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  1. Current Mortgage Rates for Thursday, February 9, 2012

    By on February 9, 2012

    Three pieces of news will likely cause mortgage rates to increase today.  First, weekly initial unemployment claims in the United States dipped again, dropping 15,000 from the previous week to 358,000.  The four-week moving average for initial unemployment claims is down by 11,000 to 366,250.  The weekly numbers are subject to significantly more fluctuation than the four week average, and the downward trend here is a good sign.

    The second piece of “good news” is that a foreclosure fraud agreement between state attorney generals and major U.S. banks appears to have been reached. Although I personally hate this deal and think it amounts to an outright screwing of the American people, flouts the rule of law, amounts to a slap on the wrist, and does absolutely nothing to solve the fundamental problems in the housing market, it will likely be interpreted as good news by the markets.  It will almost certainly buoy the stocks of major banks.

    The third piece of “good news” is that a Greek debt deal has been reached.  Bondholders will take a haircut, and a crisis will probably be averted – for the time being.  Greece is in the midst of a depression, and deep cuts and austerity measures will only exacerbate the problem, and I don’t suspect that the Greek people will be happy with this deal.  Nevertheless, this deal, assuming it moves forward, will avert a “disorderly default”.

    Given all of this news, I think we will see rates increase today.

    Some of Our Most Popular Rates and Products*:

    Mortgage Product Mortgage Rates APR
    30 Year Fixed Conventional Mortgage 3.625% 3.741%
    20 Year Fixed Conventional Mortgage 3.500% 3.661%
    15 Year Fixed Conventional Mortgage 3.125% 3.331%
    30 Year Fixed FHA Mortgage 3.625% 4.975%
    15 Year Fixed Conforming Jumbo 3.500% 3.670%
    30 Year Fixed Conforming Jumbo 4.375% 4.474%
    5/1 Adjustable Rate Mortgage 2.375% 2.752%
    5/1 Adjustable Rate Conforming Jumbo Mortgage 2.750% 2.711%

    ***Mortgage rates change often. The above rates were quoted at 1:05 P.M., on February 9, 2012. Call 877-868-2503 for more details.***

    Continue Reading…

    Category: Mortgage Rates

  2. 30 Year Fixed Mortgages Maintain Record Lows – For Now

    By on February 9, 2012

    This morning Freddie Mac released their Primary Mortgage Market Survey and found that the benchmark 30-year fixed rate mortgage maintained its record lows from the week prior. The 30 year mortgage stayed at an average rate of 3.87%.  The 15-year fixed mortgage rose slightly, from 3.14% to 3.16%.  5/1 ARMs rose from an average of 2.80% to 2.83%, and 1-year ARMs rose two basis points to 2.78%.  Frank Nothaft, vice president and chief economist for Freddie Mac remarked:

    “A strong January employment report added upward pressure to most mortgage rates this week. The economy gained 243,000 jobs last month, the largest monthly gain since April 2011, and the unemployment rate fell to 8.3 percent, which was the lowest since February 2009.  Although historical revisions also added 266,000 even more workers, they caused the labor participation rate to fall to 63.7 percent, representing the smallest share since May 1983, which offset some of the rise in mortgage rates.”

    Given recent events, I do not that we will see recent lows repeated last night.  Mortgage backed securities are selling off somewhat today (although nowhere near as much as I expected).  The Greeks have ostensibly reached a debt agreement, U.S. employment numbers are steadily improving, and state and federal officials have reached a foreclosure deal with major banks (a deal which I hate, but that is an issue for another blog).  Mortgage rates typically improve on bad news, and rise on good news, and all of the aforementioned news should be “good” in the eyes of the markets.

    Barring a larger than expected third round of quantitative easing from the Federal Reserve in the form of mortgage-backed securities purchases, I think we will see mortgage rates slowly increase over the coming weeks.

     

     

    Category: Mortgage Rates

  3. Mortgage Rates: WARNING! Higher Rates Ahead?

    By on February 9, 2012

    After a snooze inducing week thus far, we finally have news that will likely move the markets and thus mortgage rates.  The news is positive—the impact on mortgage rates, not so much.  As we have repeatedly tried to make clear over the history of this blog, news and data suggesting growth or strength for the US economy have a negative effect on mortgage rates.  Today the news that Greek officials have agreed to the terms demanded by Euro-zone officials in order to receive a second round of bailout funding, coupled with improved jobless claims numbers in the US, create conditions that may push mortgage rates higher.

    In Greece the three primary political parties have agreed to terms that will among other things cut the minimum wage by 20% and supplemental pension benefits by 20%.  The markets in Europe and the premarket activity in the US have been very positive in response.  What does this decision really mean?  Does it mean that the risk of sovereign default in Greece is eliminated? No, it simply means that it has been kicked a little further down the road.

    Greek politicians are simply being expedient at this point.  With the deadline to receive the bailout funds close at hand and a nationwide election coming after, it is simply prudent to accept the terms now (along with your political opponents) and then fight the election over how it was the other party(ies) fault.  Moreover, once a new government is in place they can decide to renege on the deal just struck.  Consequently, while mortgage rates might move higher on this news today, I do not expect it to be significant.

    Far more important for the longer-term direction of mortgage rates is the state of the US job market.  Following last Friday’s blowout positive Non-Farm Payrolls report, traders were looking for confirmation of a positive trend in hiring.  It surely came this morning with weekly jobless claims coming in significantly below forecasts.  This news does set the stage for potential increases in mortgage rates that could be meaningful.

    Consequently for consumers still on the fence—THIS IS YOUR WARNING—we may never, in our lifetimes see rates again as low as they are currently.  It is time for all homeowners with a mortgage to investigate the possibility of a refinance.

    Category: Current Mortgage Rates, Mortgage Interest Rates, Mortgage Rate Trends and Analysis, Mortgage Rates, Purchase, Refinance

  4. Current Mortgage Rates for Wednesday, February 8, 2012

    By on February 8, 2012

    I think we are all tired of talking about Greece, and hearing about Greece, but the news is that some sort of Greek debt deal is impending.  Or maybe it’s not, nobody really seems to have a good handle on what is going on.  The ECB now seems willing to work with Greece, but there are a lot of details yet to work out, and the Greeks need to do some serious budget cutting and probably adopt some particularly onerous austerity measures to come to a final agreement in order to secure more bailout money to avoid a disorderly default.  Meanwhile, Greece is more or less in the midst of a depression, and youth unemployment is running close to 50%.  I can’t imagine a lot of Greek politicians want to make this situation worse by imposing even more austerity measures.

    In any case, the situation in Greece is very much in flux, and depending upon how this plays out, we may see similar issues crop up in Ireland, Portugal, Italy, and perhaps Spain, and if the contagion spreads to Spain, Greece will look minuscule in comparison.

    There is a dearth of other news today, so I suspect that if the markets move at all, it will be because of the situation in Europe. I don’t expect that much will happen today, and my gut tells me that Greece is not close to any sort of significant deal.  Even if a deal is reached, it will be a stopgap measure, which will limit how much mortgage rates could potentially rise.  I think mortgage rates will continue to linger close to all time lows.

    Some of Our Most Popular Rates and Products*:

    Mortgage Product Mortgage Rates APR
    30 Year Fixed Conventional Mortgage 3.625% 3.702%
    20 Year Fixed Conventional Mortgage 3.625% 3.780%
    15 Year Fixed Conventional Mortgage 3.125% 3.322%
    30 Year Fixed FHA Mortgage 3.625% 4.975%
    15 Year Fixed Conforming Jumbo 3.500% 3.670%
    30 Year Fixed Conforming Jumbo 4.375% 4.474%
    5/1 Adjustable Rate Mortgage 2.375% 2.437%
    5/1 Adjustable Rate Conforming Jumbo Mortgage 2.750% 2.711%

    ***Mortgage rates change often. The above rates were quoted at 1:05 P.M., on February 8, 2012. Call 877-868-2503 for more details.***

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    Category: Mortgage Rates

  5. Mortgage Rates: Perhaps the Slowest Day Ever

    By on February 8, 2012

    Financial markets in the US today have virtually nothing new to guide them…no economic data, no major breaking news, nothing. The lead article on CNBC’s website this morning– “What the New 401k Rules Mean for Your Savings.” I am sure that the article contains interesting and even important information relative to retirement planning, but for a media outlet that is predicated on covering the financial markets, that is a sure sign that things are slow.  For mortgage rates today it means more of the same.  Sitting just above all-time lows, I see no reason to expect a change today. Unless…Unless we finally see a deal among the three political parties in Greece to accept the bailout deal that has been offered.

    With supposed deadlines being missed related to the Greek situation everyday there is no reason to expect that today will be the day a deal is finally agreed to or, dare we say, rejected.  Representatives of Greece’s three primary political parties the conservative New Democracy, PASOK socialist and far-right LAOS are reviewing a 15 page summary of the proposed deal.  Among the most difficult terms to accept are a roughly 20% further cut in the minimum wage and a 15% cut in supplemental pension benefits.  As you might imagine, these reforms are very unpopular in Greece.

    What we do know is that a week from today, February 15, 2012 is a hard deadline according to the Euro zone.  They have stated that the deal must be approved by Greece, the ECB and the IMF by next Wednesday if the funding is to be put in place in time to avoid a default.  A prominent Greek economist is calling for exactly that—a default by Greece as the best outcome for his nation.  He has stated this week that the bailout is damaging the country and will not allow it to recover, while a default will enable Greece to unload a tremendous financial burden and be in a better position to care for its people.

    If Greece decides to take the deal…mortgage rates may rise slightly as what is believed to be a risk to the global economy is removed.  If Greece decides to default…mortgage rates may drop slightly as risks to the global economy may increase.

    Category: Current Mortgage Rates, Mortgage Interest Rates, Mortgage Rate Trends and Analysis, Mortgage Rates, Purchase, Refinance

  6. Some Lenders Paying Borrowers Thousands to Short Sell Their Homes

    1 By on February 7, 2012

    According to a new article on Bloomberg by Prashant Gopal, banks have begun to incentivize troubled homeowners to short sell their homes by offering them sizeable checks:

    “Banks, accelerating efforts to move troubled mortgages off their books, are offering as much as $35,000 or more in cash to delinquent homeowners to sell their properties for less than they owe.

    Lenders have routinely delayed or blocked such transactions, known as short sales, in which they accept less from a buyer than the seller’s outstanding loan.  Now banks have decided the deals are faster and less costly than foreclosures, which have slowed in response to regulatory probes of abusive practices.  Banks are nudging potential sellers by pre-approving deals, streamlining the closing process, forgoing their right to pursue unpaid debt and in some case providing large cash incentives, said Bill Fricke, senior credit officer for Moody’s Investors Service in New York”.

    A short sale is when a homeowner sells their house for less than they owe on the mortgage, and the lender forgives the outstanding balance on the loan.  For instance, a homeowner may have a home that is worth 200,000 but has a 250,000 mortgage due to declining home values.  The homeowner might be able to petition the bank to do a short sale, and sell the house for $200,000.  The bank would then forgive the $50,000 remaining on the mortgage (although the homeowner may be liable for taxes on the forgiven debt). The reason a bank would approve a short sale is because it is a way to mitigate losses.  Often a short sale costs a bank less than a foreclosure, according to the Bloomberg article, losses are 15 percent lower on short sales than on foreclosures.

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    Category: Mortgage Rates

  7. Current Mortgage Rates for Tuesday, February 7, 2012

    By on February 7, 2012

    After a busy week of economic data, this week is extremely slow, with relatively few reports being published.  As a result, moves in mortgage rates will likely be dictated by news and rumors out of Europe, trading momentum in the markets, and whatever else may crop up over the course of the week.

    Greece has now missed several deadlines for getting a debt deal done, and they don’t appear to be any closer to coming to some sort of agreement.   The Greeks are having difficulty reaching a debt deal with their investors, the IMF, the EU, and ECB.  This is really not new at all, and a Greek default is more or less fait accompli, it is simply a matter of how messy the default ends up being. Greece is in the midst of a depression, and its politicians are not keen to impose austerity measures that will exacerbate the problem.  The Germans, and some other European nations want to set the Greeks on a more sustainable course, but it could also be inferred that they are looking to punish the Greeks for their perceived profligate ways.  I don’t envision a good outcome here.

    There are further fears that other European nations will follow in Greece’s footsteps, which makes sense to me.  If I’m Portugal, and I having a crushing debt load, why don’t I give my bondholders a 70%+ haircut just like Greece?  I bet this route will also look very appealing to Ireland and Italy, and who knows which other European countries will feel similarly.

    I think we will probably see mortgage rates more or less hold steady today.  There’s not a lot of other economic news on the horizon today (or this week, for that matter), so Euro-zone rumors and whispers will most likely dominate the news this week, and mortgage rates will move accordingly.

    Some of Our Most Popular Rates and Products*:

    Mortgage Product Mortgage Rates APR
    30 Year Fixed Conventional Mortgage 3.625% 3.657%
    20 Year Fixed Conventional Mortgage 3.625% 3.780%
    15 Year Fixed Conventional Mortgage 3.125% 3.322%
    30 Year Fixed FHA Mortgage 3.625% 4.975%
    15 Year Fixed Conforming Jumbo 3.500% 3.670%
    30 Year Fixed Conforming Jumbo 4.375% 4.474%
    5/1 Adjustable Rate Mortgage 2.375% 2.437%
    5/1 Adjustable Rate Conforming Jumbo Mortgage 2.750% 2.711%

    ***Mortgage rates change often. The above rates were quoted at 1:05 P.M., on February 7, 2012. Call 877-868-2503 for more details.***

    Continue Reading…

    Category: Mortgage Rates

  8. Mortgage Rates: Holding Pattern Awaiting Greece

    By on February 7, 2012

    Mortgage pricing this morning is in a holding pattern awaiting news from Greece on the fate of the bailout that will keep the nation from defaulting on its debts.  With no other economic data in the US today or tomorrow, that holding pattern could last for a while.

    Greece has seven conditions it must meet in order to receive the bailout funds it needs.  Creditor nations, through the International Monetary Fund established a three-person review committee, known as “the troika” to establish conditions for Greece and to certify their adherence.  The deadline for Greece to meet these seven conditions has already passed—it was yesterday.  As of that point Greece had only met one of the seven conditions.  Greek officials were coy when asked about not meeting the deadline, suggesting that they were unaware that a deadline existed.

    Throughout this ordeal in Greece over the past year deadlines have come and gone, deals have been rumored only to never materialize and actual agreements have been largely ignored.  So reports today suggesting: “The Greek government is working on the final document that will be discussed at the political leaders’ meeting later in the day”, from an unnamed government official, carry little weight with market traders. Still it has been enough so far today to keep mortgage-backed securities pricing down and the pressure on rates to move higher.

    The trouble for Greece agreeing to this deal was explained by one analyst this way. “Imagine the US needed a loan to avoid default a couple of months before a Presidential election.  Imagine further that the creditors were demanding that both the Democrats and the Republicans sign-off on a deal that is not supported by over 70% of their party’s voters prior to the creditors agreeing to lend the money.  That is what Greece is facing now.”

    In the US today there will be an auction of US Treasury debt at 1 PM.  The only reason to keep an eye on the auction is that it is the first auction following the Fed’s statement regarding its intention to hold interest rates at current levels through “late 2014”, but it is also after the blowout Non-Farm Payrolls report.  I expect a calm auction with no surprises.

    I strongly advise consumers who want to refinance their existing mortgage or purchase a home to lock mortgage rates as quickly as possible before any other potential “good news” can push rates higher.

    Category: Current Mortgage Rates, Mortgage Interest Rates, Mortgage Rate Trends and Analysis, Mortgage Rates, Purchase, Refinance

  9. Missouri AG Files Criminal Charges Over Alleged Mortgage/Foreclosure Fraud

    By on February 7, 2012

    This morning I learned that Chris Koster, the Missouri Attorney General, is pursuing criminal charges against DocX over alleged robo-signing.  I learned of this action as a result of a post by Yves Smith on her blog NakedCapitalism, as well as a report by Gretchen Morgenson of the New York Times.  In a press release, Missouri AG Chris Koster commented:

    “Today’s indictment reflects our firm conviction that when you sign your name to a legal document, it matters.  Mass-producing fraudulent signatures on millions of real estate documents across America constitutes forget.  When you file those documents in our state, you are committing a crime under Missouri law”.  

    We’ve talked about robo-signing ad infinitum on this blog, but in the event you are totally unfamiliar with it, it is alleged that banks had employees sign hundreds or even thousands of affidavits without actually verifying the information therein or possibly even reading them.  The paperwork was then used in the foreclosure process.  60 Minutes had a pretty good feature on robo-signing here.

    This is, to my knowledge, only the second attorney general to pursue criminal charges over robo-signing.  The first to do so was Nevada Attorney General Catherine Cortez Masto back in November.  It is curious to me that more attorneys general have not filed criminal charges over what appears to be an open and shut case.

    This could be interesting, we shall see where it goes.

     

     

    Category: Mortgage Rates

  10. Mortgage Rates to Maintain Lows as Greek Credit Crisis Continues

    By on February 6, 2012

    David Coster joins us for his view on the direction that mortgage rates may take in light of this week’s economic data as well as the ongoing European debt crisis.

    Category: Mortgage Rates

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