Dennis' Mortgage Blog

August 31st, 2007 12:05 PM
My Mortgage Blog has been updated with a series of articles on the current situation in the mortgage industry.  Part one explains the basic mechanics of the industry and secondary markets like Fannie Mae and Freddie Mac.  Part two explains what happened with New Century and other sub-prime lenders.  Part three explains the different licensing requirements for mortgage originators.  I know many real estate agents make take umbrage with my conclusion, that I feel we need stricter licensing for all real estate industries that is more difficult to obtain and maintain, but I feel it is ultimately what is in the best interest of the consumers. I try to update the blog a few times a week with information for you and your clients--send them the link!  Also this weekly communication will be posted.
 
What we are seeing the past few weeks are wild swings in pricing throughout the week, mirroring the swings in the stock markets.  Huge gains one day and then huge sell offs the next.  Trying to predict them is crazy but interestingly we have not really seen back-to-back days, and certainly not three days in a row, of the market moving the same direction.
 
Today rates got hit pretty good because of positive economic news, inflation is within Fed's target range (causing stocks to surge pulling money from bonds), July individual incomes up to highest level since March, personal consumption spending up, and personal savings is up.  All very positive news reflecting an economy in July that was strong and filled with consumer confidence--the opposite of what one would expect of a nation wrapped up in and concerned with a housing collapse as suggested in the media.
 
President Bush today spoke on the housing and mortgage markets and presented several ideas for government intervention, while some make sense others appear to put additional regulations and disclosures into an industry that is already heavily regulated.  None the less if his call for Congress to get FHA "modernization" that has been sitting in Congress since last year out of committees and onto his desk for signatures it will benefit the industry.  Anything he proposes, from IRS reform of lenders' forgiveness of principal in short sales, to raising the FHA limits, to easing the ability of those in default to refinance with FHA insured mortgages, will have to go through Congress before it becomes active--and then depending on how it gets sliced and diced and politicized it will take even longer to see if effective.  While some positive may come of all this I for one will not be holding my breath for anything to occur as it will no doubt be just prior to next year's elections and used as a tool by both parties.
 
How is this for a really weird week? No change in rates Friday to Friday!
 
30 Yr. Fixed Conforming with 10% or more down: 6.125% at 1.00 point
30 Yr. Fixed Jumbo with 10% or more down: 7.375% at 1.00 point  **
 
Note these are for 30 day locks, purchase transactions with 10% or more down and strong FICO's. 
 
***PLEASE NOTE*** "Jumbo" for this rate graph is for mortgages identical to those mortgages that fit Fannie Mae and/or Freddie Mac guidelines with the exception of loan amount greater than $417,000.  "Non-conforming" mortgages may be below the $417,000 loan amount and are so designated depending on may factors, including but not limited to FICO scores, income and/or asset verification, etc.
 
**There continues to be a huge disparity between lenders on their Jumbo financing, some are as high as 8.25%.  We are very successfully using conforming based piggy-back transactions for loans that would traditionally be jumbo financing to save borrowers hundreds of dollars per month.
 
It has been a much quieter week this past week than we have experienced the last few months with relatively few major announcements or changes from lenders.  I sense we are not too far off from investors on Wall Street re-entering the non-conforming markets for A+ borrowers and seeing a reduction in those rates--I hope my instincts on this are correct!
 
Have a great weekend.
 
Let me know how I can assist you and your clients.   Be sure to send them to www.DennisCSmith.com for rates, to apply for mortgages, and a lot of great information on loans and mortgages.
 
 
Dennis
 
Posted by Dennis C. Smith on August 31st, 2007 12:05 PMPost a Comment (0)
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