Mortgage Delinquencies Up, Loan Applications Down, Yikes!
Fannie, Freddie and refis, oh my
This past week revealed new loan applications at a volume unmatched in 12 years while the number of refinanced loans is down 9.5% in October.
Amy Cavender of Simplified Mortgage Solutions noted, “we are completely back to basics as far as underwriting goes – I’ve not seen it like this in awhile. The pendulum is completely on the opposite side from two years ago. There are really only “vanilla” loans out there right now.”
Residential loans are in trouble, as 9.64% are delinquent, Fannie Mae’s portfolio value declined 27.8%, and Freddie Mac’s portfolio value decreased 21.6% this year.
Cavender said, “I believe 203K loans will be in huge demand based on the type of inventory that’s out there right now – many of the distressed properties need some work. Refinances are down because we are having problems with values. I don’t see it getting any easier any time soon. Many investors are raising their minimum fico score to 640.”
This month’s Standard & Poor’s report noted the fact that so many option-ARM borrowers owe more than when they first bought their homes due to accumulating unpaid interest and a large number of loans bought in the 2004 boom are coming due for their five-year reset when they become standard amortizing loans, throwing many loan-to-value ratios out of whack and monthly mortgage payments more than doubling in some cases.
Buckle up, y’all, we’re in for a bumpy ride.
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This article published on Monday, November 30th, 2009 at 1:14 am | Contact the editor
About this Columnist (Full Profile)
AGBeat Editor-in-Chief: Lani, named one of Real Estate’s 100 Most Influential, as well as 12 Most Influential Women in Real Estate, is a business writer hailing from the great state of Texas in the city of Austin. As a digital native, Lani is immersed not only in advanced technologies and new media, but is also a stats nerd often burried in piles of reports. Lani is a proven leader, thoughtful speaker, and vested partner at AGBeat.
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- Congress Screams Bloody Murder About HAMP Program:
[...] mortgage delinquencies rising, 375,000 borrowers are eligible for permanent loan modifications by the end of December and the [...]
- Mortgage Applications Are Up This Week, Do You Know Why?:
[...] activity was homeowners taking advantage of refinancing in light of job instability, a climate of rising mortgage delinquencies and bankruptcy filings, loan modification programs under scrutiny, along with record low rates, new [...]
Benn Rosales
Conal Campbell
Elijah May
Lani Rosales
Tara Steele
Marti Trewe
Charlene Jimenez
Thank you Lani – if you or any of your readers want any other information – I am glad to provide. You rock sister!
Thanks for not fluffing the info. Wow!
Here in the NoVA area you have little chance with 203k streamlines. Our inventory is so low that any of the physically distressed REO’s get 10 cash offers. I can’t find anything for my investors. If a back-log of REO’s truely exists, it’d be a good time to release them. We have the buyer pool.
Thanks Mike for you comment. It shows how markets are different. I’m in a highly populated military community. I’m amazed at the number of our soldiers who are deployed and for one reason or another they have their home foreclosed. When people are desperate because they are losing their homes, they go to all measures. I’m happy your community is not experiencing what we and many other communities are experiencing.
Just to clarify: It’s not just military in my sphere that are losing their homes. It’s affecting all walks of life, every career, age group, race, etc. Economic hardship is not discriminating.
To your success.
Mylender
Amy, thanks!!
Susie, it’s easier to be a little more objective when you don’t have a horse in the game- I’m not an agent OR a lender.
Thanks for noticing!
Mike, you can send the investment dollars to Austin, there’s not a mass bidding war here and there’s a lot of inventory available (median price around 200k), just sayin’! lol