San Jose Weekly Mortgage Market Commentary 11/22/2009

The week that was:

  • Oct retail sales were +1.4% overall and ex autos +0.2%. Retail sales are increasingly of interest to markets as we move into Christmas shopping ( the politically correct reference is Holiday shopping).
  • NY Empire State manufacturing data; the overall index declined to 23.51 from 34.57 in October.
  • Housing starts crumbled like a fresh saltine, down 10.6%, permits -4.6%.
  • With mortgage rates well below 5.00% (with a fee) purchases were down and re-finances were lower according to the MBA data released on Wednesday.
  • Mortgage prices and mortgage rates were literally unchanged this week.
Last week Bernanke's speech Monday to the NY Economics Club he reiterated he would keep rates low; essentially admitted he has little insight as to how the economic recovery will unfold and remarked "The best thing we can say about the labor market right now is that it may be getting worse more slowly." In layman speak, he isn't sure the unemployment situation is at its bottom.

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San Jose Weekly Mortgage Market Commentary 11/15/2009

The week that was:

Not much in the way of economic measurements last week; it was a four day week for the bond and mortgage markets with Veteran's Day falling on Wednesday.

  • Weekly MBA mortgage applications index was +3.2% from last week; it was all re-finances, its index up 11.3% while purchase applications dropped a huge 11.7% to its lowest level since Dec 2000. The refinance share of mortgage activity increased to 71.5% of total applications from 66.1% the previous week. The average interest rate for 30-year fixed-rate mortgages decreased to 4.90% from 4.97%, with points increasing to 1.03 from 1.01 (including the origination fee) for 80% LTV.
  • Weekly jobless claims continued to decline last week, down another 12K for the previous week but still at 512K new unemployment claims filed.
  • The Reuters/University of Michigan preliminary sentiment index decreased to a three-month low of 66 from 70.6 in October.
  • A report from the Commerce Department showed the trade deficit widened in September by the most in a decade as rising demand for imported oil and automobiles swamped a fifth consecutive gain in exports.

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Update to FHA Condo Approval Process for San Jose

This update contains the temporary changes to the FHA Condo Approval Process for San Jose and rest of the Bay Area as outlined in Mortgage Letter 2009-46 B. Here are the 6 things you need to know about these changes: 1. These temporary changes are effective on December 7th, 2009 through December 31st 2010; except for Spot Loan Approvals. 2. Spot Loan Approvals will be eliminated as of February 1st, 2010. 3. FHA loan concentration may be increased to 100% if the following criteria are met: a. Project construction has been 100% complete…continue reading →

San Jose Weekly Mortgage Market Commentary 11/08/09

The Week that was: After the dust settled interest rates ended the week about unchanged from the previous week; the stock market gained on continued better data from manufacturing and services sectors (DJIA +311). Two events marked the week:
  1. The FOMC policy statement on Wednesday and Friday's employment report. The Fed in the statement at the conclusion of the FOMC meeting reiterated there is no concern on the Fed's part that inflation has any chance in the immediate future, and that the Fed will allow interest rates (the Fed funds rate) to remain low for "an extended" period of time. The statement was no different than what the Fed has been saying in past three FOMC meetings.
  2. Friday's employment report for Oct revealed more jobs lost than was expected, -190K; it however, was offset with revisions to Sept and Aug non-farm jobs that added back a total of 91K from the original releases. The unemployment rate jumped substantially more than economists were expecting, to 10.2% frm 9.8% in Sept; a sizeable increase.
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San Jose Conforming & FHA Loan Limits extended through 2010

President Obama signed the congressional resolution extending through 2010 the current conforming loan limits of $417,000 for most areas in the U.S. and $729,750 for high-cost areas, including San Jose. The counties of Santa Clara, Alameda, San Mateo, San Francisco & Contra Costa in the Bay Area will have the maximum loan amount at $729,750.Yesterday actions extends the higher conforming loan limits for Fannie, Freddie, and FHA loans through 2010. The floor for FHA is $271,050; the floor for Fannie Mae and Freddie Mac conforming loan limits is $417,000. "Home sales have shown…continue reading →

New Home Buyer Credit for San Jose Buyers

The $8000 first time home buyer credit has been extended and expanded for San Jose and rest of the Bay Area buyers. President Obama has signed a bill that extends the tax credit for first-time homebuyers (FTHBs) into the first half of 2010. This program had been scheduled to expire on November 30, 2009. In addition to extending the tax credit of up to $8,000 through June 30, 2010, the extension measure also opens up opportunities for others who are not buying a home for the first time. So Who Gets What? The…continue reading →

Government’s role in Housing, How far will it go?

This year Government has announced a ton of programs to prop up the Housing Market. Some of the major programs have been geared towards Foreclosure Prevention by launching 125% refinance program and incentivising Loan Servicers for modifying loans for struggling home owners. The Higher Conforming Loan Limits up to $729,750 would also be extended through 2010. Of course, all this has come with increased regulation. My focus on this blog is to talk about 3 actions that has had the most impact: Action #1 Buying Mortgage Backed Securities (MBS) The Government earlier this…continue reading →

95% LTV in Bay Area Now Available on Conventional Loans

Borrowers in San Jose and rest of California may now get 95% Loan on Conventional Mortgages. The increased Loan to Value Ratio (LTV) is available on following programs: Freddie's Home Possible (Fixed Rate only) FNMA MyCommunity (Fixed Rate, 5 yr ARM and 7 yr ARM) The Loan must meet the following criteria: Must be a First Time Home Buyer Purchase Transaction only 680 Minimum Score Requirement 1 unit property only (SFR and PUDs. Condos maxed at 90% LTV) 2 months PITI reserves required after loan closing Full appraisal required 3% Seller Concessions maximum…continue reading →

San Jose Weekly Mortgage Market Commentary 11/01/2009

The week that was: A good week for the interest rate markets. Mortgage interest rates declined about 10 basis points. Treasury once again successfully sold $123B of notes in four auctions. Consumer confidence measured by The Conference Board declined more than expected, implying consumers may not be as convinced of a recovery as the equity markets. Personal spending in Sept declined, new home sales were expected to be up slightly in Sept but declined 3.6%. Finally the stock market ended the week on what looks like the beginning of the long over-due correction…continue reading →