Today’s News Synopsis:

The House of Representatives passes two FHA reforms designed to assist certain borrowers. The National Association of Home Builders reports that builder confidence increased for the third consecutive month. The Mortgage Banker’s Association’s weekly survey shows that the volume of mortgage applications decreased by 8.6 percent from the previous week. John Isakson is pushing an extension of the $8,000 tax credit through the senate. Doug Duncan, of Fannie Mae, warns that if the Federal Reserve stops purchasing agency mortgage-backed securities then mortgage rates could jump by 30 basis points. The UCLA forecast predicts the nation will emerge from the recession this quarter although California will most likely lag in the recovery. The federal reserve is now looking into the vulnerability of small banks with commercial exposure as losses mount.

In the News:

DSNews – House Passes Two FHA Reform Measures in Voice Votes (9-16-09)

“The House of Representatives passed two housing measures this week designed to assist certain borrowers of Federal Housing Administration loans, earning kudos from some of the nation’s largest trade groups in the mortgage and housing industries.”

NAHB – “Builder Confidence Edges Up Again In September” (9-16-09)

“Builder confidence in the market for newly built, single-family homes edged higher for a third consecutive month in September, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today. The HMI rose one point to 19 this month, its highest level since May of 2008.”

Mortgage Bankers Association – “Mortgage Applications Decrease in Latest MBA Weekly Survey” (9-16-09)

“The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending September 11, 2009. This week’s results include an adjustment to account for the Labor Day holiday. The Market Composite Index, a measure of mortgage loan application volume, decreased 8.6 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 18.3 percent compared with the previous week and decreased 18.7 percent compared with the same week one year earlier.”

San Francisco Chronicle – “UCLA forecast: Recession ending in California” (9-16-09)

“California and the rest of the nation will emerge from the recession this quarter, although the state will likely lag in recovery because of high unemployment and tepid consumer spending, according to an economic forecast released Wednesday. The quarterly Anderson Forecast from the University of California, Los Angeles predicts the state’s jobless rate will jump to 12.2 percent later this year — up from 11.9 percent in July — and continue in double digits into 2011.”

Bloomberg – “Fed Examining Mid-Sized Banks’ Losses to Commercial Real Estate” (9-16-09)

“Federal Reserve supervisors are examining the vulnerability of medium-sized lenders to falling commercial real-estate values to gauge the size of potential losses across the banking system. The Fed is focusing on banks smaller than the 19 largest lenders examined in detail in May, a central bank official said on condition of anonymity.”

Bloomberg – “Real Estate Rebound Will Reap ‘04 Prices, Simon Says” (9-16-09)

“Prices of U.S. shopping malls may return to 2003 or 2004 levels as consumer spending and the commercial real estate market recover, Simon Property Group Inc. Chief Executive Officer David E. Simon said. That would represent a decline of as much as 23 percent. Simon, the biggest U.S. shopping mall owner, has $3.8 billion on its balance sheet and is looking at possible acquisitions, Simon said in an interview in New York.”

Bloomberg – “Homebuyer Tax-Credit Extension Gains Support on Isakson Push” (9-16-09)

“An extension of the $8,000 U.S. homebuyer tax credit is gaining support in the Senate as bill sponsor John Isakson said he is rallying lawmakers to continue a program that helped boost home sales by more than 1 million.”

Orange County Register – “Expert: high-end housing market is ‘awakening’” (9-16-09)

“Third quarter is now benefiting from six months of inventory reduction and stabilization of the entry market. Buyers have been communicating they feel stability and don’t want to miss out on the combination of low interest rates and low home prices. There is a consistent activity level now up to $1 million sale price as the process continues. Even now the higher end market is awakening yet still stabilizing. The overhang is the talk of an impending overload of REOs forthcoming. There will be a release as the moratorium ends and the fourth quarter will see the affect. However, the pent up demand based on the sheer number of pre-qualifications and current multiple offers on existing properties will go a long ways to eliminate further decay of sales prices created from this affect.”

Orange County Register – “Mortgage rates could jump in January” (9-16-09)

“If the Federal Reserve Board suddenly stops purchasing agency mortgage-backed securities on Jan. 1, mortgage rates could jump by 30 basis points to 50 bps, according to Fannie Mae chief economist Doug Duncan. Conventional mortgages with principal balance up to $417,000 would likely rise by 30 bp and rates on higher balance loans of $650,000 to $729,750 could go up by 50 bps, he told MortgageWire.”

Orange County Register – “Trulia fixes price cut mix-up” (9-16-09)

“Huntington Beach ZIP 92648 ranks 3rd in the county, with 39% of homes on the market showing discounts. “

Looking Back:

One year ago, Washington Mutual was telling the media that the recent downgrade by Standard and Poor’s credit rating of the company to junk would have a “material” effect on the company.  The National Association of Home Builders announced a rise in builder confidence for the first time in seven months.