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Tag Archives: Refinance

Fitch: Recent Prime Borrowers Prepaying at Rapid Rates

According to Fitch Ratings, prime RMBS mortgage pools issued since 2010 had an average conditional prepayment rate (CPR) of about 42 percent, more than twice as fast as the rates of outstanding prime loans securitized in earlier vintages. Generally speaking, Fitch explained high refinance activity tends lead to more "performance volatility" since loans remaining in mortgage pools are usually of poorer quality. However, Fitch is seeing a different trend this time around.

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Fed Governor Addresses Capacity Concerns

Capacity limits may be playing a significant role in keeping first-time homebuyers out of the credit market, according to Federal Reserve Governor Elizabeth Duke. As the ratio of refinance applications to the number of real estate credit employees rises, loans are taking longer to process as the procedure becomes more thorough. Adding to that, Duke said, is the problem that real estate credit employment has risen relatively slowly in response. As a result, borrowers with hard-to-complete loans or low credit scores have been crowded out.

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Rising Rates Topple Application Volume in February

February's increase in mortgage interest rates took some of the heat out of the refinancing boom, Capital Economics says in its latest US Housing Data Response. Capital Economics' report, which compiles application data from the Mortgage Bankers Association (MBA), shows application volume fell 0.3 percent month-over-month in February. That decline, however, is still an improvement over January, which saw a 2.5 percent drop in applications from December.

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Mortgage Industry Employment Grows in 2012

Employment in the mortgage industry reached a post-crisis high in 2012, according to data from Mortgage Daily's Mortgage Employment Index. The index showed a gain of 2,571 jobs during last year's fourth quarter, making it the sixth straight quarter to post an increase. However, job growth wasn't as strong as the third quarter, which saw 2,926 mortgage jobs created. For the entire year, the mortgage industry gained 8,978 new jobs, more than twice what was gained in 2011 (4,320).

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Freddie Mac Posts $11B Profit in 2012


Freddie Mac's net profit for 2012 totaled $11 billion, a marked turnaround from 2011's net loss of $5.3 billion. According to the company's earnings release, the increase reflects a decrease in delinquent single-family loans, improved national home prices, and a higher income tax benefit. Freddie Mac CEO Donald Layton attributed the reversal to last year's strengthened housing market and the company's efforts to "minimize legacy losses and build a strong book of business."

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Mortgage Applications Fall as Rates Rise to 6-Month High

Mortgage application volume continued to decline last week, according to the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending February 15. The survey's Market Composite Index, a measure of application volume, fell 1.7 percent on a seasonally adjusted basis from the previous week. On an unadjusted basis, the index fell 1.0 percent. According to the MBA's measure, the average contract interest rate for a 30-year fixed-rate mortgage was 3.78 percent last week, the highest rate since August 2012.

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