Are Housing Prices Finally Stabilizing?
Bloomberg is reporting this morning that einmonth. They take this as a sign the the economy is beginning to level off. But consumer confidence has sunk a bit and the most experts agree that we will have what is known as a jobless recovery as far as the recession is concerned.
For more info, you can read the full story here.
Welcome, Julie Messina!
Please join me in welcoming Julie Messina as our newest author on Mortgages Unzipped.
Julie started her career in real estate finance in 1979 at a community bank in Rochester, New York. After moving to Arizona in 1984, Julie held various management positions at banks and mortgage banking companies. In 2008, Julie achieved the Certified Mortgage Banker (CMB) designation from the Mortgage Bankers Association of America and serves on their Secondary and Capital Markets Committee. Julie is currently originating loans for Scottsdale-based CNN Mortgage, using her background in mortgage trading to provide competitive products and pricing for her clients. An advocate of consumer awareness, Julie is a regular blog contributor for the Examiner and Active Rain.
We look forward to your future posts, Julie!
Mortgage Market Update
Well, here we are on the Monday before the Fourth of July. What should we expect for the week?
- As the week progresses, expect to see the moves and the volatility on Wall Street get more and more accentuated. Why? Because there will be more and more of the people who are left on Wall Street are going to be heading out early for the 4th of July weekend. So the trades that are there will make the market act “strangely.”
- The Chinese government came out over the weekend and basically said, “We don’t have any plans to change our buying habits of Treasuries.” The market at first said, “Yeah!” Then they read the speech more closely and saw that the Chinese government official used the term, “drastic” in reference to changing plans. In other words, “We aren’t going to change our plans tomorrow.” Does that mean that they are leaving the door open for changing later? Stay tuned, the China saga isn’t over yet.
Rates have hardly changed at all this morning. My recommendation remains to lock all loans. Here’s why:
- The China “factor” is an unknown but it’s almost certainly going to be either a non-factor or something that pushes rates higher.
- The fact that the Fed said that they don’t see deflation as an issue means that more than likely the opposite of deflation is more likely to come into play. Remember, interest rates don’t react kindly to inflation.
See below for some “samples” of the rates I’m quoting today. I’ll keep in touch,
Tom Vanderwell
Purchase, Owner Occupied, 30 year fixed, $417,000 loan amount, 80% loan to value, 5.125% with 0 pts, or 4.875% with 1.125 pts. 30 day lock.
Purchase, Investment Property (1-4 unit), $125,000 loan amount, 75% loan to value, 6.25% with 0 pts or 5.75% with 1 pt. 30 day lock.
APRs are available upon request
Mortgage Market Week in Review
This week’s Mortgage Market Week in Review is complete and scheduled to go out at 5:00 on Saturday, June 27. Go to Straight Talk About Mortgages and fill out the box in the left column. Sign up there before 4:45 and you’ll get your own copy by e-mail. It’s totally free and hopefully useful!
Tom Vanderwell
Mortgage Market Week in Review
Mortgage Market Update
So, what’s been happening in the markets since the last time I did a Mortgage Market Update on Wednesday? A couple of things:
- Citibank is suffering a variety of issues this week, but I’ll write about that later.
- Personal incomes were up, mainly because of the stimulus plans. Personal savings was up as well. That’s a good thing, except that consumer spending most likely won’t be what brings the economy back from recession.
- The “country” of California is in such dire financial straits that they are “paying” their bills with IOU’s.
- The Treasury held a number of auctions this week and a number of foreign investors showed up. That’s a good thing.
With all of that, rates have drifted down slightly. Today, I’m quoting:
30 year fixed, owner occupied, refinance, 80% loan to value, 5.5% with 0 pts.
30 year fixed, purchase, owner occupied, 95% loan to value, 5.125% with 0 pts.
30 year fixed, purchase, investment property (1 to 4 units), 75% loan to value, 6.375% with 0 pts or 5.875% with 1 pt.
All quotes assume a loan amount of $417,000 or less and credit scores of 740 or higher.
Recommendation – I’m still recommending that we lock all loans. The volatility in the markets leads me to believe that the risk for rate increases is greater than the possibility of rate decreases.
I’ll have more this weekend in my Mortgage Market Week in Review. Sign up for it in the column on the left.
Thanks!
Tom Vanderwell
Under Water By More Than 105%: Now What?
Many people in who are current on their mortgage payments and want to refinance their home have spoken with their lender about the Obama refinance — where they can be up to 105% “under water” and still get a Fannie Mae / Freddie Mac loan.
What they are finding out once their appraisal comes back is that they are actually “under water” by more than 105% — and now they are trying to decide what to do. Should they just keep making payments at their high interest rate? Should they stop making payments and try to get a loan modification? Should they try for a loan modification even though they are current?
All of these are good questions – and really, there is no easy answer. There for sure is not an answer that will fit everyone’s situation perfectly — each situation is different and individual.
But…
There is a possibility — note the word possibility — that the guidelines on the Obama refinance will soon be expanded where you can be up to 125% upside down on your home and qualify for the Obama refinance.
It hasn’t been made official yet — but for many people who currently have been turned down by their lender and are trying to decide whether to:
- Just keep making their mortgage payments as normal
- Stop making payments and try to get a loan modification
- Try for a loan modification even though they are current
Now there is at least one more option on the table — wait and see if the Obama refinance guidelines get expanded.
According to Bloomberg:
Fannie Mae and Freddie Mac may get permission to begin refinancing mortgages with loan-to-value ratios above 105 percent as the Obama administration seeks to boost participation in its anti-foreclosure programs.
“We’re actively considering how to structure a program that makes sense over 105 percent,” Federal Housing Finance Agency Director James Lockhart said yesterday. He said a ratio of 125 percent “is a number” that’s on the table, though “not necessarily the number we’re going to end up with.”
Mortgage Rates Look for Direction and the Week Ahead
Last week was a good week for mortgage backed securities and consumer borrowing costs. In total MBS, improved by almost 100 basis points which helped to lower mortgage rates by ¼ percent. Much of the improvement came on the day after the FOMC statement…(read more)
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Mortgage Rates Make a Break After Successful Auctions
If you read the blog yesterday, I stated that we were in need of a rally in treasury yields in order for prices of mortgage backed securities to improve before mortgage rates to could move lower. Well, that is what happened. The benchmark 10 year treasury…(read more)
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Rates dip; should you lock?
Mortgage rates dipped on Thursday, which means that you should at least consider locking.
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Rates up, appraisals down
Rates rise modestly in Bankrate’s survey; conventional wisdom on appraisals is misinformed.
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