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Inside Mortgage Finance

January 13, 2006

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Mortgage Markets Expected to Cool Significantly In 2006; More Pressure Likely on Loan Performance

A substantial drop in new loan business in 2006 may be less of a concern for the mortgage industry than the potential for serious – if somewhat isolated – credit performance issues to crop up. Mortgage industry economists widely agree that originations are likely to decline significantly this year after a surprisingly strong year in 2005. The consensus forecast among industry experts is that new loan production will fall by about 20 percent in… Read More

After Growth Binge Since 2000, Mortgage REITs Taste Market Reversal During 2005

While real estate investment trusts performed well as a whole in 2005, with total returns topping 8 percent and besting other market benchmarks, mortgage REITs took a pounding. According to the National Association of REITs, the composite total return on mortgage REITs fell by 23 percent in 2005. The big problem for mortgage REITs was a sharp drop in stock prices, with investor returns due to price appreciations equaling a 30 percent loss for the… Read More

GSEs Post Sharp Drops in Share Prices in 2005; Analysts Lower Valuations But Still Recommend Buying Stock

Fannie Mae’s stock price took a pounding in 2005 as investors fled from the government-sponsored enterprise’s political and regulatory problems. Freddie Mac took a less severe hit to its share price in a market that generally shunned mortgage stocks in anticipation of higher interest rates and cooler housing markets. … Read More

Private Mortgage Conduits Post Huge Year in 2005, Near $1 Trillion Mark in Total Issuance

The boom in Alternative A mortgage securitization through the non-agency MBS market fueled a huge increase in private mortgage conduit business during 2005, according to a new market analysis and ranking by Inside Mortgage Finance. The private conduit business pumped out a record-shattering $923.68 billion of new mortgage securities during the past year, posting a hefty 45.2 percent gain over total production in 2004. That’s an especially dramatic gain since most observers think total… [One data table included] Read More

Rising Interest Rates Ate into ARM Savings Last Year, New Freddie Mac Poll Finds

Hybrid adjustable-rate mortgages were the ARM of choice for borrowers last year, a new Freddie Mac survey suggests. But ARM borrowers overall saved less money than they have in the past. Reporting on the results of its annual ARM survey, Freddie noted that start rates in 2005 on one-year ARMs rose by 1.0 percent, on an annual basis, while rates on long-term hybrids – those with initial terms of 5 to 10 years … Read More

MBA Reports Success in Contacting ‘Hurricane’ Homeowners, 80 Percent Respond to Industry Plea, Says Group Official

An estimated 80 percent of borrowers affected by Hurricanes Katrina and Rita have contacted their mortgage lenders or servicers to work out loans on Gulf Coast properties destroyed or damaged in the disasters last year, according to the Mortgage Bankers Association. The surprisingly high percentage of borrowers who got in touch with their lenders or servicers was the result of an intense communication campaign waged by the MBA and large lenders to persuade affected… Read More

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