mortgage update denver colorado

The Housing Market Update
Plum Creek Funding Inc

New Foreclosures Plummet:

New Foreclosure filings drop 22%.

The housing market is improving, no question. Home prices are rising, interest rates are low, inventory levels have fallen and fewer borrowers are falling behind on their mortgage payments. All of this helped to temporarily put a curb on new foreclosure filings by banks in October (the most recent data published).

Lender Processing Services reported that the decline also has to do with changes in mortgage servicing that went into effect in September under the $25 billion mortgage settlement. Servicers are now required to give borrowers a 14-day notice in writing before referring a loan for foreclosures. Those letters began going out in September.

Another reason for the drop in new foreclosures may be a surge in loan modifications involving principal reduction. These are also mandated by the mortgage servicing settlement. Principal reduction modifications jumped 62 percent from October to November.

Regardless of the reason, the fewer homes on the market at depressed prices, the better it is for the housing market.

What Happened to Rates Last Week?

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Mortgage backed securities (MBS) lost -40 basis points from last Friday to the prior Friday which caused 30 year fixed mortgage rates to move higher. We had our highest mortgage rates on Friday and our lowest rates on Wednesday.

We had a mixed bag of economic data last week:
The ISM Manufacturing Index (representing 1/3 of our economy) was much weaker than expected and showed contraction in that sector. However, the ISM Services Index (representing 2/3 of our economy) was much stronger than expected showing economic expansion. Private Payrolls were weaker than expected but the Unemployment Rate and the more closely watched Non-Farm Payrolls data was better than market expectations.

MBS sold off Friday morning on the strength of Non-Farm Payrolls report which gave us our highest mortgage rates of the week.

What to Watch Out For This Week:

The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages.

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It is virtually impossible for you to keep track of what is going on with the economy and other events that can impact the housing and mortgage markets. Just leave it to me, I monitor the live trading of Mortgage Backed Securities which are the only thing government and conventional mortgage rates are based upon.

mortgage broker denverVince Reece
Senior Loan Officer
Office: 303-840-0966
Cell: 303-818-0699
vince@coloradomortgageguy.com
19519 E Parker Square Dr
Parker, CO 80134
www.coloradomortgageguy.com

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