Rates on 30-year, fixed-rate home loans spiked 0.53 percentage points to an average of 4.46% this week — the largest weekly increase in more than 26 years, mortgage giant Freddie Mac said Thursday.
The 30-year loan, which stood at 3.35% as recently as early May, is at its highest level since July 2011.
Rates for 15-year loans, popular with homeowners refinancing their mortgages, jumped 0.46 percentage points to 3.5%.
An extra percentage point will cost homebuyers with 30-year, fixed-rate mortgages $56 more a month for every $100,000 they borrow. Read More.
Freddie Mac, one of the key mortgage lenders, has issued its outlook for the real estate market and it is coming up roses. Now every increased percentage point of property value removes a huge amount of risk to their mortgage portfolio, so every bit of positive spin needs to be recognized as slightly self serving, the news is still great. Read More.
Fannie Mae and Freddie Mac will build a new joint company for securitizing home loans as a stepping stone toward shrinking the government’s role in the mortgage market, the regulator of the U.S. government-controlled firms said on Monday.
“The overarching goal is to create something of value that could either be sold or used by policymakers as a foundational element of the mortgage market of the future,” Edward DeMarco, acting director of the Federal Housing Finance Agency, told the National Association for Business Economics.
Fannie Mae and Freddie Mac, which were bailed out by the government in 2008, help finance about two-thirds of new U.S. home loans. DeMarco is seeking to shrink their footprint and reduce risks to the taxpayers that support the mortgage giants.
Since they were seized by the government, the companies have drawn nearly $190 billion from the U.S. Treasury to stay afloat.
By creating a new securitization company, FHFA intends to pave the way for a single securitization platform and force Fannie Mae and Freddie Mac to abandon their separate systems. Read More.
Short sales are getting much shorter, Freddie Mac says. The mortgage giant launched a Freddie Mac Standard Short Sale program on Nov. 1 that sought to speed up the short sale process and make it easier and more transparent.
“We estimate that the time to complete a short sale will decrease by approximately 50 percent to 75 percent,” as a result of the changes, writes Tracy Mooney, Freddie Mac’s EVP in a recent blog post. Read More.
For borrowers who refinanced in the second quarter, fixed-rate mortgages dominated consumer preferences.
Among those who refinanced in Q2, more than 95 percent opted for a fixed-rate mortgage, according to the Freddie Mac Quarterly Product Transition report.
For those who had a hybrid ARM, 81 percent transitioned into a fixed-rate loan during the second quarter; the percentage represents the highest share in two years. In contrast, for those with a 15-year fixed rate loan, 2 percent transitioned into a hybrid ARM. Read More.
In the latest sign that the worst might be over for the battered US housing market, the two government-controlled mortgage finance giants, Fannie Mae and Freddie Mac, this week reported some of their best quarterly results since the real estate collapse.
On Wednesday, Fannie Mae posted second-quarter net income of $5.1 billion. That is up from $2.7 billion in the first quarter of this year and an improvement from a net loss of $2.9 billion in the second quarter of last year. Fannie requested no additional money from the Treasury and said it would pay a $2.9 billion dividend to taxpayers.
On Tuesday, its brother organization, Freddie Mac, announced second-quarter net income of $3 billion, up from $577 million in the first quarter and a net loss of $2.1 billion in the year-ago second quarter. It also requested no additional federal aid and said it would pay a $1.8 billion dividend to the federal government. Read More.
The Federal Housing Finance Agency announced Tuesday that after several months of mounting pressure from the Obama administrator and lawmakers that the mortgage giants it regulates, Fannie Mae and Freddie Mac, will not lower the mortgage principal of underwater home owners. Its decision quickly drew criticism.
The FHFA insists that through its own analysis it has concluded that reducing the mortgage principal of struggling home owners will not help prevent foreclosures nor save taxpayers money in bailout money to the GSEs. Read More.
The Federal Housing Finance Agency announced a new policy to speed up the process that mortgage servicers use to handle short sales, deeds-in-lieu, and deeds-for-lease for mortgages that are backed by Fannie Mae and Freddie Mac.
The FHFA, the regulator of Fannie and Freddie, says the new policy includes a revised timeline that will require mortgage servicers to respond to a request for a short sale offer within 30 days. Servicers also will be required to make a final decision on the short sale offer within 60 days. Read More.
This topic seems to cause quite the debate among the masses. What are your thoughts?
Fannie Mae and Freddie Mac could save $1.7 billion if they forgave principal on some distressed mortgages, new analysis shows.
The Federal Housing Finance Agency— which regulates the mortgage giants — may decide in the next few weeks about whether to use principal forgiveness as a foreclosure prevention tactic, said Edward DeMarco, acting director of the FHFA while speaking Tuesday at the Brookings Institution.
The FHFA, and DeMarco, have come under pressure to allow Freddie and Fannie, which own or guarantee 60% of all home loans, to do principal forgiveness. Read More.
A variety of encouraging indicators suggest the housing market is awakening, “much like the garden flora reemerging from their winter dormancy,” Frank Nothaft, Freddie Mac chief economist said Wednesday.
In the agency’s latest economic outlook report, Nothaft predicts stronger economic growth in 2012 will translate to a reduction in the unemployment rate below 8.3%. He expects 30-year fixed-rate mortgages to gradually increase throughout the year to 4.5% and new rental construction to reach heights not witnessed since 2005 — if the current pace is maintained, that is. Read More.