Mortgage Blog News – Week of Sept 29- Oct 3

The “NO” vote turned into a “YES” vote last week… I guess that is the biggest news… and boy did that [cough] stabilize things [cough]. Ughhhhmmmm. Sorry. Congress did approve the $700 billion “Bailout Bill” Friday. Ironically it was not exactly $700B… it was closer to $850B. Well, i mean come on… they had to do something to entice the ‘no’ voters to switch… why not more pork. Really… can you tell the difference between $700B and $850B? $150B doesn’t buy what it used to. [Especially now that they have devalued everyone's money! Yippeeee.]

Oh, you thought they had that in a “lock Box” somewhere? He he he… naw, the just printed more therefore making the dollar in your hip pocket worth less! Oops.

The uncertainty prior to the vote created huge market swings that ultimately sent the Dow to its worst week since 9-11, while causing similar problems in the mortgage world.

Interest rates got worse for the 3rd straight week.

Taking the congressional vote out of the picture, last week’s technical data would have had rates falling… not going up. Uncertainty is the economic Anti-Christ. Is that too strong? LOL

For example, the nat’l economy lost another 159,000 jobs. This brings the 2008 total to 760,000 lost jobs. This reduces the likelihood of inflation and is normally good for mortgage rates. [When it comes to mortgage rates, inflation is like the 800# gorilla boogie man.] In addition, the dollar had its strongest week ever against the Euro… oh… you didn’t hear that on the news…. huh! Whoduthunkit. These economic events usually attract borrowers to the mortgage market, therefore lowering rates.

Lower rates = Home lovin’ goodness.

Additionally Fannie Mae eliminated one of its mandatory loan fee hikes. This improves mortgage backed-security pricing for buyers, again leading to lower rates.

But, mortgage rates rose didn’t fall last week and that shows how deep the economic uncertainty really ran. [Remember... uncertainty.... booooooo.] And this week, with the bill now passed into law, we would expect the market to turn its attention back to fundamentals. Butttttttt, it can’t.

Unfortunately, there’s isn’t much new economic data for release this week so it is likely the markets will take their cues from the following:

1. The 8 scheduled Fed speakers, including Bernanke on Tuesday
2. Wednesday’s Pending Home Sales report
3. Rumors of a “surprise” Fed Funds Rate cut [you heard it here first...]
   

Regardless of to what markets react, though, be prepared for them to react swiftly and for mortgage rates to dip and spike — often in the same day. Is this the “New World” of mortgage financing? For the foreseeable future…yup.

In other words, a mortgage rate quote from the morning is likely to be “expired” by the afternoon so if you see a rate and payment that you like, consider locking it. It likely won’t last long.

Wake up Orlando Real Estate: Fannie Mae cuts Mortgage Loan Fees

Okay, FHA Loans are only 90% of today’s market… conventional loans DO still exist.
In an effort to provide “the most market support possible”, one of our beloved GSEs, Fannie Mae, is slicing one of its standard loan fees by 0.25%.

Fannie Mae introduced their, [Good Lord, who thinks up these names...] Adverse Market Delivery Charge in December 2007 to help in offsetting the foreclosure losses. The initial fee was a quarter-percent of the amount borrowed.

As things got worse, Fannie Mae said, ‘you know what, let’s double it!’ and they changed that fee to 0.5% percent in August.

Now, we are back where we started the fee is back to its starting point. The good news here is, if you are debating an Orlando refinance, now maybe a good time to make the move. It is true that the credit guidelines are a bit more strict, so more of you may be in need of Orlando credit repair. If that is the case, let me know. Bad credit can be addressed if you have a large enough reason.

Since the beginning of this year, Fannie Mae has made 21 separate changes to its mortgage guidelines. I gotta use toes to count that high…uh oh… I am out… good, 21… they are all there. Anywayyyy, most of these not been beneficial to borrowers. They increase the difficulty, or the cost, of qualifying for a conforming home loan for most folks.

Friday’s change is among the very few that are “good news” For Orlando home buyers.

Friday, mortgage pricing edged higher because of the – at the time – looming Congressional vote and Wall Street’s reaction to the weak jobs report.

The good news is that price changes could have been worse. In this case, the flip-flop helped the cosumer. Fannie Mae’s Adverse Market Delivery Charge change is keeping rates from rising as high as they might have otherwise risen.