Danny Salas

Archive for the 'Loan Qualification' Category

Chico, CA Interest Rates Market Report – Economic Influences – January 28, 2010

Obama's Speech Was Promising

What The Fed…Said…

First, the Fed ended up saying, “rates will remain low for an extended period.”  This was good news for Bonds and interest rates.  However, the Fed also indicated that the $1.25 Trillion Mortgage-Backed Securities Government Purchase Program will, in fact, end on March 31, 2010.  After taking a moment to digest all of the information released, Bonds ended up not liking the news, and the market reacted negatively, with interest rates increasing approximately .25% Points in cost.

Barack Did The Talk…

Last night President Barack Obama gave his State of the Union Address to America.  One of his main theme’s was jobs creation.  This would be the driving force behind real estate and a much more healthy economy.  Jobs is the true answer…not just low interest rates.  So, it will be interesting what the Senate can agree to to move the country forward.  Regarding his comments on more regulation regarding the Big Banks.  There is a lot of controversy into how this will effect the economy.  The arguments stem from more regulations mean less jobs and less investment opportunity and growth.  Cow Dung (to put it nicely)!  Less regulation is what led us to the financial meltdown of almost the entire world.  The Big Banks can afford to pay Billion of dollars bonuses…they can afford to refund tax payers!  I agree…and if you don’t…tell me…what DID lead to the Mortgage Credit Crises?  I’m listening!

Treasury Auctions Are Kinda Rockin’

So far, this week, the Treasury Auctions have panned out fairly well.  This is good news.  There is a $32 Billion Auction of 7-Year Treasury Notes, today.  This is a longer term, and therefore, harder to sell at today’s yields, however, let’s see how it lays out.

Initial Claims Is To Blame

470,000 new claims were reported for last week.  450,000 were expected.  So, this is higher than we thought, however, it’s a little worse than just that.  Extended Benefits can continue for 99 weeks.  The Extended Benefits numbers are not included in the Continuing Claims numbers, that are currently reported at 4,602,000.  The estimated for people obtaining Continuing Claims Benefits plus people obtaining Extended Benefits are 5,600,000.  And that’s what’s being reported…but not by the media…so some estimates have the unemployed at nearly 10,000,000 people.  We better do something about jobs!

Durable Goods Are In The Hood

Durable Goods Items are things like T.V.s…or things that are anticipated to last the consumer over three years.  So, when jobs are bad, usually Durable Goods Numbers are too.  They came in at 0.2% as opposed to the 2.0% expected.  Not a great sign for a robust economy.

Locking Advice

We did a lot of locking yesterday, before banks had a chance to change their rates…after the Fed Announcement.  Now we’re sitting above the 200-Day Support level…so float again, if you didn’t take advantage of yesterday morning’s pricing.

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Freddie Mac Announcement Regarding Loan Limits for 2010

Fannie Mae & Freddie Mac Loan Limits Extended to 2010

Freddie Mac Maximum Loan Limits Are Unchanged for 2010

On November 12, Freddie Mac announced that our base conforming loan limits will be maintained at their current 2009 levels for 2010, with the maximum loan limit for a 1-unit single-family property remaining at $417,000. The temporary high-cost loan limits for properties located in designated high-cost areas will remain unchanged for 2010 as well.

- High-Cost Loan Limits

As a reminder, the loan limits in designated high-cost areas are the higher of the temporary limits established by the Economic Stimulus Act of 2008 (maximum of $729,750 for 1-unit single-family properties) and the permanent limits established by the Housing and Economic Recovery Act of 2008 (maximum of $625,500 for 1-unit single-family properties).

Actual loan limits for a specific high-cost area may be lower than the maximum permitted loan limit. It is important that you review the 2010 loan limits permitted for a specific county, which the Federal Housing Finance Agency (FHFA) determines and makes available on its Web site <http://www.fhfa.gov/Default.aspx?Page=185>.

- Super Conforming Mortgages

The recently enacted extension of the high-cost loan limits through year-end 2010 applies to all super conforming mortgages with note dates on or after October 1, 2008, and on or before December 31, 2010. There are no changes to our super conforming mortgage requirements as a result of the extension.

- Operational Impacts

Because the 2010 loan limits are unchanged from 2009, there are no impacts to Loan Prospector or the selling system.

The Single-Family Seller/Servicer Guide (Guide) <http://www.freddiemac.com/sell/guide/> will be updated in an upcoming Guide Bulletin to reflect the extension of our current loan limits through 2010, as well as the eligible note dates for super conforming mortgages.

For More Information

- Review the 2010 base conforming loan limits <http://www.freddiemac.com/sell/selbultn/limit.htm> and the higher loan limits in designated high-cost areas <http://www.freddiemac.com/sell/selbultn/limit.htm> as permitted under ARRA.

- View the 2010 loan limits <http://www.fhfa.gov/Default.aspx?Page=185> in designated high-cost areas as published by FHFA.

- Learn more about our super conforming mortgage requirements <http://www.freddiemac.com/singlefamily/mortgages/super_conforming.html>.

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Chico, CA Interest Rates Market Report – Economic Influences – November 13, 2009

Rates Are About As Low As They Can Get

Happy Friday the 13th!

Bonds are actually trading at a signicant level.  They’re currently at the high’s of October and May.  So, another opportune time to take advantage of the market!

Consumer Sentiment

Consumer Sentiment was reported at 66, lower than the 71 mark that economists were looking for.  I’ve been writing about how the media has been hyping up the employment numbers as good signs of a recovery, however, it looks as though most consumers are taking a similar opinion as mine.

$1 Trillion Auctioned So Far

About $14 Billion in Treasuries were auctioned off this week.  Compared to past months of about $25 Billion is auctions, you can see that the number is dwindling.  As this number declines, rates will eventually move up!

Next Week…

That’s about it on the interest rate front this morning.  Next week is loaded with economic data, so pay close attention!  Have an excellent weekend!

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Chico, CA Interest Rates Market Report – Economic Influences – November 12, 2009

25-40-50-Day Moving Averages

As I write, Mortgage-Backed Securities (MBS) are sitting directly on the 25, 40, & 50-Day Moving Averages.  All three averages are sitting almost at exactly the same place.  We, actually, dipped below those lines, however, have rebounded and are awaiting the 30-Year Treasury Auction report. 

Auction Results Will Effect Rates

The 30-Year Treasury Auction should not fare too well.  At the cost of sounding pessimistic, it’s just difficult to have foreign investors like a longer term, when investing in these bonds.  However, to be fair, the 3-Year and 10-Year Treasury Auctions have fared well this week.  This is a somewhat encouraging sign. 

Jobless Claims Getting Better…BUT…

The other news pushing bonds and MBS down is the fact the government reported the number of workers filing new claims for jobless benefits dropped by 12,000 last week.  The four-week moving average of new claims, considered a better gauge of underlying trends, fell by 4,500 for the period.  During the latest week for which data is available (week ended October 24^th) enrollment in extended benefits programs decreased by 28,240 while the Emergency Unemployment Compensation program enrollment rose by 22,400 (somewhat offsetting the decrease).  So, while the media continues to paint a brighter picture of the labor market, I don’t see it.  Particularly coupled with the fact that the new legislation signed by Obama will extend unemployment benefits for the people not working full time.  This will definitely change the outlook of the continuing claims numbers.  We’ll keep an eye on this…

Locking

I think its prudent to lock.  Even with the level of support we have directly under us…I don’t see the 30-Year Treasury Auction surprising us, and the Labor Statistics are being received as joyous information by the media.  Stocks will benefit at the expense of bonds. 

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