August 22nd, 2010

Weekly Recap (8/16/10 – 8/21/10)




Millions of homeowners afraid to sell“:

According to Zillow.com’s Homeowner Confidence Survey, millions of borrowers are just itching to sell their homes, but are too afraid to because of market conditions.

I’d be willing to bet that there are millions more ’sidelined sellers’ — in addition to Zillow’s survey — out there who can’t sell (or don’t want to)because of lost or negative equity.

To take a deeper look at the problem, we crunched some numbers to try to figure out how long a borrower’s underwater situation might persist  before they could sell without triggering a loss; Click here to read “Home Equity: Why 2015 Is The New Zero”…


Should you borrow from a 401(k) to support your home?“:

 A recent report says the number of Americans withdrawing early from their retirement savings to support their homes has grown substantially.

To some, withdrawing early from your retirement savings may seem foolish. But for others, it may be their only option to stay in their home or be able to come up with a sizeable down payment so they can own a home…


Are closing costs rising? Too soon to say“:

The increase revealed in one year-over-year comparison (2009-2010) probably isn’t comparable because of the change in the Good Faith Estimate (GFE).

All the new factors and changing market conditions have made it nearly impossible to determine at this juncture if closing costs are really rising or not. Evidence suggests that this is the case, but comparing estimated 2010 closing costs with estimated 2009 closing costs is like comparing apples to oranges. We’ll have to wait until mid-to-late 2011 to get a fair year-over-year comparison…and who knows what could change from now until then…


Treasury defends HAMP. I’m still not satisfied“:

I came across an article in The Street this morning (hat tip: National Mortgage Professional Magazine) that was an “edited transcript of [Treasury Department spokeswoman Andrea Risotto's] response to specific criticisms” concerning the home affordable modification program (HAMP).

I was hoping this article would provide some concrete explanations to such long-standing questions as “what is taking so long, what’s with the lack of success, why has the program changed so often and why are the results so much better for servicers outside of HAMP?” Unfortunately, Ms. Risotto’s responses didn’t reveal too much new or enlightening information that would help us get a better sense of what we can do to make this program better…


Fannie, Freddie Reform Talk of the Nation Today“:

The consensus is growing increasingly clear amongst market observers and administration officials alike: the government needs to distance itself from the nation’s housing market. But the billion-dollar question remains: “How?”

The sentiment for change was voiced this morning by Treasury Secretary Timothy Geithner who “promised ‘fundamental change’ for the nation’s housing finance system…” at the Conference on the Future of Housing Finance, wrote Jim Puzzanghera of the Los Angeles Times. Shaun Donovan, secretary of Housing and Urban Development (HUD),echoed Geithner’s comments saying himself that the government’s involvement in housing should be downsized.

Having the administration’s housing heads declare the need for change doesn’t do much for the market today. We’ll have to wait and see this January if the administration’s “roadmap” will lead us out of this mess or get us even more lost…


Fed’s move: Good news for mortgage rates“:

Last week the Federal Open Market Committee (FOMC) announced that they “will keep constant the Federal Reserve’s holdings of securities at their current level by reinvesting principal payments from agency debt and agency mortgage-backed securities in longer-term Treasury securities.”

Mortgage rates dipped almost immediately following the Fed’s announcement last Tuesday. “This decline was probably related more toward a loss of optimism about the economy and reduction in concerns over inflation than any anticipated support for mortgage markets,” according to the latest issue of HSH.com’s Market Trends Newsletter…

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About the HSH Blog

HSH.com'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 HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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