Wednesday, October 21, 2009
Saturday, October 10, 2009
Spike In 10 Yr Note Rate
Speculation on my part is that the Primary Dealers are getting stuck with huge inventory from the auctions. It will be interesting to see any stories coming out. Imo, the jig is up. Rates are moving higher. Fasten your seat-belts. If you are looking to refinance, this is no time to get cutesy and wait for bottom-tick. The Spreads between the 10 Yr and Fannie Maes are historically thin, I'll be updating that chart tomorrow. Bottom-tick for 30 yr fixed has left the station, lock immeditately. You'll thank me in March.
Wednesday, September 23, 2009
Fannie Mae DU 8.0 Coming December 12, 2009
The changes included in this release will apply to new loan case files submitted to DU on or after the weekend of December 12, 2009. Loan case files created in DU Version 7.1 and resubmitted after the weekend of December 12 will continue to be underwritten through DU Version 7.1.
Some of the changes this enhancement will bring are as follows:
Total Expense Ratio
With this release, the maximum allowable total expense ratio in DU will be revised to 45 percent; with flexibilities offered up to 50 percent for certain loan case files with strong compensating factors.
If current debts exceed the maximum allowable total expense ratio, the loan case file will receive an Ineligible recommendation. DU will no longer return a Refer recommendation on loan case files that would have otherwise received an Approve recommendation but had exceeded the maximum allowable total expense ratio.
DU Refi Plus™ loan case files submitted to DU Version 8.0 will continue to be subject to the maximum allowable total expense ratio currently applied to DU Version 7.1 DU Refi Plus loan case files.
Minimum Credit Score Requirement
As stated in Announcement 09-29, Fannie Mae is modifying the minimum “representative” credit score requirement for all loans delivered to Fannie Mae to 620. With the exception of DU Refi Plus, loan case files that are underwritten through DU Version 8.0 with a minimum representative credit score below 620 will receive an Ineligible recommendation.
Revised Mortgage Insurance (MI) Coverage Level Requirements
As stated in Announcement 09-29, loans with a loan-to-value (LTV) ratio greater than 80 percent will now be subject to the following simplified MI coverage requirements.
Simplified Mortgage Insurance Options
Reduced MI and Lower-Cost MI will no longer be offered with DU Version 8.0;
Age of Credit Documents
The DU documentation expiration will be updated to reflect a credit report expiration of 90 days from the date of the credit report for purchase and refinance transactions, and 120 days from the date of the credit report for construction and construction-to-permanent transactions
Verification of Stocks, Bonds, Mutual Funds, and Retirement Accounts
The Verification messages issued when stocks, bonds, or mutual funds are entered on the application will be modified to remind customers that only 70 percent of the value of the account should be entered if such funds will be used as reserves. The message will also state that if the funds will be used for the down payment or closing costs, receipt of the funds realized from the sale or liquidation of the assets must be verified, and that stock options or non-vested restricted stock may not be used for reserves.
The Verification message issued when retirement funds are entered on the application will be modified to remind customers that only 60 percent of the value of the account should be entered if such funds will be used for reserves. The message will also state that if the funds will be used for the down payment or for closing costs, receipt of the funds realized from the sale or liquidation of the assets must be verified.
Retirement of DU Version 7.0
When DU Version 8.0 is implemented, DU Version 7.0, which went into production in June 2008, will be retired. Therefore, effective the weekend of December 12, 2009, customers will no longer be able to resubmit loan case files to Version 7.0; however, users will continue to be able to view the online loan applications and the DU Underwriting Findings reports that were created under Version 7.0. To obtain an updated underwriting recommendation after the weekend of December 12, the user must create a new loan case file and submit it to DU.
Outlined below are the two links for the announcements:
https://www.efanniemae.com/sf/guides/duguides/pdf/current/rndodu80.pdf
https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2009/0929.pdf
Also provided are the FAQ’s some of which are as follows:
Why is Fannie Mae raising the minimum credit score to 620 for all loans delivered?
Raising the minimum credit score will support prudent risk management and better ensure sustainable homeownership.
Why is Fannie Mae lowering the maximum total expense (debt-to-income or DTI) ratio in DU?
The updates to the maximum allowable total expense (debt-to-income) ratio in DU to 45percent, with flexibilities up to 50 percent for certain loan case files with strong compensating factors, are designed to support sustainable homeownership for borrowers and to better align DU with Fannie Mae’s current manual underwriting requirement.
Because the DU credit risk assessment considers multiple risk factors when evaluating the overall risk of a loan, we elected to offer certain loan case files additional flexibilities to exceed 45 percent based on the overall risk of the transaction.
https://www.efanniemae.com/sf/guides/ssg/relatedsellinginfo/pdf/0929faqs.pdf
Friday, September 4, 2009
Employment Report and Interest Rates
Today’s employment report, BLS report here, weighed on interest rates. The 10 Yr Treasury closed at 3.44%, after being as low as 3.29% on Wednesday. Yields on the Treasuries may have put in an important short term low on Wednesday. Testing the July low in yields (3.26%), but failing to break below the July low in yield. Not a great sign at this point. I would submit that incrementally moving into a hedge against higher rates makes sense right now, see TBT at at 47.70 close….Technically, the 10 Yr T note is at the bottom of the Rsi range, closing at 35.03 on Wed, not below the official oversold point at 30.00, but it marks a divergence with the July lows. Higher low in price, lower low in momentum.
Sunday, August 23, 2009
Government Loan FICO Changes
Wow! The lenders keep increasing the costs for low FICO scores, or even mid-range FICO scores; I mean a 659 credit score on a VA loan is not that bad.
Here is the latest update from a major government lender, i.e. they do a lot of VA Loans and FHA Loans.
Thursday, August 20, 2009
Tuesday, August 18, 2009
Mortgage Tidbits
A couple of tidbits:
I got this email in from a lender rep today:
Minimum FHA FICO scores had been 620,
Things are loosening up a bit.
Also loosening up in the Jumbo market as well:
I’m deliberately leaving the lender’s name off,
But the lender is not a portfolio lender, that’s the
Important thing, they sell to Chase as I understand
It…The important thing is that it is a small signal that
The Jumbo market is loosening up as well.
Monday, August 17, 2009
Interest Rates and The Stock Market
A few thoughts:
Stocks – Pretty certain we’re going to see a pullback
On the Nasdaq Comp to the low to mid 1600’s, between
Now and say, mid to end of October.
5 month rally and 2 to 2 ½ month pullback. It should
Generate plenty of fear…Then a nice rally into Q1 of ’10,
With Nasdaq going to a new recovery high above
the Aug 12 high at 2015.26. After that, ultimately it could get
even uglier than March of ’09.
Interest Rates: with the stock selloff, we should see lower rates…
However, what I’m seeing is that interest rates are struggling to
Go down. Yes, rates declined today, but not as easily as they
Should have, given the big drop in stocks. The 10 Yr broke, and closed,
Below 3.50%, so we could see 3.300% soon. Fingers crossed.
Momentum is not oversold yet (42.70 on Rsi), good sign.
Saturday, August 15, 2009
The Hangover
I just got back from seeing The Hangover…
I haven’t laughed so much, so hard in such a long time.
Dan Mellis
Hometown Lending
div of TMBG, Inc
9757 NE Juanita Dr. Suite 119
Kirkland, WA 98034
Toll Free: 877-238-5097
Office: 425-605-0948
Cell: 425-260-5562
Fax: 425-484-6559
Lic: 510-LO-34535
Website: www.htlkirkland.com
Email: dan.mellis@htlkirkland.com
"Life is putting Prozac to the test." - Tony Soprano
Monday, August 10, 2009
Treasury Auctions Tomorrow
The twice a month Treasury Auctions begin tomorrow.
If history is a guide, mortgage rates should rise tomorrow
And into Wednesday, then begin to flatten out and begin to
Drop on Thursday around 10:30 am Pac. Time, after the
Auctions are over. We’ll see what happens tomorrow.
Friday, August 7, 2009
Employment Report Behind the Headlines
From Calculated Risk:
Employment-Population Ratio,
Part Time Workers,
Average Workweek
Note: Several analysts follow the average workweek series to look for the end of a recession.
The idea is that companies will increase the work week before they start hiring,
so the average weekly hours might increase as a recession ends.
The small increase in July will be viewed as a possible indicator.
Other employment measures that are used to judge the end of a recession are
the four-week moving average of initial unemployment claims (has fallen significantly)
and the diffusion index (previous post). A few more graphs based on the (un)employment report ...
Employment-Population Ratio
This graph show the employment-population ratio; this is the ratio of employed Americans to the adult population. Note: the graph doesn't start at zero to better show the change. The general upward trend from the early '60s was mostly due to women entering the workforce. As an example, in 1964 women were about 32% of the workforce, today the percentage is close to 50%. This measure fell slightly in July to 59.4%, the lowest level since the early '80s. This also shows the weak recovery following the 2001 recession - and the current cliff diving!
Average Weekly Hours
The average weekly hours has been declining since the early '60s, but usually falls faster during a recession. Average weekly hours in June was at the lowest level since the series began in 1964, and the uptick in July was very small. Note: the graph doesn't start at zero to better show the change.
From American Staffing Association:
The ASA Staffing Index estimates weekly changes in the number of people employed in temporary and contract work.
ASA developed the index to provide a current measure of staffing industry employment trends.
Comments: So far we’re getting an uptick off the bottom, but it’s still very early in any
potential recovery.
Mortgage Update: Employment Report: 247K Jobs Lost, 9.4% Unemployment Rate
Employment Report: 247K Jobs Lost, 9.4% Unemployment Rate
From the BLS:
Nonfarm payroll employment continued to decline in July (-247,000),
and the unemployment rate was little changed at 9.4 percent,
the U.S. Bureau of Labor Statistics reported today.
The average monthly job loss for May through July (-331,000)
was about half the average decline for November through April (-645,000).
In July, job losses continued in many of the major industry sectors.
Interest Rates – 10 Yr Treasuries
Comments: Interest rates are higher on the employment data,
continuing a trend of higher interest rates that began back in December ’08.
Don’t expect this trend to reverse anytime soon.
Today’s Mortgage Rates
| Date: Aug 7, 2009 |
|
|
|
|
|
| |
| 30 Yr Fixed |
| 5/1 ARM |
| 7/1 ARM |
| FHA- 30 Yr |
|
| Rate | Price | Rate | Price | Rate | Price | Rate | Price |
| 4.750% | 1.625 | 4.000% | 0.875 | 4.500% | 0.750 | 5.500% | Par |
| 4.875% | 0.875 | 4.125% | 0.625 | 4.625% | 0.375 |
|
|
| 5.000% | 0.500 | 4.250% | 0.250 | 4.750% | 0.125 |
|
|
| 5.125% | 0.000 | 4.375% | -0.125 | 4.875% | -0.250 |
|
|
| 5.250% | -0.500 | 4.500% | -0.375 | 5.000% | -0.500 |
|
|
| 15 Yr Fixed |
| 10/1 ARM |
| VA - 30 Yr |
| USDA RH | 30 YR |
| Rate | Price | Rate | Price | Rate | Price | Rate | Price |
| 4.250% | 0.750 | 4.625% | 1.625 | 5.500% | FICO>640 | 5.75% | Par |
| 4.375% | 0.125 | 4.750% | 1.125 | 5.625% | Fico<640, Fico .620 |
|
|
| 4.500% | -0.375 | 4.875% | 0.625 | 6.000% | Fico < 620 |
|
|
| 4.625% | -0.750 | 5.000% | 0.250 |
|
|
|
|
| 4.750% | -1.125 | 5.125% | 0.000 |
|
|
| tdtdtdtd
Wednesday, August 5, 2009
Notes on Treasury Auction
Comparing the August auction with July:
3 Yr Offering August ‘09: $37 B
3 Yr Offering July ’09: $35 B
3 Yr Offering Increase: 5.7%
10 Yr Offering August ‘09: $23 B
10 Yr Offering July ‘09: $19 B
10 Yr Offering Increase: 21%
30 Yr Offering August ‘09: $15 B
30 Yr Offering July ‘09: $11 B
30 Yr Offering Increase: 36%
Treasury Auction Announcement
| Term and Type of Security | Offering Amount | Auction Date | |
| May 21, 2009 | 7-Year Note | $ 26,000,000,000.00 | May 28, 2009 |
| May 21, 2009 | 5-Year Note | $ 35,000,000,000.00 | May 27, 2009 |
| May 21, 2009 | 2-Year Note | $ 40,000,000,000.00 | May 26, 2009 |
| June 4, 2009 | 3-Year Note | $ 35,000,000,000.00 | June 9, 2009 |
| June 4, 2009 | 10-Year Note | $ 19,000,000,000.00 | June 10, 2009 |
| June 4, 2009 | 30-Year Bond | $ 11,000,000,000.00 | June 11, 2009 |
| June 18, 2009 | 7-Year Note | $ 27,000,000,000.00 | June 25, 2009 |
| June 18, 2009 | 5-Year Note | $ 37,000,000,000.00 | June 24, 2009 |
| June 18, 2009 | 2-Year Note | $ 40,000,000,000.00 | June 23, 2009 |
| July 2, 2009 | 3-Year Note | $ 35,000,000,000.00 | July 7, 2009 |
| July 2, 2009 | 10-Year Note | $ 19,000,000,000.00 | July 8, 2009 |
| July 2, 2009 | 30-Year Bond | $ 11,000,000,000.00 | July 9, 2009 |
| July 23, 2009 | 7-Year Note | $ 28,000,000,000.00 | July 30, 2009 |
| July 23, 2009 | 5-Year Note | $ 39,000,000,000.00 | July 29, 2009 |
| July 23, 2009 | 2-Year Note | $ 42,000,000,000.00 | July 28, 2009 |
| July 23, 2009 | 19 Yr 6 month TIPS | $ 6,000,000,000.00 | July 24, 2009 |
| August 5, 2009 | 3-Year Note | $ 37,000,000,000.00 | August 11, 2009 |
| August 5, 2009 | 10-Year Note | $ 23,000,000,000.00 | August 12, 2009 |
| August 5, 2009 | 30-Year Bond | $ 15,000,000,000.00 | August 13, 2009 |
|
| Total May 26 to August 13, 2009 | $ 525,000,000,000.00 |
|
|
|
|
|
|
|
| Cumulative Totals May 26 to July 30 2009 | Amounts | % of Total |
|
| 2-Year Note | $ 122,000,000,000.00 | 23.24% |
|
| 3-Year Note | $ 107,000,000,000.00 | 20.38% |
|
| 5-Year Note | $ 111,000,000,000.00 | 21.14% |
|
| 7-Year Note | $ 81,000,000,000.00 | 15.43% |
|
| 10-Year Note | $ 61,000,000,000.00 | 11.62% |
|
| 30-Year Bond | $ 37,000,000,000.00 | 7.05% |
|
|
|
| |
|
| Percent in 2 Yr through 7 Yr | 80.19% |
|
More on Taylor Bean
I spoke with our Taylor Bean Lender Rep this morning, before the Press Release hit, as I submitted a loan into their pipeline yesterday, before all this stuff hit the fan.
The rep sounded hopeful that whatever problems TBW was having with HUD, that those problems could be worked out in a reasonably timely fashion. Apparently, this will not be the case.
Let me add, that the lender rep with TBW has been outstanding to work with in the past, a longtime veteran of the mortgage industry. I wish the best for him and his family.
Taylor Bean Ceasing Operations
Taylor Bean Ceasing Operations Update: Taylor Bean press release (ht Wayne)
TAYLOR BEAN MUST CEASE ALL ORIGINATION OPERATIONS EFFECTIVE IMMEDIATETLY OCALA, FLORIDA – TAYLOR, BEAN & WHITAKER MORTGAGE CORP. (“TBW”) RECEIVED NOTIFICATION ON AUGUST 4, 2009 FROM THE U.S DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, FREDDIE MAC AND GINNIE MAE (THE “AGENCIES”) THAT IT WAS BEING TERMINATED AND/OR SUSPENDED AS AN APPROVED SELLER AND/OR SERVICER FOR EACH OF THOSE RESPECTIVE FEDERAL AGENCIES. TBW HAS UNSUCCESSFULLY SOUGHT TO HAVE THE TERMINATION/SUSPENSION DECISIONS OF EACH OF THOSE AGENCIES REVERSED. AS A RESULT OF THESE ACTIONS, TBW MUST CEASE ALL ORIGINATION OPERATIONS EFFECTIVE IMMEDIATELY. REGRETTABLY, TBW WILL NOT BE ABLE TO CLOSE OR FUND ANY MORTGAGE LOANS CURRENTLY PENDING IN ITS PIPELINE. TBW IS COOPERATING WITH EACH OF THE AGENCIES WITH RESPECT TO ITS SERVICING OPERATIONS AND EXPECTS TO CONTINUE TO SERVICE MORTGAGE LOANS AS IT RESTRUCTURES ITS BUSINESS IN THE WAKE OF THESE EVENTS. WE UNDERSTAND THAT THIS COULD HAVE A SIGNIFICANT IMPACT ON OUR VALUED EMPLOYEES, CUSTOMERS AND COUNTERPARTIES, AND ARE VERY DISAPPOINTED THAT A LESS DRASTIC OPTION IS UNAVAILABLE.
Dan Mellis
Hometown Lending
div of TMBG, Inc
9757 NE Juanita Dr. Suite 119
Kirkland, WA 98034
Toll Free: 877-238-5097
Office: 425-605-0948
Cell: 425-260-5562
Fax: 425-484-6559
Lic: 510-LO-34535
Website: www.htlkirkland.com
Email: dan.mellis@htlkirkland.com
"Life is putting Prozac to the test." - Tony Soprano
Geithner to Financial Regulators: Enough is Enough
http://online.wsj.com/video/geithner-to-financial-regulators-enough-is-enough/8647C6F2-3070-4C8B-B88A-B8F6549EE813.html
Tuesday, August 4, 2009
Untitled
I should have mentioned in the earlier post that I received a very nice Birthday e-card from Deb in Las Vegas.
That card got my day started great, thanks Deb. You always make my day better.
Heading Home
I had a very quite birthday yesterday. I received a nice call from mom, we chatted for about 10 minutes.
She’s back at the cottage in Wisconsin after visiting my sisters in Sacramento for a couple of weeks.
My sister Susie texted me and wished a happy birthday. I also got some very heartwarming calls from Shawn and Mike. It’s always good to hear from them.
Mortgage Pricing: August 4 2009
| Date: Aug 4, 2009 |
|
|
|
|
|
| |
| 30 Yr Fixed |
| 5/1 ARM |
| 7/1 ARM |
| FHA- 30 Yr |
|
| Rate | Price | Rate | Price | Rate | Price | Rate | Price |
| 4.500% | 2.000 | 4.000% | 0.500 | 4.250% | 1.000 | 5.500% | Par |
| 4.625% | 1.500 | 4.125% | 0.250 | 4.375% | 0.625 |
|
|
| 4.750% | 0.625 | 4.250% | -0.125 | 4.500% | 0.250 |
|
|
| 4.875% | 0.000 | 4.375% | -0.500 | 4.625% | -0.125 |
|
|
| 5.000% | -0.500 | 4.500% | -0.750 | 4.750% | -0.500 |
|
|
| 15 Yr Fixed |
| 10/1 ARM |
| VA - 30 Yr |
| USDA RH | 30 YR |
| Rate | Price | Rate | Price | Rate | Price | Rate | Price |
| 4.250% | 0.125 | 4.250% | 1.750 | 5.500% | FICO>640 | 5.50% | Par |
| 4.375% | -0.375 | 4.375% | 1.250 | 5.625% | Fico<640, Fico .620 |
|
|
| 4.500% | -0.750 | 4.500% | 0.750 | 6.000% | Fico < 620 |
|
|
| 4.625% | -1.125 | 4.625% | 0.250 |
|
|
|
|
| 4.750% | -1.625 | 4.750% | -0.125 |
|
|
|
|
