Rates
Last Friday, we saw rates dip to 2014 loans, based on economic news coming out of Europe, and some economic news that wasn’t so good about the US economy:
New home sales 458K vs est. of 472K
Consumer Sentiment 88.8 vs est. of 90.0
Chicago PMI 60.8 vs est. of 63.0
Weekly Jobless claims 313K vs est. of 288K, 1st time over 300K in a while.
With that economic news, and a short trading week, rates rose to their best levels of 2014, with conventional rates dipping into the high 3’s and government rates, FHA, VA, RD, hitting the mid 3’s.
But this week was a different tune, as traders look over the numbers cumulating with today’s AWESOME unemployment report.
ISM manufacturing 58.7 vs est. of 58, close enough
November Construction spending 1.1% vs es.t of -0.6%
ADP private payroll 208K vs est. 221K Still positive
ISM non-manufacturing 59.3 vs est. 57.5
Weekly jobless claims 297K vs est. of 295K, back under 300K\
Then the big boy, Non-Farm payroll 321K vs est. of 230K, so almost 100K more people employed than was expected.
Ouch, that number sent stock rallying and bonds to sell off, taking our mortgage rates out of the 2014 lows and into their standard trading rage of the low 4’s for conventional and high 3’s for Government loans.
Don’t get me wrong, we are still having some of the lowest rates of 2014, just not the bottom.
Next week, early part of the week has nothing coming out, but Thursday and Friday, lots of economic news, along with Inflation news.
Inflation is bad for bonds, and causes interest rates to jump, but with gas prices going lower, there is some fear of deflation.
Lock them when you can, gambling on the floating may pay off, but not too much in the way of big rate drops.
QE4??
QE is the program where as the Federal Reserve was buying bonds to keep interest rates low, but they quit buying bonds in October after buying almost $4 TRILLION.
Well it was thought that the Fed would quit buying bonds, and rates would continue to go up. But hang on!!!
The Fed is now saying that as a bond is being paid off, they will re-invest that money back into bonds.
So the Fed is actually buying roughly $1BILLION per week in bonds, STILL!
This could continue to keep rates low for the foreseeable future or at very least prevent them from running up quickly!
HUD/HFA
Housing limits for 2015 were announced last week, for the most part all of Idaho home price limits will be $417,000.00
Anything over $417,000 in loan amount will be considered a Jumbo Loan.
And just Today, FHA announced that loan limits for FHA will stay at $271,070 for Single Family Resident in Idaho, most counties, other than Teton & Blaine.
House Resolution 2994
This will be a bill to follow for the next 3 weeks, this bill will allow the Mortgage Debt Relief Act of 2007 to be extended again.
This original law prevents the IRS from assessing Income Tax on debt forgiven as a result of a foreclosure or short sale deficiency.
Right now, the old law expired 12/31/2013, so anyone who FC or SS a home in 2014, and the bank wrote off the deficiency, will have to pay tax on that money.
Example: Owed $100,000 on the mortgage, Short Sale it for $80,000, there is a $20,000 deficiency. XYZ bank wrote off that $20,000 and sent the borrower a 1099 for $20,000.
Right now, borrower will have to pay tax on that $20,000. OUCH!
Looks like the Senate isn’t too keen on passing it, being Democratic controlled, and the President is threatening a VETO.
Fannie Mae guidelines changes
Although stuff changes on a daily basis, one of note is on Cash Out conventional refinances, Fannie is going to limit to from 85% to 80% loan to value.
Lead Generator
Go back into your files of past clients who you helped purchase a home and see if they have Private Mortgage Insurance. This will be on line 1003 of the HUD-1.
Now I am sure you have kept all of your HUD-1’s for the last 5 years, because that is the IREC requirements, right…
Anyways, if they have that MI, and it has been longer than 24 months, or it is getting close, this would be a GREAT time to:
-Contact them.
-Remind them about their Mortgage insurance
-Offer to do a FREE CMA to get the estimated value.
-Ask for referrals!
You can also utilize this web link which explains the MI and how to remove it:
http://www.375loan.com/resources/removing_mortgage_insurance/
What better way to get back in touch with old clients and ask for referrals!