Good Afternoon,
I hope your weekend was great for your and that your week is off to a fabulous start so far.
In the markets today, Bonds were higher this morning in response to news that China, the largest holder of US debt, will continue to purchase our Bonds as part of their foreign-currency reserve policy. This good news for Bonds comes on the heels of last week's strong Treasury auction results, which showed a good foreign appetite for US Bonds.
Also this morning, Stocks are trading slightly higher and continue to do battle at their own technical ceilings of resistance.
There are no big auctions in this shortened holiday week, as all markets will be closed this Friday in observance of the 4th of July. I recommend floating for now, but be prepared to change course if the volatility makes it necessary. I hope you enjoy the rest of your day. If there is ever anything that I can do for you, please let me know.
Monday, June 29, 2009
Friday, June 26, 2009
YOUR Mortgage Minute -- 06/26/2009
Good Morning!
Happy Friday!
Mortgage Bonds had a great day yesterday--powering through multiple layers of resistance, including the tough 200-Day Moving Average. Stocks also had a good day, but stalled at their 200-Day Moving Average and have already dropped below this ceiling in early trading today.
In other news, personal income rose in June by its biggest gain in over a year. The increase in income led to increases in both consumer spending and savings in June. Spending rose for the first time in three months, while the savings rate climbed to its highest level since December 1993.
Currently, Mortgage Bonds are trading in the middle of a wide range of support. I recommend floating for now, as I monitor the markets to see if Bonds can make any more gains. But, as always, be prepared to lock if the situation changes. I will certainly keep you posted as the need warrants.
In the meantime, I hope you have a great rest of your day. If there is ever anything that I can do for you, please let me know.
Happy Friday!
Mortgage Bonds had a great day yesterday--powering through multiple layers of resistance, including the tough 200-Day Moving Average. Stocks also had a good day, but stalled at their 200-Day Moving Average and have already dropped below this ceiling in early trading today.
In other news, personal income rose in June by its biggest gain in over a year. The increase in income led to increases in both consumer spending and savings in June. Spending rose for the first time in three months, while the savings rate climbed to its highest level since December 1993.
Currently, Mortgage Bonds are trading in the middle of a wide range of support. I recommend floating for now, as I monitor the markets to see if Bonds can make any more gains. But, as always, be prepared to lock if the situation changes. I will certainly keep you posted as the need warrants.
In the meantime, I hope you have a great rest of your day. If there is ever anything that I can do for you, please let me know.
Tuesday, June 23, 2009
YOUR Mortgage Minute -- June 23, 2009
Good Morning,
Its a warm, muggy day here in Central Iowa. I hope that this note finds you well and that your day is great wherevr you may be.
In the Markets today, Mortgage Bonds started out the morning down, but have since climbed into positive territory. Overall, however, prices still remain just below a stiff ceiling of resistance at the 200-Day Moving Average.
In other news, Existing Home Sales came in below expectations. Also in the news, the Fed Meeting begins today. Although the Fed Funds Rate most likely won't change as a result of the meeting, there is speculation that the Fed will buy more longer-term Treasuries, which may jumpstart the cycle needed to eventually bring Mortgage rates down.
For now, I recommend floating as we watch to see if a continued slide in Stocks can help Bonds improve or if the Treasury Department's auction of 2-Year Notes later today will pressure Bonds lower. I will certainly keep you posted as things develop. In the meantime, I hope you have a great rest of your day. If there is ever anything that I can do for you, please let me know.
Monday, June 22, 2009
YOUR Mortgage Minute -- June 22, 2009
Good Morning,
I hope that your week is off to a terrific start.
In the market news, the incredible volatility continues today as Mortgage Bonds have managed a triple digit rally since late last week. However, Bonds are near a key ceiling of resistance and there is still heavy supply coming to the market from Treasuries as well as Mortgage Bonds from recent refinance closings. These obstacles could lead to a quick reversal of any previous gains.
In other news, Stocks are also attempting to stay above an important level, and if they are able to improve, this will add even more pressure to Bonds. And tomorrow begins the 2-day Fed Meeting with a statement being issued at 2:15pm ET on Wednesday, and this is always a potential market mover. Leading indicators are pointing to some "positive commentary" from the Fed, but time will tell.
I recommend floating for now, but I will be watching closely to see if technical factors, supply, or the action in Stocks requires a change in direction for you or those you are working with. In the meantime, I hope that you enjoy the rest of your day. If there is ever anything that I can do for you, please let me know.
Thursday, June 18, 2009
YOUR Mortgage Minute -- June 18, 2009
Good Morning,
Bonds woke up angry this morning following yesterday's sell-off, and are now struggling to regain their footing and move back above an important level of support.
On the news front, Initial Jobless Claims were slightly higher than expectations and continue to be a drag on the economy. However, continuing claims fell by 148,000 to 6.69 million, which is the largest one-week drop since November of 2001.
Next week brings another round of Bond supply from the Treasury, which could weigh on the Bond market. Therefore, I recommend locking for now but I will let you know if Bonds are able to reverse course and muster another rally.
Bonds woke up angry this morning following yesterday's sell-off, and are now struggling to regain their footing and move back above an important level of support.
On the news front, Initial Jobless Claims were slightly higher than expectations and continue to be a drag on the economy. However, continuing claims fell by 148,000 to 6.69 million, which is the largest one-week drop since November of 2001.
Next week brings another round of Bond supply from the Treasury, which could weigh on the Bond market. Therefore, I recommend locking for now but I will let you know if Bonds are able to reverse course and muster another rally.
I hope you enjoy the rest of your day. If there is ever anything that I can do for you, please let me know.
Wednesday, June 17, 2009
YOUR Mortgage Minute -- June 17, 2009
Good Morning,
I hope you are having a great Wednesday so far.
Stocks continued to struggle against a tough ceiling of resistance yesterday, while Mortgage Bonds continued their climb higher yesterday and so far this morning as well.
Helping Mortgage Bonds this morning was more good news on the inflation front. The Consumer Price Index came in lower than expected and the year-over-year reading was at its lowest level since 1950. These are good signs that inflation hasn’t become an issue yet. However, many experts expect the inflation concern to rise in the future.
Currently, Mortgage Bonds are testing a tough ceiling of resistance of their own at the 25-Day Moving Average. I recommend floating for now. But be prepared to lock in these gains if the situation changes, since this window of improved pricing may not last very long. I will keep you posted.
In the meantime, if there is ever anything that I can do for you, please let me know.
Tuesday, June 16, 2009
YOUR Mortgage Minute
Good Morning,
I trust that your Tuesday is off to a good start.
In the financial sectors, Mortgage Bonds are near unchanged this morning, after testing the 200-Day Moving Average yesterday before being pushed back down. Stocks also tested their 200-Day Moving Average yesterday, only to be knocked back down to their 50-Day Moving Average.
In the news today, Housing Starts rose a whopping 17% in May to come in better than expectations. In addition, Building Permits--which are a sign of future construction--also came in better than expected. These are good signs that the affordable home prices, tax incentives and low home loan rates are attracting buyers to the market.
Currently, I recommend floating your rate, as I monitor the market. If Stocks drop below their 50-Day Moving Average, Bonds could benefit. However, if Stocks bounce higher, it could be really tough for Mortgage Bonds to gain any headway. I will keep you posted.
In the meantime, I hope that you enjoy the rest of your day. If there is ever anything that I can do for you, please let me know.
Monday, June 15, 2009
YOUR Mortgage Minute -- June 15, 2009
Good Morning,
I hope that this note finds you well and that your week is off to a terrific start already.
In the markets today, Mortgage Bonds are advancing higher so far today, after two days of healthy gains. Better still, they appear to have some room before reaching resistance at the 200-Day Moving Average.
In other news, the US Dollar is rebounding higher against global currencies. This is causing a sell-off in Oil and putting downward pressure on Stocks in shares of energy, mining and other natural resource companies. Also today, the New York State manufacturing index came in weaker than estimates, indicating that the US economy is still very weak.
I recommend floating for now. But with Stocks and Bonds essentially slugging it out near their respective 200-Day Moving Averages, the situation could change quickly. So be prepared to lock. I will certainly keep you posted if the events of today requires a change of course.
In the meantime, I hope you have a great rest of your day. If there is ever anything that I can do for you, please let me know.
Tuesday, June 9, 2009
YOUR Mortgage Minute -- June 09, 2009
Good Morning,
I hope that this note finds you well and that your Tuesday is off to a fabulous start!
In the markets today, Mortgage Bonds are trading slightly higher, after big losses yesterday due to added supply in the markets. Where is that supply coming from, you might ask? Simple. Those refinances you've heard about lately that have now closed are actually turned into Mortgage Backed Securities after they have closed, which adds more Bonds to the market overall.
Although the Fed has a program to purchase some of these Mortgage Bonds, the number of new Bonds simply outweighs what the Fed is able to buy. Still, the Fed's program is helping slow down the rate increases we are seeing.
Currently, Mortgage Bonds are in a fairly good position. So I recommend floating to see if prices can improve a little more, but be prepared to lock if the situation changes. And certainly feel free to contact me if you have any questions about your financial situation and today's market overall.
In the meantime, I hope you enjoy the rest of your day. If there is ever anything that I can do for you, please let me know.
Monday, June 8, 2009
Finding a Diamond in the Rough
Good Evening,
I wanted to take a moment to share a letter I wrote to my local real estate partners yesterday, extolling the virtues of a often misunderstood product -- the 5/1 ARM.
...
Sales Leaders,
I wanted to take a moment to touch base with you again on the current mortgage rate environment. Friday's news of unemployment coming in better than expected (I'm not sure that 9.4% is really good news, but its all about perspective I suppose) coupled with continuing increases in gas prices and the recent rally in the stock markets, have made long term mortgage bonds fall out of favor with investors once again, despite the Federal Reserves decision to continue to buy, buy and buy some more on the bond market.
Two weeks ago, the rate on a 30 year fixed was as low as 4.75% (with 1% origination) as of Friday that had moved all the way up to 5.625% (with 1% origination). This is a $95+/month increase in payment on $175,000 loan in the matter of 10 days. So, you may be thinking, the first time home buyer client of mine waiting on the sidelines for rates to drop just got priced out of his/her home as the payment jumped too high for the loan to pass any longer.
Not so fast -- while the long term 30 year note has increased, there is a diamond still out there -- the 5/1 ARM. Okay, now before you dismiss this as another horror story of how we got into this mess in the first place, I think it would be good to understand more about this particular product.
Pricing: as low as 4.5% fixed for 30 years (1% origination applies)
Amortization: 30 Year principal and interest full payout (no balloon)
Cap: 2% max increase in year 6 and 2% max on anniversary once a year beyond that.
Lifetime cap: 5% above initial note rate
Now I realize this is not a product that would be for everyone, and probably many of your client's friends would be telling them not to get involved with something with such an uncertain future. But, consider this: How often do client's move? Usually in less than 5 years. How often do client's refinance? Again, statistics show in less than 5 years. So if you had a opportunity to help your client to have a guaranteed interest rate lower than the market for 5 years and an opportunity to make a significant dent in principal overall, it might be something worth mentioning to him or her as you consider writing the offer, especially with the understanding that within 5 years, circumstances will probably have changed.
Certainly, it is not your responsibility to discuss mortgage options -- that's my job, and as YOUR trusted mortgage advisor I would be happy to go through scenario after scenario with your clients showing the fixed 30 versus the opportunity in the 5/1 ARM. I just want to make sure you are aware of what else can utilized.
I want to leave you with one particularly telling example of what a difference thinking creatively can mean: take the 30 year payment and apply that payment monthly on the ARM and essentially pay what one was to pay on the 30 year fixed for the first five years. Care to take a guess at the difference in the unpaid principal at the end of 60 months when the 5 year ARM is set to adjust for the first time? On the 30 year fixed schedule, the unpaid balance is $161,824. On the 5/1 ARM schedule, paying the 30 year payment and putting the extra to principal, drops the unpaid principal balance all the way down to $150, 520. This is a difference of $11,304 on a $175,000 loan just for switching the loan type and paying the regular 30 year payment that is available at the 30 year rate, nothing additional at all.
So, while rates have indeed increased on the most popular mortgage option, there are still opportunities to close the deals and secure financing for your clients at very attractive rates. I hope that you have a great week ahead and please feel free to reach out to me, or have your clients reach out to me, with any particular questions that come up. This is still a huge opportunity and my hope is that you now have a better understanding of the great potential that still exists to help you close that elusive client and get that extra home sold this month. If there is ever anything that I can do for you, please let me know.
I wanted to take a moment to share a letter I wrote to my local real estate partners yesterday, extolling the virtues of a often misunderstood product -- the 5/1 ARM.
...
Sales Leaders,
I wanted to take a moment to touch base with you again on the current mortgage rate environment. Friday's news of unemployment coming in better than expected (I'm not sure that 9.4% is really good news, but its all about perspective I suppose) coupled with continuing increases in gas prices and the recent rally in the stock markets, have made long term mortgage bonds fall out of favor with investors once again, despite the Federal Reserves decision to continue to buy, buy and buy some more on the bond market.
Two weeks ago, the rate on a 30 year fixed was as low as 4.75% (with 1% origination) as of Friday that had moved all the way up to 5.625% (with 1% origination). This is a $95+/month increase in payment on $175,000 loan in the matter of 10 days. So, you may be thinking, the first time home buyer client of mine waiting on the sidelines for rates to drop just got priced out of his/her home as the payment jumped too high for the loan to pass any longer.
Not so fast -- while the long term 30 year note has increased, there is a diamond still out there -- the 5/1 ARM. Okay, now before you dismiss this as another horror story of how we got into this mess in the first place, I think it would be good to understand more about this particular product.
Pricing: as low as 4.5% fixed for 30 years (1% origination applies)
Amortization: 30 Year principal and interest full payout (no balloon)
Cap: 2% max increase in year 6 and 2% max on anniversary once a year beyond that.
Lifetime cap: 5% above initial note rate
Now I realize this is not a product that would be for everyone, and probably many of your client's friends would be telling them not to get involved with something with such an uncertain future. But, consider this: How often do client's move? Usually in less than 5 years. How often do client's refinance? Again, statistics show in less than 5 years. So if you had a opportunity to help your client to have a guaranteed interest rate lower than the market for 5 years and an opportunity to make a significant dent in principal overall, it might be something worth mentioning to him or her as you consider writing the offer, especially with the understanding that within 5 years, circumstances will probably have changed.
Certainly, it is not your responsibility to discuss mortgage options -- that's my job, and as YOUR trusted mortgage advisor I would be happy to go through scenario after scenario with your clients showing the fixed 30 versus the opportunity in the 5/1 ARM. I just want to make sure you are aware of what else can utilized.
I want to leave you with one particularly telling example of what a difference thinking creatively can mean: take the 30 year payment and apply that payment monthly on the ARM and essentially pay what one was to pay on the 30 year fixed for the first five years. Care to take a guess at the difference in the unpaid principal at the end of 60 months when the 5 year ARM is set to adjust for the first time? On the 30 year fixed schedule, the unpaid balance is $161,824. On the 5/1 ARM schedule, paying the 30 year payment and putting the extra to principal, drops the unpaid principal balance all the way down to $150, 520. This is a difference of $11,304 on a $175,000 loan just for switching the loan type and paying the regular 30 year payment that is available at the 30 year rate, nothing additional at all.
So, while rates have indeed increased on the most popular mortgage option, there are still opportunities to close the deals and secure financing for your clients at very attractive rates. I hope that you have a great week ahead and please feel free to reach out to me, or have your clients reach out to me, with any particular questions that come up. This is still a huge opportunity and my hope is that you now have a better understanding of the great potential that still exists to help you close that elusive client and get that extra home sold this month. If there is ever anything that I can do for you, please let me know.
YOUR Mortgage Minute -- June 08. 2009
Good Morning,
I hope that this note finds you well and that your week is off to a terrific start.
In the markets today, Mortgage Bonds are down on the day and well off their opening levels. This comes after Mortgage Backed Securities tested the 200-Day Moving Average on Friday and were subsequently turned lower. Since Bond prices are starting to react negatively to any news of economic recovery, it's truly quite important to work with a knowledgeable advisor who monitors the market's every move.
In Stocks, the huge rally of late looks like it may be set to stall. The S&P 500 failed to break above a tough ceiling of resistance and continues to show negative technical signals. If Stocks pull back, it could help Bonds with a much-needed bounce in the future. For now, however, Bonds are down, so I recommend locking in loans that we need to close in the short term. If the situation changes, I will certainly let you know.
In the meantime, I truly hope that you enjoy the rest of your day. If there is ever anything that I can do for you, please let me know.
Thursday, June 4, 2009
YOUR Mortgage Minute -- May 04, 2009
Good Afternoon,
I hope that this note finds you well and enjoying a good day so far.
Mortgage Bonds opened lower this morning, in anticipation of a massive Treasury auction expected next week. However, earlier today, we received some good news when the Treasury Department announced that it is scaling back its auction because it was weighing down so heavily on the Bond market and the US Dollar.
In other news, Initial Jobless Claims, which is a leading indicator of the health of the jobs market, was reported in line with expectations.
Overall, Stocks opened a bit higher this morning, but there are several technical signals that suggest weakness ahead. Additionally, Stocks could be exacerbated by the tomorrow's Jobs Report, which is expected to be negative. Therefore, I recommend floating for now. I will continue to monitor the situation and keep you posted as things develop.
In the meantime, I hope you enjoy the rest of your day. If there is ever anything that I can do for you, please let me know.
I hope that this note finds you well and enjoying a good day so far.
Mortgage Bonds opened lower this morning, in anticipation of a massive Treasury auction expected next week. However, earlier today, we received some good news when the Treasury Department announced that it is scaling back its auction because it was weighing down so heavily on the Bond market and the US Dollar.
In other news, Initial Jobless Claims, which is a leading indicator of the health of the jobs market, was reported in line with expectations.
Overall, Stocks opened a bit higher this morning, but there are several technical signals that suggest weakness ahead. Additionally, Stocks could be exacerbated by the tomorrow's Jobs Report, which is expected to be negative. Therefore, I recommend floating for now. I will continue to monitor the situation and keep you posted as things develop.
In the meantime, I hope you enjoy the rest of your day. If there is ever anything that I can do for you, please let me know.
Tuesday, June 2, 2009
YOUR Mortgage Minute -- June 02, 2009
Good Afternoon,
I hope that this note finds you well and enjoying your Tuesday.
Volatility is the name of the game again today for Mortgage Bonds, as they continue to fluctuate in a wide range. Stocks, on the other hand, had a good day yesterday and appear to be set for more gains today.
In the news, Pending Home Sales came in far above forecasts, rising for a third straight month! With home affordability levels at the second highest level ever on record, that means now is the time to act--while rates are still low and affordability is still high.
Currently, Mortgage Bonds are off their best levels from earlier this morning. There is a chance they will bounce off an important floor of support and eventually make some gains. But, there's also a risk they'll deteriorate more. With so much to lose and only a little to gain in the short-term, I recommend locking your rate at this time if closing is within the next week or so. If anything changes, I will certainly keep you posted.
In the meantime, if there is ever anything that I can do for you, please let me know.
I hope that this note finds you well and enjoying your Tuesday.
Volatility is the name of the game again today for Mortgage Bonds, as they continue to fluctuate in a wide range. Stocks, on the other hand, had a good day yesterday and appear to be set for more gains today.
In the news, Pending Home Sales came in far above forecasts, rising for a third straight month! With home affordability levels at the second highest level ever on record, that means now is the time to act--while rates are still low and affordability is still high.
Currently, Mortgage Bonds are off their best levels from earlier this morning. There is a chance they will bounce off an important floor of support and eventually make some gains. But, there's also a risk they'll deteriorate more. With so much to lose and only a little to gain in the short-term, I recommend locking your rate at this time if closing is within the next week or so. If anything changes, I will certainly keep you posted.
In the meantime, if there is ever anything that I can do for you, please let me know.
Monday, June 1, 2009
YOUR Mortgage Minute -- June 01, 2009
Good Afternoon,
I hope this note finds your day going well so far and that your month is off to a great start as well.
Despite news that General Motors is heading for bankruptcy court, Stocks are starting off strong today after China's manufacturing expanded for the third straight month--signaling that the worldwide recession may be ending.
Also today, Personal Spending declined slightly in May, while Personal Income came in better than expectations thanks in part to the economic stimulus package. Overall, indications are that the market may be in the beginning of a bottoming process. But, this process will likely be marked by volatility and confusion, which means it's more important than ever to follow the advice of a knowledgeable mortgage professional who tracks the market daily.
Currently, prices are more than 100 basis points (1%) above the next floor of support, which means they could fall significantly if Stocks continue to climb. Rather than risk losing the gains of the last few days, I recommend locking now! I will certainly keep you posted of any changes or newsworthy developments.
In the meantime, I hope that you have a great rest of your day. If there is ever anything that I can do for you, please let me know.
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