LPS introduces tool to proactively manage default risk

Mortgage rates shoot up following bond yieldsMortgagePress.commortgage rates, Primary Mortgage Market Survey, ARMs, Frank Nothaft Freddie Mac has released the results of its Primary Mortgage Market Survey (PMMS) in which the 30-year fixed-rate mortgage (FRM) averaged 6.46 percent with an average 0.6 point for the week ending Oct. 16, 2008, up from last week when it averaged 5.94 percent. Last year at this time, the 30-year FRM averaged 6.40 percent. This weeks increase of 52 basis points was the largest weekly increase since the week ending April 17, 1987, when the 30-year FRM rose 84 basis points. The 15-year FRM this week averaged 6.14 percent with an average 0.6 point, up from last week when it averaged 5.63 percent. A year ago at this time, the 15-year FRM averaged 6.08 percent. Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.14 percent this week, with an average 0.6 point, up from last week when it averaged 5.90 percent. A year ago, the 5-year ARM averaged 6.11 percent. One-year Treasury-indexed ARMs averaged 5.16 percent this week with an average 0.6 point, up from last week when it averaged 5.15 percent. At this time last year, the 1-year ARM averaged 5.76 percent. Average commitment rates should be reported along with average fees and points to reflect the total cost of obtaining the mortgage. "Interest rates for 30-year fixed-rate mortgages rose this week to an eight-week high," said Frank Nothaft, Freddie Mac vice president and chief economist. "ARM rates, which tend to be based on shorter-term benchmarks, showed smaller gains in part due to the Federal Reserve's Oct. 8 inter-meeting rate cut in the overnight lending rate. "Recent economic reports suggest the economy is still slowing. For instance, retail sales fell for the third consecutive month by 1.2 percent in September. In addition, in its latest Beige Book, released October 15th, the Federal Reserve indicated that economic activity weakened in September across all twelve Federal Reserve Districts and that several Districts also noted that their contacts had become more pessimistic about the economic outlook." For more informaiton, visit www.freddiemac.com.