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

mortgage update denver colorado

Housing Market Picture Brightens with Job Gains:

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The pace of job creation surged in January, with the US economy generating 243,000 new positions while the unemployment rate dropped to 8.3 percent, according to government data released Friday.

Both numbers were far better than the consensus estimates, which expected a growth of 150,000 jobs and a steady unemployment rate of 8.5 percent.

Job gains have been concentrated primarily in the service sector, particularly in retail and the food and beverage industries. Warehousing, manufacturing, mining and health care also have participated.

True to form, services were responsible for 162,000 of the January swell, with manufacturing payrolls growing 50,000. Government cuts subtracted 14,000 from the total. Retail has added 390,000 jobs since December 2009, while durable goods manufacturing is up 418,000 over the past two years, according to government figures.

Housing demand is driven primarily by two factors (neither is interest rate): Consumer Sentiment and Employment Stability.  So, the surprisingly strong Nonfarm Payroll data is certainly good news for the housing industry.

What Happened to Rates Last Week?

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Mortgage backed securities (MBS) gained just +4 basis points from last Friday to the prior Friday which moved mortgage rates sideways on a week-over-week basis.
But the real story was that on Thursday MBS shot up to their highest levels (and therefore lowest mortgage rates) ever as the benchmark Fannie Mae 3.5% coupon traded at its highest level since it has been issued.
But MBS sold off of their highs and had a major reversal on Friday which moved mortgage rates upward from Thursday’s level on the much better than expected Unemployment Rate and Nonfarm Payroll data.

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. I will be watching these reports closely for you and let you know if there are any big surprises:

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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. 

Quote of the week:
“Everything counts in large amounts” – Depeche Mode

mortgage broker denver

Vince 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

mortgage update denver colorado

Plum Creek Funding Inc 1/30/2012

Consumer Sentiment Rises in January for Fifth Monthly Gain:

A measure of consumer sentiment rose in January for the fifth straight monthly gain, according to data released Friday, as job gains helped put worries about U.S. government finances in the background.
The final January reading of the University of Michigan/Thomson Reuters gauge of consumer sentiment reached 75.0, compared to a preliminary report of 74.0 and a December reading of 69.9. The sentiment gauge, which covers how consumers view their personal finances as well as business and buying conditions, averaged about 87 in the year before the start of the most recent recession.
Recent job growth has been improving, though still well below the pace needed to bring unemployment significantly below the 8.5% rate it was last month.

Obviously, this is important to housing. As consumers feel better about the economy, the more likely they are to purchase a home.

What Happened to Rates Last Week?

Mortgage backed securities (MBS) gained +150 -91 basis points from last Friday to the prior Friday which moved mortgage rates to their lowest level in 4 months.
This was a complete reversal from the previous week where we lost -91 basis points.
MBS shot up (and therefore mortgage rates moved lower) primarily for three reasons. Front and center was the Fed.

The Fed left their key interest rates alone but made a statement that their fed fund rate would essentially be zero until 2014 which caused MBS to rally.

Also the 4th QTR GDP numbers did show economic growth at 2.8% but fell short of the market expectations of 3.0%. This helped mortgage rates because this report was not inflationary.

U.S. bonds also benefited from concerns in Europe that the renegotiations between Greece and their bond holders was not going well. This could trigger Greece to finally default and cause some additional financial instability in the region.

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. I will be watching these reports closely for you and let you know if there are any big surprises:

DateTimeEconomic Release
30-Jan8:30PCE (MoM)
30-Jan8:30Core PCE (MoM
30-Jan8:30Core PCE (YoY)
30-Jan9:55PCE (YoY)
30-Jan8:30Pesonal Income
31-Jan9:00S&P Case-Shiller Home Price Index
31-Jan9:45Chicago Purchasing Managers Iindex
31-Jan10:00Consumer Confidence
1-Feb7:00MBA Mortgage Applications
1-Feb8:15ADP Employment
1-Feb10:00Consutruction Spending
1-Feb10:00ISM Manufacturing
1-Feb10:00ISM Prices Paid
1-Feb10:30EIA Crude Oil Stocks
1-Feb17:00Total Vehicle Sales
2-Feb8:30Initial Jobless Claims
2-Feb8:30Continuing Jobless Claims
2-Feb8:30Nonfarm Productivity
2-Feb8:30Unit Labor Costs
3-Feb8:30Average Weekly Hours
3-Feb8:30Nonfarm Payrolls
3-Feb8:30Avg. Hourly Earnings (MoM)
3-Feb8:30Avg. Hourly Earnings (YoY)
3-Feb8:30Unemployment Rate
3-Feb10:00Factory Orders
3-Feb10:00ISM Non-Manufacturing

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 denver

Vince 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

mortgage update denver colorado

Existing Home Sales Rose 5% in December:

Home sales rose in December to the highest pace in nearly a year. The gain coincides with other signs that show the troubled housing market improved at the end of last year.

The National Association of Realtors said Friday that sales increased 5 percent last month to a seasonally adjusted annual rate of 4.61 million, the best level since January 2011 and the third straight monthly increase.

Sales are increasing at a time when the market is flashing other positive signs. Mortgage rates are at record-low levels. Homebuilders have grown slightly less pessimistic because more people are saying they might be open to buying a home this year. And home construction picked up in the final quarter of last year.

The median sales price rose 2.3 percent to $164,500 in December.

What Happened to Rates Last Week?

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Mortgage backed securities (MBS) lost -91 basis points from last Friday to the prior Friday which moved mortgage rates upward.
The biggest economic surprise was the large decrease in the weekly Initial Jobless Claims data which is certainly positive for the economy, but negative for bonds.

But the real catalyst was a change in market sentiment that Greece’s bond holders were close to accepting the new terms of a “voluntary” hair cut of 60% to 70% on what they are owed. This removed some of the “fear factor” premium in bonds that have kept mortgage rates artificically low for the past 8 weeks. 

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. I will be watching these reports closely for you and let you know if there are any big surprises:

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Quote of the week:

“More buyers coming into the market mean additional benefits for the overall economy. When people buy homes, they stimulate a lot of related goods and services.” – NAR President Moe Veissi

mortgage broker denver

Vince 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

Mortgage applications surge on refinancing demand: MBA
January 18, 2012 7:01 AM ET

NEW YORK (Reuters) – Applications for home mortgages surged more than 20 percent last week, fueled by a wave of refinancing demand as interest rates dropped, an industry group said on Wednesday.

The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, jumped 23.1 percent in the week ended January 13.

The MBA’s seasonally adjusted index of refinancing applications climbed 26.4 percent, while the gauge of loan requests for home purchases rose 10.3 percent.

“With mortgage rates reaching new lows, refinance volume jumped,” Michael Fratantoni, MBA’s vice president of research and economics, said in a statement. “Purchase activity also increased as buyers returned to the market after the holiday season.”

The refinance share of total mortgage activity rose to 82.2 percent of applications from 80.8 percent the previous week, making it the highest refinance share since October 2010.

Fixed 30-year mortgage rates averaged 4.06 percent, down 5 basis points from 4.11 percent.

The survey covers over 75 percent of U.S. retail residential mortgage applications, according to MBA.

(Reporting By Leah Schnurr; Editing by Leslie Adler)

mortgage broker denver

Vince 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

Foreclosure Rates Fall Again:
U.S. foreclosure rates fell for the third straight month according to RealtyTrac’s new report.  New foreclosure fillings in June dropped 2.81 percent from the previous month and 6.98 percent from the previous year.

While foreclosure rates are falling, they are still at high levels with 16 straight months of readings of over 300,000.  Still 410 out of every 411 homes are not in foreclosure, so there is still some strength in the housing market.

Consumer Prices Continue to Fall:
Consumer Prices fell for the third straight month, providing bargains for American Shoppers.

The Consumer Price Index, the government’s most closely watched inflation barometer, dipped 0.1 percent in June, according to the Labor Department. Less expensive energy bills were a big factor behind the drop. Prices for food items and airline fares also dropped last month.  Also, “core” consumer prices are holding near a 44 year low.

What Happened to Rates Last Week:
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Mortgage backed securities (MBS) gained +44 basis points last week which caused 30 year fixed rates to decrease for both government and conventional loans.  Rate declined on the back of some weaker than expected economic data.  Manufacturing Data, Consumer Price Index and Consumer Sentiment all were much worse than market expectations.  Economic concerns helped to push investors towards purchasing MBS as a way to earn low yields in exchange for safety that you cannot find in the stock markets.

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.  I will be watching these reports closely for you and let you know if there are any big surprises:
mortgage rates denver

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.

Contact Colorado Mortgage Guy
Plum Creek Funding, Inc.
303-818-0699 (Cell)
303-840-0966 (Office)
877-840-0965 (Fax)
www.coloradomortgageguy.com
www.plumcreekfunding.com
vince@coloradomortgageguy.com
19519 E. Parker Square Dr. Parker, CO 80134