New Petition Urges Mortgage Re-HARPing

Well, file this one under “was bound to happen,” or, “was only a matter of time.”

A clever guy by the name of Marcus J. from Clementon, New Jersey has created an online petition to eliminate the securitization cut-off date for HARP eligibility.

At the moment, this ever-important cut-off date is May 31, 2009, meaning if your mortgage was sold to Fannie Mae or Freddie Mac after that date, you’re not eligible for a HARP refinance.

Unfortunately, many homeowners already refinanced their mortgages under HARP, perhaps when it wasn’t as attractive as it is now, seeing that there is a much more flexible HARP 2 nowadays.

At the same time, mortgage rates have marched lower and lower since HARP was originally unveiled, again, likely frustrating homeowners who refinanced early on.

There are also the many people who purchased homes after that cut-off date, who are now underwater and likely seeking a HARP refinance.

Eliminate HARP Cut-Off Date?

The petition essentially calls for the elimination of the cut-off date, which Marcus J. refers to as “arbitrary,” along with the one-time HARP limit. This would allow for so-called “reHARPing.”

He argues that removing these roadblocks would permit millions of Americans to refinance their mortgages to lower rates, thus saving thousands on their monthly mortgage payments over time.

Note: You can reHARP a Fannie Mae loan that was refinanced under HARP from March to May 2009.

Interestingly, he isn’t the first to propose such an idea. Back in May 2012, U.S. Senators Robert Menendez (D-NJ) and Barbara Boxer (D-CA) proposed extending the cut-off date an additional year to May 31, 2010.

That seemed to fall on deaf ears, so it’s unlikely a complete removal of this key date will be approved.

As much as it sounds like a good idea (maybe), it’s a bit of a slippery slope. If you remove the date, borrowers could just refinance over and over until they saw fit, assuming rates continued to fall.

And this isn’t a traditional refinance program – it’s essentially a loss mitigation tool for distressed borrowers, or those at risk of walking away.

A line has to be drawn somewhere, otherwise it would become something of a free-for-all.

Does the cut-off date deserve a second look? Absolutely; the FHFA should dissect the data to determine if extending it will provide a net benefit.

But removing the date entirely might be a bit extreme.

When it comes down to it, timing can be your best friend or your worst enemy, and we can’t rely on the government to extend the program every time rates drop, especially when there’s not even a refinance program for non-agency mortgages.

Ironically enough, you can blame the government for creating this situation, seeing that they simultaneously worked to push mortgage rates lower and lower long after HARP was released.

Petition Needs 25,000 Signatures


It will certainly be interesting to see if the petition receives the necessary 25,000 votes to at least “get a look.”

It’s currently available for online signature over at, which is the official website to have your voice heard.

At the moment, it only has 26 signatures, so an additional 24,974 are needed by February 8th, 2013 in order for an official review and response from the Obama administration.

Additionally, it needs at least 150 signatures to be publicly searchable on the website, meaning it’s got zero visibility right now.

If you’re interested, you can sign here.

(photo: Feral78)

About the Author: Colin Robertson

Before creating this blog, Colin worked as an account executive for a wholesale mortgage lender in Los Angeles. He has been writing passionately about mortgages for 15 years.


Remax-affiliated Motto Mortgage doubles originations in 2020

Motto Mortgage, Remax’s mortgage brokerage franchising business, reported explosive growth in the past year, with its operators doubling their combined origination volume on a year-over-year basis.

The 141 operating offices produced $2.47 billion in 2020; in 2019, the 111 locations the company had at the time did $1.1 billion.

“Closing nearly $2.5 billion in loan volume as a network is a remarkable feat in any year, but especially in a challenging one like 2020 – only our fourth full year of operations,” Ward Morrison, the president of Motto Franchising LLP, said in a press release. “2020 was a record-breaking year for Motto franchise sales, and the fourth quarter was our best quarter yet in company history.”

Remax rolled out Motto as a turnkey mortgage brokerage business in October 2016. Motto only collects franchise fees on a per-office basis from its operators. Each franchisee is responsible for brokering its own loans to the wholesaler.

During 2020, Motto sold 71 of its franchises. That’s both an annual record and an increase of more than 35% from 2019.

Even though Remax owns the franchisor, Motto branches also have been sold to real estate brokers affiliated with other companies as well as independent operators.

Motto is working on a new concept called the “Branchise,” the Remax 10-K filing said.

These offices, which are being offered to existing Motto franchisees, are similar to having a satellite office at a traditional mortgage lender. It allows them to expand their physical and/or virtual presence for a reduced contractual fee.

“The aim of these new models is to give franchisees the flexibility to expand their business to places where it would not have been feasible to support a full additional franchise while keeping offices compliant with state branch regulations,” the Remax 10-K said.

As of Jan. 31, there were two open Branchises, the company added.

Last August, Remax purchased Wemlo, which provides processing services to mortgage brokers. The company paid $6.1 million in cash and $3.3 million in common stock, plus an additional $6.7 million of equity-based compensation, the 10-K filing said.


Mortgage and refinance rates today, Feb. 27, and rate forecast for next week

Today’s mortgage and refinance rates 

Average mortgage rates fell a little or held steady yesterday (Friday). Unfortunately, it was the only glimmer of light in a gloomy week that saw rises — including a sharp one — on every other day.

Right now, there seems to be no end in sight to these rate increases. Of course, we’re almost bound to see an occasional fall, because that’s how markets work. But sustained downward movement appears unlikely, and I’m expecting that mortgage rates will keep rising next week. Read on for more details.

Find and lock a low rate (Feb 28th, 2021)

Program Mortgage Rate APR* Change
Conventional 30 year fixed 3.062% 3.065% -0.13%
Conventional 15 year fixed 2.587% 2.596% -0.11%
Conventional 20 year fixed 2.875% 2.882% -0.13%
Conventional 10 year fixed 2.474% 2.493% -0.13%
30 year fixed FHA 2.87% 3.549% -0.1%
15 year fixed FHA 2.539% 3.121% -0.16%
5 year ARM FHA 2.5% 3.213% -0.03%
30 year fixed VA 2.383% 2.555% -0.36%
15 year fixed VA 2.25% 2.571% Unchanged
5 year ARM VA 2.5% 2.392% Unchanged
Rates are provided by our partner network, and may not reflect the market. Your rate might be different. Click here for a personalized rate quote. See our rate assumptions here.

Find and lock a low rate (Feb 28th, 2021)

COVID-19 mortgage updates: Mortgage lenders are changing rates and rules due to COVID-19. To see the latest on how coronavirus could impact your home loan, click here.

Should you lock a mortgage rate today?

If I were still floating, I’d lock my rate right away. Of course, there’s always a possibility of rates falling back. But that currently looks a slim one. And the chances of continuing rises seem much stronger. Read on to discover why.

So my recommendations remain:

  • LOCK if closing in 7 days
  • LOCK if closing in 15 days
  • LOCK if closing in 30 days
  • LOCK if closing in 45 days
  • LOCK if closing in 60 days

However, with so much uncertainty at the moment, your instincts could easily turn out to be as good as mine — or better. So be guided by your gut and your personal tolerance for risk.

Compare top lenders

What’s moving current mortgage rates

The forces that are driving rates higher are the same ones we reported last week. The vaccination program and dwindling COVID-19 infection rates are creating optimism that an economic recovery will be upon us sooner than many expected. Indeed, we’re already seeing some better economic data. And a better economy goes hand-in-hand with higher rates.

But what we last week listed as a secondary factor may have now turned into the primary one. And that’s the fear of future inflation.

Unfortunately, such fears also tend to push mortgage rates higher.

Fear of inflation

And you can see why. Imagine you’re an investor who buys a mortgage bond (a mortgage-backed security or MBS) with a fixed rate of 3% for 30 years. That means your yield (income) is fixed, too.

And now imagine how sick you’d feel if next year (or in 10 years’ time) serious inflation took hold, and you were suddenly seeing inflation and interest rates soaring up to 10% or even higher — while you were still getting 3%.

This isn’t impossible fiction. Between 1978 and 1990, the average rate for a 30-year, fixed-rate mortgage never dipped below 10%, measured annually. And, in October 1982, that rate peaked at 18.45%, according to Freddie Mac’s archives.

It’s not hard to imagine how petrified investors are of having their money tied up in fixed-rate securities if there’s any likelihood of future inflation.

Still a slim possibility of falls

Of course, nothing’s certain in markets. And some disastrous news could come out of nowhere and kill both optimism and its accompanying fear of inflation.

Indeed, earlier this week, The New York Times reported on a new variant of SARS-CoV-2 (the virus that causes COVID-19) that’s currently circulating in New York City. And some scientists worry that it might prove more resistant to current vaccines than existing strains are.

That research is yet to be peer-reviewed. And it may turn out to be nothing. But it’s an example of the sort of news that could turn markets and mortgage rates around. The trouble is, the chances of such an event arising before your closing date don’t seem high.

Economic reports next week

Next Friday brings the official, monthly, employment situation report. And that’s arguably the most important economic data of all at the moment. So markets may be moved by those figures

They’re less likely to be affected by the other reports this week. However, any data can have an impact if it varies significantly from expectations.

Here are next week’s main economic reports:

  • Monday — January construction spending. Also February auto sales. Plus the February manufacturing index from the Institute for Supply Management (ISM)
  • Wednesday — February ISM services index
  • Thursday — Weekly new claims for unemployment insurance.
  • Friday — February employment situation report, including nonfarm payrolls and the unemployment rate.

Watch out, too, for top Federal Reserve officers’ speaking engagements. The Fed’s walking a fine line at the moment between keeping the recovery on the road and not stoking inflation fears. So investors are paying close attention to their remarks.

Find and lock a low rate (Feb 28th, 2021)

Mortgage interest rates forecast for next week

Unfortunately, I can only predict rising rates this week. The pace of increases may slow and we might even see some small and occasional falls. But, overall, it’s hard to imagine the recent trend reversing.

Mortgage and refinance rates usually move in tandem. But note that refinance rates are currently a little higher than those for purchase mortgages. That gap’s likely to remain constant as they change.

How your mortgage interest rate is determined

Mortgage and refinance rates are generally determined by prices in a secondary market (similar to the stock or bond markets) where mortgage-backed securities are traded.

And that’s highly dependent on the economy. So mortgage rates tend to be high when things are going well and low when the economy’s in trouble.

Your part

But you play a big part in determining your own mortgage rate in five ways. You can affect it significantly by:

  1. Shopping around for your best mortgage rate — They vary widely from lender to lender
  2. Boosting your credit score — Even a small bump can make a big difference to your rate and payments
  3. Saving the biggest down payment you can — Lenders like you to have real skin in this game
  4. Keeping your other borrowing modest — The lower your other monthly commitments, the bigger the mortgage you can afford
  5. Choosing your mortgage carefully — Are you better off with a conventional, FHA, VA, USDA, jumbo or another loan?

Time spent getting these ducks in a row can see you winning lower rates.

Remember, it’s not just a mortgage rate

Be sure to count all your forthcoming homeownership costs when you’re working out how big a mortgage you can afford. So focus on your “PITI” That’s your Principal (pays down the amount you borrowed), Interest (the price of borrowing), (property) Taxes, and (homeowners) Insurance. Our mortgage calculator can help with these.

Depending on your type of mortgage and the size of your down payment, you may have to pay mortgage insurance, too. And that can easily run into three figures every month.

But there are other potential costs. So you’ll have to pay homeowners association dues if you choose to live somewhere with an HOA. And, wherever you live, you should expect repairs and maintenance costs. There’s no landlord to call when things go wrong!

Finally, you’ll find it hard to forget closing costs. You can see those reflected in the annual percentage rate (APR) you’ll be quoted. Because that effectively spreads them out over your loan’s term, making that higher than your straight mortgage rate.

But you may be able to get help with those closing costs and your down payment, especially if you’re a first-time buyer. Read:

Down payment assistance programs in every state for 2020

Compare top lenders

Mortgage rate methodology

The Mortgage Reports receives rates based on selected criteria from multiple lending partners each day. We arrive at an average rate and APR for each loan type to display in our chart. Because we average an array of rates, it gives you a better idea of what you might find in the marketplace. Furthermore, we average rates for the same loan types. For example, FHA fixed with FHA fixed. The end result is a good snapshot of daily rates and how they change over time.


Forbearances Post Typical Mid-Month Increase

Black Knight reports a second increase in the number
of loans in pandemic related forbearance
plans in as many weeks. Forborne loans
rose by 21,000 during the week ended February 23 after falling below 2.7
million for the first time since last April earlier this month. The company
said such mid-month increases have been typical in recent months. At of the end
of the reporting period there were 2.7 million homeowners in active plans, 5.1
percent of those with a mortgage, and representing an aggregate unpaid balance
of $537 billion.

The largest increase in active plans was among those
serviced for bank portfolios and private label securities (PLS) which grew by
16,000 loans or 2.4 percent growth. The number of VA an FHA loans in forbearance
rose by 7,000 or 0.6 percent. The combined Fannie Mae and Freddie Mac (the
GSEs) portfolios posted the only declines, with 2,000 fewer loans.

As of February 23, there were 903,000 GSE loans in
forbearance, 3.2 percent of those total portfolios. The FHA/VA loans totaled
1.13 million or 9.3 percent and the 678,000 portfolio/PLS loans are a 5.2
percent share of those being serviced.

Even though there was an uptick in the number of plans
over the past week, the monthly rate of improvement was 2.0 percent. This is
consistent with the declines for such periods since early December.

The company says around 160,000 forbearance plans are set to
hit scheduled expiration points at the end of this month.


3 questions for homeowner education expert Danielle Samalin

In a new episode of the Financial Planning podcast, the CEO of a homeownership education nonprofit explained the many challenges facing first-time homebuyers.

Danielle Samalin, Framework Homeownership

Danielle Samalin is the CEO of Boston-based Framework Homeownership.

Danielle Samalin is CEO of Framework Homeownership, a Boston-based organization that offers online training for prospective homebuyers and a network of nonprofit counseling partners. She answered the following three questions posed by FP Senior Editor Tobias Salinger:

1. What’s the size of the homeownership gap and what is being done to change it?

2. What are the most important questions for first-time homebuyers?

3. How does the organization work?

Listen and subscribe to the FP Podcast on Apple, Spotify or wherever you get podcasts.


MBS Week Ahead: Battle to Find a Rate Ceiling Continues

Bond yields have been surging higher in February with last week bringing the sharpest losses so far.  The move has surprised more than a few market participants.  To be sure, the pace of selling doesn’t seem to fit with the economic reality at first glance.  Moreover, the higher yields have gone, the more expectations have increased for a technical correction.  In other words, we have to find a ceiling soon, even if it’s only temporary.  It looked like we found that ceiling in the middle of last week, but Friday saw yields break to new highs.  Now as the new week begins, we have more new highs (overnight) and more new hope for a ceiling bounce as bonds are rallying early.

20210222 open.png

On the data front, this week’s headliners include Durable Goods, Core PCE, and the 5/7yr Treasury auctions.  With the exception of Wednesday’s 5yr auction, all of that happens on the last 2 days of the week.  Incidentally, those are also the last 2 trading days of the month.  That means we could see a glut of trading momentum in one direction or the other, depending on how the rest of the week trades and how much “month-end” trading is left to be done.  

MBS Pricing Snapshot

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.


UMBS 2.0

101-17 : -0-06


10 YR

1.3470 : +0.0020

Pricing as of 2/22/21 10:13AMEST

Tomorrow’s Economic Calendar

Time Event Period Forecast Prior
Monday, Feb 22
10:00 Leading index chg mm (%) Jan 0.5 0.3
Tuesday, Feb 23
9:00 CaseShiller 20 yy (% ) Dec 9.9 9.1
9:00 CaseShiller 20 mm SA (%) Dec 1.3 1.4
9:00 Monthly Home Price yy (%) Dec 11.0
9:00 Monthly Home Price mm (%) Dec 1.0
10:00 Consumer confidence * Feb 90.0 89.3
Wednesday, Feb 24
7:00 MBA Purchase Index w/e 299.5
7:00 MBA Refi Index w/e 4337.0
10:00 New Home Sales (%) (%)* Jan 2.1 1.6
10:00 New Home Sales (ml) Jan 0.855 0.842
13:00 5-Yr Note Auction (bl)* 61
Thursday, Feb 25
8:30 GDP Prelim (%) Q4 4.2 4.0
8:30 Durable goods (%)* Jan 1.1 0.5
8:30 Core CapEx (%)* Jan 0.7 0.7
8:30 Jobless Claims (k) w/e 838 861
10:00 Pending Sales Index Jan 125.5
10:00 Pending Home Sales (%) Jan 0.0 -0.3
13:00 7-Yr Note Auction (bl)* 62
Friday, Feb 26
8:30 Core PCE Inflation (y/y) (%)* Jan 1.4 1.5
9:45 Chicago PMI * Feb 61.1 63.8
10:00 Sentiment: 5y Inflation (%) Feb 2.7
10:00 Sentiment: 1y Inflation (%) Feb 3.3
10:00 Consumer Sentiment (ip) Feb 76.5 76.2


Redfin CEO likens housing inventory crunch to ‘Soviet-era supermarket’

The gap between housing supply and demand grew to canyon-sized proportions in February as properties sold nearly immediately after being listed, according to Redfin.

Even as buyer activity slowed during the severe winter weather, a record 42.7% of homes sold in under seven days for the four-week period ending Feb. 21 compared to 30.7% the year before. Pending sales jumped 18% to 45,432 from the year-ago total of 38,430.

The dearth of inventory fueled the frenzied level of transactions. Active listings tumbled 40% year-over-year and reached a new all-time low of 497,909 from 835,149. Meanwhile, new listings also dropped 17% annually to 63,155 from 76,492.

This combination of factors drove median home sale prices up 15% annually to $321,250 from $278,400 and median asking prices up 11% to a new high of $343,961 from $309,937 the year prior.

“The housing market is now like a Soviet-era supermarket, with most of the shelves empty,” Redfin CEO Glenn Kelman said in the report. “Migrations are warping the space-time continuum of small-town economies. The affordability crisis that flowed like some huge, unspent electrical charge from San Francisco to Seattle to Portland to Denver and to Boise is now reaching virtually every town in North America, bringing dazzling prosperity but also new anxieties.”

The recent upward trajectory of mortgage rates may add pressure on borrowers to get in now before further rate growth occurs. Redfin’s homebuyer demand index — a market indicator based on requests for home tours and other services — spiked 35% year-over-year to 148 from 109. The index has a baseline score of 100.


MBS Day Ahead: It Was a Trap… Don’t Expect Stocks to Save Us

MBS Day Ahead: It Was a Trap… Don’t Expect Stocks to Save Us

Yesterday saw yields hold at just slightly lower highs on an intraday basis, thus offering a glimmer of hope for a bond bounce.  We discussed the risk that this was a trap, and so far today, it looks like it was.  10yr yields are over 1.4% and UMBS 2.5 coupons are now the only game in town.  Where is that giant squid guy from Star Wars when you need him?

20210224 open.png

The bond market weakness is sharper and more relentless than many market watchers anticipated.  One common topic of conversation among those hoping for a bounce is the interplay between stocks and bonds.  Late 2018 is fresh in our minds with widespread belief that “high rates” precipitated a stock sell-off which, in turn, helped rates move lower.

I won’t say “that’s not what happened,” because that dynamic was in play.  But I will say a few other things.  First off, that wasn’t the whole story in 2018.  There was a ton of momentum behind “global growth concerns.”  Much like 2015, late 2018 brought a mini or “stealth” contraction for the global economy–especially manufacturing in Europe.  It also marked the end of the tax bill sugar high for US equities markets.  

What’s the point of all this?  Just a reminder/warning/etc to not place undue hope on “high” 10yr yields (if you can call 1.4%+ “high” in the bigger picture) to do profound damage to the stock market.  Scarier spikes than this have generally failed to do so.  2018 was an exception, and one that probably gets too much credit in our worldview because it was the most recent example.

20210224 open2.png

MBS Pricing Snapshot

Pricing shown below is delayed, please note the timestamp at the bottom. Real time pricing is available via MBS Live.


UMBS 2.5

103-21 : -0-11


10 YR

1.4250 : +0.0610

Pricing as of 2/24/21 9:47AMEST