Greece and the stock market are two words that set the tone for our mortgage market this AM. It seems the bailout of the Country of Greece has been solidified and with some international anxiety reduced, the stock market is up as well. That news has worsened our mortgage market this AM with personal Income and spending both up and in-line with expectations. Finance ministers approved a 110B euro bailout for Greece; they refused, however, to answer questions about how other struggling nations in the 16-nation bloc would be treated, calling Greece a "special case". Wonder what they would refer to State of California as a "special special case"? How does the Country of Greece have any bearing on our mortgage rates? Many have said that excessive debt mortgages the future of our children's children. And some parallels have been made about the future of the U. S. if the current debt levels for this Country are not brought under control. Right now, the futures market is pricing in a 74% chance that the Fed keeps rates at .25% through September 21st, 2010. Currently, the Ten Year yield is at 3.71% (3.74% on Friday). 30 year fixed rate mortgages are off .25% at present from the Friday close.
Market News: As we watch the financial reform bill inch forward, which will have a sweeping impact on our business, beside lobbyists, others are concerned about the direction of the bill. Since Freddie and Fannie are not a part of the bill and the government sector is over 95% of loans being made today, concerns mount about what the liquidity will be in the capital markets for the mortgage market. Article in New York Times explores the issues attached.
How large is the federal government in our mortgage market? The statistic from the first quarter of 2010 is 96.5% of the loans. And while one large jumbo deal has been reported in the mortgage back security market, it has a long way to go before we can see jumbo pricing come closer to conforming pricing. Article in Walls Street gives a basic outline of where we are today.
http://online.wsj.com/article/SB10001424052748704093204575216530213580458.html?mod=rss_whats_news_us
What do California, Florida, Nevada, and Arizona have in common? All 20 of the large metropolitan areas with the highest rates of foreclosures during the first quarter were located in these states. RealtyTrac's research showed that the four each had at least one metropolitan area with a population of 200,000 at the top of the 206 city list. California accounted for ten positions, Florida seven, Nevada two and Arizona one. On the "good news" side, however, 14 of the top 20 areas and eight of the top ten reported a decrease in foreclosure activity from the same quarter in 2009, mostly due to government intervention and other non-market influences.
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