Tim Sloan

Wells Fargo, tapping into a refinancing market invigorated by low interest rates, announced Friday that its fourth-quarter profits totaled $5.1 billion — a 24 percent increase over last quarter, the New York Times reported. Wells Fargo reported earnings of $0.91 a share, exceeding the expectations of analysts, who had thought the San Francisco, Calif.-based bank would earn $0.89 a share. Revenues were also up seven percent from last quarter to $21.95 billion. The growth was spurred in large part by the bank’s consumer lending business, as borrowers took advantage of record low interest rates to refinance their mortgages. [more]

Efforts by the Federal Government to prop-up the housing market are having a big affect on homeowners in Florida, where the impact of the housing collapse was particularly acute, according to the South Florida Business Journal. The Obama administration’s Home Affordable Refinance Program has allowed 1.2 million homeowners nationwide to refinanced their mortgages in the first quarter of 2012. According to Federal Housing Finance Agency data, it is common for participants in the program to save more than $2,500 annually on their interest payments. “HARP and refinancing more broadly is providing a meaningful boost to homeowners’ cash flow, particularly in the stressed housing states like Florida,” said Mark Zandi, chief economist for Moody’s Analytics. [SFBJ]

President Obama

As the election approaches, President Barack Obama is increasing his push to help more Americans refinance their home loans, according to the Wall Street Journal, but recent data shows that his efforts to date have had lackluster results. Bloomberg News reported that more Federal Housing Administration-insured loans entered foreclosure in March, largely because of refinanced loans. [more]

Mortgage loan application volume increased for a third consecutive week during the week ending Dec. 11, according to the Mortgage Bankers Association’s weekly survey, with the market composite index increasing .3 percent over the previous week, according to seasonally adjusted data. But while the refinance index increased .9 percent over the week before, the mortgage purchase index actually decreased .1 percent, indicating a market trend toward refinancing over purchasing. Compared to the same time period one year ago, the purchase index was down 15.4 percent. This data comes as the average 30-year fixed mortgage rate increased to 4.92 percent from 4.88 percent. TRD

The number of mortgage applications filed this week increased nationwide, as forecasts predict the rate of U.S. mortgage loan delinquencies will improve beginning in 2010, according to two recent reports.
Mortgage loan application volume is on the rise, according to seasonally adjusted data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey covering the week ending Dec. 4. The MBA’s Market Composite Index, which measures mortgage loan applications, saw its volume increase 8.5 percent over the prior week, reaching a two-month high, according to Reuters. Meanwhile the survey’s Refinance Index, which measures the number of refinance applications filed, increased 11.1 percent over the previous week.
This news follows yesterday’s report from credit and information management firm TransUnion, which projected that the rate of national mortgage loan delinquencies will decline to 6.39 percent by the end of 2010, a 3 percent decline from the projected end-of-2009 percentage. TRD

As home values deteriorate, lenders are pressuring appraisers to be
more conservative in their estimates of home values. Doing appraisals
is more difficult even without that pressure, as home values are
shifting quickly and sale prices from previous months no longer match
the market. Several appraisers said many of the appraisals they are
doing now are too low to allow the homeowners to refinance their
mortgages. Low appraisals can also result in homeowners’ home equity
credit lines being seized, as happened to the owner of one
2,650-square-foot Manhattan apartment appraised at $1.475 million in
2005 and worth $600,000 today. [more]