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Weekly Mortgage Update

Good afternoon ,

The LA market is heating up just like the California sun and summer is kicking off with a bang.With this weeks rate update I am excited to touch on RPM Mortgage’s Service-Retained Bridge Loan. This new product exclusively offered by RPM is the answer a lot of current homeowner’s prayers! Many of our clients want to buy another home but need the equity in their exit property in order to place a down payment on the next home they’ll purchase. So what do they do? 

 

RPM’S bridge loan is the answer! With a competitive rate of 2.99% (7.64% APR) your client would borrow against their current home’s equity (up to 70% cumulative loan to value) to help fund the down payment on their new home. There are no monthly payments, just ONE payment due upon the sale of their old home!  As the mortgage consultant on the clients new mortgage, I will provide exceptional service to ensure that the process is as smooth and seamless as possible which means the client will get into their new home while rates are low and can also take advantage of prices as they continue to rise before having sold their old property.  

 

 

Please contact me for details if this program fits your client’s needs!

 

This week’s noteworthy news….

Housing starts slumped 16.5%, the most since February 2011, to an 853,000 annualized rate after a revised 1.02 million pace in March.   Building permits increased 14.3% to a 1.02 million annualized rate in April, the highest level since June 2008, exceeding the median forecast of 941,000.

 

Consumer Price Index decreased 0.4%, the biggest decrease since December 2008, after falling 0.2% in March.  the Core Rate ex food and energy increased 0.1%, less than projected.  Cheaper fuel costs are helping consumers overcome the burden of higher taxes and anemic wage gains by freeing up extra cash to spend elsewhere. Apart from receding energy expenses, subdued gains in the price of other goods and services give officials at the Federal Reserve latitude to adjust policy should they decide the economy needs more monetary stimulus

 

Initial jobless claims increased by 32,000 to a seasonally adjusted 360,000 in the week ended May 11, the largest one-week gain in new benefit requests since November 2012. The prior week’s level was revised up by 5,000. The four-week moving average of claims, which smoothes week-to-week volatility, increased by 1,250 to 339,250. Continuing claims decreased by 4,000 to 3,009,000 in the week ended May 4.

 

Philadelphia Fed manufacturing index of current activity  decreased from 1.3 in April to -5.2 this month, and has shown no pattern of sustained growth over the past seven months.

 

What’s happening in the markets:

Recently a number of mortgage industry insiders have pointed to the reduction in real estate litigation as a sign that equilibrium may finally be upon us…..but, ‘not so fast,’ says Ballard Spahr in their Mortgage Litigation Update for this week. They conclude that while the total number may be drifting down, it still is very high compared to historical analysis. They write, “From an overall standpoint, the index shows that 2012 was a huge year for mortgage litigation. The total number of reported cases for the year¯934¯represented a 15 percent increase over 2011.Fortunately, in the latter half of 2012, total litigation numbers gradually eased down from the all-time high we saw in the second quarter of 2012. The total number of cases reported in the fourth quarter¯223¯was about 5 percent less than the preceding quarter, and 15 percent less than the record set in the second quarter of 2012.” Anyone interested is furthering their knowledge of mortgage related litigation should check out their industry related webinar on May 17th , 12-1 PM EDT, by registering here: http://info.ballardspahr.com/Reaction/RSGenPage.asp?RSID=nTrL37-8dY0bt2M0gQX46CZBxn-36H7ipHgYbehFpBA&RS_REFERRSID=nTrL37-8dY0bt2M0gQX46Eq-eV1ZbhKrm6YNRhiwukU&RS_REFERRSTYPE=NEWUSER&RS_ORIGRSID=nTrL37-8dY0bt2M0gQX46Eq-eV1ZbhKrm6YNRhiwukU.

 

Thank you so much for your continued support through the referral of your new and existing clientele for refinance and purchase business.  I look forward to supporting each of your businesses this coming week!

 

Your trusted mortgage advisor,

 

Ubaldo 

 

Weekly mortgage update

Good morning ,

As a quick note, I’d like to announce that the down payment requirement fro our foreign national program has changed from 50% to 40% down.  Keep in mind that the down may also consist of a combination of both actual down payment funds and pledged assets.  Pledged asset are when a client is able to take a loan out against funds they have at a financial institution without liquidating(cashing out) those funds.  The lender simply places a lien on those funds.  The benefit to the client is that these pledged funds can continue to grow and make money for the client plus the client avoids tax implications of liquidating certain types of accounts.  Please feel free to reach out with any questions you may have about this program or any others.

 

This week’s noteworthy news….

Non-Farm Payrolls grew by 165,000 in April following a revised 138,000 increase in March that was larger than first estimated.   The unemployment rate, at 7.5%, changed little in April but has declined by 0.4 percentage point since January.   The Labor Department also significantly revised up job totals for the two prior months, by a combined 114,000. The economy added 138,000 jobs in March, compared with the initially reported 88,000.  Average hourly earnings rose 1.9% from a year earlier to $23.87.   The workweek shrank to 34.4 hours for all U.S. employees on average from 34.6 hours in March.

Institute for Supply Management’s non-manufacturing index declined to 53.1 last month from 54.4 in March.    ”The NMI™ registered 53.1 percent in April, 1.3 percentage points lower than the 54.4 percent registered in March. This indicates continued growth at a slightly slower rate in the non-manufacturing sector. The Non-Manufacturing Business Activity Index registered 55 percent, which is 1.5 percentage points lower than the 56.5 percent reported in March, reflecting growth for the 45th consecutive month. The New Orders Index decreased by 0.1 percentage point to 54.5 percent, and the Employment Index decreased 1.3 percentage points to 52 percent, indicating growth in employment for the ninth consecutive month. The Prices Index decreased 4.7 percentage points to 51.2 percent, indicating prices increased at a slower rate in April when compared to March. According to the NMI™, 14 non-manufacturing industries reported growth in April. Respondents’ comments remain mostly positive about business conditions. Cost management and revenue pressures are areas of concern for many of the respective companies.”

FHFA Gears Up for Single GSE Securitization Platform.  A key objective of the Federal Housing Finance Agency is to execute various risk transfer transactions aimed at reducing the enterprises’ footprint in housing finance.

 

Thank you so much for your continued support through the referral of your friends, family y and collegues for refinance and purchase loans.  I look forward to supporting each of you this coming week!

 

Your trusted mortgage advisor,

 

Ubaldo

Weekly mortgage Update

 

Good morning,

Hopefully this week’s blog post finds you basking in the glow of the spring sunshine.  I am often asked by clients why some real estate agents have a better success in obtaining accepted offers than others when, for the most part, all agents will have both well qualified and not so well qualified clientele at any given point in time. So all things being considered equal, why do some agents always end up the bride and others the bridesmaid?  The answer is quite simple.  In a market like this we must be prepared to move quickly to submit an offer immediately after a client has decided to move forward with a property.  My more successful agents have already ensured that the clients are fully preapproved AND most importantly they email both the purchase price and offer amount to me immediately so that I am able to write the preapproval letter quickly and accurately.  Speed and preparation are the key here, take advantage of your trusted mortgage professional and give yourself the leg up over the competition.

 

This weeks noteworthy news:

 

Treasuries Show Inflation Expectations at Three-Month Low, and as Jobless claims uptick before Payrolls report tomorrow.  The 10yr UST is up 8/32 to yield 1.788%, and FNMA 3.0% is up 6+/32, and 3.5% up 3+/32.  Also a surprise to the bond Market, Japan’s central bank is pulling out the stops to fight deflation with aggressive easing measures unveiled Thursday.

Job Market Still U.S. Economy’s Wild Card   As the U.S. economy picks up steam, the job market remains a question mark.  The Employment report due out tomorrow is expected to show employers added 195,000 workers to payrolls in March after 236,000 the month before, according to the median forecasts, and the jobless rate is projected to hold at 7.7%.

Fed’s Lockhart Won’t Rule Out Tapering QE3 This Summer   Atlanta Fed President Lockhart said he “wouldn’t totally rule out” a tapering of the Fed’s quantitative easing in the summer. But said that “we need a few more months of really solid data and evidence that the recovery is moving ahead.”

Flaws Cited in Foreclosure Review   A federal watchdog is faulting U.S. bank regulators for a flawed review of foreclosure documents, saying the agencies didn’t establish consistent procedures or adequately monitor the consulting firms performing the work.

 

What’s happening in the markets:

Bond markets were off to the races yesterday morning, and fortunately for us they were racing in the right direction!!  Rates look phenomenal at the moment which is a much welcomed reprieve from the previous 2.09% showing on the 10-yr yield.  The culprit for these fantastic rates?  ADP’s weaker-than-expected jobs data moved markets and the ISM number gave an extra push for the better.  North Korea nervousness, rallied prices and encouraged better buying in lower coupon MBS. Volume shot up above normal as the 10-yr hit its lowest yields of the year and Fannie 3% security prices went back to where they were a month ago. By the end of the day current coupon (impacting rate sheets) MBS prices were better by .250 in price, and the 10-yr closed at 1.81%.  Today we see the trend continuing as the 10-yr is down to 1.76%.  The rally is on!

Thank you for your continued support through the constant referral of your friends and family for refinance and purchase loans.  I look forward to supporting each of you this coming week!

 

Your trusted mortgage professional,

Ubaldo

 

 

Weekly mortgage update

Good afternoon ,

 

I hope this week’s rate blog finds you enjoying the spring sunshine!  For this week’s “hot tip topic” I’d like to discuss deposits on personal bank statements.  It is a well known fact that for many years, lenders have required the last two months of personal bank statements as required documentation for approval of a mortgage loan( Note…business bank statements are not a required part of the loan package  unless fund to close are coming from the business and even then deposits are not required to be sourced for business funds.)  Since 2009 on FHA loans and around 2011 on the conventional conforming side of lending, lenders have asked that we “source” deposits on bank statements that are non- payroll deposits in excess of 400.00.  To source a deposit merely means to explain where is came from and provide supporting documentation such as an image of the check for that deposit.  Being a little taken aback by the requests, realtors and clients alike sometimes ask “what does it matter, money is money?”

Most people would argue that this is big banks playing big brother but the answer, and this is something easily explained to clientele, is simple.  If large deposits were borrowed (meaning that the person taking the loan out would be required to pay them back,) this would have a potentially huge impact on their ability to make the mortgage payments as they, post close of escrow, would not only need to pay back the borrowed funds but would also need to make the mortgage payment.   All in all this is simply another set of checks and balances to ensure that clients are not stretching themselves too thin on the quest for a piece of the American dream.

 

This week’s noteworthy news…

Consumer Price index rose 0.7% in February, driven higher by gas prices, the first increase in four months, the biggest jump since June 2009, and higher than the expected consensus of 0.5%.   The gasoline index alone surged 9.1%, which accounted for nearly three-fourths of the gain. Overall energy prices climbed 5.4% after declining the previous three months. The core rate, excluding the volatile food and energy sectors, increased 0.2%. Shelter costs, which account for nearly a third of the overall index, climbed 0.2%.

Industrial Production rose 0.7% in February, more than forecast and the most in three months,  as factories turned out more business equipment and motor vehicles.  , indicating showing manufacturing is helping boost the economy.   January production was unchanged, revised from a previously reported 0.1% drop. Capacity utilization rate for total industry increased to 79.6%, a rate that is 0.6 percentage point below its long-run (1972–2012) average.

The Federal Reserve Bank of New York’s general economic index eased to 9.2, from 10 in February. Readings greater than zero signal expansion in New York, northern New Jersey and southern Connecticut.

The Thomson Reuters/University of Michigan preliminary sentiment index for March fell to 71.8, the lowest level since December 2011, from 77.6 in February. The gauge was projected to increase to 78.

 

Freddie Mac:  Mortgage Rates up on Signs of Improving Economy.  For the week ended Thursday, the 30-year fixed-rate mortgage averaged 3.63%, a six month high; the 15-year fixed-rate mortgages averaged 2.79%, versus 2.76% a week earlier;  Five-year Treasury-indexed hybrid ARMs averaged 2.61%, compared with 2.63% the previous week.  “The economy added 236,000 new workers in February, which helped push down the unemployment rate to 7.7%,” Freddie Mac Chief Economist Frank Nothaft noted. “This helped offset the effects of the payroll tax holiday expiration and led to a 1.1% increase in retail sales, which was well above the market consensus forecast.”

 

What’s happening in the markets?…..

Mortgage rates sure are not doing much although we’ve seen about an eighth of a percent worse in rates this week on the positive economic news.  The 10-year note reached a whopping 2.05%, mortgage-backed securities barely budged (thank god.)

Today we’ve had Initial Claims, expected at +350k from +340k, went from a revised +342k to +332k and the February Producer Price Index, expected at +0.7%, core at +0.2%, came in at exactly that! But rates have crept slightly higher since February so advise your clients to lock in if they can, the 10-yr is at 2.00% and MBS prices are roughly flat for the day.

 

As always, thank you for your continued support through the constant referral of your friends and family for refinance and purchase business.  I look forward to supporting each of you this coming week!!

 

Your trusted mortgage professional,

 

Ubaldo

Weekly Mortgage Update

Good morning,

March is upon us!!! Did you know that on this day in 1872 Yellowstone became the world’s very first National Park?　 Spring is just around the corner and all of us worker bee’s have begun buzzing around in preparation.　 Realtors have begun prepping their listings for the summer rush and my CPAs/ Business managers are hard at work preparing for tax season.　 This week I wanted to touch on a topic that many of you may or may not be familiar with, Financing a Flipped Property.　 You real estate agent whether you are buying or selling should always check the chain of title to a property and notify your lender if the property has been flipped within 90 days of its previous sale date.　 Many lenders will not finance a property IF a property has been flipped within 90 days AND had realized more than a 20% increase in value within that time.　 Given the current market environment where investors have once again begun to step into the marketplace, we are coming across this type of flip more and more frequently.　 RPM’s track record of providing investors with solid loan portfolios has given us an edge over other lenders.　 RPM mortgage does have the ability to finance these flipped properties with more than a 20% increase in value in.　 Simply put, we’ll need a second appraisal to verify the value and we’re good to go.　 We will also need to lock the loan with the appropriate investor so…letting us know about the flip ahead of time will save everyone the headache of re-organizing things later in an escrow when the fact eventually does surface(and it always does.)   Here’s to another smooth closing!

This week’s noteworthy news:

Construction spending unexpectedly fell 2.1% in January following the biggest back-to-back gain in a year, reflecting a slump in nonresidential and government projects. 　　Upwards revisions for December and November showed gains of 1.1% and 1.9% respectively, the best performance since the same two months in 2011. 　Private non-residential building was depressed by a plunge in construction of power plants, while public outlays dropped to the lowest level since November 2006 as government agencies face budget strains.

Personal incomes dropped 3.6% in January, weaker than the 　expected a 2.5% decline. Personal-consumption expenditures rose 0.2%, a measure of purchases ranging from cars and clothes to health care and travel. Consumers cut back on big-ticket items but spent more on services. When inflation is factored in, consumer spending rose 0.1%.

Michigan Consumer Sentiment Index Rose to 77.6 in February from 73.8 at the end of the previous month. The index is now at its highest level since November.　 The current conditions index increased to 89.0 from a preliminary reading of 88.0. The expectations index rose to 70.2 from 68.7.　 The one-year inflation expectations reading stayed steady at 3.3% at the end of February. The inflation expectations covering the next five to 10 years remained at 3.0%.

Hawk or Dove? Depends on Where You’re Standing 　The difference between Fed hawks and doves may be the result of more than just personality or ideology: The economic health of a particular Fed president’s district may be influencing their stance on Fed policy, according to an analysis by Citigroup economists Nathan Sheets and Robert Sockin.

Labor Department’s Layoffs Report Could Become Victim of Sequester 　　The “sequester” spending cuts could cause hundreds of thousands of layoffs across the U.S., economists say. But, in a twist, the cuts will also impede the government’s ability to count for those layoffs.

Freddie Mac Posts $11 Billion Profit 　　Freddie Mac, buoyed by the housing market’s rebound and an improving economy, reported an $11 billion annual profit for 2012 on Thursday—its largest ever annual gain.

The return of interest-only mortgages; These loans promise low monthly payments, but plenty of risks

What’s happening in the markets…..

This morning we learned that Personal Income for the month of January was way down by 3.6% and that Personal Consumption/Spending was @.2% even though last month was revised slightly down.　 On this news the bond market continues its rally and the ten year yield is down to 1.84%.　 This means that rates are down roughly .125% from last week.　 Analysts speculate that the downward trend will not last as the Ten Year Yield is expected to rise significantly by years end.

As always, thank you for your unwavering support through the constant referral of your friends and family for refinance and purchase loans.

I look forward to supporting each of you!　 Have a fantastic weekend!

Your Trusted Mortgage Advisor,

Ubaldo

Weekly mortgage Update

 

Good morning,

I sincerely hope that each of you have been productive this week as we work through the end of February.  Thank you to those of you who sent the Birthday wishes my way yesterday, I am grateful to work with such wonderful clients so thank you!  This week’s rate blog post is all about TAXES!  As many of you know, business managers and CPAs alike are working diligently to prepare their clients for this year’s tax season.  Remember to remind your friend and family that IF they plan on refinancing and/or purchasing a property, they will need to utilize the services of an experienced  CPA who has an in-depth knowledge of the ins and outs of qualifying for a mortgage loan.  We are fortunate enough to work closely with CPAs who are well versed in this very subject.  If you need to be connected with one of these individuals, please do not hesitate to let us know.

This week’s noteworthy news….

 

NAR: January Existing-Home Sales Hold, increasing 0.4% in January , with Steady Price Gains, Seller’s Market Developing.  “Buyer traffic is continuing to pick up, while seller traffic is holding steady,” he said. “In fact, buyer traffic is 40 percent above a year ago, so there is plenty of demand but insufficient inventory to improve sales more strongly. We’ve transitioned into a seller’s market in much of the country.”  Total housing inventory at the end of January fell 4.9 percent to 1.74 million existing homes available for sale, which represents a 4.2-month supply 2 at the current sales pace, down from 4.5 months in December, and is the lowest housing supply since April 2005 when it was also 4.2.

Consumer Price Index was unchanged in January, Core CPI Rate increased 0.3%. Over the last 12 months, the all items index increased 1.6% before seasonal adjustment. The index for all items less food and energy increased 0.3 percent in January. This increase offset another decline in the gasoline index and resulted in the seasonally adjusted all items index being unchanged, as it was last month. Increases in the indexes for shelter and apparel accounted for much of the increase in the index for all items less food and energy, with advances in the indexes for recreation, medical care, and airline fares also contributing. The energy index fell 1.7% in January.

Leading Economic Indicators Rose 0.2% in January from a 0.5% rise in December.  Six of the 10 indicators in the leading index contributed to the increase, led by stock prices and the interest-rate spread between the federal funds rate and 10-year Treasury notes.

Fed Signals Possible Slowing of QE Amid Debate Over Risks.  At the December meeting, Fed officials were “approximately evenly divided” between those favoring a mid-2013 end to purchases and those advocating a later date.  “Several others argued that the potential costs of reducing or ending asset purchases too soon were also significant, or that asset purchases should continue until a substantial improvement in the labor-market outlook had occurred,” the minutes showed

Treasuries Advance as Inflation Trails Fed Target.  The 10yr UST is +10/32 to yield 1.97%, and FNMA 3.0% are + 6/32 and 3.5% +4/32 as of 11:22 AM.  

 

What’s Happening in the markets?….

 

Today we’ve already had weekly Jobless Claims (expected at 355k from 341k, they were up 20k to 362k from a revised 342k) and the Consumer Price Index which was unchanged. For anyone looking for a little inflation, the core rate (ex-food and energy) was +.3%, slightly more than expected. Later we’ll have more housing news with Existing Home Sales (4.9 million versus 4.94 million), but also Januarys Leading Indicators (+0.3 percent from +0.5 percent previously), and February’s Philly Fed Index (+1.0 compared to -5.8 in January). In the early going, our risk-free 10-yr T-note, which closed Wednesday at 2.02%, is sitting around 1.96%, and agency MBS prices are better by about .125.

 

As always, thank you for your unwavering support through the continued referral of your friends and family for refinance and purchase loans.  I look forward to supporting each of you this coming week!

 

Your trusted advisor(who is slightly older than he was last week,)

 

 

Ubaldo

Weekly mortgage Update

Good morning , 

I hope this weeks blog post finds you thriving in this competitive real estate market.  I’ve had a few of my agents refer to this market as a boxing match to get an excepted offer followed by the American Gladiator obstacle course in a race to close escrow.  LOL.  It’s been a while since I threw one of my “interesting facts” your way so here goes….Did you know that Disneyland does not sell chewing gum?  Walt Disney did not want his guests inconvenienced by stepping on gum purchased at the park.  What a thoughtful man, nothing puts you in an instant bad mood like stepping in gum and that should never happen at “The Happiest Place on Earth!” 

Getting down to business, this week I’d like to discuss a few changes to FHA loans that are on the horizon for all of us. Many of my clients are preapproved using this amazing finance tool and so sharing this knowledge with them and all of you will most certainly make  difference your timeline for purchasing a home with an FHA loan.  HUD(the Government entity that controls the FHA loan programs) has released a statement informing us of an increase in the annual/monthly mortgage insurance due on all FHA loans.  Depending on the loan amount and down payment, the Mortgage insurance rates for FHA loans will increase by .05%-.10% for all loans with FHA case numbers assigned after April 1st, 2013.  Please inform any of your friend and family who plan on utilizing this low down payment program as soon as possible so we are able to get them in escrow under the current lower mortgage insurance rates.  It is important to note that even with the increase in the mortgage insurance premiums, FHA rates continue to be extremely low which is why they are such an excellent tool for our clientele.

 

What’s happening in the markets?…..

 

Jobless Claims fell 5,000 to 366,000 in the week ended Feb. 2, with four-week moving average, a less- volatile measure, fell to 350,500, the lowest since March 2008, from 352,750. The average reflects a plunge to 330,000 in initial claims two weeks ago that reflected difficulty in adjusting the data from the holidays and the start of a quarter.  Continuing claims rose by 8,000 to 3.22 million in the week ended Jan. 26.

Productivity of workers fell 2.0% in 4Q12 by the most in almost two years, and after a 3.2% gain in 3Q, Unit labor Costs increased 4.5%, higher than forecast, a sign businesses are near the limit of how much efficiency they can wring from employees.    Expenses per worker climbed at a 4.5% rate after falling 2.3% in the third quarter.

Treasuries Remain Lower on U.S. Weekly Jobless Claims.  The Fed will also be buying as much as $1.75 billion of Treasuries due from February 2036 to November 2042 today. The 10yr UST is up 8+/32 to yield 1.93% as of 10:44AM EST, and FNMA 3.0% are +4+/32, and FN 3.5% are up 3/32.

 

As for rates, they continue to float in limbo as yesterday the Congressional Budget Office (CBO) said that growth in the US will slow due to large government spending cuts coupled with new tax increases in 2013.  The Gross Domestic Product (GDP) is expected to rise by a meager 1.4% this year – clearly not enough to lower the Unemployment Rate, which is estimated to remain near 7.9% in 2013.  This may bode well for mortgage rates as the FED has stated in earlier announcements that they will continue to purchase MBS(Mortgage Backed Securities) until the unemployment rate reaches approximately 6.5%.  In the early going today the 10-yr is sitting around 1.95% which is slightly better than yesterdays close.

 

As always, thank you so much for your continued support through the referral of your friends and family for refinance and purchase loans.  I sincerely look forward to supporting each of you this coming week.

your trusted advisor,

 

Ubaldo

 

Weekly Mortgage Update

 

Good Morning,

I hope this Mortgage Update finds you well as we close out the month of January(My how the month flew by!)　 This was an extremely busy week for economic news, one that will hopefully provide the recently rising mortgage rates some relief.　 Yesterday the minutes from their most recent two day Federal Reserve meeting were released.　 The FED announced that they will continue to purchase mortgage backed securities at a rate of $85 Billion Dollars per month!　 Following the announcement we witnessed a slight improvement to mortgage coupons but the 10-year treasury yield(which mortgage rates closely follow) continues to hover above the 2% mark which leaves mortgage rates about .125% higher than last week.　 To give you a frame of reference as to how the markets have turned, the 10- year was at 1.72% in September just a few months ago.

The U.S. economy shrank .0.1% in the fourth quarter of last year which was mostly attributed to weather (hurricane sandy) however the FED remains committed to the economic recovery so perhaps we’ll see investors follow the FED’S commitment towards mortgage backed securities and we’ll in turn experience a slight lull in rates.　 Don’t expect that to last though as rates are expected to rise through the end of the year heading into 2014.

This week’s noteworthy News:

Personal Income jumped 2.6% in December, and Personal Spending rose 0.2%, following a 0.4% gain in Nov.　　 Higher incomes in November and December was in part attributed to accelerated and special dividend payments to persons for irregular pay in private wages and salaries in anticipation of changes in individual income tax rates.

Employment Cost Index 　Increased 0.5% in 4Q12. Wages and salaries, which make up about 70% of compensation costs, increased 0.3%. Benefits, which make up the remaining 30% of compensation, increased 0.6%.　 　

ISM Chicago Business Barometer accelerated 5.6 to 55.6, the highest since April 2012.The advance came amid broad gains in Production, New Orders, and Employment. Five of seven business barometer indexes gained, but inconsistent with the expansionary theme were declines in Supplier Deliveries and Prices Paid.

Treasuries Erase Gains on U.S. Manufacturing Report.　 The 10yr UST price is unchanged to yield 1.99% as of 10:44AM, and FNMA 3.0% are down 1/32, 3.5% unchanged.

FOMC Statement:

“The Committee decided to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that this exceptionally low range for the federal funds rate will be appropriate at least as long as the unemployment rate remains above 6-1/2 percent, inflation between one and two years ahead is projected to be no more than a half percentage point above the Committee’s 2 percent longer-run goal.”　　 “The Committee expects that, with appropriate policy accommodation, economic growth will proceed at a moderate pace and the unemployment rate will gradually decline.”　　 Fed officials said that economic activity had “paused in recent months,” largely because of weather and temporary factors. “The Committee will closely monitor incoming information on economic and financial developments in coming months. If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until such improvement is achieved in a context of price stability. In determining the size, pace, and composition of its asset purchases, the Committee will, as always, take appropriate account of the likely efficacy and costs of such purchases.”　　　 “The Committee will continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month.”

Bernanke Dissatisfied With Growth Will Press on With Pace of QE.　

As always; thank you for our continued support through the referral of your friends and family for refinance and new home purchase loans.　 I look forward to supporting each of you this coming week!

Your Trusted Advisor,

Ubaldo

Weekly mortgage update

Good morning,

Happy New Year!!!!  This is the first blog of 2013 and before I just jump into things, I want to take a moment to thank you for all your support in 2012.  Because of your support we had the most profitable year ever and were able to put more clients in news homes than we had initially forecast.  You did that and my staff and I at RPM Mortgage are eternally grateful!!

Now that we have that out of the way…let’s jump feet first into 2013!!  Did you know that the word, “hippopotomonstrosesquipedaliophobia” means “the fear of long words”?  Don’t know why I wanted to throw that in there but just challenge yourself to pronounce that!

Last week we learned that the Federal Reserve will most likely discontinue their purchase of over $85 billion dollars in bonds each month known as QE3.  QE3 is what has been keeping mortgage rates artificially low and the “phase-out” is slated for mid to late 2013.  What does this mean for mortgage rates?

Upon hearing the announcement, many investors pulled back and as a result the 10 year treasury yield (which mortgage rates often mirror) rose.  As a result, we saw an increase of about .125%-.25% in interest depending on the investor and this is a clear indicator that once these programs end, unless the FED comes up with another plan, rates are likely to rise slightly and slowly through the middle to the end of the year.  This is an important piece of information for those who have been waiting to purchase property or refinance.

 

What’s happening in the markets?…..

 

MBA Weekly Mortgage Applications Survey:  The Market Composite Index increased 11.7%,  Refinance Index increased 12%, and the Purchase Index increased 10%.   The refinance share remained constant at 82%, the ARM share was unchanged at 3%, and the HARP share of refinance applications decreased to 25% from 27%.   The average 30-year fixed-rate for conforming increased to 3.61% from 3.52%, and Jumbo loan rates increased to 3.78%  from 3.75%.

Treasuries Little Changed Before $21 Billion Note Sale. the 10yr UST is down 1/32 in price to yield 1.86% as of 10:44AM, and FNMA 3.0% are down 1+/32, FNMA 3.5% are down 00+/32.

Fed Officials ‘Cautiously Optimistic’ About Growth.

Fed’s Lacker Warns of Damage Over Debt Ceiling Debate   Richmond Fed President Lacker said it would be damaging to the economy if it starts to look like Congress won’t raise the debt limit before the Treasury runs out of room to borrow.

The States of Foreclosure.  Housing prices stabilize when lenders can enforce contracts.  “the difference between “nonjudicial” states that have streamlined foreclosure procedures and the 23 “judicial” states that force lenders to go to court to enforce mortgage contracts. Prices are stabilizing in the former but still faltering in much of the latter, which isn’t surprising, except to politicians.”  The state foreclosure protections

 

By Monday’s end 10-year T-notes (which lost over 1-1/2 points last week) improved about .125 and closed at 1.90%.  Today we have another lack of scheduled economic news, although we do have the Treasury’s auction of $32 billion in 3-year notes at 1:00 p.m. ahead of $24 billion more in 10-year notes and 30-year bonds over Wednesday and Thursday. So far the 10-yr is slightly better at 1.88% and MBS prices are a shade better than Monday’s close.

As always, thank you for your continued support through the constant referral of your friends and family for refinance and purchase loans.  Please let me know if there’s anything that I can do to support your businesses going into 2013 and I will gladly do so!

I look forward to hear from you this coming week!

 

Your trusted mortgage advisor,

 

Ubaldo 


Weekly Mortgage Update


Good morning and Happy Holidays!!!!!  This weeks entry  will be the final of the year, wow 2012 just flew right by! In writing my business plan for 2013, I’ve had the opportunity to reflect on the blessings bestowed upon me in 2012.  Because of your support my team has funded many many millions of dollars in loan volume this year, my client base has almost doubled and most exciting of all I am blessed with having opened my own branch of RPM mortgage.  Without support from each of you, I would not be where I am today.  I am humbled by your support and am eternally grateful.  I wish nothing but the ultimate in joy and happiness for each of you and your families this Holiday Season!!

 

In other news….given the fact that during this weeks meeting, my talented, and extremely thorough, agents at Engel & Volkers had questions regarding the rules regarding CO detectors and exactly what the appraisers are looking for; I did some digging around and here is what I came up with:  

“Based on the information from the state of California requires:

For minimum security, a CO Alarm should be centrally located outside of each separate sleeping

area in the immediate vicinity of the bedrooms. The Alarm should be located at least 6 inches

(152mm) from all exterior walls and at least 3 feet (0.9 meters) from supply or return vents.

Building standards applicable to new construction are as follows (overview summary only):

Section R315 et seq. of the 2010 edition California Residential Code (CRC) [effective Jan. 1,

2011] (applicable to new one-to-two family dwellings and townhouses not more than 3 stories

and also where work requiring a permit for alterations, repairs or additions exceeding one

thousand dollars in existing dwellings units):

Installed outside of each separate sleeping area in the immediate vicinity of the bedroom(s) in

dwelling units and on every level including basements within which fuel-fired appliances are

installed and in dwelling units that have attached garages.

Section 420 et seq of the 2010 edition California Building Code (CBC) [effective Jan. 1, 2011]

(applicable to other new dwelling units and also where a permit is required for alterations,

repairs or additions exceeding $1,000 in existing dwelling units):

Installed outside of each separate sleeping area in the immediate vicinity of the bedroom(s) in

dwelling units and on every level including basements within which fuel-fired appliances are

installed and in dwelling units that have attached garages.

 

The bottom line is that ALL SINGLE FAMILY residential dwelling units as of July 1, 2011

must have a CO detector, even those that are not being sold. All other dwelling units (large multifamily,

dormitories, hotels, motels, etc) must have CO detectors installed by January 1, 2013.

Expect to see this new inspection item in the home inspection report. Home inspectors

will be required to report on the presence or absence of a working Carbon Monoxide detector just

like they report on Smoke Detectors, and water heater strapping.

 

Of course if you have questions regarding this topic or are in need of additional assistance, please let me know.

 

What’s happening in the markets:

Initial Jobless Claims Rose 17k to 361,000 in week ending 12/15/12. The four-week moving average of claims, a less-volatile measure, declined to 367,750, the lowest since the end of October, from 381,500. Continuing claims rose by 12,000 to 3.23 million in the week ended Dec. 8.

November Existing-Home Sales Increase 5.9% to a 3 year high and Prices Maintain Uptrend. rate from a downwardly revised 4.76 million in October.  Existing home sales are 14.5%  higher year over year, and are at the highest level since November 2009.  Lawrence Yun , NAR chief economist, said there is healthy market demand. “Momentum continues to build in the housing market from growing jobs and a bursting out of household formation,” he said. “With lower rental vacancy rates and rising rents, combined with still historically favorable affordability conditions, more people are buying homes. Areas impacted by Hurricane Sandy show storm-related disruptions but overall activity in the Northeast is up, offset by gains in unaffected areas.”   The national median existing-home price for all housing types was $180,600 in November, up 10.1%  from November 2011, the  ninth consecutive monthly year-over-year price gain.

Philadelphia Fed Current Activity Index increased to 8.1 in December from a reading of ‑10.7 in November, and the highest reading since April.   The demand for manufactured goods picked up: the new orders index increased 15 points, from ‑4.6 in November to 10.7 this month. The current shipments index also improved notably, rising by 25 points. Labor market conditions at the reporting firms improved marginally this month.

Treasuries Remain Higher on Cliff Concern Before GDP Data.  The 10yr UST us up 5+/32 to yield 1.787% and FNMA 3.0% are up 2+/32, 3.5% are up 1+/32 as of 10:44AM.

Fannie, Freddie Losses in Libor Case May Top $3 Billion    Fannie Mae and Freddie Mac may have lost more than $3 billion as a result of banks’ alleged manipulation of a key interest rate, an FHFA watchdog report said.

 

As always, than you for your continued support through the referral of your friends and family for refinance and purchase loans.  I look forward to supporting each of your businesses through the remainder of 2012 and as we push forward into the New Year!!!!

 

Your trusted Mortgage professional, 

 

Ubaldo 


“I am impelled, not to squeak like a grateful and apologetic mouse, but to roar like a lion out of pride in my profession.” John Steinbeck

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