Looking at the national real estate market, Chris McLaughlin reported today that “borrowers are rushing to take advantage of low borrowing costs and other incentives while they last. The Mortgage Bankers Association (MBA) released its Weekly Mortgage Applications Survey for the week ending January 15, 2010.  The Market Composite Index increased 9.1 percent on a seasonally adjusted basis from one week earlier, and decreased 52.3 percent compared with the same week one year earlier.  The Refinance Index increased 10.7 percent from the previous week and the seasonally adjusted Purchase Index increased 4.4 percent from one week earlier.  The unadjusted Purchase Index increased 9.8 compared with the previous week and was 19.1 percent lower than the same week one year ago.”

“The refinance share of mortgage activity increased to 71.7 percent of total applications from 71.5 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 4.1 percent from 4.0 percent of total applications from the previous week. Average 30-year mortgage rates dropped to 5 percent last week, and it’s still before the deadline to take advantage of the government’s extended and expanded federal tax credit.  Despite these lures to buyers, the fallout from unemployment, underemployment and the ongoing sale of foreclosure properties continue to keep many potential buyers out of the market, and [nationally] housing is unlikely to gain much traction until these barriers start to fall.”

If new applications to buy homes are any gauge, the U.S. housing market is warming up, and that’s despite the fact that we’re now into the traditionally quiet holiday season.

Applications for home purchase loans soared 42 percent last week on a non-seasonally-adjusted basis compared with the week before, according to the Mortgage Bankers Association.

That burst of activity may have been influenced in part by the long Thanksgiving week layoff. Or it could have been an early reaction to the extension of the $8,000 tax credit or the start-up of the new $6,500 credit.

Either way, it was an exceptional week for mortgage lenders.

But here’s another possibility: With the economy gaining a little momentum, interest rates have begun edging up again.

Mortgage rates are still close to historic lows, 4.9 percent on average for 30-year fixed and 4.3 percent for 15 year fixed, but MBA chief economist Jay Brinkmann says they’re likely to exceed 5.2 percent by this coming March.

So, maybe the rush to nail down financing by home buyers is a smart move … compared with paying half a point higher rates by early spring.

On other economic fronts, we’re looking at a mixed bag of reports this week, though mainly positive:

Freddie Mac’s found home prices nationwide up by about one point on average during the third quarter. That’s on top of a two percent gain for the second quarter. Clear Capital, a real estate data company, also found prices up marginally – by 1.4 percent – during the month of November, though a few local markets came in with double digit gains.

But not all surveys agree on that. The well-regarded “IAS 360” index came in with a contrarian result. It found that overall prices in the U.S. were down slightly on average — by about half a percent.

Since there’s not a huge variation among the three reports, we can probably safely conclude that — at the very worst — prices have stabilized in most markets — and at the very best, they’re up a little.

There were also positive indications on lower delinquencies and foreclosures across the country. Realty Trac says foreclosure filings in November dropped by 8 percent – the fourth consecutive month of declines.

And Trans Union, the big credit bureau, forecasts three percent fewer mortgage delinquencies next year – after three straight years of rising delinquency rates.

Meanwhile, ZIP Realty’s latest national study on price reductions on listed properties found that during November the number of price cuts dropped in 27 major markets, a welcome sign of more realistic asking prices.

source: realtytimes

Commercial Loan Compliance | Multifamily Origination Drops 40%

Over the past year multifamily loan defaults have been on the rise even though housing analysts believe there will be more renters because of a weak job market.

The origination of commercial mortgages backed by apartment buildings fell 40% in 2008 to $88 billion with a small cadre of lenders dominating the market, according to an analysis released by the Mortgage Bankers Association.

The trade group said 2,877 different lenders funded multifamily loans during the year with PNC Real Estate, Wachovia (now part of Wells Fargo), Wells Fargo, Capmark Financial and Deutsche Bank Commercial Real Estate having the largest market shares. (Capmark recently filed for bankruptcy protection.)

The Mortgage Bankers Association found that 26% of lenders that funded Multi-Family loans made just one mortgage on these properties in 2008. And two-third of originators made five or less.

_______________________

Commercial Loan Compliance® | A Mortgage Loan Compliance Company

Multi-Family and Commercial Audits | Get The Facts on Your Loan and Protect Your Rights! | Certified Forensic Compliance Audits Starting at $2495

Call 1-866-966-6615 or visit www.cl-compliance.com

The Obama administration is set to announce a new program to help troubled borrowers whose mortgages are deemed ineligible for modification.

“Maybe this week but certainly next week,” said Laurie Maggiano of the Treasury Department’s Office of Homeownership Preservation. Speaking at the Mortgage Bankers Association’s annual convention, Ms. Maggiano said Treasury would set out the parameters under which servicers can earn financial incentives if they offer borrowers the option of participating in a short sale and deed in lieu of foreclosure.

“We are hoping to set an industry standard so investors will know exactly what they can expect,” she said. “There’s really no magic. We haven’t reinvented the wheel,” Ms. Maggiano told industry executives in San Diego. To cut down on the paperwork, the program will provide a standardized set of forms.

The program will also cap the amount of money that can be paid to subordinate lien holders who agree to waive their interest in a property. The government expects that some second mortgage investors will “walk away” from the program because the compensation being offered will be too little. But Ms. Maggiano, who is director of policy in the preservation office, told a standing room only session that by setting a limit, the White House is hoping to eliminate time consuming back-and-forth negotiations between servicers, borrowers and investors.

_______________________

Mortgage Loan Compliance® | A Forensic Loan Audit Company

Get The Facts on Your Loan and Protect Your Rights! – $59 Rapid Report Forensic Audits and $295 Certified Forensic Compliance Audits

Call 1-866-966-6615 or visit www.ml-compliance.com

The 10 year note started out a little higher this morning and has since leveled off.  There are some more treasury auctions today and tomorrow.  Yesterday’s auction was well received and there was brief improvement in interest rates.

The improvement in rates that has been broadcasted here on a fairly daily basis was confirmed by the Mortgage Bankers Association which reported mortgage applications surged to a three month high.

Keep an eye on the treasury auctions today.  If they are well received again today we should see some lower rates.