• New home sales increased only slightly in September, up 0.2 percent over August, bringing the annual rate of those sales to 467,000.  Sales were up 17.0 percent from the September 2013 pace of 399,000 units.

    Perhaps bigger news in today's joint release from the Census Bureau and the Department of Housing and Urban Development was the revision to the August new home sales number. The initial report of those sales indicated a very significant 18 percent increase over July's number, sending sales to a seasonally adjusted annual rate of 504,000 and over the half-million mark for the first time since May 2008.  The estimate was well over analysts' expectations; the consensus had been 430,000 units.  Turns out the analysts were closer to the mark than the government agencies which today downgradedthe August estimate to an annual rate of 466,000.

    This takes what had been a potential trend of improvement back into the stagnant sub-500k range that's been intact throughout the post-crisis period.

     

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  • Fannie Mae said on Thursday that real economic growth in the last two quarters of 2014 appear poised to exceed 3.0 percent, providing a solid basis for growth in 2015.  However the housingrecovery will remain "choppy."

    The October Economic and Housing Outlookpublished by Fannie Mae says reduced fiscal uncertainty and slowing monetary intervention has enabled momentum in the private sector to build while total government spending no longer declined.  Those government cutbacks had been masking improvement in the private economy. Housing contributed to growth as well, rebounding strongly in the second quarter from sharp drops in the previous two quarters

     

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  • September appears to have been another month in which loan performance improved and the states continued to slog through the overhang of delinquent mortgages left over from, in some cases, the early days of the housing crash.  Black Knight Financial Services released a "first look" at its data for the month showing overall improvement in delinquency and foreclosure metrics.

    The inventory of delinquent loans - those for which one or more payments have been missed but the loan is not yet in foreclosure - declined by 3.90 percent or 117,000 loans in September, nearly reversing a huge 146,000 delinquent loan increase in August.  This brought the 30+ day rate down to 5.67 percent and was a 12.22 percent drop representing 388,000 fewer loans compared to September 2013.

     

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  • Builders who engage in home remodeling continue to display confidence in their market the National Association of Home Builders (NAHB) said today.  NAHB's Remodeling Market Index (RMI) rose from 56 in the second quarter of 2014 to 57 in the third quarter.

    NAHB described the current index reading as a "high water mark" and said it was the sixth consecutive quarter that the reading has been above the benchmark of 50.  This indicates that more remodelers report a higher level of activity compared to the previous quarter than those who see activity as down. 

    The RMI averages responses about currentactivity with those about futureexpectations for work.  Both current and future responses are based on calls for bids, amount of work committed for the next three months, backlog of jobs, and appointments for proposals.

     

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  • The percentage of American homeowners a mortgage that was seriously underwater fell to 15 percentin the third quarter of 2014 RealtyTrac said on Thursday.  There were 8.1 million properties with mortgages that met the company's definition of seriously underwater - where the combined loan amount of the homes mortgage(s) is at least 25 percent higher than the properties market value.  The combined market value of negative equity in these properties is an estimated $1.4 trillion.

    In the second quarter of 2014 there were an estimated 9.1 million residential properties in a negative equity situation or 17 percent of all mortgaged homes.  The new third quarter figures were the lowest since RealtyTrac began following the issue in the first quarter of 2012.  Negative equity, which is a leading indicator of the possibility of foreclosure and seriously dampens a homeowner's ability to refinance or sell the property, peaked according to RealtyTrac's data in the second quarter of 2012 at 12.8 million properties or 29 percent.

     

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  • Frank E. Nothaft and Leonard Kiefer, Freddie Mac's chief and deputy chief economists have come up with a formulafor lifting the economy from its continuing low-growth status to a trajectory of robust sustainable growth.  And that's what they are calling it, L.I.F.T.  The acronym stands for Labor, Income, Fixed Investment, and Trust and in the current edition of the company's U.S. Economic and Housing Market Outlook they lay out the parameters for each.

    Labor

    The labor market must fully recover, providing solid employment gains, less long term unemployment, and broad-based income growth.  Unless the labor market recovery accelerates, any improvement in the housing market will also lag.  Last month the unemployment rate finallyfell below 6 percent for the first time since the recovery began but that number does not tell the full story.

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  • Falling interest rate precipitated a major refinancing rally during the week ended October 17 even though Columbus Day shortened the business weeks in some locations.  The Mortgage Bankers Association's (MBA's) Refinance Index jumped 23 percent compared to the previous week, the largest increase for the index this year, far surpassing an 11 percent gain in January and taking the index to its highest level since November 2013.  Applications for refinancing made up a 65 percent share of all applications compared to 59 percent the previous week and the average size of a loan for refinancing rose to $306,000 the highest level since MBA started its survey in 1990.

     

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  • Financial regulators on Tuesday finally released the final rule defining Qualified Residential Mortgages (QRM).  The definition is intended to determine which loans are exemptfrom the risk retention requirements of the Dodd Frank Wall Street Reform and Consumer Protection Act. 

    As expected, the final QRM is aligned with the definition of Qualified Mortgages (QM) which defines how lenders determine if a borrower has the ability to repay the loan and sets out a safe harbor for lenders as they make that determination and underwrite the loan.

    The regulatory agencies issuing the regulation (Treasury, Housing and Urban Development, the FDIC, Securities and Exchange Commission, Federal Housing Finance Agency, and the Federal Reserve) observed in the preamble to the proposals presenting the rule the securitization markets are an important part of the provision of credit to the nation's households and businesses.  "When properly structured, securitization provides economic benefits that can lower the cost of credit."

     

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  • Existing home sales, which ended four straight months of gains with a 1.8 percent decline in August, bounced back in September the National Association of Realtors® (NAR) said today. Sales increased 2.4 percent to a seasonally adjusted annual rate of 5.17 million homes, the highest pace of the year, from the August rate of 5.05 million.

    Despite the recovery, sales in September are still 1.7 percent lower than in September 2013.  Existing homes were selling then at a rate of 5.26 million.  

    Sales of single familyhomes rose 2.0 percent to an annual rate of 4.56 million from 4.47 million in August but were 1.9 percent below the annual rate of 4.65 million units a year earlier.  Existing condo and cooperative units sold at a 5.2 percent higher rate than in August, 610,000 units compared to 580,000, but were unchanged from September 2013.

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  • David Stevens, President of the Mortgage Bankers Association (MBA), told an audience attending the association's s annual convention in Las Vegas that the rules for Qualified Residential Mortgages will be, as rumored, released on Wednesday. This rule, which was sent back to the drawing board two years ago after housing stakeholders complained it would shut down mortgage lending will, in this iteration, he said be aligned with the Qualified Mortgage Rule and will not have steep downpayment or strict debt-to-income requirements.  He credited the industry and consumer groups for advocating on the issue.  

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  • Federal Housing Finance Agency (FHFA) Director Melvin L. Watt focused his remarks to attendees at the Mortgage Bankers Association annual conference on the issue of representation and warranties.  He acknowledged that fears of being forced to repurchase large numbers of loans after they have been sold to one of the two government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac has created unease among lenders almost from the start of the mortgage crisis.

    Watt said that the Representation and Warranty Framework in use by the GSE's provides them the necessary assurances they need to purchase loans in an efficient and responsible manner without checking each loan individually or attending every closing. They also provide the Enterprises remedies to address situations where a lender's obligations to meet the Enterprises' purchase guidelines have notbeen fully met.

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  • Earlier this year the Mortgage Bankers Association (MBA) began releasing its Mortgage Credit Availability Index, a measure of how "loose" or "tight" mortgage credit is when compared to the previous month or year.  In an article on CoreLogic's Insights blog, titled "Goldilocks and the Three Credit Bears," senior economist Mark Fleming describes his company's similar index.

    The Housing Credit Index (HCI) measures the range and variation of mortgage credit over time and over various underwriting criteriaincluding credit scores, debt-to-income and loan-to-value ratios and loan attributes such as whether the loan is a fixed or adjustable rate, the amount of documentation, and the loan origination channel.  CoreLogic then uses what Fleming calls "mathematical techniques popularized in the economic inflation forecasting literature to handle multiple correlated attributes."

     

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  • One has to hope that foreclosure data reported on Thursday by RealtyTrac is a sign that states are wrapping up the foreclosure crisis that has been ongoing since 2008, notthat it signals further trouble in the housing sector.  The company's U.S. Foreclosure Market Report for both September and the third quarter of 2014 indicate that both defaults and scheduled auctions increased in the third quarter driving overall foreclosure activity to its first quarterly increase in three years. 

    The increase was small; overall foreclosure filings including default notices, scheduled auctions, and completed foreclosures or bank repossessions increased 0.42 percent form the second quarter to a total of 317,171 and were down 16 percent from the same quarter in 2013.  However the increases were at the front end of the foreclosure process.  Default notices increased 2 percent from the second quarter and scheduled foreclosure auctions were up 7 percent.  These were partially offset by a 12 percent drop in completed foreclosures.

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  • Over the last year or so mortgage servicers have transferred a number of large mortgage portfolios to other servicers.  Beyond the selling of mortgage servicing rights (MSR), many of the transfers have been from large traditional servicers to "specialty servicers" most of whom are supposedly better equipped for handling delinquent mortgages.  These increased transfers were prompted in part by servicing rules promulgated by the Consumer Financial Protection Agency (CFPB) which went into effect in January 2014.

    The high volumeof these transfers has led to concern and increased scrutiny on the part of regulators regarding potential risks to consumers.  This regulatory attention and lack of clarity attending it was problematic for servicers, many of which are non-depository institutions which have used bulk MSR transfers and corporat

     

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  • The Department of Housing and Urban Development has released the first wave of data from the 2013 American Housing Survey (AHS).  It is a massive treasure trove of virtually everything virtually anyone might want to know about the nation's housing.

    The Survey is conducted biennially and, as in past years, provides current national-level information on a wide range of housing subjects.  A verywide range.

    Survey participants were asked questions about their homes and the ways they live in it, ranging from the units size along various parameters, to the type of plumbing, heating, and other systems employed; amenities, the occupant's opinion of the home's condition, from what type of housing the occupant migrated, if the size of the household had grown or shrunk, and characteristics that indicate the state of emergency preparedness of the occupants.

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