July 18th, 2010

Weekly Review (7/12/10-7/17/10)




Weekend Conversation: Financial Reform & FHA Credit Scores:

How Will the Financial Reform Impact Mortgages? From what we know about the bill at this point, the main impact this legislation will have on the mortgage market goes a little something like this: with increased protection comes higher costs and fewer loans.

FHA: No More Sub-500 Credit Scores. The Federal Housing Administration (FHA) has changed their tune about not requiring minimum credit scores. With all the loan volume the FHA has taken on recently, it’s important that they begin employing stricter requirements, even if they won’t impact a great deal of borrowers (it’s all about baby steps, right?).


 Revisiting: “Home Prices: The Statistic That Matters Most?”:

Back-to-back posts yesterday in the Wall Street Journal’s Developments blog got me thinking once again about home prices. So I spent some time this morning going through some of HSH’s past blog posts to examine our previous thoughts, predictions and expectations for home prices.

Looking over the previous posts I remembered just how much of an emphasis we put on the importance of home prices and their influence on our overall economic recovery.


 Borrowers, Lenders: Have You Learned Your Lesson?:

We knew it would happen. We can safely say that most of those who have followed the markets closely over the last few decades or so knew it would happen as well.

What are talking about? Lending to below-prime borrowers. Many market observers will tell you that the financial markets rarely learn from their mistakes. We knew that the credit crisis which spawned from the recession couldn’t last forever. Lenders of all stripes (mortgages, credit cards, automobiles) would have to eventually begin seeking out less-qualified borrowers to lend to. Frankly, there aren’t enough pristine borrowers to keep them in business.


Has MERS Ripped You Off?:

There has been a lot of publicity surrounding the Mortgage Electronic Registration System (MERS) and the lawsuits filed against the company that owns it. MERS serves as the mortgagee of record for the actual mortgage lenders, investors and their loan servicers on the records filed with counties across the U.S. Lenders use MERS because it eliminates the need of filing with the county every time a mortgage changes hands on the secondary market. 


How Did Canada Manage to Avoid the Foreclosure Crisis?:

Canada and the U.S. have a lot in common. Both countries are wealthy, stable, technologically advanced democracies with highly developed financial systems. However, as many point out — including the Wall Street Journal, which also recently asked why Canada avoided a mortgage crisis — Canada has no Fannie Mae and no Freddie Mac. There is no mortgage interest tax deduction. There are no 30-year fixed-rate home loans that can be freely refinanced and prepaid. Mortgage lending is far more conservative, and Canadian mortgage lenders have a lot more recourse than American ones. 


ARM Borrowers: Is It Time To Refinance?:

Everybody knows interest rates are low and that there’s a lot of refi activity going on.  So instead of focusing this week’s Market Trends recap on last week’s movement of mortgage rates, we decided to examine the question “if I’m an ARM borrower, should I refi?”

In today’s market at least, fixed-rate to fixed-rate refinancing is arguably the most common occurrence. However, given the fact that short-term interest rates are so low, especially the short-term rates which govern ARMs, we wondered how many ARM borrowers would be interested in switching products?

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About the HSH Blog's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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