Rates
Weeks like this make you want to start drinking…
Rates made HUGE swings this week, we say rates down to 3.50% and all the way up to 4.125% on conventional financing.
When all the dust settled, conventional ended in the high 3’s, WOW yes you heard me right we are sitting in the 3.875% range this week.
Government loans, VA/FHA/RD also swung, and now looks like we settled in the mid 3’s, yep 3’s!!!!
I will try to make a little sense of this, but basically it was all about Europe and Ebola this week, not the US economy.
First it was a short week, no trading on Monday due to the holiday.
Tuesday got hit by Retail Sales in the US, down 0.2% vs. est of +0.3%, quite a broad swing, and had people and investors scratching their heads.
But this was pretty much the only bad US economic news this week:
-Producer Inflation at 1.8%, very weak number, good for us!
-Business Inventories 0.2% vs est. of 0.4%, not too bad.
-Weekly jobless claims 264,000 vs est. of 290,000, LOWEST number since 2000!
-Philly Fed Survey 20.7 vs est. of 20.0, still positive.
-Housing starts 1.017M vs est. 1.10M
-Building permits 1.018M vs est. 1.030M Both building numbers were nice!
-Consumer Sentiment 86.4 vs. est. 84.1 VERY strong.
US economy is doing quite strong, plus oil prices have really come down meaning gas prices are coming down, so bodes well for US consumers.
But lets talk Europe:
-Germany investor confidence down.
-UK inflation dropping
-Russian economy dropping, mainly due to Oil prices.
-There is quite a bit of concern about EU going back into Recession, while many believe the Germany, the largest EU economy, is already in a recession.
Let’s take Germany, currently the German Bund (Bond) 10 year is paying .81%, so Germany can sell their debt, and an investor can make a .81% profit on it. While here in the US, the US Bond 10 year, is trading 2.20%, so investors can make 2.20% return.
Doesn’t take too much education to determine where you want to invest, thus lots of EU banks are dumping EU stocks and Bonds to invest in the US.
Now lets talk Wednesday, Dow dropped 400 points and the 10 year bond dipped to almost 2.00%, thus mortgage rates dropped significantly, I even saw some lenders dip rates back to 2013 lows!
Now Ebola news.
Traders are becoming more and more concern with the Ebola news and the total mess out of Dallas. Currently it looks like we have 3 confirmed cased in the US with over 100+ people on watch.
Talking heads figure that this is still a manageable number, but, if cased start to double, as they have we went from 1 case to 2-3 cases in < 7 days, more and more people will be taking their money out of Stocks and shoving dollars into mattresses and gold.
Mortgage Bonds are way over bought since Wednesday and have hit a ceiling of resistance, so looks like some stability for a while, but all it is going to do is take 2-3 more cases of Ebola in the US and more bad economic news, say out of China, and EU and we could take the bonds down another notch, which will take rates into the low 3’s!!!
Lock them if you have to, gambling might pay off right now.
Realtors and RESPA section 8
CFPB is really starting to come down on Section 8 violations from Title companies and Realtors.
And I am seeing Realtors (just last week) that are advertising to their past clients that they will give them a $100 gift card for referrals.
I would HIGHLY recommend that you consult your Broker if you are deciding to do any type of promotion, the fines are HUGE!
FHA and interest day.
Typically on a FHA loan, when a borrower was refinancing or seller was selling the home, FHA, no matter if you closed the 1st day of the month or the last day of the month, would collect 30 days of interest.
So typically Realtors told clients to close at the end of the month.
Well the CFPB say “Hang on there” and indicate that this could be a Prepayment Penalty! Which is illegal under the Frank Dodd Act.
The final rule is expected to come out November, so next month, and anticipating the rule change to start early in 2015!
Good Faith Estimate is dying!
Time to say Good Buy to the GFE and TIL and Hello to LE & CD!
Yep, the new Loan Estimate form will be released on 8/1/2015 and the new CD or Closing Disclosure will be released 8/1/2015.
We did confirm, that the CD will have to be given to the borrower 3 business days BEFORE they can sign the closing documents, and if there is something wrong with the documents or the CD, new ones will have to be disclosed.
And then you may have to wait up to 6 days before you can sign, 3 days for the LE to be disclosed and then an additional 3 days for the CD to be disclosed.
Anyway, no more same day funding’s!
More info and training classes coming!!