Article source: http://www.cnbc.com/id/46373217?__source=RSS*blog*&par=RSS

It was barely a few months ago, albeit a few thousand degrees ago, that I moderated a panel of mortgage types from the major banks, including the Mortgage Bankers Association’s new president David Stevens, formerly FHA commissioner.

Stevens and I have been talking housing for many years now, so I’m well aware that he is not exactly the ambivalent type.

When I suggested to the panel that the risk of a double-dip in housing was great and that winding down Fannie Mae and Freddie Mac now could be detrimental to the housing market, Stevens was adamant that housing was well into recovery, and all those home price and mortgage delinquency reports I was citing were backward looking and not indicative of the current state of the market.

Now Stevens is reversing course.

This morning he put out a statement advocating a continuation of the higher loan limits at the GSE’s (Fannie and Freddie) and the FHA for one more year. “The temporary loan limits authorized by Congress have benefited consumers and the housing market during what has been a turbulent period for our nation’s economy,” Stevens said in the statement. “That decline is not over yet.”

The statement was a little dry for me, knowing the source, so I called Stevens for a little elaboration. He stated right from the get-go that he is still bullish about the future of the housing market, which is not exactly saying he feels great about it right now.

Page 1 of 3 | Next Page
Show Entire Article

Terrorism Strikes Norway, With Death Toll Likely to Rise

Broad US Debt Deal Remains Elusive, But Talks Continue

Greek Bailout May Not Be Cure-All That Europe Hopes

GAO Audit Reveals Fed Played Fast and Loose With Loan Rules

For Fundraising, Obama Relies Even More on Wall Street

More Top Stories

Article source: http://www.cnbc.com/id/43859013?__source=RSS*blog*&par=RSS

Yesterday a lot of folks, including myself, were slightly incensed at the announcement by mortgage insurer PMI that it is launching a pilot program offering cash bonuses to borrowers who stay current on their mortgage payments.

I went on a tirade about how ridiculous it is to pay people to meet their legal, contractual obligations, how it enables bad behavior. Don’t get me wrong, I still believe that.

Today, however, I learned something that made me understand a bit more why the mortgage insurers, and the lenders and investors participating in a similar bonus program, are running so scared:

Between 12 and 24 percent of always performing loans, depending on the asset type, exhibit LTVs (loan to value ratios) that are higher and have risen more steeply than those of defaulted loans, raising the specter of a renewed increase in strategic defaults should previous default trends hold true—Moody’s ResiLandscape

Researchers at Moody’s say that a loan’s LTV is a “strong predictor of its propensity to default,” and if history serves as a model, the higher the LTV, the more risk of default.

After the end of the home buyer tax credit, the average home price for always-performing loans originated since 2005 began falling again, according to Moody’s, which consequently turned falling LTVs around, pushing them up as borrowers lost more equity in their homes.

Page 1 of 2 | Next Page
Show Entire Article

Wednesday Look Ahead: Markets Watch Bernanke, Debt Talks and Worry About Europe

Even In a Struggling Market, You Can Still Sell Your House

McConnell Offers ‘Backup’ US Debt Limit Plan

Murdoch Papers ‘Worked With Criminals’: Gordon Brown

Moody’s Cuts Ireland to Junk, Warns of 2nd Bailout

More Top Stories

Article source: http://www.cnbc.com/id/43728831?__source=RSS*blog*&par=RSS

A few weeks ago the National Association of Home Builders put out a report asserting that new lower loan limits going into effect in October at Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA) “will reduce housing demand and place downward pressure on home prices in major housing markets.”

On the blog that day, I wrote that the games were only beginning.

Now another report, this time from researchers at George Washington University, is suggesting just the opposite, that lower loan limits may raise cost for a very few borrowers, but overall will not affect most mortgage shoppers.

The report focuses on the FHA, claiming, “The FHA still could serve 95 percent of its historic targeted market even if the maximum FHA loan limit were reduced by nearly 50 percent.” Its market share right now (30 percent) far exceeds its target population.

“FHA’s expansion played a major role in keeping the housing market afloat during the economic collapse of 2008 and 2009,” said Robert Van Order, co-author of the report. “However, we now are left with large loan limits that were set when home prices at the top of the bubble. They don’t reflect current market conditions and are unlikely to assist the FHA in reaching its historical constituencies – first time, minority and low income homebuyers.”

Page 1 of 3 | Next Page
Show Entire Article

Hedge Fund Giants Are Coming Up Small This Year

Wednesday Look Ahead: Why the Services Data is Unlikely to Boost Stocks

WTO Rules China Curbs on Raw Material Exports Illegal

Oil Prices Climb Back to Pre-Reserve Release Levels

Fearing Bailout, Moody’s Downgrades Portugal to Junk

More Top Stories

Article source: http://www.cnbc.com/id/43643094?__source=RSS*blog*&par=RSS

At the end of a day-long negotiation session over the foreclosure paperwork mess at the Department of Justice, Iowa Attorney General Tom Miller and Associate Attorney General Thomas Perrelli came out for a brief chat with reporters.

They essentially said nothing.

Miller: “We had a good first meeting with the banking and servicer industry- emphasis on good and first. It was a first meeting, it was a breaking of the ice, and that takes some time and is part of the process. The discussion was good—I think it was on a good level, given the exchange of ideas and rationale and principles. I think we have a long way to go—again emphasis on first meeting.”

Perrelli: “Tom Miller is a fantastic partner, we’re lucky to be working together. I’ll echo what Tom said, I think it was a very productive first meeting, with serious discussion of a wide range of challenges and problems in the mortgage servicing industry.”

The banks weren’t talking, at least the representatives in the meeting weren’t talking, nor were their spokespeople. But big bank executives have been commenting on the biggest sticking point in a potential settlement over foreclosure practices: Principal reduction.

Page 1 of 3 | Next Page
Show Entire Article

Fed’s Data Dump Leaves Investors in the Dark

Sokol to CNBC: I Shouldn’t Have Told Buffett I Liked Lubrizol

Surprise Resignation of Leading Buffett Successor Raises Unanswered Questions

Government Lost Out on Billions With Bailout

Oil Ends at 2 1/2 Year High Near $107 a Barrel

More Top Stories

Article source: http://www.cnbc.com/id/42360433?__source=RSS*blog*&par=RSS

Yesterday morning I attended the FDIC’s background press briefing before the vote on proposed risk retention rules.

While the rules covered a vast ground, I was of course most interested in those that focus on the “Qualified Residential Mortgage.”

The QRM would be the exemption from risk retention, and therefore banks would want most borrowers to fall under the QRM standard.

A few moments after we reporters sat down at the big conference table, FDIC representatives clunked down a huge document in front of each of us. Then another, then another: Well over 200 pages of what these proposed rules are all about. Thankfully, they then had some other FDIC folks explain to us exactly what we needed to know. I then ran out onto the balcony camera and reported the three top points…20 percent down payment, debt to income ratio requirements and various servicer rules.

Page 1 of 2 | Next Page
Show Entire Article

Surprise Resignation of Leading Buffett Successor Raises Unanswered Questions

AIG CEO Warns Taxpayers Could Lose Money On Bailout

Thursday Look Ahead: Best First Quarter Since Tech Bubble Was Brewing

Fed Debate Over Exit Policy Seems to Be Heating Up

Big Stock Market Breakout Coming?

More Top Stories

Article source: http://www.cnbc.com/id/42341427?__source=RSS*blog*&par=RSS