Mortgage markets worsened last week on general profit-taking in the U.S. bond market, combined with talk of a coordinated rescue effort for Greece and its debt burden. Mortgage-backed bonds sold off, causing conventional and FHA mortgage rates to rise.

There wasn't much hard data on which to trade last week, either, so momentum took markets farther than they otherwise might have moved on their own.  It marked the first time in 5 weeks that rates rose for NH rate shoppers.

This week, data returns. Expect mortgage market movement.

Some of the week's more important releases include:

1. Housing Starts and Building Permits (Wednesday)
2. The release of the last month's FOMC Minutes (Wednesday)
3. Business and consumer inflation figures (Thursday and Friday)

Inclement weather may have impacted last month's Housing Starts reading so pay closer attention to Building Permits.  Permits precede actual construction and can be more indicative of economic optimism. If permit readings are strong, it should be a negative for mortgage rates.

The same is true for the FOMC Minutes. 

Last month's FOMC post-meeting press-release was decidedly middle-of-the-road, but the statement is just a summary of the Fed's 2-day meeting, boiled down to a few paragraphs.  Wednesday's release of the FOMC Minutes will reveal the deeper discussions among members of the Fed.  Wall Street will mine it for clues about the future of the economy.

If Wall Street senses optimism coming from the Fed -- again -- mortgage rates should rise.

And, lastly, keep an eye on Thursday and Friday's inflation data.  Inflation is bad for mortgage rates so a higher-than-expected reading should spark a bond market sell-off.

Since mid-December, mortgage rates have moved within a tight range and there's little reason for rates will break this range this week. However, we are near the top of the channel. If you know you're going to need a rate locked soon, it's probably best to do early in the week.

for more info, check out our NH Mortgage Blog or fill out our secure, online NH mortgage application!

The mortgage lending landscape changes a lot.  Rates and guidelines are in constant flux, and it creates preparedness challenges for buyers in Raymond that aren't paying in cash.

The loan you get today won't always be the loan you get tomorrow.

Because of how frequently bank rules are changing, it can be hard for laypersons to distinguish between mortgage fact and fiction of "what's coming next".

Recently, we saw this with respect to FHA home loans.

January 20, 2010, the FHA issued a press release with new lending guidelines.  Specifically, it announced 3 changes that will be effective starting April 5, 2010:

1. Upfront mortgage insurance premiums increase from 1.75% to 2.25%
2. Allowable seller concession reduced from 6% to 3%
3. FICO scores of 580 or lower are subject to a minimum 10% downpayment

But, also in its official statement, the FHA announced it would ask Congress for permission to raise monthly mortgage insurance premiums.  This is where the rumors started.

Nestled on page 348 of the Budget of the United States Government, Fiscal Year 2011, in a section titled Special Topics, there is a 1-paragraph notation that details the FHA's petition. 

1. Raise monthly premiums by roughly 0.30%, or $25 per $100,000 borrowed per month
2. Lower upfront mortgage insurance premiums by 1.25%, or $1,250 per $100,000 borrowed at closing

For now, the request is neither approved nor acknowledged by Congress. It's merely a request. And in the event that Congress does approves it, that doesn't mean that FHA has to stand by its initial projections.

Truth is, about the only thing we know about the future of FHA lending is that, come April 5, 2010, borrowing money is going to be tougher, and mortgage expensive. These are the facts as we know them today.

Homebuyers should plan accordingly.

For more info, check out our NH Mortgage Blog or complete our secure online mortgage application!

The economy's improving but lending standards are not. Nationally, banks are making mortgage approvals harder to come by.

Underwriting guidelines are tightening.

The data comes from the Federal Reserve's quarterly survey to its member banks.  The Fed asks senior bank loan officers around the country to report on "prime" residential mortgage guidelines over the most recent 3 months and whether they've tightened.

For the period October-December 2009:

• Roughly 1 in 4 banks said guidelines tightened
• Roughly 3 in 4 banks said guidelines were "basically unchanged"

Just 2 of 53 banks said its guidelines had loosened.

Combine the Fed's survey with recent underwriting updates from the FHA and generally tougher standards for conventional loans and it's clear that lenders are much more cautious about their loans than they were, say, in 2007.

Today's Raymond home buyers and would-be refinancers face a bevy of new borrowing hurdles including:

• Higher minimum FICO scores
• Larger downpayment requirements for purchases
• Larger equity positions for refinances
• Lower debt-to-income ratios

So, if you're on the fence about whether now is a good time to buy a home, or make that refi, consider acting sooner rather than later.  It doesn't necessarily matter that mortgage rates are low, or that there's an up-to-$8,000 home purchase tax credit for households that qualify.  With each passing quarter, fewer and fewer applicants are eligible to take advantage.

For more info, check out our NH mortgage blog or complete our NH online mortgage application!

Mortgage markets improved last week on domestic jobs data and international banking concerns. The news triggered buying in the bond market and, as a result, conventional, FHA and VA mortgage rates in NH improved for the 4th consecutive week.

Mortgage rates are now at a 6-week low but probably shouldn't be.  It underscores just how important global events can be to U.S. mortgage markets.

For example, corporate earnings continue to improve and key elements of the economy are strengthening.  Even the Federal Reserve acknowledges this.  In most circumstances, that would be a boon for the stock markets and bond markets would suffer, including mortgage bonds.

Last week, that wasn't the case.

Early in the week, as (1) China tightened its monetary policy, (2) Greece did little to quell lingering default fears, and (3) Spain raised its deficit forecasts, global investors sought to reduce their collective risk exposure. For safety of principal, many sold some of their more aggressive positions and moved the cash proceeds into the U.S. bond market -- which includes mortgage bonds. 

On Wall Street, this type of trading pattern is called a "flight-to-quality".  Because mortgage bonds are backed by U.S. government entities, the debt is considered to be ultra-safe.  Last week's extra demand for bonds helped to push prices up and mortgage rates down.

And that was before Friday's weak jobs report. Although the Unemployment Rate fell to 9.7%, the government reported a net loss of 98,000 jobs last month and this, too, helped mortgage rates tick lower.

This week, we'll hope for momentum to continue.

There's very little domestic news to move rates this week so keep an eye on the global market for similar stories like what we saw last week.  Or, if you're not sure what to look for, just give me a call or send me an email and I'll be happy to watch the markets and mortgage rates for you.

For more info, check out our NH Mortgage Blog or fill out our NH Mortgage online application and let's work together towards your goals!

On the first Friday of every month, the U.S. government releases its Non-Farm Payrolls data from the month prior. The data is more commonly known as "the jobs report" and it swings a big stick on Wall Street. Especially now -- many analysts believe job growth is tightly linked to the future of the U.S. economy. Therefore, when January's jobs report hits the wires at 8:45 AM ET tomorrow, Manchester home buyers would do well to pay attention. A net job reading that is much higher (or lower) than Wall Street's expectations can make a serious change in home affordability. Wall Street expects that the economy added 13,000 jobs last month. It would mark the second time in 3 months that the jobs report showed a net monthly gain. In November 2008, the economy added 4,000. Jobs matter to the economy for a lot of reasons, but one of the biggest is that when Americans are working, Americans are buying and consumer spending accounts for 70 percent of the economy. Job growth spurs the economy and draws money to the stock market. Unfortunately for rate shoppers, that kind of stock market growth happens at the expense of the bond market which is where mortgage rates are made. Good jobs data usually means higher mortgage rates. Also, job growth can lead to higher home prices. This is because working homeowners are less likely to default on a mortgage versus non-working homeowners. In this way, job growth helps hold foreclosures to a minimum which, in turn, suppresses the housing supply. Less supply means higher prices for home buyers. Mortgage rates are idling this morning in advance of tomorrow's data. If you're shopping for a mortgage rate, the prudent play may be to lock your rate before the jobs data is released. A jobs figure that's higher than the 13,000 expected could cause rate to rise sharply.

For timely information, check out our NH mortgage blog or fill out a NH mortgage application online!

The Pending Home Sales Index rose slightly in December, climbing 1 percent from November. A Pending Home Sale is a home that is under contract to sell, but not yet sold. It's a figure compiled by the National Association of Realtors® using sales data from over 100 regional listing services and more than 60 large brokerages around the country. Because each pending sale is a true measure of sales activity, the Pending Home Sales Index is purported to be the most reliable forward-looking indicator for housing. Recent data supports this hypothesis. After Pending Home Sales plunged 16 percent in November, Existing Home Sales fell by 17 percent in December. Based on the most recent Pending Sales Index, therefore, we can expect January's closed sales to be similarly level. For home buyers in Manchester , this is all a bit of good news. Home prices are based on the supply-and-demand balance that exists between buyers and sellers. When buyers outnumber sellers, like they did through most of 2009, home supplies dip and, in fact, the national home inventory nearly halved during the 12 months ending November 2009. With fewer homes for sale, multiple-offer situations were almost commonplace and home values rose as result. Activity has since slowed, however, and fewer buyers are in today's market. The supply-and-demand equation has shifted back some. In December, home supplies rose for the first time in 7 months and January will likely show the same. The net result: Home buyers have more homes from which to choose and that can create negotiation leverage for better prices and better concessions. With mortgage rates still low and a looming deadline on the homebuyer's tax credit, market activity should be strong between now and April. Take your time and bid right. And when you're ready, be ready. The best deals likely won't last.

For more great NH home buying info, check out our NH Mortgage Blog or for fast, peronal service apply now for a NH mortgage loan!

In a news-heavy week, mortgage markets improved last week, adding to a 3-week rally. But, given last week's data and domestic story lines, it's surprising that rates actually fell.

1. The Federal Reserve said the economy continues to strengthen
2. Consumer Confidence pushed to a 2-year high
3. 4th Quarter domestic output exceeded Wall Street's expectations

Usually, events like these draw money away from the bond markets and into the stock markets and Wall Street preps for better corporate earnings. The movement pressures mortgage rates to rise. Last week, however, different stories trumped the headlines including a report from Standard & Poor's that said U.K. banks are no longer counted among the world's most stable. This research, in particular, triggered a flight-to-quality among investors that pumped the U.S. dollar and sparked new demand for mortgage bonds. It's one reason why we ended the week on a rally and it just goes to show how unpredictable mortgage rates can be. This week figures to be a challenge, too. First, we start the week with key inflation data. When inflation runs hot, it's usually bad for mortgage rates. Inflation is expected to be tame, however -- a point the Fed made several times in its press release last week. That said, inflation data is closely watched by markets and can make a big impact on rates. Then, on Wednesday, ADP releases its private sector job report. The ADP data is a precursor to the government's own Non-Farm Payrolls report which is due to hit Friday. ADP is expected to show a net loss of roughly 85,000 jobs. Depending on where the actual numbers comes in, mortgage rates could wiggle a bit. If the ADP report shows much fewer than 85,000 jobs lost, expect mortgage rates to rise. The same is true for Friday's job report. A miss on expectations will cause mortgage to ratchet higher. Since peaking on the last day of December, mortgage rates took a slow, steady descent through January. They've have taken back close to two-thirds of December's overall losses. This week, rates could fall some more, or they could bounce back up. The most prudent time to lock would be prior to Tuesday's closing. After that, the respective jobs reports will take over and rates could go either way with force.

For more great NH mortgage news and info, check out our NH Mortgage Blog!

<!-- This material is non-exclusively licensed to Kevin Wallace, CMPS and may not be copied, reproduced, or sold in any form whatsoever.-->

The Federal Open Market Committee voted to leave the Fed Funds Rate within its target range of 0.000-0.250 percent.

In its press release, the FOMC noted that the U.S. economy “has continued to strengthen”, that the jobs markets is getting better, and that financial markets are supportive of growth.

There was no mention of the housing market's strength.  The last 3 statements from the Fed included that specific verbiage.

It’s the fifth straight statement in which the Fed spoke about the economy with optimism.  This should signal to markets that 2008-2009 recession is over and that economic growth is returning to U.S. economy.

The economy isn’t without threats, however, and the Fed identified several in its press release, including:

1. Credit remains tight for consumers
2. Businesses are reluctant to hire new workers
3. Housing wealth is down

The message’s overall tone, however, remained positive and inflation appears is still within tolerance.

Also in its statement, the Fed confirmed its plan to hold the Fed Funds Rate near zero percent “for an extended period” and to wind down its $1.25 trillion commitment to the mortgage market by March 31, 2010.  This is noteworthy because Fed insiders estimate that the bond-buying program suppressed mortgage rates by 1 percent through 2009.

Mortgage market reaction to the Fed press release is, in general, negative. Mortgage rates in Bedford are rising this afternoon.

The FOMC’s next scheduled meeting is March 16, 2010.

For more updated info, check out our NH Mortgage Blog!

<!-- This material is non-exclusively licensed to Kevin Wallace, CMPS and may not be copied, reproduced, or sold in any form whatsoever.--> The Federal Open Market Committee ends a scheduled, 2-day meeting today in Washington. It's the first of 8 scheduled meetings for the policy-setting group in 2010. The group adjourns at 2:15 PM ET. As is customary, upon adjournment, the Fed will issue a press release to the markets recapping its views of the country's current economic condition, and the outlook for the near-term future. The post-meeting statements from the Fed are brief but comprehensive. And Wall Street eats them up. Every word, sentence and phrase is carefully disected in the hope of gaining an investment edge over other active traders. It's for this reason that mortgage rates tend to be jittery on days the FOMC adjourns. Wall Street is frantically rebalancing its bets. Today should be no different. The FOMC is expected to leave the Fed Funds Rate within its target range of 0.000-0.250 percent — the lowest it's been in history. However, it's what the Fed says Wednesday that will matter more than what it does. After the Fed's last meeting in December, it made several observations:

1. The jobs market is getting "less worse"
2. The housing sector is making improvements
3. Financial markets are stabilizing further

The economy is gradually improving, the Fed told us, but there are still risks to the economy ahead. Furthermore, inflation remains in check. As compared to December's press release, today’s FOMC statement will be closely watched. If the Fed changes its verbiage in any way that alludes to strong growth and/or inflation in 2010, expect mortgage rates in Manchester to rise as Wall Street moves its money from bonds to stocks. Conversely, reference to slower growth in 2010 should lead rates lower. We can't know what the Fed will say so if you’re floating a mortgage rate right now or wondering whether the time is right to lock, the safe approach would be to lock prior to 2:15 PM ET Wednesday. After that, what happens to rates is anyone's guess.

For more timely and accurate NH mortgage info, check out our NH Mortgage Blog!

NH home owners should take note,

this past week we marked the official start of the Making Home Affordable Refinance Program. We expect that this may help thousands of NH homeowners! The Making Home Affordable program turns a blind eye with respect to falling home values, approving mortgage applications based on borrower payment history and benefit to the NH homeowner. NH mortgage applicants have to meet a few basic qualifications to take advantage of the Making Home Affordable refinance program.

First, your existing NH mortgage must be with either Freddie Mac (Freddie) or Fannie Mae (Fannie). Fortunately, both of these agencies provide a way to check online. It's best to start with Fannie since she's the bigger sister (has more of our NH loans) and because Freddie's online tool requires your ss # (It's okay to enter, I've checked it out and site is secure!).

Next, you must have a perfect mortgage payment history over the last 12 months. Even one payment made 30 days late disqualifies you from participating in the Making Home Affordable program. It is okay, however, if you were 20 days late on your payment and incurred late fees.

And lastly, the balance on your mortgage cannot exceed your home's value by more than 5%. The math formula is (Mortgage Balance) / (Home Value). If the quotient is greater than 1.05 then your loan-to-value exceeds 105% and you are not eligible for Making Home Affordable.

Now, assuming you meet the criteria, there are some noteworthy details of the Making Home Affordable program:

1. If your current NH mortgage doesn't have mortgage insurance, you won't have to pay it after refinancing -- even if your new loan-to-value is greater than 80%. If you do have mortgage insurance presenlty on your loan, there's a plan for that, too ... we're just not sure yet what that plan is! That part of the plan is still in the works but we expect more details shortly. For the most current info on this program head over to our NH mortgage blog and subscribe to our newsletter!
   
2. All NH mortgage refinances under this program (and pretty much every other program available) require income verification -- even if the original mortgage was a stated income loan.
   
3. Second mortgages cannot be paid off through this program. They have to be subordinated. That can be some heavy lifting so make sure that, if you've come this far, you're working with someone who knows what they're doing!
   

Fannie and Freddie each of other guidelines that need to be followed as well. (Links to their sites can be found at www.NHLoanInfo.com)And, of course, their guidelines are different from each other! Like most government programs, their guidleines are created by the pound and all of us are learning as we go.

My recommendation would be to give their guidelines a brief review before talking with a local NH mortgage lender (like me!) so that you have a general understanding. If you have a NH mortgage and you have specific questions about the Making Home Affordable program and your own eligibility, first check to see if Fannie or Freddie is backing your loan. If they are, pick up the phone and call me to plan the next steps. While, the program doesn't end until June 10, 2010 , low NH mortgage rates probably won't last that long.