Rates!

Well as we all know the Democrates are basically in charge again, so what does this mean for rates.

1st, it means the Mr. Bernake will still be the Fed Chief for another term, which means his policy of keeping rates low until 2014 will not change.

2nd, in early elecdtions results stocks rallied and rates when through the roof because they though Romney was going to win.  Which in the market's estimation, means that the economy would of come back stronger, thus rates would of risen, but....

As Wednesday came around, and Obama won, market sold off and rates fell back down to their lows.

Then also on Wednesday, EU came out and indicated that they are sliding back into a recession (DUH) again. 

So Thrusday and Friday, rates continue to slide, although today we are seeing some selling.

So for the outlook for the next 6-12 months, we feel rates should stay about where they are, especially with Europe back in play.

Inflation is still in check and as long as the unemployment picture is weak, there is no reason for rates to continue to go up, more likely sideways.

But why won't rates go any lower, see my past blog about apples and oranges, but basically because at some point in time rates become too cheap for the risk and bond traders are not going to buy them.

Change is coming:

With the Obama administration still in power, that measn the Consumer Finance Protection Buruea (CFPB) will still be around, thanks to the Frank/Dodd bill.

This means more regulations and more reforms and lots of new forms. 

You can see the new "proposed" forms here:

http://www.consumerfinance.gov/knowbeforeyouowe/

But it looks like these are going to go forward, and cause upto a 1 week delay in all closing, due to the fact that borrowers HAVE to see ALL documents 3 days before they sign, which is not really a bad thing, we just need to put the delay into the expectations.

FHA changes:

FHA is due to announce, at any time, increase in their Up Front Mortgage Insurance and Monthly Mortgage Insurace i.e. Housing Tax.

Expected chages:

Upfront from 1.75% to 2.00%

Monthly from 1.25% to 1.45%

Mortgage Forgiveness Act:

Still no word on an extension, nice of Congress and the President to wait for last minute, here is artilce link HERE for a pretty good CNN report