MND NewsWire

Obama Signs Home Buyer Tax Credit Extension. Will It Be Effective?

2009-11-06T18:43:33Z

It is finally official. The homebuyers' tax credit has been extended to April 30, 2010. President Barack Obama approved the extension as part of a $24 billion economic stimulus bill signed Friday. The bill also includes an extension of unemployment benefits to the longtime jobless and tax credits for some businesses. The housing tax credit portion of the bill extends the $8,000 tax credit for home buyers who are purchasing their first home from the current November 30 deadline and expands the program to offer a credit of $6,500 to other homeowners who have lived in their current home for at least five years and are seeking to relocate. Another modification to the original legislation raises the income limits for program participation from $75,000 for a single purchaser to $125,000 and from...(read more)

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Fannie Mae Posts 3Q Loss; Asks Treasury for More Money

2009-11-06T17:31:00Z

Citing 22.0 billion of credit-related expenses, Fannie Mae Thursday night announced it lost a net $18.9 billion in the third quarter of 2009. Losses in the second quarter totaled $14.8 billion and $30 billion in the third quarter of 2009. The third quarter loss resulted in a net deficit of $15 billion as of September 30 and prompted the Acting Director of the Federal Housing Finance Agency (FHFA) to request an additional infusion of that amount from the Department of the Treasury. FHFA has asked that the $15 million be made available by December 31. The loss on a per share basis was $3.47, a substantial increase from the $2.67 loss posted last quarter, but a vast improvement over the $13 per share loss during the third quarter of 2008. Fannie reported net revenues of $5.95 billion in the third...(read more)

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The Day Ahead: Fannie Mae Needs Another Bailout; Markets Wait for Jobs Report

2009-11-06T12:59:15Z

Trading is cautious ahead of the month’s most important indicator. Equities jumped more than 2% on Thursday on optimism for the labor market and positive earnings from blue-chip companies, but sentiment is more cautious in the final hour before nonfarm payrolls. Dow Futures continue to dance around the 10k level while S&P 500 futures trade half a point higher at 1,064. WTI crude is back below the $80 per barrel mark, but Spot Gold is up more than $3 to $1,093.38. Meanwhile, the dollar is weaker against the yen, euro, and Aussie dollar, but stronger against the Canadian loonie. Outside of markets the news is that Fannie Mae has asked for a fourth dose of bailout funds from the government. The government-sponsored mortgage lender announced losses of $19 billion from July to September...(read more)

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Despite Less MBS Purchases, Fed Still Helping Keep Mortgage Rates Low

2009-11-05T22:04:00Z

The Federal Reserve today reported on their weekly purchases of agency mortgage-backed securities (MBS). In the five trading days between October 29 and November 4, the Federal Reserve purchased a total of $16.00 billion agency MBS. In those five days the Federal Reserve sold no agency MBS coupons. The Fed's weekly net purchases totaled $16.00 billion. The goal of the Federal Reserve's agency MBS program is to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally. Only fixed-rate agency MBS securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae are eligible assets for the program. The program includes, but is not limited to, 30-year, 20-year and 15-year securities of these issuers. Since the inception of the program...(read more)

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House Passes Home Buyer Tax Credit Extension. Obama to Sign Friday

2009-11-05T19:57:00Z

The House of Representatives has voted to pass legislation extending the home buyer tax credit until April 30, 2009. Last night the Senate voted 98-0 to pass the legislation. Next the bill will head to President Obama to be signed into law on Friday. While the bill extends the $8,000 tax credit for first time home buyers, it also makes available a tax credit to homeowners who have lived in their current residence for at least five years. The credit for these buyers will be capped at $6,500. Income levels will be extended from the current limits of $75,000 for a single purchaser and $150,000 for couples to $125,000 and $225,000 respectively. Above those limits there are diminishing credits available. Housing interests, especially the National Association of Home Builders and the National Association...(read more)

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Fannie and Freddie: Mortgage Rates Dip Below 5 Percent Again

2009-11-05T19:02:38Z

Mortgage rates once again slipped below 5 percent during the week ended November 5 according to data released today by Freddie Mac. Results from the weekly Primary Mortgage Market survey peg the average rate for the 30-year fixed-rate mortgage (FRM) at 4.98 percent, down from an average of 5.03 percent a week earlier. Fees and points averaged 0.7 both weeks. The 15-year FRM averaged 4.40 percent with 0.6 point compared to 4.46 percent also with 0.6 point last week. The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) dropped 7 basis points from the previous week's average for an average of 4.35 percent. Fees and points were unchanged at 0.6 point. The one-year Treasury-indexed ARM was at 4.47 percent with 0.5 point. Last week the average was 4.57 percent with 0.5 point....(read more)

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Fannie Mae Launches Lease Program for Borrowers

2009-11-05T18:36:13Z

Homeowners who are facing foreclosure may soon be able to remain in their homes for up to a year under a 'Deed for Lease' program announced Thursday by Fannie Mae. Under the terms of the program qualifying homeowners who are not eligible for modifications to their mortgage may be able to sign a lease with the government sponsored enterprise and stay in their homes during a transitional period. Jay Ryan, vice president of Fannie Mae said that the program will help eliminate some of the uncertainty of foreclosure, keep families and tenants in their homes, and help to stabilize neighborhoods and communities. Borrowers who qualify for the program but are not eligible for other foreclosure avoidance programs can transfer their property to the lender through a deed in lieu of foreclosure...(read more)

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Jobless Claims Improve. Temporary Hiring Adds Volatility to Data

2009-11-05T15:25:00Z

The Department of Labor this morning released the Unemployment Insurance Weekly Claims report, also known as Jobless Claims. This data set tracks new filings for unemployment insurance benefits and the number of Americans who continue to receive state unemployment benefits (called continuing claims or insured unemployment). The fact that this data is released on a weekly basis makes it very appealing to traders and economists as it provides a week over week view into the health of the domestic labor market. Trader's and economists are looking for hints for answers to questions like: Are jobs being created? Are jobs being lost? Does the trend indicate more job losses ahead? Does the trend indicate firms are expanding and hiring more in the process? Consumers drive output of goods and services...(read more)

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The Day Ahead: Stock Futures Lower Before Jobless Claims and Productivity Data

2009-11-05T13:08:00Z

The US Senate OK’d an extension of the first-time home-buyer tax credit that was to expire at the end of this month. If the house approves the Senate bill, the incentive would expire six months into 2010. In addition, the program will allow homeowners who have lived in their current home for more than five years to receive a $6,500 tax credit to purchase a new primary residence. READ MORE The Senate bill also includes an extension of unemployment benefits for states with jobless rates of 8.5% or higher. In those states, individuals will be eligible for an additional 20 weeks of benefits. On to markets . . . After ending the day with mixed results yesterday, Thursday is set to open with similar sentiment. Equity futures are looking slightly down ahead of the weekly jobless claims report...(read more)

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Senate Approves Homebuyer Tax Credit Extension

2009-11-05T00:39:00Z

The Senate voted unanimously Wednesday night to extend the $8,000 tax credit for home buyers beyond its scheduled November 30, 2009 expiration date. The credit would be available until April 30, 2010. Under the new legislation the credit will also now apply to home buyers who are buying their second or subsequent home. The credit currently applies only to first time home buyer. The Senate vote was 98 to 0. Under a compromise reached late last week, the tax credit for veteran homeowners will apply only to those who have lived in their current residence for at least five years. The credit for these buyers will be capped at $6,500 while first time buyers will continue to receive $8,000. Income levels will be extended from the current limits of $75,000 for a single purchaser and $150,000 for couples...(read more)

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Diving Deep Into the FOMC Statement. How Does It Affect Mortgage Rates?

2009-11-04T20:43:00Z

Although this may not be necessary, I am going to over-analyze the FOMC statement and relate it to mortgage rates. Below is the FOMC Statement. I highlighted the adjustments and additions the FOMC made today.... Release Date: November 4, 2009 For immediate release Information received since the Federal Open Market Committee met in September suggests that economic activity has continued to pick up. Conditions in financial markets were roughly unchanged, on balance, over the intermeeting period . Activity in the housing sector has increased over recent months. Household spending appears to be expanding but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit. Businesses are still cutting back on fixed investment and staffing, though at a slower...(read more)

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Mortgage Applications Increase 8.2%. Refinance Demand Up 14.5%

2009-11-04T12:53:00Z

The Mortgage Bankers Association today released the Weekly Survey on Mortgage Application Activity for the week ending October 30, 2009. Housing is a key component of economic forecasts, thus real estate surveys and housing data are closely scrutinized by policy makers. The Mortgage Banker's application survey covers over 50% of all US residential mortgage loan applications taken by mortgage bankers, commercial banks, and thrifts. The data gives economists a look into consumer demand for mortgage loans. A rising trend of mortgage applications indicates home buying interest is increasing, a positive for the housing industry and economy as a whole. Furthermore, in a low mortgage rate environment, a trend of increased refinance applications implies consumers are seeking out a lower monthly...(read more)

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The Day Ahead: Equity Futures Better Before Busy Day

2009-11-04T12:48:11Z

Risk is back on the table. As investors await labor data, a key survey on the services sector, and of course the policy announcement from the central bank’s monetary policy board, equity futures are all looking up. More than two hours ahead of the bell, the S&P 500 looks to open 7 points higher at 1048.70 and Dow futures are up 64 points to 9,836. The main action may not be in equities though. Gold hit a new record high Tuesday at $1,089 per ounce, and this morning gold futures are up further to $1,094.60. Meanwhile, oil futures are back above $80, and yields on the benchmark 10-year Treasury Note are up 1 basis point to 3.48%. Analysts have said the US dollar will rally if the Federal Reserve shows any signs of tightening rates sooner than expected. However, in a morning note HFE’s...(read more)

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The Day Ahead: Equity Futures Erase Monday Gains Ahead of FOMC Meeting

2009-11-03T12:46:22Z

For a packed week Tuesday is pretty light, but that hasn’t stopped equity futures from dropping sharply lower. Markets in Europe are the likely culprit as Germany’s DAX is down -1.8% and shares in France and London are each 2.2% lower. Two hours before the opening bell, Dow futures are looking to open 97.00 points off at 9638, while S&P 500 futures are down 11.75 points at 1027.25. Meanwhile, WTI Crude has fallen $1.09 to $77.04 per barrel, Spot Gold is trading $0.78 lower at $1058.72, and the US dollar is stronger against most currencies except the yen. The only major data release today from the US is the factory orders index. In addition, markets will look at the weekly retail sales numbers from the ICSC (7:45) and the Johnson Redbook (9:55). None of those are too influential...(read more)

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Refinancing Boom Boosts Lender Loan Profitability

2009-11-02T18:12:02Z

Heightened levels of refinancing continued in April, May, and June and led to an increase in per-loan profits for independent mortgage bankers and subsidiaries according to a study released on Monday by the Mortgage Bankers Association (MBA). The average production profits on each loan written during the second quarter of 2009 was $1,358 (71.29 basis points), a substantial gain over the average of $1,088 (54.58 basis points) per loan during the first quarter of the year. The gain came as a big increase in production volume allowed lenders to spread their fixed costs over a larger number of loans, thus increasing net profits according to a statement released by Marina Walsh, MBA's Associate Vice President of Industry Analysis. The "net cost to originate" fell to $1,295 per loan...(read more)

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