Mortgage Applications Rise Despite High Rates [Housing Tracker]

Mortgage Trends 

Subprime the Highest Risk Segment in Seriously Delinquent Loans, OTS Says.“Office of Thrift Supervision Mortgage Metrics Report: While the proportion of mortgages that were current and performing remained relatively constant during [Q1] at approximately 92%... subprime mortgages made up 9% of the total portfolio examined, [and] they experienced twice the rate of serious delinquencies in Alt-A mortgages and nearly eight times the rate of prime mortgages. The OTS’ report… is based on data from the five largest servicers of residential mortgages: WaMu, Countrywide, IndyMac Bank, Wachovia FSB, and Merrill Lynch… Seriously delinquent mortgages… declined slightly from 3.65% to 3.61% of all serviced mortgages.”  (Default Servicing News, July 7^th) 

Housing Market Still Struggling; Positive Signs Beginning to Emerge. “Another encouraging sign is the recent week-over-week increase in mortgage applications for both refinancings and home purchases. While total applications were down almost 23% from a year ago, applications for home purchases were up 2.8% from the prior week.” (Vahan Janjigian in Seeking Alpha, July 7^th) 

The Lending Labyrinth.  Delaware: “The ranks of real estate agents, mortgage brokers and lenders may have thinned in the past year… yet buyers and sellers continue to do business every day, local real estate experts say. Joe Capaldi Jr., president of Mortgage Plus Corp., a mortgage broker: "Right now, in all honesty, it's really not as bad as one would think… Markets for subprime loans [and] loans requiring no down payment … have all but disappeared; lenders today want to see some “skin in the deal.” But the void left by the vanishing subprime market has been filled at least partly by the Federal Housing Administration, which insures home loans made by approved lenders.” (Delaware Online, July 7^th) 

Home Buyers Waiting As Rates Rise, Prices Fall. “Though still at historic lows, mortgage interest rates have trended higher in recent weeks at a time when consumers are already grappling with rising prices on everything from gasoline to groceries. In the Twin Cities metro area, for example, the average 30-year fixed-rate mortgage on Wednesday was 6.71% with 0.92 points, according to HSH Associates in N.J. In mid-May, a comparable loan, with 0.8 points, was at 6.51%. On a $300,000 mortgage, the monthly difference would be about as much as it takes to fill your gas tank.”   (Minnesota Star Tribune, July 5^th)

Fighting Foreclosure: One Family’s Story.  “A California judge recently ruled that a debt-ridden couple's home equity line of credit [HELOC] could be discharged in their bankruptcy filing, due to the bank's failure to perform due diligence and offering them the loan despite their clear financial problems. Judge Leslie Tchiakovsky: "In general, a lender's reliance is reasonable if it followed its normal business practices. However, this may not be enough if those practices deviate from industry standards or if the creditor ignored a 'red flag'...[T]he Bank ignored a 'red flag' that should have called for more investigation concerning the accuracy of the income figures."  (Consumer Affairs, July 5^th)

 

Seeking Alpha's Housing Tracker is a collection of housing-related excerpts from various sources, grouped by topic. Feel free to post any interesting links on the subject in the comments section below.

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