U.S. Purchase Mortgage Applications Slip 2.9% in Week Ended Feb. 17, 2012: MBA

Posted on February 22, 2012 by | Leave a comment

The Mortgage Bankers Association has reported that applications for mortgages to purchase a home fell 2.9 percent in the week ended Feb. 17, 2012.  In the previous week, purchase applications dropped 8.4 percent, so a potential sharp downward trend is forming, erasing positive signs of strength seen at the end of 2011 into January 2012. The four-week moving average is now down 3.21 percent.

Mortgage rates remained relatively stable near all-time lows.  The conforming 30-year fixed rate mortgage edged higher to 4.09 percent from 4.08 percent, with points increasing to 0.53 from 0.51.

The full MBA press release follows:

WASHINGTON, D.C. (February 22, 2012) — Mortgage applications decreased 4.5 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending February 17, 2012.

The Market Composite Index, a measure of mortgage loan application volume, decreased 4.5 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index decreased 3.6 percent compared with the previous week.  The Refinance Index decreased 4.8 percent from the previous week.  The seasonally adjusted Purchase Index decreased 2.9 percent from one week earlier. The unadjusted Purchase Index increased 1.4 percent compared with the previous week and was 9.2 percent lower than the same week one year ago.

The four week moving average for the seasonally adjusted Market Index is down 0.30 percent.  The four week moving average is down 3.21 percent for the seasonally adjusted Purchase Index, while this average is up 0.33 percent for the Refinance Index.

The refinance share of mortgage activity decreased to 80.1 percent of total applications from 81.1 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 5.3 percent from 5.4 percent of total applications from the previous week.

In January 2012, among refinance borrowers, 57.2 percent of applications were for fixed-rate 30-year loans, 24.4 percent for 15-year fixed loans, and 5.5 percent for ARMs.  The share of refinance applications for “other” fixed-rate mortgages with amortization schedules other than 15 and 30-year terms was 12.9 percent of all refinance applications. The share for 30-year fixed, 15-year fixed and ARM increased from the previous month while the “other” fixed category shares decreased from last month.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,500 or less) increased to 4.09 percent from 4.08 percent, with points increasing to 0.53 from  0.51 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans.  The effective rate also increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,500) increased to 4.32 percent from 4.30 percent, with points decreasing to 0.42 from 0.44 (including the origination fee) for 80 percent LTV ratio loans.  The effective rate also increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA remained unchanged at 3.87 percent, with points decreasing to 0.41 from 0.78 (including the origination fee) for 80 percent LTV ratio loans.  The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages increased to 3.38 percent from 3.33 percent, with points decreasing to 0.37 from 0.40 (including the origination fee) for 80 percent LTV loans. The effective rate also increased from last week.

The average contract interest rate for 5/1 ARMs increased to 2.94 percent from 2.93 percent, with points increasing to 0.44 from 0.42 (including the origination fee) for 80 percent LTV ratio loans.  The effective rate also increased from last week.

If you would like to purchase a subscription of MBA’s Weekly Applications Survey, please visit www.mortgagebankers.org/WeeklyApps, contact mbaresearch@mortgagebankers.org or click here.

The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990.  Respondents include mortgage bankers, commercial banks and thrifts.  Base period and value for all indexes is March 16, 1990=100.

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The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation’s residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,200 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA’s Web site:  www.mortgagebankers.org.

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U.S. Economic Activity Slowed in January 2012, But Still Above Average: Chicago Fed National Activity Index

Posted on February 21, 2012 by | Leave a comment

The Federal Reserve Bank of Chicago has announced that its index of national economic activity was +0.22 in January 2012, down from +0.54 in December. Despite the weaker showing, January’s positive reading represents the
first back-to-back positive months in a year. Consumer spending and housing was negative in January, which pulled the index down. Otherwise, three of the four broad categories covered by the index were positive.

The three-month moving average rose from +0.06 in December to
+0.14 in January, reaching its highest level since March 2011. The growth rate reflects economic expansion at a higher-than-historical-trend rate. However, the rate is at a level where economic growth is not expected to cause inflationary pressures.

Here is a link to the report: Chicago Fed National Activity Index – January 2012.

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Brazil’s Unemployment Rate Rises to 5.5% in January 2012

Posted on February 20, 2012 by | Leave a comment

Brazil’s statistics bureau has reported that the unemployment rate jumped to 5.5 percent in January 2012, after having fallen to 4.7 percent in December 2011. However, January generally sees a spike in the unemployment rate, and the 5.5 percent rate is the lowest recorded since the series began in 2002.  The unemployment rate is also much lower than the 6.1 percent recorded in January 2011.

The full press release follows:

Unemployment was of 5.5% in January

 

 

The unemployment rate was estimated at 5.5%, the lowest rate for January since the beginning of the series (March 2002), and recorded a rise of 0.8 percentage points over December 2011 (4.7%). Compared with January last year (6.1%), it declined 0.6 percentage points. The unemployed population (1.3 million people) increased 15.9% against December (more 180 thousand people looking for a job). Compared with January last year, it declined 7.7% (less 110 thousand people). The employed population (22.5 million) dropped 1.0% compared with December (less 220 thousand employed persons).  Compared with January 2011, this estimate increased 2.0% (more 433 thousand employed persons). The number of workers with a formal contract in the private sector (11.1 million) did not record a significant change in relation to December.  In the annual comparison, there was an increase of 6.3%, accounting for additional 664 thousand jobs with a formal contract.

The real average income usually earned by employed persons (R$ 1,672.20, the highest value for January since March 2002), rose 0.7% in the monthly comparison and 2.7% compared with January a year ago. The volume of real income usually earned by employed persons (R$ 37.9 billion) fell 0.5% against December and grew 3.6% in relation to January 2011. The volume of real income effectively earned by employed persons (R$ 47.2 billion), estimated in December 2011, rose 14.8% in the month and 3.9% in the year.

The Monthly Employment Survey is conducted in the metropolitan areas of Recife, Salvador, Belo Horizonte, Rio de Janeiro, São Paulo and Porto Alegre.  The complete publication can be accessed at www.ibge.gov.br/home/estatistica/indicadores/trabalhoerendimento/pme_nova/

(See the release in Portuguese).

Desocupação cai em três regiões metropolitanas frente a janeiro de 2011

A taxa de desocupação (proporção de pessoas desocupadas em relação à população economicamente ativa, que é formada pelos contingentes de ocupados e desocupados) foi estimada em 5,5% para o conjunto das seis regiões metropolitanas. Regionalmente, na análise mensal, a taxa de desocupação registrou variação significativa em Recife (de 4,7% para 5,7%), Belo Horizonte (de 3,8% para 4,5%), Rio de Janeiro (de 4,9% para 5,6%), São Paulo (de 4,7% para 5,5%) e Porto Alegre (de 3,1% para 3,9%). Na região metropolitana de Salvador não ocorreu variação significativa. Frente a janeiro de 2011, a taxa caiu em Salvador (-2,4 pontos percentuais), em Recife (-1,4 ponto percentual) e em Belo Horizonte (-0,8 ponto percentual) e nas demais registrou estabilidade:

Na análise mensal, o contingente de desocupados (pessoas sem trabalho que estão tentando se inserir no mercado) aumentou em Porto Alegre (24,8%), Recife (22,1%), Belo Horizonte (20,5%), São Paulo (16,5%) e no Rio de Janeiro (13,9%). Ficou estável apenas em Salvador. No confronto com janeiro de 2011, verificou-se queda expressiva no número de desocupados na região metropolitana de Salvador (-24,9%) e em Recife (-16,9%) e nas demais regiões não ocorreram variações significativas.

Nível da ocupação fica em 53,5%

O nível da ocupação (proporção de pessoas ocupadas em relação às pessoas em idade ativa), estimado em 53,5% no total das seis regiões, caiu -0,5 ponto percentual frente a dezembro último e não variou significativamente em relação a janeiro do ano passado. Regionalmente, na comparação mensal, a maioria das regiões metropolitanas mantiveram resultados estáveis. Nas regiões metropolitanas de Porto Alegre e de São Paulo, o indicador caiu -1,1 e -0,8 ponto percentual, respectivamente. Frente a janeiro de 2011, ocorreu variação positiva em Recife e em Belo Horizonte (1,9 e 1,2 ponto percentual, nesta ordem).

A análise da ocupação segundo os grupamentos de atividade mostrou que, de dezembro para janeiro, ocorreu variação apenas nos Serviços domésticos, queda de -4,2%. No confronto com janeiro do ano passado, ocorreram variações na Construção (alta de8,8%, equivalente a 142 mil pessoas), e nos Serviços prestados a empresas, aluguéis, atividades imobiliárias e intermediação financeira (alta de 6,9%, equivalente a 238 mil pessoas).

Na comparação anual, rendimento médio aumenta em quatro das seis regiões

Na análise regional, o rendimento médio real habitual dos trabalhadores (R$ 1.672,20 no conjunto das seis regiões) subiu frente a dezembro em Recife (7,3%), Salvador (3,0%), Belo Horizonte (1,7%) e Porto Alegre (4,0%). Caiu no Rio de Janeiro (-1,6%) e manteve-se estável em São Paulo. Na comparação com janeiro de 2011, o rendimento cresceu em Recife (2,5%), Salvador (16,6%), Belo Horizonte (6,4%) e São Paulo (2,2%). Ficou estável no Rio de Janeiro e em Porto Alegre:

Na classificação por grupamentos de atividade, o maior aumento no rendimento médio real habitualmente recebido em relação a janeiro de 2011 foi de 13,8%, referente à Construção:

Já na classificação por categorias de posição na ocupação, o maior aumento no rendimento médio real habitualmente recebido em comparação com janeiro do último ano foi para os Militares e funcionários públicos (6,0%):

Social Communication
February 17, 2012

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Posted in Brazil, Economy, Employment Report

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Nonreliance Clause in Securities Agreement Bars Stock Purchaser From Using Oral Statements as Cause of Action: Illinois Appellate Court

Posted on February 20, 2012 by | Leave a comment

Where a purchaser of securities contractually agrees through a nonreliance clause that it is not relying on any oral representation made in connection with its purchase of the securities, the purchaser is barred as matter of law from thereafter pleading in action alleging common law fraud that it relied on oral statements when purchasing the securities, the Illinois Appellate Court has held.

The appellate court answered a certified question on appeal. The case involved the purchaser of stock of a company.  The purchaser received a document called a private placement memorandum (PPM) from the seller, which provided details about the company and the proposed investment. The purchaser then signed a contract known as a subscription agreement in order to consummate the stock purchase. The subscription agreement contained a nonreliance clause.

Not long after signing the subscription agreement, the purchaser  allegedly discovered that certain material statements that sellers had made orally and in
writing about the company were untrue. The purchaser filed suit in Cook County, asserting several causes of action, of which one was based on the sellers’ alleged oral misrepresentations.

A certified question was sent to the appellate court on the narrow issue of the legal effect of the nonreliance clause on a common-law fraudulent oral misrepresentation claim. The appellate court, citing precedent, held that as a matter of law that the plaintiffs could not have justifiably relied on any of the alleged oral misrepresentations because of the nonreliance clause in the subscription agreement.

Here is a link to the decision:
Greer v. Advanced Equities, 2012 IL App (1st) 112458 (January 31, 2012) Cook Co., 2d Div.

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Posted in Case Law, Securities

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IRS Extends Deadline for Estates to File Estate Tax Return to Make Portability Election Benefiting Surviving Spouses

Posted on February 17, 2012 by | Leave a comment

The Internal Revenue Service has issued guidance that allows certain estates of married individuals who died during the first six months of 2011 an extension of the deadline to make the portability election.

The portability election passes along a decedent’s unused estate and gift tax exclusion amount to a surviving spouse. An extension is available to estates of married individuals with assets of $5 million or less, but only if the decedent died in the first six months of 2011, and the executor files Form 4768 requesting an extension no later than 15 months after the decedent’s date of death.

The extra time is available to an estate even if the estate did not request an automatic six-month filing extension on Form 4768 prior to the regular nine-month filing deadline. As a result, these estates will now have until 15 months after the date of death, rather than the usual nine months, to make the election by filing an estate tax return on Form 706. Thus, the first estate tax returns for estates eligible to make the portability election (because the date of death is after Dec. 31, 2010) are now due on Monday, April 2, 2012.

Affected estates should submit both a properly-prepared Form 4768 and Form 706 to the IRS no later than 15 months after the decedent’s date of death. Further details are in Notice 2012-21, posted today on IRS.gov.

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Posted in Personal Finance

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