Archive for September, 2011
The Mortgage Bankers Association recently expanded its mortgage rates survey to include more than 75% of all mortgage originations, up from approximately 50% previously.
As a result of the modification, data tracking rates shifted back to the middle of January. For the most part, changes to separate categories of mortgage products remained little changed.
For Federal Housing Administration-backed mortgages however, the change in effective mortgage rate reveals that borrowers' loans on average cost less than originally thought (see chart below):
The mortgage strategies group of Sandler O’Neill & Partners, a registered broker-dealer, put together the information in a note to clients.
"Like the conventional universe, the 4.5% coupon has now moved completely into the 40bp refinancing window," said Scott Buchta, managing director at Sandler O'Neill. "Higher (mortgage insurance) fees and a lack of a HARP-like program may prevent some FHA borrowers from refinancing."
The average FHA rate was actually lower than previously reported as the new expanded survey increased the amount of data that they were getting in. That means that FHA loans are actually more affordable than previously reported, the data states.
Write to Jacob Gaffney.
Follow him on Twitter: @JacobGaffney.
Bank of America has reached an agreement to sell an approximately $880 million portfolio of commercial mortgages at a discount of 20% to 25% off the face value, according to a person familiar with the deal.
A venture of Square Mile Capital Management LLC, Invesco Ltd. and a fund managed by Canyon Capital Realty Advisors LLC is buying the portfolio, a mix of performing and nonperforming loans tied to 32 properties, the person said. The buildings include the eight-story Renaissance Centre office building in Wilmington, Del., and the Bank of America Tower in St. Louis, which is not owned by the bank.
The deal is among the largest commercial mortgage portfolio sales of the year, coming as many banks continue to shed loans made during the market's peak.
Foreclosure cases are taking longer to complete in Chicago while auctions are decreasing, according to data released this week from the Woodstock Institute.
The result is a 51% drop in foreclosure completions during the first six months of this year compared to the first half of 2010.
In the six-county region, 8,515 cases completed the foreclosure process at auction in the first half, down from 17,331 a year earlier.
In the first half of 2011, declines occurred in all six counties when compared to the year ago, with the steepest declines in auction activity in Lake County, which had a 55.2% drop, and Cook County at 55.1%.
The research organization said completed foreclosure auctions in the second quarter fell to the lowest level since the beginning of the housing crisis, dropping 26% from the first quarter. In the six-county region, only 3,604 properties completed the foreclosure process in second quarter — fewer than any other quarter since 2007.
Longer foreclosure process times have contributed to the declines in auctions.
For cases in the Chicago region that completed the foreclosure auction process during the second quarter, the median length was 359 days , which is the highest since 2008.
The length of the foreclosure process is heavily influenced by the share of regional cases completing in Cook County, the nation's second most populated county, which accounts for more than 60% of all completed cases in the region.
It took 363 days to process foreclosure cases in Cook County in the second quarter.
The Woodstock Institute said the minimum timeline is 261 days, but that rises when there are defendant motions, bankruptcy issues or other factors.
The firm attributed the longer foreclosure timelines to the legacy of the robo-signing scandal. Trends in the first half were a continuation of regional declines first observed in the fourth quarter when the robo-signing issues broke and the resulting moratoria was implemented to correct improper document processing by mortgage servicers.
As of the end of the second quarter, Illinois with 7% of loans in foreclosure was one of four states with the highest percentage of loans serviced that are currently in the foreclosure inventory.
Click on chart below to expand the breakdown of foreclosure timelines in the Chicago region..
Write to Kerry Curry.
Follow her on Twitter @communicatorKLC.
