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  1. Treasury to Sell $142 Billion Mortgage Backed Security Portfolio

    By on March 21, 2011

    Breaking news this morning: the Treasury announced its intentions to sell off its portfolio of $142 billion worth of mortgage-backed securities (MBS).  The MBS were purchased in 2008 in order to help prop up the housing market and keep credit flowing.  The Treasury will sell up to $10 billion worth of MBS per month.  Mary J. Miller, the Assistant Secretary for Financial Markets for the Treasury commented:

    “We’re continuing to wind down the emergency programs that were put in place in 2008 and 2009 to help restore market stability, and the sale of these securities is consistent with that effort.  We will exit this investment at a gradual and orderly pace to maximize the recovery of taxpayer dollars and help protect the process of repair of the housing finance market.”

    The market for mortgage-backed securities has improved somewhat since the asset purchases took place, and the Treasury predicts that it will turn a profit on its MBS investment.  The MBS market is taking a beating on the announcement.

    Category: Mortgage Rates

  2. Bailout Watchdog Says AIG A ‘Corporate Frankenstein’

    By on May 26, 2010

    The chairwoman of a Congressional oversight panel that is examining the $700 billion taxpayer bailout of the financial sector testified Wednesday that insurance giant AIG “was a corporate Frankenstein, a conglomeration of banking and insurance and investment interests that defied regulatory oversight.”

    The analysis from Congressional Oversight Panel Chairwoman Elizabeth Warren included startling revelations about a lack of the federal government oversight of AIG, along with the company’s enormous infrastructure. But she also questioned why government regulators didn’t move faster and examine less expensive taxpayer assistance options, such as filing for bankruptcy or requesting concessions from AIG’s creditors.

    AIG received a $182 billion federal bailout.

    Warren, a Harvard University law professor, said the U.S. may need to weigh putting many units of AIG into bankruptcy, but didn’t specify which divisions of the company would be viable candidates for such proceedings.

    Representatives from the Fed contended that they had a very limited amount of time to act on bailing out AIG, considering the disintegrating economic climate of September 2008. Since Lehman Brothers had already collapsed, a private-sector bailout of AIG wouldn’t be possible was the contention.

    Tom Baxter, the Fed’s top attorney, said, “”We had a matter of hours to deal with decision.” He said the Fed only became aware of AIG’s inevitable collapse on Sept. 12, four days before it issued the bailout funds to save the company, and that prior to Sept. 12, the Fed didn’t even classify AIG as a “top 10 exposure”.

    That assertion seems to substantiate Warren’s claim that “regulatory oversight” of the company was severely lacking.

    Today’s testimony accompanied claims to Congress from AIG Chief Executive Officer Robert Benmosche that the company is on a “clear path” to repaying taxpayers the bailout money. He said AIG will repay a Federal Reserve credit line upon the divesting of two units for $51 billion later this year.

    “We are well on our way to remaking AIG into a more streamlined and focused company,” Benmosche, 66, said in the testimony. “AIG is now on a clear path to repaying taxpayers.”

    Treasury chief restructuring officer Jim Millstein stated AIG must complete the planned sales of the two large insurance subsidies and regain the market’s confidence.

    “It will take time to repair in full the damage to their franchises, particularly in the United States,” Millstein says.

    Category: Mortgage Rates

  3. Mortgage Rates Open Low Tuesday At Total Mortgage

    By on May 18, 2010

    There has been no movement in mortgage rates today from yesterday, though some reports anticipate rates are due to rise, including yesterday’s economic outlook by Fannie Mae.

    Bond prices fell however slightly yesterday as trading was reasonably quiet. April’s housing starts, released this morning, came in better than expected.

    Late last week at Total Mortgage Services, LLC, the 30-year fixed conventional fell from 4.500 percent to 4.375 percent. Additionally, the 20-year fixed conventional dipped from 4.375 percent to 4.250 and the 15-year fixed conventional fell from 4.000 percent to 3.875 percent.

    The 30-year fixed FHA was lowered this past week to 4.250 percent from 4.375 percent.

    There has not been any recent movement in the 30- and 15-year fixed jumbo mortgages, nor the 5/1 ARM conforming or 5/1 ARM jumbo mortgage.

    Total Mortgage Services, LLC is listing some of the lowest current rates on 30-year fixed-rate mortgages, FHA mortgages, jumbo mortgages and adjustable-rate mortgages. Current mortgage rates are updated continuously on Total Mortgage’s website, in addition to daily insight and perspective on mortgage industry news and trends.

    As of 9:20 a.m. on May 18, 2010, the following rates were listed at Total Mortgage:

    30-Year Fixed Conventional 4.375% Rate, 4.583% APR

    20-Year Fixed Conventional 4.250% Rate, 4.535 APR

    15-Year Fixed Conventional 3.875% Rate, 4.236% APR

    30-Year FHA 4.250% Rate, 5.178% APR

    30-Year Fixed Jumbo Mortgage 5.125% Rate, 5.336% APR

    15-Year Fixed Jumbo Mortgage 4.000% Rate, 4.352% APR

    5/1 ARM Conforming Mortgage 3.000% Rate, 3.367% APR

    5/1 ARM Jumbo Mortgage 3.500% Rate, 3.291% APR

    For a complete listing of rates and mortgage products visit TotalMortgage.com.

    * All rates shown are for 30 day rate locks. Longer locks available. The APR for conventional loan amounts is calculated using a loan amount of $417,000, 2 points, a $495 application fee, $500 loan processing fee, $715 underwriting fee and a $16 flood certification fee. The APR for jumbo loan amounts is calculated using a loan amount of $500,000, two points, a $495 application fee, $500 loan processing fee, $715 underwriting fee and a $16 flood certification fee. The APR for FHA loan amounts is calculated using a loan amount of $295,000, two points, a $495 application fee, $500 loan processing fee, $715 underwriting fee and a $16 flood certification fee. Some rates and fees may vary by state. All interest rates listed are for qualified applicants and are subject to mortgage approval. All rates are subject to change without notice.

    Category: Mortgage Rates

  4. Mortgage Rates Update For Friday, May 14 From Total Mortgage

    By on May 14, 2010

    The market proved to be volatile Thursday, but bond prices closed up. While mortgage rates remain extremely low – and may even inch lower today – the financial reform bill continues to progress on the floor of the Senate.

    Current mortgage rates are updated continuously on Total Mortgage’s website, in addition to daily insight and perspective on mortgage industry news and trends.

    As of 9:30 a.m. on May 14, 2010, the following rates are available at Total Mortgage:

    30-Year Fixed Conventional 4.375% Rate, 4.583% APR

    30-Year FHA 4.250% Rate, 5.178% APR

    30-Year Fixed Jumbo 5.125% Rate, 5.336% APR

    5/1 ARM Conforming Mortgage 3.000% Rate, 3.367% APR

    For a complete listing of rates and mortgage products visit TotalMortgage.com.

    Also in the News:

    Federal Reserve Vice Chairman Weighs in on Interest Rates

    Senate Votes To Outlaw Deceptive and Predatory Lending Practices

    HUD Unveils New Plan For Sustainable, Affordable Housing

    * All rates shown are for 30 day rate locks. Longer locks available. The APR for conventional loan amounts is calculated using a loan amount of $417,000, 2 points, a $495 application fee, $500 loan processing fee, $715 underwriting fee and a $16 flood certification fee. The APR for jumbo loan amounts is calculated using a loan amount of $500,000, two points, a $495 application fee, $500 loan processing fee, $715 underwriting fee and a $16 flood certification fee. The APR for FHA loan amounts is calculated using a loan amount of $295,000, two points, a $495 application fee, $500 loan processing fee, $715 underwriting fee and a $16 flood certification fee. Some rates and fees may vary by state. All interest rates listed are for qualified applicants and are subject to mortgage approval. All rates are subject to change without notice.

    Category: Mortgage Rates

  5. Mortgage Rates: Did Bernanke Expose His Plan?

    By on March 26, 2010

    Mortgage Rates: Did Bernanke Expose His Plan?
    With less than a week to go before the Federal Reserve exits its program to purchase $1.25 trillion in mortgage-backed securities, Chairman Ben S. Bernanke indicated a change in his stance on dealing with the holdings. Last month, Bernanke alleged the Federal Reserve did not anticipate selling any of the security holdings in the near future. However, Bernanke indicated while testifying before the House Financial Services Committee yesterday that the Federal Reserve “has the option of redeeming or selling [the] securities” it bought as a result of the economic crisis.

    The Federal Reserve’s effort to support the housing economy resulted in artificially low mortgage rates for more than a year. When the Fed announced it had purchased $8 billion in mortgage-backed securities last week and $1.244 trillion cumulatively since the program began, Bernanke’s amended perspective suggested the Federal Reserve will indeed begin to sell the security holdings once the economy shows an apparent and “sustainable recovery.”

    Bernanke’s change in stance may only raise more questions surrounding the housing recovery though.     If he originally did not anticipate selling the securities in the near future – or at least until the Federal Reserve began raising interest rates again – but now reserves the right to sell the securities, will mortgage rates begin to rise sooner rather than later? Some analysts think Bernanke may have unintentionally shown his hand.

    In other mortgage-related news, the Treasury will reportedly announce its latest plan for mortgage relief later today. It is expected to be one of the most noteworthy of strategies to date as mortgage payments for unemployed homeowners will be decreased while also reducing the principal balances in relation to home values. While the overall economy continues to exhibit signs of improvement, the housing market will need to be handled with kid gloves.

    Robert Hyder

    Follow Total Mortgage on Twitter

    Category: Mortgage Rate Trends and Analysis

  6. Mortgage Modification Program to be Modified Itself

    By on March 26, 2010

    Mortgage Modification Program to be Modified Itself

    Effective June 1, the Obama administration’s $75 billion Home Affordable Modification Program (HAMP) will be modified itself to force mortgage loan servicers to take a more proactive approach in helping struggling homeowners who are facing foreclosure. Essentially branded ineffective, the program will undergo long-desired changes designed to expand its outreach while also accelerating the process.

    Mortgage servicers will be required to prescreen all borrowers who have missed at least two monthly mortgage payments to ascertain eligibility into the program. If the borrowers meet the eligibility requirements for HAMP, the mortgage servicers “must proactively solicit those borrowers” to participate.     Additionally, the program will be expanded to incorporate homeowners that have already filed for bankruptcy protection. Mortgage servicers will be expected to streamline the decision process and expedite the documentation process.

    At a hearing before the Committee on House Oversight and Government Reform, Herbert M. Allison, Jr. announced the amendments to the program. Allison is the Assistant Secretary for Financial Stability and Counselor to the Secretary of the Treasury. As critical opponents to HAMP, many Congressional leaders from both sides of the isle have brought into question the effectiveness of the program.

    Introduced approximately one year ago, the intent behind HAMP was to reduce monthly mortgage payments for borrowers to prevent foreclosure while incentivizing mortgage servicers for each modification they perform. The program aspires to modify mortgage loans for 3 to 4 million homeowners by 2012. Permanent modifications have increased by nearly 45%, but nonetheless falls significantly short of the program’s lofty goal. The most recent Treasury report indicates that more than 170,000 permanent modifications have been completed and that number continues to rise. The upcoming changes to the program should certainly facilitate sustained growth.

    Continuous complaints from a growing number of homeowners getting the runaround and being frustrated with delays caused by the servicers have triggered the overhaul of the program. Congressman Edolphus Towns (D-NY), Chairman of the committee said, “We continue to hear numerous reports of borrowers who want to participate in HAMP, but just don’t know where to begin … If they do begin, they often encounter unresponsive lenders, repeated incidents of lost paperwork and a variety of other administrative frustrations.”

    Allison responded to the criticism by defending the program’s intentions and noted the changes to the program are designed to address such complaints. “The administration has made substantial progress in implementation and has seen initial signs of housing stability, but a number of critical challenges remain.”

    Robert Hyder

    Follow Total Mortgage on Twitter

    Category: Stimulus

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