Absolutely Unreal Times!

I thought I had seen it all but every time I feel things have ran there course another whirlwind hits us. I'm sure it's no surprise but December holiday sales were down 2.7% and excluding auto's were down 3.1% more than double the expectations by most economists of 1.3% and marked the first calendar year decline ever! The DOW is down over 200 points, treasuries are skyrocketing with yields in the low 2's and guess what our friendly and ever rate influencer (known as MBS) have traded "sideways" for 4 consecutive days which means stagnant mortgage rates.

The primary problem we are seeing right now is the banks not translating today's current economic rate environment onto rate sheets and thus customers. For instance, we have two BIG lenders that are so overwhelmed with business that the only way to keep it from coming in is to raise rates! That way bankers and brokers are forced to use other avenues but hey guess what? Almost all banks are doing this to some extent. Simply put the banks are now too busy to handle the volume of business and do not want to "staff up" to cover it because of fear that this refinance rally will be short lived. The general public cannot win for losing and it's getting extremely frustrating to sit on the sidelines and watch this happen. Ben Bernanke stated yesterday (paraphrasing) "If $600 billion of GSE/MBS buying doesn't do the trick, then we'll buy another $600 billion. And if treasury traders even think about donning the vigilante hat of taking market matters into their own hands in a sign of policy protest then we will set up a bear trap of buying term treasuries in size." Bluntly put stopping messing with our market presence or you will pay!

It's nice to see the government take such an active role in trying to influence consumer rates and in particular mortgage rates however, to date the moves have not been doing what was planned as it seems sellers and treasury traders are making their presence felt!

Brought to you by Flat Branch Mortgage, Inc.
Your Mid-Missouri Mortgage Lender
Posted by: Shawn Von Talge