It's important we end the blogging year on a positive note. And remember - the people who are predicting a long, drawn-out recession are the same people who wrung their hands last summer worrying about $200 a barrel oil and $5 a gallon gasoline.
Mortgage applications mushroom on lower rates
Refinancings pace upsurge; ARMs all but disappear
By Amy Hoak, MarketWatch
Last update: 7:00 a.m. EST Dec. 24
CHICAGO (MarketWatch) -- With mortgage rates approaching record lows, the volume of applications filed for mortgages jumped a seasonally adjusted 48% last week compared with the previous week, according to the Mortgage Bankers Association's weekly survey.
Applications for the week ended Dec. 19 ran 124.6% ahead of the mortgage activity seen during the same week last year, the Washington-based MBA said. Its survey covers about half of all U.S. retail residential mortgage applications.
The boost in applications coincided with another drop in mortgage rates, as the government's efforts to thaw out the home-mortgage market show further signs of having the desired effect.
According to the MBA's survey, rates on 30-year fixed-rate mortgages averaged 5.04% last week, down from 5.18% the previous week. This interest rate hasn't been lower since the 4.99% average rate seen for the week ended June 13, 2003.
Fifteen-year fixed-rate mortgages averaged 4.91%, down from 4.93% the week before.
And one-year ARMs averaged 6.36%, down from 6.63%.
Applications to refinance existing mortgages increased 62.6% on a week-to-week basis, while applications filed for mortgages to buy homes increased a seasonally adjusted 10.6%.
The four-week moving average for all mortgage applications was up 28.8%.
Refinancings made up 83.2% of all applications filed last week, up from 76.9% the previous week. The share of applications for ARMs decreased to 0.8%, down from 1.1%.
Amy Hoak is a MarketWatch reporter based in Chicago.
Wednesday, December 24, 2008
Tuesday, December 23, 2008
Central Islip in the New York Times
The New York Times' Lawrence Downes writes about Central Islipin today's New York Times. This could be a huge opportunity for the Long Island Builders Institute.
Editorial Observer
In a Reborn Corner of Long Island, Blight Comes Creeping Back
By LAWRENCE DOWNES
The foreclosure crisis has created a continent’s worth of disasters, so it might seem unfair to pick one out from all the others. But this one hits close to home, and it hurts. The epidemic of bad loans is threatening to unravel one of the brightest stories of community recovery that New York State has seen in decades: the rebirth of Central Islip.
Central Islip is a Long Island community of about 32,000 people — a modest place, right off the expressway, about as un-Hamptons as Long Island gets, without a quaint downtown or a beach. Its best-known landmark, the Central Islip Psychiatric Center, was for decades both the engine of its prosperity and the catalyst of its devastation.
It was once the country’s second-largest mental hospital, and Central Islip was a company town for thousands of workers and their families. But when the hospital emptied out from the 1960s through the ’80s, the neighborhoods around it did, too. Blocks of tidy houses fell prey to abandonment and rot. Families moved away. Drug dealers and absentee slumlords moved in.
Homegrown institutions kept things from falling apart. One of the most important has been the Central Islip Civic Council, a little nonprofit that has acted as a form of community glue for more than 40 years — building houses, offering loan counseling, managing rental properties and running a food pantry and newspaper.
Its executive director, Nancy Manfredonia, has seen the area fall and rise as master plans have come and gone, bringing new homes and businesses to fill the hole left by the hospital. For years, things have slowly been getting better. A county courthouse was built in the early ’90s, then a federal courthouse. A law school set up nearby. The New York Institute of Technology repaired and occupied many of the old hospital buildings. Then came a ballpark for the Long Island Ducks, shopping centers and housing developments with aspirational names like Islip Landing and Courthouse Commons.
The biggest achievement was College Woods, once a blighted neighborhood called Carleton Park, which the civic council and Town of Islip rebuilt from the ground up. Hundreds of new homes were sold at subsidized prices to low- and moderate-income families. “We recycled the neighborhood,” Ms. Manfredonia said proudly.
But all during the boom, predatory lenders were descending on Central Islip, just as they were next door in Brentwood and Bay Shore and in Wyandanch, Hempstead Village, Freeport, Roosevelt and other working-class places across Long Island. They pushed people into taking loans they couldn’t repay, sold the bad loans into the securitized abyss and disappeared.
Now the bottom has fallen out. Central Islip is a hot spot for defaults and foreclosures. Ms. Manfredonia’s organization regularly surveys abandoned homes. Last year in one neighborhood, the number fell to a historic low: only 11. Now it is rising again. I drove around with her last week, our heads turning left, right and left as we spied the telltale plywood and broken windows. Willow Street in particular was badly hit. “Geez,” she said. “This is really gruesome.”
Ms. Manfredonia knows that not everybody should be a homeowner. She’s hoping the crisis shakes Long Island into filling its desperate need for rental housing — for single people, old people, poor people and now for the people ruined by the burst housing bubble.
Central Islip’s master plans never included significant amounts of rentals because nobody wanted them. That’s typical for Long Island, which is trapped in old patterns of segregation where homeowners see renters as problem people. But now that homeownership itself is under siege, maybe that will change.
The solutions won’t necessarily come from the top down. New York’s state and local governments have lots of other problems besides housing. No one knows how much federal money will eventually flow to distressed homeowners, though it already seems clear that it won’t be enough. There is a dire need for creative ways to keep people in their homes — and those, too, are in short supply.
Grass-roots groups don’t have the luxury of waiting for the crisis to pass. There are banks to haggle with, houses to repair, homeowners to comfort and advise. We’ll figure it out ourselves, Ms. Manfredonia says, voicing the optimism that housing advocates on Long Island choose, as an alternative to despair.
Editorial Observer
In a Reborn Corner of Long Island, Blight Comes Creeping Back
By LAWRENCE DOWNES
The foreclosure crisis has created a continent’s worth of disasters, so it might seem unfair to pick one out from all the others. But this one hits close to home, and it hurts. The epidemic of bad loans is threatening to unravel one of the brightest stories of community recovery that New York State has seen in decades: the rebirth of Central Islip.
Central Islip is a Long Island community of about 32,000 people — a modest place, right off the expressway, about as un-Hamptons as Long Island gets, without a quaint downtown or a beach. Its best-known landmark, the Central Islip Psychiatric Center, was for decades both the engine of its prosperity and the catalyst of its devastation.
It was once the country’s second-largest mental hospital, and Central Islip was a company town for thousands of workers and their families. But when the hospital emptied out from the 1960s through the ’80s, the neighborhoods around it did, too. Blocks of tidy houses fell prey to abandonment and rot. Families moved away. Drug dealers and absentee slumlords moved in.
Homegrown institutions kept things from falling apart. One of the most important has been the Central Islip Civic Council, a little nonprofit that has acted as a form of community glue for more than 40 years — building houses, offering loan counseling, managing rental properties and running a food pantry and newspaper.
Its executive director, Nancy Manfredonia, has seen the area fall and rise as master plans have come and gone, bringing new homes and businesses to fill the hole left by the hospital. For years, things have slowly been getting better. A county courthouse was built in the early ’90s, then a federal courthouse. A law school set up nearby. The New York Institute of Technology repaired and occupied many of the old hospital buildings. Then came a ballpark for the Long Island Ducks, shopping centers and housing developments with aspirational names like Islip Landing and Courthouse Commons.
The biggest achievement was College Woods, once a blighted neighborhood called Carleton Park, which the civic council and Town of Islip rebuilt from the ground up. Hundreds of new homes were sold at subsidized prices to low- and moderate-income families. “We recycled the neighborhood,” Ms. Manfredonia said proudly.
But all during the boom, predatory lenders were descending on Central Islip, just as they were next door in Brentwood and Bay Shore and in Wyandanch, Hempstead Village, Freeport, Roosevelt and other working-class places across Long Island. They pushed people into taking loans they couldn’t repay, sold the bad loans into the securitized abyss and disappeared.
Now the bottom has fallen out. Central Islip is a hot spot for defaults and foreclosures. Ms. Manfredonia’s organization regularly surveys abandoned homes. Last year in one neighborhood, the number fell to a historic low: only 11. Now it is rising again. I drove around with her last week, our heads turning left, right and left as we spied the telltale plywood and broken windows. Willow Street in particular was badly hit. “Geez,” she said. “This is really gruesome.”
Ms. Manfredonia knows that not everybody should be a homeowner. She’s hoping the crisis shakes Long Island into filling its desperate need for rental housing — for single people, old people, poor people and now for the people ruined by the burst housing bubble.
Central Islip’s master plans never included significant amounts of rentals because nobody wanted them. That’s typical for Long Island, which is trapped in old patterns of segregation where homeowners see renters as problem people. But now that homeownership itself is under siege, maybe that will change.
The solutions won’t necessarily come from the top down. New York’s state and local governments have lots of other problems besides housing. No one knows how much federal money will eventually flow to distressed homeowners, though it already seems clear that it won’t be enough. There is a dire need for creative ways to keep people in their homes — and those, too, are in short supply.
Grass-roots groups don’t have the luxury of waiting for the crisis to pass. There are banks to haggle with, houses to repair, homeowners to comfort and advise. We’ll figure it out ourselves, Ms. Manfredonia says, voicing the optimism that housing advocates on Long Island choose, as an alternative to despair.
Monday, December 22, 2008
Wednesday, December 17, 2008
'New Deal for Nassau' for business owners is on the table
This Long Island Business News article appears on its web site - LIBN.com.
Nassau focuses on being builder friendly
by Michael H. Samuels
Published: December 17th, 2008
For years, Long Island’s builders and contractors have complained about the blockade that is Nassau County government.
In good times, builders took the problems, such as delays in issuing permits, discrepancies in the application process and slow payments, in stride, knowing there would, eventually, be a big payday ahead. But now as the country sits in a recession, those same builders are begging for expediency. Perhaps they’ll get it.
The county Legislature has launched what it expects will be a series of meetings with contractors, builders, Chamber of Commerce officials and others to help make Nassau County more builder friendly. Those groups joined the Long Island Housing Partnership, the Nassau County Industrial Development Agency, the county economic development department, Hofstra University and the Long Island Association, as the county seeks to fast-track development. More meetings with workers and municipalities are scheduled.
Already, some business leaders have weighed in and told Nassau officials what they probably already knew: Delays are costly and zoning laws are cumbersome and often difficult to make sense of.
Mark Herbst, executive director of the Long Island Contractors Association, said companies he represents would be better off if county, town and village governments passed capital budgets when they are proposed in January. Often, capital budgets aren’t passed until March or later, leading to delays that affect contractors’ ability to bid on projects and increase planning costs.
Herbst added that government is slow to pay for work, which makes it less appetizing to work on public projects.
“Our suppliers demand to be paid in 30 to 60 days,” Herbst said. “They do not want an excuse that the town or county has not paid us.”
Michael Watt, executive vice president for the Long Island Builders’ Institute, said the new Nassau initiative shows political leaders are ready to put an end to the bureaucracy, which has led to delays in approving development and paying for work already done.
“We have to believe the Nassau leaders are sincere,” Watt said.
Watt said Nassau should speed up the permitting and application process for builders. He said agencies in Nassau, regardless of the municipality, should have a similar application process.
Watt added that Brookhaven and Islip have already streamlined the building application process.
“Builders need to plan their costs,” Watt said. “For instance, they estimate that they will need to borrow a certain amount of money and pay it back in six months. But when six months turns in to 18 months, you’re screwed.”
Many of these complaints are not new. But a booming real estate business made the mess more tolerable.
Lewis Yevoli, the former Oyster Bay supervisor who is now a consultant with the Nassau County Industrial Development Agency, said the county needs to spearhead an effort to get towns and villages to change their zoning laws to make it easier for builders to increase density and build affordable, work-force housing.
He said many of the density figures are arbitrary and can be easily raised.
But not everyone has grievances.
Jim Castellane, president of the Building and Construction Trades Council of Nassau and Suffolk counties, said he has a good working relationship with both counties.
He suggested Nassau look into implementing a policy similar to Huntington’s, which fast tracks permits for companies that use a state-approved apprenticeship program. He also said Nassau could hire a labor adviser similar to Suffolk’s. A Suffolk adviser acts as a liaison between the unions and the county.
Otherwise, Castellane said, builders and contractors are going to have to ride through a rough economy. There’s only so much government can do.
“Everybody is going to run into problems now,” Castellane said. “That’s expected with the way the economy is.”
Nassau focuses on being builder friendly
by Michael H. Samuels
Published: December 17th, 2008
For years, Long Island’s builders and contractors have complained about the blockade that is Nassau County government.
In good times, builders took the problems, such as delays in issuing permits, discrepancies in the application process and slow payments, in stride, knowing there would, eventually, be a big payday ahead. But now as the country sits in a recession, those same builders are begging for expediency. Perhaps they’ll get it.
The county Legislature has launched what it expects will be a series of meetings with contractors, builders, Chamber of Commerce officials and others to help make Nassau County more builder friendly. Those groups joined the Long Island Housing Partnership, the Nassau County Industrial Development Agency, the county economic development department, Hofstra University and the Long Island Association, as the county seeks to fast-track development. More meetings with workers and municipalities are scheduled.
Already, some business leaders have weighed in and told Nassau officials what they probably already knew: Delays are costly and zoning laws are cumbersome and often difficult to make sense of.
Mark Herbst, executive director of the Long Island Contractors Association, said companies he represents would be better off if county, town and village governments passed capital budgets when they are proposed in January. Often, capital budgets aren’t passed until March or later, leading to delays that affect contractors’ ability to bid on projects and increase planning costs.
Herbst added that government is slow to pay for work, which makes it less appetizing to work on public projects.
“Our suppliers demand to be paid in 30 to 60 days,” Herbst said. “They do not want an excuse that the town or county has not paid us.”
Michael Watt, executive vice president for the Long Island Builders’ Institute, said the new Nassau initiative shows political leaders are ready to put an end to the bureaucracy, which has led to delays in approving development and paying for work already done.
“We have to believe the Nassau leaders are sincere,” Watt said.
Watt said Nassau should speed up the permitting and application process for builders. He said agencies in Nassau, regardless of the municipality, should have a similar application process.
Watt added that Brookhaven and Islip have already streamlined the building application process.
“Builders need to plan their costs,” Watt said. “For instance, they estimate that they will need to borrow a certain amount of money and pay it back in six months. But when six months turns in to 18 months, you’re screwed.”
Many of these complaints are not new. But a booming real estate business made the mess more tolerable.
Lewis Yevoli, the former Oyster Bay supervisor who is now a consultant with the Nassau County Industrial Development Agency, said the county needs to spearhead an effort to get towns and villages to change their zoning laws to make it easier for builders to increase density and build affordable, work-force housing.
He said many of the density figures are arbitrary and can be easily raised.
But not everyone has grievances.
Jim Castellane, president of the Building and Construction Trades Council of Nassau and Suffolk counties, said he has a good working relationship with both counties.
He suggested Nassau look into implementing a policy similar to Huntington’s, which fast tracks permits for companies that use a state-approved apprenticeship program. He also said Nassau could hire a labor adviser similar to Suffolk’s. A Suffolk adviser acts as a liaison between the unions and the county.
Otherwise, Castellane said, builders and contractors are going to have to ride through a rough economy. There’s only so much government can do.
“Everybody is going to run into problems now,” Castellane said. “That’s expected with the way the economy is.”
Tuesday, December 16, 2008
Like everybody else, Long Island business owners in general and the Long Island building community in particular will pay close attention to the Governor’s budget message this morning. Here are some thoughts we have on the matter.
• New York State government should strive to "do more with less" as the thousands of NYS businesses dealing with this economic crisis have done already.
• Raising prices is not an option for us, so increasing the already onerous tax burden on NYS residents and business owners should not be an option for the state. We do support such creative measures as expanding the number of venues where wine can be sold and blocking the sale of untaxed cigarettes to non-Native Americans.
• A more efficient and effective NYS - i.e. taking less time to approve permits -- would mean more business activity, which in turn generates more tax revenues. One of my developers had to wait 10 weeks to get the permits he needed for a development and it almost cost him the deal. That's tens of thousands of dollars in tax revenues that were delayed and almost lost.
• The Governor has vowed to re-visit DEC regulations that are un-enforceable because of a lack of manpower and other programs that inhibit the development process. This would be helpful.
• The Governor should re-visit well-intentioned but flawed land preservation practices that take huge chunks of property off the property tax rolls. Rather than purchase whole blocks of land and rendering them sterile, for instance, it should allow a portion of that land to be developed with higher densities than currently allowed so that the developer can contribute the unused portion of that land back to the community at no charge to the taxpayer.
• New York State government should strive to "do more with less" as the thousands of NYS businesses dealing with this economic crisis have done already.
• Raising prices is not an option for us, so increasing the already onerous tax burden on NYS residents and business owners should not be an option for the state. We do support such creative measures as expanding the number of venues where wine can be sold and blocking the sale of untaxed cigarettes to non-Native Americans.
• A more efficient and effective NYS - i.e. taking less time to approve permits -- would mean more business activity, which in turn generates more tax revenues. One of my developers had to wait 10 weeks to get the permits he needed for a development and it almost cost him the deal. That's tens of thousands of dollars in tax revenues that were delayed and almost lost.
• The Governor has vowed to re-visit DEC regulations that are un-enforceable because of a lack of manpower and other programs that inhibit the development process. This would be helpful.
• The Governor should re-visit well-intentioned but flawed land preservation practices that take huge chunks of property off the property tax rolls. Rather than purchase whole blocks of land and rendering them sterile, for instance, it should allow a portion of that land to be developed with higher densities than currently allowed so that the developer can contribute the unused portion of that land back to the community at no charge to the taxpayer.
Monday, December 8, 2008
Are public works projects the answer?
According to a story in this morning's Newsday, some federal lawmakers have estimated that 47,000 jobs are created for every $1 billion spent on infrastructure.
The Newsday story goes on to delineate different construction projects under consideration for the region. To see the complete story, click here.
The Newsday story goes on to delineate different construction projects under consideration for the region. To see the complete story, click here.
Friday, December 5, 2008
Washington’s New Tack: Helping Homeowners
The New York Times presents some interesting insight as to what's happening in Washington to help stimulate home buying across the country. Click here to read the article.
Thursday, December 4, 2008
Home loan applications doubled last week
Newsday's Ellen Yan reports today that mortgage applications are up and keeping mortgage brokers busy. Click here to check it out or read it below.
Newsday.com
After rates drop, mortgage brokers get busy
BY ELLEN YAN
ellen.yan@newsday.com
11:48 PM EST, December 3, 2008
On an average day, Gregory Frank's Woodbury mortgage brokerage would get 20 new inquiries, but lately phones and e-mails have been tied up with about 100 new inquiries a day.
Yesterday, he reversed an interest rate lock, from 6.5 percent to 61/8 percent, when a client set to close Friday on a $1.2-million loan asked him to renegotiate with the bank.
"My loan officers are very active now, writing new deals and pricing out new deals," said Frank, president of Blackstone Mortgage Corp. "We're definitely feeling the heartbeat."
It's been a Thanksgiving to remember for many brokers and lenders as a cornucopia of calls and loans has spilled open. The federal government said last week it would start buying up to $600 billion in bad loans and mortgage-backed securities. That caused home-loan interest rates to fall. They were hovering around 5.5 percent yesterday for 30-year fixed-rate mortgages. The drop, in turn, led to borrowers' calling about refinancing, homeowners' trying to turn their adjustable rates into fixed ones, house hunters' committing to buying and others' asking to be notified if rates dropped more.
Home loan applications last week doubled despite the shortened workweek, the Mortgage Bankers Association said yesterday. Refinancing last week accounted for 69.1 percent of all mortgage activity, up from 49.3 percent the week before, the trade group said, while home purchase loans increased 38 percent.
That report backed claims from lenders of banner times. The day after the federal announcement, a top-20 home mortgage lender, Ohio-based AmTrust Bank, said in an e-mail that rates had been locked on $1.5 billion in mortgages for the day, "historic levels" for the company. In its e-mail to mortgage brokers before the holiday, Wells Fargo said it had a "remarkable day" with "huge activity."
Borrowers learned a lesson when they missed locking onto rates that went down briefly in September after the federal government took over mortgage giants Fannie Mae and Freddie Mac, said Orawin Velz, the trade group's associate vice president of economic forecasting. With the federal government's latest move, he said, "many of those on the sidelines decided to quickly jump in and take advantage of lower rates before they began to rebound."
At a Westbury-based mortgage banker, Financial Equities, there's been a 30 percent to 40 percent jump in calls from stable borrowers who carry a 6.5 percent or higher interest rate and now want the current rate of 5.5 percent and lower.
"Over the last year, maybe 20 percent of my business was refinancing, now today it's probably closer to 40 to 50 percent," said company president Walter Stashin.
But he said house hunters have not inundated phones lines and probably won't until early next year, when federal loan purchases free up cash for lenders and the impact trickles down to consumers.
For one thing, Stashin said, the National Bureau of Economic Research on Monday confirmed that the country is in a recession, and that countered optimism over the federal government's loan buybacks. Also, he said, standards for federally backed mortgages, which is mostly what's available now, have not eased much, with fully documented loans required for the most part. On top of that, many house hunters in high-cost places such as Long Island need jumbo loans, which are more than $417,000, but these loans carry higher interest rates of 7 percent and are harder to get, he said.
"We have quite a bit of pre-approvals," Stashin said. "But have people found a home yet? No. People don't know if it's the bottom yet as far as the housing market, and with the way the economy's going, people are talking recession."
Copyright © 2008, Newsday Inc.
Newsday.com
After rates drop, mortgage brokers get busy
BY ELLEN YAN
ellen.yan@newsday.com
11:48 PM EST, December 3, 2008
On an average day, Gregory Frank's Woodbury mortgage brokerage would get 20 new inquiries, but lately phones and e-mails have been tied up with about 100 new inquiries a day.
Yesterday, he reversed an interest rate lock, from 6.5 percent to 61/8 percent, when a client set to close Friday on a $1.2-million loan asked him to renegotiate with the bank.
"My loan officers are very active now, writing new deals and pricing out new deals," said Frank, president of Blackstone Mortgage Corp. "We're definitely feeling the heartbeat."
It's been a Thanksgiving to remember for many brokers and lenders as a cornucopia of calls and loans has spilled open. The federal government said last week it would start buying up to $600 billion in bad loans and mortgage-backed securities. That caused home-loan interest rates to fall. They were hovering around 5.5 percent yesterday for 30-year fixed-rate mortgages. The drop, in turn, led to borrowers' calling about refinancing, homeowners' trying to turn their adjustable rates into fixed ones, house hunters' committing to buying and others' asking to be notified if rates dropped more.
Home loan applications last week doubled despite the shortened workweek, the Mortgage Bankers Association said yesterday. Refinancing last week accounted for 69.1 percent of all mortgage activity, up from 49.3 percent the week before, the trade group said, while home purchase loans increased 38 percent.
That report backed claims from lenders of banner times. The day after the federal announcement, a top-20 home mortgage lender, Ohio-based AmTrust Bank, said in an e-mail that rates had been locked on $1.5 billion in mortgages for the day, "historic levels" for the company. In its e-mail to mortgage brokers before the holiday, Wells Fargo said it had a "remarkable day" with "huge activity."
Borrowers learned a lesson when they missed locking onto rates that went down briefly in September after the federal government took over mortgage giants Fannie Mae and Freddie Mac, said Orawin Velz, the trade group's associate vice president of economic forecasting. With the federal government's latest move, he said, "many of those on the sidelines decided to quickly jump in and take advantage of lower rates before they began to rebound."
At a Westbury-based mortgage banker, Financial Equities, there's been a 30 percent to 40 percent jump in calls from stable borrowers who carry a 6.5 percent or higher interest rate and now want the current rate of 5.5 percent and lower.
"Over the last year, maybe 20 percent of my business was refinancing, now today it's probably closer to 40 to 50 percent," said company president Walter Stashin.
But he said house hunters have not inundated phones lines and probably won't until early next year, when federal loan purchases free up cash for lenders and the impact trickles down to consumers.
For one thing, Stashin said, the National Bureau of Economic Research on Monday confirmed that the country is in a recession, and that countered optimism over the federal government's loan buybacks. Also, he said, standards for federally backed mortgages, which is mostly what's available now, have not eased much, with fully documented loans required for the most part. On top of that, many house hunters in high-cost places such as Long Island need jumbo loans, which are more than $417,000, but these loans carry higher interest rates of 7 percent and are harder to get, he said.
"We have quite a bit of pre-approvals," Stashin said. "But have people found a home yet? No. People don't know if it's the bottom yet as far as the housing market, and with the way the economy's going, people are talking recession."
Copyright © 2008, Newsday Inc.
Wednesday, December 3, 2008
A Ray of Sunshine? Mortgage Applications Up. Way Up
This article was posted to Marketwatch.com today.
Borrowers rush to refinance
Mortgage applications up 112.1% last week, due to drop in rates: MBA
By Amy Hoak, MarketWatch
Last update: 7:38 a.m. EST Dec. 3, 2008CHICAGO (MarketWatch) -- Mortgage applications filed last week rose a seasonally adjusted 112.1%, compared with the week before, as borrowers rushed to lock in lower rates, according to the Mortgage Bankers Association's weekly survey, released on Wednesday.
"Many borrowers missed an opportunity to take advantage when rates dropped sharply for a brief period when the GSEs were placed under conservatorship," said Orawin Velz, associate vice president of economic forecasting for the association. GSEs refer to government-sponsored enterprises Freddie Mac and Fannie Mae.
"When rates plummeted following the Fed's announcement that it would buy GSE debt and MBS [mortgage-backed securities], many of those on the sidelines decided to quickly jump in and take advantage of lower rates before they began to rebound."
The Federal Reserve announced last week that it would purchase up to $100 billion in direct debt of Fannie, Freddie and the Federal Home Loan Banks, along with up to $500 billion of mortgage-backed securities backed by Fannie, Freddie and Ginnie Mae.
The move caused mortgage rates to drop.
According to the MBA survey, rates on 30-year fixed-rate mortgages averaged 5.47% for the week ending Nov. 28, a shortened week due to the Thanksgiving holiday. The mortgage averaged 5.99% the previous week.
Fifteen-year fixed-rate mortgages averaged 5.13% last week, down from 5.78%. And one-year ARMs averaged 6.61% last week, down from 6.87%.
Applications to refinance an existing loan rose 203.3% last week, compared with the week before. Mortgage applications to purchase a home rose a seasonally adjusted 38.0%.
The four-week moving average for all loans was up 29.7%. Still, application volume last week was down 21.9% compared with the same week in 2007.
Refinance applications made up 69.1% of all activity, up from a 49.3% share the previous week. The adjustable-rate mortgage share was 1.4%, down from 3.0% the week before.
The MBA survey covers about half of all U.S. retail residential mortgage applications.
Amy Hoak is a MarketWatch reporter based in Chicago.
Borrowers rush to refinance
Mortgage applications up 112.1% last week, due to drop in rates: MBA
By Amy Hoak, MarketWatch
Last update: 7:38 a.m. EST Dec. 3, 2008CHICAGO (MarketWatch) -- Mortgage applications filed last week rose a seasonally adjusted 112.1%, compared with the week before, as borrowers rushed to lock in lower rates, according to the Mortgage Bankers Association's weekly survey, released on Wednesday.
"Many borrowers missed an opportunity to take advantage when rates dropped sharply for a brief period when the GSEs were placed under conservatorship," said Orawin Velz, associate vice president of economic forecasting for the association. GSEs refer to government-sponsored enterprises Freddie Mac and Fannie Mae.
"When rates plummeted following the Fed's announcement that it would buy GSE debt and MBS [mortgage-backed securities], many of those on the sidelines decided to quickly jump in and take advantage of lower rates before they began to rebound."
The Federal Reserve announced last week that it would purchase up to $100 billion in direct debt of Fannie, Freddie and the Federal Home Loan Banks, along with up to $500 billion of mortgage-backed securities backed by Fannie, Freddie and Ginnie Mae.
The move caused mortgage rates to drop.
According to the MBA survey, rates on 30-year fixed-rate mortgages averaged 5.47% for the week ending Nov. 28, a shortened week due to the Thanksgiving holiday. The mortgage averaged 5.99% the previous week.
Fifteen-year fixed-rate mortgages averaged 5.13% last week, down from 5.78%. And one-year ARMs averaged 6.61% last week, down from 6.87%.
Applications to refinance an existing loan rose 203.3% last week, compared with the week before. Mortgage applications to purchase a home rose a seasonally adjusted 38.0%.
The four-week moving average for all loans was up 29.7%. Still, application volume last week was down 21.9% compared with the same week in 2007.
Refinance applications made up 69.1% of all activity, up from a 49.3% share the previous week. The adjustable-rate mortgage share was 1.4%, down from 3.0% the week before.
The MBA survey covers about half of all U.S. retail residential mortgage applications.
Amy Hoak is a MarketWatch reporter based in Chicago.
Tuesday, December 2, 2008
Holiday Parties
Last night I attended a holiday soiree hosted by a major law firm on Long Island. It was packed and apparently the firm is doing well, because there was no skimping on the food and drink. Unfortunately I get the sense that this will be the exception rather than the rule for the rest of Long Island.
I find the whole process fascinating. As the month drags on I am sure I will hear complaints from folks who "have" to attend these things. Quite frankly I see the events as terrific networking opportunities. I have perfected the art of seeing who I have to see at these things and then skedaddling home in time to see my son before he retires for the evening.
Put another way: in light of current events, "having" to attend a function where free food and drink is at your disposal and there are ample opportunities to meet new people is a nice problem to have.
I find the whole process fascinating. As the month drags on I am sure I will hear complaints from folks who "have" to attend these things. Quite frankly I see the events as terrific networking opportunities. I have perfected the art of seeing who I have to see at these things and then skedaddling home in time to see my son before he retires for the evening.
Put another way: in light of current events, "having" to attend a function where free food and drink is at your disposal and there are ample opportunities to meet new people is a nice problem to have.
Monday, December 1, 2008
The Return of the Blog
The first day back to work after a long weekend is always an interesting challenge. Not as big a challenge as NOT having a job to go back to, of course, and that reality gets you out of bed in a hurry.
But as we wind down 2008 - say good riddance, really - and get ready for 2009, it's only natural to wonder if next year will represent something better or worse. We'll spend the rest of this month gearing up to put us in a position to make it as good a year as possible, obviously, but if 2008 taught us anything it's that we're not always in control of what transpires over time. Just ask Eliot Spitzer, Joe Bruno and anyone else for whom this year did not go exactly as planned.
But as we wind down 2008 - say good riddance, really - and get ready for 2009, it's only natural to wonder if next year will represent something better or worse. We'll spend the rest of this month gearing up to put us in a position to make it as good a year as possible, obviously, but if 2008 taught us anything it's that we're not always in control of what transpires over time. Just ask Eliot Spitzer, Joe Bruno and anyone else for whom this year did not go exactly as planned.
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