Friday, December 12, 2008

Redesign Complete: Behind The Mortgage 2.0 Now Live

Yes, we are now live.  Check it out:

We're still tying up some loose ends on the redesign, and for some reason the RSS feed is not rendering properly from the new platform, so we are sending up this flare for those of you who follow Behind The Mortgage Exclusively via an RSS Reader. 

Please update your RSS feeds, which should be working properly very soon:



And for a (hopefully) short time, check out the latest content directly at

12/12/08 at 08:27 AM Permalink | Comments (0) | TrackBack (0)

Wednesday, December 10, 2008

Just Numbers: Twin Cities Real Estate Market, Nov 2008

Nov 2008 percentage of list price 
click image to biggify

Courtesy of the just released  data stream from the Minneapolis Area Association of Realtors,  we know that in the month of November:

  • The $175,000 Median sales price was down 19% from a year ago. The lowest such figure since 2001
  • Affordability is the highest since 1990
  • There were 4,985 new listings. Down 18.9% from last year
  • There were 2,577 closed sales. Down 1.6%
  • $571,600,000.00 worth of real estate changed hands. Down 19%.
  • The average sales price was $221,82617% lower than last year.
  • There were 27,734 homes for sale.
  • Sellers received 90.1% of asking price.  Down 2.5%.
  • There are 12 homes for sale for every pending sale.
  • There is an 8.5 month supply of homes for sale.  5 months is considered normal.

And if you follow our weekly commentary, or our Ratewatch (Twitter) Feed, you know that 30 year fixed rate mortgages are mostly under 5.5%.

Are we at a bottom?  Hard to say.  We don't know because nobody does.  In some areas, maybe.  In others, probably not.

But we do know this: Very low mortgage rates and low(er) home prices will not exist in tandem forever, and we'll guarantee you that when it is obvious that the market has turned and prices are headed up, mortgage rates will be much higher.

More great statitude from MAAR here.

12/10/08 at 11:05 AM Permalink | Comments (0) | TrackBack (0)
Filed Under: Market Stats, Minneapolis, Twin Cities

Monday, December 08, 2008

Monday Market Commentary: Mortgage Rates Still Teasing 2008 Lows

Last Week
Rates for thirty year fixed mortgages continue to hover in the sub 5.5% range, though we are seeing a good bit of volatility within a narrow band. Rates generally ping between 5.125% and 5.5% on a daily (if not several times daily) basis.

If you have not yet noticed, these are some of the best rates we've seen all year, and really, since 2003.

Last week was also noteworthy in that the Media was awash in stories touting a proposal from the homebuilding and real estate lobbyists advocating for 4.5% mortgage rates in addition to other stimulus aimed at supporting the real estate market.  See our full post on the topic here, but thus far any further action or direct intervention in real estate and interest rate markets does not appear imminent.

This Week
For the first three days of the week, the economic calendar offers little data to the markets.  Without hard data to digest, the interest rate markets will be taking cues from other sources:  Stocks.  Not one but three scheduled public comments/speeches by Fed officials.  The ongoing negotiations over the fate of Detroit. Etc. Etc.

Starting on Thursday, a string of potentially high impact reports are scheduled for release.

Weekly Jobless claims and trade balance data (both only moderately important) print on Thursday AM.

Friday, we get a read on inflation (Producer Price Index. 8.30A), the retail sector (RetailSales, 8.30A), and consumer confidence (UofM Consumer Sentiment Index, 8.30A.)

We expect most of the above data to confirm an economy in retreat, and while that sort of thing is normally helpful to mortgage rates, it may take another major economic event, or the announcement of another initiative aimed at lowering rates, to move mortgage rates lower.
This Week's Economic Calendar [Barron's]

Watching Mortgage Rates? Get multiple daily updates on mortgage rates and the events that move them, via the Web, IM, or your phone by subscribing to our Twitter feed right here.

12/08/08 at 09:53 AM Permalink | Comments (0)
Filed Under: Interest Rates

Thursday, December 04, 2008

4.5%: Where Pipe Dreams and Bad Ideas Meet?

So media outlets are awash in stories about a "plan" being "considered" by Treasury to somehow - there are few details - force mortgage rates down to 4.5%.

As described, this sounds an awful lot like what the Federal Reserve has already pledged to do - buy mortgage backed securities, thereby forcing mortgage rates lower - except this time, it's Treasury doing the buying.

the proposal calls for Treasury to buy securities backed by 30-year fixed-rate mortgages from Fannie Mae and Freddie Mac. Details on the plan remain sketchy, but an announcement could come as early as next week, the source said.

Just to be clear, this is not a "plan" that the Treasury hatched, but a poposal being pushed by the Real Estate and Home Building lobbyists.  

It remains to be seen whether there is any appetite for this at the Treasury, and the mortgage backed securities market (which is what actually determines mortgage rates) has barely budged.  This tells us, at the very least, that those with actual dollars at stake aren't convinced the Treasury is poised to act.

As we've mentioned many times before, low interest rates in and of themselves are not going to re-inflate home prices, re-ignite demand for another 40 acres of tract homes in every suburb, or put underwater homeowners on dry land.

There is such a thing as too much intervention in these markets, and we'd prefer to see the laundry list of initiatives already enacted given time to work (for that matter, we don't even know whether whats been done so far is effective) before we line up for every half baked "save the [insert major industry], save the world" plan put forth by lobbyists.

12/04/08 at 11:34 AM Permalink | Comments (2) | TrackBack (0)
Filed Under: Interest Rates

Tuesday, December 02, 2008

Low Volume Alert: Redesign, Rates and More

Posting will be light this week as we make the final tweaks on the long awaited redesign of Behind The Mortgage.  Here is a sneak preview, still Beta (natch).  Feedback is encouraged.

Also, 30 year fixed mortgage rates are in the low to mid 5% range as I write this.  Thanks to all of the readers who've recently inquired about becoming clients.  Though inspired by ultra low mortgage rates, it is heartening to see our blogging efforts bear such fruit.

12/02/08 at 04:25 PM Permalink | Comments (3) | TrackBack (0)
Filed Under: Interest Rates, Random

Tuesday, November 25, 2008

Me Media: With Fox 9 Discussing Deliciously Low Mortgage Rates, and The Fed

FOX_9_Logo Just wrapped a piece with Fox 9's Tim Blotz on Today's move by the Fed, Falling Mortgage rates, and what it all means.

Executive Summary: We are testing the all time 2003 lows. Low mortgage rates are fleeting.  Home prices are at 5 year lows. Don't get caught napping if you need to buy or refinance a home.

On at 5PM: Fox 9.

11/25/08 at 01:34 PM Permalink | Comments (1) | TrackBack (0)
Filed Under: Interest Rates, Press

The Fed Acts to Push Mortgage Rates Lower

In it's first action to directly influence mortgage rates and the housing market, the Federal Reserve has announced that they "will initiate a program to purchase the direct obligations of housing-related government-sponsored enterprises (GSEs)--Fannie Mae, Freddie Mac, and the Federal Home Loan Banks--and mortgage-backed securities (MBS) backed by Fannie Mae, Freddie Mac, and Ginnie Mae."

There's more:

This action is being taken to reduce the cost and increase the availability of credit for the purchase of houses, which in turn should support housing markets and foster improved conditions in financial markets more generally.

This action is aimed directly at, and intended to narrow, the interest rate "spreads" between Mortgage related securities and treasury securities, which have been leaking wider ever since the Fed stopped short of affirming a "full faith and credit guarantee" for Fannie and Freddie's obligations.

If you read our post last week on why mortgage rates are higher than they should be, you'll have some great context as to why the Fed had to do this.

Prices of mortgage backed securities are sharply higher on this news.  Expect mortgage rates to see .25 in improvement immediately, (putting them in the sub 5.5% range for 30 year fixed paper) with further gains possible as the market sorts out the impact of this action.

11/25/08 at 09:35 AM Permalink | Comments (0) | TrackBack (0)
Filed Under: Breaking News, Fannie Mae, Freddie Mac, GSE's, Interest Rates, The Fed

Monday, November 24, 2008

More on the MN Foreclosure Mediation Plan

You know from reading our post last week on the Attorney General's Mandatory Mediation plan for fixing the foreclosure crisis is basically a foreclosure moratorium under separate cover. You also know that it is based, in part, on a plan used to halt Farm foreclosures in the 1980's. 

So, in the interest of identifying possible unintended consequences of such an action, we asked a few MN banking veterans (grizzled enough to remember the original program,) what they thought.

The following comment, from a 30+ year veteran of banking who shall remain nameless, was too good not to share:

[Attorney General Swanson] should do more research on the farm bill from the 80's.  What happened when they passed the farm foreclosure act was that banks quit lending on farms completely until they rescinded it.  It's where we got the 10 acre minimum.  Anything over 10 acres had a moratorium on foreclosure.

...we have to quit calling renters homeowners.  Until that happens this won't be fixed.

The last, absolute last, thing that we need is for lending to clamp down further based on the vagaries of "helpful" programs launched by aspirational politicians.  This is sounding more and more like a bad idea.

11/24/08 at 01:59 PM Permalink | Comments (1) | TrackBack (0)
Filed Under: Foreclosures, Housing Market Politics, Twin Cities

Monday Market Commentary: Mortgage Rates Improve Slightly Last Week

Last Week:
Despite another week of mostly bond market friendly news, mortgage rates only managed very slight improvement, finishing the week unchanged to .125% lower depending on the particular blend of loan type, loan size, and borrower quality.

In addition to other well publicized economic malaise, declining demand has driven energy and other prices lower, as evidenced by both the producer and consumer price indices published last week.  In effect we have replaced market fears over inflation with those of deflation.  A prolonged period of deflation would bode well for lower mortgage rates.

This Week:
Thanksgiving festivities shorten the trading week.  During short weeks, market participants scale down staffing and take a risk averse approach.  Accordingly, trading volume slows to a trickle.  This, as often as not, is a recipe for volatility - we just don't know which direction.

The economic calendar offers a handful of high impact reports this week.  GDP (Tue), Personal Consumption Expenditures (Wed), and Durable Goods Orders(Wed) are the most likely to move the bond markets and mortgage rates.  The ongoing tale of real estate market woe will print another chapter as existing and new home sales reports hit the street Monday and Wednesday respectively.

Barring a huge stock market rally, more signs of a weak and/or deflationary environment could help mortgage rates improve. We re-iterate our opening warning that things may be volatile in the holiday shortened week.
This Week's Economic Calendar [Barron's]

Watching Mortgage Rates? Get multiple daily updates on mortgage rates and the events that move them, via the Web, IM, or your phone by subscribing to our Twitter feed right here.

11/24/08 at 10:57 AM Permalink | Comments (0) | TrackBack (0)

Friday, November 21, 2008

Curb Appeal Enthusiasmâ„¢: Weekend Open House Picks

Curb Appeal Enthusiasm is a weekly feature where we scour the open house listings for the upcoming weekend and pick out a few based on our own subjective (and some say suspect) tastes.

Comments and reports from the field are encouraged.

4809 Dupont4809 Dupont Avenue S. | Mpls
$649.9K | Sun 1-3 | Beth Sutherland
Majestic two-story fronts the street incredibly well. Great period details inside.
4917 Penn 4917 Penn Avenue S. | Mpls
$579.9K | Sun 2-5 | Craig/Kim Counters
Every detail right on, inside and out. Block and change from Lake Harriet.
4916 oakland4916 Oakland Avenue S. | Mpls
$439.9K | Sun 2.30-4.30 | Michael Wille
A solid, quietly handsome Nokomis classic.
4022 Wayzata blvd4022 Wayzata Blvd | Golden Valley
$369.9K | Sun 1-3 | Carla Anderson
Low-slung Cape Cod's like this are an under-appreciated form. Love it.
5001 wentworth5001 Wentworth Ave. S. | Mpls
$293k | Sun 1-3.30 | Kim Henderson
Has a nice look, but only one picture leaves an awful lot to the imagination.
3453 snelling  3453 Snelling Avenue | Mpls
$189K | Sat/Sun 1-3 | Bill Foster
Classic midwestern lines with an awesome '40's throwback vibe working inside.
Got an open you think should be included? Have a comment on one of the picks? Drop us a line at alex [a] or hit the comments link at the bottom of this post.

11/21/08 at 03:45 PM Permalink | Comments (0) | TrackBack (0)
Filed Under: Curb Appeal Enthusiasm

MN Attorney General Proposes Foreclosure Relief, Fannie/Freddie to Suspend Foreclosures

MN Attorney general Lori Swanson proposed mandatory mediation for foreclosures at a press conference yesterday.  Strib reports:

The Homeowner Lender Mediation Act, patterned after a program from the mid-1980s that helped about 14,000 Minnesota farmers stay on their land, would put a foreclosure on hold for three months if a borrower asks to renegotiate mortgage terms to an affordable level.

So this is essentially a foreclosure moratorium under separate cover.  To which we say: Fine. Great. To the extent that it helps lenders and borrowers make rational decisions, and gets servicers that aren't negotiating in good faith with borrowers to the bargaining table, it's a good thing.

We do maintain a healthy skepticism about the extent of relief a moratorium of any kind will bring.  There are simply many, many foreclosures that will happen, no matter what. It is an unfortunate fact of a declining real estate market and faltering economy.

Also, as we shared with Chris Snowbeck at the Pioneer Press on this subject, if we are going to enlist the power of the state to professionally renegotiate mortgage terms on behalf of borrowers, there's real concern in many quarters that we are rewarding many that, perhaps, took ill-considered risks, and punishing those who stayed within their means. A quick scan of the angry comments on this article at the Strib is telling.

That said, with Fannie and Freddie announcing their own foreclosure moratorium, we're mostly beyond the point where flip arguments about "moral hazard" and "unintended consequences" are even relevant to the current conversation.  The banks, the servicers, and the borrowers need time.  Time to get control of the process and allow other relief efforts to take effect.

11/21/08 at 06:13 AM Permalink | Comments (0) | TrackBack (0)
Filed Under: Consumer Protection, Credit Crunch, Fannie Mae, Foreclosures, Freddie Mac

Wednesday, November 19, 2008

Wednesday Linklube: Twin Cities Builders Pull Back, Radioactive Granite, Citi Death Watch

Charles w schneider house 
The Charles W. Schneider house is on the market for $219,000. Project anyone? Image via St. Paul Pioneer Press.


Department of Duh, Volume II [The Skinny]
Jeff Allen reports on the pullback in Twin Cities New Construction: "2008 new construction permit activity is down 69.4 percent from the peak year of 2004. Year to date, only 4,754 unit permits have been issued in the region. In 2004, there were 15,561 issued by this point in the year."

Radon In Granite Countertops? [WCCO]
Turns out, your granite countertops can not only withstand a 500 degree La Creuset, but might also cook your lungs into a cancer souffle: "The stuff, the hot [granite] that I have, is about 10 to 50 times hotter than the stuff I measured in '88." And if you think that's bad, test your basement.

Utilities See More Payments via Credit Cards [PiPress]
Yet another sign that the consumer is being squeezed as the economy slows.  Good news is, energy prices declined 8.6% at the consumer level in October, and experts predict further declines in prices.

Zenith Condos Almost Ready [Star-Tribune]
The 65 Unit Zenith Condo's (across from Guthrie in the Mill District) is nearing completion.  Have you noticed? Downtown Minneapolis is quietly one of the healthiest sectors going in real estate right now.  Why? Affluent, first time buyers want to live there.

Who Will Save this Old House [PiPress]
Great story about a truly cool "Shingle Style 1890 home with a gambrel roof and polygonal tower." Unfortunately, many of these period classics get the same "great to visit but I don't want to be the one to restore it and live there" reception. Must see slideshow of the interior.

Odd Fit But Welcome Neighbor in Prior Lake [Strib]
VFW Commander turned restaurateur Lyaman McPherson is about to answer the question: Will a new England Style "boxcar diner" work in Prior Lake?

Elsewhere & Otherwise

Citi: From Bad to Worse [Portfolio]
Those of you who had Citi in your financial institution dead pool may be cashing in soon. At $7 per share, it is now worth less than US Bank, and has a market cap more than 70 million dollars less than book value.

CMBS: This is No Cave [Accrued Interest]
Don't look now, but the credit crisis is trying to make a comeback in the commercial mortgage backed securities market.

11/19/08 at 04:00 PM Permalink | Comments (0) | TrackBack (0)


About the Author

Alex J. Stenback is mortgage banker (and real estate obsessive) tracking the world of real estate and mortgage banking inside and out of the Twin Cities of Minneapolis & Saint Paul. [more...]

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