It’s because buyers are looking for lower rates and lower home prices.
Mortgage applications fall again, worrying housing economists
By Kerri Ann Panchuk September 5, 2012 • 8:01amMortgage applications fell 2.5% for the week ending Aug. 31 as credit conditions remained tight, stalling robust buyer and refinancing activity.
Interest rates also continued to decline with the 30-year, fixed-rate mortgage with a conforming loan balance falling to 3.78% from 3.80% a week earlier, the Mortgage Bankers Association said.
Interest rates and application filings also declined the previous week, setting a precedent that has housing analysts worried.
“Mortgage applications for home purchases fell sharply in August, providing further evidence that mortgage-dependent buyers are barely contributing to the recovery in the housing market activity,” Capital Economics said in a report. “Without a significant easing in credit conditions, it’s hard to see how this will change in the foreseeable future.”
Refinancing activity cooled falling 3% from the previous week, the lowest level since May. Meanwhile, the purchase index fell 0.8%.
The 30-year, FRM on jumbo loans also fell to 4.05% from 4.06%, and the 30-year, FHA loan declined to 3.54% from 3.60% a week earlier.
The refinance share of mortgage activity remained unchanged at 79%, while ARM activity grew to 5% of all loan applications.
The average interest rate on a 15-year, FRM declined to 3.10% from 3.12%, the MBA said. In addition, the average contract interest rate for 5/1 ARMs fell to 2.64% from 2.68%.
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Proprietary OC Housing News home purchase analysis
11620 WARNER Ave #627 Fountain Valley, CA 92708
$239,900 …….. Asking Price
$195,000 ………. Purchase Price
8/3/2012 ………. Purchase Date
$44,900 ………. Gross Gain (Loss)
($15,600) ………… Commissions and Costs at 8%
============================================
$29,300 ………. Net Gain (Loss)
============================================
23.0% ………. Gross Percent Change
15.0% ………. Net Percent Change
276.3% ………… Annual Appreciation
Cost of Home Ownership
——————————————————————————
$239,900 …….. Asking Price
$8,397 ………… 3.5% Down FHA Financing
3.60% …………. Mortgage Interest Rate
30 ……………… Number of Years
$231,504 …….. Mortgage
$70,705 ………. Income Requirement
$1,053 ………… Monthly Mortgage Payment
$208 ………… Property Tax at 1.04%
$0 ………… Mello Roos & Special Taxes
$60 ………… Homeowners Insurance at 0.3%
$241 ………… Private Mortgage Insurance
$265 ………… Homeowners Association Fees
============================================
$1,827 ………. Monthly Cash Outlays
($158) ………. Tax Savings
($358) ………. Equity Hidden in Payment
$10 ………….. Lost Income to Down Payment
$50 ………….. Maintenance and Replacement Reserves
============================================
$1,370 ………. Monthly Cost of Ownership
Cash Acquisition Demands
——————————————————————————
$3,899 ………… Furnishing and Move In at 1% + $1,500
$3,899 ………… Closing Costs at 1% + $1,500
$2,315 ………… Interest Points
$8,397 ………… Down Payment
============================================
$18,510 ………. Total Cash Costs
$21,000 ………. Emergency Cash Reserves
============================================
$39,510 ………. Total Savings Needed
The property above is available for sale on the MLS.
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Cost of Ownership Analysis
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$350,000 17168 NEWHOPE St #212 |
0.07 miles 2 bd / 2 ba 1,257 Sq. Ft. |
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$329,000 11116 LA NARANJA Ct |
0.63 miles 3 bd / 1.5 ba 1,268 Sq. Ft. |
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$245,000 16445 ABERDENE Mtn #106 |
0.77 miles 2 bd / 1.75 ba 1,106 Sq. Ft. |
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$150,000 15907 GODWIN Ct |
1.18 miles 2 bd / 2.5 ba 1,002 Sq. Ft. |
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$319,000 2929 West EDINGER Ave |
1.3 miles 2 bd / 2.5 ba 1,309 Sq. Ft. |
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$120,000 603 South NEWHOPE St #7 |
1.66 miles 2 bd / 1.5 ba 842 Sq. Ft. |
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$249,900 17333 BROOKHURST St Unit E5 |
1.7 miles 2 bd / 2 ba 752 Sq. Ft. |
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$499,900 1328 CORTE VENOSA |
1.71 miles 3 bd / 2.5 ba 1,500 Sq. Ft. |
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$214,000 2510 West MACARTHUR Blvd Unit H |
1.78 miles 2 bd / 2 ba 1,177 Sq. Ft. |
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$168,400 2526 West MACARTHUR Blvd Unit I |
1.78 miles 1 bd / 1 ba 793 Sq. Ft |
This is a classic example of misleading headlines to make a failed government program look successful. The big increase in “successful” loan mods was caused by B of A’s big push from the settlement agreement reaching the three-month mark. If you pay careful attention to the “big” improvements, you see the improvements are not that large at all. The NAr would be proud of this level of spin and bullshit, and this report was put out by our own government. Obama will be happy.
HOPE NOW: Proprietary Loan Mods Up 43% in July
The number of homeowners who received permanent, affordable proprietary loan modifications jumped up 43 percent from June to July, HOPE NOW reported Wednesday.
The voluntary, private sector alliance of mortgage professionals and non-profit counselors released its July 2012 loan modification data, revealing that an estimated 66,002 homeowners received proprietary loan modifications in July, an increase from 46,208 in June.
The group’s report did not include loan mods completed under HAMP, as that data had not yet been released by the Treasury at the time of writing. Year-to-date through June, an estimated 110,144 homeowners had received HAMP modifications.
For the month of July, proprietary loan mods that included fixed interest rates of five or more years accounted for 96 percent of the total. Mods with reduced principal and interest monthly payments made up 77 percent of the total, while mods with reduced principal and interest payments of more than 10 percent accounted for 71 percent of total proprietary mods.
Meanwhile, proprietary loan modifications with 90-plus day delinquency hit the lowest level in HOPE NOW’s recorded data. The re-default rate for modified loans fell to 8.9 percent of the total loan pool, a substantial drop from 10.3 percent in June.
Delinquencies of 60 days declined to 2.47 million in July, down from 2.52 million in June.
The data also showed that short sales continued to have a significant impact on the market. July saw 36,260 short sales, bringing the total of short sales since 2009 up to 974,000. The combination of loan mods and short sales brought the total number of permanent, non-foreclosure solutions up to approximately 6.63 million.
Faith Schwartz, executive director of HOPE NOW, said the increase in modifications illustrates the efforts of industry, non-profit, and government groups on behalf of homeowners.
“HOPE NOW has always been about collaboration, aggressive outreach to borrowers, and education on options,” Schwartz said. “Our data, which has been collected monthly for five years, continues to support these activities, and our members remain active in helping families find sustainable and realistic mortgage solutions.”