Browse by Tags

Mortgage rates capped off a great week in sour fashion last Friday. After four days of stock selling induced rate rallying, lenders were finally forced to reprice for the worse on Friday. While mortgage rates did rise more than they have on average, the best 30 year conventional fixed loan rate was still seen near the best levels of the year. The week ahead offers and entire menu of mortgage rate influential events including two gauges of consumer spending and sentiment, three Treasury debt auctions, and a full foursome of housing releases. On top of that we will contend with investor sentiment surrounding the ongoing European debt crisis (contagion), hopefully the Federal Reserve will use one it's scheduled speech events as an opportunity to calm the concerns in the market ...

The Department of Treasury announced the terms of next week’s debt offering. They will sell $44 billion 2 year notes, $42 billion 5 year notes, $32 billion 7 year notes, and $11billion 5 year TIPS notes for a total of $129 billion. All auctions amounts were as expected with exception of the 5 year TIPS offering, that was $1bn larger than the previous auction. The added supply of debt on the market pressured both treasury and mortgage yields higher. The Treasury rally that helped mortgage rates recover from the previous day's marginal weakness reversed course today. Once again we have taken one step forward only to immediately take one step back. ...

Tomorrow we get the official government numbers on the employment situation. This is the most influential report offered on a monthly basis. Job creation is crucial to our overall economic recovery; if more people are out of work, there will be less consumer spending. This is bad for corporate profits and our economy. I have been saying all week to lock ahead of this report, I am sticking with that guidance. If tomorrow's report is better than expected, rates will rise and rise quickly. If it is on the screws or slightly worse, mortgage rates will probably hold steady near current levels, even if MBS prices rise. if much worse than expected, rates could dip another .125% for a brief amount of time. With rates holding at the best levels of the year and not much to gain by floating, the wise move is to lock ahead of this report. ...

Reports from fellow mortgage professionals indicate the par 30 year conventional rate mortgage remains in the 4.50% to 4.75% range for well qualified consumers. There are, HOWEVER, several lenders rewarding high FICO, low LTC borrowers with 4.375% rates. To secure a par interest rate you must have a FICO credit score of 740 or higher, a loan to value at 80% or less and pay all closing costs associated with the loan including an estimated one point loan origination/discount/broker fee. If you are seeking a 15 year term, you should expect a par rate between 4.00% to 4.25% with similar costs. While AQ and MG do believe that benchmark rates have room to fall further, we all agree that mortgage rates are not likely to continue to decline. That said, I continue to recommend locking over floating. At this point we are seeing about the best rates in history and lenders continue to be reluctant to offer lower rates. ...

Prices of mortgage backed securities posted modest gains yesterday in an uneventful trading session. Intraday gains didn’t warrant reprices for the better from lenders, however because the rally has carried over into today, mortgage rates are better this morning! After touching 5 month lows before moving higher last week, mortgage rates are almost as aggressive as they were two weeks ago. If you have been floating your rate, you can secure better terms today...take advantage of the gains. I go back to the saying, lock at the MBS price highs, float at the MBS price lows. ...

The secondary mortgage market went on quite a ride yesterday! Following a weaker than expected 5 year Treasury note auction, market participants hurriedly sold their fixed income investments ahead of the FOMC statement. This led to MBS falling below the recent range and a few lender reprices for the worse. However, following the release of the Fed statement, Treasuries rallied, the dollar recovered losses, and stocks sold off. When all was said and done MBS managed to close the day near the upper end of the current trading range, allowing lenders to reprice for the better, keeping mortgage rates in the same stable range they've in over the last few weeks. ...