Tag Archives: Loan-to-Value Ratio

Mortgage applications increased 1.3 percent on a seasonally adjusted basis in May, according to the Mortgage Bankers Association's latest mortgage application survey released Wednesday. The survey measured application data for the week ending June 1 and included an adjustment for the Memorial Day holiday. On a non-seasonally adjusted basis, application rates were not as strong, falling more than 9 percent from the previous week. Refinances continue to make up a large portion of mortgages, taking up 78 percent of activity for the week, up 1 percent from the previous week.

The number of loans refinanced through HARP in the first quarter of 2012 was nearly double the number of refinances in the fourth quarter of 2011, according to the Federal Housing Finance Agency's March 2012 Refinance Report released Friday. The report showed that 180,185 loans were refinanced through HARP during the year├â┬ó├óÔÇÜ┬¼├óÔÇ×┬ós first quarter, nearly twice the 93,190 refinances in the previous quarter. The month of March alone saw 79,470 loans refinanced with HARP, implicating nearly one in seven loan refinances in the quarter.

A surge in refinance applications could propel mortgage originations by more than $200 billion in 2012, increasing to $1.28 trillion, according to the Mortgage Bankers Association. The trade group attributed estimates ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô upwardly revised from $1.26 trillion in 2011 ├â┬ó├óÔÇÜ┬¼├óÔé¼┼ô to account for a refinance boom sparked by the crises in debt-saddled Europe. The MBA said that it expected refinance originations would amount to $870 billion this year, an amount nearly identical to forecasts from last year, when HARP led the way in estimates.

More homeowners continue to reap benefits from the newly modified Home Affordable Refinance Program, with 79 percent of homeowners with government-backed mortgages either keeping the same level of mortgage debt as before or reducing it over the first quarter. Of those homeowners, Freddie Mac found recently, 79 percent held onto the same level of debt for first-lien home mortgages, while 21 percent of homeowners shaved off dollars from their principal balance. The share of borrowers keeping their original loan amounts hovered at the highest level in the 26-year history of the survey.

The Consumer Financial Protection Bureau unveiled new rulemaking proposals Thursday that would require background checks for mortgage originators and complement a previous rule that prohibits loan officers from steering borrowers to higher-priced products. Together with these rules, others would provide consumers with discounts for paying mortgage origination points, mandate comparison plans for those interested in tracking different products, and ban brokerage firms from charging fees that vary by the loan size.

Solvency issues re-emerged for the Federal Housing Administration in a hearing convened Tuesday by the Senate Banking Committee, with HUD Secretary Shaun Donovan calling for lower loan-to-value thresholds and more servicer competition to expand refinance opportunities. The hearing follows a bill by Sens. Barbara Boxer and Robert Menendez to roll back refinancing barriers for homeowners with GSE-held mortgages and featured the legislation as lawmakers discussed solutions to the housing crisis. The hearing quickly turned to servicer competition.

Lawmakers seated on the Senate Banking Committee convened a hearing Wednesday to determine just how radically draft legislation should lift barriers to refinance opportunities for homeowners and lenders. The message from those testifying: More refinance modifications would help, but beware of the impact for investors and lenders. The Obama administration moved on expansions to HARP last fall by working with the Federal Housing Finance Agency to sign off on lower loan-to-value ratio requirements and remove obstacles for lenders and servicers.

Refinance activity ticked up for Fannie Mae and Freddie Mac during the fourth quarter, showing an increase in interest for the Home Affordable Refinance Program over last year. The Federal Housing Finance Agency released the results Monday in a Foreclosure Prevention and Refinance Report for the last quarter. Total HARP refinance volume came to include more than 1,021,800 loans, with a cumulative rise by 10 percent for the GSEs in the fourth quarter. Of these, Fannie Mae netted 376,365 in refinance loans, a measure of 2,045,777 HARP loans it saw last year.

Modifications to the Home Affordable Refinance Program will likely benefit small loan originators this year, even while refinance share of activity beats market expectations, FBR Capital Markets said in a note Wednesday. Paul Miller, an analyst with the research arm of the investment bank, attributed the information to D.C. insiders and government contacts, which hold that approximately 3.5 million to 4 million loans will enter the refinance program this year.

The Obama administration rolled out an ambitious package of benefits and structural changes Wednesday for homeowners who want to refinance their loans. The plan would cost anywhere from $5 billion to $10 billion and pay for itself with fees exacted from financial institutions. If it makes it into law, the bill would significantly expand refinancing opportunities for underwater borrowers, shift appraisal responsibilities in distressed neighborhoods to an automated system under the GSEs, and offer new servicing reforms.