Connecticut Mortgage Rates and Financing Update October 21, 2011

This week  Mortgage Rates worsened as trading in the secondary mortgage market and beyond grew increasingly volatile.  Best-Execution offerings may be the same or slightly higher than last week, but if the rate remains the same, closing costs will likely have increased.  Market volatility is a reaction to the situation in Europe and the impending summit this weekend.  We have to expect the volatility  to continue indefinitely. Treasuries bounced around higher and lower with 10-year notes ultimately closing down 6/33 in price to yield 2.18%. Mortgage Backed Security prices on 30-year current coupon 3.5 and 4.0 were flat to 1/8 point lower/worse.

The general market is -
    BEST EXECUTION 30 YEAR FIXED -   3.99% - 4.250%
    FHA/VA - More 3.875% today, 3.75% still out there for some.
    15 YEAR FIXED -  Mostly 3.5%
    5 YEAR ARMS -  low 3% range, huge variations from lender to lender.

The U.S. Senate voted Thursday to restore higher loan limits, approving, 60-38, an amendment to a federal spending bill that would raise the maximum size of loans that can be guaranteed by government-controlled mortgage companies Fannie Mae (FNMA) Freddie Mac (FMCC) and the Federal Housing Administration. The amendment was sponsored by Sen. Robert Menendez (D., N.J.), but things don't look so good for it in the Republican-controlled House, as many argue that the current reduced loan limits help scale back government support of the mortgage market.  

NAR reported this week that Existing Home Sales dropped 3% in September from August but are still up about 11% versus a year ago. The median sales price was $165,400, down 3.5% from $171,400 a year earlier. The inventory of previously owned homes listed for sale, meanwhile, fell at the end of September to 3.48 million. That represented an 8.5-month supply. Foreclosures and other distressed properties represented about 30% of sales.

Today's Mortgage Rates

30 year fixed - 3.99% + 0 cost points for rate
20 year fixed - 3.875% + 0 points for rate
15 year fixed - 3.375% + .50 points for rate
10 year fixed - 3.250%  0 cost points for rate
5/1 ARM - 2.625% - 0 points for rate
7/1 ARM - 2.875%  + 0 points for rate

FHA/VA
30 year fixed - 3.875% with 0 points for rate
5/1 ARM - 3.00 with 0 points for rate
7/1 ARM - 3.25 with 0 point for rate

Jumbo - over 635,000 to 2,000,000
30 year fixed - 4.750 % with 0 points  for rate
15 year fixed - 4.250% with 0 points for rate
5/1 ARM - 3.375% - 0 points for rate
7/1 ARM - 3.50 % - 0 points for rate

10/1 ARM - 4.375% with 0 points for rate

Jennifer Buchanan,  Certified Mortgage Planning Specialist at MetLife Loans is a seasoned veteran of the Mortgage, Banking and Broker Industry and specializes in mortgage loans throughout Fairfield County, Connecticut.
   Her attention to detail is unsurpassed, and her understanding of the marketplace makes it easy to find the right loan to fit her clients specific needs .  Jennifer's local processing and closing team are also known for their exemplary service.
   Understanding that the vast majority of mortgage brokers never discuss the long or short term  financial needs or goals with their clients, she set herself apart from the rest by obtaining the coveted CMPS  designation. (Certified Mortgage Planning Specialist)
    She is a member of the National Association of Responsible Loan Officers, and her commitment to ethics, understanding of the marketplace, and business acumen have earned her the respect of her peers and clients alike.

Jennifer Buchanan
Metlife Loans
203-341-6949

Jennifer Buchanan- Your certified expert
 on mortgages offering Free Unbiased
recommendations based on your needs.

Connecticut Mortgage Rates and Financing Update October 14, 2011

This Week's Financial News

Paperwork, paperwork, and more paperwork. Why do well qualified borrowers have to supply so many documents that are not income and asset based?   Fannie Mae and Freddie Mac are increasingly demanding sellers ( your lenders)  repurchase mortgages that default years after they were made and buy back recent loans that aren't even delinquent, according to PHH." "They're casting the net wider," Luke Hayden, head of PHH's mortgage unit.  Which means, the banks have to buy back the mortgage debt and have less money to lend.  And with the threat of a buy back on a mortgage, the banks (sellers) want to make sure everything is documented by the borrower.  The indication is, it is only going to require more paper work from borrowers to qualify for a mortgage.

Today the Fed will announce how much money it will have to reinvest into the Mortgage Backed Securities market from mid-October through mid-November. Estimates are around $22 billion which translates to about $1.1+ billion per day. This scenario with mortgage banker supply holding in the $1.5 to $2.0 billion area equates to the Fed taking between 73% and 55% of daily supply. This is a more favorable demand dynamic versus last week when supply hit between $2.5 and $3.0 billion in a couple of sessions.
 

With Bank of America leaving correspondent, is someone like Chase going to be next? There is a big difference between hallway chatter and headlines of "MetLife May Sell Mortgage Business" in Bloomberg! "Chief Executive Officer Steven Kandarian, who took the job in May, is planning to exit a business that expanded in June when it replaced Bank of America Corp. as the preferred lender of builder KB Home...Keeping the mortgage unit could divert "resources away from MetLife's primary focus on its global insurance and employee benefits businesses," the New York-based company said in a statement.  Let's sum things up, given the investor scuttlebutt from the national Mortgage Conference this week and general rumors, possible half-truths, and outright misstatements. MetLife is/was a solid competitor for wholesale broker business in many parts of the nation - maybe someone like Fortress will buy the mortgage group. Bank of America will soon be strictly retail, and only in some states. Chase does not buy third-party originated production, i.e., broker business, from clients. GMAC, PHH, and SunTrust have varying degrees of operational hurdles, and only buy loans on a mandatory basis one at a time or not at all, and have varying degrees of tolerance for buying loans from smaller companies offering correspondent relationships. Are they ready for all this volume? Looking at the top correspondents, volume-wise, so we have Wells Fargo, which is grappling with purchase turn time days into the teens, CitiMortgage, U.S. Bank, Flagstar, Franklin American, and BB&T. Rumors of higher capital requirements for correspondent sellers are rampant.

Too much competition is one thing, but does the industry really need fewer players? Besides making things easier for pricing engines, will the borrower be better off? Let's ask the protesters about unintended consequences.

Today's Mortgage Rates

30 year fixed - 3.99% + 0 cost points for rate
20 year fixed - 4.00% + 0 points for rate
15 year fixed - 3.375% + .50 points for rate
10 year fixed - 3.250%  0 cost points for rate
5/1 ARM - 2.750% - 0 points for rate
7/1 ARM - 3.00%  + 0 points for rate

FHA/VA
30 year fixed - 3.875% with 0 points for rate
5/1 ARM - 3.00 with 0 points for rate
7/1 ARM - 3.50 with 0 point for rate

Jumbo - over 635,000 to 2,000,000
30 year fixed - 4.50 % with 0 points  for rate
15 year fixed - 4.250% with 0 points for rate
5/1 ARM - 3.250% - 0 points for rate
7/1 ARM - 3.625 % - 0 points for rate

10/1 ARM - 4.375% with 0 points for rate

Jennifer Buchanan,  Certified Mortgage Planning Specialist at MetLife Loans is a seasoned veteran of the Mortgage, Banking and Broker Industry and specializes in mortgage loans throughout Fairfield County, Connecticut.
   Her attention to detail is unsurpassed, and her understanding of the marketplace makes it easy to find the right loan to fit her clients specific needs .  Jennifer's local processing and closing team are also known for their exemplary service.
   Understanding that the vast majority of mortgage brokers never discuss the long or short term  financial needs or goals with their clients, she set herself apart from the rest by obtaining the coveted CMPS  designation. (Certified Mortgage Planning Specialist)
    She is a member of the National Association of Responsible Loan Officers, and her commitment to ethics, understanding of the marketplace, and business acumen have earned her the respect of her peers and clients alike.

Jennifer Buchanan
Metlife Loans
203-341-6949

Jennifer Buchanan- Your certified expert
 on mortgages offering Free Unbiased
recommendations based on your needs.

Connecticut Mortgage Rates and Financing Update September 23, 2011

This Week's Financial News

Unfortunately, HUD does not want to extend the temporary loan limits.  Period.  HUD has conference calls with the heads of mortgage banking divisions every day, and they have been saying since early last summer, they do not want to extent the expanded loan limits.

So it's no big surprise to anyone following the mortgage industry that The Federal Reserve Thursday morning released its 2010 Home Mortgage Disclosure Act database, concluding that a drop in the maximum GSE loan limit to $625,500 (from $729,750) will have only a "small" impact on mortgage origination going forward. 

Researchers at the Fed estimate that in 2010 just 1.3% of Fannie Mae/Freddie Mac mortgages --including both refinancing and purchase money deals – fall into the GSE ‘jumbo' category of being between $625,500 and $729,750.  However, an additional 2.1% of 2010 home-purchase loans and 2.4% of refi's would "potentially" be affected by a decline in Federal Housing Administration loan limits.

Yes, it will cost you more for a loan some time next year.  The Federal Housing Finance Agency as early as Thursday could release its annual report on guarantee fees charged to mortgage bankers by Fannie Mae and Freddie Mac, according to industry officials.  FHFA acting director Ed DeMarco this week said Fannie and Freddie will hike their guarantee fees some time next year to better reflect “that which would be anticipated in a private competitive market.”  DeMarco also hinted that the two may soon stop providing volume discounts to their largest seller/servicers. In 2009 the 10 largest sellers to Fannie and Freddie accounted for about 74% of their total residential purchases in the secondary market.  

Please keep in mind that lenders simply cannot move mortgage rates lower at the same pace as a rapid rally in Benchmark Treasuries.  Although you might hear that mortgage rates are tied to Treasuries, THEY ARE NOT, and you'll be perennially frustrated if you expect them to be.

The current market is in a state of flux at the moment and mortgage rates moving up and down around ALL TIME LOWS.  Best Execution 30yr Fixed rates were mostly near 3.875% this week with some lenders at 4.0%, they're closer to 3.75% with quite a few lenders still at 3.875%.  FHA/VA deals are in a bit of a predicament that's keeping them blocked off below 3.75% (there's no secondary market for rates any lower than that right now!).  For similar reasons, 15 year fixed conventional loans may be stuck at 3.25%.  The secondary market factors driving adjustable rate loans are in a massive state of flux, but one that is mixed between positive and negative.  5 year ARMS remain near 3.125%, but with variations from lender to lender.  Bottom line, adjustable rates aren't participating in this rally to the same extent as fixed rates.

Guidance these days is all about the risk of "pipeline control" price changes among lenders.  Regardless of what happens in markets, be they Treasuries or the Secondary Mortgage Market, lenders can still only write loans to the extent allowed by their capacity.  Lenders also must be careful not to lower rates so quickly that borrowers who recently locked actually break those lock commitments in order to move down to a lower rate.  Even if borrowers do this at the same lender, it costs lenders a lot of money.  So whether it's to avoid that sort of cannibalization or to avoid capacity issues, there's an elevated risk right now of lenders RAISING rates without warning, even if the underlying market movements would not suggest it.

Today's Mortgage Rates

30 year fixed - 3.75% + .0 points for rate
20 year fixed - 3.625 % + 0  points for rate
15 year fixed - 3.125% + 0 points for rate
10 year fixed - 3.125 %  0 points for rate
5/1 ARM - 2.50% - 0 points for rate
7/1 ARM - 2.75%  + 0 points for rate

FHA/VA
30 year fixed - 3.75% +  0 points for rate
5/1 ARM - 2.875 +  0 points for rate
7/1 ARM - 3.250 + 0 point for rate

Jumbo - up to 2,000,000
30 year fixed - 4.625 points  for rate
15 year fixed - 4.125% + 0   points for rate
5/1 ARM - 3.250 % + 0 points for rate
7/1 ARM - 3.875% + 0 points for rate

10/1 ARM -  4.250 % with + 0 points for rate

Jennifer Buchanan,  Certified Mortgage Planning Specialist at MetLife Loans is a seasoned veteran of the Mortgage, Banking and Broker Industry and specializes in mortgage loans throughout Fairfield County, Connecticut.
   Her attention to detail is unsurpassed, and her understanding of the marketplace makes it easy to find the right loan to fit her clients specific needs .  Jennifer's local processing and closing team are also known for their exemplary service.
   Understanding that the vast majority of mortgage brokers never discuss the long or short term  financial needs or goals with their clients, she set herself apart from the rest by obtaining the coveted CMPS  designation. (Certified Mortgage Planning Specialist)
    She is a member of the National Association of Responsible Loan Officers, and her commitment to ethics, understanding of the marketplace, and business acumen have earned her the respect of her peers and clients alike.

Jennifer Buchanan
Metlife Loans
203-341-6949

Jennifer Buchanan- Your certified expert
 on mortgages offering Free Unbiased
recommendations based on your needs.

Connecticut Mortgage Rates and Financing Update September 16, 2011

Fixed mortgage rates fell to the lowest level in six decades for the second straight week, according to new figures compiled by Freddie Mac.  The GSE said the average rate on the 30-year Fixed Rate Mortgage dropped to 4.09%, the lowest rate since 1951.  The average rate on the 15-year mortgage, a popular refinancing product, fell to 3.30%, also a new low.  Freddie Mac chief economist Frank Nothaft said continued investor worries over the debt crisis in Europe kept Treasury bond yields low, driving down mortgage rates in the process.  Over the past week the yield on the benchmark 10-year Treasury fell to as low as 1.9% before rebounding to 2.08% on Thursday.

This Week's Financial News

The market had a "slew" of economic news Thursday. The Consumer Pride Index  was +.4% (higher than expected), but Jobless Claims were +11k to a total of  428k - higher than expected.   The Empire State Manufacturing Survey General Business Conditions index inched down one point. Nationwide, Industrial Production increased 0.2% in August, and Capacity Utilization edged up to 77.4%.  The Philadelphia Fed Index of General Business activity within the factory sector rose to -17.5 this month from -30.7 in August and 3.2 in July.

The impact of all this on rates was not particularly good, since the ECB coordination with our Fed will dampen the bid for safe assets (i.e., Treasury securities) and the CPI rose faster than expected in August. The 10-year US Treasury note yield increased as much as 13 basis points to 2.12%, after having dropped to a record low of 1.8770% three days ago and closed at 2.09%. Volume in Mortgage Backed Securities was light Thursday at just 64% of the 30-day average, according to Tradeweb's experience, and prices were worse by about .250.

The Federal Housing Administration is selling 11,000 to 13,000 foreclosed homes a month after re-engineering the way it manages and markets Real Estate Owned, or REO.  For the first nine months of fiscal year 2011 (ending June 30) the average days-to-list and the average days-to-sell REO decreased by 76 days (61%) and 25 days (12%) respectively, as compared to Financial Year 2010, according to the commissioner's Sept. 8 testimony.  This acceleration of sales has allowed FHA to reduce its REO inventory by nearly 40% in four months.  "As a result of these initiatives and despite the spike in properties being conveyed to us, FHA's inventory of REOs is down to 48,324," Galante testified. The agency had an REO inventory of nearly 80,000 REO at the end of March.

Today's Mortgage Rates

30 year fixed - 3.99% + .50 cost points for rate
20 year fixed - 3.75 % + 0 points for rate
15 year fixed - 3.250% + .50 points for rate
10 year fixed - 3.250%  0 cost points for rate
5/1 ARM - 2.50% - 0 points for rate
7/1 ARM - 2.875%  + 0 points for rate

FHA/VA
30 year fixed - 4.00% with 0 points for rate
5/1 ARM - 2.75 with 0 points for rate
7/1 ARM - 3.25 with 0 point for rate

Jumbo - up to 2,000,000 with 20% down
30 year fixed - 4.750 % with +.250 points  for rate
15 year fixed - 4.250% + .250 cost points for rate
5/1 ARM - 3.250% + .250  points for rate
7/1 ARM - 3.750% + .250 points for rate

10/1 ARM 4.375% with +.250 points for rate

Jennifer Buchanan,  Certified Mortgage Planning Specialist at MetLife Loans is a seasoned veteran of the Mortgage, Banking and Broker Industry and specializes in mortgage loans throughout Fairfield County, Connecticut.
   Her attention to detail is unsurpassed, and her understanding of the marketplace makes it easy to find the right loan to fit her clients specific needs .  Jennifer's local processing and closing team are also known for their exemplary service.
   Understanding that the vast majority of mortgage brokers never discuss the long or short term  financial needs or goals with their clients, she set herself apart from the rest by obtaining the coveted CMPS  designation. (Certified Mortgage Planning Specialist)
    She is a member of the National Association of Responsible Loan Officers, and her commitment to ethics, understanding of the marketplace, and business acumen have earned her the respect of her peers and clients alike.

Jennifer Buchanan
Metlife Loans
203-341-6949

Jennifer Buchanan- Your certified expert
 on mortgages offering Free Unbiased
recommendations based on your needs.

Connecticut Mortgage Rates and Financing Update September 9, 2011

The rapid rallies of the market this week equals high pricing volatility. Mortgage Backed Securities don't like volatility and neither do lenders making rate sheets.  The Friday rally is all EU Panic-driven. Greek default, Stark exit, take your pick. If Greece is alive on Monday, no more 1.8's in 10 year notes (probably?) We don't normally see aggressive moves on Mortgage Backed Securities  settlement dates. Lenders will probably want more assurance of current benchmark ranges before getting more aggressive with rates.  Lenders have recently gotten more aggressive with rates anyway! Another move down so quickly is going to cause capacity and fallout issues, which will cause rates to rise again with some lenders so they can control their pipelines.  The bottom line , this speaks to bigger re-prices for the better. If we hold or improve upon these levels, "token" re-prices for the better are quite possible.

This Week's Financial News

"Economic activity continued to expand at a modest pace, though some Districts noted mixed or weakening activity," the Fed said in its Beige Book collection of anecdotal reports of economic conditions in the 12 Fed districts. Growth was modest or slight in five districts, while the remaining seven described activity in terms such as "very subdued" or "more slowly." In the Fed's last Beige Book covering the period into early July, eight regions characterized growth as having slowed. Consumer spending increased in most districts, but spending on items besides cars was flat or down in several places through late August, Fed said. Manufacturing conditions were mixed across the country and had slowed in many districts, the central bank said. Hard-hit residential real estate markets remained weak overall. Price pressures edged lower, although retail prices rose in some districts, the Fed said. Labor markets were generally stable and some districts reported modest gains.

“I think we’ve got a good chance of continuing a moderate pace of growth coming out of this crisis,” Geithner said today in an interview with Bloomberg Television in Marseille, France. If Congress approves the plan, “it would dramatically reduce the risk of a long period of much weaker growth.” U.S. Treasury Secretary Timothy Geithner said on Friday that the administration did not need an act of Congress for new initiatives to boost refinancing of federally supported home mortgages. He said more details on how refinancing would work would be announced in the next three weeks.  The indications are, it is a revamping of the current HARP/HAMP program that allows borrowers to refinance their current first mortgage at current market rates if the homeowner is underwater on the value of their mortgage debts.  There is no indication that a new program is under consideration for those borrowers underwater who do not qualify for the current refinance programs.

Today's Mortgage Rates

30 year fixed - 3.99% + .0 points for rate
20 year fixed - 3.75 % + .0 points for rate
15 year fixed - 3.250% + .0 points for rate
10 year fixed - 3.250%  .750% lender credit points for rate
5/1 ARM - 2.50% - 0 points for rate
7/1 ARM - 2.875 %  + 0 points for rate

FHA/VA
30 year fixed - 4.005% +  0 points for rate
5/1 ARM - 2.750 +  0 points for rate
7/1 ARM - 3.25 + 1.00 lender credit  point for rate

Jumbo - over 635,000 up to 2,000,000 at 80% loan to value
30 year fixed - 4.625 % with +0  points  for rate
15 year fixed - 4.125% + 0   points for rate
5/1 ARM - 3.125 % + 0 points for rate
7/1 ARM - 3.625% + 0 points for rate

10/1 ARM -  4.250% with + .0 points cost for rate

Jennifer Buchanan,  Certified Mortgage Planning Specialist at MetLife Loans is a seasoned veteran of the Mortgage, Banking and Broker Industry and specializes in mortgage loans throughout Fairfield County, Connecticut.
   Her attention to detail is unsurpassed, and her understanding of the marketplace makes it easy to find the right loan to fit her clients specific needs .  Jennifer's local processing and closing team are also known for their exemplary service.
   Understanding that the vast majority of mortgage brokers never discuss the long or short term  financial needs or goals with their clients, she set herself apart from the rest by obtaining the coveted CMPS  designation. (Certified Mortgage Planning Specialist)
    She is a member of the National Association of Responsible Loan Officers, and her commitment to ethics, understanding of the marketplace, and business acumen have earned her the respect of her peers and clients alike.

Jennifer Buchanan
Metlife Loans
203-341-6949

Jennifer Buchanan- Your certified expert
 on mortgages offering Free Unbiased
recommendations based on your needs.