rates: Banks Face $100 Billion of Writedowns on Level 3 Rule - 11/07/07 03:23 AM
Under FASB terminology, Level 1 means mark-to-market, where an asset's worth is based on a real price. Level 2 is mark-to- model, an estimate based on observable inputs and used when there aren't any quoted prices available. Level 3 values are based on ``unobservable'' inputs reflecting companies' ``own assumptions'' about the way assets would be priced.
U.S. banks and brokers face as much as $100 billion of writedowns because of Level 3 accounting rules, in addition to the losses caused by the subprime credit slump!
The Financial Accounting Standards Board's rule 157 will make it harder for companies to avoid putting market … (1 comments)

rates: Forecast for the Week - 11/07/07 12:13 AM
Have you ever flipped through all your TV channels to find nothing on? Well, that's how market traders will likely feel this week as they flip around for some economic news releases. But the news calendar takes a well deserved rest next week with mostly lower to mid-level reports scheduled. That means bonds will probably trade inside the range illustrated below - unless stocks bust a major move. If stocks rally sharply higher, bonds will be sold off to raise the cash needed to chase stocks, causing home loan rates to rise. Should stocks slump on more fears about credit quality, … (1 comments)

rates: Subprime Contagion May Claim 10-Year Treasuries Next - 11/05/07 12:24 AM
The U.S. housing slowdown that propelled 10-year Treasuries to their biggest gains since 2002 may soon make the same securities laggards in the government bond market. The notes returned 9.6 percent since mid-June as investors sought a haven from credit market losses caused by subprime mortgages.
Sales of bonds backed by housing loans have dropped 20 percent this year as home purchases declined.
Fund managers may ``no longer buy the 10-year Treasury'' to protect their holdings. With housing prices actually decreasing coupled with tighter underwriting standards, you've definitely decreased the number of people who could refinance.
A drop in adjustable-rate mortgages is also adding … (0 comments)

rates: Treasuries Rise as Bank Losses are Greater than Growth in Employment - 11/04/07 01:34 AM
Treasuries rose, pushing two-year note yields to the lowest since 2005, as investors bet that bank losses on mortgage loans will slow the economy.
Shares of financial- services companies including Merrill Lynch & Co. fell to a two- year low as analysts predicted the housing slump will cause banks to lose more money.
The two-day drop in yields is the biggest since they dropped 28 basis points on Sept. 4-5 in 2003 on an employment report showing unexpected job losses and indications the Fed might lower rates.
We will all have to wait to see what Santa brings.

rates: U.S. Employment Slowed in October as Housing Slumped - 11/02/07 01:37 AM
Employment in the U.S. slowed in October as a worsening housing slump led to firings at homebuilders, manufacturers and mortgage lenders, economists said before a report today.
Wage gains may slow as employment weakens, increasing the burden on consumers already saddled with rising fuel costs and declining home values. The Federal Reserve has lowered the benchmark interest rate twice in as many months to prevent the real-estate recession from dragging down the rest of the economy.
A meltdown in the subprime mortgage market during August may mean housing will drop even more. Home-price decreases signal fewer owners can tap home equity … (1 comments)

rates: Treasuries Rise on Speculation Credit Market Losses May Deepen - 11/01/07 03:20 AM
Treasuries rose as investors sought the safety of government debt after stocks tumbled and equity analysts cut the ratings of Citigroup Inc. and Bank of America Corp. on renewed concern over credit market losses. The gains in the two-year notes more than erased yesterday's decline triggered by the Federal Reserve's indication that it doesn't anticipate lowering interest rates further. The downgrades of the two largest U.S. banks were based on projections that rising delinquencies on mortgage loans will lead them to write down the value of assets.

rates: Treasuries Little Changed as Consumer Confidence Decreases - 10/30/07 02:43 AM
Treasuries were little changed after a private report showed consumer confidence fell more than forecast in October.
The Conference Board's index of confidence declined to 95.6, the lowest since October 2005, from a revised 99.5 the prior month. The index averaged 105.9 last year.
It looks like we are in for a weak spending Holiday Season....but at least Santa may bring us some lower rates and move some of the excess housing inventory and improve the US economy!!

rates: The FED says a TREAT should do the TRICK this Halloween! - 10/29/07 05:00 AM
They say to be careful what you wish for...and with Halloween just around the corner, kids aren't the only ones wishing for a "treat". This Wednesday, October 31st, The Fed will decide if the financial markets will get a treat of their own with another cut to the Fed Funds Rate. It is very fitting that the decision on whether or not the Fed cuts rates happens on Halloween, because the "treat" may be a bit "tricky".
A Fed rate cut typically helps the economy and the stock market, but inflation hating Bonds and home loan rates usually have a negative reaction … (2 comments)

rates: Sub-Prime lender ResMAE Mortgage is back - 10/29/07 02:12 AM
Sub-Prime is making it's way back...but is a little stricter and the rates are definately higher!
Here is the information we discussed.  Our focus is the sub-prime market; here is a sample of what we can do.
Loans to 1.25 million to 80% LTV (min. 620 score, full doc) Loans to 1 million to 75% LTV (min. 600 score, full doc) Full doc up to 90% LTV  - 560 score with up to a 1x30 Full doc up to 90% LTV  - 580 score with up to a 3x30 Full doc up to 75% LTV  - 525 score with up to a 1x60 … (2 comments)

rates: Treasuries Rise on Evidence Credit Losses Threatening Economy - 10/18/07 03:02 AM
Treasuries rose, pushing two-year note yields toward their biggest weekly drop since September 2005, as concern increased that credit market losses are threatening the broader economy. Two-year note yields fell for a fourth straight day after a 32 percent decline in profit at Bank of America Corp. triggered concern that the mortgage market slowdown may worsen. Futures showed that traders raised the odds to 70 percent that the Federal Reserve will cut borrowing costs a quarter-percentage point at its meeting this month.
Futures traded on the Chicago Board of Trade suggested a 54 percent chance yesterday and a 40 percent chance … (1 comments)

rates: Forecast for the Week... - 10/16/07 04:33 AM
So could this week's slate of economic reports hold enough information for Bonds to decide they've had enough of the 200-day Moving Average - and cause home loan rates to make a move? The upcoming calendar features reports on Manufacturing, Housing, and Consumer Inflation...so it could get juicy, depending on the flavor of the reports.
The report that has the potential to cause the most action is the Consumer Price Index, which is simply a measure of the price levels we as consumers are paying for our goods and services. Last week's Producer Price Index was somewhat mixed, but had a pretty … (1 comments)

rates: Treasuries Rise as Global Stocks Fall on Concern Over Housing - 10/16/07 04:31 AM
Treasuries rose as renewed concern that the U.S. housing slump will reduce corporate earnings spurred a drop in global stocks. Two-year note yields fell the most in four weeks as traders increased bets that the Federal Reserve will cut borrowing costs this month. Fed Chairman Ben S. Bernanke said yesterday that the collapse of subprime mortgages will be a ``significant drag'' on U.S. economic growth.
It's about time he admitted it!!

rates: How The U.S. Prime Rate Works - 10/09/07 10:31 AM
Don't you hate it when borrowers call you and say "Hey, I heard that the FED cut the rates...I want 6% instead of my 6.50% now!!
How PRIME works.... 
If you are shopping for a new credit card, education loan, a car loan or a specific type of second mortgage called a home equity line of credit (HELOC) then you need to understand how the U.S. Prime Rate works.
On Wall Street and throughout the worldwide banking community, the U.S. Prime Rate is understood as the interest rate at which banks lend money to their most creditworthy business customers. Most American banks, credit … (4 comments)

rates: FDIC Says Make Teaser Rates Permanent - 10/09/07 02:21 AM
Some institutions are starting to be more proactive in modifying loans, FDIC's chairman said at an investor conference last week, according to a transcript of her presentation. She called for servicers to make teaser start rates permanent for owner-occupied borrowers with current mortgages, adding that these hybrid loans were designed as short term programs that relied on appreciation. "Keep it at the starter rate," she said. "Convert it into a fixed rate. Make it permanent. And get on with it."
That would REALLY help a lot of home owners IF banks would do this.....but I haven't heard of a single one ACTUALLY … (5 comments)

rates: Housing Will Fixate Fed for Years! - 10/01/07 09:36 AM
Bill Gross, manager of the world's biggest bond fund, said falling home prices will be the main driver of U.S. monetary policy for ``several years,'' and repeated his forecast the Federal Reserve will lower the federal funds rate to at least 3.75 percent in the coming 12 months. The Fed may delay the rate cuts until next year because the economy is showing signs of strength that will prove temporary, Gross wrote in a report published on the Web site of his firm, Pacific Investment Management Co. The Fed on Sept. 18 lowered its target for the overnight lending rate between … (0 comments)

rates: Recession Concern Spurs U.S. Bond Rally on Fed Ease - 10/01/07 09:33 AM
For the first time since 1995, the U.S. bond market will rally on the assumption that the Federal Reserve has relegated inflation to a secondary concern because the central bank views a recession as a much greater threat to the economy. The bellwether 10-year Treasury note, which depreciated as its yield climbed at least a quarter-percentage point when the Fed began lowering interest rates in 1998 and 2001, won't be recoiling anytime soon after the Fed lowered its benchmark by half a point to 4.75 percent on Sept. 18, the first cut in four years.
Credit Suisse forecast in January that 10-year … (0 comments)

rates: October's 1st week in review.. - 10/01/07 07:22 AM
The Bond market and home loan rates were fairly tame for the bulk of the week, but had picked up a little steam on Thursday following the US Treasury's auction of $13 billion in five-year notes that afternoon. The Treasury auction showed strong foreign demand and heavy buying by large institutional investors - and anytime demand is strong, pricing moves higher; so as Bond pricing moved higher, conforming home loan rates improved.
Then along came Friday, when the Bond market and home loan rates gave back the ground they had previously gained. What happened? Things started off well on Friday morning, when … (0 comments)

rates: Treasury 10-Year Note Falls the Most in Six Weeks on Inflation - 09/19/07 03:26 AM
Treasury 10-year notes fell the most in six weeks as investors speculated inflation will accelerate after the Federal Reserve cut interest rates by a half-percentage point. The difference between two- and 10-year Treasury yields rose to 55 basis points, the widest spread in four weeks. The Fed yesterday reduced its target interest rate to 4.75 percent, saying in its statement that it ``will act as needed to foster price stability'' and sustainable growth.
Core consumer prices, which exclude food and energy, climbed 0.2 percent last month as economists forecast and were up 2.1 percent from a year earlier, the Labor Department … (3 comments)

rates: Markets Await Ben's Cutting Remarks - 09/17/07 05:57 AM
The economic calendar thickens up considerably this week, giving a read on manufacturing, inflation and housing...but many of these reports will take a back seat to the Fed's Policy Statement and Interest Rate Decision, to be released on Tuesday afternoon. Traders are forecasting a 100% chance of a Fed rate cut. About half the traders are expecting a cut of ¼%, and the others expecting a cut of ½%. Of perhaps greater importance is tone of their highly analyzed Policy Statement. Comforting words about inflation will help bonds and home loan rates.
Remember that a cut to the Fed Funds Rate would … (5 comments)

rates: Treasuries Rise on August Retail Sales - 09/14/07 02:22 AM
Treasuries rose as a government report showed sales at U.S. retailers increased last month less than economists forecast and a British mortgage lender got a bailout from the Bank of England. Traders raised bets that the Federal Reserve will cut borrowing costs half a percentage point to limit the economic impact of the housing slump. A government report showed last week that the U.S. economy unexpectedly lost jobs in August for the first time in four years! Good news for all of us!


Kris Krajecki

Mortgage Broker Huntley, IL

Huntley, IL

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Kris Krajecki - FOX VALLEY MORTGAGE - Huntley, IL

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