Today was another strong Friday! The bad news for the economy in the form of poor job reports was good for mortgage rates! They crept down all day and ended the day at 5.75% for a 30 year fixed. We sure hope this trend continues, but it no doubt will yo-yo around next week like it has been in the weeks preceding! Aside from interest rates we had another strong day for referrals and applications! It looks like there will be several buyer's out and about shopping for homes this weekend and in weeks to come! This is a great sign! We have enough inventory for them, so please shop away. We want to thank everyone out there who has been referring us their clients. PMG's business model is built around referrals and we couldn't do it without you!
Have a great weekend and be sure to check back to www.pmg-inc.net to get updates next week.
If you are a realtor, please remember you can send your clients to our website to apply or view their loan status! If you are buyer you can apply directly by clicking here.
These are great tools to make the process easy and smooth!
Brought to you by:
Professional Mortgage Group, Inc.
Friday, April 4, 2008
Thursday, April 3, 2008
Will Things Get Better?
I have really been almost amazed by traders mentality these days especially when it comes to the economy. You've heard me talk time and again that rates are largely determined by the fluctuations in demand for MBS (Mortgage Backed Securities). It seems we are fighting an uphill battle armed with water balloons while the traders are at the top with bazookas! See my point? Well then let me explain it to you.
The bottom line is traders seem to have little faith in the performance of MBS given the billions of losses that investors and even huge companies (i.e. Bear Stearns) have taken on these fixed coupons. Even though underwriting guidelines have REALLY tightened, programs have been slashed, MI companies will not ensure anything over 97% ltv and the mortgage market in general has "trimmed the fat" so to speak. The economic data has to be SOOOOOO bad and I stress BAD that traders literally have to feel VERY unsure about the DOW in order to stash money in MBS or the safe haven treasuries!
The Fed, although their efforts have been very admirable, have failed to pass the HUGE savings that large corporations are feeling onto consumers. The bottom line mortgage rates have not followed suit with the reductions that The Federal Government has given the corps and especially; yes no matter how you slice it the "bail out" of Bear Stearns. Most people do not even realize that the Fed opened their doors to taking some of the "less liquid" assets Bear had in order to facilitate the transaction.
Where does that leave us? Well unless the Fed can instill the same faith in MBS that they seem to have tried to instill in the financial markets then mortgage rates will never reach there true "potential"? In the past given the same set of circumstances or performance of Treasuries and MBS (i.e. 2003) rates should be around 5.375-5.5% instead as posted on Bankrate the national average for mortgage rates was lightly over 6.0% last week. If the Fed and in particular the US government want to HELP the economy then they must address the housing sector vigorously! If that means the Fed buying "Agency" MBS then that's what THEY MUST DO! I can guarantee you that if buyers can get 5.375% on a 30 year fixed mortgage the inventory of homes at the national level will dwindle and at a fairly fast pace.
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
The bottom line is traders seem to have little faith in the performance of MBS given the billions of losses that investors and even huge companies (i.e. Bear Stearns) have taken on these fixed coupons. Even though underwriting guidelines have REALLY tightened, programs have been slashed, MI companies will not ensure anything over 97% ltv and the mortgage market in general has "trimmed the fat" so to speak. The economic data has to be SOOOOOO bad and I stress BAD that traders literally have to feel VERY unsure about the DOW in order to stash money in MBS or the safe haven treasuries!
The Fed, although their efforts have been very admirable, have failed to pass the HUGE savings that large corporations are feeling onto consumers. The bottom line mortgage rates have not followed suit with the reductions that The Federal Government has given the corps and especially; yes no matter how you slice it the "bail out" of Bear Stearns. Most people do not even realize that the Fed opened their doors to taking some of the "less liquid" assets Bear had in order to facilitate the transaction.
Where does that leave us? Well unless the Fed can instill the same faith in MBS that they seem to have tried to instill in the financial markets then mortgage rates will never reach there true "potential"? In the past given the same set of circumstances or performance of Treasuries and MBS (i.e. 2003) rates should be around 5.375-5.5% instead as posted on Bankrate the national average for mortgage rates was lightly over 6.0% last week. If the Fed and in particular the US government want to HELP the economy then they must address the housing sector vigorously! If that means the Fed buying "Agency" MBS then that's what THEY MUST DO! I can guarantee you that if buyers can get 5.375% on a 30 year fixed mortgage the inventory of homes at the national level will dwindle and at a fairly fast pace.
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
Tuesday, April 1, 2008
A Couple Positve Days!
Friday and Monday were a couple positive days in the Columbia market!
We haven't been able to say that too much lately have we? MBS prices steadily improved during this time frame resulting in mortgage rate improvements! While we don't know if this trend will continue, it is still a good sign. As soon as the MBS market stabilizes, so will mortgage rates!
At the same time we received numerous phone calls and realtor referrals the last couple days! In taking these applications and talking to the Realtors involved, it does sound like the activity is picking up! This is of course another great sign! Even as all the negativity in the news is floating out there, the Columbia market seems to be a bit more healthy than the markets being depicted in the media! It is obvious Columbia has had its struggles or ups and downs, but for once I wanted to point out the bright side!
Another pleasant surprise has been buyer's reaction to the news that 100% financing was being eliminated! While this sounds like it may scare off many first time buyers, we haven't noticed that trend yet. All the buyer's have taken the news in stride and are more than willing to put the minimum 3% down. These buyer's have just sucked it up and stated " If we don't have 3% somewhere then we shouldn't be buying a home anyway!" I have been a bit surprised by these reactions. While I think it is the correct mindset and approach, I thought I might see a little bit more bitterness. This being a reaction to all their friends getting 100% and not them due to unlucky timing!
Like I said this is all positive news and I truly hope we have turned a corner. I hope these last few days will be more of an indication of a return to normalcy, rather than a few random good days!
If you are a realtor out there that has noticed things picking up, please post a comment. We would love to hear your feedback!
Brought to you by:
Professional Mortgage Group, Inc.
We haven't been able to say that too much lately have we? MBS prices steadily improved during this time frame resulting in mortgage rate improvements! While we don't know if this trend will continue, it is still a good sign. As soon as the MBS market stabilizes, so will mortgage rates!
At the same time we received numerous phone calls and realtor referrals the last couple days! In taking these applications and talking to the Realtors involved, it does sound like the activity is picking up! This is of course another great sign! Even as all the negativity in the news is floating out there, the Columbia market seems to be a bit more healthy than the markets being depicted in the media! It is obvious Columbia has had its struggles or ups and downs, but for once I wanted to point out the bright side!
Another pleasant surprise has been buyer's reaction to the news that 100% financing was being eliminated! While this sounds like it may scare off many first time buyers, we haven't noticed that trend yet. All the buyer's have taken the news in stride and are more than willing to put the minimum 3% down. These buyer's have just sucked it up and stated " If we don't have 3% somewhere then we shouldn't be buying a home anyway!" I have been a bit surprised by these reactions. While I think it is the correct mindset and approach, I thought I might see a little bit more bitterness. This being a reaction to all their friends getting 100% and not them due to unlucky timing!
Like I said this is all positive news and I truly hope we have turned a corner. I hope these last few days will be more of an indication of a return to normalcy, rather than a few random good days!
If you are a realtor out there that has noticed things picking up, please post a comment. We would love to hear your feedback!
Brought to you by:
Professional Mortgage Group, Inc.
Monday, March 31, 2008
An Interesting Week!
The week is off to an unusual start I say that because the Chicago NAPM (the gauge for manufacturing and non-manufacturing productivity for the Chicago area) came in slightly better than forecast 48.2 (forecast was 46.0); keep in mind anything less than 50 signals contraction. In the past anything that was even close to expectations signaled a big "sell-off" in the MBS (Mortgage Backed Securities) and hence higher rates. However this mornings release has actually held MBS very steady, in fact we are up 12bp since the close on Friday and in turn this mornings rate sheets are slightly better than Friday. The one thing that is constant throughout this is CHANGE in a moment's blink we could see a swing either way and that is why it is so hard to predict rates right now!
In other news Treasury Secretary Henry Paulson is currently speaking on reorganizing the U.S. financial sector governing body. This could be a big reason why the MBS market is doing quite well; perhaps traders feel the increased guidance and legal oversight will help the financial markets perform well over the long term. ``We should and can have a structure that is designed for the world we live in, one that is more flexible, one that can better adapt to change, one that will allow us to more effectively deal with inevitable market disruptions, one that will better protect investors and consumers,'' Paulson said. (Courtesy of Bloomberg.com)
This week will certainly pick up steam as we have other pertinent news to be released Tuesday through Friday. For instance, March ISM Manufacturing, Weekly Jobless Claims, Unemployment Rate just to name a few. Plan for another volatile week (boy this is getting really repetitive) and hold onto to your hats because I am sure we will get some hurricanes of wind!
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
In other news Treasury Secretary Henry Paulson is currently speaking on reorganizing the U.S. financial sector governing body. This could be a big reason why the MBS market is doing quite well; perhaps traders feel the increased guidance and legal oversight will help the financial markets perform well over the long term. ``We should and can have a structure that is designed for the world we live in, one that is more flexible, one that can better adapt to change, one that will allow us to more effectively deal with inevitable market disruptions, one that will better protect investors and consumers,'' Paulson said. (Courtesy of Bloomberg.com)
This week will certainly pick up steam as we have other pertinent news to be released Tuesday through Friday. For instance, March ISM Manufacturing, Weekly Jobless Claims, Unemployment Rate just to name a few. Plan for another volatile week (boy this is getting really repetitive) and hold onto to your hats because I am sure we will get some hurricanes of wind!
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
Thursday, March 27, 2008
Good Bye 100% Hope to See You Again Soon!
Well the bottom "may have" hit as far as underwriting guidelines go this morning. I was just informed that the maximum loan-to-value (ltv) that MI companies will now ensure is 97% (Effective April 1, 2008). This also applies to the ever popular and state specific Missouri Housing Development Corp. or (MHDC) program. After speaking with Don Brinker, Managing Director for the MHDC program the main problem they are having is the appetite for there bonds. In the past companies like Fannie Mae, Freddie Mac, Bear Stearns and Lehman Bros. would purchase the state issued bonds. However, with the "liquidity and credit crisis" Fannie and Freddie have stopped purchasing the bonds all together and "the other" investors like Bear and Lehman want a premium return (i.e. higher interest rate) so the bond basically becomes ineffective. The last bond issue was at 5.99% and the latest bid for the bond was around 7%, therefore there are currently no MHDC funds available until the end of April and unless the appetite for these bonds increases there may be no funds period until the market returns to some normalcy!
There are 7 major mortgage insurance companies (Genworth, MGIC, PMI, Radian, RMIC, Triad and UG/AIG) the one synopsis with all of these insurers is that they will no longer insure 100% financing. Their credit requirements however vary; some require a minimum of 680 while others require a 620. So for now the "floor" (speaking in terms of mortgage financing) is 97% ltv, full-documentation with at least a 620 credit score (Fannie & Freddie speaking).
I cannot begin to tell you how hard being a true mortgage professional is right now! Mortgage rates are the most volatile I have seen in 10 years, underwriting guidelines are constantly changing, lenders are closing their doors, MI companies are changing the rules of the game, and all the while the nationally economy is in a deepening recession! I spend approximately 3-4 hours of my day doing research on everything imaginable regarding the economy and the mortgage industry and I still cannot keep up with all the changes. I subscribe to over 20 websites that constantly send me updates, graphs, and expert opinions and I still feel overwhelmed. As I type this post I have a nagging headache that simply won't go away. However, now that I am done "venting", let me tell you that quality financing programs are still available and at "fair" rates. I cannot speak enough to the fact that if you are not working with a "true" mortgage professional then you better be! Future homeowner's need honest advice on programs, rates, the home buying process, market trends, the Columbia economy, the national economy and to some extent future predictions.
I truly believe we are at the "bottom" as far as possible guideline changes are concerned hopefully in the future (6-12 months) we will see some "normalcy" with lenders, investors, and insurance companies. But for now these are the "rules of the game" that we must all play by.
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
There are 7 major mortgage insurance companies (Genworth, MGIC, PMI, Radian, RMIC, Triad and UG/AIG) the one synopsis with all of these insurers is that they will no longer insure 100% financing. Their credit requirements however vary; some require a minimum of 680 while others require a 620. So for now the "floor" (speaking in terms of mortgage financing) is 97% ltv, full-documentation with at least a 620 credit score (Fannie & Freddie speaking).
I cannot begin to tell you how hard being a true mortgage professional is right now! Mortgage rates are the most volatile I have seen in 10 years, underwriting guidelines are constantly changing, lenders are closing their doors, MI companies are changing the rules of the game, and all the while the nationally economy is in a deepening recession! I spend approximately 3-4 hours of my day doing research on everything imaginable regarding the economy and the mortgage industry and I still cannot keep up with all the changes. I subscribe to over 20 websites that constantly send me updates, graphs, and expert opinions and I still feel overwhelmed. As I type this post I have a nagging headache that simply won't go away. However, now that I am done "venting", let me tell you that quality financing programs are still available and at "fair" rates. I cannot speak enough to the fact that if you are not working with a "true" mortgage professional then you better be! Future homeowner's need honest advice on programs, rates, the home buying process, market trends, the Columbia economy, the national economy and to some extent future predictions.
I truly believe we are at the "bottom" as far as possible guideline changes are concerned hopefully in the future (6-12 months) we will see some "normalcy" with lenders, investors, and insurance companies. But for now these are the "rules of the game" that we must all play by.
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
Tuesday, March 25, 2008
Home Buyers... Will you take advantage?
Consumer Confidence was reported this morning and guess what, that's right more bad news! It came in at a 35 year low! The index fell to 64.5 which was lower than the March forecast of 73.3.
If the title of this index doesn't do it for you, this is a gauge of how confident people are in the economy. Also reported today was that housing prices fell once again across the county.
I bring this bad news up for 2 reasons. First, to report it to our readers. Second, to also point out that just because bad news is splashed around in the media doesn't mean it is a bad time for you to buy a home! The media is always looking to break the next story and bad news sells better than good news!
There are many home buyers out there that have been and are taking advantage of these conditions. While the economy is volatile, their situation is much more calm and they are looking to head down the path toward home ownership! The conditions are ideal for people that fall into this category. They don't have to worry about a home to sell, homes are selling at enormous discounts, inventory is high, interest rates are low, and there are still good mortgage products available! Add all this up and I wish I was a buyer again! If you truly are not ready to purchase a home, then please don't. Just continue to save and wait until you are comfortable.
However, don't let all of the negativity make you uncomfortable to buy and make the decision for you.
As a buyer you can be very picky on what you want as more homes have fallen into your price range. You can get more bang for your buck! Be sure to ask for seller paid closing costs and some are even getting allowances for new carpet etc. Remember you won't get them unless you ask! Your realtor will be able to point you toward homes and sellers that are more motivated if you don't know what to look for.
Just be sure to do 2 important things once you feel ready to jump into the market. Find a good realtor to work with (if you are unsure of who to use be sure to look at our strategic partners on our website for contacts) and get pre-qualified with a solid lender. You want to know how much you can spend and what program you will be on. With programs changing rapidly it is important to have a lender stay on top of it and keep you informed.
Just remember, there is a home out there for you and a good realtor and lender at your side will make it a smooth and enjoyable experience!
Don't let all the negativity get you down! After all, if you get a good deal on a home and a solid mortgage that you can afford; why do you care if banks are going belly up because of past bad mortgages? You just got a steal on your new home!
Brought to you by:
Professional Mortgage Group, Inc.
If the title of this index doesn't do it for you, this is a gauge of how confident people are in the economy. Also reported today was that housing prices fell once again across the county.
I bring this bad news up for 2 reasons. First, to report it to our readers. Second, to also point out that just because bad news is splashed around in the media doesn't mean it is a bad time for you to buy a home! The media is always looking to break the next story and bad news sells better than good news!
There are many home buyers out there that have been and are taking advantage of these conditions. While the economy is volatile, their situation is much more calm and they are looking to head down the path toward home ownership! The conditions are ideal for people that fall into this category. They don't have to worry about a home to sell, homes are selling at enormous discounts, inventory is high, interest rates are low, and there are still good mortgage products available! Add all this up and I wish I was a buyer again! If you truly are not ready to purchase a home, then please don't. Just continue to save and wait until you are comfortable.
However, don't let all of the negativity make you uncomfortable to buy and make the decision for you.
As a buyer you can be very picky on what you want as more homes have fallen into your price range. You can get more bang for your buck! Be sure to ask for seller paid closing costs and some are even getting allowances for new carpet etc. Remember you won't get them unless you ask! Your realtor will be able to point you toward homes and sellers that are more motivated if you don't know what to look for.
Just be sure to do 2 important things once you feel ready to jump into the market. Find a good realtor to work with (if you are unsure of who to use be sure to look at our strategic partners on our website for contacts) and get pre-qualified with a solid lender. You want to know how much you can spend and what program you will be on. With programs changing rapidly it is important to have a lender stay on top of it and keep you informed.
Just remember, there is a home out there for you and a good realtor and lender at your side will make it a smooth and enjoyable experience!
Don't let all the negativity get you down! After all, if you get a good deal on a home and a solid mortgage that you can afford; why do you care if banks are going belly up because of past bad mortgages? You just got a steal on your new home!
Brought to you by:
Professional Mortgage Group, Inc.
Monday, March 24, 2008
This Week's Financial Data
For the most part this is a "light" first couple of days to the week for "pertinent" economic data being released! Most of the what will influence the markets will be "headline" news, for instance this mornings news that JP Morgan Chase will up its stock offer for Bear Stearns from $2.00 to $10.00 a share and take on the first BILLION in losses. Oh, I almost forget Bear Stearns agreed to sell a 39.5% stake in the company in order to "bypass" shareholder approval! This GREAT (sarcastically stated) news has far out weighed the fact that FHLB (Federal Home Loan Banks) were freed to invest up to $150 Billion in MBS (Mortgage Backed Securities) which would be great for rates and instead the MBS are down over 50bps points and mortgage rates have taken a .25% point hike.
I leave today's post with just the above and include the "pertinent" data being released later in the week!
Tuesday 3/25: March Consumer Confidence Forecast: 73.3
Wednesday 3/26: Feb Durable Goods Orders Forecast: .6%
Wednesday 3/26: Feb New Home Sales Forecast: 575K
Thursday 3/27: 4Qtr Final GDP Forecast: .6%
Friday 3/28: Feb Consumer Spending Forecast: .0%
Friday 3/28: Feb Personal Spending Forecast: .2%
Friday 3/28: Feb Core PCE Price Index Forecast: .1%
Friday 3/28: March Univ. of Michigan Sentiment Forecast: 69.6
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
I leave today's post with just the above and include the "pertinent" data being released later in the week!
Tuesday 3/25: March Consumer Confidence Forecast: 73.3
Wednesday 3/26: Feb Durable Goods Orders Forecast: .6%
Wednesday 3/26: Feb New Home Sales Forecast: 575K
Thursday 3/27: 4Qtr Final GDP Forecast: .6%
Friday 3/28: Feb Consumer Spending Forecast: .0%
Friday 3/28: Feb Personal Spending Forecast: .2%
Friday 3/28: Feb Core PCE Price Index Forecast: .1%
Friday 3/28: March Univ. of Michigan Sentiment Forecast: 69.6
Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker
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