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Inauguration Blues should turn around today-Mortgage rates for Wednesday 1/21/09

Amidst all the Pomp and Circumstance surrounding the the Inauguration of US #44, MARKETS SUFFERED THEIR WORST SINGLE DAY LOSS SINCE EARLY DECEMBER AND CLOSED UNDER 8000 FOR THE FIRST TIME SINCE NOVEMBER. Once again fresh concerns (or at least somewhat fresh) surrounding world financial markets caused investor panic. The Royal Bank of Scotland led the investor blues reporting a 2008 total loss expectation of over 40 billion. This follows last weeks US results from US giants Citi and B of A, each reporting loss numbers that were off the charts. Both of these once "too big to fail" institutions lost 20% yesterday alone in the wake of the world market gloom. Britain reported that it's unemployment rate is now rivaling the US as it tipped the scale over 6% for the first time in more than 10 years. The one financial firm that actually helped to moderate the world tone was France's Societe General which bucked the trend and reported a gain, much like the US's JP Morgan did last week.

Today's market start should be higher as IBM and Ericcson each reported better than expected results. The post Inauguration rally could be short lived as the afternoon brings the release of the Housing Index, which won't bring any big surprises, but will underscore the fact that our new President has LOTS OF WORK TO DO NOW, NOT LATER.

So what does this mean for Mortgage rates? We saw the 10 year TNOTE yield retreat yesterday after several consecutive days of increases. The 30 year rates actually rose to over 5% during this period, but should start the day a little lower in early morning pricing releases. To be honest with you, I am unsure where they will head today. Investor sentiment with the anticipated rally may send pricing up a bit, HOWEVER, if Financials actually see some relief and if the Housing Index releases don't shock the market too severely, there may actually be pricing improvements. Keep your eyes open. NO MATTER WHICH DIRECTION PRICING TAKES, RATES ARE STILL THE LOWEST IN MANY, MANY YEARS AND THIS IS A GREAT TIME TO GET YOUR APPLICATION IN PLACE. IT MAY NOT BE THE DAY TO LOCK THAT RATE, BUT WITH BANK UNDERWRITING TURN TIMES UP AND TYPICAL REFINANCING PERIODS NOW CLOSER TO 45 DAYS THAN TO 30 DAYS, THERE IS TIME TO LOCK DOWN THE ROAD.

THIS IS MY OPINION ONLY AND NOT THAT OF EAGLE NATIONWIDE MORTGAGE CO. ALWAYS CHECK WITH YOUR MORTGAGE PROFESSIONAL REGARDING YOUR TRANSACTION.

Posted by James Bowen on 01/21/2009 07:27 AM

Comments (4)

Market Tumbles While OBAMA Takes Oath in the ActiveRain Channel

inauguration, tnote, rates, float versus lock, application turntimes, financial turmoil

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4 Comments on Inauguration Blues should turn around today-Mortgage rates for Wednesday 1/21/09

JAN

It is still a very volitale market. It looks like this is going to take some time before we will see relief. Buyers still are very fearful that they may lose their jobs. So even though the interest rates are very good, buyers are afraid to take the leap.

Thanks for the post. Rates are going to have to be much lower to get buyers to take the leap of faith. Have you heard anything about the new administration doing something to help homeowners with no cash out refi's to be able to refinance without appraisals. It certainly would allow more people to keep their homes and prevent even more foreclosures.

thanks - Keep us up to date please!

Thanks to both of you for your comments. I am in complete agreement that rates will have to come down for folks to "take that leap of faith". I am convinced that our new Presient will enforce some tougher guidelines on lenders who have received "bailout bucks" to start to more agressively pass those dollars on to consumers.

There is a program for no appraisal, no credit check, no income verification refi's for those who have FHA mortgages currently. I am working with a few folks right now who have 7% and higher FHA mortgages from a year or two ago. That was when the subprime market turned to FHA for loans, but rates reflected the environment of that time. Streamline FHA refi's should be the first offering to those who have diligently made thier mortgage payments on time, even if that meant letting other creditors wait in line. My advice to anyone out there is ALWAYS PAY YOUR HOUSING OBLIGATION FIRST.The streamline process requires a VOM or proof that the mortgage has been paid on time. Other than that, there are no qualification restrictions for those with FHA NOT looking for cash out. There must be a benefit shown and a lower rate which lowers the payment by roughly $50 per month is the benchmark.

I welcome any additional comments on this topic and would love to talk to anyone who thinks they may qualify for this program. I am confident that other programs may take shape in the months to come and can only hope that financial institutions who are truly attempting to avoid further deterioation will see the light and abide by the tax payers requests for immediate attention. After all, it is OUR MONEY BEING PUMPED INTO THESE LENDERS COFFERS. IT'S TIME FOR THEM TO STEP UP TO THE PLATE AND REACH OUT TO US ALL!!

James Bowen

315-398-9400

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