So long 4.x%...it was nice knowing ya!

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<a href="http://mortgage.freedomblogging.com/2009/05/27/oc-mortgage-rates-above-5-and-climbing/11205/">O.C. mortgage rates above 5% and climbing</a>



<a href="http://www.calculatedriskblog.com/2009/05/mortgage-rates-moving-higher.html">Mortgage Rates: Moving Higher </a>
 
Yes, rates from last week to this week jumped 1 percent. This does not mean that 4.x is gone. The Treasury and the Fed can jawbone rates lower, as they did in January and March of this year.



It's the squirts for anyone who did not lock, waiting for lower rates to come.....



My .02



Soylent Green Is People.
 
[quote author="Soylent Green Is People" date=1243492168]Yes, rates from last week to this week jumped 1 percent. This does not mean that 4.x is gone. The Treasury and the Fed can jawbone rates lower, as they did in January and March of this year.



It's the squirts for anyone who did not lock, waiting for lower rates to come.....



My .02



Soylent Green Is People.</blockquote>
True, but now that hill has become a lot steeper to climb as the spread between the 30-year Fannie mortgage bond and the 10-year treasury bond was north of 2% earlier this year and now it's below 1%. There is only so low this spread can go so if the 10-year bond yields keep going up, no amount of purchasing of the Fannie MBS bonds will keep mortgage rates from climbing.
 
Got this from a Mortgage Banker today



You knew it would eventually happen. Here's the news, but don't perceive it as all bad.

Today the U.S. Treasury began a three day auction to raise a total of $101 billion on 2, 5, and 7 year bonds. The overall credit worthiness of the U.S. in the world economy has caused the required yields for these bonds to increase greatly compared to the past months. This bond sale directly affects mortgage rates.

Home buyers and refinance customers have enjoyed very low interest rates for the past three months and lenders have been overwhelmed with very high volumes of business. Conventional 30 year fixed rates below 5.0% were common and we offered 4.875% as recently as last Friday.

Today our conventional 30 year fixed rate mortgages have priced at 5.50%. Some people will be in shock, but they need to take history into perspective. Over the past 20 years mortgage rates have been as high as 10% and guess what, people still bought houses.

All of us in the housing and mortgage business need to take a positive viewpoint on the rate increase of today.

* Rates are still lower than the average over the past 10 years.

* Home prices are down, so more people can still afford to buy.

* Stimulus money will continue to bring first time buyers into the market for many months.
 
We have all known interest rates were going to rise, it was only a matter of when. This may be a blip rather than a turning point, but the abruptness of the move is remarkable.



Everyone has been piling in to Government Treasuries as a flight to safety, but eventually money would flee Treasuries in favor of riskier assets, particularly as the economy improved. I did not think we would see this for many more months because the economy is still horrible, but apparently investors do not agree. We may see a flight back into Treasuries if the economy is revealed to have more problems.
 
I saw the article in the OC Register online this afternoon and immediately went to my Countrywide login (now BofA Mortgages) and checked on just how much my refinance would now cost me.



You see, I refied last month for 4.375% for 0.5 points on a 300K loan. I was a current Countrywide customer and that was a helluva deal. That was with a 45 day lock, too.



The rate today on their site is 5.375% for 0.825 points on a 300K loan. And the lock is NINETY days!



I figured that would happen because my loan processor told me that he was overwhelmed with refi's and the 45 day lock just wouldn't cut it anymore.



I had to basically babysit the whole process with several calls to them a day, faxing, refaxing and then re-refaxing documents to them, etc. It was a pain in the ass but it's over and I have a $1400 a month payment.



Glad to get in while I could because I believe that's it for the 4.X% until the next economic crisis twenty years from now.
 
[quote author="PANDA" date=1243503341]Got this from a Mortgage Banker today



All of us in the housing and mortgage business need to take a positive viewpoint on the rate increase of today.

* Rates are still lower than the average over the past 10 years.

* Home prices are down, so more people can still afford to buy.

* Stimulus money will continue to bring first time buyers into the market for many months.</blockquote>


Bwa-ha-ha-ha-ha-ha-ha-ha-ha-ha-ha-ha-ha!



These jokers never give up.



As with so many markets, prices are set and determined at the margin. It is not the actual interest rate which will kill sales. It is the change in interest rates, and especially the rate of change, (2nd derivative), of interest rates that will kill the re market. 90% of any market is psychological.
 
[quote author="awgee" date=1243514214][quote author="PANDA" date=1243503341]Got this from a Mortgage Banker today



All of us in the housing and mortgage business need to take a positive viewpoint on the rate increase of today.

* Rates are still lower than the average over the past 10 years.

* Home prices are down, so more people can still afford to buy.

* Stimulus money will continue to bring first time buyers into the market for many months.</blockquote>


Bwa-ha-ha-ha-ha-ha-ha-ha-ha-ha-ha-ha-ha!



These jokers never give up.



As with so many markets, prices are set and determined at the margin. It is not the actual interest rate which will kill sales. It is the change in interest rates, and especially the rate of change, (2nd derivative), of interest rates that will kill the re market. 90% of any market is psychological.</blockquote>
Sounds very similar to what those idiot realtards preach, eh? Makes since you need a California RE license to be a realtard or a mortgage agent/broker.
 
[quote author="IrvineCitizen" date=1243509316]I saw the article in the OC Register online this afternoon and immediately went to my Countrywide login (now BofA Mortgages) and checked on just how much my refinance would now cost me.



You see, I refied last month for 4.375% for 0.5 points on a 300K loan. I was a current Countrywide customer and that was a helluva deal. That was with a 45 day lock, too.



The rate today on their site is 5.375% for 0.825 points on a 300K loan. And the lock is NINETY days!



I figured that would happen because my loan processor told me that he was overwhelmed with refi's and the 45 day lock just wouldn't cut it anymore.



I had to basically babysit the whole process with several calls to them a day, faxing, refaxing and then re-refaxing documents to them, etc. It was a pain in the ass but it's over and I have a $1400 a month payment.



Glad to get in while I could because I believe that's it for the 4.X% until the next economic crisis twenty years from now.</blockquote>
Sounds almost identical to my experience and rate as a current customer of WaMu/Chase. At one point I was told that every loan processor had 500 clients to deal with. There were several times when I thought there was no way I'd make the 45-day lock. It kept going back & forth to underwriting purgatory, they kept "losing" paperwork...and this was a "streamlined" refi. I finally got hold of a supervisor who pushed it through and I closed with 2 days to spare. The savings and hassle were worth it though, and at this rate I know I'll never have to go thru a refi on this place again.
 
Mr. Mortgage has a great entry on the ramifications of the mortgage meltdown.



<a href="http://www.fieldcheckgroup.com/2009/05/28/5-28-potential-consequences-of-55-mortgage-rates/">5-28 - Potential Consequences of 5.5% Mortgage Rates</a>



Mortgage Rates - It Could be as Bad as You Can Imagine
 
Since Black Wednesday we had a fairly rough Thursday (only 2 price changes) and so far today 3 price changes - all for the better. What was 5.50% for 1.0 point Wednesday is now 5.00% for 1.0 point today. Sure, the market action so far is end of month window dressing by traders, but as said before: trees don't grow to the sky, and prices don't fall to the center of the earth. There is a middle ground that will come back in the upper 4's with possible mid 4's if the Fed says nice things about Mortgage Backed Securities.



My .02c



Soylent Green Is People.
 
With the ten year yield gaining close to 20 points today, does anybody know how the mortgage market responded?
 
[quote author="awgee" date=1243911072]With the ten year yield gaining close to 20 points today, does anybody know how the mortgage market responded?</blockquote>
According to the LA Times, the average 30-year fixed rate is 5.38%.



<a href="http://latimesblogs.latimes.com/laland/2009/06/are-the-days-of-the-sub5-mortgage-past-.html">"If you wanted a sub-5% rate, that opportunity has passed you by," McBride said.</a>
 
<a href="http://www.msnbc.msn.com/id/31091125/">Rising interest rates could threaten recovery </a>



This story is a good reminder that the Federal Reserve has less control over interest rates than they would like everyone to believe.



<blockquote>"As the U.S. Treasury continues to churn out hundreds of billions of dollars of fresh debt, officials are confronting one of the thorniest problems since the financial crisis began.



Who?s going to buy all this paper? And if demand dries up, how much higher will interest rates have to go to attract new buyers?



The question is not just academic. When the crisis first hit last fall, investors worldwide sought shelter in U.S. Treasuries, and interest rates plunged. That helped to shore up battered banks and restart the housing industry with low mortgage rates "</blockquote>
 
<a href="http://mortgage.freedomblogging.com/2009/06/04/oc-mortgage-rates-jump-again/11569/">O.C. mortgage rates jump again</a>



Jeff Altman, a partner with brokerage WestCal Mortgage Corp. in Orange, said today was another crazy day with two to three mid-day changes in rates, with quotes as high as 5.625% with no points on a 30-year fixed-rate loan and 5.375% with a one-point fee.
 
<a href="http://www.calculatedriskblog.com/2009/06/rising-rates-next-fed-meeting-will-be.html">Rising Rates: The Next Fed Meeting Will be Interesting</a>



"<strong>Based on this historical data, a Ten Year yield at 3.84% suggests a 30 year mortgage rate of around 5.75%.</strong>



Freddie Mac reported that 30 year mortgage rates were at 5.29% for the week ending June 4th, and the MBA reported rates at 5.25% for the week ending May 29th. These rates should jump again next week putting pressure on the Fed. "
 
[quote author="IrvineRenter" date=1244248557]<a href="http://www.calculatedriskblog.com/2009/06/rising-rates-next-fed-meeting-will-be.html">Rising Rates: The Next Fed Meeting Will be Interesting</a>



"<strong>Based on this historical data, a Ten Year yield at 3.84% suggests a 30 year mortgage rate of around 5.75%.</strong>



Freddie Mac reported that 30 year mortgage rates were at 5.29% for the week ending June 4th, and the MBA reported rates at 5.25% for the week ending May 29th. These rates should jump again next week putting pressure on the Fed. "</blockquote>
6% here we come.
 
Those Freddie Mac average rates are as realistic as Lending Tree or Bankrate.com's averages. Way behind the curve and full of junk statistics.



5.50% FHA and Conventional: 1.0 point. So far this Friday we've had a morning and mid day rate change and are expecting a worse rate change in an hr or so.



Here's how I think it's playing out - from a cynics perspective.



Timmy G went to Beijing for a dressing down. Our Chinese Overlords (OCO) are not going to invest long term at sub 3% rates. The short term rate auctions last week went well, but next week comes a 3y/10y/30yr auction that was likely to be a disaster. Timmy convinced OCO that if the US floats rates to the upper 3's - as they are now - that OCO should invest. Next week you'll either see a great Treasury auction or a crappy one. If OCO buys a bunch, mortgage rates which are currently way oversold will settle into the upper 4's, low 5's. If the auction is a steaming pile, 6.0% mortgage rates are on their way.



That said though, of the 1.2t the Gubmint is committing to spend on Mortgage Backed Securities, they've only spent 500b. A TARP's worth of ammo is still out there.



My .02c



Soylent Green Is People.
 
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