Rates
Well up until today rates had been on a nice stable swing to lowest since June. All caused by the government’s ability to no do anything.
Let’s review this week:
The biggest news came out on Wednesday, when the Federal Reserve indicated that it will be some time before they decide to remove the QE3, which has kept rates down so low for so long of time.
There was even some speculation that because of the government shutdown and the economy slowing down that the Fed would increase QE3 from their existing $85B to $90B per month, but that didn’t pan out.
So the talking heads feel that the Fed isn’t going to do anything until atleast March 2014, and some feel that if economic numbers don’t pick up it could be noting until June 2014.
So for all those people that sat on the fence post, and then cried when rates almost ticked up to 5%, now would be a good time to get off the fence, because even though rates are not going up, we are still seeing home prices rise!
Also this week we saw some negative numbers, like Pending Home Sales coming in at a -6.2%, which was way below expectations.
Retail sales expectation was 0.1% increase, came in at -0.1%.
Inflation at the Consumer level and the Producer level also were flat (Inflation keeping low is what is also keeping rates low, if inflation raised it ugly head, rates will go higher with our with out the Fed’s help)
Consumer Confidence slipped from 75.0 to 71.2 (50 is the PAR). Showing that consumers may pull back in spending.
But over the last 2 days, we have seen 2 reports that are giving investors some pause, Chicago PMI, came in at 65.9 on an est. of 55.00. And ISM Manufacturing came in at a 56.4 vs. est. of 55.0.
Both of these report are showing growth in the economy, thus negative for mortgage rates.
I believe these are just small blips, because the Big economic news will come out next week, when Unemployment numbers will be released.
For those faint of heart, we are at some of our best pricing since June, lock it. For those gamblers next week unemployment numbers will move the markets!
Farm Bill
We should be all watching Congress and they try to tackle the latest Farm Bill, the first reason is due to Rural Development.
Although Kuna and Rigby have been reprieved until 1/15/2014 in allowing RD loans to be completed in these areas, it could be a short one.
The Farm bill would allow RD loan to be carried out in these cities until 2020 census is finalized, which would be nice.
The 2nd area of concern is more personal, Farm Subsidies for milk go away 1/1/2014, which means a gallon of milk would go up to around $8.00 a gallon. OUCH!!
Title
In my last class, we discussed how important it is to make sure before you list a home and before you buy a home to get a Title Report.
Typically we have seen people selling homes who think they have the right to sell the home, but don’t.
Well another issue has arisen in the last 30 days, that probably had some title company people and Realtors concerned for their licenses and E & O insurance.
Link here to the lady who purchased ½ of a house in Nampa:
http://www.ktvb.com/news/Woman-who-bought-half-a-house-gets-help-230147941.html
I am pretty sure if someone had looked at the title report and the plat map, a lot of heart ache could have been avoided.
Answer to questions from my last class:
My last CE class had a couple of questions that needed answered, here they are:
1-If a person has not claimed a tax credit in the last 3 years of their tax returns, are they a 1st home buyer:
In this situation, because they currently "own" a home, they would not be qualified as a 1st time home buyer, typically IHA does not come across this, but on the 1003 loan application, the question on there is: "Have you had an ownership interest in a property in the last three years?". Saying "NO" to this question, but really having a house, is a HUD violation and "...any misrepresentation that was made on this application, and/or in criminal penalties including but not limited to, fines or imprisonment or both under the provision of Title 18 United States Code, Sec. 1001, et sq"
2-Will the QM affect some who is older getting a 30 year mortgage:
The answer is no, that would be a violation of ECOA. But the QM will require that income and repayment ability at the time of application be considered. Thus the fix income individual could be denied for a high price home purchase price or denied overall because their fixed income does not meet the QM requirements.
QM
Latest Update on the QM:
Quite a few Groups, ABA, NAMB, NAR have filed briefs, letters with the CFPB asking for changes to the QM and the QRM mortgage mess that is going to go into affect 1/10/2013.
With just a little over 2 months left for this mess to get started, these changes that have been requested are going to be tough to get through