TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/57493
FEATURE ANALYTICS Of course, the median amount of appreciation provides further evidence of the trend in home values and prices. Freddie releases annual cash-out information for the whole U.S. and by the four Census regions. Quarterly data are published for the U.S. only. While the quarterly cash-out report is fairly straightforward, the trends are subtle. Note that in the run-up to the downturn (which wasn't necessarily foreseen), homeown- ers were drawing equity, but by the end of 2008—just a year after the recession began—they shifted dramatically to lowering their outstanding balance. In the most recent report covering Q4 2011, only 15 percent of homeowners increased their loan balance in refinancing, taking advantage of lower rates. The quarterly statistics also show a continued deceleration of home values. Cash-out Report Has Changed over the Years W hen Freddie Mac first reported the interest-rate ratio, it was calculated as the original loan rate divided by the new loan rate. Starting with the 2006 Q3 report, Freddie flipped the ratio to report the new interest rate divided by the original rate. The new ratio is Tracking Trends Percentage of Refinances Resulting in: Quarter 200701 200702 200703 200704 200801 200802 200803 200804 200901 200902 200903 200904 201001 201002 201003 201004 201101 201102 201103 201104 64 | THE M REPORT Loan Amount 83% 84% 86% 77% 59% 67% 76% 55% 44% 37% 36% 25% 28% 26% 19% 17% 25% 22% 17% 15% 5% Higher No Change In Loan Amount 12% 11% 9% 15% 33% 24% 15% 28% 43% 47% 46% 39% 53% 51% 47% 39% 54% 51% 43% 37% Lower Loan Amount 5% 5% 5% 8% 9% 9% 9% 17% 13% 16% 18% 36% 18% 23% 35% 44% 21% 27% 40% 49% Descriptive Statistics on Loan Terms and Property Valuation Median Ratio of New to Old Rate 1.02 1.02 1.09 1.02 0.90 0.94 1.04 0.92 0.81 0.80 0.83 0.84 0.84 0.84 0.81 0.78 0.81 0.81 0.78 0.74 of Refinanced Loan (years) 3.4 3.6 4.0 3.7 2.5 3.4 4.4 3.1 3.1 3.5 3.6 3.7 4.0 4.1 3.9 4.2 5.0 5.0 4.4 3.7 Median Age Appreciation of Refinanced Property 26% 25% 26% 20% 9% 13% 17% 7% 3% 2% 0% -2% -4% -5% -2% -3% -7% -8% -6% -4% Median more intuitive: Values less than one indicate that the borrower lowered his or her note rate, and values greater than one indicate that the rate increased. The Cash-out Refinance Report also estimates another important macroeconomic indicator: the amount of home equity borrowers are withdraw- ing from their home. Equity withdrawals through refinanc- ing peaked at $83.7 billion in SECONDARY MARKET ANALYTICS SERVICING ORIGINATION