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NEW YORK: If you need more proof that the mortgage crisis is far from over, look no further than the tepid reaction to the initial public offering of PennyMac Mortgage Investment Trust.PennyMac (PMT) is a real estate investment trust that wants to buy up distressed loans, modify the mortgages to keep borrowers in their homes and then sell the loans once their value goes up. The company went public Thursday morning and finished the day 4.5% lower, at 19.10 a share.It’s an ominous sign for PennyMac, which originally filed to sell 20 million shares at 20 apiece but reduced the offering’s size to 16 million shares — likely a reflection of weak demand.Why was there such a lack of interest, especially on a day when bank stocks helped fuel the overall market’s surge? Maybe it’s the name. After the failure of lender IndyMac and the government takeover of mortgage financing giant Freddie Mac, a company dubbing itself as PennyMac may not exactly conjure up images of financial success.Maybe it’s guilt by association. Many of PennyMac’s top managers, including CEO Stan Kurland, are former employees of Countrywide Financial, the troubled mortgage lender that was bought by Bank of America (BAC, Fortune 500) last year.Kurland, who left Countrywide in 2006, was the lender’s chief operating officer. Former Countrywide CEO Angelo Mozilo has since been charged with securities fraud by the SEC. There are also a litany of significant risks listed in the company’s prospectus. For one, PennyMac has a limited operating history. The company, which was only founded a year ago, has purchased some pools of distressed loans from the FDIC through a series of funds. But PennyMac has no revenue or earnings yet.PennyMac also noted in its registration filing that “many of our anticipated competitors are significantly larger than we are and have stronger balance sheets and access to greater capital and other resources than we have and may have other advantages over us.”Talkback: Do you think the Obama administration’s plans to help homeowners has made a difference? Leave your comments at the bottom of this story. But at the end of the day, PennyMac may simply be yet another victim of the painfully slow progress of the Obama administration’s attempt to fix the mortgage mess.The Treasury Department’s plan to partner with private investors to rid banks of toxic mortgages, known as the Public-Private Investment Program, or PPIP, has been scaled back drastically. Many banks appear to be unwilling to sell the loans for such a reduced price.And a foreclosure prevention program announced by the administration in February is off to a rocky start. Regulators are pushing banks to do what they can to modify 500,000 mortgages for borrowers already in, or at risk of, default by November. But many homeowners have griped about how difficult it is to get their loans modified, partly due to banks being ill-prepared to deal with a deluge of applications.0:00
/4:02Shiller on home price uptickAll that may make it tough for PennyMac to thrive.”Banks are loath to sell a lot of these loans because they would have to take a capital hit and acknowledge they made bad loans,” said Merrill Ross, senior analyst with BGB Securities, a research firm owned by money manager Aegis Financial. “So banks may still want to try and work the loans out themselves. But at the same time, banks are overwhelmed with refi requests for mortgage modifications.” Then there is the issue of competition. There are already several other real estate investment trusts around that invest in mortgages, and many more are coming out of the woodworks to try and take advantage of the depressed values in the market.”To buy loans at discount and work through them would seem to be a good way to play the upside in the housing market since not all of these loans will go bad. But there are a lot of companies out there going after the business. There are a lot of other distressed asset investors with similar ideas,” said Jason Arnold, an analyst with RBC Capital Markets. Invesco Mortgage Capital (IVR), a mortgage REIT managed by investment firm Invesco (IVZ), went public last month. Like PennyMac, it is trading below its offering price. Earlier this week, Bayview Mortgage Capital, whose parent company is backed by private equity firm Blackstone (BX), filed for an IPO. And mortgage REITS backed by investment firms AllianceBernstein (AB), Apollo Management, Colony Capital and Starwood Capital Group have also filed for IPOs since the beginning of June.Another analyst suggested that it’s not as much fear of competition as it is the glut of mortgage REITS heading to the market that’s scaring off investors.”In reality, the pool of distressed assets is huge,” said Matthew Howlett, an analyst with Fox-Pitt Kelton Cochran Caronia Waller. “But investors are viewing all of these companies going public as a cookie cutter type of thing. At some point, the market is going to be saturated.” To its credit, PennyMac attracted some notable investments prior to its IPO as well. Its two biggest backers are investment management firm BlackRock (BLK, Fortune 500) and Highfields Capital Management, a Boston-based hedge fund most well-known for shorting Enron’s stock before it collapsed due to accounting fraud.Ross said that the fact that there are so many ex-Countrywide officials at PennyMac could be a plus going forward. Since Countrywide was such a major subprime mortgage lender, it’s possible that the company will have a leg up on other competitors about how to best undo the damage done.”It’s like taking a watch apart. Anyone can take it apart, but if you have the guy who put it together that makes a difference,” she said. Talkback: Do you think the Obama administration’s plans to help homeowners has made a difference?

NEW YORK (Reuters) — Mortgage applications fell for the first time in four weeks, driven by a drop in demand for home refinancing loans as interest rates climbed, data from an industry group showed on Wednesday.Applications for loans to buy a home, an early indicator of sales, were flat. Lack of interest for purchase loans does not bode well for the hard-hit U.S. housing market, which has otherwise been showing signs of stabilization.The U.S. Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended July 24 decreased 6.3% to 495.4.Jeffrey Fisher, professor of real estate and director of the Benecki Center for Real Estate Studies at the Indiana University Kelley School of Business, said the housing market has stabilized, but believes interest rates on mortgages are very important right now and are likely to rise.”The rise in interest rates on mortgages is likely going to be accompanied by a rise in inflation and that has historically been good for housing,” he said.Construction costs are also likely to start rising again if the market in China continues to recover and their demand for materials increases, he said.”This will put upward pressure on home prices,” he said.Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 5.36%, up 0.05 percentage point from the previous week, and sharply higher than the all-time low of 4.61% set in the week ended March 27. The survey has been conducted weekly since 1990.Interest rates, however, were well below year-ago levels of 6.46%.But, mortgage rates remained above 5% for a ninth straight week. Some experts say mortgage rates at 5% and below are what is necessary to make a significant impact on home loan demand.0:00
/4:02Shiller on home price uptickAnd with the U.S. unemployment rate at 9.5%, its highest in nearly 26 years, many potential home buyers who have lost or who fear they may lose their jobs are opting to stay sidelined even though home affordability has improved significantly.The MBA’s seasonally adjusted purchase index was unchanged at 262.0.The four-week moving average of mortgage applications, which smooths the volatile weekly figures, was up 2.6%.Refinancing activity slidesThe Mortgage Bankers seasonally adjusted index of refinancing applications decreased 10.9% to 1,862.1.The refinance share of applications decreased to 52.6% from 55.5% the previous week, significantly lower than the peak of 85.3% in the week ended Jan. 9. The adjustable-rate mortgage share of activity increased to 5.5% in the latest week, up from 4.8% the previous week.Professor Fisher said the main threat to the housing market is some unforeseen event that derails the economic recovery.”The economy is recovering, but fragile,” he said.”But, as consumer confidence increases and banks start making more loans we should see continued strength in the housing market,” he said.The U.S. housing market has suffered the worst downturn since the Great Depression and its impact has rippled through the recession-hit economy, as well as the rest of the world.The housing market, however, has been showing signs of stabilization, with sales rising and home price declines moderating in many regions of the country. In fact, home prices in some regions have risen.The U.S. government has embarked on an aggressive plan to bring mortgage rates down to levels that will spur demand and help the hard-hit housing market begin to recover. The Fed’s efforts however, have been offset by rising Treasury yields, which are linked to mortgage rates.The Federal Reserve has set a goal to buy up to 1.25 trillion of agency MBS, 300 billion of Treasuries and 200 billion of agency debt in 2009. The purchases are part of efforts to lower borrowing costs.Fixed 15-year mortgage rates averaged 4.75%, down from 4.8% the previous week. Rates on one-year ARMs increased to 6.66% from 6.5%.

Source:CNN

NEW YORK: Home mortgage rates ticked lower after Federal Reserve Chairman Ben Bernanke said the central bank will continue to keep interest rates low. The average 30-year fixed mortgage slipped to 5.55% from 5.58% the week prior, and the 15-year fixed fell to 4.89% from 4.93%, according to the weekly national survey from Bankrate.com.Recently rates have been “yo-yoing as corporate earnings announcements and economic data toy with investor sentiment,” the report noted.On Wednesday Bernanke gave his semi-annual congressional testimony on the state of the economy, saying the central bank will “likely keep interest rates low for an extended period of time,” the Bankrate report noted.A separate Thursday report showed sales of existing homes disappointed again in June, rising just 3.6%.Current mortgage rates remain much lower than last year’s levels, when the average 30-year fixed was 6.77%, according to Bankrate.com.At the current rate of 5.55%, the monthly payment on a 200,000 mortgage would be 1,141.86, or about 158 less than the monthly payment at last year’s rate.Adjustable-rate mortgages: ARMs “continue to post mixed results,” the report said, with the average 1-year ARM rising to 5.23% from 5.22%, and the 5-year ARM falling to 4.93% from 4.98%.

Source:CNN

NEW YORK (Reuters) — Mortgage applications rose despite a jump in borrowing costs last week, but still bounced around the year’s lows with unemployment fears depressing demand.The Mortgage Bankers Association’s total loan applications index rose by a seasonally adjusted 2.8% to 528.9 last week, even as 30-year mortgage rates rose by about 1/4 percentage point to 5.31%.The measure of requests to buy homes and refinance loans was up from a seven-month low of 444.8 three weeks earlier but still less than half the level seen during the spring, when mortgage rates sank to record lows.”The primary negatives right now are the high rate of unemployment and general uncertainty about the future path of the economy, which make people reluctant to buy,” said David Stiff, chief economist at Fiserv in Cambridge, Massachusetts, which produces the S&P/Case-Shiller and other price indexes.Home affordability has vastly improved with mortgage rates about 1-1/4 percentage less than a year ago and home prices, based on the S&P/Case-Shiller gauges, plunging an average 32% in the past three years.But the fear of unemployment, with the highest rate of job loss in almost 26 years, is keeping many potential buyers unwilling or unable to commit to such a major purchase, economists said.The MBA’s index of applications to purchase homes inched up by 1.3% last week to 262.1, and has been fairly range-bound for months.Federal Reserve Chairman Ben Bernanke told Congress on Tuesday that unemployment is apt to stay uncomfortably high into 2011 and could drain consumer confidence. A peak-to-trough average price slump of 39% is likely, with losses as great as 75% in the bubble markets, according to Fiserv.The prospect of more price erosion keeps many buyers at bay, waiting for better bargains.”The one silver lining in rapidly declining prices at least is that we’re falling back in line with household income levels,” Stiff said.Home prices in more than half of the markets are within 25% of levels seen before the housing bubble, he said.”That still seems like a large amount of overvaluation, but during the bubble peak in many of the most expensive markets, prices were 100% to 150% higher relative to income than they were in 2000,” Stiff noted.The MBA’s index of refinance applications gained 4% last week to 2,089.7, a one-month high. At the year’s highs, the refinance measure was more than triple last week’s level.The average 30-year loan rate jumped 0.26 percentage point last week to 5.31%, heading closer to this year’s high of 5.57% in June than to the record low 4.61% in March.

Source:CNN

NEW YORK: The eagerly anticipated foreclosure prevention program unveiled Wednesday by President Obama targets 9 million borrowers for help – are you one of them?The 75 billion effort, dubbed the Homeowner Affordability and Stability Plan, boils down to two basic solutions: First, the government is aiming to help more homeowners refinance to take advantage of new low interest rates. Second, it provides incentives to lenders and servicers to restructure your mortgage to more affordable levels. Official guidelines won’t be unveiled until March 4, but here’s how to know whether you’ll likely be able to take advantage of either of these options. Help for those seeking refinancingThis part of the program targets borrowers who have kept current on their mortgages. Many of the homeowners in this group have been unable to lower their housing costs through refinancings because of falling home prices.Right now, if you’re underwater on your mortgage, owing more than the home’s market value, forget about qualifying for a refi. In fact, at least 20% equity in your home is now a must, unless you’re using an FHA loan. The new guidelines should help. Even homeowners with debt that exceeds home value by 5% could be eligible. And there will be no prepayment penalties. But your loan must be owned or backed by Fannie Mae or Freddie Mac. The Administration estimates that this will enable up to 5 million homeowners to obtain lower interest rate mortgages.Who’s not eligible. Homeowners whose property values have dipped severely, putting them underwater by more than 5% are out of luck. Those with “jumbo” mortgages also don’t qualify – only those with “conforming’ mortgages do. To be absolutely sure what kind of loan you have, you need to check with your servicer or lender after March 4. But in general, until the past year, loans above 417,000 were considered jumbo mortgages, and Fannie Mae and Freddie Mac were not allowed to buy and guarantee them. All borrowers will have to prove they have sufficient income to be able to keep up their loan payments, though what would be sufficient proof wasn’t yet clear. Mortgage modification help for at-risk borrowersHomeowners in default or at risk of default may qualify for loan modifications, which restructure the terms of loans.Anyone with high combined mortgage debt compared to income or who is underwater may be eligible for a loan modification. Borrowers with high levels of other debt, such as car loans and credit card debt exceeding 55% of their incomes, may still qualify for a modification but they’ll be required to accept debt counseling in a HUD-certified program.If you qualify, your servicer or lender will reduce your monthly mortgage payments to 31% of your gross income. The payment would stay there for five years and then gradually revert back to the conforming loan rates in place at the time.The reduction would come mostly through interest-rate reductions, though in some cases, principal reduction also would be an option. Borrowers would also receive incentive bonuses of up to 1,000 a year for five years for making payments on time.President Obama estimated 3 to 4 million homeowners could benefit from the new modification procedures. Who’s not eligible. Speculators, those who bought homes for investment purposes, do not qualify for help — all homes must be owner/occupied.The program will also not reward homebuyers who were irresponsible in their borrowing. All applicants will be closely examined by lenders and those who acted unscrupulously by, for example, misrepresenting their incomes in no-doc loan applications, would not qualify.And, in order to protect taxpayers from excessive expenses, no loans will be modified unless it results in a net savings compared with the costs of foreclosing. Finally, rates would not be lowered below 2%. That will disqualify many borrowers who simply can’t afford any reasonable mortgage payment because of illness, for example, or job loss. “[The plan] will not reward folks who bought homes they knew from the beginning they would never be able to afford,” said Obama. “In short, this plan will not save every home.”No mortgages for amounts above comforming loan limits would be eligible.

NEW YORK: Home mortgage rates saw an up-and-down week but ended almost unchanged, according to a report released Thursday.The average 30-year fixed mortgage slipped to 5.58% from 5.59% the week prior, and the 15-year fixed held at 4.93%.The lack of change belies rates’ “yo-yo movement” over the week, said the weekly national survey from Bankrate.com.”It was an active week for mortgage rates,” the report added. “After first declining on continued economic weakness, mortgage rates reversed ground following corporate earnings that weren’t as bad as feared.”As a result, investors have flocked to the safety of government and mortgage-backed bonds. Mortgage rates are closely related to yields on long-term government debt.Volatility is likely to continue amid uncertain recovery sentiment and mixed economic data, the report warned.Current rates remain much lower than last year’s levels, when the average 30-year fixed mortgage rate was 6.42%, according to Bankrate.com.At the current rate of 5.58%, the monthly payment on a 200,000 mortgage would be 1,145.63, or about 108 less than the monthly payment at last year’s rate.Adjustable-rate mortgages: ARMs continue to post mixed results, the report said, with the average 1-year ARM rising to 5.22% from 5.18%, and the 5-year ARM falling to 4.98% from 5.05%.Have you exhausted your unemployment benefits? We want to hear about your experiences. E-mail your story to realstories@cnnmoney.com and you could be part of an upcoming article. For the CNNMoney.com Comment Policy, click here.

Source:CNN

NEW YORK: Home mortgage rates fell for the third time in four weeks, with the 30-year fixed slipping to 5.59% from 5.7% the week prior, according to a report released Thursday.The average 15-year mortgage rate also fell, dropping to 4.93% from 5.07%, according to the weekly national survey from Bankrate.com.”A disappointing June jobs report, coupled with the onset of quarterly earnings season, has many again viewing the economic glass as half-empty,” the report said.As a result of those factors investors have flocked to the safety of government and mortgage-backed bonds, the report added, sending mortgage rates back down to levels last seen on Memorial Day. Mortgage rates are closely related to yields on long-term government debt.A report released last week said home prices fell 18.1% from a year earlier, but the change from March narrowed sharply in a possible sign that housing markets may be starting to turn.Current rates remain much lower than last year’s levels, when the average 30-year fixed mortgage rate was 6.48%, according to Bankrate.com.At the current rate of 5.59%, the monthly payment on a 200,000 mortgage would be 1,1461.51, or about 114 less than the monthly payment at last year’s rate of 6.48%.Adjustable rates: ARMs were mixed, the report said, with the average 1-year ARM ticking up to 5.18% from 5.17% and the 5-year ARM falling to 5.05% from 5.17%.

Source:CNN

NEW YORK (Reuters) — Demand for mortgages to buy homes and refinance loans bounced from seven-month lows last week, with average 30-year borrowing rates unchanged, the Mortgage Bankers Association said on Wednesday.The industry group’s total loan applications index rose a seasonally adjusted 10.9% to 493.1 in the week ended July 3, after slumping the prior week to the lowest level since November.Last week’s report was adjusted to account for the Independence Day holiday on Friday.A sudden spike in home loan rates from record lows in the spring had derailed a race by homeowners to cut monthly costs by refinancing.The group’s seasonally adjusted refinancing index rose 15.2% last week to 1,707.7, after a 30% plunge in the prior week.Purchase applications, which lagged refinancing demand all through the spring home sales season, rose 6.7% last week to 285.6.The average 30-year mortgage rate stayed at 5.34% last week. That was up from the record low 4.61% in late March, based on MBA data, but sharply below 7.04% in the same week a year ago.On a four-week moving average, which smooths out volatility, the purchase index rose 1.4% and the refinance index fell 10.9%.

Source:CNN

NEW YORK: Mr. President, help us get one of your mortgage workouts now.That’s what many borrowers are saying nearly five months after President Obama unveiled his housing rescue plan. The program is beset with problems, say borrowers, housing counselors and even the president himself. Loan servicers are overwhelmed by the numbers of homeowners applying for loan modifications or refinancing. Borrowers are frustrated that their paperwork is being lost, and calls are not returned. Administration officials are racing to roll out new features to improve the program.Even Obama acknowledges that the program is failing to stem the foreclosure tidal wave.”Our mortgage program has actually helped to modify mortgages for a lot of our people, but it hasn’t been keeping pace with all the foreclosures that are taking place,” Obama said last month. CNNMoney.com has heard from hundreds of troubled homeowners who’ve run into roadblocks. The complaints are often the same: a lack of responsiveness by servicers. Even many of those whose applications are deemed complete say they never receive final approval or are told they can’t be helped now because they haven’t missed a payment.”We are trying to refinance but are getting the runaround from the bank,” Janeen, a Los Angeles homeowner, wrote on a CNNMoney.com Talkback. “[T]hey keep stalling, missing appointments and forgetting to send us paperwork.”Administration officials say they are well aware of the problems and are leaning on the banks to do better. Servicers will have to report the results of their efforts within the next month or two, opening them up to public and government scrutiny, said Seth Wheeler, senior adviser at the Treasury Department. But don’t expect the hurdles to go away anytime soon.”Immediately, we want to see an improvement in borrower experience, but I don’t think that means we will see a resolution of every hiccup in the process,” Wheeler said. “We should see over the course of the summer real improvement, but those challenges will linger well into the fall certainly.”Under the Obama plan, people with little or no equity in their home can refinance to take advantage of today’s low mortgage rates. The plan allows people to participate even if they have loans of up to 125% of the value of their property, as long as they meet other criteria. Also, eligible borrowers who are in or at risk of default may be able to lower their monthly payments to no more than 31% of their pre-tax income through a loan modification. Homeowners, servicers and mortgage investors can receive incentives to entice them to participate.Announced in February and implemented by most servicers starting in April, the program has produced more than 200,000 trial modifications and 20,000 refinancings. Borrowers in the loan modification program must make three on-time payments before the adjustment is considered official.Foreclosures risingWhile the administration often highlights that the program has helped a lot of people in a short period of time, it has a long way to go if it is to truly stem the foreclosure crisis, experts say.Nearly 1.5 million homes have received a foreclosure filing in the first five months of the year, according to RealtyTrac. Defaults are on track to hit 3.5 million this year, according to Mark Zandi of Moody’s Economy.com. Foreclosures in process jumped in the first quarter by 22% over the previous quarter, according to data released last week by the Office of the Comptroller of the Currency and Office of Thrift Supervision. The number of mortgages that were more than 60 days past-due rose 7%, but delinquencies among prime borrowers with the best credit backgrounds soared nearly 20% as rising unemployment takes its toll.”This system is not running at the level of efficiency that it has to,” said Barry Zigas, director of housing policy for the Consumer Federation of America.Getting through to the banks isn’t easy. Distressed borrowers have told CNNMoney.com that they are in danger of losing their homes because their banks are not able to handle the flood of applications for the president’s foreclosure prevention plan. In addition to problems with lost documents and endless waits on hold, borrowers complain they never receive an answer or are told they can’t be helped because they are still current with payments.Tanya in Jacksonville, Fla., wrote in the Talkback that she has contacted her servicer 27 times since applying for a loan modification in April, faxed all the documents six times and is still not getting help. “So still I wait. Still I have no assistace[sic] in my loan!”"Now it has been a month since I returned all the proper paper work and have received no correspondence,” wrote Craig of Howell, Mich., who is seeking to refinance. “I call the loan officer I spoke with at least once a week and she refuses to return my phone calls!! Getting a person on the phone who is [knowledgeable] is next to impossible since everyone there makes Forest Gump look like Albert Einstein. I’m simply fed up with this whole process.”Housing counselors, who help distressed borrowers navigate the system, are quite familiar with stories such as these. Much of the bottlenecks stem from the fact that servicers have not hired nor trained enough staff, nor have they fully updated their computer systems to handle the administration’s program, said Bruce Dorpalen, director of housing counseling for Acorn Housing.”There’s no excuse for this,” he said. “The servicers are not able to make decisions, or good decisions.”Still ramping up0:00
/3:57Hope Now’s foreclosure fightBanks and government officials say the foreclosure prevention program is very complicated, requiring a lot of training, system upgrading and documentation. Therefore, the institutions need time to ramp up.”We have a new plan that’s also more complex than any other plan,” said Faith Schwartz, who heads Hope Now, a coalition of servicers, community groups and mortgage investors working to stem foreclosures. “The banks have tripled, quadrupled their staffs. It will be effective. We’ll see more in the fall.”Citigroup (C, Fortune 500), for instance, said it is trying to resolve cases as expeditiously as possible, while JPMorgan Chase (JPM, Fortune 500) has touted the fact that it had approved 87,000 applications by June 30. Both banks said they are looking to improve.The Treasury Department is pressuring servicers to streamline the application process. And officials say they will check to make sure banks are following the guidelines.The soon-to-be-issued reports will include how many loan modifications and refinancings have been extended and how many are underway at each institution. Servicers with low approval levels or high complaint figures will raise red flags. Also, the administration has hired Freddie Mac (F, Fortune 500), the mortgage finance firm now under the government’s control, to check the applications that have been approved and rejected.”It’s not just that we’re hoping that servicers get out there and get results,” Wheeler said.

NEW YORK (Reuters) — Mortgage applications plunged to a seven-month low last week as demand for home refinancing loans tumbled 30%, data from an industry group showed Wednesday.The drop does not bode well for the hard-hit U.S. housing market, which has been showing some signs of stabilization, with sales rising and home price declines moderating in many regions of the country.The Mortgage Bankers Association said its seasonally adjusted index of mortgage applications, which includes both purchase and refinance loans, for the week ended June 26 decreased 18.9% to 444.8, the lowest reading since the week ended Nov. 21, 2008.Kenneth Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley, said mortgage rates are just one factor driving potential borrowers.”Rising unemployment, concerns about job security, potential buyers’ inability to sell their existing homes and problems with appraisals coming in too low are all weighing on demand,” he said.”The government needs to take more aggressive action to bring mortgage rates back down to below 5% as that seems to be a key level for the market,” he said.Borrowing costs on 30-year fixed-rate mortgages, excluding fees, averaged 5.34%, down 0.10 percentage point from the previous week, but significantly higher than the all-time low of 4.61% set in the week ended March 27. The survey has been conducted weekly since 1990.Mortgage rates remained above 5% for a fifth straight week, but were well below year-ago levels of 6.33%.Thirty-year mortgage rates had mostly been on a downward trend since the Federal Reserve unveiled its plan to buy mortgage-backed debt in late November. But the Fed met resistance in the bond market in late May and early June.Treasury yields, which act as a benchmark for mortgage rates, rose sharply during that period. Treasury yields, however, have come down recently, allowing rates to fall.The MBA’s seasonally adjusted purchase index fell 4.5% to 267.7.The four-week moving average of mortgage applications, which smooths the volatile weekly figures, was down 9.2%.Refining activity sinks: The mortgage bankers’ seasonally adjusted index of refinancing applications decreased 30% to 1,482.2, also the lowest level since the week ended Nov. 21, 2008.Refinancings accounted for 46.4% of applications, down from 54% the previous week and significantly lower than the peak of 85.3% in the week ended Jan. 9.The U.S. housing market is in the worst downturn since the Great Depression and its impact has rippled through the recession-hit economy, as well as the rest of the world. Economists contend that the economy might not emerge from its slump unless the housing market stabilizes.The shares adjustable-rate mortgage activity increased to 4.3% in the latest week, up from 4.1% the previous week.Fixed 15-year mortgage rates averaged 4.81%, down from 4.93% the previous week. Rates on one-year ARMs decreased to 6.52% from 6.54%.

Source:CNN