Banks’ Buybacks of Loans up 373%
According to National Mortgage News banks had to buy back $7.1 billion in defaulted single-family loans in the third quarter to reimburse mortgage investors, up from $1.9 billion in the previous quarter. JPMorgan Chase and Bank of America led the field followed by Citibank, National City, Wells Fargo and SunTrust.
What does this mean for you? Further tightening of underwriting standards and larger down payment requirements are coming. The next wave of changes hits in mid-December.
Average 30-Year Freddie Mac Rate Matches Record Low
The average Freddie Mac rate for a 30-year fixed-rate mortgage has matched a record low last seen earlier this year. Borrower’s who qualify can get 30-year, fixed rate conforming loans with note rates in the mid 4’s.
New Home Sales Bump Up– Big Deal
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. Still, according to the chart below from realestatedecline.com new home sales are seriously below annual averages for the last ten years.
According to National Mortgage News, real estate analyst Mike Larson of Weiss Research says this is a sign builders need to start swinging their hammers. Mike Larson is wrong unless you believe more bankrupt builders and banks in trouble are a good thing. Until this economy creates jobs and the current and hidden inventory of existing homes held by banks are moved off their balance sheets, builders need to be hyper-cautious. Actually, builders don’t need to be hyper cautious because banks are not lending.
How does a builder create a small fortune in housing in this market? Start with a large one……
CraigGoebbel - NMLS #139637 