Dec 8, 2017

Mortgage rates rise slightly, but a bigger increase is possible

Mortgage rates ticked up this week, but a larger rise is possible next week depending on what Congress does about tax reform and the budget.

30-Year FRM15-Year FRM5/1-Year ARM
Average Rates3.94%3.36%3.35%
Fees & Points0.50.50.3
The 30-year fixed-rate mortgage averaged 3.94% for the week ending Dec. 7, up from last week when it averaged 3.9%, according to Freddie Mac. A year ago at this time, the 30-year fixed-rate mortgage averaged 4.13%.
"This week's survey reflects last week's uptick in long-term interest rates, with the 30-year fixed mortgage rate up 4 basis points. The 30-year mortgage rate has been bouncing around in a 10-basis-point range since September. While long-term rates have been relatively steady week-to-week, shorter-term interest rates have been on the rise," Len Kiefer, Freddie Mac's deputy chief economist, said in a press release.

Mortgage rates rebound
The 15-year fixed-rate mortgage this week averaged 3.36%, up from last week when it averaged 3.3%. A year ago at this time, the 15-year fixed-rate mortgage averaged 3.36%.
The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.35% this week with an average 0.3 point, up from last week when it averaged 3.32%. A year ago at this time, the five-year adjustable-rate mortgage averaged 3.17%.
Congress was a big influence on rates last week and it could be for this week as well.
"Mortgage rates edged higher early last week with the passage of the Senate's tax reform bill, which would imply greater federal borrowing over the next decade, and news of two new Fed members with less-known monetary policy views," Aaron Terrazas, Zillow's senior economist, said when that company released its own rate tracker on Wednesday.
"Friday's employment report is the most important piece of economic data due this week, though markets will also closely watch the final contours of the tax reform bill as negotiations get underway between the House and Senate. Rates could rise sharply if Congress fails to enact a resolution to continue funding the federal government later this week," said Terrazas.

Dec 1, 2017

Impact of proposed cut in taxes

Small businesses which form the back bone of the economy will definitely cheer the cut on tax rates from 35% to 20% as proposed by President Trump but the proposal to reduce the deductions to simplify tax code will definitely come as a jolt to people at least in the initial stage before the reduced complexity benefits get to be seen by the public at large.

The cut in corporate tax cut will impact the GSE's financial stability as it will affect their deferred tax assets (DTA) - and will have them go back to the central banks for liquidity. This was declared in the Q3 financial statement when news of the possible rate cuts was announced. 

The impact on the larger mortgage market is to be seen. When liquidity gets impacted, originations can be impacted as well. Anyway, we at Peoples Privo Processing are ready to process your files any time !

Aug 8, 2017

Nonbank mortgage employment soars on brighter origination

As per Mortgage New, Nonbank mortgage employment rose for the fourth consecutive month in June, as loan production during the second quarter was higher than expected at the start of the year.
Nondepository mortgage lenders and brokers added 5,000 jobs in June, bringing total employment to 341,000 from a revised 336,100 for May, according to the Bureau of Labor Statistics. May's original estimate was reduced by 600 jobs.

Lenders added 2,800 jobs, while brokers added 2,200 positions. It's the largest one-month gain in nonbank mortgage jobs since independent mortgage bankers and brokers added 5,100 jobs in July 2016. Employment is at its highest level since November 2007, when 348,700 people worked in the sector.

In June, Fannie Mae increased its 2017 origination forecast to $1.62 trillion from $1.59 trillion as refinance activity was stronger than expected. And the Mortgage Bankers Association now forecasts total volume of $1.7 trillion for 2017, up from the $1.6 trillion it forecast last December.

In July, the MBA projected second-quarter purchase lending volume of $316 billion, up from an earlier estimate of $310 billion. The MBA's refinance volume estimate also increased to $147 billion, from $120 billion. Annual purchase mortgage volume for 2017 is expected to be $1.1 trillion, up from $990 billion for 2016.Mortgage industry employment data lags the BLS national data by one month. Total nonfarm payroll employment increased by 209,000 jobs in July, and the unemployment rate was relatively flat at 4.3%."Employment growth has averaged 184,000 per month thus far this year, in line with the average monthly gain in 2016," a statement from acting BLS Commissioner William Wiatrowski said.The increase in employment was broad-based and the report was the sign of a strong labor market, Fannie Mae Chief Economist Doug Duncan said in a statement.

"One could nitpick the lack of a pickup in year-over-year wage gains, which have stayed within a narrow range of 2.5% to 2.8% this year. However, in the context of decelerating headline and core inflation witnessed since early 2017, the steady annual wage increase isn't too shabby," he said.

"All in all, today's report is consistent with gradual monetary normalization; therefore, we continue to expect September balance-sheet tapering and a December rate hike," Duncan added.

Mar 20, 2017

MBA: Mortgage Applications Rise after two weeks of decline.

After two weeks of decline, mortgage applications rose to 5.8% as per the latest data collected by Mortgage Bankers Association’s Weekly Mortgage Survey for the week ending Feb 24th,2017.

Despite the record low activity in refinance applications as interest rates remained above 4%, Mortgage applications managed to increase.

The refinance share of mortgage activity decreased to 45.1% of total applications. This is the lowest level since Nov 2008. This is down from 46.2% the previous week.

The adjustable rate mortgage activity remained unchanged at 7.3% of total applications.
The Refinance Index increased 5% from the previous week to its highest level since December 2016. The seasonally adjusted Purchase index increased 7% from one week earlier.

The average contract rate for 30-year fixed -rate mortgages with conforming loan balances decreased to 4.30% from 4.36%.

Similarly, the average contract interest rate for 30- year fixed-rate mortgages with jumbo loan balances decreased to 4.23% from 4.29%.