sellers, after months and years in denial, are finally giving in to reality and slashing prices. There is a distance still to go. There may even be a lot to go. But the process, long delayed, is now well underway. The National Association of Realtors on Tuesday released its long-awaited report on prices from the first quarter. The price drops were startling. In many of the former hot spots, from Florida to Nevada to the Californian “Inland Empire,” single-family home prices plunged by 20% to nearly 30% in a year.
Nationwide, the decline from the previous quarter was about 5%, says the NAR. And this, ultimately, is good news. We know prices have to fall. The sooner it happens, the quicker the market can clear. We may not be at that stage known on Wall Street as “capitulation,” but there is more than a whiff of it in the air. Far too many people in the real estate market have spent far too long insisting that denial is just a river in Egypt. They refused to accept there was a bubble on the way up, and refused to admit it even on the way back down. (There’s a few still out there: Last week I got an angry email from a broker who blamed the whole slump on “the media”.) It is simply remarkable how slow this bubble has been to deflate. That, bluntly, is part of the problem. As well…you can imagine what fantasies the sellers were clinging to. “Well, two years ago this home was worth half a million bucks.” The problem: So what? It doesn’t matter what prices were three or two years ago. We were in a bubble. Market psychologists call this “anchoring”, because people anchor their expectations to the past, and it’s a fallacy. Just five years ago, the same home sold for $270,000 and 10 years ago just $200,000. Are those relevant anchor points too? But sellers have at least returned to the bargaining table. If you are in the market for a home, it is time, cautiously, to take a look and, maybe, see if you can play, “Let’s Make A Deal.”
Some good news for a change….. but with important conditions.
Fannie Mae Scraps Declining Markets Policy By Robert Freedman for REALTOR® Magazine.
Fannie Mae will no longer require borrowers to put up an extra 5 percent down payment when purchasing homes in areas deemed “declining markets,” the country’s largest secondary mortgage market company said Friday. Fannie Mae had been hearing concerns from REALTORS® and others for months that its declining-markets policy was bad for the housing market because it discouraged consumers from buying homes in markets hardest-hit by foreclosures. Under the policy change, borrowers can get loans up to 95 percent loan-to-value, even in markets in which prices have been falling. Prior to the change, borrowers could only get loans up to 90 percent to give lenders a 5-percentage-point cushion to protect against possible price declines in the future. The new policy takes effect June First.
Anyone notice what is missing? High Cost Area Jumbo Conforming loans are not part of this policy change. From $1.00 to $417,000 you can get a 95% LTV loan. From $417,000 to $729,600 the maximum is 90%, but lenders will still hit those loans with a 5% reduction in maximum financing so a 90% max is really 85%. The good news is that 95% purchase loans can be had for prices up to $439,900. Anything over a $439,900 price where a buyer wants to put 5% to 10% down will have to close as an FHA purchase. Freddie Mac, Fannie Mae’s competitor in the mortgage market has had this policy in place for about 30 days already.
Rates below assume a 20% down fully documented purchase transaction with a clients FICO score at or above 700. Rate and terms as of 05/16/08 and are subject to change without notice. APR’s have not been calculated.
Conforming 30 Fixed $417,000 and below: 5.625 1.0 point
HCAJ Conforming 30 Fixed $417k to $729k 5.750 1.0 point
Jumbo 30 Fixed $417,000 to $2m 6.875 1.0 point
Standard FHA 30 Fixed $362,000 and below: 5.875 1.0 point
HCAJ FHA 30 Fixed $362k to $729k 6.125 1.0 point
Conforming 5/1 ARM $417,000 and below 4.875 1.0 point
HCAJ Conforming 5/1 ARM $417k to $2m 5.750 1.0 point
( End of report.)
May 17th, 2008 at 10:47 pm
Even MORE good news from another lender friend:
On 6/01/08, Fannie Mae will accept up to 97 percent loan-to-value ratios for conventional, conforming mortgages processed through its Desktop Underwriter® (DU®) automated underwriting system, and 95 percent loan-to-value ratios for loans underwritten outside of DU, in all geographic locations in the United States. The new national down payment requirements of 3 or 5 percent will apply to loans for purchase of single-family, primary residences. Down payment requirements will vary for other occupancy, property and transaction types.
Among the changes in response to market conditions, in December 2007 Fannie Mae adopted a “Maximum Financing in Declining Markets Policy” that restricted the loan-to-value ratios on properties in markets where home prices are declining, essentially requiring higher down payments in these markets. The new single national down payment policy announced today will supersede that policy. Fannie Mae will continue to provide support for homebuyers that need down payment assistance, and will continue to allow loans with Community Seconds® up to a maximum 105 percent combined loan-to-value ratio.
The market is turning, and the bears are scurrying for their dens. Have a nice snooze until the next peak, Smokey.