Mortgage Market News

The only economic data point released this morning was the better-than-expected Empire Manufacturing Index rising to 9.6 in April, well above the 2.6 expected and above the 0.6 recorded in March. It was a 15-month high for the index, while the March reading was the first positive reading since last July. The report comes after the March Philadelphia Fed Index on manufacturing came in at 12.4, after the -2.8 reading in February. The manufacturing sector, which has been devastated by the strong dollar and the resulting sharp drop in commodity prices and weak exports, is showing signs of a rebound.
Americans attitudes regarding current economic conditions declined in early April as future job prospects weighed, while wage growth has been dismal. The Consumer Sentiment Index fell to 89.7 from the 91 recorded at the end of March and below the 92.0 expected. It was the fourth consecutive monthly decline. "Consumers reported a slowdown in expected wage gains, weakening inflation-adjusted income expectations, and growing concerns that slowing economic growth would reduce the pace of job creation," said Richard Curtin, the chief economist of the survey.
The Federal Housing Finance Agency (FHFA) announced a plan this week for limited reduction of mortgage principal for certain seriously delinquent, underwater borrowers who are still struggling after the housing collapse, to help them avoid foreclosure and stay in their homes. The rollout will help only about 33,000 people with mortgages held by Freddie Mac and Fannie Mae. The FHFA states that the modification will be available to owner-occupant borrowers who are 90 days or more delinquent as of March 1, 2016. In addition, mortgages must have an outstanding unpaid principal balance of $250,000 or less, and the value of the home must be at least 15% less than what is owed on the loan.
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