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More on Mortgage applications: The refinance index dove 15% to its lowest level since November...

More on Mortgage applications: The refinance index dove 15% to its lowest level since November 2011 as the average 30-year fixed-rate mortgage jumped 17 bps to 4.07%, the highest in more than a year. The index is now off about 40% in a month. Mortgage REITs (MORT,, REM) certainly face a few issues at the moment, but prepayment risk is no longer one of them. Struggling enough finding growth, the refinancing cash cow benefitting the big banks (WFC, BAC, JPM, C isn't producing at the moment.
Comments (11)
  • mickmars
    , contributor
    Comments (1323) | Send Message
     
    Bernanke's gotta buy this rate back down, or you can kiss this "Housing Recovery" goodbye. It's all dependent upon a 3.4% 30 yr. mortgage....
    5 Jun 2013, 08:56 AM Reply Like
  • june1234
    , contributor
    Comments (2599) | Send Message
     
    I thought we were in a housing recovery. Thats what they keep saying
    5 Jun 2013, 09:37 AM Reply Like
  • Economic Analyst
    , contributor
    Comments (2463) | Send Message
     
    Thats what they always say about real estate, sell in April.
    5 Jun 2013, 09:48 AM Reply Like
  • IgnisFatuus
    , contributor
    Comments (2116) | Send Message
     
    EA, <Thats what they always say about real estate, sell in April.>

     

    Hmmm, I thought it was sell in 2006 and go away...
    5 Jun 2013, 12:57 PM Reply Like
  • Teutonic Knight
    , contributor
    Comments (2055) | Send Message
     
    Strange, doesn't sound right, does it? If people think that rates are on their way up then they would rush to refinance to take advantage of such low rates now before missing the boat.

     

    What is happening? Huh?
    5 Jun 2013, 10:28 AM Reply Like
  • enigmaman
    , contributor
    Comments (2686) | Send Message
     
    TK- agreed, something else going on here, maybe its not that borrowers are afraid of rates going higher but more to do with waiting for rates to go lower. If borrowers believed rates were going up and not coming back down there would be a mad rush to refinance.
    5 Jun 2013, 10:51 AM Reply Like
  • Teutonic Knight
    , contributor
    Comments (2055) | Send Message
     
    @enigmaman

     

    You may well be right.

     

    One thing I pointed out elsewhere is that both VWO and EEM, two most popular emerging market ETF's had been performing tepid of late. To me this is an indicator of the big boys and the big whales at least hedging their bets overseas. They the big boys and the big whales are the movers and shakers and they watch their cash registers every minute. Without naming names, one casino scion threw in a couple of hundred millions into the Macau arena in 2009 and easily tripled or quadrupled his money in a short 3 years.

     

    Those were the movers!

     

    The signs are somewhat bearish as I read it, as money seems to be flowing back to Fortress America, the safe haven.
    5 Jun 2013, 11:21 AM Reply Like
  • Buckoux
    , contributor
    Comments (6190) | Send Message
     
    Borrowers are NOT waiting for rates to go lower (?), they're waiting for home prices to go down and the economy to actually improve. Which it's not. In particular (and paradoxically) these low interest rates are an impediment to home buying and refinancing. Therefore, if a low interest rate is the solution, then just what, exactly, is the problem?
    5 Jun 2013, 12:09 PM Reply Like
  • rubber duck
    , contributor
    Comments (194) | Send Message
     
    Waiting for home prices to go down? That's like waiting for the stock market to crash. It already happened from 2008-2011. If they're waiting for things to go down they better just start renting.
    5 Jun 2013, 04:11 PM Reply Like
  • Phr3d
    , contributor
    Comments (231) | Send Message
     
    refi = 75% of appraised value, hard number.
    appraisals are hideously low, with tight requirement of comparable houses sold in last six months (generally 25% Below tax assessment valuation).
    fees for appraisal & 'inspections' reach $1k to "find out" if a refi will actually produce 'cash-out' to do home repairs.
    smart street wisdom is don't even try if your house is in less than stellar condition AND paid to under 50% of assumed hideously low appraisal.
    long and short, the banks have cherry-picked nearly all of those customers and the remainder aren't willing to even try at an outlay of $1k (which also leaves the hideous appraisal on record).
    MHO, refi is already dead, has been for approaching 12 months, and investors running from the refi drop when profits continue to grow are misreading the financials, or something.
    5 Jun 2013, 09:04 PM Reply Like
  • EGalindo
    , contributor
    Comments (90) | Send Message
     
    So....maybe this is why the TBTF banks are considering a move on Australia? See the adjoining article in Seeking Alpha.

     

    http://seekingalpha.co...
    6 Jun 2013, 09:04 AM Reply Like
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