Rates
Well Holy Cow! Europe went on Vacation (Holiday for them) and rates jumped more in 1 week then they have in over 2 years. Will it sustain? Let's look at the numbers.
If we just look at US Economic numbers, then yes, rates should be going up, over the last week:
Consumer inflation has been kept in check according to the CPI and PPI.
Jobless claims were flat once again.
Building permits were the highest since August 2008.
Homebuilder confidence is highest in 2 years.
So with all of this news, and nothing coming out of Europe, rates, which were overbought, sold off,
You can see by the above chart of the 10 year bond, that we bottomoe out, last week of July at 1.40%, and then from there, the Bond has shot up, and so did Mortgage Rate.
Europe has not been in the picture, and there has been some chatter from that Germany is now willing to play along with a bail out of the PIIGS. And if that is the case, then Europe may be out of play in the case of Bonds, which will cause US Rates to increase.
Now how much will they increase is anyone questions, the Federal Reserve has indicated that they plan on keeping rates low until 2014. But how low?
Well, Having rates down to the 3.25% may be a thing of the past, currently rates have increased to the 3.50% mark, and if we see the Bond market continue to climb, I think we will see rates stabilize in the 3.75% range, so just under the 4.00% mark.
If rate continue to go further, there is talk that the Federal Reserve will step in and push rates down or atleast stabilize them.
Our advise to clients right now is LOCK them at application and don't look back. Who can complain if there is a 3 in your interest rate?!
Rural Development
Big changes in just over 30 days for RD.
The biggest for us is that Kuna will lose their RD status and will not be able to have any more RD loans close in their geographical area.
2nd change is that RD's monthly Mortgage Insurance rate is going to go up from .30 to .40%.
We just received and email today from RD that has indicated that if you don't have your file in by September 1 for underwriting, don't bother submitting under the old rules.
Consumer Finance Protection Bureau
If you haven't heard of these people, you soon will. This is a new agency that was created by the Frank-Dodd Bill and signed into law last year.
They are going to have a major impact in the coming months our mortgage and real estate. Some items that they are changing:
-New GFE and TIL forms.
-New rules on Appraisal
-New rules on Fees
-New Rules on disclosures
-New rules on licensing
After they get done with us, it will be nearly impossible to get anything done.
Stay tuned for more!