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Mortgage Related News

MBS RECAP: Bonds Refuse to Follow Stocks Lower

Posted To: MBS Commentary

We've had a pretty good run recently where bond yields have been willing to at least move in the same direction at the same time during sharper stock sell-offs. No luck on that front today however. Stocks sold-off in moderately sharp fashion, and bond yields spent most of that time moving higher instead of lower. This can mean a couple things, but one of the most likely is that bond buyers have found a limit as to how far they're going to chase a stock sell-off unless that sell-off gets a whole lot worse. The less onerous possibility is that this is Thanksgiving week and we shouldn't read too much into typical tradeflow patterns because everything could look completely different in the coming weeks. Finally, for those who would like to maintain a purely positive outlook, I'd...(read more)

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Mortgage Rates Unchanged at Recent Lows

Posted To: Mortgage Rate Watch

Mortgage rates managed to maintain their lowest levels in more than a month yet again today. All this despite modest losses in underlying bond markets (the stuff that's primarily responsible for most mortgage rate movement). Apart from bond markets, lenders' individual pricing strategies also come into play. This becomes a bigger deal than normal during holiday weeks. In general, lenders try to set rates at levels less likely to require tweaking during Thanksgiving week. That could help explain the absence of change despite the bond market losses. That said, we could also simply be looking at another case of timing, where the bond market losses happened late enough in the day that the average mortgage lender was better served to adjust tomorrow morning's rate sheets as opposed to going to that...(read more)

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Mixed Residential Construction Results, Another Lackluster Month

Posted To: MND NewsWire

October was another mixed but largely mediocre month for residential construction . Permits were lower both on a monthly and an annual basis, while housing starts improved marginally, but only for the month. Completions also lagged earlier numbers. The Census Bureau and the Department of Housing and Urban Development said that permits were issued at a seasonally adjusted annual rate of 1,263,000 units, down 0.6 percent from the September rate of 1,270,000. The September number was revised up from the original estimate of 1,224,000. Permits in October were down 6.0 percent from the October 2017 rate of 1,343,000 units. The permitting number did come in higher than predictions of analysts polled by Econoday. They had estimated in the range of 1,224,000 to 1,285,000 with a consensus of 1,260,000...(read more)

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MBS Day Ahead: Opening The Conversation

Posted To: MBS Commentary

Despite a fairly perfect bounce yesterday, the trend-lines acting as floors in stocks and bonds have given way overnight, even if only in somewhat underwhelming fashion. For instance, compared the 3.06 line in the sand, 10yr yields began the day at 3.04 and are already up a bit from there. The S&P is only 20-30 points below its supportive line (not a big move for the S&P these days). Nonetheless, a break is a break! The biggest question is whether or not we should read much into this considering my typical effort to convince you that Thanksgiving week market movement should be taken with a grain of salt. In fact, I do think we CAN read something into it. Granted, there's no way to confirm a definitive , big-picture shift. Absent a much sharper sell-off in stocks, I think bonds will...(read more)

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CRA Requirement Study; World Economies Pushing US Rates Lower; LO Resources

Posted To: Pipeline Press

Here are some tech developments as we seem to be moving closer to machines running our lives, or a loan being approved instantly by reading a fingerprint or retina. No, this isn’t a story from the Onion: British companies are planning to microchip personnel in order to boost security and stop them accessing sensitive areas. Biohax , a Swedish company that provides human chip implants…is in talks with a number of UK legal and financial firms to implant staff with the devices. One prospective client…is a major financial services firm with “hundreds of thousands of employees.” Around the world, Google Home users no longer need another voice assistant to communicate with GE products. And, of course, there is continued concern that Facebook, Google, Twitter, and other...(read more)

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MBS RECAP: Weaker Start, But Stronger Finish Thanks to Econ Data

Posted To: MBS Commentary

Builder Confidence doesn't typically move markets, but today it did. For the past several month's, the NAHB's Housing Market Index (generally considered tantamount to "builder confidence") looked like it was bucking the consensus among other housing data that all but verified a decisive cooling trend. But it made up for its recent lack of movement today. It's as if builder confidence did't get the memo on the shift in housing and suddenly rushed to catch up. This resulted in bond market improvement and stock losses, and that's a very tall order for this data. It speaks to two things. First, markets are indeed concerned about the housing market and the role it could play in a broader economic shift. Many see such a shift beginning within 12 months at this point...(read more)

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Sweat Equity as a Downpayment? Yes, Actually

Posted To: MND NewsWire

Freddie Mac has announced a new collaboration with a handful of rural non-profits to expand sweat equity opportunities to homeowners in several rural and underserved regions. Potential homebuyers in selected areas will be able "to leverage their construction skills to cover down payment and closing costs when purchasing a home." The company said the expansion of sweat equity parameters of its Home Possible program, part of its "Duty to Serve" mandate, is designed to support the renovation of aging homes and provides borrowers with an additional form of down payment instead of cash. There is no limit on the amount of sweat equity that can be applied toward a down payment as long the labor is completed in a skillful manner to support the appraised value-and is certified by an appraiser. "More...(read more)

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Mortgage Rates Maintain Recent Lows

Posted To: Mortgage Rate Watch

Mortgage rates unexpectedly dropped to their lowest levels in more than a month as of last Friday. That assertion is at odds with quite a few media reports that cited Freddie Mac's weekly survey data saying that rates were essentially unchanged from the previous week. This occurred because Freddie's survey only captures the first few days of any given week and most of last week's improvement took place on Thursday and Friday. As such, this week's Freddie surveys should reflect that nice drop in rates. How nice is "nice?" In absolute terms, we're talking about something slightly less than an eighth of a percentage point in terms of a typical 30yr fixed rate from the average lender. That's actually a fairly quick move relative to the average pace of mortgage rate movement. In any event, it's...(read more)

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After a Steady Run, Builder Confidence Finally Folds

Posted To: MND NewsWire

Builder confidence took a steep dive this month, reflecting increasing news of slowing home sales and rising concerns over affordability. The National Association of Home Builders (NAHB) said its Housing Market Index (HMI), a joint project of NAHB and Wells Fargo, dropped eight points. The index, which has been floating in the 67 to 70 range since March, had a November level of 60, the lowest since July 2016. NAHB Chairman Randy Noel said, "Builders report that they continue to see signs of consumer demand for new homes but that customers are taking a pause due to concerns over rising interest rates and home prices." "For the past several years, shortages of labor and lots along with rising regulatory costs have led to a slow recovery in single-family construction," said NAHB Chief Economist...(read more)

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Lehman Litigation Webinar; Upcoming Events and Training; New Products

Posted To: Pipeline Press

Thanksgiving means many things to many people: family time, a half day of work Wednesday, or a four-day weekend. To the staff and students of Johns Hopkins, they are thankful for the gift from Michael Bloomberg, class of 1964, of $1.8 billion (with a “b”). Lenders and their staffs give millions every year to various causes, but beginning in the fall of 2019, Johns Hopkins will be a loan-free institution. “We will replace all undergraduate student loans with scholarships, and we will reduce overall family contributions to financial aid. In addition, for the spring 2019 semester, we will offer immediate loan relief to every enrolled undergraduate student whose financial aid package includes a federal need-based loan.” That is really something. Upcoming events James Brody...(read more)

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MBS Day Ahead: Slow Holiday Trading Unless These Key Levels Break

Posted To: MBS Commentary

Happy Thanksgiving week. These can go a few different ways for bond markets with 2 main varieties standing out. Both varieties are the product of illiquidity (fewer buyers and sellers at any given price point). In the first case, those buyers and sellers are roughly balanced and neither side has an stubborn/desperate outlier. The result is a boring, sideways grind for 3 days followed by a forgotten half-day on Friday. In the second case , there is an outlier or two who is stubborn or desperate--a buyer with big buying needs or a seller who isn't willing to give up their bonds without getting top dollar. In an illiquid environment, such outliers can quickly drive prices/yields higher or lower. The most frustrating part of watching such things happen (well, I guess it's only frustrating...(read more)

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MBS RECAP: New Fed Vice Chair Helps Rates and Stocks

Posted To: MBS Commentary

We haven't heard much out of new Fed Vice Chair Richard Clarida since he accepted the position, but what we heard today was good. Well, at least the bond market reaction was good. His comments ended up setting the tone for the day. So what did he say? Nothing too complicated... Whereas Fed Pres Bostic was talking about a "neutral rate" of 2.5-3.5 yesterday, Clarida said we're close to a neutral range NOW. That certainly seemed to be the biggest deal among his comments, but it was perhaps just as significant that he noted evidence of global economic slowing. Stocks and bonds both rallied from there on out. The fact that the shorter end of the yield curve led the charge was especially telling (that's where we'd expect to see a bond market rally driven by shifts in Fed...(read more)

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Mortgage Rates Lowest in a Month

Posted To: Mortgage Rate Watch

Mortgage rates hit their lowest levels of THE month yesterday, and the lowest levels in A month today. It's a bit of a technicality, really. As of yesterday, there were a few days in mid-to-late October that saw lower rates. Today's drop means we'd need to go back to early October to see anything lower. What's the significance of being at the lowest levels in a month? None, really. It's just really fun to be able to say such things in an environment where such things haven't been easily said for quite some time! Perhaps more relevant and more tangible is the fact that we can say rates are nearly an eighth of a percentage point lower on the week, and that's a decent move regardless of the environment. Next week brings the Thanksgiving holiday, which tends to make mortgage lenders set rates more...(read more)

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New Home Sales, Prices Faded in October

Posted To: MND NewsWire

The Mortgage Bankers Association (MBA) notes that applications for the purchase of new homes declined by 2.1 percent in October compared to the same month in 2017. Those applications were also 11 percent lower than in September. The information, taken from responses to MBA's Builder Application Survey, does not include any adjustment for seasonal patterns. Based on the survey results and other assumptions including about market coverage, MBA estimates that new single-family home sales were at a seasonally adjusted rate of 673,000 in October, an increase of 4.7 percent from the September sales rate of 643,000 units. On an unadjusted basis, the MBA projects 53,000 new home sales occurred during the month, up by 6 percent from 50,000 sales in September. Conventional loan applications accounted...(read more)

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Mutual Mortgage Insurance Fund Outperforms for Fourth Year in a Row

Posted To: MND NewsWire

The Federal Housing Administration (FHA) said on Thursday that its Mutual Mortgage Insurance Fund (MMI Fund) exceeded its congressionally mandated minimum reserves in FY2018 for the fourth year in a row. In its 2018 Annual Report to Congress the agency said its Capital Reserve Ratio was 2.76 percent at the end of the year, an 0.58 percentage point increase from FY2017. The Economic Net Worth of the fund was $34.8 billion an increase of more than $8 billion from the previous year. The figure is comprised of Total Capital Resources of $49.24 billion and a negative Cash Flow NPV of -$14.38 billion. FHA is required to maintain reserves to cover estimated losses plus a capital cushion of 2.0 percent of all Insurance-in-Force (IFF). This 'Capital Ratio' is calculated by dividing the Fund's Economic...(read more)

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MBS Day Ahead: Bonds Already Commuting for Thanksgiving?

Posted To: MBS Commentary

Because November 1st was a Thursday, we'll be treated to the earliest possible iteration of Thanksgiving. It's next week, by the way! Why are we talking about such things with respect to financial markets? Simply put, the winter holidays definitely have an impact. The catch is that the these impacts vary, and their timing is uncertain with respect to Thanksgiving (as opposed to late December, when it's always going to be the last 2 weeks of the month followed by the first week of January. What sort of patterns do we see shaping up? Oftentimes, it's simply a consolidation. In other words, yields/prices are in the process of making higher lows and lower highs. Sometimes there's a breakout well before the end of the year, but there are rarely breakouts in late November. The...(read more)

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Profitability and Commission Products; HELOCs, Servicing, Digital...Geocoding Bid Tapes!

Posted To: Pipeline Press

Why is the housing market sluggish despite a solid U.S. economy, solid demographics, and pent-up demand? Those don’t matter if prices are out of reach relative to incomes , and housing appreciation has outpaced income growth for a long time. And lending standards have remained more rigorous than they were during the last housing boom, so it has been harder for people to stretch to buy a home. (Veteran lenders will tell you, however, that not everyone deserves to own a home .) The inability of people to buy homes they can’t really afford is great news in terms of avoiding another crisis or even a bubble, but not so great for the near-term outlook for housing. Lender Services and Products Is your correspondent lending business prepared to grow in 2019? To find out, check out this...(read more)

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MBS RECAP: Bonds Pulled 2 Ways by Stocks and Global Gloominess

Posted To: MBS Commentary

Remember the middle of 2016 when rates managed to make it all the way back in line with all-time lows despite having almost no justification in terms of economic data and policy outlooks? Those low rates were mostly about Brexit . Something about Brexit is utterly captivating for global financial markets. When it first happened, there was a bit of an anticlimactic response, largely due to the time window involved in working out the nuts and bolts. Now more than 2 years later, we're getting into the more serious phases of the process. Markets aren't nearly as rattled as they were in 2016, but shifts in potential Brexit outcomes have nonetheless been relevant market movers this week. In general, they made a case for bond market gains (i.e. lower rates) this morning, and never really reversed...(read more)

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Fannie Mae Offering Relief Programs in Wildfire Areas

Posted To: MND NewsWire

Fannie Mae has expanded the menu of post-disaster services it is offering to its borrowers. The new services are in addition to the up to 12 months of forbearance, waived fees, and temporary foreclosure moratorium that Freddie Mac and Fannie Mae (the GSEs) traditionally offer in the wake of hurricanes, wildfires, and other disasters. A press release from Fannie Mae, probably prompted by the unprecedented destruction and loss of life from wildfires in both the northern and southern parts of California, announces personalized case management services through its Disaster Response Network. The program will provide personalized support "to address safety and basic needs, property repairs, employment, and financial recovery-all of which affect a borrower's ability to meet their mortgage obligations...(read more)

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Lowest Mortgage Rates This Month!

Posted To: Mortgage Rate Watch

Mortgage rates hit their lowest levels of the month today! Sure, that's only 10 business days for the mortgage world, but we'll take every little victory we can get these days. Why is that? Because "these days" have been pretty rough. Exactly one week ago, rates were at their highest levels in nearly 8 years. The assertion about today's rates runs counter to quite a few news stories. Major media outlets are reporting rates as being 'unchanged' this week. That wasn't necessarily incorrect until today. In those cases, reporters are relying on Freddie Mac's weekly survey data. The survey only collects responses from Monday through Wednesday and the results tend to over-represent Monday and Tuesday's rates on any given week. Long story short, as of yesterday, it would have been fair to say rates...(read more)

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Buyers Not Holding Their Breath for Short Term Market Relief

Posted To: MND NewsWire

It ain't going to get any easier... The National Association of Home Builders (NAHB) tells us these cheery words encapsulate the attitude of respondents to its survey regarding home purchasing. The company's Housing Trends Report for the third quarter of the year found that seven out of 10 of prospective homeowners think that shopping for a house is either going to get harder or stay about the same. The report focuses on the 13 percent of survey respondents defined as prospective homebuyers, that is persons planning on purchasing within the next year. This percentage was 24 percent in the fourth quarter of 2017 and has declined steadily since. Among Millennials surveyed, 19 percent had short term purchase plans as did 13 percent of Gen Xers. Only 7 percent of Baby Boomers and 3 percent of seniors...(read more)

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MBS Day Ahead: Brexit Strikes Back

Posted To: MBS Commentary

Ah Brexit... You thought you'd heard the last of it back in 2016? No such luck. Actually, it is a bit lucky to be hearing about it, at least as far as domestic rates are concerned. Both in 2016 and in the past week, Brexit-related developments helped rates move lower. The current iteration of Brexit drama is not anywhere near that of 2016 and neither is the market reaction. That said, there certainly has been a market reaction. Yesterday afternoon, that reaction was noticeable, but barely. The overnight session brought an even bigger move in British currency (Pounds Sterling), and a more direct response in US bond markets. Much like bonds' relationship with stocks, it will take quite a bit of drama in Sterling to motivate additional gains (at least if we're talking about gains that...(read more)

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Accounting, Subservicing, Warehouse Products; Freddie and Fannie Changes Roll On

Posted To: Pipeline Press

With only week until Thanksgiving there’s a lot going on – every one of these stats impacts lenders. CoreLogic tells us that there are 48,390 homes at risk from the current California wildfires. Believe in climate change or not, or in science or not, one study shows 386,000 homes are said to be at risk in the coming decades due to rising sea levels and coastal flooding. And according to the RV Industry Association, there are now a million Americans living in RVs full time . (Try counting them in the census, figuring out where they vote, where/if they pay taxes, or if 500 KOA Kampgrounds are enough.) Lender Products and Services As of October 2018, 100 mortgage lenders have signed with Loan Vision to utilize its financial management and accounting solution. Martin Kerr, President...(read more)

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MBS RECAP: More Stock Losses Bring More Bond Bounces

Posted To: MBS Commentary

The narrative has grown (remained?) the same for bonds lately. If stocks are losing ground, then it's time to rally . If stocks are stabilizing or recovering, it's time to sell . Today was more of the same in that regard. For the first few hours of the day, yields moved gradually higher despite the inability of core inflation to even meet forecast levels (in its defense, it was really really close!). But when stocks began losing ground in a fairly convincing way, bonds began to improve. Stock losses were compounded by headlines surrounding the Brexit process, where there was apparently some drama today regarding Theresa May's cabinet and its ability to agree on the current draft proposal. After a few conflicting reports, it finally came out that there was sufficient agreement. British...(read more)

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Afternoon Mortgage Rate Improvements For Most Lenders

Posted To: Mortgage Rate Watch

Mortgage rates began the day in roughly unchanged territory. Some lenders were microscopically stronger or weaker compared to yesterday, but not enough to impact the average mortgage borrower. For the first few hours of the day, it looked as if rates would stay unchanged or possibly move slightly higher. That all changed when stocks began losing ground. It's always worth remembering (and this will be especially true when the next time it's proven) that there's no magic rule that says stock prices and interest rates must move in the same direction. It is true that there are frequent examples of such correlation, but there are plenty of other examples where the correlation complete breaks down. All that to say that stock losses helped rates today, but will not always necessarily help rates in...(read more)

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Joe Sanchez
Terra Linda Realty
Ph: 909-931-1307Fax:909-803-9840
400 North Mountain Ave., Suite 223
Upland, CA 91786 US
BRE License # 01201910
www.terralindarealty.com
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