The major stock market indexes continued moving higher to record new all-time highs for the fourth consecutive week as investor sentiment was boosted following President Trump’s highly anticipated and successful first speech before both houses of Congress.  Bonds did not fare as well with prices falling and yields rising in response to the week’s positive economic data and President Trump’s speech proposing increased infrastructure spending and greater economic stimulus.

 

In economic news, a robust reading on manufacturing activity improved investor sentiment.  The Institute for Supply Management’s Purchasing Managers’ Index recorded its highest level since late 2014 with the New Orders Index reaching its highest level in almost four years.  Moreover, weekly Initial Jobless Claims fell to 223,000, the lowest level in 43 years.  On Friday, a speech by Fed Chair Janet Yellen made it fairly certain the central bank will raise interest rates at their next meeting on March 15.  Yellen stated “we currently judge that it will be appropriate to gradually increase the federal funds rate if the economic data continue to come in about as we expect. Indeed, at our meeting later this month, the Committee will evaluate whether employment and inflation are continuing to evolve in line with our expectations, in which case a further adjustment of the federal funds rate would likely be appropriate.”  The two-year Treasury yield spiraled to its highest level in nearly 10 years following Yellen’s speech, but it didn’t seem to have much impact on longer-dated Treasury yields as these had already risen earlier in the week.

 

This past week in housing the National Association of Realtors (NAR) reported their Pending Home Sales Index, based on contract signings of previously owned homes, unexpectedly fell 2.8% to 106.4 in January, led by a shortage of housing inventory in the West and Midwest regions.  Furthermore, the December Pending Sales Index was revised lower from 1.6% to 0.8% to a value of 109.5.  Although this was the lowest reading since January 2016, the Index is now 0.4% higher since then.  NAR chief economist Lawrence Yun remarked “The significant shortage of listings last month along with deteriorating affordability as the result of higher home prices and mortgage rates kept many would-be buyers at bay.”

Mortgage application volume declined during the week ending February 24.  The Mortgage Bankers Association (MBA) reported their overall seasonally adjusted Market Composite Index (application volume) rose by 5.8%.  The seasonally adjusted Purchase Index advanced 7.0% from the prior week, while the Refinance Index increased 5.0%.  Overall, the refinance portion of mortgage activity decreased to 45.1% of total applications from 46.2% from the prior week, the lowest activity since June 2009.  The adjustable-rate mortgage share of activity remained unchanged at 7.3% of total applications.  According to the MBA, the average contract interest rate for 30-year fixed-rate mortgages with a conforming loan balance decreased from 4.36% to 4.30% with points increasing to 0.38 from 0.35.

 

For the week, the FNMA 3.5% coupon bond dropped 90.6 basis points to close at $101.88 while the 10-year Treasury yield increased 16.64 basis points to end at 2.4816%.  Stocks ended the week higher with the major indexes continuing to set new record all-time highs on Wednesday.  The Dow Jones Industrial Average gained 183.95 points to end at 21,005.71.  The NASDAQ Composite Index rose 25.44 points to close at 5,870.75 and the S&P 500 Index advanced 15.78 points to close at 2,383.12.  Year to date, the Dow Jones Industrial Average has gained 6.29%, the NASDAQ Composite Index has advanced 9.06%, and the S&P 500 Index has gained 6.44%.

 

This past week, the national average 30-year mortgage rate rose to 4.25% from 4.12%; the 15-year mortgage rate increased to 3.45% from 3.33%; the 5/1 ARM mortgage rate rose to 3.10% from 3.01%; and the FHA 30-year rate increased to 3.85% from 3.75%.  Jumbo 30-year rates rose from 4.25% to 4.39%.

 

 

Economic Calendar – for the Week of March 6, 2017

Economic reports having the greatest potential impact on the financial markets are highlighted in bold.

Date Time

ET

Event /Report /Statistic For Market Expects Prior
Mar 06 10:00 Factory Orders Jan 1.0% 1.3%
Mar 07 08:30 Balance of Trade Jan -$48.5B -$44.3B
Mar 07 15:00 Consumer Credit Jan $17.0B $14.2B
Mar 08 07:00 MBA Mortgage Index 03/04 NA 5.8%
Mar 08 08:15 ADP Employment Change Feb 180,000 246,000
Mar 08 08:30 Revised Productivity Q4 1.5% 1.3%
Mar 08 08:30 Revised Unit Labor Costs Q4 1.6% 1.7%
Mar 08 10:00 Wholesale Inventories Jan -0.1% 1.0%
Mar 08 10:30 Crude Oil Inventories 03/04 NA +1.5M
Mar 09 07:30 Challenger Job Cuts Feb NA -38.8%
Mar 09 08:30 Export Prices excluding agriculture Feb NA 0.1%
Mar 09 08:30 Import Prices excluding oil Feb NA -0.2%
Mar 09 08:30 Initial Jobless Claims 03/04 240,000 223,000
Mar 09 08:30 Continuing Jobless Claims 2/25 NA 2,066K
Mar 10 08:30 Nonfarm Payrolls Feb 188,000 227,000
Mar 10 08:30 Nonfarm Private Payrolls Feb 185,000 237,000
Mar 10 08:30 Unemployment Rate Feb 4.7% 4.8%
Mar 10 08:30 Average Hourly Earnings Feb 0.2% 0.1%
Mar 10 08:30 Average Workweek Feb 34.4 34.4
Mar 10 14:00 Treasury Budget Feb NA -$192.6B

 

Mortgage Rate Forecast with Chart – FNMA 30-Year 3.5% Coupon Bond

 

The FNMA 30-year 3.5% coupon bond ($101.88, -90.6 bp) traded within a wider 117 basis point range between a weekly intraday high of $102.70 on Monday and a weekly intraday low of $101.53 on Friday before closing the week at $101.88.  The chart shows the bond failed to continue higher through overhead resistance, and instead pivoted lower as stocks continued their historic run higher while being extremely overbought technically.

 

The bond fell through several layers of support during the week until bouncing higher off of support found at $101.69 on Friday.  In fact, Friday’s action resulted in a small engulfing lines candlestick pattern, a buy signal suggesting higher prices in the short-term.  Overhead technical resistance is now found at the 76.4% Fibonacci retracement level at $102.07.

 

The slow stochastic oscillator shows bonds are becoming “oversold” suggesting bond prices could soon continue to move higher.  Meanwhile, the stock market remains extremely “overbought” with more pronounced sell signals being generated by numerous momentum indicators.  Although the stock market has probably already priced in the next rate hike by the Federal Reserve, as the Fed’s next policy meeting on March 15 approaches, investors may get nervous and begin to sell positions to lock in some of their profits.  Should this scenario take place, we may see a slight improvement in mortgage rates as bond prices improve

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by | Categories: main, Refinance | No Comments

click here ti request a mortgage check-up

 

The tend has started interest rates and home prices are on the rise. The Fed increased the interest rates  last month and Freddie Mac has predicted 30 year fixed mortgage rates will continue to rise and home buyers  will be paying over 5% on mortgages closing in the first half of 2017.

 

ja2jan201630yrfixed

 

Home prices continue to increase at rates greater than inflation due to supply issues and rental rates increasing.  Higher home values means current home owners equity positions are improving.  Higher values and historically low mortgage rates mean it is a good time to review your mortgage.  (click here ti request a mortgage check-up).

 

Paul Cantor

 

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closedfamilyHUD Reduces the Cost of FHA Loans.

 

Like the cost of oil the cost of FHA loans is falling. In its first mortgagee letter of 2015, HUD announced that the monthly premium on 30 year fixed rate loans will go down by ½ of a percent (50 bps), starting n loans with FHA case numbers issued after January 26, 2015.

 

 

New monthly MIP premiums:

 

Term > 15 Years
Base Loan Amt. LTV Previous MIP New MIP
≤ $625,500 ≤ 95.00% 130 bps 80 bps
≤ $625,500 > 95.00% 135 bps 85 bps
> $625,500 ≤ 95.00% 150 bps 100 bps
> $625,500 > 95.00% 155 bps 105 bps
Term ≤ 15 Years
≤ $625,500 ≤ 90.00% 45 bps 45 bps
≤ $625,500 > 90.00% 70 bps 70 bps
> $625,500 ≤ 90.00% 70 bps 70 bps
> $625,500 > 90.00% 95 bps 95 bps

 
The reduction in premium translates to a monthly payment reduction of over $83 per month on a $200,000 loan. Home buyers can qualify to purchase larger homes.

 

Combine the MIP reduction with the recent interest rate drop, many folks will save thousands by refinancing, especially those with 30 year FHA loans closed after the spring of 2009. (click here to request information for an FHA Streamline Refinance).

 

www.PaulCantor.info

 

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Mortgage rates ended last week lower for the second week in a row.  On September 26th Freddie Mac reported the average rate for a 30 year fixed rate mortgage was 4.32% with points of 0.7 and 15 year fixed rate mortgages with an average rate of 3.37% also with points of 0.7.  The recent drop in home loan rates has sparked refinance activity including HARP, VA IRRLs and FHA Streamline refinances.  Uncertainty this week may lead to an unpredictable week for rates.

 

 pmms_chart09262013

 Highlights from the Freddie Mac survey include:

  • FHA mortgage rates are at a 12-week low
  • VA mortgage rates are a 12-week low
  • Conventional mortgage rates are at a 10-week low

The decision to lock becomes more difficult this week as a likely partial government shutdown will likely play havoc with the financial markets.  Furthermore Ben Bernanke speaks on Wednesday and the unemployment rate will be released on Friday.

econ09302013

Improved mortgage rates mean it is a good time to buy a home.  These rates have also made refinancing attractive for those who did not refinance in the spring.

Paul Cantor

(804) 719-1515

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LifePreserver

I speak many homeowners on a weekly basis who have lost value in their homes and can not refinance as their mortgages so not qualify for HARP or a Streamline FHA refinance.  Talk about a new version of the Home Affordable Refinance Program, HARP 3.0, has been quite until this week. Reuters reports that Fannie Mae and Freddie Mac may soon be offering refinance options for these homeowners.   I will keep you posted on this.

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Rates rising on economyMortgage markets worsened last week for the first time in a month as the U.S. economy showed signs of improvement, and the Eurozone stepped closer to launching its $500 billion euro rescue fund.

Conforming mortgage rates in Virginia rose last week on the whole — even though Freddie Mac’s Primary Mortgage Market Survey proclaimed that they fell.

This occurred because Freddie Mac’s weekly mortgage rate survey is conducted between Monday and Tuesday each week and, last week, mortgage rates were lower when the week began. Through Wednesday, Thursday and Friday, however, they rose.

According to the Freddie Mac survey, the average 30-year fixed rate mortgage slipped to 3.36 percent nationwide last week, while the 15-year fixed rate mortgage fell to 2.69 percent. Both rates required 0.6 discount points and both marked all-time lows.

As this week begins, to gain access to the same 3.36% and 2.69% mortgage rates from last week, Henrico mortgage applicants should expect to pay more closing costs and/or higher discount points.

Improving U.S. employment data is partially to blame.

Friday morning, the Bureau of Labor Statistics released its September Non-Farm Payrolls report. More commonly called “the jobs report”, the monthly issuance details changes in U.S. employment by sector and reports on the national Unemployment Rate.

In September, accounting for upward revisions to data from July and August, 200,000 net new jobs were created — far exceeding Wall Street’s estimates for 120,000 net new jobs created. Furthermore, the Unemployment Rate unexpectedly dropped to 7.8%.

Jobs are considered a keystone in the U.S. economic recovery. As a result, when the jobs numbers hit Friday, mortgage rates worsened, building on momentum built earlier in the week as Greece moved steps closer to accepting aid from the Eurozone.

In general, since 2010, weakness in the Eurozone has helped push U.S. mortgage rates lower. As Europe regains its footing, therefore, domestic mortgage rates are expected to rise.

This week, in a holiday-shortened week, . The Federal Reserve’s Beige Book is released Wednesday and some key inflation data is due for Friday release. Beyond that, mortgage rates will continue to take cues from the Eurozone.

 

Date Time (ET) Statistic For Market Expects Prior
10/09/12 01:15:00 PM 3-year Treasury Note Auction
10/10/12 10:00:00 AM 10-year Treasury Note Auction
10/10/12 02:00:00 PM Fed’s Beige Book Sep
10/11/12 08:30:00 AM Initial Claims 10/06/12 370K 367K
10/11/12 08:30:00 AM Trade Balance Aug -$43.8B -$42.0B
10/11/12 01:15:00 PM 30-year Treasury Bond Auction
10/12/12 08:30:00 AM PPI Sep 0.80% 1.70%
10/12/12 08:30:00 AM Core PPI Sep 0.20% 0.20%
10/12/12 09:55:00 AM Mich Sentiment Oct 78.5 78.3

 

It is a good idea to discuss locking a rate with your loan officer while mortgage rates remain near all-time lows.

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Many home underwater homeowners with FHA mortgages have not taken advantage of the FHA streamline refinance because their monthly mortgage insurance payment (PMI) would significantly increase due to HUD increasing the premium numerous times on FHA loans in the last 2 years.  Starting today many of these folks will receive a lower monthly mortgage insurance payment on FHA streamline refinances.  HUD has reduced the up front and monthly premium on streamline refinances of FHA loans endorsed by FHA prior to June 1, 2009.  This may mean an FHA streamline refinance will help thousands of home owners refinance and reduce their monthly mortgage payment, even if they have lost equity

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Existing Home Sales Mortgage bonds improved last week on lingering concerns for the European Union, plus weaker-than-expected economic data here at home. Global investors were net buyers of mortgage-backed securities last week, pushing mortgage rates lower nationwide.

According to Freddie Mac’s mortgage rate survey, conforming 30-year fixed rate mortgage rates slipped to 3.79%, on average, last week for borrowers willing to pay 0.7 discount points and a full set of closing costs.

This is the lowest on-record.

15-year conforming fixed rate mortgage rates also fell to a new all-time low, registering 3.05% with 0.7 discount points and closing costs.

Unfortunately, not all mortgage applicants in Virginia are getting access to Freddie Mac’s posted rates. This is because the “national mortgage rates” assume a 30-day closing window and few banks have been closing loans in 30 days lately. Persistently low mortgage rates have created an appraiser scarcity which, among other reasons, is forcing banks to stretch the traditional 30-day closing window by fifteen days or more.

Longer rate locks carry higher mortgage rates.

For home buyers in Henrico , purchase money loans can often be accommodated in 30 days. For refinancing households, however, the process can take up to 60 days. As a result, refinancing homeowners are finding the 3.79% mortgage rates promised by Freddie Mac’s survey somewhat elusive.

This week, though, as chatter of a European Union dissolution grows, investors are seeking safety of principal. Lately, they’ve been finding it in the U.S. mortgage bond market. As demand for mortgage bonds rises, mortgage rates should fall for both 30-day locks and 60-day ones.

This will aid everyone looking for a home loan.

Date Time (ET) Statistic For Market Expects Prior
05/22/12 10:00:00 AM Existing Home Sales Apr 4.65M 4.48M
05/22/12 01:15:00 PM 2-year Treasury Note Auction


05/23/12 10:00:00 AM New Home Sales Apr 339K 328K
05/23/12 10:00:00 AM FHFA Housing Price Index Mar NA 0.30%
05/23/12 01:15:00 PM 5-year Treasury Note Auction


05/24/12 08:30:00 AM Initial Claims 05/19/12 365K 370K
05/24/12 08:30:00 AM Durable Orders Apr 0.30% -3.90%
05/24/12 01:15:00 PM 7-year Treasury Note Auction


05/25/12 09:55:00 AM Michigan Sentiment – Final May 77.5 77.8

Other news set for release this week includes April’s Existing Home Sales report and New Home Sales report. Both will be closely watched because housing is tied to U.S. economic recovery. Strong results in either data set may push mortgage rates higher.

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Today we conducted the last scheduled HARP 2 seminar / webinar.  Here are some of the common questions raised from attendees over the last 3 weeks and our answers.  Remember these answers are valid as of today and may change:

 

What are the two minimum requirements for a mortgage to eligible for a HARP refinance?     

(1)     Loan must be backed by Fannie Mae or Freddie Mac.  (2) Loan must have a securitization date prior to June, 2009

 

How do I find out if my loan is a Fannie Mae or Freddie Mac loan?

Use a web based look-up tool: 

www.fanniemae.com/loanlookup

www.freddiemac.com/mymortgage 

 

If neither Fannie Mae nor Freddie Mac has a record of my mortgage, do I have options?

Yes.  These include a traditional refinance and FHA streamline refinance.

 

If I refinanced with HARP, can I refinance with HARP II?

No.

 

Is my current lender the only lender that can refinance my mortgage under HARP?

No.

 

I pay PMI now. Can I refinance under HARP II if my loans balance is greater that the home value?

Most Likely.

 

Can I refinance a rental property or vacation home with HARP?

Yes.

 

Can I refinance a two unit property with HARP?

Yes.

 

Does HARP allow loan balances to increase, so that I do not need to bring funds to closing?

Yes.

 

Are VHDA mortgages eligible for HARP 2 refinances?

No

 

These and many other issues were covered at these events.  If we see a strong demand we may repeat them live or via the internet.

 

Click here to discuss a HARP or other refinance with a TrustMor loan officer.

 

 

 

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If the last time you looked at your mortgage was when you closed on your loan, it’s time to take it out for an annual once over.  Mortgage rates are at historic lows, which means you should speak with Member Mortgage Solutions sooner than later.

 

Are you paying for Private Mortgage Insurance (PMI)?

There are a loan programs available that can help you eliminate PMI, even if you have less than 20% equity in your home. The monthly savings adds up quickly.

 

Are your taxes and insurance up to date?

It just makes sense to periodically check to see that these payments are being made properly. While you’re at it, you’ll want to review your homeowner’s insurance policy. It’s a good idea to review your policy every few years to make sure it covers recent home improvements, replacement costs for the contents of your home, and that its reconstruction coverage is keeping pace with inflation.

 

Do you have a Home Equity Line of Credit (HELOC) for emergencies?

Many homeowners are making the proactive choice to secure a Home Equity Line of Credit (HELOC) for emergencies.  A HELOC is a revolving line of credit that only charges interest when you actually draw money from the line of credit. As you repay the balance of the draw, the credit becomes available again. Securing a HELOC in advance can be a great help if you’re ever laid off or have an unexpected medical or other emergency.

 

How’s your credit report?

The information in your credit report has a huge impact on whether or not you will again qualify for a mortgage loan.  That’s why it’s important to periodically check your credit report.

 

Are you making the most of your home’s equity?

With rising home prices, you may have more equity in your home than you realize. Taking out a home equity loan to payoff credit card debt, car loans and other higher interest debts makes good financial sense.

 

Is it time to refinance?

The timing might be right to refinance your mortgage loan.  New rates may help you significantly lower your monthly payment. Or you might want to “cash out” some of the built-up equity in your home, which you can use to consolidate debt, improve your home, take a vacation – whatever! Perhaps by refinancing you can even pay off your mortgage sooner!

 

We’ll work with you to determine if the timing is right to change your loan program, considering your cash on hand, how likely you are to sell your home in the near future, and what effect refinancing might have on your future plans.

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