Here is today's market wrap for Friday, November 20,2009
A highly anticipated speech on Monday by Fed Chief Bernanke on the economic outlook revealed no change in the Fed's stance on short-term monetary policy. There were also few surprises in the economic data released during the week. The monthly inflation readings continued to show that inflation is not a cause for concern in the short-term. As a result, mortgage rates edged just slightly lower during the week, remaining at historically low levels.
The decline in the value of the dollar has received a great deal of attention lately. While Fed officials rarely discuss the value of the dollar, Bernanke assured investors that the Fed is closely watching exchange rates. However, he then reminded investors that the Fed's dual mandate is to promote full employment and to keep prices stable. According to Bernanke, the value of the dollar is just one of many factors affecting inflation, and the Fed is not concerned by the movement in the dollar so far. With a fragile economy and high unemployment rate, he suggested that the Fed intends to keep the fed funds rate at very low levels. Tightening monetary policy to strengthen the dollar would hurt the economic recovery and slow job creation. After the speech, the value of the dollar fell to the lowest level since August 2008.
If foreign investors expect the value of the dollar to continue to fall, it may pose a risk for mortgage rates in the future. Foreign investors historically have been major buyers of mortgage-backed securities (MBS). When the dollar falls, the value of US assets to foreign investors in their own currency declines, making US investments less rewarding. With the Fed scaling back its MBS purchases over the next few months, a drop in foreign demand would further pressure yields higher to fill the void left by the Fed.
Conforming Fixed Rates ended the day today at 4.375% with an APR of 4.573%. **
Conforming Jumbo Rates here in San Diego ended today at 4.625% with an APR of 4.747%. **
** Rates quoted are for 30 Day Locks
Also Notable for the Week
October Core CPI inflation was a tame 1.7% higher than one year ago
October Housing Starts dropped 11% from September
The Treasury will auction a record $118 billion next week
The Fed purchased $16 billion in agency MBS during the week ending 11/18
The Week Ahead
A wide range of economic data will be released during the holiday-shortened week ahead. Existing Home Sales will come out on Monday. GDP, Consumer Confidence, and the FOMC Minutes from the November 4th Fed meeting will be released on Tuesday. Durable Orders, Personal Income, Core PCE inflation, New Home Sales, and Consumer Sentiment will all be packed in on Wednesday. In addition, there will be Treasury auctions on Monday, Tuesday, and Wednesday. Mortgage markets will be closed on Thursday for Thanksgiving.
Advice for next week is to watch the market closely if you have any clients closing soon who have not locked.. Recommendation for your clients is to tread cautiously, and lock if possible.
Good luck, and have a great weekend. Best Wishes also for a Happy Thanksgiving Holiday.
I am certainly not the most knowledgeable person when it comes to the Internet or computers, but I recently stumbled upon a site that has proven helpful for my son and I in our business. We own two companies; one is a custom home and remodeling company, and the other is a mortgage company. The site allows you to post and create slide-shows of pictures that you down load to the site. It's called Slide.com and you can access it Here. The best feature is that it is FREE.
I also think this site could prove useful for Realtors in general marketing and display of your listing pictures. You can even downloan or link your pictures to your website. We have begun to use it in our online marketing, and correspondence to our prospective building clients. While I am still learning about many of the sites features, it has proven useful so far.
Again, I am still learning about many of it's features. Most of my issues have been due to lack of computer expertise. One feature that I have not learned how to get around yet is how the slide-show downloads initially. The site gives you three options on how to view. I prefer the Gallery option, but when it downloads, it comes up initially in what they term " Original View ".
Below is a sample of my son's work ( You can change the viewing method once it downloads ):
Today is Friday the 13th, but the financial markets actually ended up for the week with respect to mortgages as rates continue to improve or hold to historic lows.
Since the Fed meeting on Wednesday of last week, mortgage rates have edged slightly lower for most of the week with minor bumps up periodically. The Fed indicated that monetary policy would remain on hold for quite a while. The Fed acknowledged that eventually rates would have to increase;however, their message was clear that it could take some time to do so.
Conforming fixed rates ended the day today at 4.50% with an APR of 4.678%.
Conforming Jumbo here in San Diego ended today at 4.75% with an APR of 4.851%.
Clearly the rates this week ended up better than they started earlier in the week. Bloomberg announced today that Consumer Sentiment dropped again in November as job losses were on the minds of workers and Wall Street traders. This helped to improve rates with multiple rate adjustments down today by several key lenders. To view the article, click on the link to Bloomberg below:
The most significant data next week will be the monthly inflation reports with the Producer Price Index due out on Tuesday, and the Consumer Price Index which clearly the most watched coming out on Wednesday. Retail Sales will be announced on Monday. Also notable, the Treasury will announce the size of the upcoming auction of Treasuries on Thursday.
Advice for next week is to watch closely. Recommendation for your clients is to tread cautiously, and lock if possible.Good luck, and have a great weekend.
For many years now, all purchase transactions that I have handled have most certainly had the Escrow and Title companies chosen by either the listing agent or selling agent. In some cases, those companies were either solely or partially owned by the real estate brokerages involved in the transaction. Newly enacted changes by HUD may bring some new changes for Realtors when it comes to choosing what company will handle these functions.
Although I have done some fairly extensive research in this area, note at the time of this writing there still remain many unanswered questions relative to the changes by HUD that take effect on January 1, 2010. Specifically, I am talking about the new Good Faith Estimate forms that must be used by all lenders on and after this date. On December 2nd, I have to attend a class by my compliance counselor who is going to explain to those of us in attendance just what this means for us in complete detail.
HUD has been working on these changes for some time now with industry experts giving advice or comments of disagreement on these proposed changes. The new Good Faith Estimate ( GFE ) is supposed to make any costs associated with a purchase or refinance transaction more transparent, and easier for the client to understand. While some in the industry laud these changes, others either remain skeptical or disillusioned by the new process.
Don't get me wrong. We all believe in disclosure. It should be as accurate as we can make it for our clients, yet sometimes even we lenders get surprises in the end for charges that are not totally in our control. With these new changes, lenders as well as consumers, need to pay close attention. Why? Since some deviation of charges, some with variance allowances, will have to be eaten by the lender if they deviate too much. Below is a brief breakdown of some of the new changes that are taking place:
Starting January 1st, loan charges and settlement fees will be spelled out on this revised, more consumer friendly version of the GFE. Charges will fall under three broad categories on the form. By the way, the form now increases from one to three pages.
The three new categories include: Fees that cannot increase from up front estimates to final closing. Fee estimates that come with slight variance ability up to 10% in aggregate from upfront estimates. Finally, fees that can increase without limit since the lender has no control over them due to the fact that the amounts are difficult to predict weeks in advance.
Charges with zero tolerance changes include the lender's or broker's origination fee, processing and underwriting fees. Also included are the lender's or broker's discount points based upon the interest rate quoted, and local transfer taxes.
Charges that are subject to a 10% variance, include services required by the lender, and the lender chooses the service providers such as appraisals, credit, lenders title insurance and settlement services where the borrower chooses a firm on a list approved by the lender, and charges for recording by local governments. Under this category, any variance over 10% of combined total charges must be eaten or absorbed by the lender. As a lender and broker, title and escrow are where I often see most of the deviation at closing.
Charges that can increase without limit include any lender required charges where the borrowers choose a title insurance or escrow company that is not on the lender's approved list, cost of homeowners insurance, daily interest charges on the loan, and the amount of the initial deposit by the borrower into an escrow account.
Any cost estimate you receive from the lender or broker are required to remain available for 10 business days. Interest rates can change unless locked by the lender and borrower.
A new HUD 1 settlement statement is also being enacted by HUD to compare all fees on the GFE to those at settlement. Borrowers will then be able to compare what they were initially estimated to what they are actually being charged at closing.
The last page of the new HUD 1, itemizes the three categories of fees and compares them directly with actual fees at closing.
While I am all for complete and honest disclosure, this new enactment will certainly bring about some changes. One distinct change in mind is who will now control title and other settlement providers. Most consumers may want to opt for lender approved providers since they will have more latitude against the lender if charges increase by more than 10 %.
After my formal class on this in December, I will do my utmost to update you on any changes in the process.
For more information on this, please visit HUD's website below detailing this change as well. A sample GFE can also be obtained there:
Within the confines of my blog, you may or may not have read my announcement on October 30th of the enactment of this new ruling affecting lenders and some Realtors.
The same day that I wrote this blog, the FTC once again made what was their 3rd delay in this ruling effective date.
I have been active on Zillow for almost more than three years now. While I understand business and reasoning for profits on sites such as Zillow and Active Rain or any other business for that matter, it seems that Zillow may have just "Screwed the Pooch" so to speak today with their new roll out of their mortgage marketplace.
While I am not an attorney, it appears at first glance that Zillow could be in for some unsuspected surprises from changes that they initiated today online.
For weeks now Zillow has announced coming changes to lender participants who have paid a fee to register their profile and company information on their website. Unfortunately, Zillow was and still can not accurately disclose their new pricing mechanism to any of us who participate in their mortgage quoting section. Zillow plans to charge a fee which can vary for competing with other lenders who wish to quote interest rates to borrowers who submit loan requests. In Zillow's initial release of information, they indicated that these leads might range from $ 0 to $ 100 or more PER customer CONTACT.
I could write for hours detailing the various pros and cons of their new idea to generate revenue. All you have to do is go to Zillow, and search under advice for mortgages to get a gist of what I mean.
While I could ramble on for hours about the horror stories of the Zillow Mortgage Marketplace feature, it has been evident that Zillow is truly only interested in increasing revenue vs. being a good tool for borrowers and lender participants. What was once a manual system where lenders input responses, is now a system where lenders can automate their quotes through what Zillow terms API providers.
A client places a request, and instantaneously through the API providers they get 30, 50 and many times over 100 responses to their request. Not only is the client overwhelmed by all of the responses, but those of us who participate have charged for months that the policing of this forum is truthfully lacking. Most of our complaints stem from those lenders who quote outrageous rates, or omit alot of pertinent information regarding closing costs.
Since Zillow's recent announcement, I have watched and read comments from both lender participants and Zillow emplyees about the pending changes. Yes, I had my concerns, but I also agreed to hang in there until the dust settled.
I have for years and continue to do so by answering questions from Zillow visitors from across the nation. I'm a little irked since my response count is higher than what shows as Zillow introduced a new system a year or more ago that whipped out my comments countdetail. I can tell you that for all these years, I have daily answered questions in their forum. Quite often I am contacted by those in other states that I can not help since I am only licensed in California. I still answer these calls, and can honestly say that I have gotten enough loans from Zillow to warrant doing so. I figure that if I am helping someone, it will eventually come back to me by following " The Golden Rule ".
Many other lenders such as myself have been faithful Zillow participants which has helped to contribute to their success.
Today, we had the doors slapped in our faces. Below are the areas if critical concern.....some of which are legal in nature. I use an outside compliance consultant to ensure that I am keeping up to date with all the changes......and believe me there have been and will be many more coming down the pipeline:
First, we participants were assured by Zillows representatives that we could still participate on the question and answer boards free of charge, And that potential clients could still reach us through our profile information without a fee.Those of us who previously manually quoted responses to client loan requests can no longer participate in that feature without paying a $ 250 deposit which will be used to deduct charges when Zillow goes live with the charging mechanism for "Customer Contact" in December.
Zillow stated that until the system was fully tested and analyzed for fee structure that no charges would be made until the official December date. We still had to make a deposit to participate, but charges would not occur until final roll-out.
Today, many of us participants were shocked after we investigated the email from Zillow this morning. Most noticeable was the fact that those of us who paid to become " Confirmed Lenders" through license check had our contact information changed. Bogus toll free numbers were put in place, our email and web site addresses deleted from our profiles. IT GETS BETTER!
So much for Zillow's assurance that customers on the chat boards could contact us for information or possible business!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Part of Zillows new feature to help fight bogus customer requests is the monitoring and recording of calls made to lenders through the site. Zillow has apparently assigned bogus contact numbers which are then routed to our real numbers. Per Zillow, any calls made would be RECORDED. WHEN I DIALED MY BOGUS NUMBER, I HEARD NO SUCH RECORDING SAYING THIS CONVERSATION MIGHT BE RECORDED.
Now I am not an attorney, but from many of the responces on the board, this is the equivalent of wire tapping and in violation of FTC rules.
As a lender.........and some Realtors too, the new Red Flag Rules which went into affect November 1st by the FTC covers various privacy issues regarding client information. Zillow will have access to tapped conversations with any clients we talk to. This for a fact is a clear violation of the Red Flag Rules as privacy is thrown out the window.
Besides all the clear violations that appear to be seeping from this new process, we staunch supporters of Zillow feel like we have been slapped in the face after helping to make Zillow what it is today.
One key point, Realtors and those lenders who are not "Confirmed Lenders" still have all of their contact information in tact on their profiles.
Gee, am I missing something here. So unless I front the $ 250 for potential future charges for contact, I am SOL for all the guidance and support I have given to Zillow and customers over the past years.
As Realtors, are you the next in line to be taken advantage of by Zillow? What's in store for you?
To read some of the posts in today's mortgage section, go to this link:
This week was not unlike many with rates initially edging up this week over economic news and comments from various politicians on Capital Hill regarding spending plans for the country.
Today's weaker economic news sent Bond yields lower with many lenders reporting rate changes to the better several times. One of my lenders improved rates four times today alone.
Conforming fixed rates ended the day at 4.50% with an APR of 4.665%.
Conforming Jumbo here in San Diego ended at 4.75% with an APR of 4.873%.
Clearly the rates this week ended up better than they started earlier in the week. Two key market segments had alot to do with today's improvements. First was a report on week consumer spending and confidence. The second, was news on new job worries. Both can be detailed at the link below to Bloomberg:
Advice for next week is to watch closely. Good time to suggest to your clients who are buying to lock in their rates while they are still at semi-historic lows.
At first glance, some of you may be asking yourself, why is he directing this at me?
A while back, I wrote about the upcoming Red Flags Rule proposed by the FTC which has been placed on hold two or three times this year. The day of reckoning has come with the rule becoming effective on November 1st of this year.
Within the confines of the legislation, it is somewhat ambiguous to some industries whether they are covered by this new legislation. Obvious businesses include financial institutions, mortgage brokers and such. Within the pages of guidelines and requirements, it mentions that real estate agents can also fall under this category.
The Red Flag Rule's key ingredient is " Identity Fraud ", and it's purpose is to have those businesses that are affected comply with certain requirements to safeguard their clients personal information. Because of the broad definitions, Realtors could and will be effected by this new ruling.
Fines for non-compliance are steep with some cases potentially open to license revocation.
While you may laugh, or casually dismiss this post and topic since you think it will not apply to you, all agents should approach your broker of record to see what steps they have taken to be in compliance. Your brokers failure could also come back to haunt you.
For further information about this new regulation, please visit the FTC website identified below where the Red Flags Rule is available, and tools to ensure compliance are available:
While I would rather be bringing brighter news, this new ruling will affect many of those who would never have dreamed that they fall under it's jurisdiction.
Just when I think I've seen it all during my career, I get another surprise to add to the list.
Rates have been dropping sharply over the last week with rates for some borrowers with excellent credit and equity to lock at 4.50% with an APR of 4.654% on loans up to $ 417k.
Consumers also still have an opportunity with Fannie Mae's Conforming Hign Balance loans to get very low jumbo rates ranging 4.625% with an APR of 4.769%
This temporary High Balance Conforming Limit is set to expire on December 31, 2009 unless the government and Fannie Mae along with Freddie Mac agree to extend this limit. If it expires, those in the Jumbo category will see rates spike up to previous norms where they were generally almost more than 1 % higher than the regular conforming loans at or below $ 417k.
I encourage all Realtors and prospective clients to lock in now on these historic low rates. As a Realtor, I am sure that you are helping your client navigate the loan maze out there. My recommendation is to lock with your lender as soon as you can. Rates change daily, sometimes more than once or twice a day depending on market sentiment.
Realtors...I would advise you to cousel your buyers to lock with their lender as soon as possible. Those consumers reading this blog.....I encourage you to do the same with your lender.
Best Regards,
Wayne L. Brown President Thor Funding & Investments, Inc. CA Dept. of Real Estate, Real Estate Broker Brokers License # 00906571 Corp. License # 01848367 http://www.sdmortgagefinder.com/index.htm
I've been on Active Rain here now for a while, and enjoy both reading and writing on occasion. I also participate on Zillow, FaceBook, and Linkedin.
Candidly, I think we all do this for enjoyment, as well as, to get our name out there for recognition in the hopes that one of our blogs helps someone...and just maybe a client once in a while or new business relationship.
I often tease my son that I only know enough about computers to be dangerous. Yet it seems with everything that comes before us, it can sometimes be daunting and overwhelming. Am I using the right key words and tags, proper placement, etc. More important, am I staying within the terms of agreement?........not sure about you, but they can be wordy and ambiguous too at times.
I try to research some of the pieces on SEO and such. I try to change up my website content with up to date and current relevant information.
While I appear to get some recognition......no business yet from this avenue, I have found myself wondering.........really....is this worth it? Or is it better to just go back to basics with the face to face in the field.
Just looking for some candid feedback. Thanks in advance for any insight that you might have on the subject.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
;)
;)
