Posts Tagged → fha loans
January 2012 Economic Calendar
| Date | (GMT) | Event | Actual | Cons. | Previous |
| Jan 01 | 00:00 | New Year’s Day | |||
| Jan 03 | 15:00 | Construction Spending (MoM) | 1.2% | 0.5% | -0.2% |
| Jan 03 | 15:00 | ISM Manufacturing | 53.9 | 53.2 | 52.7 |
| Jan 03 | 15:00 | ISM Prices Paid | 47.5 | 47.9 | 45.0 |
| Jan 03 | 19:00 | FOMC Minutes | |||
| Jan 04 | 12:00 | MBA Mortgage Applications | -4.1% | 0.3% | |
| Jan 04 | 15:00 | Factory Orders (MoM) | 1.8% | 2.0% | -0.2% |
| Jan 04 | 21:00 | Total Vehicle Sales | 13.60M | 13.50M | 13.63M |
| Jan 05 | 13:15 | ADP Employment Change | 165K | 206K | |
| Jan 05 | 13:30 | Continuing Jobless Claims | 3.522M | 3.601M | |
| Jan 05 | 13:30 | Initial Jobless Claims | 375K | 381K | |
| Jan 05 | 15:00 | ISM Non-Manufacturing | 53 | 52 | |
| Jan 05 | 16:00 | EIA Crude Oil Stocks change | 3.899M | ||
| Jan 06 | 13:30 | Average Hourly Earnings (MoM) | 0.2% | -0.1% | |
| Jan 06 | 13:30 | Average Hourly Earnings (YoY) | 2.1% | 1.8% | |
| Jan 06 | 13:30 | Average Weekly Hours | 34.3 | 34.3 | |
| Jan 06 | 13:30 | Nonfarm Payrolls | 150K | 120K | |
| Jan 06 | 13:30 | Unemployment Rate | 8.7% | 8.6% | |
| Jan 09 | 20:00 | Consumer Credit Change | $7.65B | ||
| Jan 10 | 15:00 | IBD/TIPP Economic Optimism (MoM) | 42.8 | ||
| Jan 10 | 15:00 | Wholesale Inventories | 1.6% | ||
| Jan 11 | 12:00 | MBA Mortgage Applications | -4.1% | ||
| Jan 12 | 13:30 | Continuing Jobless Claims | |||
| Jan 12 | 13:30 | Initial Jobless Claims | 381K | ||
| Jan 12 | 13:30 | Retail Sales (MoM) | 0.2% | ||
| Jan 12 | 13:30 | Retail Sales ex Autos (MoM) | 0.2% | ||
| Jan 12 | 15:00 | Business Inventories | 0.8% | ||
| Jan 12 | 15:30 | EIA Crude Oil Stocks change | |||
| Jan 13 | 13:30 | Trade Balance | -$43.47B | ||
| Jan 14 | 13:55 | Reuters/Michigan Consumer Sentiment Index | 69.9 | ||
| Jan 16 | 00:00 | Martin L. King’s Birthday | |||
| Jan 17 | 13:30 | NY Empire State Manufacturing Index | 9.53 | ||
| Jan 18 | 12:00 | MBA Mortgage Applications | |||
| Jan 19 | 13:30 | Continuing Jobless Claims | |||
| Jan 19 | 15:30 | EIA Crude Oil Stocks change | |||
| Jan 25 | 12:00 | MBA Mortgage Applications | |||
| Jan 25 | 19:00 | FOMC Minutes | |||
| Jan 25 | 19:15 | Fed Interest Rate Decision | 0.25% | ||
| Jan 26 | 13:30 | Continuing Jobless Claims | |||
| Jan 26 | 15:30 | EIA Crude Oil Stocks change | |||
| Jan 31 | 14:00 | S&P/Case-Shiller Home Price Indices (YoY) | -3.4% |
Thursday Trivia
Yesterday the US Federal District Court denied the request for an injunction and restriaining order on the implementation on the Loan Offcier Compensation rule. This is not just a mortgage industry issue as who is to say another industry will not be targeted in the future and our government will take a stab at legislating that industry out of business? Housing led us into the economic crisis and housing will be the catalyst for a true recovery. All of our governments “well intentioned” actions have done nothing but to further bog down the mortgage industry, increase costs, confuse the consumer, and slow down a very slow moving recovery. Thank you Washington DC. To read the courts opinion you can follow this LINK.
Treasuries and mortgages doing better early this morning. At 8:30 weekly jobless claims saw a decline of 6K filings from last week, however last week’s claims were revised from 282K to 394K. Continuing claims were down 51K to 3.714 mil but as with the claims continuing claims were revised from 3.721 mil last week to 4.22 mil in the revision. The 4 wk average also increased to 394,250 frm 391.000 based on the revisions. The claims report today is data collected after the BLS gathered the data for tomorrow’s monthly employment report.
Next up this morning, the March Chicago purchasing managers index, expected at 70.0 frm 71.2 in Feb, was 70.6. The new orders component at 74.5 frm 75.9, the employment index at 65.6 frm 59.8 the highest read since Dec 1983 and the prices pd for materials at 83.4 frm 81.2, the highest since July 2008. Employment and prices are more evidence that the economy is improving along with inflation concerns. However, there was little reaction to the report, treasuries and mortgages held steady with small price gains and the stock market unchanged.
Finally today, Feb factory orders were expected to be up 0.4%, were down 0.1% and Jan revised to +3.3% frm 3.1%.
In Europe inflation data was stronger than expected; in the 17-nation euro region inflation increased to 2.6% in March from 2.4% in February, European Union estimates showed today. That’s the fastest pace since October 2008, and exceeds the ECB’s 2.0% limit for a fourth month. Economists had forecast inflation to hold steady. Next week the ECB will meet to discuss increasing its base lending rate, the inflation data today further increases the chance ECB will increase rates. Following moves in China, Brazil, Russia and India base lending rates are moving higher. In the US so far, the Fed still holds that inflation is not an immediate problem and plans to continue the easing move of buying $600B of treasuries. Whether or not inflation is about to click in, the bond market will face a huge hill to climb keeping long term rates including mortgages at or below the present levels. Fed officials are increasingly more divided on ending QE 2 sooner and less buying than originally intended; Bernanke however appears to be holding with completing the entire $600B buying that will conclude at the end of June.
After all the data this morning the rate markets holding better than we would have thought given the strong Chicago PM index and inflation increase out of Europe. The stock market holding unchanged. Technically the 10 yr held 3.50% on Tuesday giving traders a little opportunity but overall the bond market still holds a bearish outlook for rates. The rest of the session will be setting up for tomorrow’s employment report with estimates still for an increase of 200K jobs and the unemployment rate unchanged at 8.9%. If floating stay close today; normally we do not like having a market position into employment as it is too volatile.
Weekly Market Update
Foreclosure Rates Fall Again:
U.S. foreclosure rates fell for the third straight month according to RealtyTrac’s new report. New foreclosure fillings in June dropped 2.81 percent from the previous month and 6.98 percent from the previous year.
While foreclosure rates are falling, they are still at high levels with 16 straight months of readings of over 300,000. Still 410 out of every 411 homes are not in foreclosure, so there is still some strength in the housing market.
Consumer Prices Continue to Fall:
Consumer Prices fell for the third straight month, providing bargains for American Shoppers.
The Consumer Price Index, the government’s most closely watched inflation barometer, dipped 0.1 percent in June, according to the Labor Department. Less expensive energy bills were a big factor behind the drop. Prices for food items and airline fares also dropped last month. Also, ”core” consumer prices are holding near a 44 year low.
What Happened to Rates Last Week:
Mortgage backed securities (MBS) gained +44 basis points last week which caused 30 year fixed rates to decrease for both government and conventional loans. Rate declined on the back of some weaker than expected economic data. Manufacturing Data, Consumer Price Index and Consumer Sentiment all were much worse than market expectations. Economic concerns helped to push investors towards purchasing MBS as a way to earn low yields in exchange for safety that you cannot find in the stock markets.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages. I will be watching these reports closely for you and let you know if there are any big surprises:
| Date | ET | Release | For |
| 19-Jul | 10:00 | National Homebuilders Association Index | July |
| 20-Jul | 8:30 | Building Permits | Jun |
| 20-Jul | 8:30 | Housing Starts | Jun |
| 21-Jul | 10:30 | Crude Inventories | 17-Jul |
| 22-Jul | 8:30 | Initial Claims | 17-Jul |
| 22-Jul | 8:30 | Continuing Claims | 10-Jul |
| 22-Jul | 10:00 | Existing Home Sales | Jun |
| 22-Jul | 10:00 | Leading Indicators | Jun |
It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.
All in all rates are at very attractive levels and it is unlikely they will go much lower from here. If you are a fence sitter and are waiting for the bottom, wait no more as the trend is more likely to be upward for the near term outlook. 30 year fixed rates are in the mid 4% range and 15 year fixed rates are in the low 4% to high 3% range! In 26 years as a mortgage professional I have never been able to quote such attractive interest rates!
FHA Loans May Become More Costly
It is time for a call to action as FHA loans are in danger of becoming more costly thereby pushing persepctive home buyers out of the market. To view a video and get more details on this issue - CLICK HERE!
Please take the time, watch the video and let your representative know how you feel!!
Attention Realtors, Asset Managers, and Sellers – There is a Solution
I am writing you this post in an effort to inform you of an FHA loan program that is specifically designed for distressed properties. It has been my experience that many real estate agents and asset managers alike are either not aware of the program at all or have several misconceptions. With a little clarification, I think you will see that this loan program is of great benefit to both buyers and sellers.
The FHA 203 (k) loan program allows a borrower to finance in all the costs of rehabilitating a property. It allows an FHA borrower to take advantage of purchasing a property that wouldn’t normally be FHA financeable. This program is a tremendous tool for you as a seller as well. Property condition issues won’t hold up your escrow because any FHA conditions that would appear on an appraisal will be addressed by the borrower’s financing program and after the close of escrow.
Please also be aware that Mason-McDuffie Mortgage Corporation has a Full Eagle status with HUD and is therefore fully delegated to underwrite all FHA/VA loans through its in house banking. This significantly cuts back on the normal delays that brokers/bankers are experiencing today with processing government loans. Our average close on FHA is 21 days. I am available to furnish references should the sellers or their agents have any concerns with regard to this fact.
At Mason-McDuffie Mortgage we understand that information is your key to a successful transaction and so I’m always available to answer any loan questions that you may have.
Thursday and Rates are On the Rise
It is Thursday the 11th and with signs of inflation looming overseas we are seeing a slight sell off on the bond market and upward pressure on interest rates. China posted a 2.7% increase in consumer prices (year over year). If China feels the need to curb inflation then monetary tightening (higher rates) would be one move to achieve this result. This would cause the Yuan to rise against the dollar. Another way for them to influence a rise of the Yuan over the dollar would be for China to purchase less from our bond market. That prospect along with the end of the Fed’s MBS purchase program on the horizon has bond traders a bit nervous this morning. Isn’t nice that we are all one big happy, interconnected world and what happens in China can have an adverse affect on our mortgage rates!
This morning’s economic release showed Initial Jobless Claims at 462,000 which was higher than the expected 460,000 number. Overall, claims are at 4.6 million and the number of people filing for EUC (Emergency Unemployment Compensation) benefits is at 5.6 million! As of now, the jobs outlook is still grim with little or no improvement showing in the numbers.
The treasury auctions the last 2 days had strong showings which has helped to mitigate losses in the MBS market. Today is the final leg of borrowing with an auction of $13 billion of 30 year bonds. We’ll see how this goes later today and what effect it may have on rates for the short term.
Remember that if you are interested in applying for an FHA loan you want to get started and get a case number prior to April5th. As of April 5th the upfront MIP (Mortgage Insurance Premium) increases from the current 1.75% to 2.25%. This equates to an increase in monthly mortgage payments of about $3 for every $100,000 borrowed. Thanks for now and have a great day!
Wednesday Dulldrums
Nothing on the economic report front today so we are experiencing technical trading and a slight upward bias on mortgage rates. Yesterday’s note auction went well and if we see similar results to today’s $21 billion 10 year note auction we could get a little afternoon boost to the mortgage backed securities.
There are changes on the horizon for FHA loans. The upfront MIP (Mortgage Insurance Premium) will be increasing as of April 5th from the current 1.75% to 2.25%. If you calculate the change out, it equates to roughly a $3 payment increase for every $100,000 borrowed Other possible changes coming from FHA and currently in the comment stage is a possible increase of the monthly MI factor from the current .55% (@ max financing) and .50% (@ 95% and below) to a factor of .85%. If this passes through, it would result in an increase of $25.70 on a $100,000 mortgage. Obviously this change would have a more significant effect on qualifying then the financed MIP increase. Lastly, there is still the prospect of the allowable seller’s concessions being lowered to 3% from the current 6% level. I’ll keep this site updated as these proposals go through the comment stage. It looks like the proposal to increase the required down payment to 5% from 3.5% does not have much traction and should not come to pass.
Good weather here in northern California and a friendly reminder to move your clocks forward 1 hour on Saturday night. One hour less sleep but a clear sign that spring is on the way! Have a great Wednesday.
Saturday’s Thoughts
Well it was not a boring week in our industry and the volatility and uncertainty remained in regards to mortgage rates. The short term looks fine but the big question remains is what will happen over the longer term. March 31st marks the end of the Federal Reserve’s MBS buying program and there is much speculation as to what will happen with mortgage rates when that day comes. The early betting line has rates spiking anywhere from 25 bps to as much as 100 bps. This means that today’s 4.875% @ 1.000 point cost on a 30 year fixed rate mortgage becomes somewhere between 5.125% to 5.875% for the same 1.000 point cost.
I wanted to take some time and push a “movement” that is gaining momentum. That is the movement to eliminate or change HVCC (Home Valuation Code of Conduct). If you work in or around our industry you are most likely familiar with HVCC and the havoc it has wreaked on our industry. It was designed to protect the consumer but instead it has cost the consumer more, given consumers and us in the industry poor quality appraisals. forced home values lower, and has put numerous competent professionals out of work. This You-Tube video helps explain what is going on and what you can do about it. Please take a few minutes to watch and listen and if you are so inclined, to sign the petition.
That is all I have for this morning. Remember that we are always here for all of your mortgage needs and we are here to help. You can reach us by placing and comment or using the contact form below. Thanks and have a great weekend.