[tags]sub-prime, mortgage, moodys[/tags]

The conforming loan limit determines the maximum size of a mortgage that an Enterprise can buy or guarantee. By law the maximum conforming loan limit is based on the October-to-October change in the average house price in the Monthly Interest Rate Survey (MIRS) of the Federal Housing Finance Board (FHFB). The FHFB reported the decline in the average price was $10,685 or 3.49 percent, from $306,258 in October 2006 to $295,573 in October 2007. The combined two-year decline is now 3.65 percent.

While many in the mortgage industry have felt that this number needs to increase, as the rise in property values in some states has outpaced this limit, the limit will remain the same…even though pricing indicators are showing a decline in values. This is good news for homeowners and mortgage professionals alike as a drop in this limit would make financing even more difficult and more expensive for the end user.

[tags]Loans, Mortgages, FNMA, Financing, Housing[/tags]

Housing start numbers were off this morning as well as the new home permit numbers were down and the only numbers that were up a bit were new multi-family starts in some areas.

[tags]Freddie Mac, Bernanke, FOMC, FED, Mortgage[/tags]

[tags]Mortgage, market, Loans, Home Loans, Wharton, Subprime[/tags]

Everyone is waiting for the Fed announcement tomorrow and is hoping a Fed rate cut will rescue the housing and mortgage markets. As I stated once before, a rate cut may create liquidity in the financial markets, however, investors still need to believe mortgage lenders are making quality loans.

People need to understand that increased liquidity at this point merely helps people who have credit and the ability to support it, to borrow at cheaper rates. Lending guidelines are still extremely tight and that is not likely to change until the fat is trimmed from the housing market.

[tags]FED, Bernanke, FOMC, Interest Rates, Housing Market, Bubble, Foreclosure[/tags]

Washington Mutual is to stop providing warehouse lending lines (ouch)

Option One (Sub Prime) is to cut 575 jobs

First Horizon to cut 1,500 jobs in their secondary division

Countrywide funded ~$34Billion in loans in August of 2007, off 17% from August of 2006

[tags]Mortgage, Market, Economy, Loans, Residential[/tags]

[tags]sub prime, mortgage, economy, financing, home loan[/tags]

In other news, the Fed lowered the Discount Window Rate from 6.25% to 5.75% in an emergency session last week after announcing they would not change it…interesting, I wonder who called them to change their minds.  They also increased the amount of time banks can borrow from the window to 30 days, probably more significant than lowering the discount rate. Comparing this to the Fed Funds Rate (the rate that banks borrow from each other) for 30-day money @ 5.5%, and you can see that this makes letting other banks borrow money from you, if you are a bank, more palatable.  Personally, I think this is pretty irresponsible and almost as irresponsible as Senator Chris Dodd’s comments the other night on Hardball. I didn’t write anything about his blaming the vast majority of the mortgage market problems on mortgage brokers because I was pretty pissed. I think what he said is irresponsible and shows that he is no different than the rest of the BS finger pointers looking for a scapegoat on Capitol Hill. The really crappy part is that he chairs the Banking, Housing and Urban Affairs Committee up there. More proof that we simply need to kick all of the people in Congress out of office and start from scratch.

[tags]BofA, Countrywide, Banking, Fed, FOMC, Discount Rate, Fed Funds Rate, Chris Dodd[/tags]

A great write up on the recent Fed action and the difference between the Discount Rate and the Federal Funds Rate.

Due to continued uncertain market conditions, effective as of 1 pm EDT (10am PDT) today, August 21, 2007, 1st National Bank of Arizona (FNBA) will focus on Retail originations and has suspended Wholesale and Correspondent originations.
Wholesale and Correspondent locks received prior to 1 pm EDT (10am PDT) today, August 21, 2007 will be honored.
Requests for Edits or Extensions to locks after 1 pm EDT (10 am PDT) today, August 21, 2007 will NOT be accepted.

Looks like the credit crunch on Wall Street is taking its toll even with the emergency move by the FOMC to lower the FFR by 500 basis points last week.  While making money easier to access for banks, there is still the main issue of the drastic changes in underwriting guidelines by Wall Street MBS investors which translates into entire product lines being eliminated by all mortgage lenders. This will continue.

[tags]Credit Crunch, First National Bank of Arizona, Closing, Mortgage, Economy, FNBA[/tags]

[tags]First Magnus, Lender, BK, Closing Doors, Sub Prime, Economy, Credit[/tags]