Happy New Year!  Thank you for tuning back into the Weekly Recap.

In this edition we are covering the rising interest rates projected for this year as the Federal Reserve begins to execute their exit strategy.   Currently the Federal Reserve accounts for 73% of the mortgage back securities being purchased from the open market.  Why is this so impactful if they exit the market?  The open market is not purchasing these securities at these lower yields.  In order for the investors in the open market to begin to buy again the yields will increase to attact those investors.  This in return will increase the mortgage rates that current and new home buyers receive.

We are also in the process of a all new look on the mortgage reel which will be user friendly to our viewer and fans.  This is only weeks away so stay tuned. We also have the real estate side of the site coming on live soon also so stay tuned.

Thank you for joining us and please share this with anyone who may find the information valuable.

If you have any questions or need assistance please contact us at info@themortgagereel.com

Post from: The Mortgage Reel - Seattle Real Estate Preferred Correspondent Lender

Seattle Mortgage Reel, Weekly Recap, January 8, 2010

Exciting – Encouraging News!!!

The vote for the $8,000 tax credit extension is in the works.  It is looking very good for approval!!!  If you’re in contract right now because you thought it was going to expire, CLOSE.  No guarantees and interest rates right now are at very low levels. 

Some additional improvements mentioned are a $6,500 tax credit for other primary home purchases, repeat home buyers.  The income limits will hopefully be increased for both single individuals and joint taxpayers. 

More details will follow shortly!!

Are you still waiting for a lower interest rate?

Wall Street took a 249 point dive today, which helped rally the bond market.  Interest rates improved but don’t wait.  If Wall Street has the double dip which many are predicting, this can lower interest rates but don’t forget inflation and the Treasury auctions. 

This week was up and down because of another record Treasury Department auction of $123 Billion worth of securities.  This has been the largest auction this year and higher then the original prediction.  With the Feds purchase program slowly coming to an end, this has the potential to shake up the market instantly.  As you can see if the auctions DO NOT go as planned, interest rates increase!

3 trillion worth of commercial real estate is set to mature in 2010.  Will financial institutions be liquid to refinance?  Extend credit?  Because of the financial crunch, commercial real estate is expected to drop just as residential real estate. 

Media has announced the RECESSION is OVER.  Yes we had increased 3Q earnings but remember we had “Cash for Clunkers” and the “First Time Home Buyer Tax Credit.”  These alone spiked numbers!!  Don’t believe everything media announces!!! 

Unemployment is HUGE and we have not hit the peak as of yet.  Washington State has been allocated the largest amount of funds towards saving and creating more jobs.  We received more then CALIFORNIA!!  Seattle is unique and powerful with the local economy and will stabilize as employers have started to hire. 

www.recovery.gov

If you have questions please ask!!  Refinancing is HOT, Purchasing is HOT!!  We are here to help and assist the local economy!!

More details to follow, for instant updates:  www.twitter.themortgagereel.com

The Mortgage Reel

425.818.2078

info@themortgagereel.com

Post from: The Mortgage Reel - Seattle Real Estate Preferred Correspondent Lender

Seattle Mortgage Reel Weekly October 30, 2009

The housing sector is still showing life as the numbers came in better than expected. 433,000 over the expected 390,000 homes sold in July. Housing inventory now stands at a 7.5 month supply down from the previous report of an 8.8 month supply. However this could be too soon to say recovery is really in play. Contributing to the improvement is the $8,000 tax credit for first time home buyers. Also strategy is in play for many home buyers who recognize the opportunity to take advantage of low interest rates, many of these buyers moved up plans and not wait until 2010. This could affect the first two quarters in the housing numbers moving into 2010, which could appear that housing slowed once again.

Once again we have to enforce to all first time home buyers that the sale is soon to come to an end. November 30, 2009 will be the end of the $8,000 first time home buyer tax credit. A first time home buyer is defined as any person who has not had home ownership in the last three years. This came as a surprise to one of our clients who was not expecting the credit to be available to them.

Treasuries and Bond auctions continue to have a impact on Mortgage Rates on an intraday basis.  A pattern that the short term treasuries have shown that foreign investors are purchasing over 40% of the auctions.  However in the longer term bonds there has not been as much foreign investment as they may be hesitant because of the future of inflation risks which would tie them into a longer term instrument that is not yielding current market rates.

This translates directly to home mortgage interest rates.  As yields climb so to interest rates.  Current and future home owners have to keep this in mind when making a decision weather to refinance or purchase now over waiting until 2010.

Mortgage rates have been ranging from 5.00% to 5.25% over the past week. The floor or better known in the mortgage world as the level of resistance has been 5.00%. Each time rates attempt to pressure lower they have bounced in the opposite direction moving higher. We have had many fans of the www.themortgagereel.com ask if rates will once again drop one more time. The only insight that we can provide which would cause rates to move lower is the possible “double dip recession.” Many economists refer to the current economic cycle as a “W” pattern. This would show our economy at its peak then crashing during the mortgage melt down and financial crisis. Signs of improvement with the stimulus provided by the government and then a second pull back. This pull back is the highly debated on a daily basis. Should it occur investors will look to bonds as a safe haven, past trends show when a massive exodus from stocks occur bonds benefit, directly resulting in lower yields, lower yields translating to lower rates for home owners.

We would not bank on this happening, if it does great for the gamblers out there, but what if it does not and rates continue a slow increase. Are you willing to take that chance with your largest investment and debt? We encourage everyone to be proactive at this point, don’t get into a loan with a pre-payment penalty, if rates fall you can refinance once again. At least limit the exposure you have for higher rates and increase your cash flow for the future.

We will continue to keep you updated. Are you looking for a true mortgage professional? How can we be of service? Local licensed loan originators in Washington with over 17 years of financial experience.

Post from: The Mortgage Reel - Seattle Real Estate Preferred Correspondent Lender

Seattle Mortgage Reel Weekly KickOff, August 28, 2009

Last week the record Treasury auction had mixed results but overall went well.  This improves mortgage rates late in the week.  The following week is pretty mellow for announcements. 

Fed is scheduled to purchase Mortgage Backed Securities (MBS) through the end of the year, they are only purchasing Treasuries through the end of October.  The reason the Fed is buying long-term Treasuries is to maintain the spread between the 30-year Treasury and MBS.  Once the Fed stops buying Treasuries, their yields should rise…and that would force yields on mortgage rates to move up so they can stay competitive and attractive. 

First time home buyers tax credit expires on November 30, 2009 so please do not wait until the last minute.  Currently new compliance laws (Mortgage Disclosures Improvement Act) have started which created mandatory waiting periods during a purchase & refinance transaction.  Allow 45 days to comfortably close on a new home.  A transaction can be close sooner but depending on turn times I would safely plan for 45 days.

Looking for rates to drop one more time this year?  Wall Street has a pull back to show signs of stability and strength.  Dow Jones, Nasdaq, and S &P have not been tested so far and have reached high levels again.  Depending on the confidence on investors we can see one more fall out before the full recovery takes place. 

If this happens money tends to flow out of the stock market and into the bond market.  When the bond market gains ground and strengthens, you will see mortgage rates dip to lower levels.  There are no guarantees this will or will not happen but prepare yourself for a last minute refinance or if you plan on purchasing timing will be very lucky!

If you have more questions please email directly at info@themortgagereel.com or call 425.818.2078.

We continue to post instant updates on twitter!  www.twitter.themortgagereel.com

Thanks!  

Post from: The Mortgage Reel - Seattle Real Estate Preferred Correspondent Lender

Seattle Mortgage Reel Weekly Kick Off August 14, 2009

We apologize for skipping the past week.  New regulations have been released and mandatory trainings have been taking place almost everyday to make sure we follow the new guidelines.  These new changes are going to impact the Home Buyer, Home Owner, Realtor, and Loan Originator. 

The Mortgage Disclosure Improvement Act (MDIA) effective with loan applications taken on and after July 30, 2009!

A quick close on a home loan is non existent in today’s market.  The fastest you can complete a transaction is 19 business days if all is perfect and smooth. 

Here are a few highlights
*  All retail/brokers must comply
*  No application deposits can be taken after initial waiting period (3 or 6 days)
*  Mandatory waiting periods are in place to allow enough time for redisclosure
*  If you are in a purchase contract allow enough time to close
*  Stick with your current lender or the entire process starts over which can lead to multiple extensions
*  If any guideline is broken, the loan will not fund/close!

We will post an example on the website soon.

This week the S&P broke 1000 and the Dow Jones topped 9300.  These are signs that the economy is coming out of a recession.  The unemployment rates are down but usually they do not show signs of improvement until 6 months after recovery. 

A interest rate killer is going to be the sale of treasuries next week.  Just the annoucement alone creates volatility.  The over supply is a sign interest rates might go up so prepare yourself!!

Follow us on twitter for instant updates!
http://www.twitter.themortgagereel.com

Thanks

The Mortgage Reel

Post from: The Mortgage Reel - Seattle Real Estate Preferred Correspondent Lender

Seattle Mortgage Reel Weekly Kick Off August 3, 2009

What is driving mortgage rates?

If you have ever invested in a savings bond or a Certificate of Deposit you had the issue date and a maturity date.   Bonds and Treasuries are very similar.  Year after year we have a period of time most commonly mid year bonds come up for maturity from previous issuance dates.  On the maturity date these bonds come up for auction.  BUT the economy has not been this bad in previous years and keep in mind that our national debt is being financed right now by treasuries and bonds.  Globally we saw two weeks ago China question if the United States would be able to repay the debt issued in these bonds and rates jumped higher.  The Federal reserve continues to print money and has to continue to issue and flood the market with more treasuries and bonds.  In order to attract more buyers for bonds yields are pressured higher.  As yields go up then mortgage rates also follow the same cycle.   10 year bonds are not mortgages, mortgage back securities are the true financial vehicle mortgages are secured by.  Currently the Federal Reserve is purchasing mortgage back securities through both a mix of bonds and treasuries.  

To summarize and make it super simple.  If bond auctions do well in the open market then yields lower and mortgage rates reduce, vice versa, if bonds do not auction well yields go higher and mortgage rates go up.  

Lowest rates since mid May!

Last Thursday and Friday the market rejoiced with some of lowest rates posted since mid May.  Will this last, it may be short lived as we are now entering earnings season for Wall Street.  Investors globally are watching to see if there are signs of improvement to corporate earnings, production, inventory, consumer confidence and most importantly the GDP (Gross Domestic Product).  Beware of lenders promoting rates going lower.  We are facing right now what is called a tough ceiling of resistance.  Each time we approached 4.75% on a 30 year fixed rates bounce higher.  This is where the market has currently called a ceiling.  In a nut shell this is determined by moving averages calculated in days.  For example the 100 day moving average shows rates meeting resistance from moving lower.  

On the housing front…..

First time home buyers continue to be the strength in the housing recovery.  Aided by the $8,000 stimulus tax credit first time home buyers continue to be a force in purchase price points of $350,000 and under.  It is reported from brokers and realtors that there are bidding wars happening in certain areas.  Bidding wars?  It is true but not how it was four years ago.  Today offers come in lower than asking price, but because there are more buyers who are looking for homes in this price range, they may pressure prices higher.  For example a home recently listed at $300,000.  First offer comes in at $270,000, next offer comes in at $280,000, third offer comes in at full price plus closing costs.  This is a realistic scenario first time home buyers face on well priced property!

Tax stimulus, $8,000 at closing?

We have heard this rumored and advertised by agents and lenders alike we had to find out the truth.  We contact the Department of Financial Institutions, FHA, HUD and the IRS.  Each time we inquired what program was available to administer the tax credit to be available at the time of closing.  Currently the State of Washington does not have a program established to provide the money up front.  Some other states have created a program where the funds are gifted until the tax credit is received and then repaid back to the funding program.  If not paid back by home owner, a lien/second mortgage is filed on the home.  

Comically, when we asked a representative about the tax credit he responded, “when was the last time you knew in advance when you would receive your income tax refund after filing for taxes?”  I replied true and laughed.  His next response “exactly, do you really think it is possible to file an amendment, issue the check and have it show up in 45 days or less at closing?”

How to file for a tax credit?

We have posted a downloaded copy of the form needed to file for a tax credit refund.  At this time you will need this form and a copy of your final HUD settlement statement from the closing of your new home to file.  Please click here  for a copy of the form.

Post from: The Mortgage Reel - Seattle Real Estate Preferred Correspondent Lender

Seattle Mortgage Reel, Weekly KickOff, Week of July 17, 2009

China has been a discussion in the media but to what degree are they investing in the United States.  

It was once thought that they were supporting the United States recovery which may be one angle.  Another view is the value of China’s Yuan (currency) compared to the U.S. dollar.  If Chinese Yuan becomes stronger to the U.S. dollar the manufacturing will reduce because of the cost of goods.  By China heavily investing in the United States bond markets and treasuries they are able to devalue their Yuan and increase the strength of the U.S. dollar.  For now this comes as a benefit to the mortgage world as rates should sustain current levels.  

Unemployment numbers due July 2nd, 2009

May reported unemployment at 9.4%, the estimates are pointing to once again a higher rate of 9.6%.  The Obama administration once said that unemployment would hit 8.00% before the turn around, it clear that if the end of the recession is truly near at the closing of summer we will top at 10%.  Will this be the final number, we all can only hope not to hear the number in the teens, more like single digits and falling by the beginning of 2010.

First half of 2009 is in the record books

As money fund managers close out their mid year books and balance sheets we are seeing interest rates moving slightly higher.  Thursday could prove to move the markets with the bad news of unemployment but it may be short lived as the market is closed on Friday in observation of Independence Day.  

Brief recap of last week’s Federal Reserve Announcements

As “Big Ben” Bernanke made his official testimony on the Federal Reserves stance on the current financial outlook, he was quoted for inflation currently being in check.  It appears that they are somewhat confident that inflation will not rear its ugly head until the first half of 2010.  With the possible first interest rate increase since June or 2006 off of the table for now all attention was on the key wording if the Federal Reserve would invest more monies into mortgage back securities.  They remained firm that the current $1.2 trillion currently pledged to purchase mortgage back securities is a financial plan that is working and in effect.  To date 50% of the $1.2 trillion has been used.  To put that into perspective Mortgages are on SALE!

Mortgages on Sale?

Yes that is correct, mortgages are on sale!  Why?  If the Federal Reserves initiative to keep mortgage rates low by heavily investing in mortgage back securities is working, and it is. Then we do have a sale going on.  BUT there is a expiration date to the coupon each home owner is holding, December 30, 2009.  Once the funds are used and if there is not future backing then mortgage will face higher yields driving rates higher.  No matter which way you put the spin on this it is a scenario we must all face.  With that said timing is key.  Prepare for future inflation by adjusting your cash flow, make it manageable to prepare for the higher costs of goods in the near future.  

Happy Independence Day!

Be safe and thankful for the opportunities that we have each day because of freedom!

Post from: The Mortgage Reel - Seattle Real Estate Preferred Correspondent Lender

Seattle Mortgage Reel, Weekly KickOff, June 29, 2009

All eyes on “Big Ben Bernanke”

The much anticipated and speculated two day Federal Reserve meeting is set to being Tuesday, June 23rd.  Every word Ben Bernanke speaks will cause volatility in the markets including mortgages.  It has been highly debated that he will mention increasing the short term interest rates for the first time since June 29, 2006.  For all home owners with Home Equity Lines of Credit beware the beginning of higher rates is now beginning.  

What we are really looking to hear is if the Federal Reserve will allocate more money to fund Mortgage Backed Securities.  

Keep in mind mortgages are really on sale right now.  The Federal Reserves intervention to provide a purchasing vehicle has created a stable platform for mortgages to evolve, take the Federal Reserve out of it and the market will be at FULL PRICE, yes much higher interest rates.  For the last few weeks we have seen interest rates take a jump higher and remained above 5.00%.  Lets look at why this has happened.  Since Memorial Day the market has been in Bond Roll Over season.  Bonds coming to maturity and auctioned off in the open market have not been met with buyers other than the Federal Reserve.  With such a lack of buyers in Long Term bonds yields spiked and along with this spike home loan rates increased.  

Announcements coming from the two day Federal Reserve meeting will be key in bringing interest rates lower, currently the floor of resistance has been set at 5.00%.  This again another point we made many months ago that rates are not going to go below 4.50% and may not be below 5.00% for very long.  Mortgages react adversely to rising rates, the concerns of inflation will not help to sustain low rates.  

Stay tuned for Breaking News updates this week!

We will be posting updates on the reactions of the market and how it affected home loan rates.

Timing will be key.

 If you are looking for a mortgage professional who has the pulse on the market and can offer sound advice for your most valued investment, your home, then please contact us for a free consultation.  We look forward to being of service.

Post from: The Mortgage Reel - Seattle Real Estate Preferred Correspondent Lender

Seattle Mortgage Reel, Weekly KickOff, June 22, 2009

Interest rates move lower, why?

As China re-emerged investing in long term bonds home loan mortgage rates welcomed the investors lowering yields and rates.  China originally questioned the ability of the United States to be able to repay our long term debt.  China is currently holds approximately 37% of the United States national debt.  With such a large stake in our country it was with due diligence they questioned the current administration for their spending.  Now that China is once again investing in the U.S. shows signs of reassurance to the global economies that we are beginning to stabilize.  

Will interest rates fall below 5.00%?

At the current trading levels it will take more days like we saw at the close of market last week for rates to fall lower.  Monday, June 15th,  began with the same positive patterns in monies flowing into the long term bonds however there is a lot of speculation around the outcome of the presidential election in Iran.  With the right political leader in place the United States can benefit from the new relationship which could pressure the price of oil lower for the summer.  Consumer Price Index and the Philadelphia Fed Index due Wednesday and Thursday could bring some volatility in rates being pressured higher.   Keep in mind we lost the high 4.00% rates in a matter of 48 hours and the spike higher continued for 10 trading days.  With the economy in a potential recovery from recession all indications lead to interest rates moving higher. 

What will it take for rates to move even lower?

Economic data coming out week after week show positive signs of the economy in recovery.  What still looms and weighs on the market is the unemployment in the United States.  Initial jobless claims continue the steady rise.  This could be the pressure to keep rates from moving higher.  However as we saw almost two weeks ago if confidence is lost in our long term bonds rates can spike higher quickly.  Investors Foreign and U.S. are looking for higher paying yields which will keep pressure on rates to move higher.  If you are waiting for rates to move below 5.00% you will have to have a stomache for volatility.  A combination of investments in bonds, unemployment  and economic data will have to play back to back to pressure rates lower.  Many economists have already said this would have to now the perfect storm for this to happen.  Higher rates are definitely the forecast for the future.  

Timing, timing, timing will be key!!!!

Are you working with a licensed loan originator who has the knowledge and the tools in place to keep you informed?  Ultimately this could lead to savings of hundreds of dollars a month, thousands a year.  

If you are looking for licensed loan originators we would like to apply for the position.  How can we be of service?

Post from: The Mortgage Reel - Seattle Real Estate Preferred Correspondent Lender

Seattle Mortgage Reel Weekly KickOff, June 15, 2009

Second week of mortgage rates increasing, how high will mortgage rates go and will they come back down?  

A concern that homeowners across the country continue to ask.  Leading economic indicators out this week fueling the fire of the economy recovering, Retail Sales, Consumer Sentiment, Building Permits, Housing Starts all due out with signs of positive momentum.  With the recession predicted to end by the end of the summer season rates are poised for a possible increase.  What is really causing for rates to increase you ask?  Almost on a weekly basis for the next month there are bond roll overs occurring, what is the significance of this?  The Federal Reserve has set aside a massive $1.2 trillion to be used to purchase mortgage back securities, but with the amount of bonds currently coming up for auction there is not enough demand to meet the supply triggering yields on bonds to rise.  Reflecting on mortgage rates to also increase with the bonds.  If you were able to see the past two years of bond performance you will see a cycle of bond roll overs and a increase in mortgage rates.  BUT, here is the but, we were not in the economic environment we are in currently.  A big question looms over the United States if we will be able to repay our debt we have issued.  A question that was asked last week to Timothy Geithner in China when he visited and was not met with open arms when he responded.  So now the question turns to how high will yields on bonds go?

Media and Wall Street are waiting for words of the future from the Federal Reserve and Ben Bernanke later this month.  

Mark your calendars for a wild ride which will begin June 23rd and 24th, Fed Chairmen, “Big Ben” will give his testimonial of the outcome of the first half of the year and its stance on increase the short term rate for the first time.  Home Equity Line of Credit holders get ready as this could set the tone for the rest of 2009 moving forward on rates moving back up.  Signs of the inevitable inflation concerns that are in the future of the United States.  

It is very important to keep a perspective on the change in the economy, as more optimism builds about the recession ending and the long road to recovery rates will be pressured higher not lower.  There will be bumps in the road as a possible “double dip recession” may occur later this year.  This would the best time for home owners to secure a lower interest rate before the so called “refi boom” ends. 

Timing will be key.  

It is imperative if you are looking to refinance to get your application in, have the loan fully approved and wait for the rates to have a day which falls in your favor with lower rates.  Why do this?  Lets look at volume of a lender.  When rates fall applications spike and in turn underwriting turn times get blown out.  Some banks are currently out as far as FIVE MONTHS…. yes 5!  By having your loan fully submitted and floating the interest rate you will be fully ready to secure the rate when the timing is right.  By far the best strategy and position to be in.

Most importantly you need to work with a mortgage professional who understands the timing and what is impacting rates!  Timing, timing, timing as we here in Real Estate, location, location, location.  

If you are looking for a mortgage professional who clearly understands the market we would like to ask how we can be of assistance?

The Mortgage Reel Team

Post from: The Mortgage Reel - Seattle Real Estate Preferred Correspondent Lender

Seattle Mortgage Reel Weekly KickOff, June 8, 2009