Miamism

by:  Brian Brady

Weird things are happening in the mortgage-backed securities market.  Strong buying, in the 30 year-fixed rate loans, has dropped rates .25% since my last report,  The ARM rates, however, have RISEN.  A weird phenomenon, indeed.  I'm only quoting two loan programs (the others make no sense):

Mortgage rates for August 29, 2008. Loan amounts up to $417,000:

5/1 ARM            5.750%

30 Year Fixed     6.125%

All rates offered to the borrower with 1 point cost. Rate quotes assume a purchase transaction with a 20% down payment, 720 credit score, and full income qualification. Rates are subject to fluctuation. Custom rate quotes and rate lock advice are available by calling (858)-777-9751.

Short-term, this is about as good as it gets.  I think we'll see some higher rates, in the next 7-10 days, with rates coming back down to this level by the end of September.  I'm befuddled for the 3 month trend so I'll stay neutral.

MORTGAGE RATE TREND:

Next 7 days:      Higher 

Next 30 days:     Neutral

Next 3 months:    Lower? (I'm stumped)

Originally posted on MillionaireRealEstateLender.com

Actions

Ines.Hegedus-Garcia Send feedback »

by: Brian.Brady

Mortgage rates for August 1, 2008.  Loan amounts up to $417,000:

3/1 ARM              5.500%

5/1 ARM              5.750%

7/1 ARM              5.875%

10/1 ARM            6.250%

30 Yr Fixed          6.375%

All rates offered to the borrower with 1 point cost.  Rate quotes assume a purchase transaction with a 20% down payment, 720 credit score, and full income qualification.  Rates are subject to fluctuation.  Custom rate quotes and rate lock advice are available by calling (858)-777-9751.

MORTGAGE RATE TREND:

Next 7 days:      Slightly Higher

Next 30 days:     Neutral

Next 3 months:   Neutral

Remember the song "Stuck in the Middle With You" by Stealer's Wheel?  It was background music for a particularly gruesome scene in the Quentin Tarantino movie, Reservoir Dogs. 

Well, I don't know why I came here tonight
I got a feelin' that something ain't right
I'm so scared in case I fall off my chair
And I'm wonderin' how I'll get down those stairs
Clowns to left of me, jokers to the right
Here am I stuck in the middle with you

Read more »

Actions

Ines.Hegedus-Garcia Send feedback »

by: Brian.Brady

Mortgage rates for August 1, 2008.  Loan amounts up to $417,000:

3/1 ARM              5.500%

5/1 ARM              5.625%

7/1 ARM              6.125%

10/1 ARM            6.250%

30 Yr Fixed          6.250%

All rates offered to the borrower with 1 point cost.  Rate quotes assume a purchase transaction with a 20% down payment, 720 credit score, and full income qualification.  Rates are subject to fluctuation.  Custom rate quotes and rate lock advice are available by calling (858)-777-9751.

MORTGAGE RATE TREND:

Next 7 days:       Slightly Lower

Next 30 days:     Slightly Lower

Next 3 months:   Neutral

This mortgage rates report is offered courtesy of Brian Brady.  Contact Brian for more information about a home loan or apply online.

Actions

Ines.Hegedus-Garcia Send feedback »

by: Brian.Brady 

Mortgage rates for July 22, 2008.  Loan amounts up to $417,000:

3/1 ARM              5.750%

5/1 ARM              5.875%

7/1 ARM              6.250%

10/1 ARM            6.500%

30 Yr Fixed          6.500%

All rates offered to the borrower with 1 point cost.  Rate quotes assume a purchase transaction with a 20% down payment, 720 credit score, and full income qualification.  Rates are subject to fluctuation.  Custom rate quotes and rate lock advice are available by calling (858)-777-9751.

MORTGAGE RATE TREND:

Next 7 days:      Slightly Lower

Next 30 days:     Lower

Next 3 months:  Neutral

What a difference a week makes, huh?  Last Tuesday, I signaled that a short-term increase in rates was likely when I changed the 7-day outlook to "slightly higher" from neutral.  I felt that the rally in mortgage bonds was overdone and that traders would sell off a bit; I had no idea it would be this drastic.

If you click the link, you'll see that I offered a 30-year fixed at 6.0%. last Tuesday- today, the 30-year fixed rate loan is a full .5% higher.  In fact, almost every loan program is .5% higher than it was last week.  The problem?  Wall Street thinks the worst is over for banks and that inflation is going to be the #1 target for the Fed in the next few months.  ' Treasury Secretary Hank Paulson is certainly telling the markets that the banking crisis should be averted by Christmas.

So will the Fed raise interest rates in 2008?  I'm not so certain that they will.  The housing decline has been the worst since The Great Depression.  Fed Chairman, Ben Bernanke, is an expert on monetary policy in the Depression.  He subscribes to the Milton Friedman theory that monetary policy must accommodate a healthy banking system.  His 2004 speech signaled two things two us:

Read more »

Actions

Ines.Hegedus-Garcia Send feedback »

by: Brian.Brady 

Mortgage rates are unchanged from Friday's posting.

Last week was a scary one if you've been following the mortgage industry:

Senator Schumer (NY) caused an old-fashioned bank run when he wrote a letter to the San Francisco Fed President concerned about IndyMac Bank's ability to weather the storm....then, he made that letter public. IndyMac Bank ceased new loan operations, in an effort to manage the loans they have on their books, on Monday. On GFriday, the Feds closed IndyMac Bank down.

This was political grandstanding at its worst:

Sen. Schumer rejected that, saying that, while banking regulators do their work in private, lawmakers typically do theirs in public. Sen. Schumer, the head of Senate Democrats' re-election effort, threw in a political jab as well. "Clearly what was happened here was the OTS, having the second-biggest bank failure on their watch, sought to blame the messenger. In sum, it's sort of classically what this administration does. Blame the fire on the guy who called 911."

The New York Times asked if Fannie Mae and Freddie Mac were insolvent and Wall Street went nuts.  Treasury Secretary Paulson stepped in and offered government support SHOULD the big mortgage guarantors fail.  Are Fannie and Freddie too big to fail?  Well, they insure almost half of this nation's $12 trillion worth of mortgage debt.  A failure would be a major disruption to housing capital and drive mortgage rates to the a MUCH higher level.

Mc Cain offered that this disruption in capital would be a blow to our economy:

Fannie Mae and Freddie Mac ``are vital to Americans' ability to own their own homes,'' McCain said in response to a reporter's question during a campaign stop at a diner in Livonia, Michigan. ``They will not fail; we cannot allow them to fail.''

Obama was somewhat tenuous about Federal intervention:

But Obama advisor Jason Furman issued a statement that Obama believes "the challenges facing Fannie and Freddie are part of the broader weakness in our economy." He blamed President Bush, saying "willful neglect" by the White House of trouble in the housing market and other sectors of the economy let the problems fester to crisis stage. Then he pushed Obama's call for immediate congressional action to help homeowners caught in the bind, and at risk of foreclosure.

Read more »

Actions

Ines.Hegedus-Garcia Send feedback »