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  • Foster Hamilton Blog

    Thursday, August 02, 2018   /   by Steven Guzman

    Fannie and Freddie Extend Strong Earning Streak

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    Both Fannie Mae and Freddie Mac, the two government supported enterprises (GSEs) that have been in federal conservatorship for ten years this month, reported another quarter of strong financial returns.  Freddie Mac finished the second quarter with Comprehensive Income of $2.4 billion and the significantly larger Fannie Mae had Comprehensive Income of $4.5 billion.
    Freddie Mac's Comprehensive Income was higher than both the $2.1 billion posted in the first quarter of 2017 and the $1.9 billion in the second quarter of 2017. Its Net Income was $2.5 billion compared to $2.9 billion and $1.7 billion in the two earlier periods.  A portion of the revenue was due to a $334 million ($264 million after-tax) judgement against Nomura Holding America, Inc. from litigation involving certain non-agency mortgage-related securities.
    Net interest income was down $15 million from the 1st quarter and $376 million from the 2nd quarter of 2017 at $3.0 billion ...

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    Thursday, July 26, 2018   /   by Steven Guzman

    Under 35 Homeownership Rate Rising Fastes

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    The homeownership rate remained essentially unchanged in the second quarter of 2018.  The Census Bureau said the rate rose 0.1 percentage points compared to the first quarter rate of 64.3 percent.  Homeownership hit an all-time low of 62.9 percent in the second quarter of 2016 in the Census Bureau's records which go back to 1996.

    The rate was lowest in the West at 59.7 percent, unchanged from the first quarter of the year.  The Northeast, while retaining its next to the bottom position, posted the largest gain of any region, rising 0.8 percentage point to 61.3 percent.  While homeownership remains low among those under 35 years of age, the rate among that cohort did increase from 35.3 percent to 36.5 percent, the largest gain of any age groups.  Homeownership among the oldest Americans, those 65 and older, continues to trend down, falling another half percent from the first to the second ...

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    Wednesday, July 11, 2018   /   by Steven Guzman

    Foreclosure Inventory Cruising on at 11-Year Low

    The foreclosure inventory, that is the percentage of loans in the process of foreclosure, appears to have stabilized at 0.6 percent of all outstanding first mortgage loans.  CoreLogic said on Tuesday that that the inventory has been unchanged at that level, the lowest since June 2007, since last August.  The number is down 1 basis point compared to April 2017.

    The company's monthly Loan Performance Insights Report shows that, nationally, 4.2 percent of mortgages were past due by 30 days or more in April, including loans in foreclosure.  This is a 0.6 percentage point decline in the overall delinquency rate compared with the previous April when it was 4.8 percent.
    The rate of early stage delinquencies, loans that were 30 to 59 days past due, was 1.8 percent in April, compared to 2.2 percent a year earlier and the share in the next stage, mortgages that were 60 to 89 days delinquent, was 0.6 percent, unchanged year-over-year.  The serious delinquency rate, loans ...

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    Tuesday, July 10, 2018   /   by Steven Guzman

    Mortgage Rates Slightly Higher So Far This Week

    Mortgage rates didn't move for most lenders today.  Remaining lenders were just slightly higher than yesterday, thus keeping this week's modest upward bias intact.  In the slightly bigger picture, we had a fairly friendly consolidation in rates heading into last Friday and have been giving back the gains since then.
    While we're technically able to talk about rate "movement" on a day to day (and even minute by minute) basis, the average mortgage borrower isn't seeing big changes.  In fact, in terms of the NOTE rate (the one at the top of a loan quote that determines the payment), there hasn't been any change in 2 weeks.  It's only in the form of the more granular EFFECTIVE rate, which takes upfront costs into consideration, that we can observe any movement.  In other words, we're looking through a microscope at the moment while we wait for the next round of more significant momentum.   
    Loan Originator Perspective
    Another se ...

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    Friday, June 22, 2018   /   by Steven Guzman

    2 Paradoxes For Mortgage Rates

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    Mortgage rates were microscopically higher today, which is paradoxical on two levels.  The first paradox has to do with today's bond market improvements.  Bonds underlie rates and bond market improvements coincide with rates moving lower--usually!  In some cases, the day-to-day change in the bonds that underlie mortgage rates can be quite a bit smaller than the change in US Treasuries (the core of the US bond market).  That was part of the problem today.  The other part had to do with weakness yesterday afternoon.  That weakness meant today's improvements merely got mortgage-backed bonds back to yesterday morning's levels despite being in stronger territory compared to yesterday afternoon's latest levels.

    The second paradox has to do with the most prevalent mortgage rate headline out in the world today.  It's some iteration of "mortgage rates lower this week."  Any s ...

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