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Will May be your Hangover month?

By Bill Black

Mortgage and Lending with Guaranteed Rate NMLS# 2611 NMLS# 49242

April 26, 2010 04:22 AM

Good Monday Morning to all,

As we finish the fist time home buyer frenzy I am finding this month to be considered a "hangover" to some.

The party has been the first time homebuyers coming out of the wood work to capture $8,000 tax credit by getting "under contract" for a purchase. Unfortunately some of these offers were put on homes that may never see the light of a transaction due to the fact that the short sale conditions were never identified in advance that would allow for a closing.

We are also seeing buyers whom assumed that they qualify but once the information gets into underwriting they realize even though they were W-2 income they wrote of mileage that can kill a deal or they wrote off a big loss in 2009 due to a bad tenant and now that write off no longer allows them to close on a deal... the short of the story is to not just be prepared for the hangover in our market but to find solutions to the problem before it occurs.

There are Four days left to have these offers signed..... IF YOU HAVE A LISTING- MAKE SURE YOUR BUYER IS QUALIFIED!!!!! IF YOU CANNOT TALK TO THE LENDER YOURSELF IT MAY BE WORTH A CONCERN. ASK TO SEE THE APPROVAL- REQUEST TO PROVE EFFICIENT FUNDS ARE AVAILABLE ON EVERYTHING OVER 5%. YOU DESERVE TO CLOSE THE DEAL AND YOUR CLIENT DESERVES THE RIGHT TO MAKE SURE THE SALE IS A SUCCESS.

Onto the Market-

Mortgage bond prices fell last week pushing mortgage interest rates higher. Leading economic indictors came in stronger than expected which really didn't help us. New home sales shocked the market with a 26.9% increase. This was the largest increase in 47 years and not bond friendly. Rates rose by about 3/8 of a discount point for the week.

LOOKING AHEAD

Economic Indicator	Release Date & Time	Consensus Estimate	Analysis
Consumer Confidence	Tuesday, April 27, 10:00 am, et	54.0	Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates.
2-year Treasury Note Auction	Tuesday, April 27, 1:15 pm, et	None	Important. $44 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
5-year Treasury Note Auction	Wednesday, April 28, 1:15 pm, et	None	Important. $42 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
Fed Meeting Adjourns	Wednesday, April 28, 2:15 pm, et	No change	Important. Few expect the Fed to change rates, but some volatility may surround the adjournment of this meeting.
Weekly Jobless Claims	Thursday, April 29, 8:30 am, et	455k	Moderately important. An indication of employment. A larger figure may lead to lower rates.
7-year Treasury Note Auction	Thursday, April 29, 1:15 pm, et	None	Important. $32 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
Q1 Advance GDP	Friday, April 30, 8:30 am, et	3.5%	Very important. The aggregate measure of US economic production. Weakness may lead to lower rates.
Q1 Employment Cost Index	Friday, April 30, 8:30 am, et	Up 0.4%	Very important. A measure of wage inflation. Weakness may lead to lower rates.
U of Michigan Consumer Sentiment	Friday, April 30, 10:00 am, et	72	Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates.

Consumer Confidence

The Conference Board releases the Consumer Confidence Index on the last Tuesday of every month. The report details the levels of confidence individual households have in the performance of the economy. The data is derived from a survey of 5,000 households nationwide. The survey polls consumer opinions on current business conditions, their jobs, their incomes, and their future spending plans.

The consumer confidence index is significant in that it provides a precursor into consumers' willingness to spend in the months ahead. However, many analysts point out that willingness to spend does not always convert to actual expenditures.

This week's release will be eagerly anticipated. Look for any variation from estimates to cause mortgage interest rate volatility. Signs of eroding consumer confidence could lead to improvements in mortgage interest rates. However, stronger than expected figures could spike rates higher.

Bill Black CMP

Branch Manager- Vancouver Branch

Loan Network LLC

Mortgage Banker

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Charlie Gantz

Keller Williams Commercial, Tampa Bay - Saint Petersburg, FL

J.D., M.B.A.

A thought-inspiring post. Thanks. Charlie Gantz, Greenwood, IN; J.D., M.B.A.; Owner/Principal Broker, Atlas Property Group, LLC

Apr 26, 2010 04:30 AM

Constantine Isslamow

RE/MAX Eastern Realty Inc. Brokerage - Peterborough, ON

"Training and Accountability"

Thank you for posting and sharing your very informative article.

Wishing you continued success.

Apr 26, 2010 04:32 AM

Bill Black

Guaranteed Rate NMLS# 2611 - Vancouver, WA

VP Mortgage Lending

I see posts now with Realtors pissed they didnt get the extension but they also was not aware of what this extension was wrapped around.... more spending and extended unemployment just for starters.

Jun 27, 2010 11:28 AM

Will May be your Hangover month?

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