Volatile rates - Bankrate.com - down to 4.35% on Fixed

In the last few months, it has been common for mortgage rates to have big up-and-down swings during the day -- a phenomenon known as volatility. In a random quirk, rates have been particularly volatile the last four Wednesdays, which happens to be the day when Bankrate conducts its weekly survey. Because of this volatility, Bankrate's survey didn't capture the depth of the week's rate decline.

This week's survey shows that it pays to shop around. In Dallas, some lenders told Bankrate that they were offering the 30-year fixed at 4.75 percent, and one thrift was offering it at 6.375 percent. In Los Angeles, Lazerson would disclose the lending source of his 4.375 percent loan only upon sworn assurance of strict secrecy.

For the full story click on the link below.

Mortgage rates at 4 year lows

Consumer prices fall by largest amount in 61 years worth of records - Bankrate.com

Another report from Bankrate.com

A record plunge in consumer prices in November puts pressure on the Federal Reserve to act decisively to guard against a debilitating bout of deflation.

The Federal Reserve Tuesday cut its target for a key interest rate to the lowest level on record and pledged to use "all available tools" to combat a severe financial crisis and prolonged recession.

It also said it believes that inflationary pressures have diminished. "In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate further in coming quarters," the Fed said in a statement accompanying its decision on interest rates.

In other economic news, the Commerce Department reported that construction of new homes fell in November by 18.9 percent, the biggest drop in a quarter-century. The steep decline pushed construction down to a seasonally adjusted annual rate of 625,000 homes, the slowest pace on records dating to 1959.

Benchmark mortgage rate at 4-year low -Bankrate.com

Here is an article by Holden Lewis of Bankrate.com

For a while Wednesday morning, people were getting conforming mortgages at less than 5 percent.

Rates didn't stay that low all day. By afternoon, they had gone up about a quarter of a percentage point. Dan Green, mortgage planner with the Mobium Group in Cincinnati, told his Twitter followers: "Today reminds us: The bird in the bush is ever-elusive. Lock mortgage rates when you have the chance."

There's reason to believe that borrowers will continue to have chances. The Federal Reserve made it clear Tuesday that it intends to push mortgage rates down and keep them low for a long time.

Bankrate's weekly rate survey didn't register as dramatic a decline in rates, for reasons that will be explained shortly. The benchmark 30-year fixed-rate mortgage fell 38 basis points, to 5.42 percent, according to the Bankrate.com national survey of large lenders. One year ago, the mortgage index was 6.21 percent; four weeks ago, it was 6.33 percent.

The benchmark 15-year fixed-rate mortgage fell 21 basis points, to 5.3 percent. The benchmark 5/1 adjustable-rate mortgage fell 33 basis points, to 5.84 percent.

Bankrate has been surveying mortgage rates weekly since 1985. For the benchmark 30-year mortgage, the all-time low was set June 11, 2003, at 5.28 percent. This week it's 5.42 percent. In 23 years of weekly Bankrate surveys, the benchmark rate has been below 5.42 percent eight times. The last time it was lower than 5.42 percent was March 17, 2004, when it was 5.41 percent.

Job cuts adding to growing number of housing defaults

A recent article on the number of foreclosures appeared in the USA Today.

http://www.usatoday.com/money/economy/housing/2008-12-14-unemployment-default-foreclosures_N.htm

The low interest rates are bound to increase the number of refis in the short term as more and more of the introductory ARMs are going to come up for renewal this year - if they have not yet started last year.

What the Japanese think about the financial turmoil

Recently on a trip to Japan, I had an opportunity to speak with some Japanese people and asked about their thoughts on the current situation and its impact on the the land of the rising sun. I was with a few friends waiting at our hotel when some suits who were also at the same hotel walked past us and with their little knowledge of English uttered out "sub prime crises" giggled and walked on. This seems to be the lingering thought that the Japanese have in their minds regarding Americans these days!

While the subprime crises is snowballing in to a global financial crises, we at PrivoCorp are seeing more business from customers interested in reducing the turnaround times on their loans in addition to reducing their processing costs. With the end of the crises not yet in sight, loan officers would like to see the quickest turnaround on the loan process through closing and funding.