Blog, Market Updates

Austin Mortgage Update – Week Ending 3/9/09

March 9, 2009 by Kevin Wilhelm · Leave a Comment

What Did Interest Rates Do This Week?
** according to Freddie Mac survey **

30-yr Fixed – Slightly Higher
This Week: 5.15%
Last Week: 5.07%
1yr Ago: 6.03%

15-yr Fixed – Slightly Higher
This Week: 4.72%
Last Week: 4.68%
1yr Ago: 5.47%

5/1 ARM – Slightly Higher
This Week: 5.08%
Last Week: 5.06%
1yr Ago: 5.34%

Highlight of This Week’s Major Economic Reports

Amidst the barrage of negative economic reports, the DOW tumbled below 7000 for the first time in almost 12 years. The beating was further exacerbated with news that the labor market lost another 651,000 jobs last month, putting the unemployment rate at a whopping 8.1% — the highest we’ve seen in over two decades.

Somewhere behind these headlines, there can be optimism, however, as there are signs of economic stabilization that continue to surface. Consumer borrowing, for instance, was up for the first time since September. Announced layoffs – while still elevated – were less than expected. Construction spending and auto sales remain on the decline, but at the least the drops have been less severe in recent months.

The Obama Administration also announced its much anticipated “Making Home Affordable” program, which we hope will create a firmer ground to help our economic recovery, as more and more homeowners struggle to keep up with their mortgage payments. The program is aimed at helping as many as nine million homeowners who either cannot refinance because their homes have lost value or who are at risk of foreclosure because their monthly payments have become unaffordable. While controversial, this program is intended to help stave off the fast-rising foreclosure rates affecting many parts of the country.

What to Look for This Week

The economic calendar will be relatively void of any major headliners, so expect for rates to be directed by the goings on in the stock market.

Short-Term Rate Outlook

Possibly Lower

Stay Informed: What’s in the News

Housing Rescue Program Details from RISMedia

President Obama earlier this week unveiled details of his home loan aid plan designed to help millions of Americans who are at risk of losing their homes.

Administration officials say the Homeowner Affordability and Stability Plan could help nearly nine million households restructure or refinance their mortgages to avoid foreclosure.

The plan includes a $75 billion homeowner stability initiative that targets at-risk homeowners, many of whom have adjustable-rate mortgages that have increased house payments to as much as 50 percent of their monthly incomes.

This initiative offers cash incentives to lenders and borrowers for working out loan modification agreements that result in lower monthly mortgage payments and allow homeowners to keep their homes. Any bank that receives federal money under the Treasury Department’s $700 billion financial rescue program will be required to take part.

Another component of the plan is intended to help as many as five million responsible homeowners who took out conforming loans owned or guaranteed by Fannie Mae or Freddie Mac to refinance through those institutions.

To finance that effort, the Treasury is providing the two companies with up to $200 billion in capital on top of $200 billion that it had already pledged to them.

“This is not going to save every person’s home,” said White House spokesman Robert Gibbs. “The plan is not intended to . . . augment somebody’s loan for a house that they couldn’t afford under any economic situation, good or bad.”

According to the latest data from the Mortgage Bankers Association, nearly 12 percent of homeowners — a record 5.4 million — were at least one month late or in foreclosure at the end of last year.

“Freddie Unveils REO Rental Initiative” from American Banker

Freddie Mac said Thursday that it has launched a program called REO Rental Initiative that gives qualified tenants and former owners the option to lease their recently foreclosed properties on a month-to-month basis. Fannie Mae had announced a similar program in December. Freddie’s program will be managed by HomeSteps, its national real estate unit, and implemented through several national property management firms.