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Mortgage Rates Weekly Review – June, 19 2009 – Rates Heading Lower (Chart)

yourmortgageplanner — Sat, 20 Jun 2009 17:44:53 +0000

Another positive week for Mortgage Rates. The Benchmark FNMA 30 YR 5% posted a positive 28bp improvement overall this week. The newfound lack of confidence in the U.S. recovery coupled with the Geopolitical landscape are contributing factors to the resurgence in lower rates. Fridays close is a positive sign for chartist or technical analyst similar to stocks when a security finishes positive on low volume it is a good sign. The old saying volume precedes price, displays the fact money is moving back into the security. This upcoming week should be interesting as the FED is set speak, one can only wonder if they will discuss the uncalled for kneejerk rise in MBS and Mortgage Rates.

Who Would Lose Under Obama’s Financial Reforms (usnews.com)
Mortgage Rates Head for 6 percent: 5 Reasons They Might Retreat (usnews.com)

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#HVCC CALL TO ACTION

yourmortgageplanner — Wed, 10 Jun 2009 20:06:41 +0000

To: All Mortgage Brokers, Real Estate Agents, Appraisers, Lenders, Home Builders, Title Agents, and Consumers
From: Marc Savitt, President- National Association of Mortgage Brokers

After more than a year of exhaustive negotiations with Fannie Mae, Freddie Mac, James Lockhart, Director of FHFA (GSE Regulator), and NY Attorney General Andrew Cuomo, NAMB believes the time has come for your individual voice to be heard.

In order for this “Call to Action” to be effective, we ask that you fully participate, encourage others to join the action and continue calling and emailing every day, until advised to stop by NAMB. This will NOT be a one day action!

We have received hundreds of e-mails through the hvcc@namb.org e-mail address outlining specific cases where the HVCC has created delays and additional costs to consumers. NAMB has categorized and compiled a report of the examples received, which was sent to FHFA Director James Lockhart. Please use your own examples in your conversations with legislators, regulators, or their staff. Also, please visit the NAMB HVCC Resource Center for additional information and documents on the HVCC.

Who will you be contacting?

NY Attorney General Andrew Cuomo’s Office: (212) 416-8000, Internet Complaint
Federal Housing Finance Agency (FHFA): (866) 796-5595, director@fhfa.gov
Fannie Mae: (202) 752-7000, headquarters@fanniemae.com
Freddie Mac: (703) 903-2000, Internet Complaint
Senators, Representatives and Governors: Click here for contact information.
Also, please contact your local TV and Newspaper outlets.

Below are talking points and background information to assist in your conversations. Please remember we are all professionals and should conduct ourselves accordingly in any communication with the above parties. For the most successful and influential calls, it is important to concisely quantify how the HVCC is affecting your consumer and your business.

Talking Points:

1. NAMB conservatively estimates (breakdown below) that the HVCC is costing consumers over 2.8 BILLION dollars a year in extra fees, created by long delays (extended lock-in fees) and higher appraisal costs.

2. Unregulated Appraisal Management Companies (AMCs), who have been the subject of several misconduct investigations, are the centerpiece of the HVCC. The original Cuomo investigation involved a federally chartered bank and an AMC.

3. AMCs are driving honest appraisers and mortgage brokers from business, eliminating competition, increasing costs to consumers and reducing state revenue. The HVCC is causing significant delays in real estate transactions, hurting real estate agents, title companies and other third parties reliant on turnaround time.

4. HVCC does nothing to reduce fraud, as it legitimizes the same failed model, which was the subject of Attorney General Cuomo’s investigation.

5. No Portability! Consumers are “trapped” with a specific lender. If a better deal becomes available with a different lender, the consumer is forced to pay for another appraisal.

Background:

I. Lack of Portability

A. Lenders are not allowing borrowers to transfer appraisals, regardless of the reason.

B. Forces the borrower to pay for another appraisal and wait for a new appraiser to be assigned and complete it, increasing the total cost and time needed for obtaining a home. Delays in turnaround times also cause the borrower to miss rate lock deadlines and possibly face penalties charged by the lender.

C. In a poll conducted by NAMB, 75.8% of respondents said that 0% of their appraisals are portable since the enactment of the HVCC.

II. Lack of Quality

A. AMCs are assigning appraisers from a different municipality, county, or even state to appraise the target house, therefore unfamiliar with the neighborhood and unable to produce an accurate appraisal.

i. Because of this, the HVCC is forcing appraisers to be in direct violation of the Uniform Standards of Professional Appraisal Practice (USPAP) for jurisdictional competence.

B. Because AMCs pay appraisers such low fees, those assigned appraisers willing to do the work are often inexperienced and fail to adequately appraise the home.

III. Increased Cost of Appraisals

A. The minimum increase we have seen in direct consumer cost is $150 per appraisal. That, coupled with the drastically increased appraisal turnaround times that impose extended lock periods at an average expense of $561.95 per loan, is now costing consumers an estimated additional $711.95 per transaction.

B. $150.00 – minimum increase per appraisal
$561.95 – average loan amount of $224,778 at .25% for extended lock period
$711.95 – average total increase per transaction
x 3,870,552* – 2007 HMDA report of residential real estate loans originated
$2,755,639,496 – $2.8BILLION in increased fees to consumers!

IV. Articles Illustrating the Effects of the HVCC

A. The Appraisal Bubble – The Center for Public Integrity

B. The Cure is Worse than the Disease – AppraisalPress

C. Appraisals Roil Real Estate Deals – The Wall Street Journal

i. Feel free to forward these articles and/or reference them in your conversations.

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Mortgage Rates June 5, 2009 – Week Review – I Hate When I Am Right!

yourmortgageplanner — Sat, 06 Jun 2009 01:00:00 +0000

Not much to say except is it over yet?
As my colleges would say “Stop Being Chicken Little” although this time I might be right? Over the last eight (8) days MBS have been getting there you know what handed to them. This does not translate good for consumer Mortgage Rates. End of market pricing 5.25% was par for a 30 YR Conforming Grade A Borrower. As stated in earlier post this year I forecasted Summer 2009 would be the End of the Run for LOW Rates

Fed announced its plan to purchase Mortgage Backed Securities last week, and began buying them Monday. The Fed will announce the results each Thursday (This should be an interesting rate day). The Fed is estimating 500b will be purchased. This process will continue gradually through June and should aid in pushing rates down until then. (Read between the lines, make sure your refinance or purchase before the end of July 2009, in order to take part in History) Market Forecast Week of January 5, 2009

As you can see from the chart it has not been pretty in the MBS Market. If my Technical Analysis serves me right; if we don’t fill Friday’s gap we are in trouble!

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Using First-Time Homebuyer Tax Credits – Cannot Be Used For The 3.5% Required Down Payment

yourmortgageplanner — Wed, 03 Jun 2009 03:26:18 +0000

The First-Time Homebuyer Tax Credits – Cannot Be Used For The 3.5% Required Down Payment.

• Pursuant to 12 U.S.C. 1709(b)(9), the homebuyer’s downpayment required for eligibility for FHA insurance may not consist of any funds (including funds derived from a sale of the homebuyer tax credit) provided by the mortgagee, the seller, or any other person or entity that financially benefits from the transaction (or by any third party or entity that is reimbursed, directly or indirectly, by the financially benefiting person or entity). Accordingly, the proceeds of the sale of the tax credit to FHA approved mortgagees, the seller, or any other person or entity that financially benefits from the transaction (or any third party or entity that is reimbursed, directly or indirectly, by the financing benefiting person or entity), may not be used to meet the 3.5% minimum downpayment, but may be used as additional downpayment, buying down of interest rate, or other closing costs. – U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

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Mortgage Rate Forecast June 1, 2009 (Chart)

yourmortgageplanner — Tue, 02 Jun 2009 06:17:59 +0000

June 1, 2009 started as another brutal day in the Mortgage Market. On top of the negative bankruptcy news for GM Mortgage Rates increased after a nice head fake last Thursday and Friday. After reaching as low as 4.375% on a 30 YR in May. Mortgage Rates came in like a lamb and left like a lion (see May 2009 Mortgage Rate Chart)

It was the fourth time in 5 weeks that mortgage rates worsened.

By far, the biggest news of last week was Wednesday’s mortgage market meltdown.

Beginning shortly after 1:00 PM ET, and in the span of about 90 minutes, the 30-year fixed mortgage rate soared. The action was so swift that a number of mortgage lenders shut down their Lock Desks, unwilling to accept new business.

There was no “news”-like reason for the action, by the way — just a general feeling on Wall Street that the U.S. government’s massive debt load may lead to inflation sometime in the future. As inflationary fears rise, mortgage rates often rise with them and this is what we witnessed happened Wednesday.

Markets regained their cool Thursday and Friday, but could only erase half of Wednesday’s surge.

This week, look for data to determine whether mortgage rates rise or fall. Monday and Friday will be the biggest days.

Today in addition to releasing consumer spending data from May, the government publishes the Federal Reserve‘s preferred inflation gauge.

If Friday’s employment data is better-than-expected, rates should rise, too. More working Americans means more consumer spending and spending makes up two-thirds of the economy.

Markets expect that another 550,000 workers lost their jobs last month, raising the 12-month total to 5.65 million.

Between Monday and Friday, a number of Federal Reserve members will be speaking publicly, including Fed Chairman Ben Bernanke. Each speaker’s statements, of course, can influence mortgage rates as well.

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Mortgage Rates Historic Increase – The End of Low Rates (Chart)

yourmortgageplanner — Wed, 27 May 2009 21:07:59 +0000

Today was a nightmare to say the least. Just not a good day, rates have increased almost a full 1%.
Now What?

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Mortgage Rates May 26, 2009 – Weekly Forecast

yourmortgageplanner — Wed, 27 May 2009 05:09:44 +0000

Mortgage rates have not fared well the month of May, and today was no different. Mortgage Backed Securities once again ended the day in the red, giving up 68bp. What does this mean Mortgage Rates, how does this translate into consumer rates? Mortgage Backed securities and consumer rates move inversely to one another; when Mortgage Backed Securities lose ground Mortgage Rates increase. View today’s chart to see this month’s action.
One can hope Mortgage Rates will improve. The recent pull back can be attributed to the positive Economic news. With positive signs of a economic turnaround Mortgage Rates will be poised to increase in an effort to combat inflation.

image: © theFinancials.com

Hank Paulson Admits He Never Really Understood How Mortgage-Backed Securities Worked [Incompetence] (consumerist.com)

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Mortgage Rates May 11, 2009 – Weekly Forecast

yourmortgageplanner — Tue, 12 May 2009 05:46:42 +0000

What a GREAT way to start the week. After a horrible Thursday and Friday last week, the FNAM 30 YR 4.0% regained majority of its losses in today. The MBS closed higher by 50bp, translating into .25%-.375% depending on which rate sheets you or your lender was pricing off. Mortgage Rates May 11, 2009. Take a look at that nice thick candle stick, it’s all green.

Oil prices have been rising steadily since January and are up roughly 30 percent year-to-date. Because of this, Thursday and Friday’s Producer Price Index and Consumer Price Index, respectively, will be closely watched. Both are a sort of “Cost of Living” measurement and are, therefore, susceptible to spiraling energy costs.

If either reading comes in higher-than-expected, look for inflation fears to ignite on Wall Street and mortgage rates to rise.

Similarly, if Friday’s Consumer Sentiment Index reveals a more confident American consumer, mortgage rates are likely to rise in that scenario, too. This is because a confident consumer tends to spend more, thereby hastening the recession’s end.

And, lastly, it’s worth noting that six members of the Federal Reserve will be delivering prepared speeches this week, including Chairman Bernanke. When Fed officials speak, the markets can move quickly.

If you’re still shopping for a mortgage rate, consider locking one in soon. Rates have been trending higher and there’s little reason for them to fall.

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Mortgage Rates Week Review May 4 – 8, 2009 (Chart)

yourmortgageplanner — Sat, 09 May 2009 21:52:28 +0000

The first week of May is officially over, and Mortgage backed securities once again sold off at the end of the week giving up a total of 30bp this week (FNMA 30 YR 4% Chart). The selloff pushed Mortgage Rates higher for the first week of May. May 2009 Mortgage Rates.

This week we saw the economy shed 539,000 jobs in April, raising the 6-month total to nearly 4 million jobs lost.

And while the April data may look bad, it’s actually 10% better than what was expected.

Now, it may seem odd to categorize 539-thousand lost jobs as “good-for-the-economy”, but it’s important to remember that on Wall Street, expectations are everything.

As it turns out — relative — the actual job loss data wasn’t so bad.

Now, markets are making adjustments and re-forming expectations of what’s ahead for the economy. They’re preparing for things like higher levels of consumer spending in the months ahead, and fewer home foreclosures nationwide. Both outcomes would help to spur the economy from recession.

Other economic data included the second consecutive month, the number of homes under contract to sell increased — further evidence that housing markets may have already bottomed.

As reported by an industry trade association, the Pending Home Sales Index rose by 3-plus percent last month.

A “pending” home is one that’s under contract but has yet to close. This is one reason why the Pending Home Sales Index is an imperfect statistic.

Just because a home is under contract doesn’t mean it will actually sell. A lot can go wrong between the date of agreement and the date of closing. Deals fall apart all the time. But, when the number of pending contracts rises, we can infer that buy-side demand for homes is strong.

It’s likely that the number of homes under contract is being influenced by a combination of low mortgage rates, relatively inexpensive homes, and various tax credits for certain homebuyers. Overall, it’s spurring demand and that’s part of what’s captured by the Pending Home Sales Index.

So long as the demand for homes outpaces its supply, home prices are expected to rise.

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FED Sr. LO Survey Says….

admin — Tue, 05 May 2009 16:10:53 +0000

The recent FED Sr. Loan Officer Survey provides a glimmer of hope for the Loan world. Although rates are low one survey stood out to me; the survey which reflects Sr. LO opinion that guidelines and standards are tightening. Read the Full Report.

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1.	NAMB conservatively estimates (breakdown below) that the HVCC is costing consumers over 2.8 BILLION dollars a year in extra fees, created by long delays (extended lock-in fees) and higher appraisal costs.
2.	Unregulated Appraisal Management Companies (AMCs), who have been the subject of several misconduct investigations, are the centerpiece of the HVCC. The original Cuomo investigation involved a federally chartered bank and an AMC.
3.	AMCs are driving honest appraisers and mortgage brokers from business, eliminating competition, increasing costs to consumers and reducing state revenue. The HVCC is causing significant delays in real estate transactions, hurting real estate agents, title companies and other third parties reliant on turnaround time.
4.	HVCC does nothing to reduce fraud, as it legitimizes the same failed model, which was the subject of Attorney General Cuomo’s investigation.
5.	No Portability! Consumers are “trapped” with a specific lender. If a better deal becomes available with a different lender, the consumer is forced to pay for another appraisal.

I.	Lack of Portability
	A.	Lenders are not allowing borrowers to transfer appraisals, regardless of the reason.
	B.	Forces the borrower to pay for another appraisal and wait for a new appraiser to be assigned and complete it, increasing the total cost and time needed for obtaining a home. Delays in turnaround times also cause the borrower to miss rate lock deadlines and possibly face penalties charged by the lender.
	C.	In a poll conducted by NAMB, 75.8% of respondents said that 0% of their appraisals are portable since the enactment of the HVCC.
II.	Lack of Quality
	A.	AMCs are assigning appraisers from a different municipality, county, or even state to appraise the target house, therefore unfamiliar with the neighborhood and unable to produce an accurate appraisal.
		i.	Because of this, the HVCC is forcing appraisers to be in direct violation of the Uniform Standards of Professional Appraisal Practice (USPAP) for jurisdictional competence.
	B.	Because AMCs pay appraisers such low fees, those assigned appraisers willing to do the work are often inexperienced and fail to adequately appraise the home.
III.	Increased Cost of Appraisals
	A.	The minimum increase we have seen in direct consumer cost is $150 per appraisal. That, coupled with the drastically increased appraisal turnaround times that impose extended lock periods at an average expense of $561.95 per loan, is now costing consumers an estimated additional $711.95 per transaction.
	B.	$150.00 – minimum increase per appraisal $561.95 – average loan amount of $224,778 at .25% for extended lock period $711.95 – average total increase per transaction x 3,870,552* – 2007 HMDA report of residential real estate loans originated $2,755,639,496 – $2.8BILLION in increased fees to consumers!
IV.	Articles Illustrating the Effects of the HVCC
	A.	The Appraisal Bubble – The Center for Public Integrity
	B.	The Cure is Worse than the Disease – AppraisalPress
	C.	Appraisals Roil Real Estate Deals – The Wall Street Journal
		i.	Feel free to forward these articles and/or reference them in your conversations.

Your Mortgage Planner 2.0 Blog » Your Mortgage Planner 2.0 Blog

Mortgage Rates Weekly Review – June, 19 2009 – Rates Heading Lower (Chart)

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#HVCC CALL TO ACTION

Mortgage Rates June 5, 2009 – Week Review – I Hate When I Am Right!

Using First-Time Homebuyer Tax Credits – Cannot Be Used For The 3.5% Required Down Payment

Mortgage Rate Forecast June 1, 2009 (Chart)

Mortgage Rates Historic Increase – The End of Low Rates (Chart)

Mortgage Rates May 26, 2009 – Weekly Forecast

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Mortgage Rates May 11, 2009 – Weekly Forecast

Mortgage Rates Week Review May 4 – 8, 2009 (Chart)

FED Sr. LO Survey Says….