Mortgage Banking Weekly Highlights
Week Ending January 21, 2011

Rates/Applications
Freddie Mac released its results of its Primary Mortgage Market Survey® (PMMS®) on January 20, 2011,
The survey results showed mixed results for both long- and short-term rates, with the 30-year rising slightly and the 15-year falling just as slightly.

• 30-year fixed-rate mortgage (FRM) averaged 4.74 percent with an average 0.8 point for the week ending January 20, 2011, up from last week when it averaged 4.71 percent. Last year at this time, the 30-year FRM averaged 4.99 percent.
  

• 15-year FRM this week averaged 4.05 percent with an average 0.8 point, down from last week when it averaged 4.08 percent. A year ago at this time, the 15-year FRM averaged 4.40 percent.
  

• 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.69 percent this week, with an average 0.7 point, down from last week when it averaged 3.72 percent. A year ago, the 5-year ARM averaged 4.27 percent.
  

• 1-year Treasury-indexed ARM averaged 3.25 percent this week with an average 0.6 point, up from last week when it averaged 3.23 percent. At this time last year, the 1-year ARM averaged 4.32 percent.

Mortgage Banker’s Association released it’s Weekly Mortgage Applications Survey for the weeks ending January 14, 2011.

• The Market Composite Index, a measure of mortgage loan application volume, increased 5.0 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 6.4 percent compared with the previous week.
  

• The Refinance Index increased 7.7 percent from the previous week. This is the third consecutive weekly increase in refinance applications and is the highest Refinance Index observed since the beginning of December. The seasonally adjusted Purchase Index decreased 1.9 percent from one week earlier. The unadjusted Purchase Index increased 3.1 percent compared with the previous week and was 16.0 percent lower than the same week one year ago.
  

• The four week moving average for the seasonally adjusted Market Index is up 1.4 percent. The four week moving average is down 0.8 percent for the seasonally adjusted Purchase Index, while this average is up 2.3 percent for the Refinance Index.

Fannie Mae
January 19, 2011 – Lender Letter LL-2011-01R: Making Home Affordable: Further Guidance on Interactions with Hardest-Hit Fund Unemployment and Reinstatement Programs. This Lender Letter (LL-2011-01R) is a reissuance of Lender Letter LL-2011-01, which was originally issued on January 18, 2011. The Lender Letter is being re-issued to clarify the modification eligibility of an unemployed borrower who becomes re-employed.

In Lender Letter LL-2010-12, Making Home Affordable: Interactions with Hardest-Hit Fund Unemployment and Reinstatement Programs, Fannie Mae provided guidance on servicer roles and responsibilities regarding the Hardest Hit Fund (HHF) programs. Fannie Mae servicers must continue to work closely with the Housing Finance Agencies (HFAs) as they assist borrowers in states with HHF programs. This Lender Letter provides further guidance on servicer responsibilities in connection with mortgage loans owned or guaranteed by Fannie Mae and the HHF Unemployment and Reinstatement Programs. It also clarifies the modification eligibility of an unemployed borrower who becomes re-employed.

https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2011/ll1101.pdf

January 18, 2011 – Announcement SVC-2011-01: Increase in Foreclosure Attorney Fees for the State of Maryland. This Announcement amends Fannie Mae requirements regarding foreclosure attorney fees for properties located in the State of Maryland. Servicing Guide, Part VIII, Section 104.04: Attorney (or Trustee) Fees, and Part VIII, Chapter 1, Exhibit 3: Attorney’s and Trustee’s Fees . Effective for mortgage loans referred to an attorney on or after February 1, 2011, and secured by properties located in the State of Maryland, Fannie Mae will increase the maximum allowable attorney fee for legal work related to non-judicial foreclosures of whole mortgage loans, participation pool mortgage loans, and MBS mortgage loans serviced under the special ervicing option. The fee will be increased from $950 to $1,300 and include the combined attorney's fees, notary's fees, and the trustee's commission (or statutory fee).

https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2011/svc1101.pdf

Freddie Mac
January 18, 2011 – Bulletin # 2011-2: Single-Family Seller/Servicer Guide Revisions. In our continuing effort to promote responsible lending, we are revising certain refinance Mortgage eligibility and credit underwriting requirements in the Single-Family Seller/Servicer Guide (“Guide”):

• Credit underwriting and Mortgage eligibility
  

• Property Assessed Clean Energy (PACE) Obligations
  

• 2011 Loan Limits
  

• Postsettlement Delivery Fees (correction)

http://www.freddiemac.com/sell/guide/bulletins/pdf/bll1102.pdf

HUD/FHA
January 21, 2011 – Mortgagee Letter 2011-08: FHA Single Family Insurance eclaims Accounts Receivable Subsystem (ARS) Remittances: Pay.gov Implementation. The purpose of this mortgagee letter is to announce a change in the remittance process for over claimed amounts of FHA single family claims. This modification of the existing process is being made in response to the Department of the Treasury’s mandate for all agencies to switch from their current lockbox services to Treasury’s Pay.gov collection service. On March 1, 2011, Pay.gov services will be functional for Single Family Claim remittances. All lenders/servicers must take appropriate action to fully convert to Pay.gov for this purpose by April 14, 2011. Effective April 14, 2011, HUD will no longer accept checks submitted to the U.S. Bank lockbox in St. Louis, Missouri, for funds related to Single Family Claim repayments. Guidance and instruction regarding the new remittance process can be found at:

http://www.hud.gov/offices/hsg/comp/premiums/arsclaims.cfm

http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/files/11-08ml.pdf

Market
January 20, 2011 – National Association of Realtors released the Existing Home Sales data for December, 2010.

• Existing-home sales rose sharply in December, when sales increased for the fifth time in the past six months, according to the National Association of REALTORS®.
  

• Existing-home sales, which are completed transactions that include single-family, townhomes, condominiums and co-ops, rose 12.3 percent to a seasonally adjusted annual rate of 5.28 million in December from an upwardly revised 4.70 million in November, but remain 2.9 percent below the 5.44 million pace in December 2009.
  

• Single-family home sales jumped 11.8 percent to a seasonally adjusted annual rate of 4.64 million in December from 4.15 million in November, but are 2.5 percent below the 4.76 million level in December 2009. Existing condominium and co-op sales surged 16.4 percent to a seasonally adjusted annual rate of 640,000 in December from 550,000 in November, but remain 5.2 percent below the 675,000-unit pace one year ago.

http://www.realtor.org/press_room/news_releases/2011/01/sharp_rise