blog.hsh.com

Update1: The Wall Street Journal thought our guest post on FiveCentNickel.com was worth the read — be sure to check it out if you haven’t already.

Original post (published on 2/3/10): I was given the opportunity to write a guest post for the popular personal finance blog FiveCentNickel.com. I decided to write about what HSH.com knows best: mortgage rates.

Mortgage shoppers continue to play tug-of-war between consistently-low mortgage rates and tight credit conditions:

[Last] week, the overall average for 30-year fixed-rate mortgages tracked by HSH.com’s FRMI was unchanged from [the week prior] at 5.42%. The FRMI includes conforming, jumbo and the GSE’s “high-limit” conforming products in its calculation. It also has a Hybrid 5/1 ARM counterpart, which increased by one basis points during the latest survey cycle, landing at 4.60% for the week.

The latest Senior Loan Officer survey of lending conditions, released [last] week, revealed some fair signals that the tightening of credit conditions were starting to come to an end. For the first time since the downturn began, a net percentage of banks eased borrowing terms for Commercial and Industrial loan clients, suggesting that market conditions for these kinds of borrowers has improved considerably. Four quarters ago, over 64% of banks were still tightening, so this is a fairly rapid – and welcome – improvement.

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Ah yes, time for my favorite post of the week: our weekly recap. Why is it my favorite? It means another week has elapsed, and it’s time for the weekend.

Here what was new this week on blog.HSH.com:

Friday:

The numbers look bad once again. We’ll start with the bad news, then work our way to the not-so-bad news.

Since the recession began in December of 2007, the U.S. has lost 8.4 million jobs. “In terms of job losses, this has been the worst recession since the end of the World War II more than 60 years ago,” writes Rex Nutting of MarketWatch.com. Nonfarm payrolls dropped 20,000 in January, a sizeable pool of jobs, but far less than the 150,000 (revised upward) lost in December. Moving onto the better news, the unemployment rate dipped to 9.7% from 10% last month. If the unemployment rate can continue to trend downward, it will be especially encouraging since some analysts expected the rate to remain at or above 10% for the entire year.

Trend Spotting

Last year we wrote about how the recession prompted many Americans to draw upon their Social Security (SS) benefits early. For those of you who are unaware, collecting SS benefits before your full retirement age — “which is based on year of birth” — results in a smaller monthly check than if you waited.

A recent article in the Wall Street Journal notes that a little-known strategy can help you get that bigger SS check, even if you choose to receive benefits “early”:

“You cannot buy groceries with your house.”
-Sean Reardon (TransUnion)

Assuming you have debt in both a credit card and a mortgage, which debt would you pay down first? In this post-recession society, more and more cash-strapped consumers are having to prioritize their debt payments. For most, it comes down to “what can I do without this month?”

According to a recent study by TransUnion, more Americans are choosing to pay off their credit cards before they make their mortgage payments — a trend that has really only recently begun.

I’ve stumbled across a couple of seemingly conflicting stories this afternoon that have left me asking myself, “Does Washington never want TARP to be fully repaid?”

Sounds crazy, right? While we know taxpayers want the money to be paid back, we thought Washington’s TARP tax — known as the “financial crisis responsibility fee” — was an assurance that the country wouldn’t lose a dime on the money that was pledged to the banks, both large and small.

But it seems that may no longer be the case. Treasury Secretary Timothy Geithner indicated today that if all the TARP money isn’t repaid within 10 years, that the Treasury could extend the tax to ensure it would be:

“As expected, the recent slide in mortgage rates came to a soft halt [last] week,” according to the latest issue of HSH.com’s Market Trends Newsletter. As stated in the release immediately following their two-day meeting, the Federal Reserve maintained that their MBS purchase program would end as planned on March 31, 2010. Despite the fact that many (including us) foresee a legitimate rise in rates when that program ends, rates held steady for the most part:

[Last] week, the overall average for 30-year fixed-rate mortgages tracked by HSH.com’s FRMI rose by a single basis point (0.01%) to 5.42%. The FRMI includes conforming, jumbo and the GSE’s “high-limit” conforming products in its calculation. It also has a Hybrid 5/1 ARM counterpart, which shed six basis points during the latest survey cycle, landing at 4.59% for the week. Conforming 30-year fixed mortgage rates eased by a couple of basis points while jumbos moved a like amount upward.

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As we do at the end of every week, let’s spend a few minutes reviewing the latest content from HSH.

This week’s posts showcased how the White House’s “reactionary policies” can be unproductive, some important developments to keep your eyes on, as well as our continued focus on mortgage rates and mortgage assistance.

Thursday:

We can’t begin to tell you how many stories we have read from borrowers who say that they have waited months in limbo, unsure if their loan mod application has been or will be accepted into permanent status. Many borrowers have finished paying their three required trial payments, and still have not heard any news back from their lender.

Here’s the latest comment we received from our reader Troy who’s in that exact situation: