It is likely no coincidence that standards are easing as rates rise and mortgage applications fall. Total mortgage applications were down 47 percent last week from a year ago. Refinances, which had been the banks bread and butter during the housing crash, are down 59 percent from a year ago. Applications to purchase a home are up just 5 percent.

“People see interest rates rise, they slow down some of that eagerness to get into the market,” said David Stevens, CEO of the Mortgage Bankers Association in an interview on CNBC’s “Squawk Box.”

(Read more: Map: Tracking the US real estate recovery)

Credit standards tightened dramatically over the past several years, as loose credit was largely blamed for the crash in housing. Average borrower credit scores on new loans are dramatically higher today, and lenders require larger down payments.

Even the FHA, the government mortgage insurer, which was created to help lower creditworthy borrowers, has raised its standards as well as its insurance premiums. Many lenders have overlays to their guidelines that they add on top of standard conventional guidelines. They could do that because refinances were so high, they needed to slow the volume in order to process all the loans.

Article source: http://www.cnbc.com/id/100939328

“I think you’ve got to move away from a situation where when private shareholder gain and government taxpayer losses, and that is what this bill seeks to do, it really transforms how we doing housing finance hopefully we will be able to pass something that puts us on a better course than where we are,” said Sen. Corker in an interview Tuesday on CNBC.

(Read More: Big Banks Bet on Jumbo Mortgages Again)

Some analysts say the lawsuit could actually push Congress to act more quickly on winding down Fannie and Freddie.

“What we just a few days ago saw as only a remote possibility is now a 25 percent chance for action,” wrote Jaret Seiberg of Guggenheim Partners in a note to investors. “This is because we suspect this will anger many on Capitol Hill who believe Fannie and Freddie are only alive and kicking because taxpayers put $187 billion at risk. We see the suit reinforcing the view on Capitol Hill that Fannie and Freddie included too much upside for investors and too much risk for taxpayers.”

(Read More: Reverse Mortgages Backfiring on Seniors)

—By CNBC’s Diana Olick; Follow her on Twitter @Diana_Olick or on Facebook at facebook.com/DianaOlickCNBC

Questions? Comments? RealtyCheck@cnbc.com

Article source: http://www.cnbc.com/id/100806300

(Read More: Despite Rising Demand, Some Builders Slow Production)

Listings were down 17 percent in March from a year earlier, according to the association, with several factors affecting inventories. Millions of Americans still owe more on their mortgages than their homes are worth, and that makes it impossible for them to move without incurring major expense.

Others are watching home prices rise and may be waiting to see just how high they go before listing their homes.

Meanwhile, home builders, while trying to ramp up production, are faced with a lack of land, labor and materials. Single-family starts were at a seasonally adjusted annual rate of just 619,000 units, an improvement from the worst of the crash but far below historical norms.

(Read More: Map: Tracking the US Real Estate Recovery)

Regionally, the pending home sales index was unchanged in the Northeast from February, up 0.3 percent in the Midwest, up 2.7 percent in the South and up 1.5 percent in the West.

Existing home sales in March, based on closings, fell just under one percent in March. While higher than a year ago, home sales appear to have leveled off, despite this being the normally busy spring season.

(Read More: Government Mortgage Fix Is Failing)

Article source: http://www.cnbc.com/id/100683911

The US Treasury just released its latest “scorecard” on the state of the government’s housing bailout. The numbers are still weak, compared to the overall picture.

In May, 32,398 borrowers got permanent modifications, bringing the total to 731,451, but nearly 98,000 modifications have already gone bad and been canceled. Treasury did put out some interesting new numbers on how many modifications involve principal forgiveness from the banks.

Close to 5,000 “active modifications” have a reduced principal balance of, on average, about $70,000, or 32 percent of the balance. About 16,000 more are in the trial period—kind of a pittance, when you look at the 1.6 million trial modifications started.

Banks tell me they are doing more principal reduction in their own proprietary modifications, but getting that data is, suffice it to say, difficult to obtain.

It is interesting to note that short sales are really ramping up. The Treasury’s report now includes numbers on the Home Affordable Foreclosure Alternative program, which gives incentives to servicers and borrowers to do short sales and deeds in lieu of foreclosure. Close to 18,000 of these started, nearly all short sales, and this program is just a few months old.

So, where do we stand?

Page 1 of 3 | Next Page
Show Entire Article

Week Ahead: Market Faces Its Next Hurdle-the Jobs Report

15 Stocks for JPMorgan’s ‘Summer of Cyclicals’

Greek Crisis: Key Political Risks to Watch

New York Times Sells Half Its Stake in Boston Red Sox

Web Firm Go Daddy Is Sold for More Than $1 Billion

More Top Stories

Article source: http://www.cnbc.com/id/43609086?__source=RSS*blog*&par=RSS

It’s no surprise that the private mortgage insurance industry is fighting hard against proposed new risk retention rules for the mortgage industry.

They are already trying to pick themselves up and dust themselves off from the near knockout punch the Federal Housing Administration (FHA) gave them, when the government mortgage insurer took over their market share while saving the housing market from complete and total bust.

The FHA became the only game in town for the less credit-worthy borrowers with lower down payments. Now, just when the private guys are trying to get back in the game, they’re getting battered again.

The proposal for a “Qualified Residential Mortgage,” which would be exempt from 5 percent risk retention by the banks, which of course the banks don’t want to retain, requires, among many things, that the buyer put 20 percent down on the home.

“We do not believe that affordability and sustainability are mutually exclusive goals,” Kevin Schneider, president of the Mortgage Insurance Companies of America testified before Congress yesterday (he’s also CEO of U.S. Mortgage Insurance of Genworth Financial [ GNW 12.26  +0.00 (+0.00%) ]). “We understand the drivers of sustainable, affordable homeownership because the private MI industry has a vested interest in assuring that low down payment homebuyers purchase homes with loans that they can afford to pay over time.”

Page 1 of 2 | Next Page
Show Entire Article

Article source: http://www.cnbc.com/id/42613396?__source=RSS*blog*&par=RSS