Rise in Mortgage Delinquencies is Cause for Concern

Mortgage delinquencies inched up in the second quarter of this year for the first time in five straight quarters, a directional shift that has mortgage regulators a little concerned. According to a new report from the Office of the Comptroller of the Currency, of mortgages that were delinquent between 30 and 59 days, there was 0.4 percent increase to 3 percent in the second quarter from the previous quarter, while for loans that were 60+ days late, the delinquency rate grew 0.1 percent to 4.9 Read more [...]

Fed Officials on the Economy: Not Time to ‘Pop the Champagne Corks’ Yet

There are plenty of signs of life returning to the U.S. economy, including recent and upcoming moves by the Federal Reserve, but its members are being careful not to be overly optimistic. Last week after the Fed raised its emergency lending rate, Atlanta Fed president Dennis Lockhart made it clear that he “would not interpret this action as a tightening of monetary policy or even a sign that a tightening is imminent. Rather, this action should be viewed as a normalization step.” Last Friday Read more [...]

New Mortgage Market Bailouts at ‘Zero’ Cost to Taxpayers

Today, the Obama administration announced two new programs to help a small segment of the U.S. housing industry get back on its feet, all with the promise that the taxpayer will not have to foot the bill. HFAs Getting Help: State and local housing finance agencies, also known as HFAs. They originate home loans for first-time homebuyers and lower-income buyers. They also provide refinance loans for rental properties. According to National Council of State Housing Agencies President Susan Dewey, Read more [...]

Is the Market Ready for Less Fed Help?

Since the housing market went belly-up and took Wall Street down with it, the Federal Reserve has been doing all it can to bail out the industry and provide liquidity in the system. The buying up of U.S. Treasuries and government-backed mortgage backed securities (MBS) has been the Fed's focus. But as the housing market has started to show signs of life again, the Fed has announced plans to slow down its purchases of Treasuries. It seems to be considering a similar plan with mortgage debt. "I Read more [...]

Not Many Recovering from Home Loan Delinquency

Well last week we had good news – this week it looks like more bad news. A new study conducted by Fitch Ratings Ltd. and reported in the Wall Street Journal found that home owners who start to miss mortgage payments are not that likely to get caught up again. The report looked at the “cure rate,” or the percentage of delinquent home loans that are brought current each month (The study did not include government-backed loans and loans not bundled into securities. This means only about 16 Read more [...]

Report Says Housing Crisis to Last Through 2010

A new report from two prominent academic economists predicts the U.S. housing market downtown will not bottom out until 2010. The report entitled, “The Aftermath of Financial Crises” authored by University of Maryland economist Carmen Reinhart and Harvard economist Kenneth Rogoff, suggested that the nation's unemployment rate may sink to 11 percent or lower by the end of next year. Such numbers would result in a loss of 6 million to 7 million jobs during that time. The current unemployment Read more [...]

Bailout Plans Cause Mortgage Interest Rate Hike

Uncertainty among lenders and investors about the near future of the economy led to a rise in U.S. mortgage interest rates in the latest week, according to a recent survey from mortgage giant Freddie Mac. During the week ended Sept. 25, 2008, the average rate on a 30-year fixed rate home loan climbed up to 6.09 percent, excluding points, from 5.78 percent the week before. One year ago, the average rate rested much higher still at 6.42 percent. "Mortgage rates followed Treasury bond yields Read more [...]

Federal Reserve Interest Rate Hikes Unlikely Until 2009

Even in the face of rising inflation, the Federal Reserve is unlikely to raise their target interest rate through the end of 2008, based on comments Friday from Fed Chairman Ben Bernanke. “The Federal Open Market Committee (FOMC) has maintained a relatively low target for the federal funds rate despite an increase in inflationary pressures,” Bernanke said in a speech at the annual economic symposium in Jackson Hole, Wyoming. He explained that this strategy is based on the Fed's expectation Read more [...]