Market Conditions

Mortgage Rates Climb Due to German Bund Selloff


Conforming loan rates hit their highest levels in two months during the first week of May, according to the Freddie Mac Primary Mortgage Market Survey.

“Mortgage rates rose this week to the highest level since the week of March 12 as a selloff in German bunds helped drive U.S. Treasury yields above 2.2%,” said Freddie Mac deputy chief economist Len Kiefer in a released statement.

Thirty-year fixed-rate mortgages rose 12 basis points from last week, to 3.8%. Rates were still down 41 basis points from last year. Fifteen-year fixed-rate mortgages averaged 3.02%, up eight points from last week and down 30 points from last year.

Five-year Treasury-indexed hybrid adjustable-rate mortgages averaged 2.9%, up five points from last week but down 15 from last year, while one-year Treasury-indexed adjustable-rate mortgages dipped three points, to 2.46 […]

High LTV Lending Is Actually a Good Thing


In the six months since the Federal Housing Finance Agency and the GSEs announced the return to low down payment mortgages, with Fannie Mae CEO Tim Mayopoulos noting, “Now we can safely and responsibly do these loans,” the industry and its followers have been in debate on the prudence of GSE re-entry into high loan-to-value lending.

Given recent history, that’s an understandable response from the general public and some mortgage lending stakeholders. However, the practically Pavlovian fear and loathing triggered by the phrase “97% LTV” is overblown.

Seasoned mortgage veterans of several boom-bust cycles know that borrower creditworthiness and dependable collateral valuation are the benchmarks of a responsible mortgage. When these attributes are eroded or systemically overlooked, any loan product can go rogue. Conversely, when healthy credit risk and collateral risk management assessments are in place, virtually any loan product can be properly originated within […]

Houses selling for above asking price complicates appraisals


The average Bay Area home sold in April went for 7.1 percent more than the asking price, the largest percentage since the California Association of Realtors started keeping track in January 2008. On a typical home, that amounts to $62,000.

In San Francisco, the typical buyer paid 15.6 percent, or $178,000, over asking. Even in the East Bay, “It is not at all uncommon” to see homes fetch $300,000 over asking, Oakland appraiser Marcia Larsson said.

How can homes appraise for that much over asking? In a growing number of cases, they don’t. But it’s not putting a crimp in runaway home prices.

Remember that appraisers are there to protect lenders, not buyers.

All-cash buyers, who represent about a quarter of the overall Bay Area market, don’t need an appraisal because they are not getting a loan. If they want to […]

New CoreLogic Report Bullish on Home Prices


A new report from analytics firm CoreLogic predicts that national home prices will experience a healthy rise from January 2015 to January 2016.

The report predicts a 4.9% bump for national home prices, which is actually less than the 5.7% year-over-year increase experienced by national prices from January 2014 to January 2015. Excluding distressed sales, prices rose 5.6% during that same period.

“House price appreciation has generally been stronger in the Western half of the nation and weakest in the mid-Atlantic and Northeast states,” CoreLogic chief economist Frank Nothaft said in a press release.

“In part, these trends reflect the strength of regional economies. Colorado and Texas have had stronger job creation and have seen 8% to 9% price gains over the past 12 months in our combined indexes.”

“A dearth of supply in many parts of the country is a big factor driving […]

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