National Mortgage Rates Report: April 14, 2008

I’m still floating mortgage rates, unless my clients are closing within 14 days. I’m cautiously floating because of the volatility in the market. Fundamentally, mortgage rates shouldn’t have a whole lot more room to come down; the Fed cuts are probably coming to an end.

Something much more drastic than the Fed open market activities will be needed to pull us out of the recession.

Yep. I said the R word and have been since last fall. I’m not scared of the recession; I welcome it.

Here’s the trick for mortgage rates. The weak dollar has world investors believing that the Fed’s easy money policy is inflationary…

UNTIL…

The recession hits them. Make no mistake about it, the economic slowdown is a global phenomenon. Canada and the UK are following suit by cutting rates. I think the world wide recession will lower oil prices and provide some much needed relief to the American consumer. read more

Posted by Brian J. Brady on Apr 14, 2008 under Mortgage Rates Reports

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National Mortgage Rates Report- April 2, 2008

Mortgage rates should decline, in the near term. I’m changing my recommendation from lock all loans to float all mortgage applications, if the loan is closing more than 14 days out.

That means that if you’re scheduled to close on your mortgage, before April 15, 2008, you should lock your mortgage rate.

Fed Chairman Bernanke spoke to Congress this morning. I’m one of those weird people that actually watch the Fed Chairman’s testimony. I look for a twitch, a nervous tic, or a tenuous posture, in addition to the text of his testimony. I’m as screwed up as the bond traders on Wall Street.

That was my world; I can’t change who I am now. Well, Bernanke thinks a “contraction” is underway.

In Southern California, we call that a recession but we’re awfully dramatic in Southern California. Anyway, contractions lead to lower mortgage rates.

Want to see how effective my lock/float recommendations are? It looks like I’m always a tad early: read more

Posted by Brian J. Brady on Apr 02, 2008 under Mortgage Rates Reports

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National Mortgage Rates Report- Mar.18, 2008 - Fed Cut .75%

The Federal Reserve Bank Cut both the discount rate and federal funds rate .75% today in an effort to stimulate this slowing economy.

While commodities’ prices accelerate, the housing market and subsequent liquidity crisis is dragging the economy into a recession.

We call this phenomenon stagflation and it’s REALLY bad for the economy. The Fed has been aggressively cutting interest rates and the declining housing market is closing down mortgage companies, investment banking firms, and real estate brokerages. What more can the Fed do to help?

The Fed can (and will) buy mortgage-backed securities.

Rather than to buy treasury notes in the open market, the Fed will be buying mortgage-backed securities. They will want to get those assets off investment banking firms’ balance sheets and provide stability to the MBS market. Remember when I said that only the uneducated pay attention to the treasury note to determine the direction of mortgage rates?

Today is proof.

The spread between treasury notes and mortgage-backed securities has been widening these past six weeks. Why? America was considered to be a sub-prime nation; everybody was expected to default on their home loans. Expect the Fed to prop up the MBS market in the next 4-6 weeks. That will be bad for treasury notes and good for MBS. read more

Posted by Brian J. Brady on Mar 18, 2008 under Mortgage Rates Reports

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National Mortgage Rates Report

February 28, 2008

I had a complete meltdown on my Twitter feed, yesterday. Bernanke told the House that he was concerned about inflation but more concerned about a recession.

I initially reversed my float recommendation and subsequently changed it back to lock because I thought Wall Street would hate Ben’s remarks; I was wrong. I violated the first principle; don’t fight the Fed.

The Federal Reserve is worried about a recession. I think we can expect the Fed to cut rates next month. The anticipation of that cut gives us a chance to see mortgage rates drift lower.

You should CAUTIOUSLY FLOAT your mortgage rate

If your closing is over 7 days away; I think you’ll have some room to get a mortgage rate that is .125% to .25% lower than it is today. read more

Posted by Brian J. Brady on Feb 28, 2008 under Guest Bloggers, Mortgage Rates Reports

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