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Mortgage Rates Hold Recent Lows

Mortgage rates moved slightly lower today, despite movement in bond markets that would have suggested otherwise.  The paradoxical strength is likely due to the fact that bonds improved faster yesterday without mortgage lenders adjusting rate sheets accordingly.  In other words, we began the day with an advantage thanks to lenders being overly cautious yesterday.  From here we could even see a few lenders adjust rate sheets for the better as bonds have managed to find their footing at the end of the day.

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Freddie and Fannie May Get Another Jumpstart

There has been a flurry of news about the two GSEs, Fannie Mae and Freddie Mac, in the last few weeks.  The House Financial Services Committee recently advanced H.R. 4560, the GSE Jumpstart Reauthorization Act of 2017 to the full house for consideration.  The proposed bill extends the GSE Jumpstart Act through January 1, 2019, and was approved 33-27. The Jumpstart Act prohibits the sale of the GSE preferred shares owned by the Treasury Department without congressional approval.  The bill also permits the GSEs to suspend their payments into the Housing Trust Fund for any period when it is unable to make its full dividend payment to Treasury.

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Mortgage Rates Hold On to Lower Levels After Tax Bill Doubts

Mortgage rates held on to yesterday's gains in most cases.  Some lenders were even in slightly better shape today, but not enough to have an effect on anything beyond the upfront costs associated with any given rate quote.  Rates themselves would be right in line with yesterday's. 

That's not a bad thing considering yesterday afternoon brought effective rates near their lowest levels of the month. In this case, lower "effective rates" refer to lower upfront closing costs (or higher lender credits) for the prevailing top tier conventional 30yr fixed rates of 4.0%.  

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Automated Appraisals Don’t Paint the Whole Picture

The use of Automated Valuation Models (AVM) is expected to expand following the announced plans of the Fannie Mae and Freddie Mac to waive the requirement for a professional appraisal on qualified purchase loans where the loan-to-value (LTV) ratio is at or below 80 percent.  Fannie Mae had previously allowed this waiver only for refinancing, while Freddie will now allow automated evaluation tools for both purchase and refinancing loans when working with its Loan Advisor Suite.CoreLogic's Principal Economists Yanling Mayer, writing in the company's Insights Blog, says these changes come as the industry is hearing of shortages of certified and licensed appraisers, especially in rural areas. 

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Downpayments at Record Highs as Home Prices Rise

Homebuyers ponied up the highest downpayments on record to purchase homes in the third quarter of 2017. ATTOM Data Solutions' (formerly RealtyTrac) Residential Property Loan Origination Report says that the median down payment for a single-family home or condo purchased with financing during the quarter rose to $20,000 from $18,162 in the second quarter of this year.  In the third quarter of last year the median was $14,400.  The most recent number is the highest in ATTOMs records which date back to 2000. The $20,000 downpayment represents 7.6 percent of the median sales price during the quarter of $263,000. The percentage amount was also a recent high...

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Mortgage Rates Quickly Lower After Inflation Data and Fed

Mortgage rates fell fairly quickly this afternoon following the Federal Reserves updated economic projections.  While it is indeed true that the Fed "raised rates" this afternoon, there are two reasons that doesn't matter.

First of all, the rate the Fed adjusts (aptly named, the Fed Funds Rate), governs only the shortest-time frames (overnight loans among big banks).  Although its effects radiate to longer-term debt like mortgages, the two are far from joined at the hip.  Short term rates often move one direction while long term rates move another.

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Realtors Raise Last-Minute Red Flags Over Tax Bill

Realtors are expressing concern over three measures that exist in either the House or the Senate versions of the Republican tax cut bill and have sent a letter to Orrin Hatch (R-UT) and Kevin Brady (R-TX), chairs of the Senate Banking and House Ways and Means Committees respectively, about these issues. The letter was sent as a conference committee is about to begin discussions of changes to the bills that will allow passage of a single version by both side of the Congress. Signed by, current National Association of Realtors (NAR) President Elizabeth Mendenhall, the letter stresses the important of homeownership to the U.S. economy...

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Fannie and Freddie Will Wait Until Jan 2nd to Evict You

Both Freddie Mac and Fannie Mae announced this week that evictions from foreclosed single-family and two-to-four-unit properties owned by the GSEs will be suspended during the holiday season.  The moratorium will begin on December 18 and extend through January 2 of next year. The two companies said that legal and administrative proceedings for evictions can continue during the period as well as other foreclosure-related activities.  Families, however, must be allowed to continue living in the homes. "We're taking steps to support families and to extend the timeline of help for struggling borrowers during the holidays..." 

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For Purchase Applications, This December is Better Than The Last

Applications for mortgages, both for home purchases and refinancing, declined during the week ended December 8.  The Mortgage Bankers Association (MBA) said its Market Composite Index, a measure of loan application volume, was down 2.3 percent on a seasonally adjusted basis compared to the volume a week earlier.  On an unadjusted basis, the Index decreased 4 percent.

Applications for purchases decreased 1 percent on a seasonally adjusted basis from the week ended December 1, and the unadjusted version of the Purchase Index was down 6 percent.  The unadjusted index remained 10 percent higher than during the same week in 2016.

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Mortgage Rates Slightly Higher Ahead of Fed

Mortgage rates moved modestly higher for the 4th straight business day today.  Last Wednesday saw the best levels in a month with some lenders in the best shape since early September.  The recent move higher brings rates back into the higher part of the prevailing range.

If that all sounds somewhat dramatic, it's not.  The "prevailing range" is so narrow that it barely bears mentioning.  In fact, quite a few loan scenarios would be quoted the same "note rate" on any day in the past several months.  Why, then, are we talking about rates "moving?"  Technically, it's the "effective rate" that's moving because lenders use upfront costs to make finer adjustments to the cost of financing. 

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