Kevin's Blog

FHA Q&A Online Radio Talkshow

Kevin Rhodes (Continental Home Loans) — Wed, 14 Jan 2009 08:05:29 -0600

CHL will be having a weekly Broker Online FHA Radio Talk Show every Thursday at 12 PM EST. This will help you to learn FHA Guidelines, our manual underwriting practices and system. We are now going to hold a weekly FHA Q&A Online Talk Show where one of our DE underwriters, ops managers or executive management will host an interactive informational webinar in a radio talk show format...via WCHL Radio.

Please contact for additional information and registration.

Kevin M. Rhodes

Wholesale Account Executive

Continental Home Loans, Inc.

175 Pinelawn Road Suite #402

Melville, NY 11747

203.572.0597 Office

203.522.1659 Cell

631.390.7067 Fax

krhodes@chl123.com

http://www.chl123.com/

FHA Q&A Online Radio Talkshow

Kevin Rhodes (Continental Home Loans) — Wed, 14 Jan 2009 08:01:55 -0600

We will be having our weekly Broker Online FHA Radio Talk Show every Thursday at 12 PM EST. This will help you learn FHA Guidelines, our manual underwriting practices and system. We are now going to hold a weekly FHA Q&A Online Talk Show where one of our underwriters, ops managers or executive management will host an interactive informational webinar in a radio talk show format...via WCHL Radio.

Please contact for additional information and registration.

Kevin M. Rhodes

Wholesale Account Executive

Continental Home Loans, Inc.

175 Pinelawn Road Suite #402

Melville, NY 11747

203.572.0597 Office

203.522.1659 Cell

631.390.7067 Fax

krhodes@chl123.com

http://www.chl123.com/

FHA Q&A Online Radio Talkshow

Kevin Rhodes (Continental Home Loans) — Wed, 14 Jan 2009 08:00:30 -0600

Please contact for additional information and registration.

Kevin M. Rhodes

Wholesale Account Executive

Continental Home Loans, Inc.

175 Pinelawn Road Suite #402

Melville, NY 11747

203.572.0597 Office

203.522.1659 Cell

631.390.7067 Fax

krhodes@chl123.com

http://www.chl123.com/

Building Alternate Credit For FHA

Kevin Rhodes (Continental Home Loans) — Fri, 28 Nov 2008 11:22:44 -0600

Have you ever had a borrower with only one or two FICO scores or a borrower who has yet to establish a credit profile? Well, if you have then you know how challenging this can be when attempting to secure a loan through conventional means. When using FHA financing you can build alternate forms of credit to build a credit profile.

The minimum FHA requirements with regard to credit are:

3 open/active credit accounts for 12 months.
For a borrower with 1 or more FICO scores, only the above needs to be met.
For a borrower with no scores at all the following applies.

In the above instances there are really only two types of borrowers.

Types:

Non-Traditional Credit Borrower
Insufficient Credit borrower

How do you determine which type fits your borrower?

It will depend on the sources of their alternate credit. Listed below are 2 groups of acceptable credit sources. If you can provide atleast 1 alternate credit from group 1 then your borrower is considered a Non-traditional Credit Borrower. If you can supply alternate credit from group 2 your borrower is considered an Insufficient Credit Borrower.

Group 1 Group 2

a. Rental/Housing payment a. Auto Insurance

b. Utilities (gas,electric, water) b. Child Care

c. Land line telephone c. Cell phone

d. Cable d. Personal loans

e. Internet ISP carrier

f. Retail Store (eg. Rent-to-Own)

g. History of savings

Once you've determined the type of borrower you have, the following requirements apply:

Non-Traditional Credit Borrowers:

a. 0x30 rental history.

b. No more than 1x30 in the last 12 months for the other alternate credit accounts.

c. No collection accounts or public records in the last 12 months

Insufficient Credit Borrowers:

a. No more than 1x30 on any accounts.

b. No collection accounts or public records in the last 12 months.

c. Qualifying ratio's are based solely on the occupant borrower(s).

d. The standard FHA ratios apply (31/43) and cannot be exceeded.

e. 2 months reserves required (cannot be gifted).

Weekly Mortgage Applications Down Slightly

Kevin Rhodes (Continental Home Loans) — Sun, 16 Nov 2008 13:40:49 -0600

For Week Ending: March 23, 2007

Seasonally Adjusted
Total Mortgage Activity: Down 0.2%
MBA Market Index Now: 671.0
Index One Week Earlier: 672.1

Unadjusted Basis
Total Mortgage Activity: Down 0.2%
One Year Ago: Up 16.6%

Seasonally Adjusted
Refinance Activity: Down 0.5%
Index Now: 2197.7
One Week Earlier: 2208.6

Purchase Activity: Up 0.1%
Index Now: 411.1
One Week Earlier: 414.3

Percentage of Total Activity

Refinance Share: 45.1%
One Week Earlier: 45.3%

Adjustable-Rate Mortgage (ARM) Share: 20.2%
One Week Earlier: 20.9%

Source: Mortgage Bankers Association

$29 Billion 3rd Quarter Loss For Fannie

Kevin Rhodes (Continental Home Loans) — Wed, 12 Nov 2008 11:24:12 -0600

On September 6 The federal Housing Finance Agency (FHFA) took control of both Fannie and Freddie, which forced out management after finding that their capital reserves were too low. This then prompted them to redetermine the value of the company's assets, which in turn slashed the company's net worth by 79% - The difference between the company's assets to liabilities.. Some analyst predict Fannie could very well move into negative territory by Q1 2009. This would mean that Fannie would need to tap federal funds to stay in the black, which it has not done up to this date. The good or bad news is that Treasury Secretary Henry Paulson has pledged to invest as much as $100 Billion each in both Fannie and Freddie. The good news in this is that a staple in American home financing will live another day and the bad news is that this will become yet another tax burden that our children will ultimately have to face.

According Fannie's Security and Exchange (SEC) filing from earlier this week. The company increased reserves for future credit losses to $15.6 Billion from $8.9 Billion in the Q2. They also reported that nonperforming assets such as foreclosures increased by 37% to a staggering $71 billion.

For the same period last year, Fannie had reported a net loss of $1.4 Billion and a negative assets loss of $46.4 billion. Fannie also slashed its net worth to $9.4 billion from $44.1 which it had anticipated having as of December 31, 2008.

These are dark days for the two former GSE's, now government-run companies and they have gone from maximizing shareholder profitability to supporting the US housing market.

Weekly Mortgage Applications Statistics

Kevin Rhodes (Continental Home Loans) — Mon, 10 Nov 2008 10:38:07 -0600

According to the weekly Mortgage Bankers Association data, mortgage applications were down more than 20% for the week ending November 5, 2008. Refinance business was down more than 25% from a week earlier and purchase business down nearly 14%. Below is a recap of the numbers.

Seasonally Adjusted
Total Mortgage Activity: Down 20.3%
MBA Market Index Now: 379.9
Index One Week Earlier: 476.7

Unadjusted Basis
Total Mortgage Activity: Down 21.1%
One Year Ago: Down 43.4%

Seasonally Adjusted
Refinance Activity: Down 27.8%
Index Now: 1075.4
One Week Earlier: 1489.4

Purchase Activity: Down 13.9%
Index Now: 260.9
One Week Earlier: 303.1

Percentage of Total Activity

Refinance Share: 42.9 %
One Week Earlier: 46.9%

Adjustable-Rate Mortgage (ARM) Share: 2.5%
One Week Earlier: 1.9%

Source: Mortgage Bankers Association

Hope for the (H4H) Hope for Homeowners Program...

Kevin Rhodes (Continental Home Loans) — Tue, 04 Nov 2008 15:09:49 -0600

With more than $300 Billion in its coffers to lend via the FHA, the Hope for homeowner program has resulted in a total disatser. In july of this year the H4H program was thought by many to be the key to the stabalizing home prices and curbing foreclosures, but has yet to produce any results at all. With 50 loans in queue since it's inception on Oct. 1, the program has been shunned by the lending community. Saving 50 homeowners per month will in no way cure the ailing housing market... The program is effective from October 1, 2008 to September 30, 2011.

The H4H program was created by congress to help homeowners stay in their homes and avoid foreclosure by refinancing into more affordable FHA loans. Many thought that as many as 400,000 homeowners could be helped under this program over the next three years, but the program has started off slow to say the least.

Under the current plan, lenders must agree to take a 13% writedown to 13% below a homes market value to be eligible. This inturn lets borrowers refinance loans worth less than their home's value. Currently, there are few lenders that are willing to take the necessary writedown and securitized loans that are difficult to refinance, with good cause. This was a bad plan to begin with and what lender in their right mind is going to be willing to take a 13% write down on loans that will most likely not perform?

Today regulators suggested that they may reduce the required writedown to between 3% to 5% below market value to make the program more attractive lenders. By changing the eligibilty requirements regulators hope to bring more lenders into its pool, but is this the answer? Any type of pricipal writedown is not going to be attractive, especially for loans that are currently not performing. Maybe the answer is for the FHA secure program to include fixed rate loans. H4H was a very bad idea and should be canned. I would love to hear your feedback.

16% Weekly Increase in Mortgage Applications

Kevin Rhodes (Continental Home Loans) — Mon, 03 Nov 2008 09:13:36 -0600

For Week Ending: October 29, 2008

Seasonally Adjusted

Total Mortgage Activity: Up 16.8%
MBA Market Index Now: 476.7
Index One Week Earlier: 408.1

Unadjusted Basis
Total Mortgage Activity: Up 29.6%
One Year Ago: Down 30.0%

Seasonally Adjusted
Refinance Activity: Up 28.5%
Index Now: 1489.4
One Week Earlier: 1158.8

Purchase Activity: Up 8.5%
Index Now: 303.1
One Week Earlier: 279.3

Percentage of Total Activity

Refinance Share: 46.9%

Source: Mortgage Bankers Asociation

FHA Approvals in Hours, not Days!

Kevin Rhodes (Continental Home Loans) — Tue, 23 Sep 2008 08:17:47 -0500

Hello - my name is Kevin Rhodes a Wholesale Account Executive with Continental Home Loans, Inc. We are a 25 year old FHA lender doing business in: CA, CT, CO, DE, FL, IA, IL, MD, ME, MO, MT, NC, NJ, NY, OK, SC, TN, TX and VT. VA, GA and AZ by December ’08.

WHY CHL?

 

FHA APPROVAL in HOURS, not days!

FHAnswer System – Proprietary paperless manual underwriting system unique to CHL

All approvals are reviewed and stipped upfront by our staff of FHA DE underwriters

Direct access to an FHA underwriter.

Kevin M. Rhodes

Continental Home Loans, Inc.

Wholesale Account Executive

203.572.0597 Office

203.522.1659 Cell

631.390.7067 Fax

kmrconsulting@yahoo.com

krhodes@chl123.com

http://www.chl123.com/

Mortgage Employment Declines For 13th Straight Month

Kevin Rhodes (Continental Home Loans) — Mon, 05 May 2008 23:35:06 -0500

Graph: In Thousands, Mortgage Employment since Jan. 2002

Although the rate of job losses in the mortgage industry has leveled since it began dropping precipitously last fall, industry employment has declined for more than 13 consecutive months.

The Bureau of Labor Statistics (BLS) reported 360,100 full-time mortgage positions in the month of March, down from 364,700 in February and 465,800 one year ago.

Employment reporting at the Bureau generally lags one month for the mortgage industry.

The mortgage industry has lost 144,600 jobs since employment peaked at 504,700 in October 2006.

The BLS breaks down mortgage employment into two categories.

Under "real estate credit," the BLS reported 249,100 million jobs, compared to 251,400 a month earlier.

For the "mortgage and nonmortgage loan brokers" sector, there were reportedly 111,000 positions, compared to 112,700 one month ago.

The national unemployment rate remained at 5.0% for April.

Representing the fourth consecutive monthly loss, the number of non-farm payroll jobs declined another 20,000 for the month as the number of unemployed people stood at 7.6 million.

Freddie Mac announces $20 Billion Subprime Commitment

Kevin Rhodes (Continental Home Loans) — Fri, 20 Apr 2007 08:58:02 -0500

Freddie Mac announced today that it will purchase $20 billion in fixed-rate and hybrid ARM products that will provide lenders with more choices to offer subprime borrowers. The products, currently under development by the company and slated to be introduced by mid-summer, will limit payment shock by offering reduced adjustable rate margins; longer fixed-rate terms; and longer reset periods.

The commitment follows Freddie Mac's recent announcement that it will cease buying subprime mortgages that have a high likelihood of excessive payment shock and possible foreclosure. Among other things, the company will require that subprime adjustable-rate mortgages (ARMs) - and mortgage-related securities backed by these subprime loans - qualify borrowers at the fully-indexed and fully-amortizing rate. The company also will limit the use of low-documentation products in combination with these loans; require that loans be underwritten to include taxes and insurance; and strongly recommend that the subprime industry collect escrows for taxes and insurance, as is the norm in the prime sector.

As a secondary mortgage market investor, Freddie Mac works closely with its customers in the primary market to combat predatory lending and promote foreclosure prevention. The new $20 billion purchase commitment for model products using stronger underwriting standards builds on Freddie Mac's long-term leadership in this arena. The company's previously implemented anti-predatory lending practices include:

refusing to do business with institutions that engage in predatory lending practices;
not investing in mortgages that require mandatory arbitration;
refusing to invest in high-rate or high-fee mortgages as defined by the Home Ownership and Equity Protection Act of 1994 (HOEPA), as well as mortgages with single-premium credit insurance or subprime mortgages with prepayment penalty terms of more than three years; and,
requiring that lenders provide complete credit information about borrowers to all the credit bureaus and reporting agencies.

Freddie Mac also promotes consumer education through programs such as CreditSmart®, its award-winning financial education curriculum, Don't Borrow Trouble, an anti-predatory lending campaign, as well as its many foreclosure prevention initiatives. These programs help borrowers understand the mortgage origination process, their housing finance options, and how to avoid abusive lending practices.

Freddie Mac is a stockholder-owned company established by Congress in 1970 to support homeownership and rental housing. Freddie Mac fulfills its mission by purchasing residential mortgages and mortgage-related securities, which it finances primarily by issuing mortgage-related securities and debt instruments in the capital markets. Over the years, Freddie Mac has made home possible for more than 50 million families.

Source: Freddie Mac

Avg. 30 Yr Fixed Rate Mortgage down from last week

Kevin Rhodes (Continental Home Loans) — Fri, 20 Apr 2007 08:35:12 -0500

Graph: Average 30-year Fixed-Rate Mortgage since Jan. 2005

Week Ending April 19, 2007

Average 30-year fixed-rate mortgage

04/19: 6.17%
04/12: 6.22%
04/05: 6.17%
03/29: 6.16%
03/22: 6.16%
03/15: 6.14%
03/08: 6.14%
03/01: 6.18%

One Year Ago: 6.53%

Average 15-year fixed-rate mortgage

04/19: 5.89%
04/12: 5.90%
04/05: 5.87%
03/29: 5.86%
03/22: 5.90%
03/15: 5.88%
03/08: 5.86%
03/01: 5.92%

One Year Ago: 6.17%

Average 5-year Treasury-indexed hybrid ARM

04/19: 5.92%
04/12: 5.93%
04/05: 5.92%
03/29: 5.88%
03/22: 5.91%
03/15: 5.90%
03/08: 5.90%
03/01: 5.93%

One Year Ago: 6.16%

Average One-year Treasury-indexed ARM

04/19: 5.45%
04/12: 5.47%
04/05: 5.44%
03/29: 5.43%
03/22: 5.40%
03/15: 5.47%
03/08: 5.42%
03/08: 5.47%
03/01: 5.49%

One Year Ago: 5.63%

Source: Freddie Mac

Top Ten Foreclosure States

Kevin Rhodes (Continental Home Loans) — Fri, 20 Apr 2007 08:21:39 -0500

The number of foreclosure filings was up 7% in March as Nevada reported the highest state foreclosure rate for the third month in a row with a 29% monthly increase from February, according to RealtyTrac.

A total of 149,150 foreclosure filings were reported during the month, up 7% from February's revised total and up 47% from March 2006.

The national foreclosure rate stood at one foreclosure filing for every 775 U.S. households in February, according to RealtyTrac the foreclosure tracking company.

RealtyTrac considers default notices, auction sale notices and bank repossessions as foreclosure filings.

A 29% increase in monthly foreclosure activity kept Nevada in place as the nation's highest state foreclosure rate with for the third month in a row with foreclosure rate of one foreclosure filing for every 183 households

In March, Nevada reported 4,738 foreclosure filings, up 16% from February 2006.

Colorado followed with one foreclosure filing for every 292 households in February, a 18% month-to-month increase with 6,267 total foreclosure filings.

California foreclosures jumped 36% with 31,434 foreclosure filings - the most of any state - reporting one foreclosure filing for every 389 households.

The Top Ten Foreclosure States:

1. Nevada
2. Colorado
3. California
4. Georgia
5. Arizona
6. Michigan
7. Florida
8. Ohio
9. Indiana
10. Illinois

Thousands Lose Their Jobs With Subprime Setbacks

Kevin Rhodes (Continental Home Loans) — Mon, 12 Mar 2007 20:16:52 -0500

Graph: In Thousands, Mortgage Employment since Jan. 2002

Mortgage employment statistics began to reflect the growing number of closings and scale-backs in the subprime industry.

The Bureau of Labor Statistics (BLS) reported 489,200 full-time mortgage positions in the month of January.

Employment reporting at the Bureau generally lags one month for the mortgage industry.

Employment levels were reported at 495,100 in December.

In January 2006, there were 498,100 mortgage jobs reported.
The mortgage industry has lost 15,500 jobs since October began the steady decline.

The BLS breaks down mortgage employment into two categories.

Under "real estate credit," the BLS reported 349,100 jobs, compared to 352,000 in December 2005.

For the "mortgage and nonmortgage loan brokers" sector, there were reportedly 140,100 positions, down from 146,100 one year earlier.

The national unemployment rate for February dropped to 4.5%, while the U.S. economy gained 97,000 non-farm payroll jobs.

Fremont Sends Employees Packing With Subprime Exit

Kevin Rhodes (Continental Home Loans) — Thu, 08 Mar 2007 13:17:45 -0600

Fremont General Corp. has put a number of their employees on paid leave "pending further information" after the company was issued a cease-and-desist which prompted an exit from the subprime business.

The cease-and-desist issued by the Federal Deposit Insurance Corp. (FDIC) demanded the end to 14 violations including ``unsatisfactory lending practices'' and ``operating with a large volume of poor-quality loans.''

Santa Monica, California-based Fremont recently announced that it would delay reporting earnings for the fourth quarter, as well as annual results, a move that sent company shares to their lowest level since 2003.

Following the announcement, Fitch Ratings put Fremont on "Rating Watch Negative."

Earlier this year, the subprime wholesaler announced that it had once more tightened its underwriting guidelines and had discontinued its "piggyback" second mortgages.

For the first nine months of 2006 the company's net income was $113.1 million, plummeting 59% from $273.4 million for the same period in 2005.

"The regulators did not seek any changes in the company's retail deposit-gathering business,'' the company said in a statement.

Fremont also intends to continue to offer commercial real estate loans.

"Thanks in part to its very substantial equity and $8 billion retail deposit franchise, Fremont Investment & Loan has significant balance sheet strength and funding capacity that we believe will enable us to exit the subprime lending business in an orderly and disciplined way," said Fremont President and CEO Louis J. Rampino in the statement.

The financial services holding company has taken on Credit Suisse Securities LLC to help find a potential buyer.

Mortgage Applications Climb With Surge in Refinancing

Kevin Rhodes (Continental Home Loans) — Thu, 08 Mar 2007 13:11:46 -0600

Graph: MBA Applications Index over 52 Weeks

For Week Ending: March 2, 2007

Seasonally Adjusted
Total Mortgage Activity: Up 7.3%
MBA Market Index Now: 671.6
Index One Week Earlier: 626.1

Unadjusted Basis
Total Mortgage Activity: Up 19.9%
One Year Ago: Up 15.6%

Seasonally Adjusted
Refinance Activity: Up 15.0%
Index Now: 2234.2
One Week Earlier: 1943.5

Purchase Activity: Up 1.0%
Index Now: 405.3
One Week Earlier: 401.3

Percentage of Total Activity

Refinance Share: 46.1%
One Week Earlier: 43.2%

Adjustable-Rate Mortgage (ARM) Share: 21.4%
One Week Earlier: 21.1%

Source: Mortgage Bankers Association

Mortgage Applications Decline

Kevin Rhodes (Continental Home Loans) — Thu, 25 Jan 2007 17:17:15 -0600

Mortgage Applications Decline for the Week
Graph: MBA Applications Index over 52 Weeks

Mortgage demand was on the decline for the week as applications both refinances and purchases dropped noticeably.

For Week Ending: January 19, 2007

Seasonally Adjusted
Total Mortgage Activity: Down 8.4%
MBA Market Index Now: 611.3
Index One Week Earlier: 667.2

Unadjusted Basis
Total Mortgage Activity: Down 5.7%
One Year Ago: Up 3.8%

Seasonally Adjusted
Refinance Activity: Down 9.6%
Index Now: 1848.8
One Week Earlier: 2045.8

Purchase Activity: Down 8.4%
Index Now: 402.7
One Week Earlier: 439.7

Percentage of Total Activity

Refinance Share: 47.8%
One Week Earlier: 49.9%

Adjustable-Rate Mortgage (ARM) Share: 20.3%
One Week Earlier: 21.2%

Source: Mortgage Bankers Association

Mortgage Demand Up 16.6% As Holidays Draw to a Close

Kevin Rhodes (Continental Home Loans) — Thu, 11 Jan 2007 13:33:06 -0600

The new year started with a large upsurge in mortgage demand as the holiday season drew to a close.

For Week Ending: January 5, 2007

Seasonally Adjusted
Total Mortgage Activity: Up 16.6%
MBA Market Index Now: 671.1
Index One Week Earlier: 575.6

Unadjusted Basis
Total Mortgage Activity: Up 33.2%
One Year Ago: Up 12.0%

Seasonally Adjusted
Refinance Activity: Up 17.3%
Index Now: 1923.8
One Week Earlier: 1640.4

Purchase Activity: Up 16.2%
Index Now: 472.8
One Week Earlier: 406.9

Percentage of Total Activity

Refinance Share: 48.4%
One Week Earlier: 48.1%

Adjustable-Rate Mortgage (ARM) Share: 20.1%
One Week Earlier: 20.4%

Source: Mortgage Bankers Association

FHA Loan Limits Remain, But Program Future in Question

Kevin Rhodes (Continental Home Loans) — Thu, 11 Jan 2007 13:30:04 -0600

The Federal Housing Administration loan ceiling has gone into effect for 2007, but the director of the Single Family Ownership Center with the Department of Housing and Urban Development (HUD) is openly questioning the future viability of the program.

HUD opted to leave the maximum single-family loan amount for a FHA-backed loan to remain at 2006 levels, following the decision to leave conforming loan limit at $417,000 after a decline in home prices between October 2005 and October 2006.

For high cost areas, the FHA loan ceiling will stay at $362,790 and remains at $200,160 for low cost areas.

The maximum amount on two-unit properties stayed at $464,449, three-unit properties remained at $561,411, and four-unit properties were left at $697,696.

Meanwhile, Ben Johnson recently suggested to members of the Colorado Association of Mortgage Brokers that the future of the FHA program is uncertain.

"Quite frankly, we're at a crossroads to keep FHA a viable player," the director of the Single Family Ownership Center, indicating that FHA loans currently account for less than 5% of residential mortgages each year.

Legislation to streamline the procedures for obtaining FHA loans passed in the House of Representatives last year, but failed to get off the ground in the Senate.

Johnson said that another push for something along the lines of the FHA Modernization Act of 2006 will likely occur sometime this year.

While FHA loans had been extremely popular in the past, many lenders have turned elsewhere to avoid the lengthy documentation requirements and costly audits that can be as much as $45,000 a year - a price many smaller originators cannot afford.

Also, while many brokers work out of their home or other unconventional environments, federal regulations still require an FHA lender to operate from a formal workplace.

Other disadvantages FHA loans face against the competition: a 3% down payment requirement, a ban on 40-year mortgages, and a limited number of reverse mortgages available.

In 2006, the FHA loosened regulation to increase electronic processing, provide faster turnaround of appraisals, and update guidelines for refinancing.

The agency also eliminated closing cost restrictions and reduced the documentation required.

In the meantime, the decision to leave loan limits as they were was welcome news for the mortgage industry.

Mortgage Rates Remain Flat for the Week

Kevin Rhodes (Continental Home Loans) — Fri, 05 Jan 2007 15:32:18 -0600

The average 30-year fixed-rate mortgage remained flat for the week, and not far from where rates were one year earlier.

Week Ending January 4, 2007

Average 30-year fixed-rate mortgage

01/04: 6.18%
12/28: 6.18%
12/21: 6.13%
12/14: 6.12%
12/07: 6.11%
11/30: 6.14%
11/22: 6.18%
11/16: 6.24%

One Year Ago: 6.21%

Average 15-year fixed-rate mortgage

01/04: 5.94%
12/28: 5.93%
12/21: 5.89%
12/14: 5.86%
12/07: 5.84%
11/30: 5.87%
11/22: 5.91%
11/16: 5.94%

One Year Ago: 5.76%

Average 5-year Treasury-indexed hybrid ARM

01/04: 6.02%
12/28: 5.98%
12/21: 5.96%
12/14: 5.92%
12/07: 5.92%
11/30: 5.95%
11/22: 5.99%
11/16: 6.04%

One Year Ago: 5.78%

Average One-year Treasury-indexed ARM

01/04: 5.42%
12/28: 5.47%
12/21: 5.44%
12/14: 5.45%
12/07: 5.43%
11/30: 5.46%
11/22: 5.49%
11/16: 5.53%

One Year Ago: 5.16%

"Interest rates were flat this past week, reflecting the mixed messages from recent economic indicators," said Frank Nothaft, Freddie Mac vice president and chief economist.

"The recently released manufacturing report showed improvement, and while construction spending for November was down, it was still better than expected. On the other hand, a private sector employment report suggested that the labor market was weaker than anticipated. As a result, 30-year fixed-rate mortgage rates started off the year at about the same level as this time last year. "

Nothaft added, "Currently the market is waiting for a clearer signal on the direction in which the economy is heading, and that may come on Friday when the December employment report is released."

Source: Freddie Mac

Ownit Mortgage Files For Chapter 11 Bankruptcy

Kevin Rhodes (Continental Home Loans) — Wed, 03 Jan 2007 10:43:29 -0600

Subprime lender Ownit Mortgage Solutions Inc. filed for bankruptcy last week, reportedly as a response to lawsuits filed by two creditors.

Last Thursday, Ownit Mortgage filed for Chapter 11 in the U.S. Bankruptcy Court of San Fernando Valley, California just weeks after announcing it would stop making new loans.

According to court papers, Ownit Mortgage listed assets between $1 million to $100 million.

The company was more than $100 million in debt, an estimated $93 million of which was owed to Merrill Lynch LP Holdings Inc.

Merrill Lynch also owns a 20% share in Ownit Mortgage.

Among the other unsecured creditors, Ownit Mortgage owes $19 million to Terwin Advisors LLC and $12.7 million to Credit Suisse First Boston.

Although the Chapter 11 petition did not include an explanation for the bankruptcy decision, the Los Angeles Times reported that the petition was a response to lawsuits filed by two creditors.

During the housing boom, Ownit Mortgage grew rapidly to become one of the top wholesale subprime mortgage lenders by new loan volume in the first half of 2006.

Licensed or approved to fund mortgages in 41 states, the company employed about 325 people, according to the website.

THE SAGA CONTINUES... ANOTHER MAJOR LENDER IN FINANCIAL TROUBLE!!!

Kevin Rhodes (Continental Home Loans) — Wed, 03 Jan 2007 10:38:22 -0600

Subprime lender Mortgage Lenders Network USA (MLN) has announced that it will no longer fund loans or accept applications for new loans as the company explores "strategic alternatives" for its wholesale business lines.

Middletown, Connecticut-based MLN also has a servicing portfolio over $17 billion and over 100,000 accounts, but there was no indication of any changes with the company's servicing arm.

The company has five non-prime wholesale lending offices and two retail offices, as well as centers for loan servicing and processing.

The majority of the offices are located in Connecticut.

According to MLN, the company's goal in 2006 was to produce more than $12.1 billion in loans, 80% of which would be non-prime and 20% conforming product.

On Dec. 8, MLN had posted on its website that the company would continue to operate normally.

Brace yourself as we will continue to see more consolidation in the mortgage arena. This is a much needed correction and now is the time to separate the men from the boys. See my next post as well...

Interest-Only Underwriting Tightened at Fannie Mae

Kevin Rhodes (Continental Home Loans) — Tue, 02 Jan 2007 15:21:51 -0600

Fannie Mae has indicated that as of January 30 borrowers must qualify at "a fully-indexed rate that assumes a fully-amortizing repayment schedule" in order to be considered for a loan to be purchased by the company, just one of several underwriting changes at the government-sponsored enterprise (GSE).

The company also announced it will no longer treat "InterestFirst" as an interest-only loan product, categorizing it as a "feature" to used with other loan products.

Fannie Mae will broaden the products, occupancy and property types eligible for an interest-only feature, as well as allow lenders to underwrite most products with an interest-only feature outside of Desktop Underwriter.

Because of potential payment shock for borrowers, the company will limit interest-only features to fixed-rate mortgages with terms of at least 30 years and adjustable-rate mortgages with fixed-rate periods of three years or more.

Included among the eligible fixed-rate structures for purchase by the GSE will be 30- and 35-year loans with a 5-year interest-only period, along with 40-year fixed-rate mortgages with 5-, 10-, and 15-year interest only periods.

Fannie Mae will also permit temporary buydowns for fixed-rate mortgages with an interest-only feature on primary residences or second homes if the rate reduction does not go over three percentage points and the rate increase will not exceed one percentage point per year.

The only exception to the buydown option will be "MyCommunity Mortgages," according to Fannie Mae.

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