News for Prescott AZ - AmericanTowns.com

Wednesday, March 25, 2009

Jumbo Mortgage Pricing - The Healing Has Begun

Theron Wall has some very good news to share with you regarding the
condition of the mortgage credit markets. As you are surely aware, we are
back close to record low rates on conforming Fannie Mae, Freddie Mac, and
Government loans, courtesy of the recent announcements by the Federal
Reserve. However, there is some more good news that is not getting the
attention it deserves.

Recently there is more and more evidence that banks are beginning to dip
their toe back into the Jumbo mortgage market. A handful of Jumbo mortgage
investors are making announcements they will be re-entering the market with
new loan products in the near future. In addition, investors currently
offering Jumbo Mortgages are becoming more competitive on pricing. These
loans will require excellent borrowers with proof of income and assets, but
this is an excellent sign. Currently Jumbo 30 year fixed mortgages are
priced about 1% over a comparable conforming 30 year fixed loan. Look for
that spread to improve in the weeks and months ahead.

In the mean time, rates on Jumbo Adjustable Rate Mortgages (ARMs) are
excellent. As of the week of 3/23/09 rates on a 5/1 Jumbo ARM are slightly
over 5% w/ 1 pt, depending on the specifics of the transaction. That is
actually a little better than conforming 5/1 ARM pricing. Rates on 3/1
Jumbo ARMs are at or slightly below 5% with 1pt, quite a bit better than 3/1
ARMs at a conforming loan amount. Keep in mind; with most Jumbo borrowers
the risk tolerance is different than First Time Homebuyers and other buyers
with more limited income. There are ways to build a mortgage strategy for a
Jumbo client using an ARM that, while perhaps not ideal, are effective and
not dangerous or financially irresponsible. Given that we have some high
end listings that are 40% or more below their peak value, this presents some
good opportunities for high end clients.

HERE IS THE MOST IMPORTANT PART OF THE STORY.

Improving Jumbo pricing, regardless of loan product, is an important sign
the credit markets as a whole are beginning to thaw. For the last year and
a half almost all of the mortgages originated in the entire system were
securitized and brought to the secondary market only with the help of
government agencies - Fannie/Freddie, FHA, VA, etc. Jumbo loans are not
packaged and securitized by government controlled agencies, so competitive
pricing on these products means PRIVATE money is beginning to make its way
back into the system. This is tangible proof that the healing process is
underway - one step in a long road, but significant.

Warm regards,

Theron Wall
Sr. Mortgage Consultant, CMPS
(928) 778-7167
theron@theronwall.com

Monday, March 23, 2009

MMG Weekly: Fed Announcement Opens Window of Opportunity

 

Last Week in Review

 

 

"IF A WINDOW OF OPPORTUNITY APPEARS, DON'T PULL DOWN THE SHADE." Tom Peters. And last week, the Fed saw their regularly scheduled meeting as a window of opportunity to make a blockbuster announcement.

On Wednesday, the Fed announced that over the course of 2009, they will purchase an additional $750 Billion of Mortgage Backed Securities, as well as $300 Billion in long-term Treasuries, primarily to help shore up the housing market and keep home loan rates low. On the announcement, Bonds exploded higher, leaving Bond prices within whiskers of the best levels ever.

However, it's important to understand that while their actions may keep a lid on rates moving higher, they may not cause them to move dramatically lower... more on this in the Mortgage Market View article below. Additionally, due to many understaffed lenders and investors currently working at maximum capacity, we could once again see that improvements in Bond pricing may not all be passed through to our rate sheets.

Another factor that could impact whether Bonds and rates see significant improvement ahead are concerns of future inflation - the arch enemy of Bonds and home loan rates - brought on by all the recent aggressive moves by the Fed. While we know there is little inflation at the present time, the chatter of future inflation could have a negative impact on Bonds and home loan rates, or at least stifle any improvements.

Although the media is already spinning it differently, this is not a time to stay on the fence, hoping and waiting for lower rates. Home loan rates remain within inches of all-time historic lows, but may not necessarily move significantly lower based on this purchasing plan - waiting is a very risky move.

More good news last week, as Housing Starts for February came in better than expected and actually increased for the first time in eight months. In addition, Fed Chairman Bernanke stated the recession should end in 2009 and that he is confident of the long-term outlook for the US economy.

Also, an update on Mark-to-Market - the accounting rule which has had a devastating impact on the financial markets - which we have discussed many times, including in last week's issue. The Financial Accounting Standards Board (FASB) agreed that it will propose to allow companies to use more "leeway" in applying the accounting rules they use to value their assets, and planned a final vote for April 2nd. If this rule change is approved, it could result in better first-quarter financial statements for companies that have been affected by this rule. Stocks have been moving higher lately in the hopes that Mark-to-Market will be fixed, and a resolution could help Stocks further improve.

WANT TO KNOW MORE ABOUT WHAT THE FED'S ACTIONS REALLY MEAN FOR HOME LOAN RATES, AND WHAT OPPORTUNITIES MAY BE AVAILABLE FOR YOU? CHECK OUT THE MARKET VIEW BELOW FOR THE DETAILS.

 

Forecast for the Week Error! Filename not specified.

 

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This week will be busy from start to finish, beginning with an opportunity to get a read on the housing market via Monday's Existing Home Sales Report and the New Home Sales Report following on Wednesday. With rates near historic lows and the tax credits available for first-time home buyers - and lots of buyers potentially ready to come off the sidelines - home purchases are likely to be picking up in the coming months.

Also on Wednesday, we will get an update on consumer and business consumption and buying behavior via the Durable Goods Report which shows data on items that are non-disposable, such as cars, furniture, appliances, games, cameras, business equipment, etc. And stay tuned for Thursday's Gross Domestic Product (GDP) Report, which is the broadest measure of economic activity, and Friday's Core Personal Consumption Expenditure (PCE) index, found within the Personal Income report. PCE is the Fed's favorite gauge of inflation, and given all the recent talk of potential inflation ahead, it will be interesting to see what this report shows.

Remember: Weak economic news normally helps Bonds and home loan rates improve, as money flows out of the Stock market and into the Bond market. As you can see in the chart below, Bonds were buoyed last week by the Fed's announcement regarding its Bond purchase program - but again, the improvements are not necessarily all making their way through to the rate sheets. As always, I will be watching closely to see what impact the inflation chatter and the news of the week has on Bonds and rates.

Chart: Fannie Mae 4.5% Mortgage Bond (Friday Mar 20, 2009)

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The Mortgage Market View... Error! Filename not specified.

 

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What the Fed's Latest News Means for You

As discussed above, the Fed announced last week that they are going to buy another $750 Billion in Mortgage Backed Securities, bringing their total commitment to $1.25 Trillion. But how does this really impact home loan rates?

The Fed's actions provide a demand for Mortgage Backed Securities, which should help keep the ceiling on home loan rates from moving much higher in the foreseeable future. That's good news for homebuyers who are seeing the bargains out there and understanding that now is the time to act.and also good news for those who can benefit from a refinance.

But.and this is very important.the Fed's actions do not necessarily mean home loan rates will move significantly lower.

It all depends on which Bond coupons the Fed purchases. If they purchase higher rate coupons - as they have been so far this year - their continued purchasing actions will likely keep a lid on rates, but not necessarily push them significantly lower. Rates are within inches of historic lows - so don't wait to miss a great opportunity to purchase the home of your dreams, or get more money back in your budget by a smart refinance.

There's never any pressure, so why not take five minutes to give me a call? We can discuss what makes sense for you right now - which might be just staying put in your current home loan. With a short conversation we can talk over the options, and you can then rest assured that given all the recent changes, you are making smart decisions on your home financing.

 

The Week's Economic Indicator Calendar Error! Filename not specified.

 

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Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of March 23 - March 27

Date

ET

Economic Report

For

Estimate

Actual

Prior

Impact

Mon. March 23

10:00

Existing Home Sales

Feb

4.45M

 

4.49M

Moderate

Wed. March 25

08:30

Durable Goods Orders

Feb

-2.0%

 

-5.2%

Moderate

Wed. March 25

10:00

New Home Sales

Feb

300K

 

309K

Moderate

Wed. March 25

08:30

Jobless Claims (Initial)

3/21

650K

 

646K

Moderate

Thu. March 26

08:30

Chain Deflator

Q4

0.5%

 

0.5%

HIGH

Thu. March 26

08:30

Gross Domestic Product (GDP)

Q4

-6.6%

 

-6.2%

Moderate

Thu. March 26

10:30

Crude Inventories

3/20

NA

 

1942K

Moderate

Fri. March 27

08:30

Personal Spending

Feb

0.3%

 

0.6%

Moderate

Fri. March 27

08:30

Personal Consumption Expenditures and Core PCE

Feb

NA

 

0.1%

HIGH

Fri. March 27

08:30

Personal Consumption Expenditures and Core PCE

YOY

NA

 

1.6%

HIGH

Fri. March 27

10:00

Consumer Sentiment Index (UoM)

Mar

56.0

 

56.0

Moderate

Fri. March 27

08:30

Personal Income

Feb

-0.1%

 

0.4%

Moderate

 

 

 

Meghan Knoy
115 E Goodwin Street Suite C
Prescott, AZ 86303

          

 

AZSTCU - Mortgage rates - New lows!!

WITH RATES THIS LOW… BUY A HOME.

 

DAILY RATE SHEET

http://www.homeloansforyou.org/images/trans.gif

The quotes below are only a sample of the wide variety of loan programs and rates available.

Products & rates listed below include the member paying a 1% Origination Fee.  Please contact me for any questions regarding pricing and/or discount points.

 

Loan Type

Interest Rate

Discount Points

APR

Monthly Mortgage Payment (P&I)

15 Year Fixed

4.375%

0

4.771%

$910

30/15 Year Fixed

5.250%

0

5.542%

$663

30/15 Jumbo

6.500%

0

6.873%

$3,160

30 Year Fixed

4.500%

0

4.727%

$608

3/1 Year ARM

4.000%

0

5.271%

$573

5/1 Year ARM

4.250%

0

5.336%

$590

7/1 Year ARM

4.500%

0

5.299%

$608

http://www.homeloansforyou.org/images/trans.gif

 

Rates effective as of: 3/23/2009 9:18:21 AM.

 Rates quoted as of the date and time indicated above are subject to change, with the markets, without notice.  Your actual rate and/or points may be different, as many factors go into providing you with a home mortgage loan.  The examples above assume a loan amount of $120,000 for all loans with the exception of the 30/15 Jumbo which assumes a loan amount of $500,000.  Again, rates change often, and Arizona State Credit Union will confirm rates for you at the time of application.

Please Note:  Rates disclosed do not apply to manufactured housing. 

 

Contact me with any questions or for more information on all our programs.

 

Louise Weeks

AZ State Credit Union

Residential Real Estate Loan Officer

550 E Gurley St

Prescott, AZ  86301

Tele: (928) 777-6150  Mobile: (928) 830-8877

Fax:  (928) 777-6151

www.homeloansforyou.org

 

"We deliver the most personal and memorable service you will ever experience"

 

 

Thursday, March 19, 2009

Historic Move By Feds = Low Mortgage Rates

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Big news hit the wires yesterday afternoon, as the Fed made a blockbuster
announcement.  Over the course of 2009 they will purchase an additional
$750B in Mortgage Backed Securities in an effort to help shore up the
housing market and keep home loan rates low.

Their actions are intended to keep a lid on interest rates and although the
rates dropped on the Feds announcement yesterday, it may not necessarily
push them dramatically lower in the future.

Since yesterday's Fed Meeting the US Dollar has gotten clocked in the global
market, as this aggressive Fed move appears to be quite inflationary.  While
we know that there is no inflation at the present time, the chatter of
future inflation could have a negative effect on mortgage rates.

Bottom line - although the media is already spinning it differently, this is
not the time for clients to stay on the fence, hoping and waiting for lower
rates.  Home loan rates remain within inches of ALL-TIME historic lows. 
Waiting is a risky move.

With rates at historic lows and houses on sale, now is the time for your
clients to get off the fence and buy!

Wednesday, March 18, 2009

Encouraging PPI and Housing Data: Has Spring Sprung?

 

James Picerno submits:

Is the Fed's liquidity attack winning the war on deflation? This morning's update on wholesale prices, new housing starts and new building permits offers a few reasons for answering with a tenuous "yes." Maybe. Even if that's true, we're a long way from a "recovery" that's worthy of the name. But perhaps the blood will run a little slower; perhaps it'll stop flowing altogether. Stranger things have happened.

First let's take a look at prices. The Producer Price Index ((PPI)) for February rose a modest 0.1%, the Bureau of Labor Statistics reports. That follows January's roaring 0.8% jump. And not a moment too soon, in the wake of large back-to-back monthly declines last year in PPI from August through December. A similar run of deflation has weighed on consumer prices as well.


Complete Story »


View article...

Housing Starts Rebound: Don't Get Too Excited

 

Tim Iacono submits:

The Commerce Deparment reported(.pdf) that housing starts rose for the first time in eight months, up 22.2 percent in February from record lows in January, largely as a result of a rebound in condominium and apartment building.
IMAGE While a 22 percent gain sounds impressive, it is important to recall just how low last month's record low numbers were.

Housing starts rose from an annualized, seasonally adjusted rate of 466,000 in January to a rate of 583,000 last month, but the January totals were a full 42 percent below the previous record low of 798,000 in January of 1991, a rate that is not adjusted for the increase in population.


Complete Story »


View article...

Monday, March 16, 2009

MMG Weekly: Congress Finally Gets Wise on Mark-To-Market

 

 

Last Week in Review

 

 

"I DO NOT THINK MUCH OF A MAN WHO IS NOT WISER TODAY THAN HE WAS YESTERDAY." Abraham Lincoln. Now more than ever, it's important for our country's leaders to heed yesterday's lessons and make wise choices today for our banking system and the economy. There were several key developments that happened on this front last week - here are some highlights.

On Thursday, the Securities and Exchange Commission's (SEC) Chief Accountant, the Financial Accounting Standards Board's (FASB) Chairman and the Deputy Comptroller for Regulatory Policy in the Treasury Department testified in front of the House Financial Services committee on the "Mark-to-Market" accounting rule. This rule was created so that there would be more transparency in business dealings, but fell prey to the law of "unintended consequences", and has played a major part in our current financial crisis. If you've been receiving this newsletter for awhile, you know this has been discussed several times - and we've even sent you a great explanatory video that breaks down what it all means, and why it has been such a major issue.

Because so many of you have been asking about this topic and great video - I am including the information and video once again in this week's issue - keep reading for the full scoop in the Mortgage Market View article below.

During Thursday's hearing, Congress demanded an answer for repairing this situation within the next three weeks, so right now, it looks like we will see some sort of coordinated action by both the FASB and the SEC to address the Mark-to-Market situation soon. Stocks certainly reacted positively to this news last week, as well as to Citigroup's announcement that it will not need more TARP money from the government. Stocks also liked the remarks from Federal Reserve Chairman Bernanke that the recession would be over by year-end if the banking situation is stabilized, and that major financial institutions would not be allowed to fail.

In other news, the Retail Sales numbers for February came in better than expected and the numbers for January were revised higher. This report is very volatile from month to month, but the last couple of readings have been encouraging. However, the job market continues to struggle as the number of people receiving unemployment reached a record 5.32 Million. And there was news that China is concerned the US may be spending too aggressively on the recession, which could lead to inflation down the road that would diminish the value of Bonds and China's investments in the US.

Overall, Bonds and home loan rates didn't worsen last week - even with the huge Stock rally - and ended the week relatively close to where they began.

 

Forecast for the Week

 

 

The middle of this week will be action packed with both scheduled economic reports and the Fed's next regularly scheduled meeting, including their policy statement and rate decision being delivered on Wednesday. With all the actions the government has been taking to stabilize our economy, it will be especially important to hear what the Fed has to say.and to see how the markets react.

This week also brings news on the inflation (or deflation) front, with Tuesday's wholesale measuring Producer Price Index (PPI) Report and Wednesday's Consumer Price Index (CPI) Report. Given China's concerns mentioned above about US spending to combat the recession and what that could mean for inflation, it will be important to see how these reports come in.

Also this week, we'll get a read on the new construction housing market with Tuesday's Housing Starts and Building Permits Reports. On Thursday, the Philadelphia Fed Report will be released. This monthly survey of manufacturing purchasing managers conducting business around the tri-state area of Pennsylvania, New Jersey, and Delaware is one of the most-watched manufacturing reports. We'll also have another Initial Jobless Claims report on Thursday, and with the number of people collecting unemployment reaching record highs as mentioned above, it will be important to keep an eye on this report, too.

Remember: Weak economic news normally helps Bonds and home loan rates improve, as money flows out of Stocks and into Bonds. As you can see in the chart below, Bonds were helped by important technical support and were able to hold onto recent gains even with the rally in the Stock market. I'll be watching closely to see how Bonds and home loan rates react to all of this week's events!

Chart: Fannie Mae 4.5% Mortgage Bond (Friday Mar 13, 2009)

Japanese Candlestick Chart

 

The Mortgage Market View...

 

 

The current economic crisis is the top news story for nearly every media outlet. But until recently, one of the most important factors that led to this challenging market has also been one of the least discussed.

By popular demand, I am again sending along this highly sought after video and article, unpacking the "Mark-to-Market" accounting issue - with some help from Barry Habib. Barry is a highly respected expert on home loans, who serves as Chairman of MSS, an organization that helps me to stay informed as your trusted advisor.

With the help of some easy-to-understand terms and illustrations, you will learn what it has taken the media and politicians many months to take seriously and begin to address.

Link here now to get the real story: www.mortgagesuccesssource.com/go/markmarket/

 

The Week's Economic Indicator Calendar

 

 

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of March 16 - March 20

Date

ET

Economic Report

For

Estimate

Actual

Prior

Impact

Mon. March 16

08:30

Empire State Index

Mar

-32.0

 

-34.65

Moderate

Mon. March 16

09:15

Capacity Utilization

Feb

71.1%

 

72.0%

Moderate

Mon. March 16

09:15

Industrial Production

Feb

-1.2%

 

-1.8%

Moderate

Tue. March 17

08:30

Building Permits

Feb

510K

 

531K

Moderate

Tue. March 17

08:30

Housing Starts

Feb

453K

 

466K

Moderate

Tue. March 17

08:30

Core Producer Price Index (PPI)

Feb

0.1%

 

0.4%

Moderate

Tue. March 17

08:30

Producer Price Index (PPI)

Feb

0.4%

 

0.8%

Moderate

Wed. March 18

02:15

FOMC Meeting

 

 

 

0.00% - 0.25%

HIGH

Wed. March 18

10:30

Crude Inventories

3/13

NA

 

749K

Moderate

Wed. March 18

08:30

Core Consumer Price Index (CPI)

Feb

0.1%

 

0.2%

HIGH

Wed. March 18

08:30

Consumer Price Index (CPI)

Feb

0.3%

 

0.3%

HIGH

Thu. March 19

08:30

Jobless Claims (Initial)

3/14

NA

 

654K

Moderate

Thu. March 19

10:00

Index of Leading Econ Ind (LEI)

Feb

-0.6%

 

0.4%

Low

Thu. March 19

10:00

Philadelphia Fed Index

Mar

-40.0

 

-41.3

HIGH

 

 

 

Meghan Knoy
115 E Goodwin Street Suite C
Prescott, AZ 86303
i

 

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