Rate Update

The stock market is taking a small hit this morning and bonds are relatively flat. In what are small victories (we need to take any we can get) Consumer Sentiment and Chicago Purchasing Index came in above expectations. However Gross Domestic Product came in worse than expectations and the lowest reading since 1982.

Today the Treasury will announce plans to take over 36% stake in Citi, as we have talked about this is one step closer to the first Nationalized bank.

Today I am still recommending floating. Have a great weekend.

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Rate Update

Today’s news really doesn’t have any surprises in it, however we have seen a small bounce back from yesterday in the stock market despite the bad news. Jobless claims were a little worse than expected rising to 667,000 last week. New home sales have dropped to 309,000 and that is the lowest level since they began tracking that number in 1963.

However today we are recommending floating as mortgage rates have popped up in the last few days, we may see some push down in the next few days. If anything changes I will keep you posted.

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Rate Update

Today has not been a good day for Stocks or Bonds, even after the President’s positive speech last night. Some of it may have to do with Chairman Bernanke statements to congress, however yyesterday it had the opposite effect. Also the Existing Home Sales for January were even lower than expected, and the amount of homes listed for sale is the lowest in two years.

Same song, different day I recommend locking today.

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Rate Update and More Details on Stimulus Plan

Yesterday the stock market reached levels not seen since 1997. A lot of economists and forecasters are of the belief that we have officially hit bottom. Bonds are flat even on the news of the worst consumer confidence report since 1967. The main reason to watch the stock market as it pertains to mortgage bonds is it seems to be ready to bounce higher. If that happens investments will start to come out of bonds and into stocks.

Today is not different than the previous 5 days, I recommend locking as mortgage rates are flat today.

MORE DETAILS on President Obama’s Stimulus Plan
The Homeowner Affordability and Stability Plan includes two initiatives to help struggling homeowners. Many of the plan’s details are still being worked out and will not be announced until March 4, here is an overview of the plan.
Refinancing Initiative
Currently families who own less than 20% equity in their homes have a difficult time refinancing and taking advantage of the historically low interest rates. Therefore, the refinancing initiative in the new plan provides refinancing help for homeowners with less than 20% equity in their homes or who owe more than their home is worth. This initiative is open to homeowners who have conforming loans which are guaranteed by Fannie Mae and Freddie Mac, and who owe up to 5% more than their home is worth. People that qualify under these guidelines can refinance into a 30 or 15 year fixed loan. We do not know yet what the credit score requirements will be.
Stability Initiative
This is to provide help to individual families as well as entire neighborhoods by helping reduce foreclosures and stabilize home prices. It is intended to help homeowners who are struggling to afford their mortgage payments, but cannot sell their homes because prices have fallen significantly. The goal of this initiative is simple: “reduce the amount homeowners owe per month to sustainable levels. Homeowners who are current on their mortgages but are struggling can still apply for this program. As such, this is one of the few programs designed to help homeowners who may face delinquency soon, but are current at the moment. Since the focus of this initiative is on helping families and neighborhoods, investment properties do not qualify. This initiative also includes a number of additional elements and incentives that benefit homeowners and lenders alike, including
Supporting Low Mortgage Rates
As part of the Homeowner Affordability and Stability Plan, the Treasury Department is increasing its funding commitment to Fannie Mae and Freddie Mac to ensure the strength and security of the mortgage market and to help maintain mortgage affordability. This portion of the plan will use using funds already authorized in 2008 by Congress for this purpose. The increased funding will enable Fannie Mae and Freddie Mac to carry out ambitious efforts to ensure mortgage affordability for responsible homeowners, and provide forward-looking confidence in the mortgage market.
www.treas.gov/initiatives/eesa/homeowner-affordability-plan/ConsumerQA.pdf

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Rate Update

Bonds and Stocks are relatively flat today. This comes even after the big news of the day that the Government may take a 40% ownership position in Citigroup, because of their inability to pull themselves up. As we have been talking about for a week or so this is one step closer to Nationalizing some of the large banks. How about some GOOD NEWS? Reuters reported that many economists that forecast believe we will begin to show signs of recovery in the second half of the year.

As we have said for a few days mortgage rates have hit a floor and can’t seem to breakthrough. I recommend locking today. Be sure to check out the post from last night in regards to the “New First Time Homebuyer Tax Credit”.

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First Time Buyer Tax Credit

I have been receiving a lot of questions about the changes to the new Tax Credit, here are the highlights.

This credit is equivalent to 10 percent of the purchase price of the home--although it's capped at $8,000--and applies only to first-time home buyers and principal residences. But unlike an earlier $7,500 home buyer tax credit, this one does not have to be repaid.
Who is considered a first time homebuyer? For the purpose of this legislation, a "first-time home buyer" is someone who hasn't owned a principal residence for three years before buying a house. (The date of purchase is considered the day that the title is transferred.) That means if you've owned a vacation home--but not a principal residence--within the past three years, you would still qualify for the credit.
Only those who purchase a home on or after January 1 and before December 1, 2009 are eligible for the credit. Anyone who bought a home last year won't be able to take advantage of it.
The tax credit is subject to income limitations. Single buyers need a modified adjusted gross income of $75,000 or less to qualify for the full credit, that's $150,000 for married couples. Those earning more than these thresholds may be eligible for reduced credits.
Because the tax credit is "refundable," qualified buyers can take advantage of it even if they don't have much tax liability. This means if you owed $1000 in taxes, instead of paying you will receive $7000 as a tax refund. Or if you were already getting money back you will get back an additional $8000.
Buyers have to own the home for at least three years in order to capitalize on the credit. If they sell the home before then, they will have to return the credit to the government. With the historic low interest rates and home prices that have decreased. You also have the goverment paying you to buy a house.

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Rate Update

The stock and bond market has been all over the map today, with the news being Overall Consumer Price Index rising to .3% in January and the CPI also coming in near expectations. One of the causes for the stock market behaving poorly is Senator Chris Dodd’s comments regarding Bank of America and Citi. He stated that it might make sense to nationalize them at some point. This means they would be owned by the government. Both banks are disputing these comments, but many people in the industry have been thinking this for a few months. To hear a high ranking Senator say it, just drives it home.

As we have talked about the last few days, Interest Rates have hit a floor and are having a hard time breaking thru it. Again today we recommend locking. Have a great weekend.

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Rate Update & Mortgage Plan

Mortgage bonds are headed down this morning, which is not good news for rates. As we have said in previous days, we seem to have hit a ceiling on bonds. At this point bonds are headed lower and that means rates will start to trend up. The big news this morning was unemployment numbers which were very poor, again. Also the Producer Price Index which measures inflation was up. While this was a surprise it is also good news, because deflation is so much worse that inflation.

As you might guess I recommend locking today.

I have been fielding a lot of questions in regards to President Obama’s plan for mortgages. There is a lot of confusion, because the plan is pretty vague at this point. However here is what we know so far. The plan would allow up to 5 million homeowners who now are close to owing more than their homes are worth to refinance mortgages through Fannie Mae and Freddie Mac. It will also establish a $75 billion fund to reduce monthly payments for another 3 million to 4 million homeowners facing foreclosure.

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Rate Update and Stimulus Snapshot

"President Obama signed the $787 Billion Stimulus Plan yesterday. See below for some of the details that are out. As for the economic news of the day, Housing Starts fell in January, again. Bonds have been all over the map today and are currently flat.

I think that we have hit a floor on rates, that will be difficult to go much lower. As I have recommended the past few days, I would lock today.

Stimulus Plan Snapshot
First-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. Remember a tax credit is very different than a tax deduction – a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income. If a couple makes about $150,000 or $75000 as a single filers, they will see a reduction in the credit.

Tax Incentives to Spur Energy Savings and Green Jobs — This provision is designed to help promote energy-efficient investments in homes by extending and expanding tax credits through 2010 for purchases such as new furnaces, energy-efficient windows and doors, or insulation.

Landmark Energy Savings — This provision provides $5 Billion for energy efficient improvements. According to some estimates, this can help modest-income families save an average of $350 a year on heating and air conditioning bills.

Repairing Public Housing and Making Key Energy Efficiency Retrofits To HUD-Assisted Housing—This provision provides a total of $6.3 Billion for increasing energy efficiency in federally supported housing programs.

Expanding Housing Assistance—This provision increases support for several critical housing programs. It includes $2 Billion for the Neighborhood Stabilization Program to help communities purchase and rehabilitate foreclosed, vacant properties.

President Obama’s Foreclosure Plan
Refinancing for Up to 4 to 5 Million Responsible Homeowners to Make Their Mortgages More Affordable.

A $75 Billion Homeowner Stability Initiative to Reach Up to 3 to 4 Million At-Risk Homeowners

Supporting Low Mortgage Rates By Strengthening Confidence in Fannie Mae and Freddie Mac

This plan is still a little vague, however we will hear more details in the weeks to come. While this is good news for individual homeowners, it will likely be good for the housing industry as a whole. That’s because, assisting struggling borrowers before they default should help stop the wave of foreclosures, which are estimated to top two million this year. That, in turn, will help stabilize home prices.

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Rate Update and Stimulus Package

Well its another wild day in the markets, as President Obama is scheduled to sign the largest Stimulus Plan since the Roosevelt Era. The stock market has dropped today on the news of Japan’s economy sinking to its worse levels since 1974. However there is some good news, Walmart had higher than expected earnings for the 4th quarter.

All of this has been positive news for mortgage rates, as we have gained back the ground lost on Friday. We are facing some resistance and there is still the idea that bonds will decrease in value with the amount of debt the government is taking on. I recommend locking today, as we have suggested for the last few days.

Here are a few highlights of the stimulus package that will be signed today.

• First Time Homebuyer Credit will be changed to $8000 from $7500, and it doesn’t have to be repaid as long as the buyer lives there 3 years
  
• $400 Tax Credit that will be put into each check, instead of a lump sum
  
• Energy Savings there will also be a tax credit for people that make their homes more energy efficient.

We will do a breakdown on the entire package once it is released.

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Rate Update

Today will have some ups and downs on the bond market. The market closes early today and is closed Monday. There is typically some irregular trading before a 3 day holiday. The stock market rebounded last yesterday after news that President Obama was working on a plan to help individuals delinquent on their mortgages. The Fed has now purchased 115 billion of Mortgage Backed Securities, this has not had the dramatic affect on interest rates as some predicted. Many experts believe that we are headed for higher interest rates, with the amount of debt the Fed is taking on with the new Stimulus package.

I recommend locking today, and will keep you updated with any changes. Have a great weekend, and bless those of you that have a holiday on Monday.

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Rate Update

Well we got some good news this morning. Retails sales showed an increase for the first time in a while, and Jobless claims dropped a little. However the stock market isn’t looking to much at those numbers, instead they are focused on the Stimulus plan that was finalized last night. Many expect it to be on President Obama’s desk to sign by Monday.

We have had 4 good days in a row on the bond market, it has been a long time since that happened. I recommend locking today, as rates are near an all time low.

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Rate Update

Well the market is flat today, and this is after two days of good gains by bonds. Yesterday the stock market lost over 4% after the unveiling of the New TARP plan. Interest rates are holding steady, which is nice feeling these days.
Overall I think that rates will go up long term to combat the amount of spending that the Fed is having to do in stimulating the economy. The CEO of the largest bond holding company in the world PIMCO, has stated that he believes the same thing.

I would recommend locking if you are closing within 45 days. Also if you have been thinking about refinancing, now may be a good time to pull the trigger.

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Rate Update and Stimulus Passes Senate

Well the stock market didn’t respond well to the Senate’s passing of the new Stimulus Package or the unveiling of the new plan by the Treasury Secretary. However yesterday afternoon and this morning have been positive for mortgage rates.

There has been much speculation in recent months about the Fed getting mortgage rates to 4.5%. In a recent interview Federal Housing Finance Agency Director James Lockhart said “The Treasury, not the companies, would bear the cost under proposals to use the companies to drive down mortgage rates to about 4.5 percent. That proposal was under consideration as part of a comprehensive housing-recovery plan being developed by the Treasury. That was a hot idea for a while, it’s cooled off.” It seems as though the powers at be have decided to buy Mortgage Backed Securities (Bonds) and let the rates price themselves in an open market.

I recommend floating for now, unless you are closing in the next two weeks. If you fit into that range I would advise in locking soon. I will keep you updated as the situation changes.

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Rate and Stimulus Update

Well don’t hold your breath, but so far this morning the stock and bond markets are relatively flat this morning. However I doubt the rest of the week will be as tame.

Everyone seems to be holding their collective breath waiting on the news from Washington regarding the new stimulus plan. This plan has already taken some shots over the weekend, because not every dollar is helping the economy. The new Treasury Secretary, Timothy Geithner has delayed his plan for TARP until tomorrow.

I recommend floating for now unless you are closing before Friday. Have a great week.

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Well the stock market didn’t pay any attention to the worse Jobs report since 1974, and it has held onto its early gains. The Labor Department reported today that 598,000 jobs were lost in January the expectation for this was 540,000.

The run up of the stock market is having a negative impact on Bonds and therefore Mortgage rates. In a “Normal” market the numbers today would have had exactly the opposite affect. However we all know that this market is anything but normal.

I recommend floating unless you are closing in the next week. We should see a change if the new Stimulus Package is approved by the first part of next week. Speaking of the new Stimulus

The Senate last night passed an expansion of the tax credit proposal. The proposal would be available to all purchasers (not just first-time homebuyers). The key elements are:

• A tax credit in the amount of $15,000 or 10 percent of the purchase price (whichever is less), with the option to utilize all in one year or spread out over two years
• The tax credit is available to all purchases of any home from date of enactment for one full year. Able to claim the credit against the 2008 tax return
• Buyers must occupy the homes for two years as their principal residences · Purchases of homes by investors are ineligible
• Terminates the previous $7,500 Housing Tax credit on the date of enactment
  
  

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Rate Update

"It's another crazy day for interest rates. Bonds have already traded in a wide range so far today. Today the employment picture continued its gloomy outlook ADP Employment figure showed 522,000 jobs lost in January. Based on this report, the Jobs Report for January will likely come in near 500,000 jobs lost, which is exactly what economists are forecasting. We will get this report on Friday. For know I reccommend floating unless you are closing in the next 15 days.

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