Archive for the ‘Mortgage News Daily’ Category

Following a few weeks of deteriorating economic data, there have been concerns in the financial community that the current obsession with austerity risks slowing the recovery. Evan Newmark finds out more about what he bond market is signaling from Thorold Barker.

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Sharing perspective on the situation between regulators and U.S. banks, with Joshua Rosner, Graham Fisher, managing director....(read more)

Regulators are questioning major U.S. banks about capital raising plans and BofA announces they plan to make at least 3,500 layoffs beginning tomorrow, with CNBC's Kate Kelly and Steve Liesman....(read more)

Sept. 7 (Bloomberg) -- Diane Swonk, chief economist at Mesirow Financial Holdings Inc., talks about Federal Reserve Bank of Chicago President Charles Evans's call for stimulus to cut unemployment. Swonk also discusses the Fed's Beige Book survey released today. She speaks with Mark Crumpton on Bloomberg Television's "Bottom Line." (Source: Bloomberg)

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Sept. 7 (Bloomberg) -- Richard Bove, an analyst at Rochdale Securities, talks about the appointment of Thomas Montag and David Darnell as co-chief operating officers of Bank of America Corp., a move that ousts Sallie Krawcheck and Joseph Price from the company's management ranks, and the outlook for the bank. Bove speaks with Scarlet Fu on Bloomberg Television's "InBusiness with Margaret Brennan." (Source: Bloomberg)

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Average Mortgage Rates   TODAY YESTERDAY CHANGE 30 Yr FRM 4.72 4.68 0.04% 15 Yr FRM 3.92 3.89 0.03% FHA 30 Year 4.46 4.44 0.02% Jumbo 30 Year 5.13 5.11 0.02% 5/1 Yr ARM 3.33 3.33 0.00% » View Current Mortgage Rates » Compare Mortgage Rates Updated: 7/1/11 4:35 PM Jul 1, 2011 12:53PM Mortgage Rates: Decision Time Again After failing on repeated occasions to extend a two-month rally, mortgage rates took the path of least resistance this week: UP The BestEx levee burst . In the chart of Consumer Rate Quotes below, if the line is moving up, closing costs are rising. If the line is moving lower, costs are getting cheaper. Sideways mortgage rate behavior followed by an abrupt drop followed by another spell of mostly sideways activity can be seen when looking closely. This spell of sideways activity took place near the... Read More More From MND Rate Movers: Econ Data, Trading Techs, Debt Ceiling Debate MBS MID-DAY: Loan Pricing Worse The Day Ahead: ISM, Consumer Sentiment, Long Weekend Mortgage Rates: Risking Another Move Higher MBS RECAP: Down But Off Lows MBS MID-DAY: Technical Breakdown The Day Ahead: Final Greek Vote, Claims, Chicago PMI View: Front Page | Headline Viewer Video News Economy Coast to Coast U.S. Lawmakers Seek to Reach Debt Deal to Avert Default Miller Sees Five More Years Of High Foreclosure Rates: BLAW »View More Video News Follow Rates Daily On: RSS Twitter Facebook Mobile Apps Helpful Links Current Mortgage Rates Daily Rate Movements Historic Mortgage Rates Tools Bank Strength Ratings Mortgage Rate FAQ's Mortgage Calculator Forward Know someone who might be interested in this email? Forward it. Subscribe Would you like to receive our Daily Rate Update by Email? Subscribe Now. Front Page | Headline Viewer | Video | Forums | Q&A | Market Data | Rates | Marketplace : Consumer - Industry © 2011 Brown House Media, Inc. All rights reserved. Brown House Media Inc. - 19706 One Norman Blvd - Cornelius, NC 28031 This information is not an advertisement to extend consumer credit as defined by Section 226.2 of Regulation Z. This is not an offer to enter into an agreement regarding interest rates. The rates quoted do not include discount points, origination points, or loan level risk based price adjustments.  Rates and terms are subject to change without notice.

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After failing on repeated occasions to extend a two-month rally, mortgage rates took the path of least resistance this week: UP

The BestEx levee burst.

In the chart of Consumer Rate Quotes below, if the line is moving up, closing costs are rising.  If the line is moving lower, costs are getting cheaper. Sideways mortgage rate behavior followed by an abrupt drop followed by another spell of mostly sideways activity can be seen when looking closely. This spell of sideways activity took place near the most aggressive rate quotes of the year.  Since setting new lows last Friday, consumer borrowing costs have risen sharply. 

Home loan borrowing costs clearly spiked this week...

The chart above compares the average origination costs (as a percentage of loan amount) for several available mortgage note rates as quoted by the five major lenders. Each line represents a different 30 year fixed mortgage note rate.  The numbers on the right vertical axis are the origination closing costs, as a percentage of your loan amount, that a borrower would be required to pay in order to close on that note rate. If the note rate graph line is below the 0.00% marker, the consumer may potentially receive closing cost help from their lender in the form of a lender credits. If the note rate line is above the 0.00% marker, the consumer should expect to pay additional points at the closing table to cover permanent buydown costs and origination fees. PLEASE SEE OUR MORTGAGE RATE DISCLAIMER BELOW

CURRENT MARKET*: The "Best Execution" conventional 30-year fixed mortgage rate has risen to 4.625%, but fewer lenders are readily quoting it after additional weakness was experienced today. More lenders are offering 4.75% instead (extra margin in rate sheets).  On FHA/VA 30 year fixed "Best Execution"  is still 4.375% but just barely, 4.50% is more willingly quoted.   15 year fixed conventional loans are best priced at 3.875%. Five year ARMs are still best priced at 3.25% but the ARM market is more stratified and there is more variation in what will be "Best-Execution" depending on your individual scenario. 

GUIDANCE OFFERED LAST FRIDAY:  This is as good as it's been all year. Since the middle of November really.  If you're on a short lock/float timeline (15 days), now is a good time to considering locking. While a few sessions of continued loan pricing rallies could lead to a lower overall note rate offer, we've been here before (recently) and failed to see investors commit to a sustained rally in the bond market. Our long-term outlook still supports the case for lower rates though, however until we see investors display a commitment to rally, we will be reluctant to advise floating in the short-term, especially with volatility only 2-days behind us.

CURRENT GUIDANCE:   Last week's guidance nailed it.  The path of least resistance is still up for interest rates, at least in the short-term. That puts us in a defensive posture for at least the next 10 to 20 days and creates an uncomfortable lock/float environment. Rate watchers have two choices: 1) lock up and get out now or 2) try to capitalize on a correction.  The former is the safe advice.  With respect to the latter, there will be ups and downs no matter which direction rates are trending.  And in the current environment, those swings can be BIG, as illustrated in the chart above. For the thrill-seekers out there, or the longer-term, more flexible scenarios, we haven't change our outlook for lower rates by the end of the summer. BEWARE: This is guidance is speculative in nature. We don't have a crystal ball, we can't predict the future, we can only share our outlook. Making the following considerations extra important........................

What MUST be considered BEFORE one thinks about capitalizing on a rates rally?

   1. WHAT DO YOU NEED? Rates might not rally as much as you want/need.
   2. WHEN DO YOU NEED IT BY? Rates might not rally as fast as you want/need.
   3. HOW DO YOU HANDLE STRESS? Are you ready to make tough decisions?

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"Best Execution" is the most cost efficient combination of note rate offered and points paid at closing. This note rate is determined based on the time it takes to recover the points you paid at closing (discount) vs. the monthly savings of permanently buying down your mortgage rate by 0.125%.  When deciding on whether or not to pay points, the borrower must have an idea of how long they intend to keep their mortgage. For more info, ask you originator to explain the findings of their "breakeven analysis" on your permanent rate buy down costs.

*Important Mortgage Rate Disclaimer: The "Best Execution" loan pricing quotes shared above are generally seen as the more aggressive side of the primary mortgage market. Loan originators will only be able to offer these rates on conforming loan amounts to very well-qualified borrowers who have a middle FICO score over 740 and enough equity in their home to qualify for a refinance or a large enough savings to cover their down payment and closing costs. If the terms of your loan trigger any risk-based loan level pricing adjustments (LLPAs), your rate quote will be higher. If you do not fall into the "perfect borrower" category, make sure you ask your loan originator for an explanation of the characteristics that make your loan more expensive. "No point" loan doesn't mean "no cost" loan. The best 30 year fixed conventional/FHA/VA mortgage rates still include closing costs such as: third party fees + title charges + transfer and recording. Don't forget the fiscal frisking that comes along with the underwriting process.

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According to the Department of Housing and Urban Development's (HUD) research publication, Evidence Matters, the U.S. has not examined its national rental policy since the housing crisis began.  As a result of that crisis, an ever-increasing number of renters are facing a shortage of decent, safe, and affordable homes.

In addition to the fallout from the housing crisis, there are other reasons for revisiting this topic.  Derek R.B. Douglas, a special assistant to the president who serves on the White House Domestic Policy Council and leads an interagency rental policy working group says, "It is not just homeowners who are struggling in the economy; a third of the population rents. We need to start the conversation, and the thinking, about what we can do at the federal level, and what can be done by the state, local, and private sectors to support those renters who are now looking for affordable housing options, or having trouble making rents, or living in communities where rental prices are going up, as more people who were homeowners move into the rental markets."

This was the impetus for a conference titled Informing the Next Generation of Rental Housing Policy held last October under sponsorship of the Departments of Agriculture, Treasury, and HUD at which more than a dozen experts from the nonprofit development, financial, and academic worlds offered ideas for budget-neutral initiatives in the areas of rental housing for low-income households, the relationship between rental housing and neighborhoods, and the financial and regulatory barriers in the housing industry.

That conference featured a panel of experts from the nonprofit, development, financial, and academic worlds that looked at rental housing in three different ways: rental housing and low-income households, the relationship between rental housing and neighborhoods, and the financial and regulatory barriers inherent to the industry.  This panel discussion forms the basis for the final article in the spring edition of Evidence Matters.

The primary theme that emerged from the panel discussion was using rental policy to promote better outcomes across a whole array of domains - asset-building for low income families, good schools, better neighborhood conditions, more positive outcomes for children and an end to chronic homelessness.

Nancy O. Andrews, president of the Low Income Investment Fund, said she envisioned a "children's healthy start voucher" that would link affordable housing to an array of early interventions: prenatal nutritional support; quality early childcare; community health care; replications of the family nurse visitation program which trains caregivers to parent effectively; and quality schools.

There is evidence supporting the efficacy of this approach.  Nutritional support programs such as the Special Supplemental Nutrition Program for Women, Infants, and Children, as well as increases in family income in the early childhood years appear to have more long-term effects than similar initiatives aimed at adults. Likewise, studies and experiments "have shown long-term effects, even into adulthood, of high-quality early childhood education," said Jeanne Brooks-Gunn, a social scientist at Columbia University Teachers College. Finally, each early intervention initiative "saves government spending later" on remedial programs, criminal justice, unemployment, and welfare, according to Tama Leventhal, assistant professor of child development at Tufts University.

Andrews conceived the idea of using rental housing as a platform for a healthy start voucher based on a 17-year longitudinal study by Professor Gary Evans at Cornell University which suggests that the stresses of poverty pose a serious threat to children's brain development.  The research shows that the high stresses of poverty on children "actually create physical impairments in child brain formation. In other words, poverty poisons children's brains" including inhibiting executive function and working memory, the parts of the brain used in learning. Making matters worse is that the diminished function appears to be long lasting, perhaps permanent.

The Evans study and others bring the importance of housing affordability and safe communities into focus.  Andrews said, "I began to see the connections among housing, community, and human potential." When implemented together, the services embedded in her voucher concept may counteract the stresses on children's brains and the resultant deficits. As a result, Andrews believes that lower-income children will enter kindergarten ready to learn, which may help diminish the achievement gap over the long term.

Although it may not seem as critical as quality childcare or education, research shows that net worth is a key predictor of long-term educational attainment. The article cites a study showing that parental net worth has a significant effect on total years of schooling, post-high school years of schooling, and college attendance," and net worth and non-liquid assets also affect whether parents can obtain loans to support their children's college attendance.  Given the huge and growing disparity in income in this country and the distribution of wealth, building assets is a hurdle to low income households and, given the link between net worth and educational attainment this becomes a vicious cycle. .

To help build assets among the 4 million people receiving rental assistance and the 8 million families who spend more than half their income on rent and utilities, Andrea Levere, president of the Corporation for Economic Development, proposed embedding asset-building strategies within rental housing; creating opportunities for renters to build assets through positive behaviors like contributing to a building's maintenance, paying rent on time, helping to manage properties, and reducing energy usage for individually metered apartments. These activities would be rewarded with credits, convertible to cash, that are deposited in savings accounts which residents, after financial counseling, could borrow against for asset-building investments, including education, debt reduction, homeownership, and launching a business. 

Levere also suggested eliminating restraints on asset building such as limits for subsidized housing that discourage savings accounts or even owning a car.  Income limits also discourage people from earning more money which might force them to leave their subsidized rental homes. Expanding the Family Self-Sufficiency program would allow people to stay in subsidized housing as their income rises, banking those extra funds in escrow accounts which might ultimately enable them to put a downpayment on a house or a deposit on a market-rate apartment.

Another advocate of basing a range of social services within rental housing, Rosanne Haggerty, MacArthur Fellow and founder and president of Common Ground, proposed blending nine different housing and services programs to create long-term supportive housing with the ultimate goal of ending long-term homelessness. Mental health, health care, and other programs would share risk and pool their resources she said and when those services are tied to the places where people live, the evidence of the effectiveness of supportive housing is overwhelming

Haggerty pointed to a recent 3-year Seattle study of a supportive housing development for homeless alcoholics which found that the development saved taxpayers more than $4 million in its first year - funds that would otherwise have gone toward emergency care, the criminal justice system, and other services. The savings began to appear within the first six months despite the start-up costs.  Another study found that the costs of housing a homeless person for one year were nearly the same as the systemic costs of the individual remaining homeless for a year.

The idea of supportive housing, Haggarty said, "Is an approach to housing that is relevant to so many more people and families than the homeless. All of us at some point are going to need supportive housing - to have options other than nursing homes or being a burden to our kids. Individuals and families are able to lead more stable and productive lives when they have a secure home and the help that they need to manage challenges, whether they be related to health or employment."

 

READ MORE: Builder Report Offers Reminder. Affordable Rental Units Needed

READ MORE:  HUD Focused on Rebuilding America's Dilapidated Housing Inventory

READ MORE:  Affordable Housing Units Needed for Low Income Renters

READ MORE: The Dearth of Affordable Rental Housing

READ MORE:  Gimme Shelter: Homelessness Rate Climbing. Low Income Rental Units Needed

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Average Mortgage Rates   TODAY YESTERDAY CHANGE 30 Yr FRM 4.68 4.63 0.05% 15 Yr FRM 3.89 3.88 0.01% FHA 30 Year 4.44 4.38 0.06% Jumbo 30 Year 5.11 5.08 0.03% 5/1 Yr ARM 3.33 3.29 0.04% » View Current Mortgage Rates » Compare Mortgage Rates Updated: 6/30/11 5:23 PM Jun 30, 2011 3:58PM Mortgage Rates: Risking Another Move Higher Volatility attacked on Tuesday and attacked again today. For the second time this week, home loan borrowing costs have risen about as much as they can without negatively impacting the CURRENT MARKET Best Execution Mortgage Rates. The abrupt jump in cost is again due to bond market volatility following a "technical breakdown." Read More from MBSonMND . CURRENT MARKET *: The "Best Execution" conventional 30-year fixed mortgage rate has risen to 4.625%. Some lenders may already be quoting 4.75% though... Read More More From MND MBS RECAP: Down But Off Lows MBS MID-DAY: Technical Breakdown The Day Ahead: Final Greek Vote, Claims, Chicago PMI MBS RECAP: Another Down Day Mortgage Rates: BestEx Levee Bursts MBS MID-DAY: Path of Least Resistance The Day Ahead: Greek Vote to Vote, $29bn 7s, Pending Home Sales View: Front Page | Headline Viewer Video News Post QE2 Strategy Debt Deal Grounds Senate Vacation Plans The Job Creation Challenge »View More Video News Follow Rates Daily On: RSS Twitter Facebook Mobile Apps Helpful Links Current Mortgage Rates Daily Rate Movements Historic Mortgage Rates Tools Bank Strength Ratings Mortgage Rate FAQ's Mortgage Calculator Forward Know someone who might be interested in this email? Forward it. Subscribe Would you like to receive our Daily Rate Update by Email? Subscribe Now. Front Page | Headline Viewer | Video | Forums | Q&A | Market Data | Rates | Marketplace : Consumer - Industry © 2011 Brown House Media, Inc. All rights reserved. Brown House Media Inc. - 19706 One Norman Blvd - Cornelius, NC 28031 This information is not an advertisement to extend consumer credit as defined by Section 226.2 of Regulation Z. This is not an offer to enter into an agreement regarding interest rates. The rates quoted do not include discount points, origination points, or loan level risk based price adjustments.  Rates and terms are subject to change without notice.

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Volatility attacked on Tuesday and attacked again today.

For the second time this week, home loan borrowing costs have risen about as much as they can without negatively impacting the CURRENT MARKET Best Execution Mortgage Rates. 

The abrupt jump in cost is again due to bond market volatility following a "technical breakdown." Read More from MBSonMND.

CURRENT MARKET*: The "Best Execution" conventional 30-year fixed mortgage rate has risen to 4.625%. Some lenders may already be quoting 4.75% though.  On FHA/VA 30 year fixed "Best Execution"  is 4.375% and potentially even 4.50% at some lenders (GNI pricing = better).   15 year fixed conventional loans are now best priced at 3.875%. Five year ARMs are still best priced at 3.25% but the ARM market is more stratified and there is more variation in what will be "Best-Execution" depending on your individual scenario. 

PREVIOUS GUIDANCE:   After failing on repeated occasions to extend the two-month rally, mortgage rates are acting exhausted. That means the path of least resistance is up for interest rates, at least in the short-term. That puts us in a defensive posture for the next 10 to 20 days. We are not ready to change our outlook for lower rates by the end of the summer though. This corrective behavior happened last year too, which supports our long standing view that "history is repeating itself" in the bond market. 

CURRENT GUIDANCE:   Previous guidance nailed it: The path of least resistance is up for interest rates, at least in the short-term. That puts us in a defensive posture for the next 10 to 20 days.  And markets demonstrated that again today with sharp increases in costs.  You have two choices: 1) lock up and get out now, avoiding any ongoing volatility or 2) try to capitalize on a brief correction.  The former is the safe advice.  With respect to the latter, there will be ups and downs no matter which direction rates are moving.  And in the current environment, those swings can be BIG.  You're almost looking at another note rate higher in terms of Best-Execution quotes, so PROTECT THAT, especially if you can't afford to lose it.  For the thrill-seekers out there, or the longer-term, more flexible scenarios, we haven't seen anything yet that kills chances of lower rates by the end of the summer.  Bumpy ride in assessing that possibility though....  Making the following "rules of the game" doubly important.

What MUST be considered BEFORE one thinks about capitalizing on a rates rally?

   1. WHAT DO YOU NEED? Rates might not rally as much as you want/need.
   2. WHEN DO YOU NEED IT BY? Rates might not rally as fast as you want/need.
   3. HOW DO YOU HANDLE STRESS? Are you ready to make tough decisions?

SEE A CHART OF NEW YTD RATE LOWS

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"Best Execution" is the most cost efficient combination of note rate offered and points paid at closing. This note rate is determined based on the time it takes to recover the points you paid at closing (discount) vs. the monthly savings of permanently buying down your mortgage rate by 0.125%.  When deciding on whether or not to pay points, the borrower must have an idea of how long they intend to keep their mortgage. For more info, ask you originator to explain the findings of their "breakeven analysis" on your permanent rate buy down costs.

*Important Mortgage Rate Disclaimer: The "Best Execution" loan pricing quotes shared above are generally seen as the more aggressive side of the primary mortgage market. Loan originators will only be able to offer these rates on conforming loan amounts to very well-qualified borrowers who have a middle FICO score over 740 and enough equity in their home to qualify for a refinance or a large enough savings to cover their down payment and closing costs. If the terms of your loan trigger any risk-based loan level pricing adjustments (LLPAs), your rate quote will be higher. If you do not fall into the "perfect borrower" category, make sure you ask your loan originator for an explanation of the characteristics that make your loan more expensive. "No point" loan doesn't mean "no cost" loan. The best 30 year fixed conventional/FHA/VA mortgage rates still include closing costs such as: third party fees + title charges + transfer and recording. Don't forget the fiscal frisking that comes along with the underwriting process.

...(read more)