Read More About The Lending World And Whats Happening Today!

The “two steps forward, one step back” economic news continued last week. On Friday rates went up, and nervous brokers locked in early. We had Ben Bernanke saying that there are signs that the economy is improving, or at least leveling out. And if to prove it, Existing Home Sales were up over 7% to a 2-yr high. But heck, at some price point, wouldn’t the Home Sales number look great? In this number, the median price fell 15%, aided by foreclosure numbers, government credits for first-time buyers, and relatively low rates. There is still over a 9 month supply of inventory.

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Ascent Home Loans California Direct Lender

But then we had the MBAA come out with a survey showing that the percentage of residential mortgages either in foreclosure or with at least one payment past due hit 13.16% in the second quarter, the highest percentage ever recorded. What’s a mother to do? And this number doesn’t even include mortgages in the foreclosure process! According to the MBAA, in Florida (home of humidity and palmetto bugs), 22.8% of mortgages outstanding were delinquent at least one payment or in foreclosure. “Other poor performing states include Nevada, where 21.3% of mortgages were delinquent or in foreclosure, Arizona, where 16.3% were delinquent or in foreclosure, and Michigan, where 15.3% were delinquent or in foreclosure.”

We also had our usual Friday afternoon seizing of banks, this time the FDIC garnered the third largest this year: Guaranty Bank. Guaranty is estimated to cost the FDIC, and taxpayers, $3 billion. Option ARM’s made up almost a third of Guaranty’s single family mortgage portfolio, along with $1.2 billion of loans to homebuilders in California. In an interesting note, BBVA Compass, a U.S. subsidiary of Spanish bank Banco Bilbao Vizcaya Argentaria, agreed to assume all of Guaranty’s deposits and will buy $12 billion of its assets, the first time an overseas-based bank has bought a failed U.S. bank this year. Three other banks failed: CapitalSouth Bank (AL), First Coweta (GA…and I doubt if this bank was named by an Italian dairyman in the winter), and ebank (GA).

Unfortunately for rates, the Home Sales number, combined with a little rally in equities, pushed rates higher. Mortgages were worse by .5 in price, and the 10-yr Treasury worsened by over a point. This morning the 10-yr is up to 3.59% and mortgages are worse by another.250. This week the U.S. will sell $42B of two-year notes, $39B 5-yr notes and $28B of 7yr notes starting tomorrow. On top of the auction, today we have some numbers from the Chicago Fed, tomorrow the usually grim S&P/Case-Shiller Home Price Index, along with Consumer Confidence, Wednesday Durable goods, Thursday Jobless Claims and GDP, and then on Friday Personal Income.

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Ascent Home Loans California Direct Lender

Fannie Mae “retired” their “HomeStyle Construction-to-Permanent (HomeStyle CtoP)” product. They’re giving lenders lots of advance notice: the final purchase date of HomeStyle CtoP loans is November 30. Fannie tells us that “after this date, construction phase servicing of HomeStyle CtoP loans will continue as prescribed in Section B5-2.3 of the Selling Guide until all construction is completed and all loans have converted to the permanent, fully amortizing phase.”

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