Monday is officially closed for business here on the East Coast. So, here is a breakdown of what happened today:
- Joseph Lewis now owns 7% of Bear Stearns' after a large share purchase which points to his confidence in a market upswing. There are rumors at this point in time that he will commit to a higher percentage tomorrow - possibly up to 13% of the company.
- Various speeches by Federal Reserve members did not help or provide any sort of confidence booster in the present market conditions especially after the Unemployment report that was released on Friday
- Bottom line shows that even though investors are crazily looking for hints at what the Fed will do about interest rates, members are not budging whatsoever.
- A bit of good news came out of today as well. Schumer has proposed to increase Freddie and Fannie's holdings of securities in hopes that it will allow more loans to be bought by Freddie and Fannie and therefore alleviate some of the credit crunch. He also added a proposal that would raise the loan limit of Fannie and Freddie to $625,000 in some areas that $417,000 is less than the median home price.
- Wachovia also stated that there has been an increase in their mortgage business from the shakeout of the industry. This is true with almost all the major lenders involved in today's market. The only portion of the market that has been significantly scaled down is sub-prime (as we all know).
- There has been mixed reports of citizens supporting and campaigning against the government's attempt to bailout people who took "exotic" loans or loans they knew they could not afford in the future. I would anticipate a large response to the governments actions over the next few days and will probably here a rebuttal from the government by the end of the week.
In general, today was a wash for the overall market; it was extremely stagnant throughout the day with little hope of anything better tomorrow. I would still say to lock your loans in as soon as application is taken because of the volatility - but only if they are closing by the end of this week. The 10-year bond shifted to 4.324% to end the day (a loss), which means rates are likely to improve slightly tomorrow morning. Keep your eyes open, and tune into my blog tomorrow!
For any home loan quotes or information please contact me at 203-257-5279 or email me at Andrew_Scherer@Countrywide.com. I look forward to hearing from you soon!
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