MBS very volatile today due to all the reports.
The New Home sales dropped 11.3% in November to 355K as opposed to the 438K that was expected, and while this helped MBS, the Treasury is now going to auction off $122B instead of the $118B that was expected, so this brought them back down.
If you have a new transaction in the works today, I’d go ahead and just lock it and play it safe.
Currently up 22 bps for the morning session, we’re seeing a little bounce back from yesterday’s losses. It’s still early so, I wouldn’t expect mortgage rates to open lower today, however, today is JAM PACKED with reports, and that could sway MBS in several directions.
Here’s what’s on the menu for today:
We can’t stress enough how important it is to work with a mortgage professional that has a finger on the pulse of what is going on and how it affects YOUR WALLET.
Stay tuned for any updates- I’m sure there will be several today.
Source: HUD
Important FHA notice for all mortgagees:
Delayed Implementation Date for New Requirements in ML 2009-28
Enactment of ML 2009-28, Appraiser Independence, will be delayed until February 15, 2010. ML09-28 (originally planned for a January 1, 2010 implementation) has two parts: a) prohibition of mortgage brokers and commission-based lender staff from the appraisal process, and b) appraiser selection in FHA Connection. The effective date for both sections of this guidance will now take effect for all case numbers assigned on or after February 15, 2010. This extension will provide FHA and lenders additional time to adjust systems to accommodate the changes.
Detailed instructions on changes to FHA Connection will be issued in a new mortgagee letter. However, lenders should be aware that the requirement for inputting the appraiser ID and the appraisal assignment date in the FHA Connection case number assignment screen will be removed. Instead, lenders will be required to enter all appraisal data, including the appraiser ID, in the Appraisal Update Screen once the completed appraisal is received by the lender and prior to closing the loan.
Delayed Implementation Date for ML 2009-51
ML 2009-51, Adoption of the Appraisal Update and/or Completion Report, states an effective date of January 1, 2010. The effective date is being extended and will now apply to all case numbers assigned on or after February 15, 2010. This extension will provide additional time needed by FHA and lenders to adjust their systems to accommodate use of the form.
Sorry guys…
Just like yesterday, MBS is taking a beating again this morning. We’re currently down 31 bps, and we’re awaiting the Existing Home Sales report in about 15 minutes.
The GDP (Gross Domestic Product) came in at 2.2%, lower than the expected 2.8% estimate which caused MBS to rise a little, but we are still in negative territory.
I hope you have secured all transactions for the year so that A) You got in while it was really good, and B) To get away from all this drama and enjoy your Christmas.
Be back if anything changes.
Currently down 47 bps on the morning. getting hammered under the 200 DMA (2nd level of support) due to the economic outlook of 2010.
Rates are going to start higher than Friday’s mortgage rates so no point in locking in now since we’re at the lows, but be prepared to lock if the situation worsens.
Follow us on Twitter for updates!
Good afternoon, MBS is under the 50 day moving average (1st level of support) and down 22 bps.
Rates will get bumped up a little bit this afternoon.
Currently down around 12 bps, there are no economic reports coming out today.
Yesterday was a decent day in terms of mortgage bonds, as we were in the green practically all day.
Bernanke got voted in for a second term as Fed Chairman, and the Fed stated that they intended to keep rates low for an extended period of time, however, the MBS purchase program is going to end on March 31, 2010. The MBS (mortgage backed securities program) is where the Fed buys pools of various mortgage bonds in case you didn’t know.
Let’s clear something up very quickly.
When speaking to several clients, I hear “Oh the Fed is ‘reducing’ rates” or “I heard the Fed is keeping rates at 0%” and expect a 0% mortgage rate on their home loan- THIS DOES NOT MEAN MORTGAGE RATES FOLKS.
The Fed does not control mortgage rates. Mortgage Backed Securities are what determine mortgage rates and it depends on how those securities are traded and at what price that result in the current market mortgage rates.
What the Fed controls is the “Fed Funds Rate” or “Discount Rate” and that is it. These are both very short- term rates that impact credit cards, Home Equity credit lines, auto loans, and most importantly the rate in which banks charge one another to lend money to each other overnight (overnight lending rate). This is basically for one day loans that banks facilitate between themselves to ensure liquidity. When the Fed announces a “cut in rates”, mortgage rates most often will actually move in the opposite direction as the Fed change, as this has to do with the dynamics within the financial markets.
Please read this as it is very important!
Folks, if you are looking to buy a home or refinance, NOW IS THE TIME TO DO IT while rates are still low and the incentives are still here. This is not going to last forever!
Take advantage while you can, and have a fantastic Friday!
Good morning folks,
Currently we up about 36 basis points (bps) as of this morning, as stocks are in negative territory and the Philadelphia Fed Index (an indicator of manufacturing sector trends) came in higher than expected.
We’re bouncing back from some of the losses from the past week, but I wouldn’t expect MBS to move enough to improve mortgage rates today by a significant amount, if any. Stay tuned for any updates.
Currently up around 6 bp for the morning and hovering around the 100 Day Moving Average (DMA), the CPI (Consumer Price Index-average price of basket of goods spanning over 200 categories) came in at the estimated 0.4% as well as the Housing Starts (number of new monthly residential construction projects that are underway) which came in at 574k.
The FOMC meeting is scheduled for 2:15pm EST later today. Basically what’s going on here is that the Fed will likely state that they intend to keep the Federal Funds Rate at 0% for an extended period of time into 2010. This will ease fears on inflation as we approach the new year, and hopefully keep mortgage rates stable for a little while longer.
I’d stay where you’re at on any rate locks for the moment as we enter the FOMC meeting later this afternoon.
Cheers, and have a great day!