Inflation Expectations Distorted by Bullish Perspectives of Reality

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Posted To: MBS Commentary

Inflation is always and everywhere a monetary phenomenon" - Milton Friedman Milton Friedman's statement theorizes that the source of all inflation is a sustained period of high growth rates in the money supply. Appropriately, Friedman's hypothesis implies inflation can be prevented by consistently reducing the growth rate of money supply. The key assumption in this theory is SUSTAINED periods of high money supply growth rates. Meaning high levels of inflation can only occur if money supply is being continually increased. This theory carries weight no matter the school of economic thought you subscribe to... Plain and Simple: The Fed has drastically increased money supply in the banking system. This expansionary policy, if continued, will ultimately lead to high levels of inflation. This is...(read more)

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Source: www.mortgagenewsdaily.com

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Mortgage Rates: Best Execution Back to 5.00%

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Posted To: Mortgage Rate Watch

The Best Execution conventional 30-year fixed mortgage rate rose today. UPDATED CURRENT MARKET : The "Best Execution" conventional 30-year fixed mortgage rate is now 5.00%. For those looking to buy down their rate to 4.875%, this quote carries higher closing costs but the permanent buydown fee is not overly expensive. The upfront cost of permanently buying down your rate to 4.875% is worth it to applicants who plan to hold their new mortgage for longer than the next 5 years. Ask your loan officer to run a breakeven analysis on any origination points they might require to cover permanent float down fees. On FHA/VA 30 year fixed "Best Execution" is still 4.75%. 15 year fixed conventional loans are best priced at 4.25%. Five year ARMS are best priced at 3.625%. PREVIOUS GUIDANCE : If your lock...(read more)

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The Future of HARP; Reverse Mortgages Cut by Wells Wholesale; Farmland Price Bubble; HSBC Suspends Foreclosures; Project Bravo

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Posted To: Pipeline Press

Merrill Lynch/BofA's analysts took a look at HARP, and whether or not it should be extended. The FHFA has a number of choices regarding HARP. "We see the following four broad choices for FHFA regarding HARP: Let the program expire, extend the program as is until the HAMP expiration date (December, 2012) with some minor operational adjustments, extend the program for a short period (6 months) and require lenders to demonstrate that they have taken action to improve the effectiveness of the program before they extend it for longer (another 1 year), or extend and expand the program as recommended by MBA." Merrill evaluated each of the options and looked at the key drivers for each of these choices. "We think that the simple extension is the most likely scenario but from the policy perspective...(read more)

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Mortgage Rates: Stalled Positive Progress

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Posted To: Mortgage Rate Watch

It was another volatile day in the mortgage market. Don't let that distort your perspective of reality though. When looking at the behavior of mortgage rates on a longer timeline, loan pricing has steadily improved over the past two/three-weeks. But positive progress has officially stalled out and now we're bouncing around a relatively tight range. We've gone sideways..... The session started with lenders offering improved loan pricing vs. yesterday's quotes, but as the day wore on mortgage-backed securities prices slowly slipped lower and lower. This forced many lenders to reprice for the worse. The damage was minimal though. For the most part closing costs barely budged. The Best Execution 30-year fixed was unchanged. CURRENT MARKET : The "Best Execution" conventional 30 year fixed mortgage...(read more)

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MBS RECAP: Losses Recovered. Reprices Reported

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Posted To: MBS Commentary

MBSonMND : MBS RECAP Open MBSonMND Dashboard FNMA 3.5 94-19 : +0-04 FNMA 4.0 98-22 : +0-04 FNMA 4.5 101-31+ :+0-03 FNMA 5.0 104-24 : +0-02 GNMA 3.5 95-09 : +0-01 GNMA 4.0 100-04 : +0-04 GNMA 4.5 103-08 : +0-02 GNMA 5.0 106-05 : +0-01 FHLMC 3.5 94-11 : +0-02 FHLMC 4.0 98-15 : +0-02 FHLMC 4.5 101-28 : +0-03 FHLMC 5.0 104-20 : +0-01 Pricing as of 4:03 PM EST Afternoon Market Updates A recap of MBS Market Updates provided by MND Analysts and streamed live to the MBSonMND Dashboard . 4:00PM : MBS End Session Near Best Levels. Fast$ Drives Price Action Benchmark interest rates moved higher in the overnight trading session as stocks rallied around the world. That didn't last long though. Bonds reversed course following a rush of data and news at 10am. Although the directional move was initially met...(read more)

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Mortgage Rates: Unchanged After Late Day Reprices

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Posted To: Mortgage Rate Watch

It was an exciting day in the bond market. Early in the trading session, the environment looked unfriendly for mortgage rates. Stocks were rallying and the first round of rate sheets released by lenders were worse than yesterday's. But then the tide turned after a rush of economic data and headline news events flashed at 10:00am. Stocks soon lost steam and the major indexes fell. This helped mortgage rates benefit from another investor "flight to safety" into the bond market. and gave lenders a chance to reprice for the better, which wiped out early morning losses and left loan pricing basically unchanged vs. quotes yesterday. Best Execution didn't budge and in most cases, closing costs didn't either. A "flight to safety" happens when investors are nervous about owning risky assets like stocks...(read more)

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Mortgage Rates: Flight to Safety Put to Test

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Posted To: Mortgage Rate Watch

This week begins with mortgage rates holding onto recent improvements. Last week, we discussed how a "flight to safety" helped drive up investor demand for bonds, which ultimately led to lower mortgage rates. The Best Execution conventional 30-year fixed rate moved down twice during the week. READ MORE. SEE CHART CURRENT MARKET : The "Best Execution" conventional 30 year fixed mortgage rate has fallen to 4.875%. For those looking to buy down their rate to 4.75%, this quote carries higher closing costs. The upfront cost of permanently buying down your rate to 4.75% is not worth it to many applicants. We would generally advise the permanent floatdown if you plan to hold your new mortgage for longer than the next 10 years. Ask your loan officer to run a breakeven analysis on any origination points...(read more)

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