January 25th, 2012 11:04 AM by Mel Samick
The American people say that they want both political parties to work together for the betterment of America. However, they don't seem to vote that way. Jon Huntsman dropped out of the Presidential Race this week. He was the one candidate that didn't let partisanship keep him from serving his country. Despite being a Republican, he served as President Obama's ambassador to China. He was the one candidate who could possibly work across party lines. Rick Perry also decided to drop out of the race. The list of candidates for President continues to shrink.
Despite a short week, there was a lot of news. Now that the President was able to get Richard Cordray in through the back door, the Consumer Financial Protection Bureau is up and running and full steam ahead. One subject that the CFPB is sure to address is loan officer compensation, even though changes were just made in April of last year. The government's efforts to assist borrowers has thus far fallen way short of expectations.
Despite all the government interference, Mortgage Applications have skyrocketed. Loan applications rose by 23.1 percent in the week ending January 13th. Refinance requests have risen 26.4 percent while purchase requests rose 10 percent. It seems that the new HARP rules have helped refinance activity some. It appears that homeowners need all the help they can get these days as missed mortgage payments led to the increase of Consumer Credit Default. The default rate was at its highest point since April of last year, at 2.24 percent. First time mortgage defaults rose to 2.19 percent in December and second-mortgage defaults increased to 1.33 percent.
The National Association of Home Builders released good news this week. They reported that the Housing Market Index rose, for the fourth consecutive month to 25. The index is a measure of builder confidence and is now at its highest level since 2007. However, for the housing market to be considered good, the index needs to be at least 50. Unemployment, consumer credit, and low appraisals continue to keep the number well below "Good".
In other housing news, sales of Existing Homes was up 5 percent in December. Median sales prices in December fell 2.5 percent to $164,500. Median sales prices for 2011 were $166,100, the same as they were in 2002. Inventories were lower in December by 9.2 percent. Distressed sales made up 32 percent of total sales.
Other reports last week included Initial Jobless claims, which fell 50,000 to 352,000. The Consumer Price Index was flat in December and the core rate, which excludes food & energy prices, increased slightly by .1 percent. The Empire State Manufacturing report continued its rise. It went from 8.2 in December to 13.5 percent in January. This reflects improvements seen in factory surveys.
The Dow finished positive again, up 2.4 percent from the previous week. Goldman Sachs showed better than anticipated results. Yahoo Inc. said that co-founder Jerry Yang would be leaving; which apparently was good news for investors. Target's shares fell on news that it would wait to sell its credit card portfolio. And to top it all, Eastman Kodak filed for bankruptcy this week.
And, it wouldn't be a report without more news from Greece... Greece resumed talks with bondholders to discuss a voluntary write-down of the country's sovereign debt. Prime Minister Lucas Papademos said that he would consider forcing a private sector write-down if a deal could not be reached. The other big news this week was from the International Monetary Fund. On Wednesday, they announced that they wanted to raise an additional $500 billion in lending resources. President Obama, replied, "We gave at the office" and we're not contributing any more.
Information provided by NYCB Capital Markets