August 12th, 2019 2:01 PM by Richard Sardella MLO.100007700/NMLS 233568
Foreclosure activity drops through most of U.S. in first half of 2019
It was not that long ago when one could drive through neighborhoods of lovely homes and see "for sale" signs up everywhere, vacant homes, and uncut lawns. The financial crisis causing the foreclosure of millions of homes was a scary time. The good news is that the days of rampant foreclosures resulting in scores of empty homes are thankfully now not even viewable in the rearview mirror throughout most of the nation.
According to a recent ATTOM Data Solutions report, foreclosure filings in the first half of 2019 are down 18% compared with a year earlier. Realtor.com's Clare Trapasso writes that the 296,458 filings in the first six months of the year represented an 82% drop from the worst of the foreclosure crisis in the first half of 2010, quoting the data company's chief product officer, Todd Teta. "Foreclosures are continuing to come down. Homeowners who can't make their payments are able to get out of their debt by selling their homes rather than going through foreclosure. Increased home prices are allowing them to sell the home for more than they owe."
The figures were judged by taking into account default notices, scheduled auctions, and bank repossessions in more than 2,200 counties to come up with its findings.
There are still a few metropolitan areas that are seeing a rise in foreclosure filings and price drops as a result -- a point of interest for potential investors. Teta admits that because of price stabilization and increasing values, however, lenders are becoming more confident when taking a home through a foreclosure, knowing they might easily recoup or minimize their losses by foreclosing and then selling the home.
Source: ATTOM, Realtor, MarketWatch, TBWS
How Rates Move:
Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up. Tracking these securities real-time is critical. For more information about the rate market, contact me directly. I’m among few mortgage professionals who have access to live trading screens during market hours.
Rates Currently Trending: Neutral
Mortgage rates are trending sideways this morning. Last week the MBS market worsened by -22bps. This was enough to move rates slightly higher last week. We saw high rate volatility throughout the week.
This Week's Rate Forecast: Neutral
Three Things: These are the three areas that have the greatest ability to move mortgage rates this week. 1) Trade War, 2) Domestic and 3) Across the Pond
1) Trade War: The U.S./China trade war continues to be the primary focus of bond traders as we continue to approach the September 1st deadline for the new round of 10% tariffs on $300B worth of Chinese goods. Last week focused on the Dollar/Yuan relationship, and that will continue to be in the spotlight. The Geopolitical situation in Hong Kong is also in focus.
2) Domestic: Last week got PPI, and this week we get the more important CPI as a measure of the consumer side of inflation. We also get a critical retail sales report.
3) Across the Pond: Germany (basically the only economic engine in the Eurozone), will release a very important GDP report that will get a lot of attention, particularly after Great Britain showed a negative GDP on a MOM basis last week. From China, we get retail sales and industrial production.
Central Bank Palooza: Norway and Mexico will have Central Bank meetings on Thursday.
This Week's Potential Volatility: High
Wild times for markets and rates over the last couple of weeks. This week we could see the same kind of volatility as we saw last week. There's nothing on the economic front that can cause volatility until Thursday. However, the trade war and Hong Kong could inject rate volatility into the markets at any time.
If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.
Richard Sardella has been actively managing and providing services in the mortgage industry for over 27 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.
All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.
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