Texas Mortgage Corner » mortgage bonds

Up-to-the-Minute Market Updates

Tommy — Fri, 29 Jan 2010 15:48:31 +0000

For the most current mortgage news, tips, and rate updates…

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Jobless Claims Rise, Mortgage Bonds Up, FHA’s Changes

Tommy — Thu, 21 Jan 2010 16:28:51 +0000

Yesterday was a pretty big day, and this morning even more.

The DOW is currently down about 133 points, and while several economic reports are out, the biggest one is, again, the Jobless Claims is in at 482k, that is the largest jump in claims in the past 8 months – a pretty big figure.

What does this mean for rates? Well, at the moment, we’re up about 25 bps so you should see a little drop – I’d say about .125% or so.

Remember- Economy bad, rates good.

The Treasury also just announced next weeks auctions:

Tuesday, $44B of 2 Year Notes
Wednesday, $42B of 5 Year Notes
Thursday, $32B of 7 Year Notes

Yesterday, plastered all over the media, were the changes in FHA financing. I don’t know about you, but I’m pretty sick and tired of all this “change” that has been going around lately.

While the majority of the details can be found on my blog, I also wanted to briefly outline them here as well.

So here’s what’s up:

1) Seller Contributions are going from 6% down to 3%.

a) This is apparently being done to further help the consumer avoid added loan fees and inflated home prices. (I personally thought RESPA and HVCC were solving this)

2) Up Front Mortgage Insurance Premiums are being increased from 1.75% to 2.25%, and talks of the monthly mortgage insurance (currently .55%) going up as well

a) Basically, it’s going to get a little bit more expensive for all borrowers regardless of credit score.

3) Down Payment of 10% on borrowers under a 580

a) Now while FHA has implemented a minimum credit score of 580, that doesn’t really mean anything because all lenders these days are at least at a minimum score of a 620, so this rule won’t really affect you.

Now as for the timeframe in which these are going to be put into practice by lenders, it’s not certain yet, but I should be getting something soon, in which case, I’ll post an update on here.

If you really think about it, the only biggie here is the seller contributions. It just means that consumers are now going to need a little bit more cash available when buying homes to help cover closing costs.

Let the finger pointing begin…

FHA Increases UFMIP and Down Payments

Tommy — Wed, 20 Jan 2010 15:28:58 +0000

So I’m sitting here watching CNBC, and what do I hear?

FHA changes UFMIP to 2.25% and Down Payments are being increased!

If you recall, I have been writing about my outlook on FHA changes for a while now, and folks, I wasn’t that far off.

The Federal Housing Administration has been in some financial trouble due to other types of financing being unattractive, and because of all the rising defaults due to the job market, FHA’s tightening up.

Now this is going to take some time to get passed down through the funnel to the investors (banks/lenders), so I am not sure of when the changes will be effective, but take this a forewarning, and also, A HEAD START TO PREPARE. When it does go into effect, I will be the first to let you know.

In this morning’s mortgage bond market, we are up 16 bps and we’re hedged between both levels of resistance, as the FNMA 30 Year 4.5% coupon is currently being sold at $100.78.

Here are the results from today’s reports:

Have a great day, and I’ll be back with any significant changes!

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Jobless Claims Help Mortgage Bonds

Tommy — Thu, 14 Jan 2010 15:45:21 +0000

Well after a pretty rough day for mortgage bonds yesterday, we are seeing a little rebound after this morning Jobless Claims. The figure came in higher than expected at 444k.

Also had the Retail Sales report this morning, and while it was expected to come in at 0.4%, it actually came in alot below that at -0.3%.

The FNMA 4.5% coupon has been approaching the 25 Day Moving Average the past few days, it has not gone above it, so that’s what’s basically being used to test mortgage bond resistance.

Folks, tax credit is going to be over soon and what that means is that everyone is going to be piling in wanting to close YESTERDAY.

With this being said, you have the almighty Capitol Hill lobbyists that have royally “boinked” the Real Estate Industry by implementing the new RESPA rules.

Have you ever seen 2 trains collide before?

Well that’s what’s going to happen if everyone waits until last minute.

Make sure to get everything in early, get with a good lender that understand all the new changes, and get your home closed on time (or as close as you can to it).

Don’t be behind the 8 Ball when you have a chance to cash in on a new home AND 8k! You’ll regret it later!

And the New Year is Officially Underway

Tommy — Tue, 05 Jan 2010 16:50:16 +0000

Hope everyone had a great New Year celebration!

For Texas lenders such as myself, it is definitely going to be a challenging year with all these rules and regulations that have come out and others that are still in the works.

Mortgage bonds are up 41 bps this morning and are kicking some serious butt! Rates should improve today a little bit, and that’s great because the past month we’ve been on a downhill spiral.

The Pending Home Sales report came out this morning and it was down 16%. This was mainly because buyers were waiting on the final word on the tax credit extension, and since it was extended, we should see an increase in the next report, or at least that’s what I’m personally expecting.

I’d float any new transactions at the moment, but prepare to switch gears if anything pops up.

Make sure to follow me on Twitter for all your daily mortgage updates!

Early MBS Rebounds

Tommy — Wed, 23 Dec 2009 14:44:09 +0000

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:

Personal Consumption Expenditures and Core PCE
Personal Income
Personal Spending
New Home Sales Nov
Consumer Sentiment Index (UoM)
Crude Inventories

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.