I am returning from a family vacation and will be in the office on Monday the 7th. I will continue with regular blog entries then.
Have a great weekend.
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Morgan released a statement announcing they have a 4th quarter loss of $3.6 billion, due mostly to a $9.4 billion write-down form their investments in mortge backed securities. Now that is a lot of money. They addressed their problem by selling the Chinese Government a 9.9% share of the company for $5 billion. The new CEO, John Mack, blamed the loss on a "small team" of employees that have been fired. Always easy to blame someone that is no longer around.
I find the size of the amounts amazing. Also, Morgan's stock price rose $2 on the news of the cash infusion from China. Interesting as well. The main impact of this news on Main Street is the sames as it has been. Certain high risk mortgage loans have ben drastically changed or eliminated.
The good news is also a recurring theme. There are still many, many programs available and rates are great.
Have a wonderful day.
[ add comment ] | permalink | ( 3 / 2576 )
As I mentioned yesterday, the mortgage market has been changing daily, but one of the most important things associated with mortgage loans has remained very positive. Interest rates have been wonderful. Thirty year fixed rates have been between 6.00% and 6.25% (with 0.00 points) for an extended period of time, and recent activity in the mortgage market suggests that rates will remain very attractive. A borrower can even get a rate of 5.50% by paying an upfront fee (points). Fifteen year fixed rates have been 5.875% for quite some time.
Have a great day.
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We all remember the "Liquidity Crisis" that happened this summer, and some people believe we still have the same problem. My opinion is that there is plenty of liquidity, read money, on Wall Street available to purchase mortgage loans. I think the institutions that would normally buy mortgage backed securities still have the cash, they just don't want to buy them.
This is especially true for Jumbo Loans (loan amounts above $417,000) at the present time. This summer, jumbo rates jumped from 6.75% to 8.00%. Then as the markets calmed, they dropped to 7.00%. Now they have climbed back to roughly 7.5%
All of this information leads me to my point, which is, don't wait and take the risk that the mortgage program which best meets your needs is no longer available or the rate has worsened. If you are looking to make a real estate purchase or refinance a mortgage, NOW is the time.
Have a great day!
[ add comment ] | permalink | ( 3 / 1654 )
The Discount Rate is the rate the Fed charges banks to borrow from the Fed. A 1/2 point decrease in the Discount Rate would have a been a more aggressive move, providing liquidity to the mortgage market and signaling that the Fed wanted to be pro-active.
I have heard some rumors that we may see something very unique from the Fed in the next few days. Stay tuned.
Have a great day.
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