Refis forever? Some days lenders scratch their heads wondering just when -- if ever -- the refi boom will end. On Wed. November 6 the Federal Reserve will meet to discuss lowering the overnight Fed funds rate. A handful of economists, including MBA's Doug Duncan, think a 50 basis point cut could be in the cards. Stay tuned...
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David Seiders, chief economist for the National Association of Home Builders pointed out this past week that if the Fed does cut rates it will immediately impact home builders -- not so much in the form of mortgage rates but in the rate bankers charge their builder customers. "Builders could see their cost of funds fall," he said at a forecast conference. The rate builders pay for money is a spread over the prime rate. The prime tracks the Fed funds rate tick for tick...
What's the big deal about Fannie Mae moving $135 billion in mortgages to its "available for sale" account from "held to maturity" status? For one, it boosted the company's shareholder equity by $4 billion -- a significant change. An email written by Fannie Mae's Jayne Shontell (head of investor relations) bashes the Wall Street Journal's coverage of the change, claiming the newspaper is relying too much on the opinion of a speculator who is shorting Fannie's stock. Short positions in Fannie's stock rose dramatically in October -- by a stunning 26%. Freddie Mac hasn't been immune either. Shorts in its stock jumped by 27%. And while we're on the subject of shorts, shorts in Household's stock rose 16% -- the third sequential increase for the struggling subprime lender...
This past week Fannie/Freddie critic Mike House (FM Watch director) fired another missive on OFHEO's risk based capital rule saying it's "seriously flawed" and should be withdrawn. He also called Fannie's shifting of $135 billion in mortgages a "massive bookkeeping exercise to ensure nominal compliance with the (RBC) rule while not actually addressing the very real risk question out there." Most analysts who cover Fannie & Freddie's stock think the secondary giants are doing just fine...
IN CASE YOU MISSED IT: Wachovia Securities downgraded Countrywide's stock to "hold" from a "buy" rating. Countrywide, meanwhile, is doing a massive business in seconds. (See NMN's new newsletter, Home Equity Wire, for details.)
AND FINALLY: The New York editorial office of National Mortgage News is moving to: One State Street Plaza, New York, N.Y. 10004. The telephone number for NMN's editor-in-chief, Mark Fogarty, will be (212) 803-8226. The Washington D.C. office of NMN remains where it is at 1325 G. St. N.W., Washington, D.C. 20005.
