More Home Owners Underwater as Prices Fall

More Home Owners Underwater as Prices Fall
A report from Equifax and Moody's Economy.com shows that falling prices have left 24 percent of owner-occupied, single-family home owners with mortgage debt greater than the values of the residences.

At the end of this year's second quarter, more than 16 million Americans were in this predicament, an increase from 10 million a year earlier.

Almost 5 percent of owner-occupied dwellings are saddled with mortgage debt worth 150 percent of the property value. Nevada, where 40 percent of owner-occupied homes are "upside-down," is the hardest-hit state, followed by Arizona and California.

Source: Wall Street Journal, Nick Timiraos (08/05/09)

FHA Drops Lender on Suspicion of Fraud

FHA Drops Lender on Suspicion of Fraud
The FHA's third-biggest lender, Taylor, Bean and Whitaker Mortgage Corp., has been dropped from the agency's loan program due to possible fraud.

An independent auditor found "irregular transactions that raised concerns of fraud," but FHA said the Florida-based firm failed to file a mandatory annual financial report and indicated that there were no outstanding issues related to the audit.

Experts say it could fold as a result; and with less competition in the industry, mortgage rates could rise.

"It's just a question of demand and supply," stated Equity Now Inc. President Michael Moskowitz. "If Taylor Bean goes down, it's a pretty big deal."

Source: Bloomberg David Mildenberg and Jody Shenn (08/05/09)

Mortgage Applications Rise for the Week

Mortgage Applications Rise for the Week

Mortgage applications rose a seasonally adjusted 4.4 percent last week compared to the week before, as rates on fixed-rate mortgages dropped, according to the Mortgage Bankers Association. Total application volume was up 18 percent for the week that ended July 31, compared with the same week in 2008, according to the MBA's weekly survey. Refinance applications rose an unadjusted 7.2 percent last week, compared with the week before, while refinance application volume has risen 35 percent since its recent low at the end of June. The volume of applications for mortgages to purchase a home was up a seasonally adjusted 0.9% last week. Refinance applications made up a 54.2% share of all applications, up from 52.6% the week before. Interest rates were generally lower: 30-year fixed-rate mortgages fell to 5.17 percent from 5.36 percent. 15-year fixed-rate mortgages fell to 4.60 percent from 4.75 percent. 1-year ARMs were 6.67 percent, barely changed from 6.66 percent. Source: Mortgage Bankers Association (08/05/09)