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Mortgage Rates Remain the Same for the Week Ending December 13th 
The Conventional 30 year fixed rate remained the same for the week at 4.500%. This rate would be available for a borrower who has excellent credit (credit score of 740 or greater) and could be obtained with little or no points if you make the right size of down payment.

The Conventional 15 year fixed rate remained the same, as well, at 3.500%, assuming the same parameters as mentioned above.

SHOULD I LOCK OR FLOAT?
We are seeing increased volatility in the mortgage market, so, unless you are truly a Riverboat Gambler, I would suggest that you play it safe at the moment. Things may improve next week, but at the moment, I think you should take the money and run. Lock it in!

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Tough Week for Mortgage Rates, So Far 
There has been a lot of upward pressure on interest rates this week. One of the reasons was yesterday's “guesstimate” of Q3 Gross Domestic Product by the Commerce Department. The headline data showed the economy grew at a 3.6% pace during June through August, exceeding the consensus estimate of 3.0%. We would have to go back to the first quarter of 2012 to find something similar. Economic growth generally increases the overall demand for cash which typically pushes all interest rates higher.

The data shows businesses accumulated $116.5 billion worth of inventories, the largest increase since the first quarter of 1998. Expectations were that inventories would grow by a much more modest $86 billion. Inventory growth was amazing last quarter, regardless of how you break it down. Unfortunately, domestic demand rose a very modest 1.8%.

Strong inventory accumulation in the face of slow domestic demand means businesses will be working off their high inventory levels for an extended period of time. Future GDP growth will probably weaken noticeably – dragging job creation lower as it goes.

This morning's Non-farm Payroll figure came in right on the money, but the Unemployment rate droped to 7.0%. You probably know that I think that calculation is flawed, at best. The mortgage market took an early hit, but have started to recover. We'll see if can sustain the rally.

[ add comment ] ( 367 views )   |  permalink  |   ( 3 / 1987 )
Interest Rates for the Thanksgiving Week 
This will be the last blog until December 2nd, due to the Holiday. I want to wish everyone a wonderful and safe Thanksgiving.

The Conventional 30 year fixed rate remained the same for the shortened week at 4.375%. This rate would be available for a borrower who has excellent credit (credit score of 740 or greater) and could be obtained with little or no points if you make the right size of down payment.

The Conventional 15 year fixed rate remained the same, as well, at 3.375%, assuming the same parameters as mentioned above.

SHOULD I LOCK OR FLOAT?
There is some concern that we will see increased volatility in the market. I would say it's about 50/50 to lock or float. If you are not risk averse, then go ahead and float your rate. If you are more conservative, then lock it in.

[ add comment ] ( 2026 views )   |  permalink  |   ( 3 / 1902 )
End of Week Interest Rate Review 
There was some choppiness in the mortgage market this week, but not much overall movement.

The Conventional 30 year fixed rate remained the same at 4.375%. This rate would be available for a borrower who has excellent credit (credit score of 740 or greater) and could be obtained with little or no points if you make the right size of down payment.

The Conventional 15 year fixed rate remained at 3.375%, assuming the same parameters as mentioned above.

SHOULD I LOCK OR FLOAT?
It is relatively safe to float your rate today, but there is still some risk involved. If you are not risk averse, you could choose to float your rate. If you are more conservative, then lock it in. Take the money and run.

[ add comment ] ( 4683 views )   |  permalink  |   ( 3 / 1846 )
$13 Billion is Still a Lot of Money 
A few weeks ago I wrote about JPMorgan Chase, the country's biggest bank, agreeing to a $13 Billion settlement with the Federal Government over selling shoddy mortgagesto investors during the real estate boom. It is expected that the agreement will be signed today.

I find a number of things interesting here, but mainly the distribution of the funds. $4 Billion will go to the Department of Housing and Urban Development (HUD). All well and good, but last week JPMC reached a $5.1 Billion settlement with the Federal Housing Finance Authority (FHFA), $4 Billion of which is part of today's $13 Billion, so instead of the $9.1 Billion JPMC may claim they paid, it is truly only $5.1 Billion. They are being allowed to use $1.5 Billion to write down loan values so they can forgive some borrower debt. Roughly $500 Million (a mere pittance?) would go to lowering borrower's monthly payments, while the remaining $7 Billion would go to various other measures, such as providing low-to-moderate income loans. Is this really now considered a penalty?

There are still 9 other investigations pending, apparently including private litigation over $100 Billion in Mortgage-Backed Securities (MBS). It is rumored that they have set aside $23 Billion as a hedge against any additional losses.

As I write these figures, I'm amazed at how large they are and how ordinary they have become. $1 Billion. It makes me think of Dr. Evil, from the Austin Powers movie, when he says "$1 Million". $1 Billion doesn't even seem like a lot anymore, unless it's yours.

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