opinion: The Mortgage market has been volatile, do you agree? - 02/22/08 08:34 AM
There were no economic reports scheduled for release today,  however at 1:30pm ET, Dallas Fed President and voting Fed member Richard Fisher was scheduled to speak.  I kept an eye on him, because the last time he made comments concerning inflation, he shook the markets sending mortgage Bonds to a -200bp decline. 
I have included a couple of quotes that will give you an idea of today's event.
"The 12-month number for the CPI is running at a very high level ... and the components of that (rise) are worrisome," Fisher said, referring to the U.S. Consumer Price Index.
"There are some risks that we're … (2 comments)

opinion: Fed Cuts = lower mortgage rates, right? - 02/19/08 10:40 AM
  Is a Fed rate cut really good news for mortgage rates? The facts may be surprising. The Fed can only control the Discount Rate and the Fed Funds Rate. This is very different from mortgage rates.  A mortgage rate can be in effect for 30-years while a rate set by the Fed can change from one day to another. On the graph see how the interest rate on the 30-Year Fixed FNMA have been on the rise since the last couple of Fed Rate Cuts. It is often said history repeats itself, right?
Today, the mortgage bonds dipped -135bp, which is the biggest dent … (2 comments)

opinion: What's all this? - 02/15/08 08:29 AM
I usually don't do weekly reports, however as I was getting organized after a busy week, I've noticed some things that I'll like to share.
On February 13, the highlight was last month's Retail Sales report with an unexpected +0.3% The surprise was due to the fact that traders were almost counting on  a -0.3%.  Excluding the automobile sales, we get 0.3% that also turned out to be better than the expected 0.2%.  It just makes sense that February could have been a slow month, because as we go through  changes in the economy we become more cautious about spending and some times before making additional purchase decisions we … (0 comments)

opinion: It is not what you say, but how you say it! - 02/05/08 05:51 AM
The early release of the ISM Report caught traders by surprise. How problematic is that?
First, the 44.6 reading was waaay below expectations, considering that Economists were expecting a 53.0. This data indicates that the service sector is shrinking for the first time in almost five years, implying  economic slow down.
Second,the markets are trying to figure out if the slowing in the manufacturing and the service sector is a clear indication that we are indeed heading towards recession. By now this is no surprise, however the cause of uncertainty this morning was a combination of bad news and how they were … (2 comments)

opinion: Steps to Responsible Lending - How to figure them out - 02/03/08 05:09 PM

In slower markets, some loan officers may feel pressured to close deals that aren't in the homeowner's best interest.  In order to avoid getting into difficult and financially compromised positions with their mortgages, borrowers are well advised to be acutely aware of the signs of a responsible loan officer when selecting a mortgage professional.   
First, look for an Orange County Mortgage Planner whose values are focused on helping individuals to achieve their financial goals in both the fastest and the safest way possible.  A reputable Mortgage Planner will show you the numbers associated with the proposed loan and provide you with … (0 comments)

opinion: HR 5140 Passed, Now what? - 01/31/08 07:12 AM
By now, we have all heard the good news of increased lending limits in high cost areas, and tax rebates to help stimulate the economy. On the surface, we all rejoice now that more loans and with less restriction will become available, right?
This is what's happening: The US House of Representatives overwhelmingly passed HR 5140 recently - an economic stimulus package that includes a temporary increase in the conforming loan limit and the upper threshold for FHA loan programs to as much as $729,750 in high-cost areas. 
The temporary increase would last only until the end of 2008.  This bill would also restrict Fannie … (4 comments)

opinion: It's picture time! - 01/29/08 08:31 AM
One of my clients called me last week after reading my latest posting, on our conversation I was explaining to him that most homeowners look at mortgages from the homeownership perspective instead of the personal finance point of view costing themselves a lot of money in lost opportunities to increase their bottom line (net worth.)
I shared with my client that a newsletter from Paul Richard, RFC., Executive Director of the Institute of Consumer Financial Education says, "the big picture is your net worth, listing the things you own versus the things you owe." Along with that he said, "you should determine how many years … (0 comments)

opinion: Housing – Deal or No Deal? - 01/28/08 05:37 AM
The new home sales for December 2007 were reported below expectations.  The supply of new unsold homes rose to 9.6 months from November's reading of 9.3 months. 
What 2008 will be like if you're looking for a real estate deal?
Last year home prices dropped between 5 - 10%, but there was no "bubble". This new year will be another down year for housing with similar declines in prices - but will also mark a bottoming out. The thing of it is...you can't see a bottom until you are already past it, much like how we always see refinance activity pick … (1 comments)

opinion: The Federal Reserve Lowers Interest Rates by 0.75%... What Does This Mean For YOU? - 01/22/08 05:12 AM
Dear reader,
The Federal Reserve surprised the market this morning with a 75 basis points rate cut... What Does This Mean For YOU?  In order to answer this question, it is helpful to understand the four major interest rates that are affected by the Fed:
Discount Rate (currently 4%) - the interest rate that banks pay when they borrow money directly from the Fed. The rate has been largely symbolic in the past because hardly any banks take the Fed up on their offer these days!
You see, banks prefer to get short term financing by:
Issuing "commercial paper" - these are short term IOUs of … (0 comments)

opinion: Another Fed Rate Cut Is On Its Way: Find Out Why - 01/15/08 07:16 AM

Dear reader,
Mortgage Bonds were in rally mode this morning after Retail Sales, showed its weakest growth in five years with an overall annual growth rate of 4.2%.The NY State Manufacturing Index , and the Producer Price Index(PPI) were reported lower than expectations.  When excluding volatile energy and food prices, the Core PPI matched the consensus forecast.
With this economic data, I don't see why the Fed should not have reasons to cut rates by .50%, and in fact it seems like traders are now hoping the Federal Reserve may slash rates before its next two-day session ending on Jan. 30.
Why do you need a Certified … (0 comments)


Joseph David


Fountain Valley, CA

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Clarion Mortgage Capital, Inc.

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