Countrywide sees glimmer in gloom

first_img AD Quality Auto 360p 720p 1080p Top articles1/5READ MOREStriving toward a more perfect me: Doug McIntyre L.A. housing market. Housing market overall. Countrywide – the company – moving forward.” The first two topics can be summed up in a word: bad. The jury is still out on the kind of environment the nation’s biggest mortgage company will encounter in the months ahead. Nevertheless, Greg Sayegh, divisional executive vice president for Southern California, glimpses a glimmer in the gloom. “We are seeing some encouraging signs. I think the interest rates are favorable … and we hear quite a bit about reduced valuations.” He’s right about that. Last week, the rate on a 30-year fixed fell to its lowest level in five months, according the Freddie Mac, the mortgage company. It was the third consecutive weekly drop as the benchmark rate dipped to 6.24 percent, from 6.26 percent the previous week. “Reports of weaker consumer spending in September and a decline in manufacturing activity in October kept mortgage rates at bay this week,” Frank Nothaft, Freddie Mac’s vice president and chief economist, noted in the weekly survey. Adjustable rates also fell in response to the Federal Reserve Board cutting a key interest rate by a quarter percent. Rates on 15-year fixed-rate mortgages, a popular choice for refinancing, averaged 5.90 percent last week, down from 5.91 percent. Rates on five-year adjustable- rate mortgages averaged 5.89percent last week, down from 5.98percent last week. And rates on one-year ARMs dropped to 5.50 percent from 5.57 percent. Freddie Mac also said that in the third quarter, 38 percent of mortgage applications were for refinances versus 42 percent in the second quarter. A year ago, 30-year mortgages were 6.33percent, 15-year mortgages were at 6.04 percent, five-year ARMS averaged 6.08percent and one-year ARMs were at 5.55 percent. This is probably the only bright spot for the housing market that is mired in its worst slump in more than 20 years. Thursday, Fed Chairman Ben Bernanke told Congress that an average 450,000 subprime adjustable-rate mortgages will reset next year. Countrywide has some exposure here, although that is still getting sorted out. Sayegh said the easiest loans to fund now are those that meet the Fannie Mae and Freddie Mac conforming limit of $417,000. But homes in the Southern California area, especially the coastal neighborhoods, are priced well above the conforming limit. “We do know that the valuations have certainly not dropped to a level that has reached the conforming loan amount,” Sayegh said. He also noted that Countrywide still has no-down payment loan programs and others with 5 percent and 10percent down payment requirements. The building inventory, surge in foreclosures and weak sales have pushed down prices in some areas. “Homebuyers today can afford a heck of a lot more house today than they could in the last 12 months,” he said. He might be right about that. But probably not in this part of Southern California. [email protected] local news?Sign up for the Localist and stay informed Something went wrong. Please try again.subscribeCongratulations! You’re all set! I got invited to Countrywide Financial Corp.’s spin room last week. The invite came from a P.R. firm in San Francisco, not the company’s in-house operation. Some of the company executives were participating in an open house, and these days talking with a Countrywide executive is a rare experience because not many of my calls get returned. An e-mail outlining the talking points for the interview followed the invite. “Again, the topics of discussion will be: last_img

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