MBS RECAP: 2/2/2012

Google: "Google Advisor mortgages has been discontinued We’ve been prioritizing our product efforts across Google, which means taking a hard look at products that haven’t been as successful as we would have hoped. To that end, we’ve closed down the mortgage search feature of Google Advisor and are focused on building continued improvements into the rest of the product."

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In the fourth quarter of 2011, 85 percent of homeowners who refinanced their first-lien home mortgage either maintained about the same loan amount or lowered their principal balance by paying- in additional money at the closing table, a 26-year high. Of these borrowers, 37 percent maintained about the same loan amount, and 49 percent of refinancing homeowners reduced their principal balance; this latter percentage reflecting “cash-in” borrowers was the highest in the 26-year history of the analysis.

“Cash-out” borrowers, those that increased their loan balance by at least five percent, represented 15 percent of all refinance loans, the lowest percentage in the 26 years of analysis; the average cash-out share during the 1985 to 2010 period was 46 percent.

The median interest rate reduction for a 30-year fixed-rate mortgage was about 1.4 percentage points, or a savings of about 26 percent in interest rate. Over the first year of the refinance loan life, the median borrower will save about $2,700 in interest payments on a $200,000 loan.

Two wires from the Q&A session in particular:

RTRS - BERNANKE SAYS ONE OF MAIN REASONS RECOVERY HAS BEEN DISAPPOINTING IS WEAKNESS OF HOUSING

RTRS - BERNANKE SAYS IT WOULD REPAY CONGRESS TO TAKE ACTIONS TO HELP HOUSING RECOVER

The force of recent FOMC rhetoric on the housing market seems to be building toward the consensus that either Congress must do "something" about housing (and successfully so), or the Fed will do something itself (again).

Fannie 3.5's touched 104-05 and 3.0's, although not traded in meaningful volume, broke 102-00