Bonds are down a little today, because the stock market is rebounding a little bit.
Interesting note on the unlikelihood of rates moving much lower - last Friday, Jack Koskinen, interim chief executive of Freddie Mac, said that home loan rates are near the bottom and that any further decreases will be small.
In other news Consumer Confidence is up a little over last month.
For now, I will continue to recommend locking, as I cant see much upside to floating.
Bonds are up a little today, as stocks are selling off.
The bad news from the auto sector is driving the stock market and US dollar down today, as a lot of people figured out we are still in recession.
While this hurts, it will not last forever.
I recommend floating for now, but be prepared to lock in this historic opportunity."
Sorry you haven’t seen an update on rates this week, a couple of family emergencies prevented me from doing my usual posts.
Bonds are up a little this morning due to reasonable inflation numbers and the fact that stocks are moving lower. Personal Income and Spending came inline with estimates. And as expected Personal Savings rate was up. Rates are in historic lows, and this isn’t a time to gamble. I recommend locking.
Also I have been receiving a lot of questions about why rates arent lower. Please watch the clip from CNBC, it sums it up well.
Yesterday afternoon the Fed gave us another surprise by announcing they will purchase another 750 billion of Mortgage Back Securities or Bonds. This news has driven rates down to the lows of a couple weeks ago.
The important thing to remember is that the Fed is buying 5% and 5.5% coupon bonds. These bonds equate to mortgages in the 5.75 to 6.5 range. This does keep rates low, but still a long way from 4% as the media is talking about. Because of this we are now showing some signs of inflation which is the arch enemy of rates. Also the large lenders are holding back and not pricing all of the market gains because they are overloaded with loans right now. It goes to a supply and demand philosophy.
I recommend locking today and taking advantage of the gains.
The Fed is meeting today and there isn’t much chance they will change rates. However their Policy Statements could have an effect on both markets. Inflation numbers came out today and were actually a little higher than expected. But remember a little inflation at this point is much better than deflation. The stock market is taking a small hit and our “steady eddy” bond market is flat again today. Which means rates are flat again, this is a welcome change from the last few months.
I recommend floating today, but will keep you updated with any changes.
Bonds are down a little this morning as the stock market is making another run upward. Wow it feels good to type that. The main reason for the run is the big banks say they are back to being profitable. Also Fed Chairman Bernake stated again that the recession should end in 2009.
I recommend locking today and taking advantage of gains the past few days.
Also check out the new "Poll of The Week"
Both the stock and bond markets have been all over the place today and are currently flat. There are a couple of reasons for the volatility today. First China is concerned the US may be spending too much on the recession. China is the largest single holder of US bonds. Also the stock market is reacting to the Congressional hearings on mark to market accounting and the news that Citigroup seems to have risen from the dead. They announced today they do not need anymore TARP money. This is a good sign.
For now I recommend floating and will let you know if anything changes. Have a great weekend.
Well how about another day of good news? The bond and stock markets are up this morning. Also Retail sales were again better than expected in February, and were revised even higher for January. These are good signs for the economy.
The other important item today is that the House Financial Services committee will be discussing the mark to market accounting. This could have a big impact on both the bond and the stock markets. We recommended to float yesterday and it looks like that may payoff, we had a great end of the day on the bond market and it should reduce interest rates .125% today.
I recommend taking advantage of the gains and locking today.
The stock market is up a little today, holding onto the big gains from yesterday. The bond market and interest rates are flat. The main reason for the run on the stock market had yesterday is the possibility that the Mark to Market system is going to be fixed. If you are looking for one big reason that banks aren’t lending this is it. If they can correct this we are on the way to economic recovery. Mortgage rates have been flat the last couple of days, which is a nice change.
I recommend floating today as we see how things shake out.
The stock market is off to the races today, after Citigroup announced they are looking at profits instead of losses in the next few months. Also it helped that Treasury Secretary Geithner and Fed Chairman Bernake had positive statements for Congress. They said that the recession should be over by year-end. Chairman Bernanke also reiterated that the major banks would not be allowed to fail. Normally a run up in the stock market would be detrimental to bonds and interest rates. However as we have said before this is not a “normal market”, so mortgage bonds are pretty flat today.
I recommend locking, and will keep you updated.
The stock and bond markets are relatively flat this morning. The biggest news of the week is when the SEC Chief Accountant and Chairman of the Financial Accounting Standard’s Board will be in front of Congress on Thursday to discuss the mark to market system. This is one of the biggest reasons that so many banks, investment banks, and insurance companies are in the shape they are in. If they can amend the current system it will go a long way to helping the credit system get back on track.
I recommend locking today, and will keep you updated.
As we talked about yesterday the jobs report was ugly today. The US economy has lost 4.4 milliion jobs since December 2007. However it would make sense in the current environment that the stock and bond market would take a sharp dive on the news, and then reverse course to the positive direction all in less than an hour. This market continues to be wild and we anticipate that continuing for the long term.
Whether you are buying or refinancing a home right now, it is important to be realistic in terms of interest rates and not be greedy at the same time. We suggest setting a realistic target interest rate that makes sense. So that when rates get to that level lock it in and count your blessing for the historic low interest rates that we have currently.
I recommend floating today, but that could change quickly. So stay tuned…
Earlier this week President Obama rolled out the Housing Recovery Plan. The main focus of the plan is for refinancing current mortgages and modification of mortgages with Fannie Mae and Freddie Mac.
The two initiatives are designed to significantly expand the numbers of borrowers who can refinance or modify their mortgages to a payment that is affordable now and into the future.
Home Affordable Refinance includes new refinancing flexibilities for homeowners whose loans are owned by Fannie and Freddie. Key features include:
Additional Flexibilities: Most borrowers refinancing an existing loan will not be required to buy new or additional mortgage insurance if the loan at the time of the refinance is more than 80 percent of a home's value. Any existing mortgage insurance may be carried forward to the new loan. In addition, Fannie Mae can refinance loans up to 105 percent of a home's value with this new flexibility, so even borrowers who are "underwater" -- who owe more than their home is worth -- may be able to refinance. This will expand the number of borrowers able to take advantage of lower interest rates that reduce monthly payments, or refinance into a more sustainable mortgage.
What Borrowers Need to Know:
To qualify, your mortgage loan must be owned by Fannie or Freddie
You must have a solid payment history on your existing mortgage.
The expanded refinance flexibility ends in June 2010.
Home Affordable Modification
Through the Home Affordable Modification, Fannie Mae will work with loan servicers across the country to help distressed borrowers modify their current loan into a mortgage that is more affordable and sustainable. Loan servicers participating in the program may reduce interest rates, lengthen the payment time frame or take other steps, such as principal forbearance, to bring the monthly payments down to as low as 31 percent of the borrower's gross (pre-tax) income.
What Borrowers Need to Know:
To modify a loan through Home Affordable Modification, it must be for your primary residence.
You need not wait to become delinquent with your payments -- a plan can be put in place as soon as you think you may have trouble making your mortgage payment.
The program is for mortgages originated prior to January 1, 2009.
Certain eligibility requirements, including attesting to a financial hardship, may apply in some cases.
To ensure borrowers currently at risk of a foreclosure have the opportunity to apply for a Home Affordable Modification, Fannie Mae servicers have been directed not to proceed with a foreclosure until a borrower has been evaluated for the program.
The stock market has taken another large dive today, and in the bond market we have broken thru that important ceiling we talked about yesterday. The big news of the week is scheduled for tomorrow, with the Jobs Report. This report is expected to be pretty ugly. Tomorrow we will be posting the details of President Obama’s Housing Plan.
We have changed to a floating stance, but will let you know if anything changes.
Normally we try to break things down on a level that’s easy to understand, but today we need to be a little more technical. Yesterday Bonds reached a ceiling on the 25 day moving average. It will be difficult for bond prices to go above this level.
Also the stock market is rebounding today. That is also hurting bond prices, which will raise interest rates. President Obama released the Housing Rescue Plan today and we will break it down for you as soon as we have more details.
Today I recommend locking, and will keep you informed.
The stock market is seeing a little rebound off of the really bad day yesterday. As expected there is some money flowing from bonds into stocks, but at this point its not really effecting mortgage rates. Today, Ben Beranke and Treasury Secretary Timothy Geithner will discuss the budget with Senate and House committees, and their plans to help the economy.
Today I recommend floating, and with one finger on the lock button.
The stock market is taking another hit today, thanks in large part to AIG announcing they need another government bailout. Currently the Dow is below 7,000 for the first time since 1997. Normally money would be flowing into bonds and reducing interest rates. However bond traders believe that we are poised for a rebound in the stock market which will hurt bond prices long term. Obviously we need a sign this time that the financial markets are getting better, not worse.
Today I recommend floating, but will have one finger on the lock button all day.
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