In This Blog:
Rates continue to go up
MISC info on FHA, COE, Government shutdown?

Rates 

Well another week, and another worsening of rates.

 And November was not real good month for rates, with an over ½ point increase, caused by a 261 BPS loss on Mortgage Back Securities, and just last week we saw rates worsen by .25, so what the heck.

 Well it is again all about the Fed and when it is expected that they will ease their QE3 Bond Buying Program.

 Last week:
ISM manufacturing came in GREAT, 57.3 vs. 55
ADP payroll came in good, 215,000 vs. 173,000 private job growth.
New home sales up 25% 
Weekly Jobless Claims came in at 298,000 vs. 323,000
Non-Farm payroll came in at 200,000 vs. 180,000

 So all economic reports are pointing towards a nice US Recovery, then no need for the Fed to continuing to pump money into Bonds.

 The expectation is the Fed will start easing QE3 in February, March at the latest.  So keep in mind, when they do, we will jump SIGNIFICANTLY in rates.

 Repeat after me:  “6% is not a bad rate”

 Today and Late Friday, we say some slight improvement in rates, typical after such a long ride of selling.  But this week, we have a light front end of the week, but Thursday and Friday we have economic reports that once again could move rate.

 Again, we are telling people to lock, and lock as soon as you can.  There might be minor days where you can play the market and maybe improve a rate by .125%.  But I think you have a better chance of winning the Powerball, than getting that 1/8 of a point.

 IHA 2^nd Mortgage

 If you are not using IHA for a majority of your loans, if not all of your loans, you are truly missing out.

 IHA did change their program beginning 12/1/2013 on their 2^nd mortgages.  Typically they were a 30 year fix mortgage.  So people were getting 3% 2^nd mortgages for down payments.  But the amount were so loan, IHA decided to take all of their 2^nd mortgage and reduce them from a 30 year mortgage to a 10 year mortgage.

 Not a huge change, and I reviewed my last 5 loans where I and a IHA 2^nd, and it really didn’t make a huge difference in their payment.

 Government Shutdown

 Well a couple of months ago, the government kicked the can down the road.  And now they are coming to that can.

 Budget for the USA is due 1/15/2014, yep, just over 30 days, and they are no closer to getting a budget now than when they were before.

 So, just FYI, be on the lookout for another Government Shutdown, and although it didn’t affect mortgage and home closing too much, make your clients aware.

 Home Owner’s Exemption

 FYI, 2014 HOE is $83,920.00, up from $81K.  But people are still going to be mad, because assessed values are going up, way up in 2014.

 FHA loan limits

 On January 1^st, FHA will reduce their loan limits from $729,750.00 to $625,500.00.  Not going to make a HUGE difference in any of our loans around here but here is some food for thought.

 Do we really need to have such a high loan limit for a FHA loan???