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FANNIE MAE EXPECTS RECORD REFINANCINGS TO CONTINUE THIS SPRING; INTERMEDIATE-TERM MORTGAGES TO REMAIN POPULAR

 WASHINGTON, March 31 /PRNewswire/ -- Refinancings are likely to continue at record levels this spring and near-record levels for the year in response to mortgage rates at 20-year lows, according to the Federal National Mortgage Association (Fannie Mae) (NYSE: FNM), the nation's largest investor in home mortgages. Intermediate-term mortgages also will continue to be popular, especially among homeowners refinancing their loans, the company said today.
 Intermediate-term mortgages such as the 15-year loan accounted for about one-third of Fannie Mae's mortgage business during the heavier refinancing months of April-May and November-December of 1992. Refinancings are expected to account for about 35 percent of new mortgages this year, compared with roughly 45 percent in 1992, said Donna Callejon, Fannie Mae senior vice president for single- family marketing.
 Reviewing newly available information regarding the company's business through the first two months of the year, Callejon noted that interest rates on 30-year fixed-rate mortgages fell to 7.50 percent in February from 7.84 percent in January. Home loan rates at this level led to 30-year, 20-year, and 15-year fixed-rate mortgages and 7-year balloons accounting for 93.3 percent of Fannie Mae's current mortgage purchases in February, unchanged from January. Adjustable-rate mortgage (ARM) business essentially was unchanged in February, at 6.5 percent, compared to 6.4 percent in January.
 Callejon said: "These mortgages rates, at the lowest level in a generation, have helped create increasing consumer demand, both to refinance existing loans and to buy homes. We certainly expect to see persistent interest in fixed-rate loans over the summer, even in some mortgages with shorter terms, such as 10-year loans." Regionally, through February of this year, consumers in the 10 western states that are part of Fannie Mae's Pasadena, Calif.-based western region were more than twice as likely to choose ARMs as borrowers in states that comprise the company's midwest region, based in Chicago. Western consumers chose ARMs 9.6 percent of the time through February, while midwesterners selected ARMs in 4.3 percent of the mortgages bought or securitized by Fannie Mae from that region.
 According to Callejon: "Consumers in the West have tended over time to choose ARMs more frequently than in other regions, in part because of housing costs and the presence of the country's largest mortgage-lending thrifts. Still, even in the West, fixed-rate mortgages accounted for nearly 90 percent of our business."
 The Fannie Mae information also showed that borrowers in the western region were those most likely to select 30-year fixed-rate mortgages so far through February, at 56.9 percent of Fannie Mae's business there. Consumers in the midwest were those most likely to select 15-year fixed-rate mortgage loans, at 36.2 percent of Fannie Mae's business in that region and 7-year balloons, at 7.5 percent of the company's business there. Midwesterners are also the least likely to choose ARMs, which accounted for only 4.3 percent of Fannie Mae's business in that region.
 Fannie Mae, the USA's Housing Partner, is a congressionally chartered, shareholder-owned company, and is the nation's largest investor in home mortgages.
 Mortgage Rates
 Interest rates continued to fall in February as Fannie Mae's 60- day net required yield declined over 30 basis points from the average in January of 7.84 percent to the average in February of 7.50 percent. The average required net yield on 7-year balloons dropped by over 40 basis points to 6.52 percent in February.
 Mortgage Interest Rates
 30-yr 15-yr 7-yr 1-yr
 FRM FRM FRM FRM
 January 92 8.32 7.88 7.57 6.07
 February 8.60 8.18 7.86 6.40
 March 8.83 8.45 8.28 6.86
 April 8.68 8.26 8.17 6.73
 May 8.55 8.10 8.01 6.71
 June 8.39 7.89 7.81 6.62
 July 7.95 7.40 7.15 6.02
 August 7.81 7.27 6.90 5.90
 September 7.72 7.12 6.67 5.62
 October 7.97 7.41 6.95 5.91
 November 8.24 7.74 7.37 6.38
 December 8.07 7.61 7.28 6.47
 January 93 7.84 7.50 7.32 6.94
 February 6.93 6.52 6.26 6.09
 Note: Rates Based on Fannie Mae 60-Day Required Net Yield
 Products
 During the first two months of 1993 Fannie Mae's product distribution remained close to the 1992 average. However, given the recent decline in interest rates, we expect to see a change in the distribution similar to that of other refinance periods with an increase in the share of shorter-term fixed-rate products.
 Product Distribution of Fannie Mae Business(A)
 1992 & January - February 1993
 30-yr 20-yr 15-yr 7-yr ARMs Other
 FRM FRM FRM FRMs(B)
 Jan 91 65.0pct. 0.7pct. 11.5pct. 12.1pct. 10.0 pct. 0.8pct.
 Feb 66.7 0.6 12.2 13.7 6.0 0.8
 Mar 65.9 0.7 15.6 12.8 4.1 0.9
 Apr 65.3 0.8 18.2 11.0 3.8 0.9
 May 64.8 1.0 20.3 10.2 3.1 0.7
 Jun 64.2 1.1 21.3 9.2 3.5 0.7
 Jul 66.2 1.1 18.3 9.1 4.5 0.9
 Aug 65.2 1.1 17.4 10.0 5.4 0.9
 Sep 63.7 1.2 16.8 10.7 6.7 0.9
 Oct 65.8 1.2 15.4 9.6 7.1 0.8
 Nov 64.9 1.6 19.4 8.1 5.3 0.8
 Dec 62.0 2.0 24.1 7.4 3.9 0.7
 64.8 1.2 18.3 9.9 5.0 0.8
 Jan 92 59.2 2.4 26.9 6.5 4.5 0.4
 Feb 56.2 2.7 29.4 7.3 4.1 0.3
 Mar 52.8 3.0 33.1 7.0 3.9 0.3
 Apr 48.6 3.0 35.4 7.7 5.2 0.2
 May 46.3 2.8 35.1 8.0 7.5 0.2
 Jun 50.7 2.4 30.8 6.7 9.2 0.2
 Jul 55.8 2.1 26.9 6.1 8.7 0.3
 Aug 59.9 1.8 24.2 6.3 7.5 0.2
 Sep 60.6 1.6 25.0 6.4 6.1 0.2
 Oct 54.8 2.0 31.3 6.4 5.3 0.2
 Nov 51.2 2.1 35.3 6.3 4.9 0.2
 Dec 50.4 2.1 36.4 6.1 4.8 0.2
 1992ytd 52.7 2.4 31.9 6.7 6.1 0.2
 Jan 93 54.2 2.3 30.3 6.5 6.4 0.2
 Feb p 53.1 1.8 31.7 6.7 6.5 0.2
 Note: Top two states determined by highest total Fannie Mae business volumes in 1992.
 (A) Based on current production (i.e. does not include seasoned product).
 (B) Includes Balloons and Two-Steps
 (p) preliminary
 Regional
 Product Distribution of Fannie Mae Business(A)
 1992 & January-February 1993 (p)
 (in percent)
 30-yr 20-yr 15-yr 7-yr
 FRM FRM FRM FRMs(B) ARMs Other
 Southeast
 1992 52.8 1.8 32.4 7.1 4.6 1.3
 1993 Ytd 54.8 1.6 29.9 6.9 5.7 1.1
 Midwest
 1992 45.6 4.5 38.1 6.4 3.9 1.5
 1993 Ytd 47.0 3.5 36.2 7.5 4.3 1.5
 Southwest
 1992 52.5 2.1 34.7 3.4 6.2 1.1
 1993 Ytd 53.5 1.6 33.6 3.8 6.7 0.8
 West
 1992 55.6 1.3 25.7 5.8 9.3 2.3
 1993 Ytd 56.9 0.8 25.2 6.4 9.6 1.1
 Northeast
 1992 55.3 2.7 33.1 2.6 4.7 1.6
 1993 Ytd 53.4 2.6 34.3 3.2 5.1 1.4
 Top 2 Regional States
 Product Distribution of Fannie Mae Business(A)
 January-February 1993 (p)
 (in percent)
 30-yr 20-yr 15-yr 7-yr
 FRM FRM FRM FRMs(B) ARMs Other
 Southeast
 FL 60.3 1.0 27.5 4.1 6.2 0.9
 MD 50.0 1.9 28.4 9.7 8.4 1.6
 Midwest
 IL 50.0 2.3 32.0 10.9 2.8 2.0
 MI 41.9 3.7 42.8 6.7 3.8 1.1
 Southwest
 TX 54.1 1.3 33.3 4.0 6.7 0.6
 CO 55.4 1.5 30.8 4.7 7.0 0.6
 West
 CA 55.8 0.7 25.1 7.4 9.9 1.1
 WA 59.6 1.1 26.0 5.7 6.8 0.8
 Northeast
 NY 55.5 2.4 35.7 1.2 3.8 1.4
 MA 53.7 2.8 34.3 2.2 4.6 2.4
 Note: Top two states determined by highest total Fannie Mae business volumes in 1992.
 (A) Based on current production (i.e. does not include seasoned product).
 (B) Includes Balloons and Two-Steps
 (p) preliminary
 -0- 3/31/93
 /CONTACT: Tom Marder of Fannie Mae, 202-752-7608/
 (FNM)


CO: Fannie Mae ST: District of Columbia IN: FIN SU:

KD -- DC015 -- 1564 03/31/93 14:10 EST
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