Monday, October 21, 2013

Shutdown is over - Now what?

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Forwarded exclusively by:
Bob Rosenbaum
The Rosenbaum Lending Group
Office: (703) 879-5200
NMLS#: 649782
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Monday, October 21, 2013
What happens to rates now that the government shutdown is over and the debt crisis has been averted?
Now that Washington D.C. has gotten our government up and running again, and the fear of defaulting on our debt has been pushed off until after the new year, where does that leave mortgage interest rates?

1)  Talk of tapering has all but disappeared
   In September, the markets were driven on speculation of Fed tapering back the purchases of Treasuries and MBS that are part of QE3.  The fear of tapering helped to drive interest rates up, with concern that actual tapering would lead to even further mortgage rate increases.  However, the government shutdown is expected to have a strong slowdown effect on our economic recovery, which has pushed back all talk of tapering.  Added to that is the transition next year of Fed Chairman from Ben Bernanke to Janet Yellen, which will also delay talk of tapering.  This is good for mortgage interest rates. 

2) There will be a flood of economic data releases
   Expect intraday volatility as many missed economic reports will be released now that the respective government departments are back to work.  Although September data points are not likely to be seen as affected by the shutdown, the data isn't likely to garner as much credibility as usual with traders as the markets try to assess how serious the shutdown's impact was on consumers and future job growth.  This could cause volatility with mortgage interest rates.

3) The government shutdown is expected to stunt the economy 
   Many economists feel that the government shutdown was bad for the economic recovery.  Just how bad though has not been calculated yet.  Regardless, when the economy stumbles, that always bodes well for MBS (Mortgage Backed Securities) and the bond market in general.  Until we see that the economic recovery is back on track, it relieves pressure from mortgage rates.  This is good for mortgage interest rates. 

Last Week's Mortgage Rate Recap
Mortgage Rates Currently Trending: LOWER
Last week saw rates improve an average of .250%, depending on the lender, as MBS (Mortgage Backed Securities) pricing improved on news of the government shutdown being lifted and the debt crisis being averted.  They did run out of steam however as they approached the 102.00 Resistance Level, meaning that our march to lower rates may have run out of steam.  We have been trading within the same very tight trading channel since the Fed announcement not to taper on September 18th.     

This Week's Mortgage Rate Forecast
Mortgage Rates Forecast: NEUTRAL, but high threat of volatility
This week we will be dealing with MBS pressing up against the 102.00 Resistance Level, as well as the release of economic data that was not released due to the government shutdown.  There is no reason for us to see a large increase in rates, but we may see an increase of .125% to .250% this week if the 102.00 Resistance Level holds.  However, if we can convincingly break above this level, we may find better interest rates on the other side.     

BOTTOM LINE: There is risk to floating right now, but also potential reward. The best course of action is to stay in contact with your Mortgage Loan Professional to watch the market in real time to stay a step ahead of lender reprices and market trends to protect your mortgage rate.

RateAlert’s Most Trusted Mortgage Lending Professionals: 
Loan Professions that subscribe to RateAlert Executive services have the training and market knowledge at their fingertips, along with live trading data during market hours to expertly help navigate the difficult and often times confusing process of understanding rate movements and which factors may cause volatility when considering whether or not to lock.  If you’d like to learn more about what things to consider when timing the market in an effort to obtain the best interest rates, don’t hesitate to contact the person who sent you this commentary.

This commentary has been sent to you by the Mortgage Loan Originator (MLO) above because they thought you may find it interesting or helpful. The views and opinions offered do not necessarily represent the views of your MLO. Please contact them with any questions or to find out more about the information listed herein and how to work with them


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Wednesday, October 16, 2013

Day 16! Good grief ...

The government shutdown enters its 16th day, but a deal is rumored to be struck this afternoon to reopen the government and to raise the debt ceiling. The House of Representatives will be meeting at 10:00am ET today while the Senate is set to meet at 12:00pm ET. The deadline for the debt ceiling issue is at the stroke of midnight tonight eastern time.
Late yesterday, credit rating agency Fitch placed the U.S. debt on negative watch, but did maintain its AAA rating. The reason behind the move was the "failure to raise the federal debt ceiling in a timely manner before the Treasury exhausts extraordinary measures."
Over in housing news, the National Association of Home Builders (NAHB) reported today that its Housing Market Index fell to 55 in October versus the 57 expected as home loan rates rose along with the government shutdown providing uncertainty. Any readings over 50 shows optimism and the NAHB said that it is still seeing signs of pent-up demand in many markets across the country.

Friday, October 4, 2013

Are you "On The Fence"?

Are you considering buying or refinancing?  Trying to "time" the market?  It's time to hop off that fence and hop into your new home (loan) ...

Currently the Fed is the only major buyer of mortgages on the secondary market.  Given that the Fed has made it very clear that they will begin tapering their purchases in the coming months - we expect mortgage rates to rise.  Likely this won't happen until 2014 - but 2014 is almost here!  

Consider this - an individual earning $100,000 per year, with $700/month in consumer debt, buying a home with $4,000 per year in taxes ... 

Today they would qualify for a maximum conventional loan of $536,000 @ 4.25%.  That same person would qualify for $465,000 at 5.5% - and $417,000 at 6.5% (rates were in the mid 6's in late 2008 - that's not all that long ago!). 

Our Federal Government cannot stave off inflation forever ... If you lock in with us and rates go up - you're protected.  If rates should drop by 1/4% or more in the 15 day window prior to closing - you may float down to the lower rate, plus 1/8%, at no charge.  This applies to both purchases and refinances!  

If you have a FHA Loan - we may be able to refinance you and lower or eliminate your mortgage insurance.  If you have a VA loan above 4.5% - we can do a streamline refi and save you money.  If you're in a conventional loan - consider refinancing to a 15 year loan and save 10's of thousands in interest.  

If you're a buyer - ask us about how to finance home improvements with your home purchase ... we have several options depending on your situation.  

As always - we thank you for your referrals and honor the trust you place in us.

Thursday, October 3, 2013

Government Employees / VA and FHA ... We are still closing loans ...

Government Shutdown and its impact to Loan Originations

The government shutdown has adversely affected two areas of mortgage originations across the industry.  Tax transcripts are not available for any borrowers and in many cases, it isn't possible to obtain a verbal verification of employment for government employees.

1st Portfolio Lending’s Solution

While we wait for the political stalemate to end, we recognize the adverse effect not being able to obtain tax transcripts and verbal VOEs could have on our borrowers.  Fortunately, 1st Portfolio is doing business as usual and will hold the loan until the Government gets back to work.  

For Conforming, FHA, and VA loans eligible for sale to 1st Portfolio, we will accept one year’s tax returns in lieu of transcripts, if our receipt of transcripts is delayed due to the shutdown.  We still will rely upon transcripts if they are available.  For Verbal Verification Of Employment, all attempts will be made to obtain them for government employees, but if we are unable to confirm employment due to the shutdown, we will not delay or cancel settlement.

We value our clients and appreciate the trust you place in us.  Call us today for help with your next mortgage.

Robert F. Rosenbaum, Jr. 
The Rosenbaum Lending Group
1st Portfolio Lending Corp.
8300 Boone Blvd., Ste 200
Vienna, VA 22182
(703) 879-5200  Office
(703) 608-1110  Cellular
(703) 891-9815  Direct Fax
NMLS License: 649782
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Kuntri Yonkwan
Loan Processor
(571) 327-2152 Office
(703) 564-9121 Fax

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