Drop in Refinancing Curtails Application Volume

The Mortgage Composite Index, a measure of loan application
volume, was down 6.7 percent on a seasonally adjusted basis and 6.6 percent
unadjusted during the week ended June 29 compared to the week ended June
22.  The Mortgage Bankers Association
(MBA) released the Composite and other results of its weekly Mortgage
Applications Survey this morning.

The decrease in mortgage volume was attributed to a drop of
8 percent in the Refinance Index which was in turn driven by a drop in
applications for government-backed refinancing loans.  The share of refinancing applications was 78
percent of all applications, down one percentage point from the previous
week.  Applications for HARP refinancing
which is available only to current Freddie Mac and Fannie Mae borrowers have represented
a quarter of all refinancing applications for the last two weeks.

The seasonally adjusted Purchase Index was up one percent
from the previous week.  The unadjusted
Purchase Index rose only slightly from the previous week and was down 7 percent
from the same week in 2011.  

Purchase Index vs 30 Yr Fixed

Click Here to View the Purchase Applications Chart

Refinance Index vs 30 Yr Fixed

Click Here to View the Refinance Applications Chart

Both the contract interest rate and the effective rate for
all loan types decreased during the week and several rates hit new all time
lows
.   The average contract rate for 30-year fixed
rate mortgages
(FRM) with conforming balances ($417,500 or less) decreased to
3.86 percent with 0.41 point from 3.88 percent with 0.40 percent, the lowest
rate for those loans since MBA began tracking them. 

Jumbo 30-year FRM (balances over $417,500) dropped four
basis points to 4.08 percent with points up to 0.38 from 0.35.  This was the second lowest jumbo loan rate in
MBA’s history.   

FHA-backed 30-year FRM also set a new benchmark low with an
average rate of 3.69 percent with 0.46 point compared to 3.71 percent with 0.46
point.   

Fifteen-year FRMs set a new low at 3.20 percent with 0.47
point.  The rate the previous week was
3.24 percent with 0.44 point.

The average 5/1 adjustable rate mortgage (ARM) rate fell to 2.76
percent with 0.45 point, down from 2.81 percent with 0.41 point.  Applications for ARMs represented only 4
percent of all mortgage applications.

All rate quotes are for loans with an 80 percent
loan-to-value ratio and points include the application fee.

The MBA’s weekly survey covers
over 75 percent of all U.S. retail residential mortgage applications, and has
been conducted weekly since 1990.  Respondents include mortgage bankers,
commercial banks and thrifts.  Base period and value for all indexes is
March 16, 1990=100.

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First Round of Pilot Rental Initiative Completed with 2,500 Homes Sold

The first round of winners has been
selected to purchase foreclosed real estate from Freddie Mac and Fannie
Mae.  The Federal Housing Finance Agency
(FHFA) announced today that 2,500 single family homes had been awarded to successful
bidders under a pilot initiative to convert real estate acquired by the two
government sponsored enterprises (GSE) through foreclosure into rental property. 

Successful candidates for purchasing properties
from the GSE’s real estate portfolio (REO) had undergone several steps in a
qualification process before being permitted to bid on the houses which they had
to agree to hold and rent for a period of time before reselling. 

The properties were offered in sale
pools which were geographically concentrated in various locations across the
United States.  The GSEs, FHFA and other federal
agencies involved, Departments of Treasury, Housing and Urban Development,
Federal Deposit Insurance Corporation and the Federal Reserve, had several
goals
for the program.  They hoped to
relieve the GSEs of the costs and administrative burdens of managing thousands
of foreclosed properties, alleviate the blight imposed on communities by large
number of vacant and possibly deteriorating properties, increase the rental
stock, while at the same time not flooding the market with distressed
properties.

 FHFA described the response to the pilot
initiative as “robust with strong qualified bidder interest.”  Some 4,000 responses were received to the
initial “Request for Information” issued by the program sponsors last February,
however beyond announcing that the awards had been made FHFA released no
information on the names or even the numbers of successful bidders.

“FHFA
undertook this initiative to help stabilize communities and home values in
areas hard-hit by the foreclosure crisis,” said Edward J. DeMarco, Acting
Director of FHFA. “As conservator of Fannie Mae and Freddie Mac, we believe
this pilot program will assist us in achieving our objectives and help to
maximize the benefit to taxpayers. We are pleased with the response from the
market and look forward to closing transactions in the near future.”

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David H. Stevens Staying at MBA

Slightly more than a month after it confirmed
he was leaving his post as President and CEO, the Mortgage Bankers Association
(MBA) announced that David H. Stevens would remain at the head of the trade
association.  Steven’s resignation and
appointment as president of Sun Trust Mortgage was announced by both MBA and
the parent company of his new employer, Sun Trust Bank, on May 30.  The announcement came almost simultaneous
with Steven’s first year anniversary with MBA.

In a statement released this morning MBA
said they were pleased to announce that Stevens “has agreed to stay on as
President and CEO.”  MBA Chairman Michael
W. Young said that, “Over the past several
weeks, MBA’s leadership, members and staff impressed upon Dave the important
role he was playing for the industry and his unique qualifications to lead the
association.  The importance and
significance of MBA’s voice during this critical time coupled with Dave’s
experience and talents encouraged us to do all we could to retain him.”

“The past few weeks have been extremely
difficult for me personally and professionally,” Stevens said.  “After serious thought and consideration, I
simply cannot leave the MBA at such a critical time for the industry and the
association.  Frankly, at the end of the
day, stepping away now when so much progress is being made and so much still
left to be done, did not feel right.

 “Going
through this experience left me encouraged by the tremendous opportunity that
lies within our industry and reinforced the essential component mortgage
finance will continue to play in helping our nation’s economy recover.” he
noted.  

Stevens joined MBA in May 2011 after serving as Assistant
Secretary of Housing and Urban Development and Commissioner of the Federal
Housing Administration (FHA). 

Mr. Stevens was to have joined the Company on July 16, reporting to SunTrust Mortgage President and CEO Jerome Lienhard.

“We have a strong leadership team in place, and continue to execute our business plan and serve the needs of the clients of SunTrust Mortgage,” said Mr. Lienhard.

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CoreLogic: Home Prices Show Third Consecutive Monthly Increase

Home prices were up for the third
consecutive month
in May as measured by CoreLogic’s Home Price Index
(HPI.)  The three months of increases were
noted for both annual and month-over-month numbers.

The HPI increased by 1.8 percent
compared to April figures and was 2.0 percent higher in May 2012 than in May
2011.  Those numbers are for all home
sales including those of distressed homes, both short sales and real estate
owned (REO) transactions.

When distressed sales are removed from
the calculation home prices were up year-over-year by 2.7 percent and were 2.3
percent higher in May than in April. 
This is the fourth consecutive month-over-month increase.

CoreLogic’s forward-looking Pending HPI
which is based on Multiple Listing Service data measuring price changes in the
most recent month indicates that house prices, including distressed sales, will
rise by at least 1.4 percent from May to June and by 2.0 percent if distressed
sales are not included.

“The recent upward trend in
U.S. home prices is an encouraging signal that we may be seeing a bottoming of
the housing down cycle,” said Anand Nallathambi, president and chief
executive officer of CoreLogic. “Tighter inventory is contributing to
broad, but modest, price gains nationwide and more significant gains in the
harder-hit markets, like Phoenix.”

“Home price appreciation in the
lower-priced segment of the market is rebounding more quickly than in the upper
end,” said Mark Fleming, chief economist for CoreLogic. “Home prices
below 75 percent of the national median increased 5.7 percent from a year ago,
compared to only a 1.8 percent increase for prices 125 percent or more of the
median.”

Since home prices peaked in April
2006 the national HPI including all sales has fallen 30.1 percent and non-distressed
sale prices are down 22.2 percent.

The highest price appreciation
including distressed sales was seen in Arizona (12.0 percent), Idaho (9.2
percent) and South Dakota (8.7 percent). 
When distressed sales are excluded the greatest appreciation was noted
in Montana (9.1 percent), South Dakota (8.5 percent), and Arizona (7.3
percent).

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MBA Chief Stevens: I’m Not Leaving, After All

David Stevens, the head of the Mortgage Bankers Association who in May announced his plans to become president of SunTrust Mortgage, has changed his mind and will stay on as chief executive of the MBA.