Rates
Well, someday you just don’t know which way is up.
All week there has been a bunch of talk and speculation regarding unemployment numbers, the estimate was around 200,000.
Which would be a great number for employment.
Wednesday rolled around, and the largest payroll firm ADP announced private payroll increased by 238,000 last month on their estimate of 200,000.
So traders headed into Friday, very negative for rates that the unemployment would be even higher than the 200,000 with the whisper number in the 220,000 range.
And then the bomb shell dropped, the economy only created 74,000. This was a huge miss, and the bond traders were caught off guard.
What makes this more of a miss, is that November numbers were revised from 203,000 upwards to 241,000.
So the MBS are currently trading up 84 BPS, which technically should of IMPROVED rates by .125 to .25 of a point. But hold on there…..
There seems to be something funky here, and although the bonds are rallying, lenders are very hesitated to improve their rate.
I believe they are going to give it a day or so, maybe Tuesday, and see if this sticks. Typically after a huge rally like this one, the next day has seen the rally fade away.
It was also announced that unemployment rate dropped from 7.0% to 6.7%, but this is totally a joke, because less people participated in the survey, actually the lowest number of people since 1978. Bogus number.
The rest of the economic numbers that came out this week really were meaningless, since the bond traded all week in a very narrow range, and for the most part over the last 2 weeks…which bring me to this.
Rates, since the Fed announced the reduction of QE3, have been not been as volatile (taking today out) as they have been in the previous months. Which indicates to me that although rates are going to continue to move high, maybe not at the pace which they have been.
I am still in the lock mode, today is a blip, and I figure Monday or Tuedsay we will sell off most of this, thus leaving rates where they were yesterday.
QM
Well today is the 1st day of QM…can you hear it…quiet.
If you haven’t been keeping up on QM, too late to tell you about it. Just realize that loan from here on out will be harder to get for borrowers.
But here are a few tips to help you:
1-Get your client approved BEFORE you go looking for homes. And I mean totally approved. Meaning that the loan officer has seen: Tax returns, bank statements, paycheck stubs, credit report, and complete all of the state and federal paperwork.
2-If you clients were approved last quarter, month, week, get the RE-APPROVED.
3-Tell clients to SAVE MONEY, time for a Spam and Top Raman diet. Lenders really like having money in reserves.
4-The days of high Debt To Income ratios are GONE, we are going to be thinking about 43%, so the big McMansion they wanted with the 4 car garage, may have to be scaled down.
5-Have client check their credit report for FREE, even if you are not showing them houses and they are just thinking about buying, have the borrowers go to:
www.annualcreditreport.com
And pull all 3 bureaus, that way there is no surprises when I pull the credit report, and lately, there has been some DINGERS of surprises.
Lead Generator
Ok, here is a VERY easy one, call all your clients which you got homes for in 2013. And ask them if they filed their Home Owner’s Exemption form with their local Assessor.
AND
Remind them it is time for them to pull their Free Annual Credit Report, to check up on their credit.
AND
Ask them if they have any friends or family member you may be able to help.
OR for you chickens afraid to cold call, it is really not cold calling, you already know them. Type up a nice letter and insert some business cards!