This doesn't make sense. Why aren't we getting the usual FTQ?

With the enormous amount of job losses there is high probability that some of these jobless people will default on their mortgage liablilty, thus not making MBS the "quality" it use to be. I think.

I hate to say it gang, but I see no reason why "it" will ever happen. If we are waiting on the lawmakers, we might as well forget it.

2.95 on the 10 year.... do we hit 3.00 next week? I think the death blow to mortgage rates is if we cross, and move higher, 3.50 or so. I know they're not locked at the hip, but I believe higher treasury yields right now will yield higher mortgage rates. Jason I think you're dead on as to why we're seeing higher rates (treasuries and MBS) although Matt and Adam believe otherwise. We are seeing massive increases in unemployment, and this economic bill the gov't is trying to push forward will take too long to work. We'll see what Monday brings with the plan to save the banks, but I think we're heading in the wrong direction right now. Keep in mind there is another wave of ARMs hitting banks over the next 6-18 months and don't forget Moodys is about to review nearly 400 billion of commercial mortgages....not good for banks.

It looks like there's been even more deteriorating since the morning post. Today should see the highest rates of the year. Maybe once the stimulus actually passes, we'll see a reversal, but right now every morning all I see in the news is "Treasuries fall in anticipation of quick stimulus passage" or what have you.

And Jason, watch out for the big FHA lenders (Wells) as they are going to get crushed by the buy backs. Notice how some lenders are cutting off FHA with either higher FICO scores, higher rates etc. FHA was the new sub prime for the last 2 years....what did people think was going to happen. And on the conventional side (TPO lender) I am getting some really dumb conditions, like the lender will not fund a loan because the borrower has a late fee (not payment, but paid just after the 15th) on the demand or how about the same lender who will not approve (60% LTV, 70% CLTV, 793 FICO, 22% DTI, DU approval) a loan because he has a disputed item on his credit report. WTF? So even if MBS investors don't become concerned with the unemployment numbers, banks are and they are making it harder and harder. They're also getting a lot of help from Fannie with all the new LLPAs. I remain optimistic that I am wrong but things are developing in a bad way.

any news regarding what Geitner(sp) will be rolling out on Monday?

Anyone think that the 10-year could need to make a double bottom at 2.04 and that action may coincide wtih the stimulus package over the next 2 months? That's my hope anyway. http://finance.yahoo.com/q/bc?s=%5ETNX&t=2y I really wish the government would have kept their mouth shut setting expectations for 4.5%, and now we're almost at 5.5%. Freekiing politicians.

Could it be 2008 was revised from 3 to 2.6 mil and the possible elimination of M2M accounting causing the sell off?

Here is one article I found on on the latest bank rescue...but I have read others that conflict :
http://www.ft.com/cms/s/0/b9f6cfc4-f3bf-11dd-9c4b-0000779fd2ac.html?nclick_check=1

John do you have a link about the reduction?: This is what concerns me: The 3.5 million job loss since January 2008 is the largest 12-month decline since the government started compiling those figures in 1939. And: For the first time since records began in 1939, there were three consecutive months of 500k + job losses. per B. Ritholtz. Now our population is MUCH bigger now, so we have a ways to go before we truly match previous numbers so the world is not coming to an end....yet :)

Democrats defeat GOP plan on mortgage rates February 6, 2009 Email| Print| Single Page| Yahoo! Buzz| ShareThisText size – + WASHINGTON—A plan by Republicans in the Senate aimed at pushing mortgage rates lower has gone down to defeat at the hands of Democrats. The plan by Nevada Republican John Ensign would have encouraged banks to issue mortgages with interest rates of 4 to 4.5 percent. The government-controlled mortgage giants Fannie Mae and Freddie Mac would have bought the mortgages on the secondary market. Jumbo loans would have been ineligible. Democrats killed the idea Thursday night by a 62-35 vote. The plan also contained an assortment of expensive tax cuts such as cutting the bottom 10 percent income tax rate in half for two years. New York Democrat Charles Schumer said the plan was too expensive and would provide a windfall to banks charging fees to refinance mortgages. Maybe this will help consumer pull the trigger?

Article Link AP Report http://www.boston.com/business/articles/2009/02/06/democrats_defeat_gop_plan_on_mortgage_rates/

Edgar, here is a little fuel for your fire: I just got off the phone with my A.E. for TBW, they ARE NOT hiring nor have they been hiring ANYONE new to take on the "It shall not be named". She did indicate that thy are busy enough now, and I also questioned her about the funding issues. It was a computer problem, and they had to do them all manually for a while, they are getting back on track, so she says. Of course, this is one lender/investor, maybe there are more out there doing the hiring. Thoughts??

David, As a consumer who was prepared to pull the trigger at 4.5, possibly 4.75, I can tell you I have no interest in a 5 or 5.25. Why should I fork over 4 years of equity for a 1 point interest break? I'm at 6%, and I liked the idea of the savings, but the job market is too unstable for me to risk my equity. I'm very dissapointed with that news, but don't get sold on the idea of a refi-boom at 5+% rates. Thats a fantastic rate that I wished I had, but nothing to refinance for (for me at least). I'm one of those that could have locked in at 4.5, but my LO pursuaded me to wait 5 days. Missed my chance, but the plus side is I found a great blog.

John, I wished I were you LO. I can not even imagine telling someone to wait at 4.5%. I was pleading with people to lock in at 4.75%. 30 year tsy is hangin in there.

John, I am curious, what was your LO waiting for, 3.75%?? It sounds like you were waiting for it to drop as well. Yes, I read your post, you sure you weren't being GREEDY????

George that is exactly what is happening: "they ARE NOT hiring nor have they been hiring ANYONE ". And at this point why would they? I know Matt has said it will take another 2-3 months to hire the ops people but I don't but it. I don't think lenders are going to higher a bunch of people to get ready for the it shall not be named.... especially when we're reversing course. They made add 1 or 2 here and there, but no massive ramp up. Reason: They can't afford it. I hope I am wrong as I have a ton of clients that missed the boat but as the days go on I grow more and more doubtful we'll see the is shall not be named. And I start to believe more and more that the Fed buying MBS is try and keep the market stable as the economy gets worse. Who knows the Treasury on Monday may announce their going to buy 500 billion MBS over the next 6 months, something positive can always happen.

John, Thank you for your input. Many people are discouraged right now and will not refinance with a 5%. They are looking for the 4.50% interest rate. With that said, we have had a massive sell off in these last three weeks and there some banks still pricing in at 4.99 percent which is not bad if you look at how the coupon and bond market are producing. People are worried - and the notion of a bailout is fading away for the financial system.

John you are not looking at your refinance option in the correct manner. You mention you will be "giving" away equity. That is true if you do nothing with your monthly cash flow savings. However, if you apply the cash flow savings correctly you actually gain equity by paying less interest over time. I think you need to speak with a mortgage professional instead of some kid manning the phone at your local bank.

I'm new to MND and this is my first post. Has anyone read SA353 (which did not pass) to HR1? Could it be a the model of how rates can be legislated lower? It appears that Treasury may have somethings to say about how they plan to help mortgage rates in the coming week.

Does anyone know histroically where rates should be with today's MBS prices? Are the lenders really hanging on to profit? Or this a normal spread between the MBS and rates? If so, why would they hire? I see zero reason for MBS to come down unless it is a temporary dip.

Nearly 600000 jobs are lost and gas is going back up and interest rates are pushing up - what the crap is wrong with the government! Where is the FED now and there roll out of the 4.5 interest rate. Someone commented about people loosing their jobs and that is why banks are afraid to give back good interest rates. I would say bag that idea - Banks are GREEDY!!!!

George, thats no a very friendly thing to say. I was not being greedy, and thats exactly the rate my loan officer said to expect. Personally, I am not too upset with her, as she was just trying to help me out. I will continue to watch rates, and she knows I will be looking to lock at 4.5 if it becomes available.

John, you dont make sense. you wouldnt consider a 5% but would a 4.75%? YOu are worried about losing equity in an uncertain job market? IF you lose your job, having a few thousand in equity in your home will make no difference. you wont be able to tap into the equity with no job. if it goes into foreclosure, you can kiss all your equity goodbye. Your 4 years of equity is mostly interest anyhow. Im willing to bet that dropping to 5% or even 5.25% can give you the same term with about as much or less monthyl payment. In addiiton, if you wanted to make the 30 year term payment it would than you are paying now and would only better your situation in the event of a job loss. It sounds like you are being a little greedy and unrational

John, A lot of consumers are just like you right now. Why lock in at something around 5-5.5% when every news station out there talks about lower rates each and every day. I don't blame you. I have plenty of customers asking the same questions. Let's just hope something gives on Monday or else we will be back to 6% in no time. Also it is pretty funny to see the stock market go up 2% today with that amount of job losses.

John, You are in the right to expect 4.5 because that is what the media has been saying; that is what people here on this blog have been saying, and commentators here have been pressing be patient and be positive that we will see these low rates. If anything John I would be really angry right now with this ridiculous government that we have controlling our lives.

One thing I am grateful for is Provident is doing a good job keeping rates below just about every other lender. Despite the moves up in MBS, despite the huge volume...they still keep their rates below market. Can be difficult to work with but at least their not sticking it to people. And this goes back to my disgust with other lenders and their rates along with turn times. This lender, from day one of the move down, has been the lowest priced lender period. And their turn times (at worst) 4 days. So how is the lowest priced lender for the last 2 months (think about that....2 months the lowest), is not getting killed by the volume they receive? Yet lenders with crap pricing say they're getting all this volume and they can't handle it. Are kidding me? You expect me to believe your par rate at 5.625% is sending in a massive amount of volume that you can't handle? BS. I would not be surprised if other lenders started pricing like them Provident would move even lower. So if one lender can avoid "the we can't handle the volume we're jacking our rates up" excuse there should be more.

Hey guys, just wanted to post a message I received from a rep at Amhurst: Monday, news of the Economic Stabilization plan from the Treasury Dept will be coming out. Tuesday will bring a hearing on the matter of determining the plan for the remainder of the Economic Stabilization Act funds I sure hope the plan includes some relief for Mortgage RATES and better pricing to spur homebuying and refinance activity. If you're thinking that refi activity has dried up, you're not alone. Either buying up old toxic assets and/or the Treasury buying new MBSs would hopefully help pricing and rates. It is dramatically needed. For now, I wouldn't wait on locking purchases with our +0.50 bonus on purchase locks that has no set deadline, but perhaps waiting until next week on refis is a good idea? Fill up those pipelines, run Gemstone AU and be prepared. If the government makes some good decisions, a refi and purchase boom could occur soon. I feel it will within the next week or within the next few weeks. I sure hope it will! Have a great weekend, if we don't talk today.

Wow the second sniping comment after my tenative first post. Jason, sure I can take that 1% break, but its going to cost me about 12 grand to do so. Let say I lost my job (I doubt I do, but this is a nasty market). Property values in my area are still appreciating, but I certainly could not afford my current home with a paycut. Its a nice damn house. If I give up the equity I have, I might be up a creek so to speak if I had to sell. I do not consider myself uninformed. I self-manage my retirement, and I posted a 1.3% gain in the 4th quarter, and a 12% gain over the year for 2008. I've run the numbers myself, and for the FHA I would have to buy into (93% LTV), it would take me around 3 years to break even on equity if I applied the savings to the mortgage payment. As is, I could walk today after a sell on my home and only pay about 4 grand in realtors fees after the sell. Its too risky for a 1% return.

John says: "1% break, but its going to cost me about 12 grand to do so". Are you kidding me? You are working with someone who is charging you 12K? I never get these clients, maybe I do I just dont charge enough. If you're in CA I'll do it for half (total fees)....most likely even lower depending on credit, LTV and other factors.

I have to post again...12k in fees? I picked up a loan a few weeks ago, borrower was going with someone who was charging 15k in fees and he decided he better shop around. How in gods name do people get away with charging this? There is not an LO in the country who is worth 15k or even 1k in fees. Another reason this industry has such a bad name. And with ALL the information out there how do borrowers think it's okay?

1k should be 12k in the above post.

Here's a breakdown, tell me what is wrong: Closing costs:
801 $ 2,608.24 *Loan Origination Fee
803 $ 400.00 Appraisal Fee
813 $ 399.00 *Underwriting Fee
1101 $ 250.00 *Settlement or closing fee
1108 $ 1,421.30 Title Insurance
1113 $ 55.00 *Title Co Courier Fee acutal amount only
1201 $ 275.00 Recording fees
1308 $ 25.00 *Insured Closing
$ 5,433.54 Total

Prepaid items:
901 $ 353.60 *Interest for 13 day(s) @ $27.2000 per day
902 $ 3,912.36 *Mortgage Insurance Premium
903 $ 1,364.00 Hazard Insurance Premium
1001 $ 227.34 Hazard Insurance reserves for 2 payment(s) @ $113.67
1004 $ 375.00 County property tax reserves for 3 payment(s) @ $125.00
$ 6,232.30 Total

My mistake as I took your post to say the LO was charging 12k in fess. I do not count interest, taxes and insurance because refinance or not you still have to pay them.

I think I figured this out Edgar. Hear me out. If the FED. sets the stage on Monday and tells America, "Sorry, there will be no help on mortgage interest rates at this time", won't that be good for us? We know what will happen, rates will start to go up and the media will get wind of it, announce it and people will be banging down our doors trying to refi before rates go UP! Consumers still think the 4's exist or will come back there. WRONG! As they are already on their way up now, people will be jumping off the fence before they go even higher. If they don't jump, well at least there will be purchase loans.

George: I hope (if the gov't does nothing for rates come Monday) they make a formal announcement that the gov't will not do anything for rates. That will get people off and closed. First Wells, now B of A today say they will not need anymore TARP money. This will come back to haunt them if things get worse. BUT....does this mean the 350 or so left will be used to help the mortgage industry? Hey if banks don't want it, put it to use where it will make a difference.

We are off of our lows.

i recently closed on a house in june at 5.75%. I had been monitoring the mortgage rates since I heard there was a possibility of them dropping to 4.0% - 4.5%, knowing that they had to get to 4.75% for it to be worth it to me to refi. I currently have a chance to close at 4.75% with 1.75 points, but shouldn't the february coupon be closing next week, which will offer lenders a new cash stock and allow them to temporarily lower rates to fill their pipe lines, in which case it'd be worth waiting a few more days?

Thomas, That is really too much to pay for that rate. Ask him/her if you should hold out on a better rate.