Index for New Homes with Mortgages versus Resales with Mortgages

We are bombarded with metrics which we use to analyze trends, relate to other data, and to predict the future. Now MortgageDataWeb contributes some of our own metrics. Previously we looked at the percentage of variable rate mortgages to all mortgages (fixed plus variable rate mortgages) where the index has been declining for several years.

Click on chart for larger image

A new metric looks at conventional purchase mortgages used to purchase new homes as a proportion of conventional mortgages used to purchase new or existing homes. There are 14.7 million home purchase observations in our data since January 2003. The data does not include home purchases without a mortgage. This new metric, which we call the "New/Resale Mortgage Index" has been charted by month and shown in the exhibit.

The chart reveals that new home purchases as compared with resales appear to peak during the winter months. In December of the past five years we see the highest value of the New/Resale Mortgage Index as compared with the index value for the prior 11 months. What this means is that the propensity to close on purchases of new homes as compared with existing homes is maximum during the winter months and the propensity to close on purchases of existing homes as compared with new homes is maximum during summer months.

Another trend is that the New/Resale Mortgage Index year over year values have declined in 2008. This reflects an increasing propensity to purchase and close on existing homes and a decreasing propensity to purchase and close on new homes in the first half of 2008. This trend suggests that home purchasers find greater values in the stock of existing homes versus new homes.

Prince William County Virginia - Home Prices in Free Fall!

I found this dialogue amusing and as useful as any analysis of Case-Shiller home price data. The idle chat provides a description of home price declines in one market in Virginia. Some posters contend that the crack down on illegal immigrants exacerbate foreclosures and housing prices. If that is the case then perhaps we might all benefit by being a little nicer to our immigrant neighbors!

Just for fun!! These quotes were copied from the link.

• .....Seems like there was some really irresponsible lending going on
  there.

  Let's just say if the price charts were a ski slope--it would truly be "experts only."

  Let's say if Dumfries and Manassas combined, and they changed to Dumassas

Foreclosures Up Again!

Foreclosures are up again last month. Nevada is leading state with one out of every 43 homes. Who were the subprime lenders doing the most business in Nevada in 2007 that contributed to this mess? As the new housing legislation makes its way to the President's desk for signature, will these numbers finally level off in the latter part of this year? The Congressional Budget Office estimates that about 400,000 borrowers will benefit from the program. What do you think?

Fingerprint Registry in the Foreclosure Prevention Act of 2008

Can anyone provide a coherent explanation why this bill includes capturing fingerprints and other private information on mortgage originators? See section 1505. Am I crazy or what? How does fingerprinting mortgage originators help financially distressed homeowners stay in their homes?

Which Los Angeles Communities are most impacted by FHA mortgages?

The leading cities within Los Angeles county with the most new FHA mortgages are Lancaster and Palmdale. The chart shows the top five cities in Los Angeles county with the most FHA mortgages in 2008 (year to date).

Beverly Hills has some FHA mortgages. Not enough in Beverly Hills to make the top five. Do you think FHA mortgages will finance large portions of real estate in towns like Beverly Hills, Malibu, or Pacific Palisades? We see these FHA products financing a home near you!

Impact of Economic Stimulus on Mortgage Finance in Los Angeles

The chart shows the recent growth of FHA mortgages in Los Angeles. We expect this growth to accelerate exponentially.

Early this year, the Economic Stimulus Act of 2008 (Public Law 110-185) included an increase of FHA and conventional mortgage loan limits. For Los Angeles, the new mortgage loan limit is $729,750. Before the Economic Stimulus Act the maximum FHA mortgage amount for single family homes was $362,790. That prior mortgage loan limit made FHA mortgages useless for home purchases in Los Angeles because the purchase price for most homes were substantially greater than the FHA mortgage limit. Higher mortgage loan limits and lower home purchase prices make many more homes eligible for FHA mortgages for borrowers with low down payments. Home purchases using conventional mortgages will not be as easy or cost effective for many borrowers. While conventional mortgage financing in Los Angeles is still many times greater than FHA, conventional mortgage originations are declining.

The newer housing legislation maintains the high FHA mortgage limits. Homeowners can refinance their recent "under water" conventional mortgages into FHA mortgages with a principle balance reduced to 85% of the current market value of the home and approval from their lender to release the remaining loan obligation from the borrower. More mortgage investors are accepting reduced principle as payment in full when closing short sales. Reduced principle payoffs are expected to increase in mortgage refinances adjusted to current market value of the property.

Mortgage lenders serving borrowers in Los Angeles with FHA mortgages stand ready to profit from accelerating volumes of FHA mortgage transactions. The mortgage market share report for Los Angeles covering the past two months shows some lenders we spoken about recently. Several prominent mortgage lenders have stopped originating new mortgages. First Horizon sold their mortgage operations to Metlife Bank. Prospect Mortgage. shown in the report as Metrocities, has been gaining market share in Los Angeles, especially with FHA mortgages. Prospect Mortgage recently purchased retail offices of Indymac. Prospect Mortgage may also pick up the wholesale customers of Indymac. This will propel Prospect (Metrocities) to the top of the market. In Los Angeles, Metrocities shows strong market share with conventional mortgages (Let us know if you want these market share reports).

Another mortgage lender expected to show market leadership in Los Angeles is TB&W Mortgage. They recently acquired Platinum Home Mortgage. The combined company and business relationships that TB&W has with brokers should make TB&W a formidable competitor in this market.

Any mortgage company that expects to successfully compete for business in Los Angeles must know the conventional mortgage products, Government insured mortgage products, pricing, and the business relationships that companies like TB&W and Prospect/Metrocities has established in Los Angeles. What else do you need to know about the largest mortgage market in the nation? We might have the data for you to evaluate your decision to participate Los Angeles and how to succeed. Over the next few days and weeks, I'll be publishing more reports, charts, and maps showing the mortgage market landscape in Los Angeles. Knowing this market information gives mortgage professionals the edge needed to succeed!

Housing Bill on Fast Track for Approval

The White House today dropped their opposition to the most extensive housing legislation since the Great Depression. This legislation will offer up to $300 billion in assistance to troubled homeowners. There are still some Republicans in the Senate who want to make sure the bill is helping homeowners and not a bailout for lenders.

One portion of the bill that is of particular interest is increasing the FHA loan limit to $625,000 in high cost areas. Take a look at our report at FHA Purchase loans in Los Angeles for 2008. Who is going to increase their sales in the LA market if this legislation passes as expected?

VA Mortgage Origination Data Shows No Remarkable Changes

The Veterans Administration (VA) home loan guaranty program was established in 1944 to aid veterans returning home from war. While roughly 55 million persons are eligible for VA mortgages, very few eligible veterans choose the mortgage that allows no down payment and provides the investor a guaranty on a sizable proportion of the mortgage. Even though VA mortgage borrowers are not required to purchase mortgage insurance, loan guaranty fees which vary with the down payment and the number of times used, are collected at mortgage close and rolled into the mortgage amount. Since conventional mortgages have been more difficult to obtain, we would expect an increase in the use of VA mortgages. The past few months show only a small increase (see chart) in new VA mortgage originations. Are we as a nation doing what is necessary to help our veterans with their residential finance needs?

Million $Jumbos Declining in Marin County, California

Calculated Risk reported on cracks in the high end real estate markets in the San Fransisco Bay area. The impacts that this has on the million dollar jumbo mortgages is clearly shown in the mortgage market share reports for Marin County, California for 2008, and for 2007. Purchase mortgage originations having mortgage loan amounts over 1 million dollars have declined this year to almost half of the rate that the same mortgages had in the prior year in Marin County.

Notice that the 2007 market leader, Washington Mutual (Wamu), has fallen off the chart. Wamu used to lead most markets in California with their super million dollar jumbo mortgage product. They used to lead with a lot of other mortgage products but no more! Do you think Wamu will make a comeback?

Government Insured and Conventional Mortgages, Trends in Harris County Texas

Since the refinance boom of 2003 and 2004, the numbers of conventional refinance mortgages has steadily declined in Harris County, Texas. The number of conventional purchase mortgages have remained static while more recently, FHA/VA mortgages have started to increase. Why have these government issued mortgages become more popular? According to the FHA it is now easier to qualify, it costs less, they have low down payments, and you can have less than perfect credit. The decline in conventional mortgages suggests that these types of mortgages are more difficult to obtain. In Harris County will FHA and VA mortgages dominate in market share?

Adjustable Rate Mortgages Not Popular

If you need a new mortgage loan would you want fixed rate mortgage or an adjustable rate?

Two years ago, roughly 45% of all mortgages were adjustable rate. These days less than 10% of mortgages have adjustable rates. The the mortgage data in the chart uses conventional purchase mortgages from January 2003 to the present. This data includes 14.5 million mortgage transactions collected from municipal recordings nationwide.

Wells Fargo's Profits Increase

Wells Fargo reported surprisingly higher profits today. Why? Maybe part of the answer is their increased market share since last year. Take a look at their market share in purchase mortgages for 2007 versus year-to-date for 2008. Other banks are due to report their earnings in the next couple of days. Is other good news finally on the way?

Taylor Bean and Whitaker Mortgage - Now they own the bank!

No nonsense!. Taylor Bean and Whitaker Mortgage (TB&W) of Ocala, FL. has been moving up in the national rankings year over year. For 2008, MortgageDataWeb ranks TB&W Mortgage 15th in conventional mortgage originations. The news story is that TB&W was ranked 30th in 2006 in conventional mortgage originations. TB&W's FHA/VA mortgage originations are now 2nd in the nation.

Just last week, TB&W purchased Platinum Bankshares of Rolling Meadows, IL. TB and W's trends in mortgage lending along with the quality loans they originate should make them a formidable competitor. Congratulations Taylor Bean! ...... and congratulations Whitaker!

FHA Mortgages in Texas Rapidly Rises

FHA mortgage originations in Texas are approaching levels not seen since 2004. Somewhere on this earth with some mortgage products the numbers do go up! Actually we have been reporting large increases in FHA mortgages in all areas of the country.

Prospect Mortgage Gets Big Fast!

Prospect Mortgage will take over most retail mortgage branches of Indymac. Prospect Mortgage currently includes Metrocities Mortgage of Sherman Oaks, California, Opteum Mortgage of Paramus, New Jersey, and Fidelity & Trust Mortgage of Chevy Chase, MD.

We rank Metrocities Mortgage 75th in the nation for conventional mortgage originations this year. Opteum appears to originate a majority of its mortgages in Georgia and Florida. Fidelity and Trust Mortgage originates most if its mortgages in the Washington, D.C. metropolitan area. The combined company along with the new retail offices obtained from Indymac Bank should make Prospect Mortgage a top 25 national mortgage lender in a short time period.

Indymac Bank - Schumer's Fault?

TheStreet.com article said that Indymac Bank blames Senator Schumer 's recent negative remarks about the bank for the run on the bank that drained its funds. Really! I presume that the mortgages Indymac Bank originated had nothing to do with it.

Foreclosured Bank REO with the Worst Curb Appeal

The HousingWire reported that FDIC warned its insured institutions to maintain real estate it owns. I thought I would take a look and see if Countrywide HL's REO appear to comply with the FDIC warning and regulations. They do comply!!

A bunch of properties were clustered in the Manassas, VA. The 10 properties I saw have more than acceptable curb appeal. The photo is the worst case I found. It is not so bad. In fact it appears that they are working to improve the appeal of the property shown.

It would be great readers emailed ( mortgageinfo at cbmiweb.com ) photos telling us the city/town and the institution that owns the property. If sufficient proof of ownership is provided along with a photo, we will post it here.

Mortgage Sales Tanking in Miami Metro

We know about all the vacant condos in Miami. The lack of real estate sales results in a lack of mortgage originations. Mortgage sales declined more than 50 percent in 2008 (first quarter) versus 2007. American Home Mortgage and First Magnus performed well in this market in early 2007. The other mortgage companies did not benefit from American Home and First Magnus leaving the business.

If someone reminds me, I'll post the second quarter for Miami when I obtain more complete data.

Real Estate Turning Up in Fairfax County?

A recent Washington Post article suggests increased home sales for May 2008 over the prior year. Lets hope so. I'll display the 2008 second quarter mortgage purchase data when I have it. The first quarter of 2008 was abysmal as shown by the trend report.

Thank You Fairfax Board Chairman Connolly !!!

These days leadership seems so scarce. While millions loose homes to foreclosure and neighborhoods are blighted by the rise of abandoned and trashed home, our inept President and our "do nothing" congress offers nothing to bring relief to the escalating problem. Fairfax County (Virginia) Board Chairman Gerald Connolly demonstrated bold leadership by arranging for Fairfax County to purchase these properties and offer low interest loans to new owner occupants. This effort provides a reasonable approach to reduce abandon properties, maintain quality neighborhoods, and provide some affordable housing Fairfax County. Finally someone is doing something.

El Paso County, Colorado, the Top county for VA Mortgages

El Paso County, Colorado tops the list for the most VA mortgage loans (in dollars) during the first quarter of 2008. El Paso County was the leading county for VA mortgages for all of 2007. It appears that the number of VA mortgages in 2008 will out pace 2007's number of mortgages by 30 percent.