Markets News 

This home mortgage disaster is ready to punish housing markets

“In a MarketWatch column last March, I discussed the serious threat that cash-out refinances (cash-out refis) pose for major U.S. housing markets” writes Keith Jurow for marketwatch.com. Because of the terrible experience with cash-out refis during the bubble collapse, the FHA decided to lower the loan-to-value (LTV) cap for cash-out refis to 80% from 85%. Source: marketwatch.com

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Mortgage tech startup Snapdocs just raised $25 million from Fidelity’s venture arm, Sequoia Capital, and Peter Thiel’s Founders Fund

“Snapdocs, a tech startup that aims to streamline the process of finalizing mortgages, has raised a $25 million Series B round of funding” writes Alex Nicoll for businessinsider.com. He then set out to design a company that makes the current mortgage process easier, instead of attempting to radically disrupt the whole industry.Snapdoc’s latest funding round was led by F-Prime, Fidelity’ Investments venture arm, and was rounded out by returning investor Sequoia Capital, which is one of the oldest Silicon Valley venture funds, and Peter Thiel’s Founders Fund.The mortgage process includes…

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Getting down-payment assistance may not make people more likely to default on their mortgages, after all

“Previous research had suggested that down-payment assistance (DPA) programs increased the odds of the borrower defaulting on their home loan” writes Jacob Passy for marketwatch.com. The findings suggested that black and Hispanic borrowers are more likely to default in general, and not because they may have received down-payment assistance.Louis examined the performance track record for loans made with some form of down-payment assistance. Source: marketwatch.com

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Climate change could impact your mortgage even if you live nowhere near a coast

“Fannie and Freddie, with their added liquidity in a huge mortgage market, essentially make possible the popular 30-year, fixed-rate mortgage” writes Rachel Koning Beals for marketwatch.com. They found that, after those hurricanes, lenders increased by almost 10% the share of coastal mortgages offloaded to Fannie and Freddie.That puts the health of the mortgage market at risk, a potential repeat of the financial conditions at the root of the banking crisis a decade ago, a research paper published Monday argues. But the worrisome lag, as the Ouazad and Kahn paper suggests,…

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Analysis: Polish banks haunted by Swiss franc mortgages in European court

“Neither the previous nor the current governments helped Swiss franc mortgage holders,” he said” writes Midwest Communications Inc for 95kqds.com. Since the collapse of Lehman Brothers in 2008 the Swiss franc has risen 85% from 2.18 zloty to 4.04 zloty, while this year alone it appreciated by 6% against the Polish currency.Jacek Sledzinski, a 45-year-old lawyer, resents the lack of support, even though he has been able to continue repayments on his Swiss franc loan on a 2-bedroom flat in Warsaw.WARSAW (Reuters) – Europe’s highest court will rule next week…

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Long-term mortgage rates dip; 30-year at 3-year low of 3.49%

“Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year mortgage declined to 3.49% from 3.58% last week” writes The Associated Press for seattletimes.com. Lower mortgage rates should help homebuyers, but low inventories and high prices that have consistently eclipsed wage growth have restrained sales growth.The yields on government bonds influence long-term mortgage rates.WASHINGTON (AP) — U.S. long-term mortgage rates fell this week, with the average on the key 30-year loan reaching its lowest point in nearly three years.Mortgage rates have fallen sharply as a slowing global economy…

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UK mortgage approvals hit nearly 2-1/2-year high in July: UK Finance

“Lending figures from the Bank of England, which cover a broader section of Britain’s finance industry, are due on Friday” writes Midwest Communications Inc for 95kqds.com. Banks approved 43,342 mortgages in July, up from 42,775 in March and 10.6% higher than a year earlier, according to seasonally-adjusted figures from industry body UK Finance.UK Finance said consumer lending rose 4.3% year-on-year in July, the strongest increase since February 2018.LONDON, (Reuters) – British banks last month approved the most mortgages since February 2017, adding to signs that the housing market has picked…

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The interest rate declines that have worried investors, economists, and the Fed are your mortgage’s fault

“Let’s say you have a 30-year fixed rate mortgage with a 5% interest rate and a balance of $250,000” writes George Pearkes for businessinsider.com. But repayment can also come from refinancing: borrowing a fresh chunk of cash at a lower interest rate or more attractive terms.Successfully hedge interest rate risk, and you’ve got an attractive spread with no credit risk.That hedging activity can exacerbate declines or upticks in interest rates, creating a self-fulfilling prophecy of lower rates that runs very far before negative feedbacks kick in.Thanks to the unique option…

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Moneysupermarket bets on pushing remortgaging online 

“Moneysupermarket is betting on digital mortgages to unlock new growth as it gears up to push the house-buying process online” writes Ben Marlow for telegraph.co.uk. The FTSE 250 company, which already allows users to compare UK prices for mortgages, wants to bring the full application process to the web.Its new focus comes as the company prepares to replace its chairman Bruce Carnegie-Brown with Robin Freestone, a former finance director of media group Pearson, in May. “We think mortgages will get digitised – we’re really excited to be disrupting this market,”…

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