We have a busy week ahead of us and it’s coming on the heels of horrible news out of Japan. Things appear to be much worse than initial reports so our thoughts and prayers are with all those in need.
FOMC Announcement is due out at 2:15pm on Tuesday, we don’t expect any major changes to current policy. Fed Funds rate should remain the same and no changes to the QEII program are expected. We always want to pay attention though because the market does like to read into things so it’s always on the radar.
The rest of the week we’ll get PPI numbers, initial jobless claims and several other economic reports that the bond market will be paying attention to but for the most part, rates are stuck. The range of 4.875% - 5.25% on 30 year fixed rate mortgages is based on the fact that the current appetite on the secondary market is for the FNMA 4.5 coupon and until any real and sustained demand for the FNMA 4.0 coupon shows up, don’t expect to see 4.75% on the table without an expensive buy down or unnecessarily high lender fees. (FHA/VA/USDA is a different story and we’re tracking those bonds separately.) That said, any “waiting game” being played right now on a float/lock strategy is pointless and if borrowers are waiting to buy when rates dip further or when home prices dip further, they are making a huge and very costly mistake. Show them the cost of waiting and they will be off the fence immediately. I am happy to have this conversation with any of your clients.
My expectations for the week-
· Rates remain in the 4.875% range barring any unforeseen shake up in the markets. (With the situation in Japan, it’s never easy to predict reactions from the financial world.)
· I expect to see an uptick in applications this week for purchases. The smart buyers are talking to me before you show them a house. It will save everyone heartburn and headache later.
My expectations for the rest of March-
· With the April 1st deadline approaching for the new Loan Officer compensation rules, you may find loan officers at other companies “here today, gone tomorrow” and that may lead to some unpleasant processing and less than smooth transactions until the dust settles.
· We all know the home buying season is gearing up and I would expect (especially if we get weather like this past weekend) things to be running wide open come the end of March. One thing to consider here is that going from slow to wide open always has it’s obstacles to overcome. Just getting back in the swing of handling multiple transactions is work in and of itself. You certainly don’t want to add into it the fact that most lenders and brokers are going to be scattered and totally comatose with the implementation of the new LO comp reform thanks to Dodd-Frank. Make sure you know who is closing your deals! There are more “gotchas” and hang-ups out there in the mortgage process than there ever has been before just with getting the borrower approved, it’s no longer cut and dry.
Quick Summary-
The world of mortgage finance is a completely different animal than it was 3 or 4 years ago, we all know that. The truth of it though is that the world of mortgage finance is a completely different animal than it was just a year ago and it’s still in the process of transformation. You cannot just go to an “Application Taker” at the bank and expect to walk out with financing that makes sense. If you want to truly service your clients in the best way possible, you will have them sit down with someone who knows how to take things to a level you may not be accustomed to yet. Someone that will take the time to truly construct a game plan for the short term. (Get us to the closing table, fund the loan.) Someone who will construct a game plan for the mid-range outlook, (accounting for planned expenses, job changes, additions to the family). Someone who will construct an overall, longer term, debt and asset management strategy that will help your client build and protect wealth by using their biggest asset, the home you sold them, as one of their primary tools in the arsenal.
No comments:
Post a Comment