Sep
30
Freddie Mac Contracts Titanium Solutions, Inc. to Help Borrowers Complete Modification Applications
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McLean, VA – Freddie Mac (NYSE:FRE) today announced it has hired Titanium Solutions, Inc. to meet with delinquent borrowers at their homes and help them supply missing information, documents and complete other actions needed to begin their three month trial payment periods for Home Affordable Modifications under President Obama’s Making Home Affordable program.
Titanium Solutions will target late-paying borrowers with Freddie Mac-owned mortgages who have not returned letters or phone calls sent by their servicers, or who need to provide additional information or documents to launch their three-month Home Affordable Modification trial periods. Titanium will also help those borrowers who have started their Trial periods complete the documentation process to enable them to be converted into final modifications.
“By meeting with our borrowers, one on one, in their homes Titanium Solutions can help them overcome the roadblocks keeping them from starting their Home Affordable Modification trial periods,”said Ingrid Beckles, Senior Vice President Of Default Asset Management at Freddie Mac. “We believe this can give borrowers seeking Home Affordable Modifications the same type of personalized guidance they may have had when they were buying their home or applying for their mortgage.”
“Through this initiative, Freddie Mac again demonstrates their commitment to helping homeowners in need. We are pleased to work with them to improve contact with at risk homeowners who are in jeopardy of losing their homes to foreclosure, as well as increasing the number of homeowners who receive and are approved for a modification,” said Patrick Carey, Chief Executive Officer at Titanium Solutions, Inc.
Reaching Delinquent Borrowers in their Homes
Titanium Solutions representatives will provide borrowers seeking Home Affordable Modifications with a wide range of support and expertise from reviewing program requirements, to explaining which documents are needed, to securing signatures and walking them through unfamiliar processes.
To minimize potential fraud by imposters, Titanium Solutions representatives will not accept mortgage payments or any other money from borrowers. Representatives will also carry a copy of their servicers’ solicitation letter the borrower initially received. These letters are specially formatted and include unique information about the mortgage loan.
Titanium Solutions, Inc. is the newest piece of Freddie Mac’s multi-pronged effort to help borrowers take advantage of President Obama’s Making Home Affordable program. Freddie Mac has placed program experts at servicers across the country, works one-on-one with borrowers at local events organized by the Treasury Department, and recently hired Home Retention Services, a wholly owned subsidiary of Stewart Lender Services, Inc., to ease backlogs at several servicers by processing applications from eligible delinquent borrowers with Freddie Mac mortgages.
For more information about Freddie Mac efforts to help borrowers and support Making Home Affordable, visit freddiemac.com/avoidforeclosure.
Freddie Mac was established by Congress in 1970 to provide liquidity, stability and affordability to the nation’s residential mortgage markets. Freddie Mac supports communities across the nation by providing mortgage capital to lenders. Over the years, Freddie Mac has made home possible for one in six homebuyers and more than five million renters.
Sep
24
WASHINGTON (AFP) – US existing home sales fell 2.7 percent in August as buying fever eased after four consecutive monthly increases, industry data showed Thursday.
The National Association of Realtors said August home sales dropped to a seasonally adjusted annual rate of 5.10 million units in August. That was down from July but 3.4 percent higher than the level of August 2008.
In the previous four months, sales had risen a total of 15.2 percent, the group said.
Lawrence Yun, NAR chief economist, said the tax credit for new home buyers under the US economic stimulus program is working.
“Home sales retrenched from a very strong improvement in July but continue to be much higher than before the stimulus,” he said.
“The first-time buyer tax credit is having the intended impact of bringing buyers into the market, allowing them to take advantage of very favorable affordability conditions.”
He said some of the decline may stem from “a backlog contributing to a longer closing process,” but added that “the decline demonstrates we can’t take a housing rebound for granted.”
The collapse of a housing bubble plunged the US economy into recession in 2007 and hit the worldwide financial system that had been betting heavily in the sector.
In August, the national price for all housing types was 177,700 dollars, down 12.5 percent from a year earlier and marginally lower than the level of 178,400 dollars in July.
The association said “distressed” properties continue to distort the median price because they generally sell for 15 to 20 percent less than other homes.
Sep
23
Mortgage Applications Rebound as Rates Reach Four Month Low
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Mortgage rates fell below 5% for the first time since mid-May last week, leading to increased appetite for refinancing, new loans, and purchases, an industry survey said Wednesday. The triple-front increases follow a soft performance in the holiday-shortened week before.
The Mortgage Bankers Association said the average mortgage rate fell to 4.97% in the week ending September 18. That, in combination with the $8,000 tax credit for first-time home purchasers expiring at the end of November, helped the mortgage loan application index expand by 12.8% in the week.
Even with the unemployment rate approaching double-digits, government incentives have helped the index improve by 14.0% compared to last year.
However, the main contributor to the week’s performance was from current homeowners. Refinances, which accounted for nearly 64% of all loans in the period, climbed 17.4% from the previous week, helping the 4-week average tick up to 6.8%.
Purchases also saw a significant 5.6% gain, with the boost coming from governmen-insured loan programs. “The share of purchase applications that were government-insured was 45.7%, the highest share since November 1990”, the report said.
Mortgage rates across the country remain low in part because the Federal Reserve has purchased $862 billion agency mortgage-backed securities since January 5, 2009. With new and existing home purchases stabilizing, it is unclear if the Fed needs to continue the initiative, so when the central bank concludes its two-day monetary policy meeting this afternoon, traders will be looking for comments related to the matter.
Yesterday, a report from Zillow.com showed the state average is below 5.20% in all 50 states. Lenders in Texas offer the lowest rates with an average of 4.96%, while rates in Wisconsin are currently the highest at 5.16%.
Sep
18
Sept. 18 (Bloomberg) — The Federal Housing Administration, the government agency that insures more than 20 percent of U.S. single-family mortgages, said its reserves will fall below congressional requirements as home prices decline.
The FHA isn’t in danger of failing, and the mortgage insurance fund will likely recover on its own within two years without any policy changes, Commissioner David H. Stevens told reporters on a conference call today. FHA is required by Congress to maintain a loan reserve ratio of at least 2 percent.
“Reports about the fund being insolvent and needing taxpayer bailout are inaccurate and do not reflect the total health of the fund,” Stevens said. “Under no circumstances will a taxpayer bailout be needed to support the fund.”
The insurance program, which tripled in size last year, has never been under more strain as private industry sources for lenders to finance and insure mortgages have dried up and as the U.S. mortgage default rate sits at a record high. The FHA said in a statement earlier today it’s tightening credit and appraisal standards and appointing a chief risk officer to cope.
“To be clear, the fund’s reserves are sufficient to cover our future losses,” Stevens said in the statement. “That said, given the size and scope of the FHA and its importance to today’s market, these risk management and credit policy changes are important steps in strengthening the FHA fund, by ensuring that lenders have proper and sufficient protections.”
Home Prices
Projected home price declines are the “single-biggest driver” behind the drop in reserves, Stevens later told reporters. The insurance fund won’t fall below zero, he said.
FHA’s total reserves are more than $30 billion, or more than 4.4 percent of its insurance, according to the statement. The loan insurance ratio, which measures the amount of reserves to the amount of loans insured, was 6.4 percent a year ago, according to government data.
Michael Williams, the chief executive officer of government-controlled mortgage-finance company Fannie Mae said this month that home sales are still dependent on government- affiliated programs, with private banks providing just 10 percent of loan liquidity, down from about 60 percent in 2006.
Sep
17
Housing Construction, Permits Rise
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WASHINGTON (Reuters) – New U.S. housing starts and permits rose in August to their highest level since November, lifted by a rebound in multifamily homes, a government report showed on Thursday.
The Commerce Department said housing starts rose 1.5 percent to a seasonally adjusted annual rate of 598,000 units, just shy of market expectations for 600,000 units. July’s housing starts were revised upwards to 589,000 units from the previously reported 581,000 units.
Groundbreaking for single-family homes, however, fell 3 percent in August to an annual rate of 479,000 units, after five straight monthly increases. Starts for the volatile multifamily segment jumped 25.3 percent to a 119,000 annual pace, reversing the previous month’s slump.
Compared to August last year, housing starts declined 29.6 percent. The housing market, the main trigger of the worst U.S. recession in seven decades, is showing steady signs of healing and analysts expect activity in the sector to contribute to gross domestic product growth this quarter.
A survey on Wednesday showed confidence among U.S. home builders reached its highest level in 16 months in September, which bodes well for future home construction.
New building permits, which give a sense of future home construction, climbed 2.7 percent to 579,000 units in August. That compared to analysts’ forecasts for 580,000 units. Compared to the same period a year-ago, building permits fell 32.4 percent.
The inventory of total houses under construction fell to a record low 595,000 units in August, the department said, while the total number of permits authorized but not yet started also hit an all-time trough of 99,000 units.
Sep
16
Mortgage Applications Decrease in Latest MBA Weekly Survey
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WASHINGTON, D.C. (September 16, 2009) — The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending September 11, 2009. This week’s results include an adjustment to account for the Labor Day holiday. The Market Composite Index, a measure of mortgage loan application volume, decreased 8.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 18.3 percent compared with the previous week and decreased 18.7 percent compared with the same week one year earlier.
The Refinance Index, also adjusted for the holiday, decreased 7.4 percent from the previous week and the seasonally adjusted Purchase Index decreased 10.3 percent to from one week earlier.
The four week moving average for the seasonally adjusted Market Index is up 2.9 percent. The four week moving average is down 0.4 percent for the seasonally adjusted Purchase Index, while this average is up 5.2 percent for the Refinance Index.
The refinance share of mortgage activity increased to 61.0 percent of total applications from 59.8 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 6.0 percent from 5.8 percent of total applications from the previous week.
The average contract interest rate for 30-year fixed-rate mortgages increased to 5.08 percent from 5.02 percent, with points decreasing to 0.98 from 1.23 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.
The average contract interest rate for 15-year fixed-rate mortgages decreased to 4.41 percent from 4.45 percent, with points decreasing to 1.12 from 1.13 (including the origination fee) for 80 percent LTV loans.
The average contract interest rate for one-year ARMs decreased to 6.61 percent from 6.69 percent, with points increasing to 0.20 from 0.19 (including the origination fee) for 80 percent LTV loans.
Sep
8
Manpower Employment Outlook Survey Indicates World’s Labor Markets Will Still Be Challenged in Q4 2009
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MILWAUKEE, Sept. 8 /PRNewswire-FirstCall/ — According to the global Manpower Employment Outlook Survey results released today by Manpower Inc. (NYSE: MAN), the fourth quarter of 2009 will continue to challenge job seekers in labor markets around the world, but employer hiring expectations have improved somewhat from three months ago in nearly two thirds of the countries and territories surveyed, suggesting an easing in the pattern of job cuts prevalent for several quarters. Hiring plans are strongest in the emerging markets of India and Brazil, while job prospects remain weak in the United States. However, a greater percentage of U.S. employers expect to keep staff levels unchanged in the quarter ahead, suggesting some stability. Across Europe, hiring sentiments remain generally negative but forecasts have improved in nearly half of the countries compared to the third-quarter forecast.
“Job seekers will still have limited opportunities as our data shows the world’s labor markets will not experience recovery in the fourth quarter. The good news is that many markets appear to be heading in the right direction with results from 20 countries and territories showing positive movement from three months ago,” said Jeffrey A. Joerres, Chairman and CEO of Manpower Inc. “Interestingly, employers in emerging markets are more optimistic about hiring compared to their counterparts in more developed economies. While a quarter-over-quarter comparison shows modest improvements in six of the G7 countries, with the exception of Canada, all are reporting negative hiring expectations. As demand for their products and services continues to be weak, employers remain very selective in their hiring process, resulting in a sluggish job market.”
Employers in 17 of 35 countries and territories surveyed expect some positive hiring activity in the quarter ahead, while those in 15 report negative hiring expectations with 10 reporting their weakest hiring plans since the survey was established. Employers in 31 countries and territories are reporting weaker year-over-year forecasts. Fourth-quarter hiring plans are strongest in India, Brazil, Colombia, Peru, China, Australia, Singapore, Costa Rica, Canada, Taiwan and Poland and weakest in Romania, Spain, Ireland, Japan and Mexico.
Many employers in the 18 countries surveyed in the Europe, Middle East and Africa (EMEA) region continue to report negative hiring expectations for the quarter ahead, with employers in Poland, Norway, Sweden and South Africa reporting the only positive, but slow, hiring activity. However, compared to three months ago, outlooks improved in eight EMEA countries. In contrast, where year-over-year comparisons can be made, hiring intentions are weaker in 15 countries. Job prospects in the region are strongest in Poland and weakest in Romania.
“Eighty percent of employers in Europe are telling us they will make no changes to their staffs, which will most likely lead to some labor market stability in the fourth quarter,” said Joerres. “European job seekers in the Manufacturing sector will continue to encounter a difficult market, particularly in Germany, where employers lower their hiring expectations for the sixth consecutive quarter.”
Employment prospects have improved in comparison to the third quarter across six of the eight countries and territories surveyed in the Asia Pacific region. However, hiring activity is expected to be slower than historical patterns across the region. Employment prospects are strongest in India, China and Australia with the weakest and only negative outlooks reported in Japan and New Zealand. Compared to 12 months ago, employer hiring expectations are weaker in all countries and territories, most notably in Japan, India and Hong Kong.
“Indian employers have absorbed the layoffs conducted in the third quarter and are telling us they will begin hiring again at a conservative pace, but most intend to keep their workforces intact through the end of the year. Government stimulus efforts around infrastructure projects are contributing to accelerated hiring plans in India’s Mining and Construction sector,” said Joerres. “Meanwhile, hiring expectations in China are among the most optimistic of the year, with outlooks improving from three months ago across all industry sectors, particularly in the Finance/Insurance/Real Estate and the Services sectors.”
Across the nine countries surveyed in the Americas region, hiring expectations have improved from three months ago in all countries with the exception of the U.S. and Mexico, where hiring plans of employers in both countries are at their weakest since Manpower established the survey. On the other hand, year-over-year comparisons reveal weaker hiring activity throughout the region. Manpower surveyed Brazilian employers for the first time this quarter.
“The solid job prospects in Brazil are being bolstered by the Services sector where 37 percent of employers expect to add employees in the quarter ahead. Employer optimism in Canada bounces back into positive territory with the Construction and Finance/Insurance/Real Estate sectors holding the most promise for job seekers,” said Joerres. “To the south, the U.S. and Mexican labor markets continue to struggle in tandem, with the majority of employers continuing hiring freezes, opting instead to get work done with the staff they have until conditions improve.”
The next Manpower Employment Outlook Survey will be released on 8 December 2009 to report hiring expectations for the first quarter of 2010. The Manpower Employment Outlook Survey is available free of charge to the public through their local Manpower representative in participating countries. To receive e-mail notification when the survey is available each quarter, interested individuals are invited to complete an online subscription form at: http://investor.manpower.com/investors/alerts.cfm.
Sep
4
NEW YORK (Reuters) – Rising unemployment continues to make more Americans late on their mortgage payments, a sign that the rate of U.S. personal bankruptcies will keep going up, according to monthly data from the Equifax credit bureau obtained by Reuters.
Among U.S. homeowners with mortgages, 7.23 percent were at least 30 days late on payments in June, up from about 4.5 percent a year earlier and 7.01 percent in May, according to Equifax Inc (EFX.N). The rate of subprime mortgage delinquencies jumped almost a full percentage point to 39.25 percent.
Early-stage delinquencies are a leading indicator of future bankruptcy filings, and the June data suggest bankruptcies will continue rising in coming months. Bankruptcy filings were up 31 percent in June compared with a year earlier.
While credit card delinquency rates fell slightly from May, the decline may largely reflect tougher standards imposed by credit card issuers, as well as less credit being extended to most borrowers, except those with the highest credit scores, Equifax said.
“Those who need credit the least are getting access to it the most,” said Dann Adams, president of U.S. Information Systems for Equifax.
Credit card companies, concerned about the effects of new government restrictions on lending practices, are offering fewer cards to subprime borrowers and to young people. The majority of new cards now go to “prime” borrowers with credit scores of 740 or higher, compared with about 30 percent three years ago.
Credit lines, meanwhile, are down by $647 billion over the past year to about $3 trillion; the number of card accounts is down to 360 million from 440 million at the peak.
Less credit, coupled with pressure on consumers from falling home values and rising unemployment, suggest the credit environment will reset to a “new normal” once an economic recovery takes root, Adams said.
“You will always have appetite for credit products and services, but we’re not going to be lending at the rate we were lending money,” he said.
UNINTENDED CONSEQUENCES?
A new credit card law designed to protect borrowers may have unintended consequences, Adams said. Lenders are unsure how the law will affect them when it takes effect next year, so they are being careful about signing up new accounts.
Since 60 percent of new credit files start with a charge card, cutting off young, untested consumers at the start of their credit history means limiting the ability of these borrower to get credit in the future.
“What you’re going to see in the future is young consumers will have less access to credit because they will not have established any credit history via credit cards,” Adams said. “It’s a fundamental change in the credit card landscape.”
The new credit card law, designed to ease the burdens on recession-battered consumers, caps rates and fees on cards starting next February, adding to pressure on an industry already facing massive credit losses that might not peak for several more months. The new law will also limit card companies’ ability to raise rates on existing balances.
Credit card issuers include JPMorgan Chase & Co (JPM.N), American Express Co (AXP.N), and Discover Financial Services (DFS.N), as well as Bank of America Corp (BAC.N) and Citigroup Inc (C.N).
Bank card delinquencies edged down to 4.67 percent last month from 4.79 percent in May.
Delinquencies among subprime borrowers are much higher, at 14.73 percent, but fewer such borrowers are getting cards. Subprime accounts for 20 percent of new cards issued, compared with 33 percent before the recession. Credit lines, on average, are 20 percent smaller.
(Reporting by Nick Zieminski; editing by John Wallace)
Sep
1
WASHINGTON — Pending U.S. home sales rose more than expected in July to the highest level in more than two years as first-time buyers rushed to take advantage of a tax credit that expires this fall.
The National Association of Realtors said Tuesday its seasonally adjusted index of sales contracts signed in July for previously occupied homes rose 3.2 percent to 97.6. It was the sixth straight increase and 12 percent above the same month last year.
Economists surveyed by Thomson Reuters expected the index would edge up to 96.5.
Typically there is a one- to two-month lag between a contract and a done deal, so the index is a barometer of how sales completed this month and next will turn out. However, delays in getting mortgages approved and appraisals completed have lengthened the time it takes to close a deal in many cases.
The U.S. housing market is rebounding more rapidly than expected from its historic bust, as low prices and the looming expiration on Nov. 30 of a first-time homebuyers tax credit of up to $8,000 have spurred sales. Home prices in most of the country have started to rise from the depths of the housing slump.
But analysts predict sales will drop off when the tax credit expires, or if mortgage rates rise from near-record lows. Foreclosures also continue to rise, and banks are forced to sell those properties at deep discounts, pushing prices down.
The Realtors group projects that around 2 million first-time buyers will take advantage of the credit this year, and says it is spurring 350,000 additional sales that wouldn’t have happened otherwise.
Nationally, home prices in the second quarter posted their first quarterly increase in three years, according to the Standard & Poor’s/Case-Shiller national index released last week.
While home prices are still 30 percent below the mid-2006 peak, their new direction should bring relief to both lenders and homeowners. Falling property values have wiped out $4 trillion in homeowner equity, and thousands have walked away from homes that are worth far less than their mortgage balance.