Rates
Well as expected, rates have been pretty flat for the last 2 weeks, with some good jumps up and then settling back down. But that will end on Tuesday 15th, as the Federal Reserve will be meeting Tuesday and Wednesday of next week to discuss the Feds Fund rate.
Vegas has the odds at 77% that the Federal Reserve will raise rates by .25, the first time since 2009.
Remember 2009:
#1: Movie- Avatar
#1: Song-Black Eyed Peas Boom, Boom Pow
#1: News Article: Michael Jackson’s Death
And the Stock Market Crashed and the housing industry collapsed, and we all updated our resumes…ahhh the memories!
It is time to panic again? Well not yet, although the talking heads have indicated that a .25 increase in the Fed Funds rate will slow our economy down, it won’t do it too much, but:
-Home prices will slow down by 1%, so in Ada County, home prices have gone up by 6%, this means home prices will only go up by 5%.
-Mortgage Rates will increase also, I found a GREAT Chart below, that shows the average Federal Reserve Rate compared to the 30-year mortgage rate, and as you can see, they are not 1 to 1 correlation, but trend together.
On the chart I marked what interest rates were at when the Federal Reserve Funds Rate was at .22%, which put mortgage rates at 5.13%. Now this does NOT mean next Wednesday that mortgage rate will be 5%, but it does indicate where mortgage rates will trend to.
VA Changes
The Veterans Administration released new instruction on VA loans, with some changes.
One of the major items is the VA acknowledgement of Same Sex marriages in other states, which state if a borrower marries a person in California, the VA recognizes that on an Idaho Loan application.
Pretty similar to what other lenders have indicated, but for Realtors, PLEASE make sure that you are asking people if they are married, pretty critical, since Idaho is a Community Property state!
Also, VA increased some of their prices they charge for appraisal, Idaho Did NOT change, we are still $450 for the appraisal and $100 for re-inspection.
But what did change is appraisal requirement for completion of the report, Idaho went from 5 business days, to 7 business days, BUSINESS DAYS, which in the mind of the VA is Monday through Friday.
Fannie & Freddie & FICO
A bill the “Credit Score Competition Act of 2015” was introduces this week into the US House. Basically it would allow Fannie & Freddie to utilize other credit scores other than FICO, such as Experian’s “VantageScore” score.
This would help some people, because lenders are still using FICO calculation 5, established quite a few years ago, which the new Credit Score are typically higher.
But, this would mean more paperwork and more documentation, and then Fannie and Freddie could also raise the score requirement.
Hasn’t had a 1st read, but something to follow.
Lead Generator
Well this one is pretty darn simple, Send all of your past clients Christmas card. People are more likely to open Christmas Cards than any other piece of mail they get, and having one from your, wishing them a Merry Christmas and a Happy New year is the right thing to do!!!