Category Archives: Interest Rates

MND: Mortgage Rates Continue Heading Mostly Lower Thanks to Europe

Mortgage Rates Continue Heading Mostly Lower Thanks To Europe

Mortgage rates moved lower today at a less aggressive pace than yesterday. We noted some stratification between lenders which is relatively common when market conditions are volatile, and driven by unscheduled headlines. It’s worth noting that some lenders are actually worse in price today vs yesterday, though the average lender is slightly lower in cost. This marks the 8th straight session without the average moving higher–something it last did on March 8th after the Employment Situation Report…

Article source: http://www.mortgagenewsdaily.com/channels/mortgage_rates_update/300703.aspx

Daily Rate Update: Mortgage Rates Slightly Higher Despite Market Stability

Mortgage Rates Slightly Higher Despite Market Stability

Mortgage rates moved gently higher today in what was more of an extension of yesterday afternoon’s mortgage market weakness than anything to do with today’s trading levels. In fact, bond markets were slightly stronger today as economic data was largely overlooked in favor of reacting to Cyprus-related headlines. That said, MBS (the mortgage backed securities that most directly influence mortgage rates) struggled compared to Treasuries. In general, MBS underperform Treasuries in volatile, headline…

Article source: http://www.mortgagenewsdaily.com/channels/mortgage_rates_update/301093.aspx

Daily Rate Update: Mortgage Rates Increasingly Stuck at Recently Higher Levels

Mortgage Rates Increasingly Stuck at Recently Higher Levels

Mortgage rates moved slightly higher today on average, though a few lenders were unchanged or marginally improved. Some released positively revised rate sheets in the middle of the day as bond markets and MBS (the mortgage-backed-securities that most directly influence rates) improved. Though today’s move was slightly weaker, it keeps rates in a consistent range just under their 10-month highs. After having risen to 3.625% in late January, 30yr fixed “best-execution” rates ( what is this? ) have…

Article source: http://www.mortgagenewsdaily.com/channels/mortgage_rates_update/301680.aspx

Daily Rate Update: Mortgage Rates Flat to Slightly Lower to Begin Shortened Week

Mortgage Rates Flat To Slightly Lower To Begin Shortened Week

Mortgage rates were, once again, unchanged in many cases today, though some lenders were slightly lower in cost than Friday’s latest offerings. Trading levels in MBS (the mortgage-backed-securities that most directly influence rates) started the day off in territory that would have been consistent with higher rates, but improved fairly quickly as bond markets shrugged off news that Cyprus had reached a bailout agreement with the EU. Best-Execution for 30yr Fixed, Conventional loans is 3.625% to 3…

Article source: http://www.mortgagenewsdaily.com/channels/mortgage_rates_update/301472.aspx

Daily Rate Update: Mortgage Rates Break Cyprus Slide, Move to 2-Week Lows

Mortgage Rates Break Cyprus Slide, Move to 2-Week Lows

Mortgage rates moved lower today at their fastest pace in more than a week, bringing them in line with their lowest levels since last week’s Cyprus-related market movement. Lender pricing strategies continue to be varied and some lenders didn’t improve nearly as much as the average. That said, it was enough to clearly tip the scales in favor of 3.625% as a prevailing Best-Execution rate ( what is this? ) for 30yr Fixed loans. 3.75% and 3.5% may be more viable depending on the scenario and the lender…

Article source: http://www.mortgagenewsdaily.com/channels/mortgage_rates_update/301878.aspx

Mortgage Rates Head for 2-Month Lows

Mortgage rates fell appreciably today, this time at the fastest pace of the current winning streak.  In fact, it was the biggest move lower since the March 18th FOMC Announcement when markets dialed back their expectations on the timing of the Fed’s rate hike.  That’s a topic that continues to be a key consideration for the bond markets that dictate mortgage rates. 

Today’s economic data served as more anecdotal evidence suggesting a weaker jobs report on Friday.  The jobs report (technically, the “Employment Situation,” but also referred to as Nonfarm Payrolls or NFP) is the most important piece of data when it comes to the economy’s influence on Fed policy.  The past few reports have been much stronger than expected, and markets have responded by quickly ramping up expectations for a rate hike.  Today’s report suggested that trend may be running out of steam.  That’s good for rates as investors feel it should further delay a Fed rate hike.

While the Fed’s policy rate is not perfectly correlated with mortgage rates, when the Fed finally hikes, they will be doing so after more than 6 years of a record low funds rate.  If nothing else, that’s a symbolic gesture that signals another evolution in the Fed’s removal of accommodation (the first being the end of QE).  If the Fed is moving away from accommodation, it creates upward pressure for all rates.  Fortunately, markets are already pricing in a fairly good chance of a rate hike this year, and mortgage rates are still near 2-month lows.

Specifically, many lenders moved down to 3.625% today in terms of the most prevalently-quoted conventional 30yr fixed rate for top tier scenarios.  The majority remain at 3.75%, but that would change with just a little more improvement.  For borrowers who are still seeing the same rate today, the improvements would have come in the form of lower closing costs.


Loan Originator Perspective

“Nice rally today following a much weaker than expected ADP employment report.   This, as well as the components of the ISM data and regional manufacturing data, indicate a weaker NFP number on Friday.  So floating through Friday could pay off, but we have a wild card in the form of wages.  If Friday’s jobs number is weaker than expected, but if income increases more than expected we might still see bonds worsen.  So it is risky to float.  I would strongly recommend short term closings lock up later today.  Loans closing in more than 20 days might benefit from floating especially when you take into account Greece drama is building up as they have to make bond payments next week to the IMF which they might miss.” –Victor Burek, Open Mortgage

“Rate markets had a strong day today, with both treasuries and MBS at their best levels in a month.  I’m not sure rate sheets reflect all the gains yet, but that’s not unusual.  Tomorrow’s economic calendar shows weekly unemployment and some manufacturing data, neither of which will have near the effect of Friday’s March Jobs Situation Report (aka NFP).  ADP’s March jobs estimate missed expectations today, we’ll see about NFP Friday.  I have several floating borrowers, will be watching tomorrow’s pricing to see if it’s time to pull the trigger before the jobs report.” –Ted Rood, Senior Originator

“If you are going to lock this week you have two real choices today or Friday following the NFP numbers.  Today is the safe bet and a good one for bonds have been on a winning streak.  However just like the bond market cheered the missed ADP report today they may also Cheer a potential miss on the jobs report and rally further.  Of course this is speculation but today’s pricing is real and locking should be seriously considered if you are closing within weeks.” –Manny Gomes, Branch Manager Norcom Mortgage

“Mortgage Rates improved today and if you’re considering locking in before Friday’s Non Farms Payroll report you’ll need to decide whether you want to lock today or tomorrow.  I’d lock today.  The last 2 days have shown some nice gains and it would be common to see a little of this given back before Friday’s big report and a long weekend (half day on Friday).  So if you’re not interested in floating through NFP, then today’s the day to lock. ” –Brent Borcherding, brentborcherding.com

“From today until Friday we are in a high risk high reward realm. Technical levels are super important as we are trading at the bottom of the recent range. Floating into the next couple of days data for loans closing within 15 days is oblivious. Loans closing within 15-30 should strongly consider locking. Loans with 30-45 day closing time have a bit of flexibility, but with near multi-year lows on rates we shouldn’t be greedy. Pigs get fat hogs get slaughtered. Lock em up. ” –Constantine Floropoulos, Quintic Bank


Today’s Best-Execution Rates

  • 30YR FIXED – 3.625-3.75
  • FHA/VA – 3.25-3.5
  • 15 YEAR FIXED – 3.00-3.125
  • 5 YEAR ARMS –  2.75 – 3.25% depending on the lender


Ongoing Lock/Float Considerations

  • 2015 began with a strong move to the lowest rates seen since May 2013.  The catalyst was Europe and the introduction of European quantitative easing.

  • With European QE having now begun, we’re on high alert for a big picture bounce in European economic data, sentiment, growth, and rates.  The more it looks like such a bounce is taking hold, the greater the risk that domestic bond markets and mortgage rates will also experience a big bounce higher.  There was a possibility that the bounce occurred in February, but European bonds got back to the task of improving in March.  This has helped calm the domestic bond market’s move toward higher rates.
  • While more immediate, bigger-picture disaster has been averted, it’s still a highly uncertain time for global financial markets.  On the one hand, some believe we’re in the midst of a race among world central banks to devalue currencies and lower interest rates.  Others believe that the global economy is turning a corner and rates will grind higher.  That creates a lot of volatility, and volatility is bad for mortgage rates.  One result is that they have a slightly harder time keeping pace with movement in Treasuries.  That can be good or bad, depending on which way markets are moving.  The other result is that there really is no way to be sure that today’s rates will be available a few hours from now.  They could get better or worse, but the point is that there’s more change and movement in the mortgage market so far in 2015.

  • As always, please keep in mind that the rates discussed generally refer to what we’ve termedbest-execution(that is, the most frequently quoted, conforming, conventional 30yr fixed rate for top tier borrowers, based not only on the outright price, but also ‘bang-for-the-buck.’  Generally speaking, our best-execution rate tends to connote no origination or discount points–though this can vary–and tends to predict Freddie Mac’s weekly survey with high accuracy.  It’s safe to assume that our best-ex rate is the more timely and accurate of the two due to Freddie’s once-a-week polling method). 

Article source: http://www.mortgagenewsdaily.com/consumer_rates/449650.aspx

Mortgage Rates Inch Lower to End March; Volatility Ahead

Mortgage rates fell again today extending a 3 day winning streak after shooting abruptly higher in the middle of last week.  That damage hasn’t been completely undone yet, and we shouldn’t expect it to be, given that underlying trading levels in bond markets have yet to make it back to the stronger levels seen last Tuesday.  In addition, it’s the nature of the mortgage market for rates to move up more abruptly than they move down. 

3.75% remains the most prevalently-quoted conventional 30yr fixed rate for top tier scenarios.  Most of the lenders that moved up to 3.875% with last week’s spike are now back down to 3.75% and a few of the most aggressive lenders are offering 3.625%, but the vast majority are at 3.75%.

Markets have been largely preoccupied with the month/quarter end trading process.  While traders typically react to news and economic data, there are other reasons to move money beyond the the direction of the economy.  Many investors are tasked with investing according to the decisions of their clients.  Month-end, and especially quarter-end are busier times for this sort of housekeeping trading.  

Even so, the morning’s economic data managed to create volatility, but it was subdued compared to what it might have been if not for the month/quarter-end environment.  Naturally, with tomorrow marking the beginning of a new month, traders will have more liberty to react to the regular set of inputs.  Incidentally, those inputs increase in importance, meaning there is an exceptionally wide range of possibilities tomorrow, for better or worse.


Loan Originator Perspective

“Month/Quarter end has been positive for bonds, but the gains have not
been substantial. Lender rate sheets are slightly improved today. A
new month and jobs data begins tomorrow which has me on the defensive
side. The trend has been for rates to worsen heading into the non farm
payrolls report which will be released on Friday. With today’s modest
gains, i think it would be wise to lock in. ” –Victor Burek, Open Mortgage

“Just as the college basketball world has their big event coming up in
the form of this weekends Final Four, we have ours coming up on Friday
with the NFP jobs report. After getting through Monday and Tuesday’s
relatively quiet month end gyrations and activitities things pick up
starting tomorrow the the ADP jobs # and the ISM report. Jobless claims
on Thursday could, but may not, add to any volatility/positioning ahead
of Friday’s jobs report. As the Fed is now saying they’re more data
dependent on when to raise rates I’d think a defensive approach may be
prudent as far as your lock/float decisions go. And most definitely if
you’re closing soon. The rest of the week should be interesting.” –Jeff Anderson, Loan Officer, Salem Five Mortgage, LLC


Today’s Best-Execution Rates

  • 30YR FIXED – 3.75
  • FHA/VA – 3.5
  • 15 YEAR FIXED – 3.125
  • 5 YEAR ARMS –  2.75 – 3.25% depending on the lender


Ongoing Lock/Float Considerations

  • 2015 began with a strong move to the lowest rates seen since May 2013.  The catalyst was Europe and the introduction of European quantitative easing.

  • With European QE having now begun, we’re on high alert for a big picture bounce in European economic data, sentiment, growth, and rates.  The more it looks like such a bounce is taking hold, the greater the risk that domestic bond markets and mortgage rates will also experience a big bounce higher.  There was a possibility that the bounce occurred in February, but European bonds got back to the task of improving in March.  This has helped calm the domestic bond market’s move toward higher rates.
  • While more immediate, bigger-picture disaster has been averted, it’s still a highly uncertain time for global financial markets.  On the one hand, some believe we’re in the midst of a race among world central banks to devalue currencies and lower interest rates.  Others believe that the global economy is turning a corner and rates will grind higher.  That creates a lot of volatility, and volatility is bad for mortgage rates.  One result is that they have a slightly harder time keeping pace with movement in Treasuries.  That can be good or bad, depending on which way markets are moving.  The other result is that there really is no way to be sure that today’s rates will be available a few hours from now.  They could get better or worse, but the point is that there’s more change and movement in the mortgage market so far in 2015.

  • As always, please keep in mind that the rates discussed generally refer to what we’ve termedbest-execution(that is, the most frequently quoted, conforming, conventional 30yr fixed rate for top tier borrowers, based not only on the outright price, but also ‘bang-for-the-buck.’  Generally speaking, our best-execution rate tends to connote no origination or discount points–though this can vary–and tends to predict Freddie Mac’s weekly survey with high accuracy.  It’s safe to assume that our best-ex rate is the more timely and accurate of the two due to Freddie’s once-a-week polling method). 

Article source: http://www.mortgagenewsdaily.com/consumer_rates/449325.aspx

Mortgage Rates Slightly Improved Over Weekend

Mortgage rates fell moderately to begin the week, but haven’t yet returned to recent lows.  Even so, the improvement is a relief considering rates had only just begun fighting back against a big move higher that happened on Wednesday and Thursday of last week.  Friday then offered a glimmer of hope and today keeps hope alive.  That said, upcoming events could make for some more volatility, especially after tomorrow.  It’s not safe to assume that rates will continue to fall in the short term.

3.75% remains the most prevalently-quoted conventional 30yr fixed rate for top tier scenarios.  Most of the lenders that moved up to 3.875% last week are now back down to 3.75% and a few of the most aggressive lenders are offering 3.625%, but the vast majority are at 3.75%.

As for today’s events, things were generally quiet.  This morning’s economic data had little effect on trading levels in the bond markets that influence mortgage rates.  As alluded to above, that should begin to change on Wednesday as harder-hitting data begins to come out.  It’s almost always the case that rates can react positively or negatively to important economic data.  The farther away from expectations the data is, the bigger the move can be in rates.  The leading example of this phenomenon is the Employment Situation Report, which has no equal in terms of market moving potential.  It comes out this Friday morning.


Loan Originator Perspective

“With the improved pricing we are seeing this morning, I think it might
be wise to start thinking about locking short term closings. This is
non farm payrolls week, and we typically worsen heading into the report.
However, this is also month/quarter end which typically supportive of
fixed income securities such as treasuries and MBS. I think you might
be safe floating overnight, but I wouldn’t expect there to be much to
gain. If you do plan on locking this week, I think today or tomorrow
will be the right time.” –Victor Burek, Open Mortgage

“Mortgage Bonds held there own today in the face of a huge equity rally.
Normally such a large increase in stocks would create selling in
mortgage bonds but that was not the case today. Mortgage bonds however
were not able to push above tough resistance and until that happens
floating can be dangerous. Take into consideration your risk tolerance
and if risk adverse there is enough market moving data to make your
stomach turn. Those who can tolerate large market swings and more
importantly are not closing for 30 days out or longer can consider
floating.” –Manny Gomes, Branch Manager Norcom Mortgage


Today’s Best-Execution Rates

  • 30YR FIXED – 3.75
  • FHA/VA – 3.5
  • 15 YEAR FIXED – 3.125
  • 5 YEAR ARMS –  2.75 – 3.25% depending on the lender


Ongoing Lock/Float Considerations

  • 2015 began with a strong move to the lowest rates seen since May 2013.  The catalyst was Europe and the introduction of European quantitative easing.

  • With European QE having now begun, we’re on high alert for a big picture bounce in European economic data, sentiment, growth, and rates.  The more it looks like such a bounce is taking hold, the greater the risk that domestic bond markets and mortgage rates will also experience a big bounce higher.  There was a possibility that the bounce occurred in February, but European bonds got back to the task of improving in March.  This has helped calm the domestic bond market’s move toward higher rates.
  • While more immediate, bigger-picture disaster has been averted, it’s still a highly uncertain time for global financial markets.  On the one hand, some believe we’re in the midst of a race among world central banks to devalue currencies and lower interest rates.  Others believe that the global economy is turning a corner and rates will grind higher.  That creates a lot of volatility, and volatility is bad for mortgage rates.  One result is that they have a slightly harder time keeping pace with movement in Treasuries.  That can be good or bad, depending on which way markets are moving.  The other result is that there really is no way to be sure that today’s rates will be available a few hours from now.  They could get better or worse, but the point is that there’s more change and movement in the mortgage market so far in 2015.

  • As always, please keep in mind that the rates discussed generally refer to what we’ve termedbest-execution(that is, the most frequently quoted, conforming, conventional 30yr fixed rate for top tier borrowers, based not only on the outright price, but also ‘bang-for-the-buck.’  Generally speaking, our best-execution rate tends to connote no origination or discount points–though this can vary–and tends to predict Freddie Mac’s weekly survey with high accuracy.  It’s safe to assume that our best-ex rate is the more timely and accurate of the two due to Freddie’s once-a-week polling method). 

Article source: http://www.mortgagenewsdaily.com/consumer_rates/448857.aspx

Mortgage Rates Hold Ground As Markets Take a Breather

Mortgage rates had one of their least exciting days of the week today, moving just modestly lower from yesterday’s latest levels.  The trading range in underlying markets was exceptionally narrow, especially when compared to the week’s previous activity.  The final revision of 2014’s 4th quarter GDP was released this morning, but it was close to forecasts and didn’t produce much of a reaction.  Fed Chair Yellen spoke in the afternoon, saying that a rate hike would indeed likely be warranted in 2015.  By now, this is old news for financial markets.  Few, if any, eyelashes were batted. 

3.75% remains the most prevalently-quoted conventional 30yr fixed rate for top tier scenarios.  For the lenders that moved up to 3.875% yesterday, today’s modest gains didn’t bring them any lower.  The only improvements were seen in the form of closing costs.  Even then, several lenders are actually worse off today, despite trading levels improving.

With 2 ugly days of weakness mid-week and today’s much calmer session, it’s fair to wonder which of the recent trends will be in control as we begin the upcoming week.  Ultimately, the momentum will likely be decided by next Friday’s big jobs report.  While there could be some volatility between now and then, today’s trading suggests that the past 2 days of weakness amounted to a quick move to get into position for next week.  It allows traders/investors to approach the important data from a more nimble spot in the recent range, with room to run either higher or lower depending on the data.


Loan Originator Perspective

“Lender rate sheets are slightly improved over yesterdays last sheets.
As i mentioned, during sell offs, lenders tend to take away more than
the price drop justifies. They do this incase the selling continues. I
favored floating over night yesterday and i also favor floating over
the weekend. The benchmark 10yr was able to hold below 2.00 yesterday,
so it seems like we have good support over head and plenty of room to
run back down to the 1.85 area. If you do float over the weekend, be in
touch with your lender early Monday to evaluate pricing.”-Victor Burek, Open Mortgage

“Bonds finally found support levels today, as our losses turned to
moderate gains. I wouldn’t want to call it a rally just yet though.
There’s more chatter from Germany over Greece’s willingness to enact
fiscal reforms, and the more drama there, the more rates here will
benefit. I’m still in a “lock earlier rather than later” mode, but that
could change next week, if rates continue improving. ” –Ted Rood, Senior Originator

“The sell off in mortgage bonds was stopped by strong support levels. We
now have get back above a key resistance level before we can see
pricing improvement and lower rates. Janet Yellen is set to speak just
before the closing bell today and that can stir things up a bit. The
last time she spoke rates fell hard. Lets hope the same thing happens
today. Risk/Reward favors floating over the weekend. ” –Manny Gomes, Branch Manager Norcom Mortgage


Today’s Best-Execution Rates

  • 30YR FIXED – 3.75-3.875
  • FHA/VA – 3.5
  • 15 YEAR FIXED – 3.125
  • 5 YEAR ARMS –  2.75 – 3.25% depending on the lender


Ongoing Lock/Float Considerations

  • 2015 began with a strong move to the lowest rates seen since May 2013.  The catalyst was Europe and the introduction of European quantitative easing.

  • With European QE having now begun, we’re on high alert for a big picture bounce in European economic data, sentiment, growth, and rates.  The more it looks like such a bounce is taking hold, the greater the risk that domestic bond markets and mortgage rates will also experience a big bounce higher.  There was a possibility that the bounce occurred in February, but European bonds got back to the task of improving in March.  This has helped calm the domestic bond market’s move toward higher rates.
  • While more immediate, bigger-picture disaster has been averted, it’s still a highly uncertain time for global financial markets.  On the one hand, some believe we’re in the midst of a race among world central banks to devalue currencies and lower interest rates.  Others believe that the global economy is turning a corner and rates will grind higher.  That creates a lot of volatility, and volatility is bad for mortgage rates.  One result is that they have a slightly harder time keeping pace with movement in Treasuries.  That can be good or bad, depending on which way markets are moving.  The other result is that there really is no way to be sure that today’s rates will be available a few hours from now.  They could get better or worse, but the point is that there’s more change and movement in the mortgage market so far in 2015.

  • As always, please keep in mind that the rates discussed generally refer to what we’ve termedbest-execution(that is, the most frequently quoted, conforming, conventional 30yr fixed rate for top tier borrowers, based not only on the outright price, but also ‘bang-for-the-buck.’  Generally speaking, our best-execution rate tends to connote no origination or discount points–though this can vary–and tends to predict Freddie Mac’s weekly survey with high accuracy.  It’s safe to assume that our best-ex rate is the more timely and accurate of the two due to Freddie’s once-a-week polling method). 

Article source: http://www.mortgagenewsdaily.com/consumer_rates/447428.aspx

Mortgage Rates Increase Rapidly

Mortgage rates rose rapidly today, almost completely erasing the improvement following last week’s Fed Announcement.  This is especially ironic considering most major media outlets are running Freddie Mac’s weekly mortgage rate survey headline.  Because that survey receives most of its responses on Monday and Tuesday, it fully benefited from the stronger levels earlier in the week after having totally missed out on last Wednesday and Thursday’s big move lower.  As such, the headlines suggest that rates are significantly lower this week.  That was certainly true on Tuesday afternoon, but rates have risen roughly an eighth of a point since then.  That’s a big move considering we’ve gone entire months without moving more than an eighth.

Specifically, what had been 3.625 to 3.75% is now 3.75 to 3.875% in terms of the most prevalently-quoted conventional 30yr fixed rates for top tier scenarios.  The upfront costs associated with moving down to 3.75 from 3.875% are still quite low.  If a borrower prefers paying a bit more upfront in exchange for lower payments, it’s worth looking into.  The breakeven time frame is between 4 and 5 years for most lenders (where the monthly payment savings supersede the additional upfront cost).

Yesterday, we discussed the fact that the move higher was strong enough that it shouldn’t be disregarded, but that it would take another day of similar weakness to confirm.  Instead, today ended up being significantly weaker.  This wasn’t due to trading levels in markets as much as it was simply lenders getting caught up with a quick market move.  In fact, apart from being a bit more volatile, today’s market weakness is almost exactly the same as yesterday’s.


Loan Originator Perspective

“If you missed yesterday morning’s great opportunity to lock, your
pricing as of 2pm eastern today is considerably worse. The benchmark 10
year note is putting up a fight to hold below 2.00. New supply of
treasuries are out of the way and tomorrow brings us the final reading
on 4th quarter GDP. Since this is very backwards looking, it probably
wont have much if any impact on the markets. By time you read this,
the damage of today’s continued selling will already be priced in. At
this point, i would float over night and see what tomorrow brings.”-Victor Burek, Open Mortgage

“After moving lower for several days and threatening to break through to
even lower lows it appears markets threw up a wall here and we’ve sold
off for 2 consecutive days. In the face of more frequent “Fed Speak”
about “normalizing” rates along with the failure to follow through to
lower lows I believe caution is in order. I would be locking up
everything right now as long as it was closing in less than 60 days
until we see any sort of reversal in trend.” –Hugh W. Page, Mortgage Banker, SeacoastBank

“Well, our post Fed statement rally has officially left the building, and
rates continue to rise quickly. The trend is not our friend. We’ll
need a shift in market sentiment to even hold current levels, much less
regain the ground lost since Tuesday. Floating borrowers need to assess
their risk tolerance and goals with their originators. This sell off
isn’t a head fake, and could well continue. I’ll be locking all loans
closing in 30 days or less at origination. Thanks to MBS Live, my
current pipeline is 100% locked!” –Ted Rood, Senior Originator

“Last couple days have been rough. Again, the guidance generally given
has been to protect loans with limited time. Bond markets had nearly 2
weeks of positive moves, the last couple of days remind us how quickly
things can change. Loans inside of 30 days should be considering
locking, albeit I think after consecutive sell-off days like we have
experienced at the very minimum we should see some relief to close the
week out tomorrow. Again, loans inside of 15 days should have been
locked, if you have not locked you may as well float into tomorrow, in
my opinion. Locking today is a panic move. Loans with 30+ days to
close have time on their side, however if you like the rate and costs
associated with your transaction you should lock your loan and sleep
easy.” –Constantine Floropoulos, Quontic Bank

“Today’s second poorly received auction has created another post auction
sell off and bonds have now violated the up trend they have been in.
This does not necessarily mean rates will continue to increase but
betting on lower rates in the short term is no longer safe. If your
stomach is turning because you are now being quoted rates .125%- .25%
higher than available at the beginning of the week go ahead and lock and
end the pain. If you have the stomach to stay in it and more
importantly weeks before closing waiting things out in case this is a
profit taking breather in a longer term move lower in rates may payoff.” –Manny Gomes, Branch Manager Norcom Mortgage


Today’s Best-Execution Rates

  • 30YR FIXED – 3.75-3.875
  • FHA/VA – 3.5
  • 15 YEAR FIXED – 3.125
  • 5 YEAR ARMS –  2.75 – 3.25% depending on the lender


Ongoing Lock/Float Considerations

  • 2015 began with a strong move to the lowest rates seen since May 2013.  The catalyst was Europe and the introduction of European quantitative easing.

  • With European QE having now begun, we’re on high alert for a big picture bounce in European economic data, sentiment, growth, and rates.  The more it looks like such a bounce is taking hold, the greater the risk that domestic bond markets and mortgage rates will also experience a big bounce higher.  There was a possibility that the bounce occurred in February, but European bonds got back to the task of improving in March.  This has helped calm the domestic bond market’s move toward higher rates.
  • While more immediate, bigger-picture disaster has been averted, it’s still a highly uncertain time for global financial markets.  On the one hand, some believe we’re in the midst of a race among world central banks to devalue currencies and lower interest rates.  Others believe that the global economy is turning a corner and rates will grind higher.  That creates a lot of volatility, and volatility is bad for mortgage rates.  One result is that they have a slightly harder time keeping pace with movement in Treasuries.  That can be good or bad, depending on which way markets are moving.  The other result is that there really is no way to be sure that today’s rates will be available a few hours from now.  They could get better or worse, but the point is that there’s more change and movement in the mortgage market so far in 2015.

  • As always, please keep in mind that the rates discussed generally refer to what we’ve termedbest-execution(that is, the most frequently quoted, conforming, conventional 30yr fixed rate for top tier borrowers, based not only on the outright price, but also ‘bang-for-the-buck.’  Generally speaking, our best-execution rate tends to connote no origination or discount points–though this can vary–and tends to predict Freddie Mac’s weekly survey with high accuracy.  It’s safe to assume that our best-ex rate is the more timely and accurate of the two due to Freddie’s once-a-week polling method). 

Article source: http://www.mortgagenewsdaily.com/consumer_rates/446970.aspx

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