Early May ’09 mortgage rates revisited in Sept ’09 !

September 10th, 2009

I don’t think the market is going to let rates get much lower. Actually I’m surprised we’re seeing these again, but with continued Government intervention in the mortgage securities market for now (this too will end), it’s a crapshoot.

A simple rule of thumb, rates go up a lot quicker than they go down.

Get off your decision fence, get that paperwork in and lock in your rate.   Especially those of you that qualify for the first time homeowners tax credit !

These  “planets”  will only stay aligned for so long, after which you’ll only be able to look back and kick yourself for not making a move then.

Testing important thresholds on the eve of 9/11

September 10th, 2009

Gold briefly topped $1000 per ounce but then dipped back below that psychologically important level.

The dollar slid to its lowest level since September 2008 as China expressed inflationary concerns about the U.S. amid more calls for a diversification out of the dollar as the sole reserve currency.

The Federal Reserve reported that consumer credit plunged by $21.6 billion in August, its largest decline on record. The decline came as banks cut credit lines and consumers continued to deleverage.

While this cycle’s current decline in consumer credit is a first, it is difficult to draw conclusions for the future – Will consumers releverage? Is the deleveraging a lasting retracement of past overleveraging? Does it indicate that the economic retrenchment has further to go?

None of those questions are likely to be answered in short order.

This crystal ball view of our near term economy is probably on target

September 7th, 2009

Perhaps the most meaningful comment in early September came from Dallas Fed President Fisher,  who spoke of deflationary concerns and sluggish growth.  He said, “for the immediate future, the risk to price stability is a deflationary risk, not an inflationary one” and that “we are likely to see a prolonged period of sluggish economic performance and uncomfortably high unemployment as businesses reallocate capital and labor to fit the new economic landscape.”

economic outlook

For anyone’s guess or comment :  how long is “prolonged” ?

Home Affordable Refinance Program Expands to 125 Percent Loan-to-Value

July 2nd, 2009

(News Source: Federal Housing Finance Agency)

(WASHINGTON, D.C.) — The Federal Housing Finance Agency has authorized Fannie Mae and Freddie Mac to expand the Home Affordable Refinance Program (HARP) to homeowners who are current on their mortgage payments from the present loan-to-value ratio ceiling of 105 to 125 percent. With these expanded refinance opportunities, qualified borrowers whose mortgages are currently owned or guaranteed by Fannie Mae and Freddie Mac will be allowed to refinance those loans according to the terms of the Home Affordable Refinance Program established earlier this year.

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Foreclosure Avoidance Counseling – HUD

July 2nd, 2009

HUD-approved housing counseling agencies are available to provide you with the information and assistance you need to avoid foreclosure. As part of President Obama’s comprehensive Homeowner Affordability and Stability Plan (HASP), you may be eligible for a special Making Home Affordable loan modification or refinance, to reduce your monthly payments and help you keep your home.

If you need help understanding the Making Home Affordable Program, you can use the search tool at the link below to find a counseling agency in your area that will provide you with free foreclosure prevention services. If you are eligible for the loan modification or refinance program, the counselor will work with you to compile an intake package for your servicer.

Foreclosure prevention counseling services are provided free of charge by nonprofit housing counseling agencies working in partnership with the Federal Government. These agencies are funded, in part, by HUD and NeighborWorks® America. There is no need to pay a private company for these services.

Foreclosure Avoidance Counseling – HUD

Federal Housing Finance Agency – Home Page

June 10th, 2009

Mission Statement:

To promote a stable and liquid mortgage market, affordable housing and community investment through safety and soundness oversight of Fannie Mae, Freddie Mac and the Federal Home Loan Banks.

Federal Housing Finance Agency – Home

Missed The Mortgage Rate Boat ? Timing, Luck or Greed . . . maybe a bit of each ?

June 9th, 2009

Just like the stock market and how quickly prices can go down; mortgage rates have shown they can go up just as steeply and quickly. There has to be ton of people kicking themselves for trying to time the bottom and do better than the 4 to 4.25 percent mortgage rates of a month back.

Rates will possibly get back under 5% but not as low as they were, so there may be another opportunity if your circumstances allow you to wait. Lesson learned hopefully.

Q : Wait for how long ? A : No one has a crystal ball. Two weeks, two months ? As I’ve posted elsewhere, with government intervention, mortgage rate movements can be unpredictable.

(I personally don’t trust the government or government agencies to necessarily do the right thing. I think greed still prevails at the Lender level. Why not ? They got bailed out once. No lessons learned there that I can see.)

As of this posting, mortgage rates continued to tick higher as the market showed a disdain for the risks associated with investing in mortgage-backed securities. MBS are similar to treasuries in that the price and the yield are inversely related, meaning as price goes lower, yields move higher and vice versa. So as MBS move lower in price, mortgage rates move higher. Monday June 8th, over lunchtime hours, MBS made a dramatic move lower in price forcing lenders to reissue worse rate sheets. This increased the par 30 year conventional rate mortgage by another .125% in rate. By day’s end, most lenders were offering par 30 year fixed rate mortgages in the 5.5% to 5.625% range.

Home prices are still very affordable and rates are still under 6%, so it’s still a great time to buy. And if you are a first time home buyer you can get up to $8,000 back from the government. Don’t leave it to chance that things couldn’t get worse.

Source : mortgagenewsdaily.com

More on Economic Indicators

February 19th, 2009

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Interest Rate Forecasting: Economic Indicators

February 19th, 2009

Interest rates on residential mortgages and U.S. Treasury securities can be influenced by monthly changes and the longer-term trend changes of economic indicators.

There are many variables that can influence the rates on long-term debt instruments, but an understanding of key economic indicators can provide clues to the future direction of interest rates.

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Highlights of 2008 Tax Law Changes: Tax Breaks Renewed, Recovery Rebate Credit, Homeowner Relief

January 16th, 2009

Source: Internal Revenue Service, IRS.gov
Tue Jan 6, 2009

AMT exemptions rise; several expiring deductions and credits get a new lease on life; a new standard property tax deduction and a special first-time homebuyer credit are available to some homeowners; and retirement savings incentives expand. These are among the changes taxpayers will find when they fill out their 2008 tax returns. More information about these and other changes, summarized below, can be found on IRS.gov and in various IRS documents, including the Instructions for Form 1040.

Economic Stimulus Payments Tax Free

Economic stimulus payments are not taxable, and they are not reported on 2008 tax returns. However, the stimulus payment does affect whether a taxpayer can claim the Recovery Rebate Credit and how much credit he or she can get. The credit is figured like last year’s economic stimulus payment except that the amounts are based on tax year 2008 instead of 2007. A taxpayer may qualify for the Recovery Rebate Credit if, for example, she did not get an economic-stimulus payment or had a child in 2008. See Fact Sheet 2009-3 for details. In most cases, the IRS can figure the credit. The instructions for Forms 1040, 1040A and 1040EZ have more information.

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Q : How much money will I get from the economy stimulus plan ?

March 4th, 2008

A : from msnbc.com : How much will I get from the economy stimulus plan ?

Q : Why are mortgage rates jumping?

March 4th, 2008

 A : from msnbc.com : Why are mortgage rates jumping?

Leap Day February 29, 2008 In Review

March 2nd, 2008


Unlike all the hype you hear from advertising, and sadly people who should know better, mortgage rates are more closely related to trends in Treasury Bond yields,  and definitely not directly to Federal adjustments of the prime rate.    This is a spot picture of where we were on 2/29/08. 


The Yield on the 30-Year Bond – As stocks got crushed, there was a flight to quality into US Treasuries.   The yield on the 30-Year US Treasury Bond tested 4.699 on Wednesday, as inflation fears trumped another rate cut by the Federal Reserve on March 18.   Then as stocks got clocked on Thursday and Friday a renewed flight to quality pulled the 2-Year note yield down to 1.616, a new low for the move. The bond ended the month at 4.473.     Monthly resistance is 4.066.



30 Year Treasury Bond Yield FPE 02/29/08


30 Year Treasury Bond


30 Year Treasury Bond Rates FPE 2/29/08


Chart Courtesy of Reuters and RightSideAdvisors.com 

Rate Lock Recommendation – 11/21/07 12:45 PM EST

November 21st, 2007

Wednesday’s bond market has opened strong following early stock weakness and concerns about the economy next year. The stock markets are showing sizable losses with the Dow currently down 130 points while the Nasdaq has fallen 35 points. The bond market is currently up 23/32, which will likely improve this morning’s mortgage rates by approximately .250 of a discount point.

This morning’s economic data has not had much of an impact on today’s trading or mortgage rates. Comments made by the Fed late yesterday are influencing this morning’s trading much more than the data is. The Fed lowered its economic outlook for next year, which has affected stocks negatively and helped shift funds into bonds. This has pushed the yield on the benchmark 10-year Treasury Note down to 4.01% and is flirting with the 4.00% threshold. It actually broke that level during overnight trading, which is the first time since September 2005. It will be interesting to see if it will close below 4.00%. Doing so leaves room for further improvements and lower mortgage rates. If not, rates will likely not see much more improvement in the immediate future.


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Rate Lock Recommendation – 11/14/07 1:13 PM EST

November 14th, 2007


Wednesday’s bond market has opened in negative territory despite weaker than expected economic news. The stock markets are relatively calm with the Dow up 20 points and the Nasdaq down 1 point. The bond market is currently down 8/32, which will likely push this morning’s mortgage rates higher by approximately .125 of a discount point.

The Commerce Department gave us October’s Retail Sales figures early this morning, saying that sales rose 0.2% last month. This matched forecasts, therefore, has not had a significant impact on the bond market or mortgage rates today.

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