Happy Memorial Day Weekend! Looks like Sunday is the better day to get outside - Just remember to pay tribute to our Military personnel in whatever way you deem appropriate - and read the piece about a true American Hero at the end of today's commentaries
Hugs,
MT
FROM THINK BIG WORK SMALL
Treasuries and mortgages took a beating yesterday on the very strong rally in the stock market which was fueled by relaxed sentiment over problems in Europe on comments from China it would continue investments in Europe. That was the headline; on top of that as we have been mentioning for the last few days, the stock market was technically very oversold and the bond market equally overbought. The 284 point increase in the DJIA yesterday somewhat alleviated the oversold technical outlook; the 10 yr note 9 day relative strength index increased to neutral from very overbought readings on the increase of 17 basis points in rate. Mortgages prices fell 19/32 (.59 bp) following selling in the treasury market.
This morning the stock index futures at 9:00 were fractionally better, but not much; the 10 yr note at 9:00 up 13/32 at 3.32% -4 bp and mortgage prices +7/32 (.22 bp) frm yesterday's close. At 8:30 April personal income and spending; income was as expected up 0.4% while spending was soft, unchanged on the month against estimates of +0.3%, it was the weakest sales data since Dec of 2009. While there was no immediate reaction to the report, the lack of spending likely took a little away from the stock market.
At 9:45 the May Chicago purchasing mgrs index, data on manufacturing in the mid-west region, was expected at 60.0 frm 63.8 in April, it fell to 59.7; the new orders component declined to 62.7 frm 65.2, the employment component fell to 49.2 frm 57.2 and the prices component dropped to 64.0 frm 71.4 on lower energy prices. The softer than expected report added more declines in the stock market but not much. Any of the index readings over 50 are indications of expansion, under 50 contraction.
Finally today, and this week and this month, the U. of Michigan consumer sentiment index was forecast to be at 73.2 from 73.3 previously, the index jumped to 73.6 frm 72.2 at the end of April. The expectations index increased to 68.8 frm 66.5 and the 12 month outlook increased to 83 frm 80. No reaction to the report as the various indexes are well contained at these levels.
This is the last day of the month, and the beginning of the first summer holiday weekend. The bond and mortgage markets will close early at 2:00 this afternoon but stocks will go the distance until 4:00. Of course Monday is Memorial Day and all US markets will be closed. Trading today has to consider that Europe and Asian markets will trade on Monday leaving US investors somewhat naked on Monday, that will likely influence trading today.
The very key euro currency this morning was slightly weaker, a plus for US equity markets however, it has moved to unchanged by 10:00 this morning.
Although the equity market is lower this morning so far not by much; if the equity indexes don't get clobbered as they have after every strong rally in the past month, we would consider it a good day for stocks and add more concern about interest rates.
(Side note: It's recommended that if a loan is closing 30+ days from now to Float the rate - just the opinion of the writer of the commentary)
From Freddie Mac: Instability in Financial Markets Overseas Lowers Mortgage Rates Here
May 27, 2010
McLean, VA - Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 4.78 percent for the week ending May 27, 2010, down from last week when it averaged 4.84 percent. Last year at this time, the 30-year FRM averaged 4.91 percent. The 30-year FRM has not been lower since the week ending December 3, 2009, when it averaged 4.71 percent.
The 15-year FRM this week averaged 4.21 percent, down from last week when it averaged 4.24 percent. A year ago at this time, the 15-year FRM averaged 4.53 percent. The 15-year FRM has not been lower since Freddie Mac started tracking the 15-year FRM in August of 1991.
The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.97 percent this week, up from last week when it averaged 3.91 percent. A year ago, the 5-year ARM averaged 4.82 percent.
The 1-year Treasury-indexed ARM averaged 3.95 percent this week, down from last week when it averaged 4.00 percent. At this time last year, the 1-year ARM averaged 4.69 percent. The 1-year ARM has not been lower since the week ending May 27, 2004 when it averaged 3.87 percent.
"These low rates will help to elevate home-buyer affordability and soften the effects of the sunset of the home-buyer tax credit," said Frank Nothaft, Freddie Mac vice president and chief economist. "The credit substantially propelled home sales, as reflected in the strength of the April existing and new home sales, which were up 7.6 percent and 14.8 percent, respectively.
"The latest information from Freddie Mac's repeat-transactions home-price indexes also show some encouraging signs, with national metrics either slowing their descent or showing a modest rise, suggesting that the sharp downturn in national indexes since 2006 may be nearing an end. The S&P/Case-Shiller Index® for the United States was up 2.0 percent year-over-year, and while the FHFA Purchase-Only Index and Freddie Mac's Conventional Mortgage Purchase-Only indexes showed declines of 3.1 percent and 1.1 percent, respectively, from first quarter of 2009 to first quarter of 2010, the FHFA's monthly U.S. index showed a pickup in values from February to March."
Here is info on a question I get a lot of in regards to VA loans and Seller Concessions versus Contributions - a seller is allowed to issue 4% of the sales price in concessions - and above and beyond that a seller can contribute toward closing costs - it's a pretty sweet deal for the buyer if you could structure the sales agmt to allow seller concessions and contributions - below are some items to keep in mind:
Seller Concessions/Contributions
Examples of Seller Concessions (included in 4%)
· VA funding fee
· Buyer's property taxes and insurance
· Gifts such as a television set or microwave oven
· Extra points for permanent interest rate buy downs
· Temporary buy down points
· Payoff of credit balances or judgments on behalf of the buyer.
Examples of Seller Contributions (not included in 4% concession)
· Buyer's closing costs, or
· Discount Points as appropriate to the market.
For Example: If the market dictates an interest rate of 5.0% with 2 discount
points, the seller's payment of the 2 points would not be a seller
concession. If the seller paid 5 points, 3 of these points would be considered a seller contribution.
Speaking of Memorial Day please take a few moments to pause - and pay our respects to a really cool hero:
John Finn, 100, the oldest Medal of Honor recipient
Friday, May 28, 2010
BY JULIE WATSON
Wire Service
THE ASSOCIATED PRESS
SAN DIEGO - Retired Navy Lt. John Finn, the oldest Medal of Honor recipient from World War II, died Thursday at a nursing home for veterans in Southern California. He was 100.
Mr. Finn enlisted in the Navy just before his 17th birthday and went on to become the first man to receive the nation's highest military award for heroism during the Japanese attack on Pearl Harbor on Dec. 7, 1941, according to a Navy statement.
He was oldest of 97 Medal of Honor recipients still living.
Despite head wounds and other injuries, Mr. Finn, the chief of ordnance for an air squadron, continuously fired a .50-caliber machine gun from an exposed position as bullets and bombs pounded the Naval Air Station at Kaneohe Bay in Oahu. He then supervised the rearming of returning American planes.
"Here they're paying you for doing your duty, and that's what I did," Mr. Finn said before his 100th birthday. "I never intended to be a hero. But on Dec. 7, by God, we're in a war."
Mr. Finn received the Medal of Honor on Sept. 15, 1942, from President Franklin D. Roosevelt.
He later served as a limited duty officer specializing in anti-aircraft guns in San Diego, Hawaii, Washington, Panama and aboard aircraft carriers, the Navy said.
He retired in 1956 after three decades of service, but he continued to help young sailors and stayed active in Navy organizations, Lt. Aaron Kakiel said.
"He's been a real inspiration to a number of our aviation ordnance men and an example for the entire Navy," he said.
Born July 23, 1909, in Los Angeles, Mr. Finn lived for 50 years on his ranch near Live Oak Springs, outside San Diego.
Mr. Finn died at the Veterans Home of California in Chula Vista, the Navy said. Officials initially said he had died at his ranch.
He will be buried with full military honors. Kakiel said the Navy was still working with family members on the details.
SAN DIEGO - Retired Navy Lt. John Finn, the oldest Medal of Honor recipient from World War II, died Thursday at a nursing home for veterans in Southern California. He was 100.
ASSOCIATED PRESS
In a photo provided by the Navy, John Finn is congratulated by his wife, Alice, after being awarded the Medal of Honor.
Mr. Finn enlisted in the Navy just before his 17th birthday and went on to become the first man to receive the nation's highest military award for heroism during the Japanese attack on Pearl Harbor on Dec. 7, 1941, according to a Navy statement.
He was oldest of 97 Medal of Honor recipients still living.
Despite head wounds and other injuries, Mr. Finn, the chief of ordnance for an air squadron, continuously fired a .50-caliber machine gun from an exposed position as bullets and bombs pounded the Naval Air Station at Kaneohe Bay in Oahu. He then supervised the rearming of returning American planes.
"Here they're paying you for doing your duty, and that's what I did," Mr. Finn said before his 100th birthday. "I never intended to be a hero. But on Dec. 7, by God, we're in a war."
Mr. Finn received the Medal of Honor on Sept. 15, 1942, from President Franklin D. Roosevelt.
He later served as a limited duty officer specializing in anti-aircraft guns in San Diego, Hawaii, Washington, Panama and aboard aircraft carriers, the Navy said.
He retired in 1956 after three decades of service, but he continued to help young sailors and stayed active in Navy organizations, Lt. Aaron Kakiel said.
"He's been a real inspiration to a number of our aviation ordnance men and an example for the entire Navy," he said.
Born July 23, 1909, in Los Angeles, Mr. Finn lived for 50 years on his ranch near Live Oak Springs, outside San Diego.
Mr. Finn died at the Veterans Home of California in Chula Vista, the Navy said. Officials initially said he had died at his ranch.
He will be buried with full military honors. Kakiel said the Navy was still working with family members on the details.
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