Danny Salas

Welcome to Access Real Estate Lending

Welcome, Real Estate Agents & New Readers, to AccessLoans.net  Our top two articles, Industry Updatesand Interest Rate Updates, are updated regularly.  Industry Updates is primarily a Real Estate Agent’s Informative site, educating Real Estate Agents as to current changes in the Real Estate Lending Industry.  Interest Rate Updates are for all readers to follow.  It helps understand what makes rates move up and down and what drives that market.  Scroll below to enjoy the most recent articles from similar topics.

Chico Real Estate Loan Industry Updates

Chico Real Estate Interest Rates Updates

Chico, CA Interest Rates Market Report – Economic Influences – March 19, 2010

Danny's 2nd Office

YOU DON’T WANT TO MISS THIS EVENT!!!

Scott St. John will be speaking at The Big Room At Sierra Nevada The , Friday, March 26, 2010.  Scott is a 3rd-Term Governing Board Member of Freddie Mac.  You’ll have an opportunity to inquire into expected economic future of the United States, Real Estate and its REO future, and what’s happening behind the scenes that is making closing loans to more timely and difficult, these days.   REGISTER AT THE CHICO OR PARADISE BOARD OFFICES.  $10 includes appetizers.  $15.00 AT THE DOOR!

JUST ANNOUNCED!!!!

Joining us on Friday, March 26th is Private Mortgage Insurance Company’s (PMI) own Nancy Early.

Nancy has been with PMI for 8 years and in the Mortgage Industry for 25 years. She supports  Northern and Central California, Northwest Nevada and Hawaii and lives in Roseville, California.  Come learn about some of the structured transactions that MI companies are using to lower buyer’s monthly obligations.  We’re excited to add her to the venue.

We Were Down 19, To Be Par Already Today

Rates Taking Direction From Stocks

There are no market mover announcements effecting interest rates, today, so technical factors will influence Mortgage-Backed Securities’ direction.  And that they have done!  Typical to common markets, Stocks shot off this morning, causing rates to increase, relatively substantially, until, yet another credit rating company announced their concern over the AAA rating of large economies, including the United States.  Fitch Ratings mentioned that the United States has some difficult decisions to make regarding spending.  Thanks for that enlightening information, Fitch.  With that announcement, rates came plummeting back down, and Stocks did, too.

Short For Time Periods...May As Well Lock

Locking Advice

Read yesterday’s advice.  It still stands!

What To Subscribe To:

Get Our Twitter Updates
Get Our Blog Blast
Connect With Us On Facebook

FHA MI Premium Increasing

1.75% Financed Premuim Is Going Away

Per HUD Mortgagee Letter 2010-02, the upfront mortgage insurance premium for FHA loans will increase to 2.25% on all loans for which the case number is assigned on or after April 5, 2010.

Carry Trade…The Investment Opportunity of a Lifetime…

Loss of The Carry Trade...Why Rates Will Go Up This Year

More Writing On The Wall

So, we’ve been talking about interest rates, inevitably, moving up; that the writing’s on the wall.  What are some of the writings on the wall, and how do we know?  We’ve talked about the Government’s Mortgage-Backed Security Purchase Program drying up in March.  We’ve talked about some of the financial troubles occruing in Greece, and throughout the world;  that the safe-haven for US Treasuries and Mortgage-Backed Securities will eventually reverse.  But what’s the Carry Trade?  How does it work, and how will it effect rates?

The Fed Funds Rate

So, remember that the Fed Funds Rate has been significanly lower, for quite some time.  The Fed increased the Discount Rate, however, has been mentioning that the Fed Funds Rate will remain low, “for an extended period,” of time.  This “extended period” quote was lost, at a more recent meeting.  However, Good ‘Ole Ben Bernanke brought it up again, with his talk to Congress and the Senate, last week.  Why is this back and forth mentioning of “extended period” so important?

The Writing On The Wall

The Fed’s not in the business of tricking people.  They’re significantly more transparent than that!  They want you to get the writing on the wall comments.  Here’s what’s being said:  We’ve mentioned Kansas City Fed President Thomas Hoenig, recently.  ”Fiscal policy is on an unsustainable course…”  Also, the Fed’s own Vice Chairman, Donald Kohn, has recently dissented from the Fed’s Policy, actually warning banks to be prepared for interest rate changes.

The Carry Trade Phenomenon

Think of it like this…You have $1 Million to invest and you’re interested in the 4.5% Mortgage Backed Security (which is currently being used to measure 30 Year Fixed Rate Mortgages).  4.5% on $1 Million is $45,000.  The Government Allows you to only put 10% Down on your investment.  So you only have to write a check for $100,000.  So, you can borrow the other $900,000 at the current Fed Funds Rate, plus .25%.  That equates to 2.25% or $20,250.  So, $45,000 minus $20,250 is a profit of $24,750.  Or a 24.75% return on your investment.  Now, when the Fed Funds Rate Increases…even just 0.5%, think of this;  your profit is significantly jeopardized.  That 1/2 percent alone can cost you $27,000 cost, from $45,000 earnings, is only a profit of $18,000.  So your rate of return is leveraged down to an 18% gain.  Still significant, however, quite a loss, for just 0.5% in rate increases.

Come On People, Now…

So, with the MBS Purchase Program ending, dissenting Fed Members and Presidents warning of higher rates, Greece on the Path to a financial rescue, I just don’t see how much writing can be on the wall, before everyone understands that rates are moving up.  The temporary fixes WILL NOT LAST!