by Calculated Risk on 9/23/2011 11:37:00 PM

Earlier this week, in reaction to the Fed lowering long term rates, I asked: Will there be another Refinance Boom?. And reader Soylent Green is People (mortgage broker) commented:

"Refinance boom will be much larger than 2009 when the Feds remove the 125% LTV cap on HARP loans. There are so many whispers about it I can hardly hear myself think."

From Nick Timiraos at the WSJ: Rate Drop Spurs Home Refinancing

The 30-year fixed-rate mortgage dipped below 4%, possibly triggering a refinancing boom for many of the same borrowers who already have taken advantage of rock-bottom interest rates.

According to a survey by Credit Suisse on Thursday, lenders were offering an average rate of 3.91% on 30-year fixed-rate mortgages [with 1 point].
...
Obama administration officials and U.S. regulators are in talks with lenders about ways to revamp an existing White House refinancing initiative designed to help borrowers with little or no equity. The program is open to borrowers whose loans are backed by Fannie and Freddie, which guarantee about half of all outstanding home loans.

There are a few key points: 1) rates are now below 4% with 1 point, 2) but only certain borrowers can refinance at this rate - most borrowers can't because of tighter underwriting standards and lack of equity in their homes, and 3) there might be a large refinancing boom if HARP is expanded - although only for borrowers with loans guaranteed by Fannie or Freddie.

by Calculated Risk on 9/23/2011 09:22:00 PM

From the FDIC: Tri Counties Bank, Chico, California, Assumes All of the Deposits of Citizens Bank of Northern California, Nevada City, California

As of June 30, 2011, Citizens Bank of Northern California had approximately $288.8 million in total assets and $253.1 million in total deposits. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $37.2 million. ... Citizens Bank of Northern California is the 73rd FDIC-insured institution to fail in the nation this year, and the fourth in California. The last FDIC-insured institution closed in the state was San Luis Trust Bank, FSB, San Luis Obispo, on February 18, 2011.

That was a long time between failures in California!

by Calculated Risk on 9/23/2011 06:25:00 PM

Common bank guidelines
Common sense says follow them
Commonwealth should of.
by Soylent Green is People
From the FDIC: Southern Bank and Trust Company, Mount Olive, North Carolina, Assumes All of the Deposits of Bank of the Commonwealth, Norfolk, Virginia

As of June 30, 2011, Bank of the Commonwealth had approximately $985.1 million in total assets and $901.8 million in total deposits. ... The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $268.3 million. ... Bank of the Commonwealth is the 72nd FDIC-insured institution to fail in the nation this year, and the second in Virginia.

It feels like Friday.

by Calculated Risk on 9/23/2011 05:15:00 PM

The Department of Transportation (DOT) reported today:

Travel on all roads and streets changed by -2.5% (-6.7 billion vehicle miles) for July 2011 as compared with July 2010. Travel for the month is estimated to be 261.8 billion vehicle miles.

Cumulative Travel for 2011 changed by -1.2% (-21.5 billion vehicle miles).

The following graph shows the rolling 12 month total vehicle miles driven.

Click on graph for larger image in graph gallery.

In the early '80s, miles driven (rolling 12 months) stayed below the previous peak for 39 months.

Currently miles driven has been below the previous peak for 44 months - so this is a new record for longest period below the previous peak - and still counting!

The second graph shows the year-over-year change from the same month in the previous year. The current decline is not as a severe as in 2008, but this is significant.

With the slowdown at the end of July and in August, miles driven will probably decline further in August.

by Calculated Risk on 9/23/2011 03:25:00 PM

First on Europe ... it would really help to have a consistent message, or maybe Merkel and Schaeuble are just playing good cop, bad cop!

From the WSJ: New Doubts on Greece's Ability to Secure More Aid

New doubts about Greece's ability to secure further aid and avoid default emerged Friday ... German Finance Minister Wolfgang Schaeuble led the chorus, saying that Greece's creditors may need to revise the July 21 agreement on additional aid for the country, because conditions may have changed since the deal was reached.

... The week also saw increasing speculation that Greece may need to default or at least seek much more debt relief than was foreseen in July as a result of its repeated failures to meet targets for economic growth and deficit reduction.

"It would surprise me if the conditions for a disbursement of the next tranche of aid in September had changed, but not if the conditions for an additional program had changed," Mr. Schaeuble said at a news briefing on the sidelines of a series of international meetings in Washington. "However, I want to wait and see first."

From Bloomberg: Europe May Speed Permanent Fund Enactment

European governments are exploring speeding the setup of a permanent rescue fund ... Drawing on paid-in capital, the fund will wield a 500 billion-euro ($677 billion) war chest that could help shield countries like Italy. It also includes provisions for sharing costs with bondholders for countries with “unsustainable” debt.

Senior finance officials next week will examine the cost advantages of creating the fund, known as the European Stability Mechanism, in July 2012, a year ahead of schedule, according to a staff paper prepared for the meetings and obtained by Bloomberg News.

And on auto sales ...

From the LA Times: Car sales strengthen in September

The retail sales rate for new vehicles in the U.S. this month looks “much stronger than in August,” according to J.D. Power & Associates, which gathers sales data from about 8,900 dealers. That's about half of all the dealers selling cars nationally.

“Coming off a solid Labor Day sale, retail sales exhibited unexpected strength in the second week of September, as the recovering inventory levels have helped to bring buyers back into the market,” said Jeff Schuster, executive director of global forecasting at J.D. Power.

The annual sales rate for all vehicles, including the retail segment of the market and what rental car companies, commercial customers and government agencies purchase, will hit 12.9 million this month ...

From the WSJ: Ford Analyst Sees Strong Sales for Sector

The annualized rate of sales in September is tracking at about 12.5 million cars and light trucks on a seasonally adjusted rate, the highest since April.

Another sign of sluggish growth.