October 2nd, 2010

Weekly Recap (9/27/10-10/2/10)




Is it time to stop refinancing?“:

When mortgage rates dropped below 5.5 percent, just about everyone who could refinance hopped on the bandwagon. But rates continued to drop, shattering record after record, and homeowners who refinanced just months ago are considering doing it again.

Is serial refinancing just silly?

According to the Curious Capitalist, refinancing too often can set back wealth-building in a big way, because every time you refinance, you begin paying your mortgage all over again. In the early years of a mortgage, the lender gets the bulk of the payment as interest. Author John Curran contends that restarting that process is, in his words, “a loser’s game.”


Will we eventually recover, or is this the new normal?“:

A new survey suggests that a growing number of Americans believe that the economy won’t return to pre-recession levels for years to come:

Fifty-nine percent of Americans feel “not good” or “bad” about the direction the economy is headed, up from 49% in May.  And 76% don’t expect their quality of life, including their spending levels, to return to pre-recession levels until 2012 at the earliest, up from 63% who said that in May.  That’s according to the findings of a survey released today by AlixPartners LLP, the global business-advisory firm.


The poll also finds that 74% of Americans feel the same or worse today about their personal economic situations versus a year ago, up from 71% who had that negative sentiment in May, and, in what could be a sign of either growing discontent or growing resignation in the run-up to the November elections, just 30% of Americans said that Democrats’ losing control of the U.S. House or even of the U.S. House and Senate would have a substantially positive impact on the economy in the coming year.


New Two-Month Forecast now available on“:

On a bi-monthly basis, releases their Two-Month Forecast for Mortgage Rates. In each forecast, we review our previous prediction — evaluating the circumstances that caused rates to do what they did — and we examine current factors and conditions in order to forecast mortgage rates over the next nine weeks or so.

Each two-month forecast is made up of four parts: the preface, a recap of our previous prediction, the forecast discussion and finally the forecast itself. We’ll do a short summary of each section here on the blog, but be sure to visit to read our entire forecast.


Little interest in FHA Short Refinance program“:

“All I want is the opportunity to refinance.” That’s the overwhelming message we’re hearing from underwater borrowers.

Until now, negative equity has denied underwater borrowers the opportunity to refinance. On August 6, the FHA announced a program — the FHA Short Refinance option — that’s designed to help these borrowers refinance. However, many critics (including us) feel as though the FHA’s strategy will cause the program to fall well short of the lofty goals it set out.

Why? The main reason is due to the fact that lenders are required to reduce a borrower’s principal by at least 10% right off the bat.


Mortgage rates can’t do all the heavy lifting“:

Back on July 19, we wrote a post titled “It takes more than just low mortgage rates.” Despite mortgage rates falling even further, mortgage activity was the lowest it has been in over a decade:

It takes a lot more than just low mortgage rates to spin the wheels of the housing market; and that couldn’t be more apparent than it is right now. Mortgage rates continue to fall week after week — according to the weekly average for the 30-year Conforming fixed rate fell to 4.69% (week ending 7/16/10) — and yet the Mortgage Bankers Association reported the lowest level of mortgage application activity since 1996.


The latest issue of HSH’s Market Trends Newsletter spins the same cautionary tale: low mortgage rates alone won’t help the housing market recover anytime soon. The latest Market Trends — “Mortgage rates steady, housing weak” — explains that, especially in a deflationary environment, and at a time when there is virtually no support for job growth, low mortgage rates can only contribute so much to the overall improvement in housing (at least at the moment)…

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2 Responses to “Weekly Recap (9/27/10-10/2/10)”

  1. Tweets that mention Weekly Recap (9/27/10-10/2/10) | HSH Financial News Blog -- Says: October 2nd, 2010 at 9:49 am

    [...] This post was mentioned on Twitter by Under Water Photo , Dan Jackson. Dan Jackson said: Mortgage & Housing Market News from – HSH Financial Publishers (blog): Mortgage & Housing Market … #mortgage [...]

  2. TonyCilea (Tony Cilea) Says: October 3rd, 2010 at 2:07 pm

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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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