Millions of Americans are saving billions of dollars in monthly mortgage payments, thanks to record-low interest rates. The refinance market is booming, now at 78 percent of residential mortgage activity, according to the latest read from the Mortgage Bankers Association. Make no mistake, however, the big banks are reaping great rewards as well. “Mortgage origination profitability is off the charts,” says Paul Miller, head of financial research at FBR. “Refis are surging, and many are loans that just refi-ed 6-12 months ago.” Given that so many of the refis are of relatively new loans, the banks are taking a loss in the servicing, but Miller says they usually hedge their servicing assets. The hedges, however, are not perfect and values “bounce around” in big refi booms, so the banks will take some write downs in servicing, “but the hedges will cushion the value changes,” Miller adds. Juicing the refinance market as well are big changes to the government’s Home Affordable Refinance Program earlier this year. HARP allows borrowers with Fannie Mae and Freddie Mac loans to refinance even if they owe more on the mortgage than the home is worth (so-called “underwater” loans). The changes dropped any limit to how much negative equity a borrower has in the home. It also lowered some costs. HARP volumes doubled to 180,000 in the first quarter of this year from the previous quarter, according to the FHFA. That, too, has helped the big bank servicers. “It’s hard to tell how many borrowers refi with their current servicers, but the share is up, given the demise of mortgage brokers and the advent of programs like HARP that favor the current servicer,” says Guy Cecala of Inside Mortgage Finance. Next week the FHA, the government’s mortgage insurer, will institute changes to its refinance program for current FHA borrowers, lowering fees and premiums. That should increase volumes further. While big banks may be profiting from the refinance surge, some can’t handle the volumes. It can take far longer to refinance at a larger bank than a smaller lender. “There are major staffing issues, 90-plus days for a refi at the big banks. That’s why middle market banks are doing the majority,” says Craig Strent, CEO of Bethesda, Maryland’s Apex Home Loans, a local direct lender. Wells Fargo, the nation’s largest lender, Strent admits, is the most efficient and has made it clear they want retail mortgage business. Bank of America is far less aggressive. “Most major banks are getting all the refi business they want, and can handle, at least for now,” notes Guy Cecala. “On the plus side of the surge in refi activity is that it generally improves the quality of mortgages—and servicing—since the new loans are run through tougher underwriting and often have more equity.” Questions? Comments? document.write("");document.write("RealtyCheck"+"@"+"cnbc.com");document.write('');And follow me on Twitter @Diana_Olick
Showing posts with label Benefits. Show all posts
Showing posts with label Benefits. Show all posts
Sunday, June 10, 2012
Refi Boom Benefits Borrowers and Big Banks
Millions of Americans are saving billions of dollars in monthly mortgage payments, thanks to record-low interest rates. The refinance market is booming, now at 78 percent of residential mortgage activity, according to the latest read from the Mortgage Bankers Association. Make no mistake, however, the big banks are reaping great rewards as well. “Mortgage origination profitability is off the charts,” says Paul Miller, head of financial research at FBR. “Refis are surging, and many are loans that just refi-ed 6-12 months ago.” Given that so many of the refis are of relatively new loans, the banks are taking a loss in the servicing, but Miller says they usually hedge their servicing assets. The hedges, however, are not perfect and values “bounce around” in big refi booms, so the banks will take some write downs in servicing, “but the hedges will cushion the value changes,” Miller adds. Juicing the refinance market as well are big changes to the government’s Home Affordable Refinance Program earlier this year. HARP allows borrowers with Fannie Mae and Freddie Mac loans to refinance even if they owe more on the mortgage than the home is worth (so-called “underwater” loans). The changes dropped any limit to how much negative equity a borrower has in the home. It also lowered some costs. HARP volumes doubled to 180,000 in the first quarter of this year from the previous quarter, according to the FHFA. That, too, has helped the big bank servicers. “It’s hard to tell how many borrowers refi with their current servicers, but the share is up, given the demise of mortgage brokers and the advent of programs like HARP that favor the current servicer,” says Guy Cecala of Inside Mortgage Finance. Next week the FHA, the government’s mortgage insurer, will institute changes to its refinance program for current FHA borrowers, lowering fees and premiums. That should increase volumes further. While big banks may be profiting from the refinance surge, some can’t handle the volumes. It can take far longer to refinance at a larger bank than a smaller lender. “There are major staffing issues, 90-plus days for a refi at the big banks. That’s why middle market banks are doing the majority,” says Craig Strent, CEO of Bethesda, Maryland’s Apex Home Loans, a local direct lender. Wells Fargo, the nation’s largest lender, Strent admits, is the most efficient and has made it clear they want retail mortgage business. Bank of America is far less aggressive. “Most major banks are getting all the refi business they want, and can handle, at least for now,” notes Guy Cecala. “On the plus side of the surge in refi activity is that it generally improves the quality of mortgages—and servicing—since the new loans are run through tougher underwriting and often have more equity.” Questions? Comments? document.write("");document.write("RealtyCheck"+"@"+"cnbc.com");document.write('');And follow me on Twitter @Diana_Olick
Tuesday, April 5, 2011
<b>Real Estate</b> Investing Book - What Are The Benefits Of Buying <b>Real</b> <b>...</b>
Real Estate investing isn't any longer the special diversion of rich businessmen. In today's world property has become a standard monetary motion for individuals from all walks of life. This trend can possible to still perform can into the predictable future. This alteration is because of elimination and concentration on company pension plans.
Real estate investing book will increase the information and knowledge within the property field. Those who speak in property market are the individuals with expertise in property business. A true estate book that is introduced in electronic format is named as property E-book.
A real estate book may be a assortment of paper, parchment or different material, certain together along one edge among covers that contain info regarding property investment business. A true estate book is additionally a true estate literary work or a main division of such a piece.
Property investing book may be studied by real estate course students within the type of a book report.
This book might also be browse by a true estate skilled or property business man who would love get a lot of information regarding some topic associated with property. There are many suggested property investing books on the market for increasing your property investing information and improving your property business.Investing in book of real estate is one amongst the smallest amount risky forms of investments books you'll read. Instead of investing in hit or miss stocks that are typically unpredictable, investing in property could be a rather more stable market.
If you create a wise property investing book purchase, you may be ready to increase your investment's value over time although you place very little or no information or basic concepts into it.The purpose of the investing in book is to provide all the required info so you'll get new skills and educate a lot of yourself in property investing field, So as to induce proven profitable results from your investments within the stock market! The investing book intends to not solely offer recommendation on investments for beginners, However additionally aims to supply recent concepts for knowledgeable investors. The investing book additionally offers a listing of investing terms and necessary phrases that the investors would want to be well-known with upon their embarkation into investments.
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