Rates took a Breather:

Well this week rates took a little breather, pretty much ended this week where they started.  Lets look at some of the economic numbers which helped us.

-NY state manufacturing data increase to a 15.43 from a 11.92, anything over 0 is good news, but we are really needing this number into the 20's.

-Business inventories rose to .8%, better than expected, which shows us businesses are purchasing more and keeping it.

-January PPI measure of inflation was at expectations, still now inflation at the producer level, but watch out, I think next month could be more interesting.  And inflation is going to be the topple of good interest rates.

So over all, the economic news was pretty positive this week, except for the unemployment weekly numbers, those were quite a bit higher than expected, but it was anticipated that this was mainly due to weather.

So the outlook for interest rates is for them to keep their slow climb up, I still suspect low to mid 5's by spring and mid to high 5's be end of summer.

Good Housing News:

We are starting to see some good numbers come out of housing, and on of the more positive ones, that really didn't get much attention was the Forclosure rate, it has actually dropped 10%, down to 8.5%, which is almost, almost back to where the Foreclosure rate was before the Great Depression, but not to the levels it was in 2004-2006.

This means less FC homes on the market, which will decrease inventory!

The next good news of the week was January housing starts, expected to be up 2.4%, was actually up 14.6%.  This means more builders are having a postivie outlook towards spring.  But what it also tells me is that lenders are more willing to pony up the dough for spec homes.

There was 4727 active in MLS with 1238 pending listing, now lets do the math, that would be a total of 5965 listing and 21% of those are sold.  That is a pretty good number.

Spoke with a listing agent this week, had a listing, on the market 15 days, priced right, and over the last weekend she got 4 offers and got into a bidding war.  WOW never thought I would say a bidding war again for real estate.

High end lots, getting scarce out there, builders are scambling for lots and they are going to have to develope.

Things are looking up!!!

Lending Changes

FHA taxing home buyers!  If you had heard, FHA will increase thier monthly MI from .90 to 1.15% on April 18, 2011.  This means if you don't have an address and a FHA case number BEFORE 4/15/2011, you will pay about $21 more per month for every $100,000 you borrow with FHA.

April 1st will also be a significant change affecting all lenders, banks, lenders, brokers.  The new lender compensation rule will go into affect.  How will this affect the industry?

The basic rule is this, a lender who accepts anytype of funds from a borrower, in the way of a origination fee, doc prep fee, processing fee, etc.. CAN NOT accept any other type of fee from the lender or other parties.

So this means that most lenders will not charge the borrower any fee, and you might think, well cool.  BUT NO, this means the lender will be charging a higher interst rate to make up that fee.

2nd, a lender in no way, can credit the borrower anytype of fee, so no more "lender" or "broker" credits at closing.  So lets say that the borrower has to come in with $300, and is unable to come up with that money.  Well normally I would just give a "Broker's Credit" for that $300 to get this person into their home, I call that customer service.

Well beginning 4/1/11, that is not possible, there is no way for the lender to give anytype of credit on the HUD.

Now @ 1st Choice, we feel that it should be the clients decision, so unlike what most lenders have commented, we will offer each client multiple options, and will ALWAY try to be the lowest rate.  Because when it really comes down to it, it should ALWAYS be about the rate.