Mortgage rates were all over the board

Mortgage rates were all over the board last week because the Fed meeting was optimistic. With this happening the Stock market was stronger taking money out of bonds. Today, however, mortgage bonds finished higher by about 25 bps which is helping with mortgage pricing. We are sitting on a level of support which means I am floating interest rates right now hoping save my clients more money.
The S&P 500 is testing a strong ceiling of resistance this morning. Stocks have enjoyed a strong move higher over the past couple of months and could improve more if prices break through the ceiling. If not, the Stock Market may be in for a decline.

In other news, Warren Buffet said he is very optimistic about the future of the economy and is seeing signs of a turnaround in the residential real estate market. That makes now the perfect time to benefit from today's affordable home prices and historically low interest rates. After all, as the economy moves higher, both interest rates and housing prices will follow suit.

I am never too busy for any of your referrals!!

Mortgage backed securities

Mortgage backed securities keeping pushing levels of resistance which is good for mortgage pricing and continuing to test how low rates can go.
Bonds are getting a boost today as investors seek a safe haven after hearing news of the spreading swine flu, which is pressuring Stocks in the US and around the globe.

In other news, Chrysler has received concessions from the UAW, while General Motors is phasing out its Pontiac division and offering a Bond exchange as part of its restructure.

With no economic reports scheduled for today and the boost in Bonds, I recommend floating. I will let you know it the situation changes later today when the Treasury Department auctions off its supply of bills and notes.

Oh by the way, I’m never too busy for any of your referrals.

Mortgage bonds are trading low

Hope you had a safe and fun Halloween! Check out this week’s newsletter. I’d like you to focus on the bond graph below. Mortgage bonds are trading low right now, which means rates are higher than we want, I would recommend to float interest rates for the next few days. I’m thinking about 10 days into middle of next week. If you have deals in progress or offers just accepted advise your clients to hold off on locking until the bond market comes back after the elections next week. There’s lots of volatility right now; however, I will keep you up to date with the latest mortgage news!

Mortgage Bonds are soaring higher

Mortgage Bonds are soaring higher on this weekend’s announcement that Fannie Mae and Freddie Mac will come under control of the government.

The government’s move to create a line of $200 billion to back all Fannie Mae and Freddie Mac loans at all costs is great news for homeowners. First, it ensures the continued liquidity of conforming loans nationwide and, second, it ensures that buyers of this type of Bond have a safe investment going forward. There’s no doubt that this will help the US housing market move through the current crunch that we’re in.

So far this morning, the news has lead to a nice rally in pricing. When combined with the break above the 200-Day Moving Average, this may lead to attractive rates. Therefore, I recommend floating for now.

Jobs Report for August

Wow another great - shortened week! I know you are getting busy out there! Let me know what I can do to help. Make it a great weekend!

Market Update

The Jobs Report for August came in this morning at 84,000 jobs lost. But the real buzz in trading is the swelling unemployment rate, which jumped from 5.7% to 6.1%. This marks the highest unemployment rate since September 2003.

Mortgage pricing has been on a rally for the past several days and looks like it’s about to turn the other way. It’ll interesting to see what happens next week! Stay tuned!

Rates Get Better

I mentioned on Friday that interest rates were on a roller coaster ride late last week. Fortunately, I noticed that mortgage bonds were overbought midweek and got my clients locked in saving most of them 0.125% on their 30 year fixed mortgages. This saved them anywhere from $25 and $40 per month. I look forward to helping your clients too. This weeks newsletter explains what happened last week.

Fed held constant the Fed Funds rate

Last week the Fed held constant the Fed Funds rate, which had investors ponder the stability of the market. We know the Fed should hike rates to hedge inflation, but the question is will they and when? As the Fed was cutting rates remember I warned that mortgage rates would go up and hey have. I want to mention that if the Fed hikes rates mortgage pricing will get better. I’ll keep you informed as I get the information.

It’s a short week for the Fourth of July weekend. I hope you are safe while enjoying the festivities!

-Sean

Get a Good Faith Estimate

Market Update

Rates closed the week down on some products and flat on other.

The market is still volatile and rates are changing everyday.
Get a Good Faith Estimate from your lender when shopping for a mortgage to understand the costs involved with paying points or not paying points.
After coming off the poor performance week in the market mortgage pricing has gotten better this week with a more than 100 bps increase in the market.
In other news, oil prices bumped higher once again after news of a potential strike at a Chevron plant in Nigeria, which is Africa's largest oil producing nation. If oil prices continue on their current path, it may apply selling pressure to both Stocks and Bonds.
I’m predicting that if inflation continues to be a concern interest rates will rise.

Interest rates are still at a 4 year low!!

This week’s update talks about why mortgage rates are going up after the Fed cut interest rates. Inflation is definitely a concern as the Fed continues to lower interest rates. Take a look at the 4 month bond graph in the middle of the update. Remember that mortgage pricing takes direction from Bond pricing. As bonds go up mortgage pricing comes down.

Also, interest rates are still at a 4 year low!! If you need to refinance or are looking to purchase… Call me to get prequalified and see what options you have!

Let me know if you have any questions about the information provided.

Make it a great week.

-Sean


Sean La Rue's Weekly Newsletter

Banks and investors are continuing to “write-down”

Good Morning and Happy MLK Day!

Look at my blog if you have any questions regarding the new declining market loan to value policy (http://www.SeanLaRue.com) or (http://www.MortgageDitty.com) especially if you are just now hearing about this. If I was unclear about the loan to value issue please be advised that not all loans are going to require 20% down. There are still programs available for loan down payments.

Banks and investors are continuing to “write-down” the values on their asset portfolios. This means they are adjusting the value they are placing on the portfolio not necessarily taking a loss on the company just re-adjusting their balance sheets. Slow starts in last weeks new construction report is helping mortgage backed bonds through the end of last week. Make it a great week!

Working for a Living

This week we are still looking at the jobs report and its effects on the stock market. It has caused some concern that the Labor Department could still revise the report lower. Mortgage bonds are still at a two year low.

Economists are still looking at a possible rate cut in coming meetings to help the slowing economy; however, with inflation raising it is unlikely future cuts will happen.

There are tips in today’s update for you to review regarding who is taking the losses in the market and what you can do to protect yourself with home loan rates and great advice regarding your credit cards. I hope this information helps you with your financial planning.

If you are a home owner and have an adjustable rate mortgage, 30 year fixed, or pay option ARM, and are looking to lock in a low rate give me a call and ask me about a NO POINTS AND NO FEES REFINANCE. It's a great time to get locked in. Looking forward to hearing from you!

Happy New Year!

Happy New Year!

Well I’d say it’s about time… this week we are watching the geo-political environment with the assassination of Pakistani opposition leader Benazir Bhutto. This is a great example of external forces and their effect on mortgage market. After loosing some ground in mortgage bonds earlier in the week we are back above the 50-day moving average which is good for pricing. New home sales were reported at 647,000 which came in less than expected at 715,000. This could also be a result of home sales which are typically a bit slower before the holidays.

Keep in mind this information is nationally based. There has been a pick up in loan applications and I hear a buzz in the market regarding contracts flying about. Have a VERY Happy New Year, be SAFE, and I look forward to speaking with you soon!

-Sean

Oh by the way, I’m NEVER too busy for any of your purchase or refinance mortgage referrals and I’ll be sure to treat them like family.

Mortgage Update

After a shortened holiday week mortgage bonds are basically where we started on Tuesday. Next on the economic calendar building permits and housing starts come out mid-week, which are not a high impact, but moderate, for mortgage bonds and interest rate pricing.

You are receiving the weekly mortgage market updates sent out on Mondays. I highly recommend taking 5 minutes to start your day to keep yourself up to date.

This week we found that investors are coming back to the market with new programs for “expanded criteria”. Expanded criteria loans are for borrowers who do not fit into the typically 20% down, high fico, money in the bank, verifiable income profile. This is great news as we continue to see the credit markets shift. If you have any questions don’t hesitate to call.