Rates
Another week and another roller coaster, this time rates ended an amazing level, LOW!
We started off the week pretty flat, and then Wednesday the Federal Reserve came out with their statements and basically said nothing! They gave no indication on when they will start increasing their Fed Fund rate, which is catching some traders off guard, as most are expecting June.
But now, with inflation so low, and the talk about Deflation creeping up, some talking heads are indicating that the Fed is going to wait until 2016 to start increasing rates.
Then today, we had Greece come out and give the EU the middle finger again, and we saw EU consumer prices slid 0.6%, which is worrying some analyst that the EU is slipping further and further into deflation with recession.
Then later, the UW Q4 GDP came in at 2.6% weaker than the 3.2% expected, and the stock market sold off and the bonds rally.
But what really hit the market was the fact that wages are not increasing, i.e. we don’t have wage inflation, so less money in people’s pockets, thus less for them to spend.
All of these factors left traders worried and they fled to the safety on Bonds, thus causing interest rates to fall.
This week we saw bonds increase by .76 BPS, which should of caused interest rates to lower by .125 to .25. But traders are pretty hesitant because each time we have had a large spike up, there has always been a correction, so rate were kept high this week and into the weekend, I suspect a couple more trading session in the channel that has been established and traders will loosen up rates a little more.
We are seeing a pretty good trading channel.
Next week will be a doozy for rates, lots of stuff happening:
-Personal Income
-ISM Manufacturing
-Factory orders
-ADP Private payroll
-Initial Jobless Claims
-US unemployment numbers
I think the ISA, initial jobless claims and US unemployment will be big market mover, pending any news out of the EU.
There is also some concern that Initial Jobless Claims is going to make a jump due to layoffs in the Oil Fields, which doesn’t bode well for the US economy.
I am locking at these levels, especially with all the volitilty of next week, I suspect huge swimgs and too risky to catch that falling knife.
FHA Mortgage Insurance
GREAT news, as of 1/21/2015 FHA will no longer be collecting a full month of interest on all of their loan, whether you refinance or purchase.
So, if you close on the 20th of the month, FHA will only collect from the 20th to the end of the month!!
Where as in the past FHA has collected a FULL month of interest, no matter when you closed!
This is a major shift, that was brought about by the CFPB indicating that FHA collecting a full month, for a home the borrower doesn’t own, is actually a Prepayment Penality, which his a NO-NO now!
RD
Rural Development is still alive and well in Idaho, with no major changed to maps!
Rural Development did increase their monthly Mortgage Insurance from .40% to .50%.
But Kuna is still RD, atleast until 2020!
See my Web Page with Program Brochure and Maps, Link Here!
Fannie Mae Collateral Underwriting
Haven’t heard about it, well you will now!
Fannie Mae released a new online tool for underwriter to utilize when Underwriting appraisal. It make the appraiser upload their appraisal into FNMA system and it give underwriter additional comps to review that the appraiser may not have put into the appraisal.
This could cause more appraisal to be rejected by underwriters, or underwriter asking for more desk or field reviews or even 2nd appraisal.
Also the appraiser have some extra work on their side as well, with more data.
Moral of this new rule:
-Appraiser are being scrutinized by computer generate models
-Appraiser have more work to do on appraisal
-UW have additional duties
-UW could reject appraisal more often.
Final Verdict: Delays and more appraisal rejections. Link to Fannie Web site here
It is time to Buy? Lead Generator!
In 2008 there were 4643 foreclosed home in Ada & Canyon County.
In 2009 there were 8576, and in 2010 there was 8014.
So for a 3 year time span there were 21,233 foreclosed homes, got my stats from RealtyTrac.
What does that equal in 2015, HOMES!!!
I couldn’t find the stats for 2011 & 2012.
FHA requires 3 years + 1 day out of a foreclosure or short sale to purchase a home with only 3.50% down. Link to FHA Info Here
AND because these people have not owned a home in the last 3 years, they are considered 1st Time Home Buyers, so that means there is downpayment assistance for some people also! Link to Downpayment Assistance Flyer Here
For all of you who helped someone with a short sale or foreclosure, time to give them a call and get them a NEW HOME!
For all of you who didn’t, Contact you AE with Title and have them start getting you lists!