Mortgage Time

Rate Comparison vs. Wells Fargo and Bank of America

2011-09-16T11:54:00.000-07:00

Professional Mortgage Source LLC - 3.875% with 1% Origination and Closing Costs of $2000.00

Professional Mortgage Source LLC - 4.125% with 0% Origination and Closing Costs of $0

Wells Fargo - 4.125% with 1% Origination and Closing Costs of $2,000.00
Bank of America - 4.25% with 1.25% Origination and Closing Costs of $1100

Assumptions: 30 Year Fixed, Value=$400K, Loan Amount=$300K, Fico=740

Why spend the extra thousands of dollars in points and closing costs when we can do your loan and it will end up with Wells or B of A anyway and can close in less than 30 days.

Mortgage Market News for the week ending September 16, 2011

2011-09-16T11:50:00.000-07:00

Central Banks Aid European Banks

Investors grew a little less concerned about Europe during the week, which was favorable for the stock market but negative for mortgage rates. This week's inflation data also was unfavorable for mortgage rates, and rates ended the week a little higher. This movement differs from Freddie Mac's highly publicized weekly average rate which reported that a new low was reached for the week ending September 15. The reason is simply that the Freddie Mac survey is conducted early in the week and does not reflect the change in rates which takes place later in the week.

On Thursday, five major central banks, including the European Central Bank (ECB) and the US Fed, announced that they will offer a lending facility for European banks seeking short-term liquidity. This aid reduced concerns about the region and encouraged investors to shift to riskier assets. In typical fashion, the stock market was a major beneficiary, while bonds markets suffered losses.

Inflation is on the rise. The August Consumer Price Index (CPI) rose more than expected from July and was 3.8% higher than one year ago. Core CPI, which excludes food and energy, was up 2.0% from one year ago. Late in 2010, Core CPI was increasing at just a 0.8% annual rate. The August Core Producer Price Index (PPI) was up an even higher 2.5% from one year ago. With a highly anticipated FOMC meeting next week, Fed officials must factor in higher inflation levels as they consider additional stimulus measures.
Also Notable:
August Retail Sales were flat from July
In July, employers posted the most job openings since August 2008
It was reported that China is in talks to purchase Italian bonds
Oil prices rose above $90 per barrel to the highest level since August 3

Rate Comparison vs. Wells Fargo and Bank of America

2011-09-09T10:46:00.000-07:00

Rate Comparison vs. Wells Fargo and Bank of America

Professional Mortgage Source LLC - 3.75% with 1% Origination and Closing Costs of $2000.00

Professional Mortgage Source LLC - 4.00% with 0% Origination and Closing Costs of $0

Wells Fargo - 4.00% with 1% Origination and Closing Costs of $2,000.00
Bank of America - 4.125% with 1.00% Origination and Closing Costs of $1100

Assumptions: 30 Year Fixed, Value=$400K, Loan Amount=$300K, Fico=740

Why spend the extra thousands of dollars in points and closing costs when we can do your loan and it will end up with Wells or B of A anyway and can close in less than 30 days.

Mortgage Market News for the week ending September 9, 2011

2011-09-09T10:41:00.000-07:00

Little Change in Rates

This week's economic news contained few surprises. Fed Chief Bernanke gave no indication of policy changes and President Obama's jobs package matched expectations. As a result, mortgage rates ended the week with little change, remaining at historically low levels.

The basic issue confronting the US economy is slow economic growth with high unemployment. Both Fed officials and lawmakers would like to boost economic growth, but the challenge is figuring out how to accomplish this. Thursday, Fed Chief Bernanke stated that the Fed will consider additional stimulus at its next meeting on September 21, but he gave no indication whether the Fed will take action. The consensus view is that additional monetary stimulus from the Fed would have a limited impact on the economy. Fed officials are deeply divided about whether to ease policy to help as much as possible or whether the negative consequences in terms of higher future inflation and financial market distortions are too high a price to pay. This week alone, two Fed officials publicly stated that monetary policy has little ability to help the job market under current economic conditions, while another official came out strongly in favor of additional monetary stimulus to lower the unemployment rate. In any case, the next Fed meeting may be a very significant event for mortgage rates.

Lawmakers are also faced with the difficult task of weighing the costs and the benefits of different programs to lift the economy. On Thursday, President Obama proposed a $447 billion package of tax cuts and new spending to stimulate the economy and create jobs. The debate next moves to Congress. The government has spent an enormous amount of money over the last few years on stimulus programs, and analysts disagree about their effectiveness. Given the high level of government debt, there is greater resistance now to spending more money for uncertain results.

Also Notable:

The Fed's Beige Book reported that economic activity was sluggish in most regions of the US

As expected, the European Central Bank (ECB) made no change in rates

Officials stated that Greece is not at risk of leaving the EU

The Treasury will auction $66 billion in 3-yr, 10-yr, and 30-yr securities next week

Week Ahead

The most significant economic data next week will be the monthly inflation reports. The Producer Price Index (PPI) focuses on the increase in prices of "intermediate" goods used by companies to produce finished products and will come out on Wednesday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Thursday. CPI looks at the price change for those finished goods which are sold to consumers. In addition, Retail Sales will be released on Wednesday. Retail Sales account for about 70% of economic activity. Industrial Production, another important indicator of economic growth, will come out on Thursday. Consumer Sentiment, Import Prices, and Philly Fed will round out the schedule. There will be Treasury auctions on Monday, Tuesday, and Wednesday.

Rate Comparison vs. Wells Fargo and Bank of America

2011-09-02T09:59:00.000-07:00

Professional Mortgage Source LLC - 4.00% with 0 Origination and Closing Costs of $0
Wells Fargo - 4.00% with 1% Origination and Closing Costs of $2,000.00
Bank of America - 4.125% with 1.25% Origination and Closing Costs of $1100

Assumptions: 30 Year Fixed, Value=$400K, Loan Amount=$300K, Fico=740

Why spend the extra thousands of dollars in points and closing costs when we can do your loan and it will end up with Wells or B of A anyway and can close in less than 30 days.

Mortgage Market News for the week ending September 2, 2011

2011-09-02T09:54:00.000-07:00

Jobs Fall Short

Major economic data and uncertainty about future Fed policy produced another volatile week for mortgage rates. Labor market weakness helped mortgage rates end the week lower.

The most significant economic data this week was Friday's monthly Employment report. Against a consensus forecast for a gain of 75K, the number of jobs remained unchanged in August, and the data for June and July was revised lower by 58K. The Unemployment Rate remained at 9.1%. Average Hourly Earnings, a proxy for wage growth, unexpectedly declined from July. In short, it was a weak report in nearly every area, and that was favorable for mortgage rates.

The economic data gained even more importance in light of the detailed Fed minutes from the August 9 FOMC meeting which were released on Tuesday. The minutes revealed that Fed officials were deeply divided about what to do. Some officials felt that the high unemployment rate and the downside risks to the economy justified easing monetary policy, while others questioned whether additional easing would have a significant impact. The decision to extend the pledge for low fed funds rates for two years was a compromise. Weaker than expected economic data, such as the August Employment report, supports the case for looser monetary policy. The next FOMC meeting, scheduled for September 21, has been extended to a second day to allow more time for discussion, and the Fed's announcement will be very important for financial markets.

Also Notable:

The July Core PCE inflation index was 1.6% higher than one year ago

July Pending Home Sales, a leading indicator, fell slightly from June

Consumer Confidence fell to the lowest level since April 2009

Gold prices climbed sharply to $1,880 per ounce

Week Ahead

The biggest economic news next week is likely to be an announcement from the Obama administration about a new fiscal stimulus proposal to help the economy and the job market. Its release date is currently scheduled for Thursday evening. The Economic Calendar will be very light next week. ISM Services will come out on Tuesday. The Fed's Beige Book will be released on Wednesday. The Trade Balance will come out on Thursday. Mortgage markets will be closed on Monday for Labor Day.

Rate Comparison vs. Wells Fargo and Bank of America

2011-08-26T11:07:00.000-07:00

Professional Mortgage Source LLC - 4.125% with 0 Origination and Closing Costs of $0
Wells Fargo - 4.25% with 1% Origination and Closing Costs of $2,000.00
Bank of America - 4.125% with 1.25% Origination and Closing Costs of $1100

Assumptions: 30 Year Fixed, Value=$400K, Loan Amount=$300K, Fico=740

Why spend the extra thousands of dollars in points and closing costs when we can do your loan and it will end up with Wells or B of A anyway and can close in less than 30 days.

Mortgage Market News for the week ending August 26, 2011

2011-08-26T11:02:00.001-07:00

No Surprises from Bernanke

It was another volatile week for mortgage rates. The primary factors influencing rates roughly offset each other, though, and mortgage rates ended the week just a little higher.

A wide range of economic news caused investors to either add or reduce risk at a rapid pace this week. News which generally encouraged increased exposure to risky assets helped stocks and hurt mortgage rates early in the week, while the opposite took place later in the week. Mixed US economic data, continued concerns about European debt, a highly anticipated speech from Fed Chief Bernanke, and uncertainty about the impact of Hurricane Irene all contributed to the daily volatility.

In Friday's speech, Fed Chief Bernanke gave no hint of any change in Fed policy, disappointing some investors hoping for looser monetary conditions. He stated that at its September meeting the Fed will consider whether additional monetary stimulus measures are called for, but that fiscal policy changes by lawmakers are needed to help the economy and the labor market. Following the speech, the consensus view is that the Fed is unlikely to make significant policy changes for a while.

Also Notable:

Second quarter GDP was revised lower from 1.3% to 1.0%

Continuing Jobless Claims fell to the lowest level since September 2008

Moody's downgraded the credit rating of Japan's government debt

The Fed's Hoenig said that he doesn't expect a double-dip recession in the US

Week Ahead

The biggest economic report next week will be the important Employment data on Friday. As usual, this data on the number of jobs, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month. Before the employment data, Pending Home Sales, Core PCE inflation, and Personal Income will be released on Monday. Chicago PMI Manufacturing and ADP Employment will come out on Wednesday. ISM Manufacturing, Construction Spending, and Productivity are scheduled for Thursday. Factory Orders and Consumer Confidence will round out a busy week.

Rate Comparison vs. Wells Fargo and Bank of America

2011-08-19T10:08:00.000-07:00

Professional Mortgage Source LLC - 4.00% with 0 Origination and Closing Costs of $0
Wells Fargo - 4.00% with 1% Origination and Closing Costs of $2,000.00
Bank of America - 4.25% with 1.25% Origination and Closing Costs of $1100

Assumptions: 30 Year Fixed, Value=$400K, Loan Amount=$300K, Fico=740

Why spend the extra thousands of dollars in points and closing costs when we can do your loan and it will end up with Wells or B of A anyway and can close in less than 30 days.

Mortgage Market News for the week ending August 19, 2011

2011-08-19T10:01:00.000-07:00

Inflation Climbs

Concerns about the pace of global economic growth continued to drive financial markets, causing investors to shift to less risky assets. This trend was favorable for mortgage rates, which ended the week lower.

Debt troubles in Europe, worries about the health of European banks, and weaker than expected economic data in the US have contributed to an outlook for slower global economic growth. The reaction from investors has been to shift from riskier assets such as stocks to relatively safer assets such as gold and bonds. Despite the S&P downgrade of US debt, US government-guaranteed bonds, including mortgage-backed securities (MBS), have been a primary safe haven for investors. During the week, 10-yr Treasury yields reached a low below 2.00% for the first time since 1945, and MBS prices climbed to new highs. At these levels, though, it may be difficult for yields to move much lower.

Adding to the concerns of investors, the economic data released this week showed that inflation rose faster than expected in July. The July Consumer Price Index (CPI) increased 0.5% from June, above the consensus forecast of 0.2%, and was 3.6% higher than one year ago. Core CPI, which excludes food and energy, rose 1.8% from one year ago, which was also higher than expected. Core CPI was at a level of 0.8% at the end of 2010. The July Producer Price Index also increased at a faster than expected pace. Rising inflation makes the Fed more reluctant to provide additional monetary stimulus. The inflation data may have prevented mortgage rates from dropping even further this week.

Also Notable:

July Existing Home Sales fell 3.5% from June

The Philly Fed index declined to the lowest level since March 2009

Unlike S&P, Fitch Ratings affirmed the triple-A credit rating of the US

Gold prices reached a record high above $1,880 per ounce

Week Ahead

Next week, New Home Sales will be released on Tuesday. Durable Orders, an important indicator of economic growth, will come out on Wednesday. Revisions to second quarter Gross Domestic Product (GDP) will be released on Friday, along with Consumer Sentiment. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.

Rate Comparison vs. Wells Fargo and Bank of America

2011-08-12T14:16:00.000-07:00

Professional Mortgage Source LLC - 4.125% with 0 Origination and Closing Costs of $0
Wells Fargo - 4.125% with 1% Origination and Closing Costs of $2,000.00
Bank of America - 4.25% with .75% Origination and Closing Costs of $1100

Assumptions: Value=$400K Loan Amount=$300K Fico=740

Why spend the extra thousands of dollars in points and closing costs when we can do your loan and it will end up with Wells or B of A anyway and can close in less than 30 days.

Mortgage Market News for the week ending August 12, 2011

2011-08-12T14:10:00.001-07:00

Wild Week

In one of the most volatile weeks ever seen, important economic news came out every day and produced major reactions in financial markets. Investor uncertainty is extremely high, amplifying the price movements. As stock prices fluctuated wildly, so did mortgage rates, which reached new lows for the year.

Into this highly charged environment, a steady flow of significant economic news added fuel to the flames. It began late last Friday with the announcement that S&P downgraded the credit rating of US debt. Then the Fed shocked investors with its statement (see below). A scare ran through financial markets that European banks, particularly in France, were at risk of failing, but these fears abated quickly. Investors were comforted by very strong demand for the 3-year and 10-year Treasury auctions, and then were taken aback by extremely poor results for the 30-year auction. It is not surprising that many financial markets set volatility records this week.

The biggest surprise in Tuesday's FOMC statement was that the Fed currently anticipates that economic conditions will call for the fed funds rate to remain exceptionally low through at least the middle of 2013. The Fed also downgraded its forecast for economic growth, saying that it will be "considerably slower" than previously expected at the last FOMC meeting on June 22. Slower economic growth with few signs of higher inflation will make it more difficult for the labor market to recover, but it is a favorable environment for mortgage rates.

Also Notable:

Consumer Sentiment fell to the lowest level since May 1980

Weekly Jobless Claims declined to 395K, the lowest level since April

Gold prices touched a record high above $1,800 per ounce

The European Central Bank began to purchase Italian and Spanish bonds

Week Ahead

The most significant economic data next week will be the monthly inflation reports. The Producer Price Index (PPI) focuses on the increase in prices of "intermediate" goods used by companies to produce finished products and will come out on Wednesday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Thursday. CPI looks at the price change for those finished goods which are sold to consumers. In addition, Industrial Production, an important indicator of economic growth, will come out on Tuesday, along with Housing Starts. Existing Home Sales will be released on Thursday. Empire State, Import Prices, Leading Indicators, and Philly Fed will round out the schedule.

Rate Comparison vs. Wells Fargo and Bank of America

2011-08-05T13:14:00.000-07:00

Professional Mortgage Source LLC - 4.25% with 0 Origination and Closing Costs of $0
Wells Fargo - 4.375% with 1% Origination and Closing Costs of $2,000.00
Bank of America - 4.25% with 1.125% Origination and Closing Costs of $1100

Assumptions: Value=$400K Loan Amount=$300K Fico=740

Why spend the extra thousands of dollars in points and closing costs when we can do your loan and it will end up with Wells or B of A anyway and can close in less than 30 days.

Mortgage Market News for the week ending August 5, 2011

2011-08-05T13:02:00.000-07:00

Lowest Rates of the Year

Early in the week, an agreement to raise the US debt ceiling was reached, avoiding a default on government debt, but investors found little time for relief. Concerns about debt problems in Europe and the slow pace of global economic growth sparked a large rally in US bond markets and a large decline in the stock market. Mortgage rates improved significantly during the week, ending at the lowest levels of the year.

This week's bond market rally dropped mortgage rates back to levels last seen in November, which is not too surprising since the economic environment is now similar to that time period. The economic outlook is for below average economic growth with low inflation. Slower economic growth reduces inflationary pressures, which is favorable for bonds. In addition, the possibility that the debt problems in Europe will spread to larger countries such as Spain and Italy is causing some investors to shift out of riskier assets and into relatively safer assets such as US government bonds.

Mortgage rates would have improved even more this week if Friday's Employment report had not exceeded expectations. Against a consensus forecast of 85K, the economy added 117K jobs in July, and the data for May and June was revised higher by 56K. The Unemployment Rate unexpectedly declined to 9.1% from 9.2% in June. Average Hourly Earnings, a proxy for wage growth, increased at a 2.3% annual rate, which was higher than the consensus forecast. In short, the data solidly surpassed investor expectations in nearly every area.

Also Notable:

The June Core PCE inflation index was a tame 1.3% higher than one year ago

The Bank of Japan intervened to weaken the Japanese Yen

The Dow stock index dropped to the lowest level since March

Oil prices fell to $85 per barrel, the lowest level since February

Week Ahead

The biggest economic event next week will be Tuesday's Fed meeting. Given the large stock market decline this week and the uncertainty about the economy, investors will be looking for indications on whether the Fed will provide additional monetary stimulus. The most significant economic data will be Friday's Retail Sales report, as Retail Sales account for about 70% of economic activity. Beyond that, Productivity, the Trade Balance, and Consumer Sentiment will be released. In addition, the Treasury will auction $72 billion in 3-yr, 10-yr, and 30-yr securities on Tuesday, Wednesday, and Thursday.

Rate Comparison vs. Wells Fargo & Bank of America

2011-07-29T10:29:00.000-07:00

Professional Mortgage Source LLC - 4.375% with 0 Origination and Closing Costs of $0
Wells Fargo - 4.50% with 1% Origination and Closing Costs of $2,000.00
Bank of America - 4.375% with 1.25% Origination and Closing Costs of $1100

Assumptions: Value=$400K Loan Amount=$300K Fico=740

Why spend the extra thousands of dollars in points and closing costs when we can do your loan and it will end up with Wells or B of A anyway.

Mortgage Market News for the week ending July 29, 2011

2011-07-29T10:24:00.001-07:00

GDP Falls Short

Amid all the turmoil surrounding the US debt ceiling talks, weaker than expected economic data and increased concerns about Europe helped mortgage rates improve this week.

A lack of progress in the debt ceiling talks has left investors with a high level of uncertainty, causing a great deal of volatility in mortgage markets. The current debt ceiling will be reached soon, but this time around many lawmakers from both parties are reluctant to raise the limit without an agreement to control the deficit. The two parties have been unable to reach a compromise on spending cuts and tax reform, though. Investors doubt that lawmakers would actually allow the US to default on its debt, but the US is at risk of a downgrade of its credit rating if a credible fiscal plan is not passed. As this is uncharted territory, investors don't know how large the impact of a downgrade would be on bond markets.

Due to the economic troubles in Europe, the earthquake in Japan, and the rise in oil prices, investors knew that US economic growth during the first half of the year was slower than forecast at the beginning of the year. Still, Friday's report on Gross Domestic Product (GDP) was a shock. Second quarter GDP increased 1.3%, which was well below the consensus forecast of 1.8%. In addition, first quarter GDP growth was revised lower to just 0.4% from 1.9%. Fortunately, the consensus outlook is for faster economic growth during the second half of the year.

Also Notable:

June Pending Home Sales rose 2%, New Home Sales fell slightly

Consumer Sentiment fell to the lowest level since March 2009

S&P cut the debt rating of Greece again

The Beige Book reported the pace of the economic recovery slowed in many regions

Week Ahead

The debt ceiling talks will remain in the spotlight next week, and an agreement could be reached at any time. The biggest economic report will be the important Employment data on Friday. As usual, this data on the number of jobs, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month. Before the employment data, ISM Manufacturing and Construction Spending will come out on Monday. Personal Income and Core PCE inflation will be released on Tuesday. ADP Employment, Factory Orders, and ISM Services are scheduled for Wednesday.

Rate Comparison vs. Wells Fargo & Bank of America

2011-07-22T13:17:00.000-07:00

Professional Mortgage Source LLC - 4.50% with 0 Origination and Closing Costs of $0
Wells Fargo - 4.50% with 1% Origination and Closing Costs of $2,000.00
Bank of America - 4.375% with 1.25% Origination and Closing Costs of $1100

Assumptions: Value=$400K Loan Amount=$300K Fico=740

Why spend the extra thousands of dollars in points and closing costs when we can do your loan and it will end up with Wells or B of A anyway.

Mortgage Market News for the week ending July 22, 2011

2011-07-22T12:46:00.000-07:00

Debt Talks Drive Mortgage Rates

With few economic reports released this week, news of progress in talks to provide aid to troubled European countries and to raise the US debt ceiling had the most influence on mortgage rates. As the perceived risk of default in Europe decreased, investors retreated from the relative safety of US bonds, which pushed mortgage rates a little higher. The proposed deficit reduction in the debt ceiling talks was favorable for mortgage rates, however. The net result was little change in mortgage rates for the week.

European Union (EU) officials released a significant new plan for providing aid to EU member countries with debt problems. Thursday's announcement of a new aid package for Greece and an overhaul of the region's rescue fund reduced investor concerns that the debt problems will spread. In particular, the European Financial Stability Facility (EFSF) will have the ability to make loans to European nations at lower interest rates than they could get on their own, easing the risk of default. After the news, investors reversed some of the recent flight to safety trade and returned to riskier assets.

Recent low yields for Treasuries and mortgage-backed securities (MBS) indicate that investors have little doubt that the debt ceiling will be raised before the limit is reached on August 2. For bond investors, the big question has been to what degree lawmakers will tackle the budget deficit. Simply lifting the debt ceiling without meaningfully addressing the deficit would disappoint investors and be bad for bonds. By contrast, a serious attempt to bring the deficit under control rather than pushing the issue further into the future would likely cause yields to fall for two reasons. A smaller government deficit would mean a reduced supply of Treasury securities, resulting in lower yields, and less government spending would slow economic growth, reducing inflationary pressures. As a result, the amount of deficit reduction in debt ceiling negotiations could influence mortgage rates.

Also Notable:

June Housing Starts rose 15% from May to the highest level since January

The Treasury will auction $99 billion in 2-yr, 5-yr, and 7-yr securities next week

Gold prices rose to a new high above $1,600 per ounce

The Fed's Lockhart stated that there is a "very high" bar for the Fed to provide additional stimulus

Week Ahead
Beyond the debt ceiling talks, there will be a packed Economic Calendar next week. New Home Sales and Consumer Confidence will be released on Tuesday. Durable Orders, an important indicator of economic growth, will come out on Wednesday, along with the Fed's Beige Book. Pending Home Sales, a leading indicator for the housing market, will be released on Thursday. Second quarter GDP, the broadest measure of economic growth, Chicago PMI, and Consumer Sentiment are scheduled for Friday. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.

Rate Comparison vs. Wells Fargo & Bank of America

2011-07-15T12:06:00.000-07:00

Professional Mortgage Source LLC - 4.375% with 0 Origination and Closing Costs of $0
Wells Fargo - 4.625% with 1% Origination and Closing Costs of $2,000.00
Bank of America - 4.375% with .875% Origination and Closing Costs of $1455

Assumptions: Value=$400K Loan Amount=$300K Fico=740

Why spend the extra thousands of dollars in points and closing costs when we can do your loan and it will end up with Wells or B of A anyway. We can close your loan in less than 30 days.

Mortgage Market News for the week ending July 15, 2011

2011-07-15T11:58:00.000-07:00

Growing Uncertainty

During a week packed with economic data, Europe and the Fed took center stage in influencing mortgage rates. Uncertainty about the economic outlook caused a flight to relatively safer investments, and mortgage rates ended the week a little lower.

In June, stronger than expected economic data caused investors to raise their growth outlook, which was negative for mortgage rates. Last week's disappointing jobs report removed much of the optimism and raised the level of uncertainty this week. Other factors also contributed to the increased uncertainty. Investors grew significantly more concerned about the debt problems in Europe, particularly in Italy. There was also a lack of progress in the US debt limit talks. The desire for safer assets was evident this week in improved mortgage-backed securities (MBS) prices, strong demand for the Treasury auctions, and higher gold prices.

When the FOMC Minutes from the June 22 Fed meeting were released on Tuesday, investors were surprised to see that Fed officials were open to the idea of additional Treasury bond purchases to boost the economy. Following the June 30 conclusion of the second round of bond buying, investors believed that a third round would be extremely unlikely. In his testimony to Congress, Fed Chief Bernanke elaborated that Fed officials want to keep all options open, including further stimulus, depending on the strength of the economy. Bernanke noted that the economy would have to falter significantly from its expected pace of growth for the Fed to add stimulus. What investors took from the Minutes and the testimony is that in the event of a downturn the Fed may be quicker to provide additional stimulus than previously thought.

Also Notable:

June Core CPI inflation increased at a 1.6% annual rate

The Fed's Rosengren described the June Employment report as "dismal"

Major credit rating agencies warned they might cut the rating of US govt debt

Gold prices rose to a new high above $1,580 per ounce

Week Ahead

It will be a light week coming up. Housing Starts will be released on Tuesday. Existing Home Sales will come out on Wednesday. Leading Indicators and Philly Fed will be released on Thursday. Negotiations to raise the US debt ceiling and economic troubles in Europe will remain the focus next week.

Rate Comparison vs. Wells Fargo & Bank of America

2011-07-08T10:54:00.000-07:00

Professional Mortgage Source LLC - 4.50% with 0 Origination and Closing Costs of $0
Wells Fargo - 4.625% with 1% Origination and Closing Costs of $2,000.00
Bank of America - 4.50% with 1.25% Origination and Closing Costs of $1455

Assumptions: Value=$400K Loan Amount=$300K Fico=740

Mortgage Market News for the week ending July 8, 2011

2011-07-08T10:44:00.001-07:00

Jobs Fall Short

The main focus this week was the June Employment report. Rising expectations during the week pushed mortgage rates higher ahead of the report. When the Employment data came in far below expectations, though, mortgage rates improved significantly and ended the week a little lower.

Against a consensus forecast of 125K, the economy added just 18K jobs in June, the lowest level since September 2010, and the figures from the prior two months were revised lower by 44K. The Unemployment Rate rose to 9.2% from 9.1% in May. Average Hourly Earnings, a proxy for wage growth, were unchanged from May, below the consensus for a rise of 0.2%. In short, bright spots were hard to find.

Following a series of stronger than expected economic reports in recent weeks, the Employment report was certainly a surprise. The question for investors is how much weight to place on this report in determining the economic outlook. Does this mean that the economy is recovering more slowly than previously thought? Or is it that the jobs data simply operates with a small lag? There is little doubt that the US economy slowed during the first half of the year, primarily due to rising oil prices and the Japanese earthquakes. The impact of these obstacles was expected to be temporary, and nearly all the economic data in recent weeks appeared to support this. This Employment report will certainly make investors more cautious about the pace of future economic growth, but they will not overlook the wide range of other data which suggests that growth is accelerating. With mortgage rates at such low levels, solid evidence of a sustained deterioration in growth likely will be needed for

Also Notable:

The Unemployment Rate rose to the highest level since December 2010

As expected, the European Central Bank (ECB) raised rates to fight inflation

The Treasury will auction $66 billion in 3-yr, 10-yr, and 30-yr securities next week

Moody's cut Portugal's debt rating

Week Ahead

In a packed week, the most significant economic data next week will be the monthly inflation reports. The Producer Price Index (PPI) focuses on the increase in prices of "intermediate" goods used by companies to produce finished products and will come out on Thursday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Friday. CPI looks at the price change for those finished goods which are sold to consumers. In addition, Retail Sales will be released on Thursday. Retail Sales account for about 70% of economic activity. Industrial Production, another important indicator of economic growth, will come out on Friday. The FOMC Minutes from the June 22 Fed meeting will be released on Tuesday. The Trade Balance, Import Prices, and Consumer Sentiment will round out the schedule. There will be Treasury auctions on Tuesday, Wednesday, and Thursday.

Rate Comparison vs. Wells Fargo & Bank of America

2011-07-01T09:51:00.000-07:00

Professional Mortgage Source LLC - 4.625% with 0 Origination and Closing Costs of $0
Wells Fargo - 4.75% with 1% Origination and Closing Costs of $2,000.00
Bank of America - 4.625% with 1.125% Origination and Closing Costs of $1455

Assumptions: Value=$400K Loan Amount=$300K Fico=740

Why spend the extra thousands of dollars in points and closing costs when we can do your loan and it will end up with Wells or B of A anyway. We can close your loan in less than 30 days.

Mortgage Market News for the week ending July 1, 2011

2011-07-01T09:41:00.000-07:00

Stocks Up, Rates Up

This week's economic news was nearly all positive, and the stock market posted a strong rally. Unfortunately, what's good for stocks is generally unfavorable for mortgage rates. Progress on the Greek aid package and stronger than expected US manufacturing data, along with the end of the Fed's bond buying program, combined to push mortgage rates higher this week.

While the Fed made known months ago that its $600 billion quantitative easing program would end on June 30, investors have been uncertain what the impact would be. Since the program started, Fed purchases have accounted for roughly 85% of the total new Treasury issuance. The loss of this significant source of demand makes investors less willing to purchase Treasury securities, and mortgage-backed securities (MBS), at what have been historically low yields. Yields had to rise to attract investors.

Part of the improvement in mortgage rates in recent weeks was due to the economic troubles in Greece. Investors shifted to relatively safer investments such as US government guaranteed bonds, including MBS. This week, however, an aid package for Greece took a major step forward. Despite widespread strikes and demonstrations, the Greek government voted to adopt the new austerity measures required for Greece to receive the aid. With the successful vote, the short-term uncertainty decreased, and investors reversed the flight to safety, selling bonds and buying stocks.

Also Notable:

April Pending Home Sales increased 8%, the strongest monthly gain since November 2010

May Core PCE prices were a tame 1.2% higher than one year ago

Jobless Claims have remained above the 400K level for twelve straight weeks

The Fed's Bullard suggested that Fed stimulus impacts the economy with a lag of many months

Week Ahead

The biggest economic event next week will be the important Employment report on Friday. As usual, this data on the number of jobs, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month. Before the employment data, Factory Orders will come out on Tuesday. ADP Employment and ISM Services will be released on Wednesday. Mortgage markets will be closed on Monday for July Fourth.

Mortgage Market News for the week ending June 24, 2011

2011-06-24T11:40:00.000-07:00

No Change From Fed

Investors focused on the Fed meeting and Greece this week. A reduced growth forecast from the Fed and continued concerns about the situation in Greece helped mortgage rates move a little lower.

As widely expected, the Fed made no change in the fed funds rate, and Fed policy appears unlikely to change in the near-term. The Fed lowered its forecast for 2011 GDP growth to 2.8%. This is down from 3.2% at the last meeting, but it does assume faster growth during the second half of the year. Inflation is expected to remain low. The Fed gave no indication that it will provide additional monetary stimulus any time soon. In short, it will likely take a major improvement or deterioration in the economic outlook for the Fed to take significant additional action.

On Thursday, Greece reached a deal with European Union (EU) and International Monetary Fund (IMF) officials. Greece will receive additional aid from the EU and the IMF, but to get the aid it must further reduce government spending, and its ability to execute on the deal is in doubt. The question is whether the Greek government has the political will to pass new austerity measures. The answer could lead to further market volatility. If the opposition is too strong and the measures fail, the resulting uncertainty likely would lead to a global flight to safety, which would be good for mortgage rates. On the other hand, if the measures successfully pass, mortgage rates likely would move higher.

Also Notable:

May Durable Orders increased 2% from April

May Existing Home Sales fell 4% from April

The Treasury will auction $99 billion in 2-yr, 5-yr, and 7-yr securities next week

After government intervention, oil prices declined to the lowest levels in 4 months

Week Ahead

Next week, the Core PCE price index, the Fed's preferred inflation indicator, will come out on Monday, along with Personal Income. Consumer Confidence is scheduled for Tuesday. Pending Home Sales, a leading indicator for the housing sector, will be released on Wednesday. The Chicago PMI manufacturing index will come out on Thursday. There will be Treasury auctions on Monday, Tuesday, and Wednesday. The Fed's quantitative easing program is scheduled to conclude on Thursday.

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2011-06-17T10:54:00.000-07:00

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Mortgage Market News for the week ending June 17, 2011

2011-06-17T09:58:00.000-07:00

Inflation Higher

There was a lot of volatility during the middle of the week, but mortgage rates ended nearly unchanged. Weak manufacturing data offset higher than expected inflation readings. Similarly, increased social unrest in Greece early in the week was balanced by renewed hopes on Friday for a quick solution to Greece's debt problems.

The current economic outlook, which includes expectations for tame inflation, has supported low mortgage rates. The monthly inflation reports released this week caused investors some concern, however. The May Consumer Price Index (CPI) rose 0.2% from April, which was above the consensus forecast, and CPI was 3.6% higher than one year ago, which was the highest annual rate since October 2008. Core CPI, which excludes food and energy, increased at a 1.5% annual rate, also above expectations, and up from 1.3% last month. Meanwhile, inflation readings in China rose to the highest levels since July 2008. While it will take several months of unexpectedly high data to signal a trend, investors will be closely watching for signs of a rapid increase in inflation, which would be negative for mortgage rates.

The housing sector data released this week was stronger than expected. May Housing Starts rose 4% from April, which was well above the consensus forecast. Building Permits increased 9% to the highest level since December. A closer look at the data, though, reveals that most of the improvement came from multi-family units, while new construction of single-family homes remained at low levels.

Also Notable:

Philly Fed declined to the lowest reading since July 2009

May Retail Sales fell, the first monthly decline since June 2010

The IMF lowered its 2011 forecast for US GDP growth to 2.5%

China's central bank again raised reserve requirements to fight inflation

Week Ahead

The big story next week will be Wednesday's Fed meeting. No change in rates is expected, but investors will be seeking hints of any additional monetary stimulus to boost the economy. Existing Home Sales will come out on Tuesday, and New Home Sales will be released on Thursday. Durable Orders, an important indicator of economic growth, will come out on Friday. The final revisions to first quarter 2011 GDP will also be released on Friday.

Mortgage Market News for the week ending June 10, 2011

2011-06-10T10:15:00.000-07:00

Little Change in Mortgage Rates

While mortgage rates reached a new low for the year during the middle of the week, they ended nearly unchanged. It was a light week for economic data, and demand for the Treasury auctions was close to average, so investors had little reason to alter their outlooks.

Economic growth during the first half of the year has been slower than expected, and the consensus economic outlook is for just a modest pick up in growth later in the year, with continued low inflation. This week's Beige Book confirmed that economic growth is moderate in most regions with few inflationary pressures. In speeches this week, Fed officials agreed that the first half performance was somewhat disappointing, partly due to the earthquakes in Japan. The downwardly revised growth rates in recent forecasts have helped mortgage rates remain at low levels.

How the situation in Greece will be resolved remains a major consideration for investors, and European officials are very divided over what approach to take. The basic options are to provide a bailout package or to allow Greece to default on its sovereign debt. Due to the risk of default, weaker European countries have had to offer yields in excess of 20% to persuade investors to buy their bonds. Despite these yields, many investors have shifted funds to the relative safety of US bonds, including mortgage-backed securities (MBS). This added demand has been favorable for mortgage rates.

Also Notable:

US household debt shrank by 2.0% during the first quarter of 2011

Bernanke gave no sign that additional monetary stimulus is coming

The European Central Bank (ECB) held rates steady, as expected

Fitch Ratings will put US debt on watch for downgrade if lawmakers fail to raise the debt ceiling

Week Ahead
The most significant economic data next week will be the monthly inflation reports. The Producer Price Index (PPI) focuses on the increase in prices of "intermediate" goods used by companies to produce finished products and will come out on Tuesday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Wednesday. CPI looks at the price change for those finished goods which are sold to consumers. In addition, Retail Sales will be released on Tuesday. Retail Sales account for about 70% of economic activity. Industrial Production, another important indicator of economic growth, will come out on Wednesday. Housing Starts will be released on Thursday. Philly Fed, Empire State, Consumer Sentiment, and Leading Indicators will round out the schedule.

Mortgage Market News for the week ending June 3, 2011

2011-06-03T10:04:00.000-07:00

Jobs Data Falls Short

Friday's Employment report was a disappointing indicator of the current state of the US economic recovery. This report, along with just about every other economic measure released this week, was weaker than expected. As a result, mortgage rates fell to a new low for the year. Against a consensus forecast of 150K, the economy added just 54K jobs in May, and the figures for prior months were revised lower as well. This was the lowest monthly level of net job creation since September 2010.

The big question about the economy is whether the slowdown in growth is mostly due to temporary factors or whether it will be longer-term. The earthquake in Japan caused a shortage of parts, which had a large impact on global manufacturing, and the swift rise in oil prices caused consumers to scale back on other spending. The Japanese earthquake was a one-time event, and oil prices have dropped back to $100 per barrel. Other investors, though, feel that economic troubles are more fundamental. They view debt problems in weaker European countries and a winding down of some fiscal and monetary stimulus programs in the US as major factors in the slower growth. Since mortgage rates are heavily influenced by the pace of economic growth, the degree to which the slowdown proves to be shorter-term versus longer-term will likely determine how long rates remain at these low levels.

Also Notable:

The May Unemployment Rate increased to 9.1% from 9.0% in April

The ISM Manufacturing index dropped to the lowest level since September 2009

The Treasury will auction $64 billion in 3-yr, 10-yr, and 30-yr securities next week

Moody's may put US debt on review for a possible downgrade if the debt ceiling is not raised

Week Ahead

The Economic Calendar will be very light next week. The Fed's Beige Book will come out on Wednesday. The Trade Balance will be released on Thursday, and Import Prices will come out on Friday. There will be Treasury auctions on Tuesday, Wednesday, and Thursday.

Mortgage Market News for the week ending May 27, 2011

2011-05-27T09:37:00.000-07:00

Mortgage Rates Reach Low for Year

Many factors were favorable for mortgage rates this week. Weaker than expected economic data, strong results for the Treasury auctions, and renewed concerns about weaker European countries all helped mortgage rates end the week at the lowest levels of the year.

All of the major economic data released during the week was weaker than expected. First quarter Gross Domestic Product (GDP), the broadest measure of economic growth, was unchanged at 1.8%. Most investors expected the figures to be revised higher to at least 2.0%. April Durable Orders fell 4% from March, which was the largest monthly decline since October 2010. Weekly Jobless Claims unexpectedly increased. These measures suggest reduced inflationary pressure, which is good for mortgage rates. In addition, the Core PCE price index confirmed that inflation remains very low.

Uncertainty in Europe also helped US mortgage rates improve. There is no clear solution to the debt problems of Greece, and the parties involved in aiding Greece disagree on what approach to take. European Central Bank (ECB) officials stated that Greece must adopt tough austerity measures to remain a member of the Euro zone. Greece has already sharply reduced spending, though, and further cuts will be difficult politically, increasing the likelihood of a default on Greek government debt. Investors also grew more concerned about similar problems in Spain and Portugal. Spending cuts or debt defaults are expected to lead to slower global economic growth.

Also Notable:

The April Core PCE inflation index increased at a low 1.0% annual rate

April New Home Sales rose 7% from March

The Fed's Kocherlakota lowered his forecast for 2011 economic growth

Oil prices remained near $100 per barrel, down from $115 per barrel a few weeks ago

Week Ahead

The biggest economic event next week will be the important Employment report on Friday. As usual, this data on the number of jobs, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month. Before the employment data, the Chicago PMI Manufacturing index will come out on Tuesday. The ISM Manufacturing index, ADP Employment, and Construction Spending will be released on Wednesday. Productivity and Factory Orders will come out on Thursday. ISM Services and Consumer Confidence will round out the schedule. Mortgage markets will be closed on Monday for Memorial Day.

Mortgage Market News for the week ending May 20, 2011

2011-05-20T09:36:00.000-07:00

Mortgage Rates Little Changed

Weaker than expected economic data helped mortgage rates decline to the lowest levels of the year early in the week. On Wednesday, though, a reminder that the Fed will eventually sell its portfolio of mortgage-backed securities (MBS) helped to erase the improvement. These two influences offset each other, and mortgage rates ended the week nearly unchanged.

The economic data released this week fell far short of investor expectations almost across the board. The most significant report, April Industrial Production, was unchanged from March, which was well below the consensus forecast. Manufacturing output was hurt by a shortage of parts from Japan due to the earthquakes. The Index of Leading Indicators declined for the first time since June 2010. The housing sector data also showed weakness as Existing Home Sales, Housing Starts, and Building Permits all declined in April.

The FOMC minutes from the April 27 Fed meeting contained few surprises, but they highlighted the fact that the Fed's eventual return to more normal monetary policy will include both asset sales and rate hikes. The minutes gave no indication of the timing of any Fed tightening. Longer term, officials believe that the Fed's balance sheet should contain only Treasury securities, meaning that the Fed at some point will begin to sell its roughly $1 trillion portfolio of MBS. In order to disrupt the mortgage market as little as possible, officials said that the selling may be done over a period of many years, and any asset sales would be announced far in advance.

Also Notable:

The Philly Fed manufacturing index declined to the lowest reading since October 2010

The Fed's Dudley suggested that economic growth will pick up later in the year

The Treasury will auction $99 billion in 2-yr, 5-yr, and 7-yr securities next week

Fitch lowered the rating for Greek debt again

Week Ahead

Next week, New Home Sales will be released on Tuesday. Durable Orders, an important indicator of economic growth, will come out on Wednesday. Revisions to first quarter GDP will be released on Thursday. Friday will be the biggest day with Core PCE inflation, Personal Income, Pending Home Sales, and Consumer Sentiment. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.

Mortgage Market News for the week ending May 13, 2011

2011-05-13T12:30:00.000-07:00

Little Change in Mortgage Rates

It was a volatile week for mortgage rates. Troubles in smaller European nations, mixed results for the Treasury auctions, and tame inflation data caused significant movements in rates during the week. These influences offset each other, though, and mortgage rates ended the week nearly unchanged.

Although the Consumer Price Index (CPI) inflation data came in slightly higher than expected on Friday, mortgage rates improved after the news. April CPI increased 3.2% from one year ago, which was the highest annual rate in two and one-half years. Core CPI, which excludes food and energy, increased at a 1.3% annual rate. While Core CPI remained well below the Fed's target range around 2.0%, it was up from 1.2% last month and 0.8% at the end of last year, meaning that the trend has clearly been moving higher.

Inflation is negative for mortgage rates, so the question is why mortgage rates remain at the lowest levels of the year despite rising inflation data. The likely answer is that investors expect that the majority of the increase in inflation has already taken place. Fed officials have maintained that they expect the inflationary effects of higher oil prices to be "transitory", and the recent drop in oil prices has supported the Fed's position. One year ago, oil prices were around $70 per barrel, but they averaged about $110 per barrel in April, an increase of more than 50%. So far in May, oil prices have averaged about $100 per barrel, and investors don't expect that oil prices will rise 50% over the next year. Meanwhile, wage growth, a major factor in inflation levels, has been minimal in recent months. For these reasons, current inflation expectations remain relatively low.

Also Notable:
Week Ahead
Next week, Industrial Production, an important indicator of economic growth, will come out on Tuesday. Housing Starts will also be released on Tuesday. The FOMC Minutes from the April 27 Fed meeting will come out on Wednesday. These detailed notes offer additional insight into the Fed's decisions. Existing Home Sales will be released on Thursday. Empire State, Philly Fed, and Leading indicators will round out the schedule.

Weekly Jobless Claims fell sharply from the highest level since August last week

April Retail Sales increased 0.5% from March, showing steady improvement

Plosser stated that inflation and inflation expectations will determine future Fed policy

S&P again downgraded its rating for Greece

Mortgage Market News for the week ending May 6, 2011

2011-05-06T09:06:00.000-07:00

Mortgage Rates Improve Again

Weaker than expected data helped mortgage rates improve for most of the week, but Friday's Employment report then surprised to the upside, causing mortgage rates to give back some of the improvement. In the end, as they have for each of the last few weeks, mortgage rates finished the week a little lower.

Against a consensus forecast of 185K, the economy added 244K jobs in April. Revisions to data from prior months added another 46K jobs. The private sector added 268K jobs, which was the highest level since February 2006, and the gains were broad-based across a range of sectors. The Unemployment Rate unexpectedly increased to 9.0% from 8.8% in March, as the labor force grew. When people begin to look for work, they are added to the labor force. Aside from the expected weakness in government jobs, this report was encouraging news for the labor market across the board.

Friday's Employment report particularly stood out in contrast to the much weaker than expected economic data released earlier in the week. Wednesday's ISM Services data, indicating the strength of the services sector, showed a sharp decline, and was far below the consensus forecast. Thursday's Jobless Claims report then showed a significant increase, which was also a big surprise to investors. Going forward, investors will be trying to determine whether the strong Employment report or the other weaker data better reflects the current strength of the economy.

Also Notable:

Weekly Jobless Claims jumped to the highest level since August

As expected, the European Central Bank (ECB) made no change in rates

Oil prices dropped sharply, falling below $100 per barrel during the week

The Treasury will auction $72 billion in 3-yr, 10-yr, and 30-yr securities next week

Week Ahead

The most significant economic data next week will be the monthly inflation reports. The Producer Price Index (PPI) focuses on the increase in prices of "intermediate" goods used by companies to produce finished products and will come out on Thursday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Friday. CPI looks at the price change for those finished goods which are sold to consumers. In addition, Retail Sales will be released on Thursday. Retail Sales account for about 70% of economic activity. Import Prices and the Trade Balance will round out the week. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.

Mortgage Market News for the week ending April 29, 2011

2011-04-29T10:23:00.000-07:00

No Change From Fed

The most highly anticipated economic event this week was Wednesday's Fed meeting. The Fed indicated that it will not make any changes in policy at this time, which investors took as positive news for stock and bond markets. Weakness in the GDP and Jobless Claims data released this week also helped mortgage rates improve. As a result, mortgage rates ended the week a little lower.

As expected, the Fed held the fed funds rate steady, and the statement was very similar to the last one. The Fed made no change to its plans to complete the $600 billion quantitative easing program by the end of June and will continue to reinvest the proceeds from maturing securities to maintain the size of its portfolio. The Fed did lower its near-term forecast for GDP growth and raised its outlook for both overall and core inflation levels for this year. Investors found relief in the lack of surprises and boosted their investments in both stocks and bonds, including mortgage-backed securities (MBS).

The housing data released during the week reflected improvement from last month. March New Home Sales rose 11% to an annual rate of 300K units. The inventory of unsold new homes fell to the lowest level since 1967. March Pending Home Sales, a leading indicator, rose 5%. The chief economist of the NAR predicted that existing home sales will increase by 5% to 10% in 2011 due to an improving labor market and favorable affordability levels.

Also Notable:

GDP showed that the economy grew at a 1.8% annual rate during the first quarter

The March Core PCE price index was a tame 0.9% higher than one year ago

The Dow stock index reached a multi-year high above 12,800

The value of the US dollar fell to the lowest level since the summer of 2008

Mortgage Market News for the week ending April 21, 2011

2011-04-21T10:27:00.000-07:00

Mortgage Rates Improve on Debt Warning

With little economic data, it was a relatively quiet week for mortgage rates. The biggest economic news was a surprise warning from a major rating agency that it may downgrade US debt, but investors viewed this as positive for bonds. As a result, mortgage rates ended the week a little lower.

On Monday, S&P unexpectedly announced that it had lowered its outlook for US debt due to growing budget deficits. Basically, this means that S&P sees a higher risk that they will need to downgrade the credit rating for US debt over the next couple of years. A lower credit rating would increase the yield required by all investors to purchase US debt to offset the higher perceived risk. In addition, some investors are not permitted to own lower rated debt, and the selling from these investors would add further upward pressure to yields.

In recent months, similar warnings pushed yields higher in smaller European countries such as Greece and Portugal. The immediate reaction to Monday's S&P announcement was a rise in US bond yields as well, but yields soon moved lower as lawmakers began to use the news to support their plans for deficit reduction. Investors expect that the threat of a lower debt rating will make it easier for politicians to make difficult cuts in government spending. In short, what would normally be bad news for mortgage rates actually helped them improve.

Also Notable:

March Existing Home Sales rose 4% from February

Inflation in China rose to a 32-month high

Gold prices reached a record high above $1,500 per ounce

The Treasury will auction $99 billion in 2-yr, 5-yr, and 7-yr securities next week

Week Ahead
The biggest economic event next week will be Wednesday's Fed meeting. For the first time, the Fed Chief will hold a press conference after the meeting to discuss the Fed's announcement. No change in rates is expected, but investors will be looking for hints about when the Fed will begin to tighten monetary policy. The most significant economic report next week will be GDP on Thursday. GDP is the broadest measure of economic growth. Before that, New Home Sales will be released on Monday. Durable Orders, another important indicator of economic growth, will come out on Wednesday. Pending Home Sales, a leading indicator, will be released on Thursday. Chicago PMI, Personal Income and Core PCE inflation will come out on Friday. Consumer Confidence and Consumer Sentiment will round out the busy schedule. In addition, there will be Treasury auctions on Tuesday, Wednesday, and Thursday.

Mortgage Market News for the week ending April 15, 2011

2011-04-15T10:03:00.000-07:00

Mortgage Rates Improve on Inflation Data

On target inflation data and strong demand for the longer-term Treasury auctions were favorable for mortgage rates this week. The other major economic reports contained few surprises. As a result, mortgage rates ended the week lower.

In recent weeks, the primary influence for mortgage rates has shifted from global events in Japan and the Middle East to the outlook for inflation. Last week's rate hikes in Europe and China to fight inflation raised concerns that the Federal Reserve was falling behind with its lack of tightening, and mortgage rates moved higher. This week's tame inflation data eased those concerns, however, and mortgage rates improved. The March Consumer Price Index (CPI) rose 0.5% from February, matching the consensus forecast, and was 2.7% higher than one year ago. Core CPI, which excludes food and energy, increased at a low 1.2% annual rate, which was a little lower than expected.

Rising commodity prices have focused attention on the distinction between overall inflation levels and core inflation levels. Core inflation excludes the volatile food and energy components, so it is often viewed as a better indicator of short-term inflation trends by economists and Fed officials. While consumers certainly struggle with higher gas prices, longer-term inflation trends generally are more influenced by other factors such as wages and housing costs, which recently have been increasing very slowly. In short, stronger than expected demand for commodities and violence in the Middle East have pushed energy prices significantly higher, but Fed officials forecast that this represents a temporary increase in overall inflation levels. Commodity prices are not expected to climb at this pace indefinitely. If food and energy prices stabilize, then the gap between overall and core inflation levels will likely shrink.

Also Notable:

The Beige Book reported that economic activity "generally continued to improve"

Capacity Utilization rose to the highest level since August 2008

The sovereign debt of Ireland was downgraded again

Gold prices reached a record high above $1,480 per ounce

Week Ahead

Next week will be shortened by a holiday and will be a light week for economic data. Housing Starts will be released on Tuesday. Existing Home Sales will come out on Wednesday. Philly Fed and Leading Indicators are scheduled for Thursday. Mortgage markets will close early on Thursday and will be closed on Friday in observance of Good Friday.

Mortgage Market News for the week ending April 8, 2011

2011-04-08T10:36:00.000-07:00

Inflation Concerns Push Rates Higher

With little other economic news, inflation concerns weighed on mortgage rates this week. Despite rising commodity prices, Fed officials appear to be in no rush to tighten monetary policy. Investors, worried about the risk of higher inflation, pushed mortgage rates a little higher.

While the ECB (European Central Bank) and China raised rates this week to fight inflation, US Fed officials continued to downplay the risks. According to the Fed Minutes released this week and in recent statements, the majority of Fed officials maintain the view that higher commodity prices are unlikely to raise future inflation expectations. These officials expect the impact to be "transitory" and "muted". To support the economic recovery, they believe that the Fed should move slowly in removing monetary stimulus. The more hawkish minority at the Fed is gaining support, however, and several Fed officials have suggested that the Fed may need to tighten monetary policy before the end of the year. In light of the Fed's debate, investors will be closely watching next week's important inflation reports.

Even with higher energy prices, consumers continued to spend freely on other items last month. The March sales figures from about two dozen large retail chain stores released on Thursday were stronger than expected. Consumer spending accounts for about 70% of economic activity, so this data was encouraging news for the economy.

Also Notable:

Continuing Jobless Claims fell to the lowest level since October 2008
The sovereign debt of Portugal was downgraded again
Oil prices reached a 30-month high above $110 per barrel
The Treasury will auction $66 billion in 3-yr, 10-yr, and 30-yr securities next week

Week Ahead

The most significant economic data next week will be the monthly inflation reports. The Producer Price Index (PPI) focuses on the increase in prices of "intermediate" goods used by companies to produce finished products and will come out on Thursday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Friday. CPI looks at the price change for those finished goods which are sold to consumers. In addition, Retail Sales will be released on Wednesday. Industrial Production, another important indicator of economic growth, is scheduled for Friday. Import Prices, the Trade Balance, Empire State, Consumer Sentiment, and the Fed's Beige Book will round out a busy week. There will be Treasury auctions on Tuesday, Wednesday, and Thursday. Investors also will be watching to see if Congress reaches an agreement on the debt ceiling to avoid a shutdown.

Mortgage Market News for the week ending April 1, 2011

2011-04-01T10:32:00.000-07:00

Mortgage Rates Increase

An improving economic outlook was unfavorable for mortgage rates this week. The Dow stock index reached a new high for the year, as investors shifted funds from bonds to stocks. Weaker than average demand for the 7-yr Treasury auction also helped push mortgage rates a little higher.

The economic data released during the week generally was a little stronger than expected. Most significant was the monthly Employment report. Against a consensus forecast of 195K, the economy added 216K jobs in March. The Unemployment Rate declined to 8.8%, the lowest level since March 2009, from 8.9% in February. Stronger economic growth increases inflationary pressures, which is negative for mortgage rates.

The recently passed Dodd-Frank Act requires Federal housing regulators to define the characteristics of loans which will be exempt from new risk retention requirements. Such loans will be known as Qualified Residential Mortgages (QRM). Non-QRM loans will likely require higher interest rates than QRM loans. This week, the first proposed QRM characteristics were announced. In the proposal, all government guaranteed or insured loans, including FHA/VA, Fannie Mae and Freddie Mac loans, will be QRM. Unfortunately, outside of these agency loans, the definition was very strict, making it hard to qualify. There will now be a 60-day comment period.

Also Notable:

The February Core PCE inflation index was just 0.9% higher than one year ago

February Pending Home Sales, a leading indicator, rose 2.1% from January

Oil prices rose to a 2.5-year high above $107 per barrel

The Fed's Lacker suggested that Fed asset sales and rate hikes could happen this year

Week Ahead

After a busy week, the Economic Calendar will be extremely light next week. ISM Services will come out on Tuesday. The minutes from the March 17 Fed meeting will also be released on Tuesday. These detailed notes on the discussion between Fed officials provide additional insight into the reasoning behind the Fed's decisions.

Mortgage Market News for the week ending March 25, 2011

2011-03-25T10:53:00.000-07:00

Treasury Will Sell MBS

With no major developments in Japan or the Middle East and little economic data on the schedule, mortgage markets had one of their quietest weeks of the year. The only significant market moving news was an unexpected announcement from the Treasury on Monday, which pushed mortgage rates a little higher. For the rest of the week, mortgage rates barely changed.

The Treasury announced on Monday that it will begin selling its remaining $142 billion in agency-guaranteed mortgage-backed securities (MBS) holdings. Beginning this month, the Treasury plans to sell up to $10 billion per month, as they wind down the emergency programs put in place in 2008 during the financial crisis. The expected increase in future supply pushed MBS prices lower. Mortgage rates, which are largely based on MBS prices, moved higher. The big question now is what the Federal Reserve plans to do with its larger $944 billion MBS portfolio. A similar announcement from the Fed would have a much larger negative effect on mortgage rates.

The housing sector data released this week was weaker than expected. February Existing Home Sales fell 10% from January. The inventory of unsold existing homes rose to an 8.6-month supply from a 7.5-month supply in January. Distressed sales accounted for 39% of all sales. Median existing home prices dropped 5% to the lowest level since April 2002. February New Home Sales fell 17%. As a result of price declines and continued low mortgage rates, home affordability is at the most favorable level in years, according to data from both the NAR and the NAHB.

Also Notable:

The Jobless Claims four-week average declined to the lowest level since July 2008

The Treasury will auction $99 billion in 2-yr, 5-yr, and 7-yr securities next week

Gold prices rose to record levels near $1,435 per ounce

Portugal's sovereign debt rating was cut by S&P

Week Ahead

The biggest economic event next week will be the important Employment report on Friday. As usual, this data on the number of jobs, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month. Early estimates are for a gain of 170K jobs in March. Before the employment data, Pending Home Sales, Personal Income and the Core PCE price index will come out on Monday. Chicago PMI will come out on Thursday, and the ISM Manufacturing index will be released on Friday. Consumer Confidence, Factory Orders and Construction Spending will round out the schedule. There will be Treasury auctions on Monday, Tuesday, and Wednesday. The FDIC is expected to release its proposed definition of a Qualified Residential Mortgage (QRM) next week as well. This announcement will begin to clarify which loans will be subject to risk retention.

Mortgage Market News for the week ending March 18, 2011

2011-03-18T09:55:00.000-07:00

Rates Lower on Global Events

World events overshadowed domestic news in driving mortgage rates this week. The disaster in Japan and the violence in the Middle East helped push mortgage rates a little lower. Stronger than expected US economic data had just a small impact.

The current environment is rare in that unrelated events in different parts of the world are exerting such a strong influence on US mortgage rates. While global economic growth rates are always a significant factor, they generally shift at a gradual pace. What makes the disaster in Japan so unusual is that it produced a very abrupt decline in the economic outlook for Japan. Slower economic growth in Japan will likely contribute to slower US growth, which is favorable for mortgage rates. Uncertainty in the Middle East is also favorable for mortgage rates, as it leads to higher oil prices which slow economic growth. Changing conditions in the Middle East pushed rates in both directions during the week as violence increased in Bahrain, but may be diminishing in Libya.

A week with a packed economic calendar and a Fed meeting was pushed to the background by the news from other countries. This week's generally stronger than expected economic data might otherwise have caused mortgage rates to move higher. Rising food and energy prices produced higher than expected inflation readings in February. Core CPI inflation, which excludes food and energy, rose just 1.1% from one year ago, but it has been moving higher in recent months. The Fed statement contained no surprises and produced little reaction.

Also Notable:

The Philly Fed regional manufacturing index surged to the highest level since 1984
The Jobless Claims four-week average declined to the lowest level since July 2008
The Fed statement provided a modest upgrade to the US economy
The G7 intervened after the value of the yen relative to the dollar reached record levels

Week Ahead
Next week, Existing Home Sales will be released on Monday, and New Home Sales will come out on Wednesday. Durable Orders, an important indicator of economic growth, will be released on Thursday. The final revisions to fourth quarter 2010 GDP will come out on Friday, along with Consumer Sentiment.

Mortgage Rates Drop On Crisis in Japan

2011-03-17T13:20:00.001-07:00

Mortgage Rates Drop On Crisis in Japan

17Mar11

Mortgage rates moved lower this week after the earthquake and subsequent nuclear fears in Japan sent investors toward U.S. Treasury bonds, putting downward pressure on both yields and interest rates, according to mortgage financier Freddie Mac.
That pushed the popular 30-year fixed mortgage to 4.76 percent during the week ending March 17, down from 4.88 percent last week and 4.96 percent a year ago.
The 15-year fixed slipped to 3.97 percent from 4.15 percent, and is more than a quarter-percent below the 4.33 percent average seen last year.
Meanwhile, the five-year adjustable-rate mortgage crept down to 3.57 percent from 3.73 percent, and sits about a half-point below the 4.09 percent average seen last year.
Finally, the one-year ARM dipped to 3.17 percent from 3.21 percent, and is about a point below the 4.12 percent average seen this time a year ago.
Remember, good news generally pushes interest rates up, while bad news generally leads to an easing in rates.
The mortgage rates above are good for conforming loan amounts at 80 percent loan-to-value; pricing adjustments may increase or lower the rate you ultimately receive, and mortgage points must also be paid.
Mortgage points averaged 0.7 on fixed mortgages and 0.6 percent on ARMs – I believe that includes the loan origination fee.
Jumbo loans continue to price a half percentage point or more higher than conforming mortgages.

Mortgage Market News for the week ending March 11, 2011

2011-03-11T09:51:00.001-08:00

Mortgage Rates Improve

Concerns about the pace of global economic growth and continued violence in the Middle East helped mortgage rates improve this week. Very strong demand for this week's longer-term Treasury auctions was also favorable. As a result, mortgage rates moved lower during the week.

The fighting in Libya continued this week, and violence spread to Saudi Arabia. Geopolitical tensions generally benefit bonds as investors seek out relatively safer assets. Unrest in oil-producing nations has the added impact of pushing oil prices higher. When consumers and businesses must spend more for energy, they have less money to spend on other items. This slows economic growth and can reduce expectations for future inflation, allowing investors to accept lower yields.

Extremely strong demand for this week's 10-year and 30-year Treasury auctions reinforced the view that many investors are seeking to reduce the risk in their portfolios. Despite budget deficit concerns, US government-guaranteed securities remain one of the primary "safe" assets for global investors. Demand for the longer-term auctions was well above average from both foreign and domestic investors. Increased demand drives bond prices higher and yields lower.

Also Notable:

February Retail Sales rose 1.0% from January

Moody's downgraded Spain's sovereign debt rating

Oil prices remained above $100 per barrel

The Dow stock index dropped below the 12,000 level

Week Ahead

The biggest economic event next week will be Tuesday's FOMC meeting. Investors will be looking for an update on the Fed's plans for the quantitative easing program. The most significant economic data next week will be the monthly inflation reports. The Producer Price Index (PPI) focuses on the increase in prices of "intermediate" goods used by companies to produce finished products and will come out on Wednesday. The Consumer Price Index (CPI), the most closely watched monthly inflation report, will come out on Thursday. CPI looks at the price change for those finished goods which are sold to consumers. In addition, Industrial Production, an important indicator of economic growth, is scheduled for Thursday. Housing Starts will be released on Wednesday. Import Prices, Empire State, Leading Indicators, and Philly Fed will round out a busy week.

Mortgage Market News for the week ending March 4, 2011

2011-03-04T10:44:00.001-08:00

Little Change in Rates

While investors continued to closely watch the events in the Middle East, there were few new developments there during the week. As a result, this week's important economic data had the greatest influence on mortgage rates. Daily volatility was high as investors reacted to the major economic reports, but mortgage rates ended the week essentially unchanged.

Much stronger than expected economic data during the week caused investors to prepare for the possibility that the economy is growing more rapidly than expected. The Chicago PMI manufacturing index rose to the highest level since July 1988, and the ISM Services index rose to the highest level since August 2005. Weekly Jobless Claims dropped to the lowest level since May 2008. Meanwhile, the Fed's Beige Book reported that many companies were passing through price increases due to rising commodity prices. As expected, mortgage rates reacted to the data by moving higher.

The results from Friday's Employment report were strong, but they did not exceed expectations. Against a consensus forecast for an increase of 200K jobs, the economy added 192K jobs in February. The Unemployment Rate declined to 8.9% from 9.0% in January. The gains were strong nearly across the board, with the exception of the government sector. Over the longer-term, the private sector must produce new jobs to sustain a recovery, so strength in the private sector was a good sign for the future. Average Hourly Earnings, a proxy for wage growth, fell short of expectations, remaining unchanged from January. Some investors were prepared for a much higher jobs number, and the on target results prompted a reversal of the rise in mortgage rates from earlier in the week.

Also Notable:

The January Core PCE price index was just 0.8% higher than one year ago

Bernanke upgraded the Fed's forecast for 2011 GDP growth by 0.5% to 3.5% to 4.0%

The ECB (European Central Bank) held rates unchanged

The Treasury will auction $66 billion in 3-yr, 10-yr, and 30-yr securities next week

Week Ahead

After a big week, the Economic Calendar will be much lighter next week. The most significant report will be Retail Sales on Friday. Retail Sales account for about 70% of economic activity. The Trade Balance will come out on Thursday, and Consumer Sentiment will be released on Friday. There will be Treasury auctions on Tuesday, Wednesday, and Thursday. Treasury auctions recently have been market moving events.

Mortgage Market News for the week ending February 25, 2011

2011-02-25T14:02:00.001-08:00

Mortgage Rates Lower on Geopolitical Tensions

Geopolitical events overshadowed this week's economic data and Treasury auctions. Unrest in the Middle East caused investors to seek relatively safer investments such as bonds. As a result, mortgage rates ended the week lower.

The violence in the Middle East reached a much greater level this week, as Libyan leader Gadhafi fought to retain control. Uncertainty about whether the violence will spread to other nations produced a "flight to safety", which means that investors shifted funds from risky assets such as stocks to relatively safer assets such as bonds. Higher demand for bonds, including mortgage-backed securities (MBS) helped mortgage rates improve.

As a result of the unrest in the Middle East, oil prices climbed to the highest levels since October 2008. When the current crisis eases, oil prices may move lower, but many investors expect that a higher risk premium will remain in the price of oil for quite a while. Higher oil prices impact mortgage rates in two opposing ways, increasing inflation (negative) and slowing economic growth (positive). In the longer term, it's not clear which influence will have a greater impact. Shorter term, there is a risk that the flight to safety trade will reverse as tensions ease, which could push mortgage rates back to higher levels.

Also Notable:
Fourth quarter GDP was revised lower from 3.2% to 2.8%
Consumer Sentiment rose to the highest level since January 2008
The inventory of unsold existing homes fell 5% in January, to the lowest level since December 2009
The Fed's Lacker suggested that higher oil prices are not a problem for inflation expectations right now

Week Ahead

The biggest economic event next week will be the important Employment report on Friday. As usual, this data on the number of jobs, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month. Early estimates are for a gain of 175K jobs in February. Before the employment data, Chicago PMI, Pending Home Sales, Personal Income and the Core PCE price index will come out on Monday. The ISM Manufacturing index will be released on Tuesday. The ISM Service index and Productivity will be released on Thursday. The Fed's Beige Book, Factory Orders and Construction Spending will round out the schedule.

For Additional Mortgage Info Call Chae at (888) 554-0144 or Email: cbae@fhaonline.biz http://www.fhaonline.biz/

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Professional Mortgage Source LLC - 4.50% with 0 Origination and Closing Costs of $0Wells Fargo - 4.625% with 1% Origination and Closing Costs of $2,000.00Bank of America - 4.50% with 1.25% Origination and Closing Costs of $1455Assumptions: Value=$400K Loan Amount=$300K Fico=740

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Mortgage Rates Drop On Crisis in Japan

Mortgage Rates Drop On Crisis in Japan

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Professional Mortgage Source LLC - 4.50% with 0 Origination and Closing Costs of $0
Wells Fargo - 4.625% with 1% Origination and Closing Costs of $2,000.00
Bank of America - 4.50% with 1.25% Origination and Closing Costs of $1455

Assumptions: Value=$400K Loan Amount=$300K Fico=740