Email this pageDaily Origination News
Superior Bank Adding 60 to Its Mortgage Team
November 25, 2009
Citing "tremendous opportunity" in Alabama and Florida markets, Superior Bank is expanding its mortgage banking operations by adding over 60 people and doubling its existing team based in Birmingham. Adding new staff is a timely step, Superior Bank president Rick Gardner said following investments in new systems, expanded product offerings and the branch network in the last several years. Currently the company operates 72 branches. While the expanded operation will serve primarily Alabama customers, the $3.2 billion thrift holding company said additional support positions will ensure a larger number of customer needs are met both in Alabama and in Florida in the coming years. Currently the company operates 72 branches in 44 locations throughout the state of Alabama and 28 locations in Florida.
California's Monthly New Construction Drops Below 3,000 Units
November 25, 2009
The pace of new construction in California has slowed to under 3,000 units a month, according to the latest figures from the Construction Industry Research Board. Builders in the Golden State pulled just 2,017 single-family permits in October and a mere 798 multifamily units, a grand total of 2,815. That's less than 10 new dwelling units a day for the country's largest state. During the first 10 months of the year, builders started 29,901 units, a 46% decline from the same period in 2008, when 55,632 permits were issued, according to CIRB. Single-family construction dropped 33% for the 10-month period, while multifamily construction was down 64%. The research board is projecting a total of just 36,000 starts for 2009, which, if it is right, would be the lowest on record. California Building Industry Association president and CEO Liz Snow is expecting the new and extended federal tax credits to give the business a much-need shot in the arm. Now, the group is calling on state lawmakers to resurrect the state's $10,000 tax credit, which expired a few months ago.
Thrifts' Origination Totals Leveled Off with Refinancings in Quarter
November 25, 2009
Thrifts originated $47.1 billion in single-family loans during the third quarter, down nearly 25% from the previous quarter as refinancings dropped off. Refinancing activity accounted for 39% of thrift originations, compared to 55% in the second quarter when refis were near record levels, according to the Office of Thrift Supervision. The 780 OTS-supervised thrifts hold $348.9 billion in one-to-four family loans on their books and 5.76% are classified as "noncurrent" (90 days or more past due or considered uncollectible), up from 3.39% a year ago. The noncurrent rate on construction loans is 13.1% and 2.7% on commercial real estate loans. Thrifts posted a profit of $1.3 billion for the third quarter, up from $94 million in the previous quarter. But $1.1 billion of that profit came from a sale or non-operating gain from one institution. "Without that gain, the industry's net income would have been $200 million, essentially breaking even," OTS said.
Drop in Loan Applications Includes Upward Revision in Previous Week
November 25, 2009
Survey data from the Mortgage Bankers Association released Tuesday show a decline in loan applications during the week ended Nov. 20 relative to an upwardly revised number the week previous. The group's Market Composite Index during the week ended Nov. 20 slid 4.5% on a seasonally adjusted basis and 5.8% on an unadjusted basis. The MBA said the comparative data for the week ended Nov. 20 reflect an upward change in survey information from the week ended Nov. 13 that stemmed from one participant's upward revision of its submission to show higher application volume. That participant also reclassified of some of its loan applications to refinance from purchase. This left the total for the former "modestly higher" and the total for the latter "slightly lower" than originally reported for the Nov. 13 week. During the week ending Nov. 20, purchases were up 9.6% on a seasonally adjusted, week-to-week basis, up 4.9% from the previous week on an unadjusted basis and 13.7% lower than the same week a year ago. Respective MBA indices on a seasonally adjusted, four-week moving average basis register the following: a 0.5% increase in applications overall, a 6.4% drop in purchases and a 4% gain in refis. The refi share for the week ending Nov. 20 was 71.7% of total apps, down from 74.6% the previous week. The adjustable-rate mortgage share inched up to 5.3% from 5.1% during the same period. The average contract interest rate for one-year ARMs dropped to 6.66% from 6.85% with points increasing to 0.33 from 0.29 during the week ended Nov. 20. During the same period, the rate for 15-year fixed-rate mortgages stayed stable at 4.32% while points jumped to 1.05 from 1.01, and the rate for the 30-year FRMs that dominate the market fell slightly to 4.82% from 4.83% with points increasing slightly to 1.19 from 1.18.
Market for Newly Built Houses Sees Some Revival
November 25, 2009
New home sales rebounded 6.2% in October after a slight 2.4% dip in the previous month, while the inventory of newly constructed homes plunged to a 38-year low. The U.S. Census Bureau found that the new home inventory fell to a 6.2-month supply during the month, down from a 12-month supply in January. "If you are looking for a sign that builders need to start swinging their hammers soon, this is it," said Mike Larson, real estate analyst at Weiss Research. Sales of new single-family homes rose to a 430,000 seasonally adjusted annual rate in October, up from 405,000 in September. The sales are now 5% above the pace in October 2008. "The evidence continues to show stabilization in the housing market," Mr. Larson said.
Average 30-Year Freddie Mac Rate Matches Record Low
November 25, 2009
The average Freddie Mac rate for a 30-year fixed-rate mortgage has matched a record low last seen earlier this year. The average FRM rate during the holiday-shortened week ended Nov. 25 was 4.78%, down from 4.83% a week ago and the lowest it has been since the week ending April 30. A year ago, the average 30-year FRM rate was 5.97%. The average 15-year FRM rate in the latest week continued to breach lows never before seen in the history of Freddie's rate survey of this particular product, which started in 1991. The average 15-year FRM rate was 4.29%, down from 4.31% the previous week and 5.74% a year ago. The average rate for a five-year Treasury-indexed hybrid adjustable-rate mortgage also dropped to its lowest point since Freddie started tracking it. Freddie first began tracking this product in 2005. In the latest week, the five-year Treasury hybrid fell to 4.18% from 4.25% a week ago and 5.86% a year ago. The one-year Treasury ARM remained unchanged in the latest week at 4.35%, a low that before the previous week one would have had to go back to July 7, 2005 to beat (at that time, it was 4.33%). A year ago, the average one-year Treasury ARM rate was 5.18%. Average points were as follows: 0.7 for 30-year FRMs and one-year ARMs and 0.6 for the other two aforementioned products.
Reverses Coming Under Home Equity Pressure
November 24, 2009
Once booming, home equity conversion mortgages have begun a slowdown that could continue until home prices stabilize. In the year ended Sept. 30, mortgage lenders funded 114,692 reverse mortgages under the Federal Housing Administration's HECM program, an increase of 1,336% compared with 1999. Five years ago, just 43,000 reverse loans were written. Until a year ago, the reverse mortgage niche looked like a safe bet for mortgage bankers seeking a haven from the carnage in the industry. But now — with home prices still under pressure and fears of a double-dip recession growing — reverse mortgages no longer look like a safe bet.
NABE Expects a Boom in Housing Starts Next Year
November 24, 2009
Housing starts will increase by 36% next year and the housing sector will contribute to economic growth for the first time since 2005, according to the November survey by the National Association of Business Economics. The 48 professional forecasters see housing starts hitting 790,000 units in 2010, which is up from 580,000 in 2009. The economists also expect house prices will bottom out this year and rise 2% in 2010. "When asked what factors were driving the housing rebound, panelists identified low house prices and interest rates as the two most important factors," a summary of the survey results says. The economists are forecasting that the 10-year Treasury note will yield 4.2% by the end of 2010 and the unemployment rate will average 9.6% in the fourth quarter of 2010. The unemployment rate is expected to "remain stubbornly higher." However, hiring is expected to pick up soon. "Within the next few months, companies should be adding instead of cutting jobs," said NABE president Lynn Reaser.
Case-Shiller Index Points to Home Prices Firming Up
November 24, 2009
Home prices rose 0.3% in September, compared to 1.2% in August, according to the Standard & Poor's/Case-Shiller 20-city house price index, which posted its fourth consecutive monthly increase. Overall, the 20-city HPI is down 9.4% from a year ago but the declines are decelerating. In August, home prices were off 11.3% from a year ago. Values have improved since the spring, according to David Blitzer, chairman of S&P's index committee. "However, the gains in the most recent month are more modest than during the seasonally strong summer months," he said. IHS Global Insight economist Patrick Newport said prices are stabilizing across the country but he still expects another 5% decline. "We believe that prices have further to fall — about another 5% — because the foreclosure rate, which hit a record at the end of the third quarter, and the unemployment rate are still rising," he said.
Commercial Banks See Residential Fundings Decline
November 24, 2009
Commercial banks originated $405.6 billion of residential mortgages in the third quarter, down 25% from the second quarter. New call report figures released by the Federal Deposit Insurance Corp. show that retail originations at the 874-reporting banks totaled $163.3 billion in the third quarter, compared to $222.2 billion in the previous quarter. Meanwhile, wholesale and correspondent originations totaled $242.7 billion, compared to $318.5 billion in the second quarter. Only commercial banks and FDIC-supervised savings banks with at least $1 billion in assets or smaller banks with at least $10 million in originations over the past the two quarters are required to report origination data to the FDIC.
