Fannie Mae and Freddie Mac have refinanced 1.9 million mortgage loans this year through July, and James Lockhart, outgoing director of the Federal Housing Finance Agency, told MSNBC that he sees signs of stabilization in home prices and expects the market to become more stable as modifications continue. He said Fannie and Freddie are “bleeding” from bad mortgages made in 2006 and 2007. But he expects Fannie and Freddie to turn the corner within the next year and says the two companies are currently doing profitable business. [more]

The New York Times interviews William Rudin, president of Rudin
Management Company, about the current real estate market. Rudin said he
is seeing much more activity now than in the last quarter of 2008 or
the first quarter of this year for both commercial and residential
leases. He has signed more than 30 leases in the last 30 days for
residential properties, he said. Commercially, the company has had some
success with creating and leasing prebuilt offices at 355 Lexington
Avenue. The Rudin Organization also doesn’t have much debt in its
portfolio because it did a lot of refinancing in 2006, 2007 and 2008,
Rudin said. Comments

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The Obama administration is considering altering its loan modification
program to match the current foreclosure landscape. The program was
created to address the subprime crisis, but now most foreclosures are
driven by unemployment and underemployment. The current program gives
mortgage servicers and investors incentives to reduce mortgage payments
to 31 percent of homeowners’ incomes, but many homeowners now no longer
have sufficient income to qualify for refinancings under this system
due to job losses or pay cuts. Around 27 percent of homeowners who
called the mortgage industry’s “Hope Hotline” in the second quarter of
this year said unemployment was the primary or secondary reason for
their mortgage payment problems, up from 9.7 percent of callers in the
second quarter of 2008. The administration may create more specific
guidelines for borrowers on dealing with homeowners who have lost jobs. [more]

The owners of the Bank of America Tower at One Bryant Park are expected to refinance the building Monday. The $1.275 billion loan is one of the biggest private financings since 2007. The money, which took building owners Durst Organization and Bank of America nine months to get, will be used to pay back a $950 million loan on the building, to repay investors and to finish work on the tower. Bank of America, Bank of New York Mellon, Wells Fargo Bank, Westdeutsche ImmobilienBank and Helaba Bank are providing the financing. Douglas Durst, the Durst Organization’s chairman, said securing the financing for the tower was part of what allowed him to resign as the company’s co-president. He will stay on as chairman. [more]

Mortgage applications dropped 15.8 percent for the week ending June 12
compared to the previous week, according to numbers released today by
the Mortgage Bankers Association. Year-over-year, mortgage applications
increased 0.3 percent. The association’s refinance index fell 23.3
percent week-over-week and 3.5 percent year-over-year. The average
interest rate for a 30-year fixed-rate mortgage dropped to 5.5 percent
from 5.57 the previous week. TRD [more]

From the June issue: While many potential buyers of residential real estate in New York City
are waiting on the sidelines, expecting prices to fall further, the
plunge of interest rates to historical lows has sparked an explosion in
mortgage refinancing.
“We are definitely seeing tremendous interest in refinancing,” said
Brooke Jacob, CEO of Everest Equity in Suffern, N.Y. “Anybody with an
open loan balance is trying to do it. Whether they own a unit in a
condo or a co-op, whether it’s a townhouse in an outer borough, a
single-family home, an apartment complex or any real estate, when
interest rates drop, you will see an influx of refinancing. Demand is
huge.” [more]

The number of people looking to take out or refinance mortgages fell
7.2 percent last week as interest rates rose, according to data
released by the Mortgage Bankers Association today. The average
interest rate increased from the previous week to 5.57 percent for a
30-year fixed-rate mortgage and rose to 5.1 percent for a 15-year
mortgage. The average interest rate for one-year adjustable-rate
mortgages increased to 6.75 percent. Refinancing applications fell 11.8
percent to 59.4 percent, from 62.4 percent the previous week, the
lowest since November. [more]

Senator Charles Schumer (left), City Council Speaker Christine Quinn

New York Senator Charles Schumer introduced controversial legislation
Friday that would create a federal program in which the refinancing of
over-leveraged, multi-family buildings would be based on the
apartments’ current rent roll. The bill targets buildings that are delinquent, at risk of default or
already in foreclosure, by providing refinancing capped at a level that
can be supported by the building’s income. The bill also requires that
a sufficient operating reserve be maintained in the refinanced
buildings, and would also allow the building to be transferred to
another owner, as long as the government considers the new owner
responsible. [more]