I can guarantee you that most if not all mortgage companies are working all weekend with mandatory overtime getting those purchases ready to close so that folks can get that $8000 tax credit! 

Rates are super low - I suggest you or your clients contact me if the current loan is with Bank of America - lots of loans qualify for the Making Home Affordable program which means no appraisal and 9 times out of 10 no verification of income - it's a really sweet deal!

As for my two cents on strategic foreclosures it would behoove us to advise our sphere that there are consequences in some cases as noted in the article below.

Make it a great weekend - contact me when I can be of assistance.

From Think Big, Work Small

Mortgage markets started soft today after heavy selling yesterday with the bellwether 10 yr note failing at its longer term technical resistance at 3.09%. After two weeks of price increases and declining rates the markets were ready for a correction and it began yesterday. We still have a bullish bias for the bond and mortgage markets, however to push the 10 yr note below 3.00% will require a consensus that the US economy is not growing. So far there isn't any definitive consensus either way on the economic outlook. The equity markets haven't seen any  directional movement on the indexes for weeks; just chopping back and forth playing with 200 day moving averages.

The stock market opened up 15 points on the DJIA, the 10 yr note weaker earlier, unchanged at 9:30 and mortgages which were down 8/32 (.25 bp) at 9:00 improved to +2/32 (.06 bp).

Congressional conferees finally hammered out financial reform legislation last night. Reminds me of the health care bill; massive and still most don't really know what much of it means. On the surface it appears Wall Street came out the winner. The most sweeping reform ever on the financial system; some of it good, some rather mundane and some of it so complex (who is too big to fail, how do we know, and how will the government step in to take charge) that it will take weeks or months to work out the details.

Q1 GDP final report was widely expected to be unchanged from the preliminary reading last month; growth at 3.0%. Like much of the recent economic data it was another downward revision to prior reports; +2.7% for Q1. The reason; weaker consumer spending. Like a broken record, but we can't refrain from saying it once again----consumers are not spending as much as markets believe and will not with high unemployment, home prices still declining in most areas, home sales declining every month and job stability uncertain. 

Yesterday the Senate defeated the bill that would have extended unemployment payments. 1.2 mil will loose unemployment compensation at the end of this month and 200K a week will continue to run out of unemployment payments. Republicans and a couple of Democrats made bets that voters are increasingly troubled over continued government spending and massive budget deficits. Time will tell but the take away is more economic trouble ahead. 

The U. of Michigan consumer sentiment index, expected to be unchanged at 75.5, hit at 76.0 the highest since Jan 2008. Not a big deal however, the sentiment index is volatile and emotional; the 12 month expectations index in the data fell to 79 from 83.

Yesterday the 10 yr note tried and failed to break and hold into new low yields under 3.09%, the reaction was somewhat muted in Treasury markets but not in the mortgage market. Mortgage prices declined with strong selling after three weeks of improving prices and lower rates. There is nothing significant in what occurred so far; the technical outlook remains bullish for interest rates. The 10 yr note won't be a concern unless its yield climbs above 3.32% and mortgage markets will remain bullish as long as the 4.0 MBS coupon holds above a price of 99.83 bp, presently at 100.56 bp. Increased volatility is likely; already this morning mortgage prices have traded in a 14/32 range (.43 bp).

From Freddie MacAll Rates But 1-Year ARM Hit Record Lows In Freddie Mac Weekly Survey

 

For Immediate Release

June 24, 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 4.69 percent for the week ending June 24, 2010, down from last week when it averaged 4.75 percent. Last year at this time, the 30-year FRM averaged 5.42 percent.

 

The 15-year FRM this week averaged 4.13 percent, down from last week when it averaged 4.20 percent. A year ago at this time, the 15-year FRM averaged 4.87 percent.

 

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.84 percent this week, down from last week when it averaged 3.89 percent. A year ago, the 5-year ARM averaged 4.99 percent.

 

The 1-year Treasury-indexed ARM averaged 3.77 percent this week, down from last week when it averaged 3.82 percent. At this time last year, the 1-year ARM averaged 4.93 percent. This is the lowest the 1-year ARM has been since the week ending May 6, 2004 when it averaged 3.76 percent.

 

 "Mortgage rates for all but traditional 1-year ARMs hit all-time record lows this week in our survey while activity in the housing market slowed in May following the expiration of the homebuyer tax credit," said Frank Nothaft, Freddie Mac vice president and chief economist. "Freddie Mac began collecting rates for 30-year fixed loans in April 1971, 15-year fixed mortgages in September 1991 and 5-year hybrid ARMs in January 2005. The record low for traditional 1-year ARMs of 3.36 percent occurred during the week of March 25, 2004.

 

"Both new and existing home sales showed unexpected declines in May. Existing sales fell 2.2 percent, compared to the market consensus forecast of a 6.0 percent gain, based on figures published by the National Association of Realtors®. Sales of new homes fell 32.7 percent to an annualized rate of 300,000 units, which was the largest monthly drop and slowest pace since records began in 1963, according to the Census Bureau."

 

 

 

 

 

Wednesday, June 23, 2010, 3:23pm EDT  Fannie Mae cracks down on borrowers  Washington Business Journal - by Barton Eckert

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Fannie Mae is boosting penalties for strategic defaulters by prohibiting them from getting a mortgage, backed by the company, for seven years from foreclosure date.

Washington-based Fannie Mae (NYSE: FNM) says it will also take legal action to recoup debt and will be instructing servicers to monitor delinquent loans and recommend cases that need deficiency judgments.

In a statement Fannie said policy changes designed to encourage borrowers to work with their servicers and pursue alternatives to foreclosure. "Defaulting borrowers who walk away and had the capacity to pay or did not complete a workout alternative in good faith will be ineligible for a new Fannie Mae-backed mortgage loan for a period of seven years from the date of foreclosure," the company said in a statement. "Borrowers who have extenuating circumstances may be eligible for new loan in a shorter timeframe."

Terence Edwards, executive vice president for credit portfolio management, said "Walking away from a mortgage is bad for borrowers and bad for communities and our approach is meant to deter the disturbing trend toward strategic defaulting. On the flip side, borrowers facing hardship who make a good faith effort to resolve their situation with their servicer will preserve the option to be considered for a future Fannie Mae loan in a shorter period of time."

Fannie Mae also will take legal action to recoup the outstanding mortgage debt from borrowers who strategically default on their loans in jurisdictions that allow for deficiency judgments. In an announcement next month, the company will be instructing its servicers to monitor delinquent loans facing foreclosure and put forth recommendations for cases that warrant the pursuit of deficiency judgments.

Troubled borrowers who work with their servicers, and provide information to help the servicer assess their situation, can be considered for foreclosure alternatives, such as a loan modification, a short sale or a deed-in-lieu of foreclosure.

 

 

New Federal Reserve rules give debit and ATM card users additional options regarding overdrafts. In the coming months, banks, credit unions, and other financial institutions must offer you the ability to make decisions about overdrafts for transactions made with your debit or ATM cards.

Expect your bank to send you an explanation about how it treats overdrafts; here are some key things you need to consider when reading the notice:

The basic facts

An overdraft occurs when you make a purchase or ATM transaction but don't have enough money in your account to pay for it. For a fee, your bank will cover you when you become overdrawn. This fee can apply each time you overdraw your account.

Generally, banks can cover your overdrafts in one of two different ways:

• Standard overdraft practices. Your bank will cover your transaction for a flat fee of about $20-30 each time you overdraw your account. For example, if you make a purchase with your debit card for $150 but only have $100 in your account, your account will be overdrawn by $50 and your bank will charge you a fee. If you then make an ATM withdrawal for $50, your account will be overdrawn by $100 and you will be charged another fee. In this example, if the fee your bank charges for its standard overdraft practices is $30, you will pay a total of $60 in fees.
• Overdraft protection plans. Your bank may offer a line of credit or a link to your savings account to cover transactions when you overdraw your account. Banks typically charge a fee each time you overdraw your account, but these overdraft protection plans may be less expensive than their standard overdraft practices.

The new rules

•       You choose. In the past, some banks automatically enrolled you in their standard overdraft practices for all types of transactions when you opened an account. Under the new rules, your bank must first get your permission to apply its standard overdraft practices to everyday debit card and ATM transactions before you can be charged overdraft fees. To grant this permission, you will need to respond to the notice and opt in (agree).

•       Existing accounts. If you do not opt in (agree), beginning August 15, 2010, your bank's standard overdraft practices won't apply to your everyday debit card and ATM transactions. These transactions typically will be declined when you don't have enough money in your account, but you will not be charged overdraft fees.

•       New accounts. If you open a new account on or after July 1, 2010, your bank cannot charge you overdraft fees for everyday debit card and ATM transactions unless you opt in. If you open a new account before July 1, 2010, your bank will treat you as an existing account holder: you will receive a notice about your bank's standard overdraft practices and will have to decide if you want them for everyday debit card and ATM transactions.

•       Flexibility. Whatever your decision, the new overdraft rules give you flexibility. If you opt in, you can cancel at any time. If you do not opt in, you can do so later.

•       Checks and automatic bill payments. The new rules do not cover checks or automatic bill payments that you may have set up for paying bills such as your mortgage, rent, or utilities. Your bank may still automatically enroll you in their standard overdraft practices for these types of transactions. If you do not want your bank's standard overdraft practices in these instances, talk to your bank; you may or may not have the option to cancel.