The Mortgage Man
Get more out of your mortgage experience!Archive for May, 2008
Mortgage Bonds Have A Rough Week
Mortgage rates have have a rough week, here is a wrap up of the weeks financial news.
The Financial Markets Weekly Wrap Up
Yet another exciting week in the bond market, and many are left scratching their heads as to where we go next. This was a busy week for financial news, and when there are reports coming out, the markets lie with baited breath for guidance on how to react. This week that reaction was “Run for the hills!”.
Tuesday May 27th
The Consumer Confidence report came out lower than expected, and the New Home Sales report came back higher than expected. Overall it was a good news bad news day, and there was not much movement in the markets. Although they did head south overall for the week.
Wednesday May 28th
The Durable Good report came out slightly better than expectations, but fears of inflation from comments made by the federal reserve led bonds to drop below the 25day, 50 day and 100 day moving averages.
Thursday May 29th
Yesterday, the markets reacted negatively to the Gross Domestic Product report and the Jobless claims report and drove mortgage bonds below the 200 day moving average. This was significant because only 3 times in the last 3 years have bonds made such a decisive move across the 200 day moving average.
Friday May 30th
Today, bonds traded up slightly from yesterday, but still have not come up above the 200 day moving average. This is particularly concerning because a quick rebound would have been less damaging to the market as a whole. The longer they stay below the 200 day moving average, the more likely that rates are not just up on a short term basis, but rather, they may be trending that way long term.
Overall, it has been a bad week for those in the mortgage industry, and those who are shopping for a mortgage loan right now. Based on the shear uncertainty in the market, I would recommend locking your rate to save from potential losses on your purchase loan. If you are refinancing, make sure that you have locked to maintain the benefit of the refinance to begin with.
Thursday May 29, 2008
Mortgage Bonds Continue To Fall On Shaky Economic Uncertainty
Well, there is not much good news today, so let’s get right to it. Mortgage bonds moved below the 25 day, 50 day, and 100 day moving averages earlier this week, and after flirting with the 200 day moving average yesterday, it has moved decisively below it today.
So what does this mean for you as a consumer and potential home owner? Since the 200 day moving average has only been crossed with such vigor 3 times in the last 3 years, this is a very clear indicator that the overall trend on mortgage rates is that they are moving up. If you have a loan in process and have not locked it, you better do it TODAY.
In other economic news, the Gross Domestic Product (GDP) report came out today showing first quarter growth of 0.9% which is higher than the estimated 0.6% that the markets were expecting. At the time of this article, the markets are up slightly, but nothing to get excited about.
Also, the Treasury will be auctioning off $19 Billion in 5 year notes today. Since the auction of 2 year notes yesterday did not go as well as planned, today’s auction is not expected to be any better.
Overall, today’s recommendation for mortgages would be to lock in your rate while you still can, it may get ugly in the coming days.
New Senate Bill Imposes Fingerprinting For All Mortgage Loan Officers.
I read this article posted on C-net.com about the new bill approved by the Senate Banking Committee this week by a margin of 19-2.
I don’t have a problem with the bill since in Florida (where I have been a licensed Mortgage Broker for 11 years) all Mortgage Brokers are required to submit fingerprints for a background check. This has been in place for years, and after hearing that states like Minnesota don’t even require a test, there needs to be some sort of intervention.
What I do have a problem with is the level of secrecy surrounding the bill, and the refusal of drafters Sen. Dianne Feinstein (D-Calif.) and Mel Martinez (R-Florida) to answer questions about how it will work or to return phone calls to reporters about the bill. As I get older (and increasingly cynical about the government in general), I find my self becoming more irritated that many elected officials seem to forget that they work for us.
If this proposed legislation is such a great solution (and not just an opportunity for 2 Senators to get their names in the paper), then what is the problem with talking about it?
The Mortgage Man 
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