Where R Rates & Market Knowledge Information To Chat With & Share With Clients & Realtors
MARKET CHANGES
1 BPS = $10.00 change in cost to borrower for the same rate per 100K in loan size.
Take Coupon % & add .75%ish to know the area impacted on your rate sheets.
GREEN is GOOD for Rates – RED is BAD for Rates
| YESTERDAY CONV 5.5% – UP 4 CONV 6.0% – UP 1 GOVT 5.0% – UP 8 GOVT 5.5% – UP 5 10 YR NOTE – DOWN 1 DOW JONES – UP 236 |
| SO FAR TODAY CONV 5.5% – UP 11 CONV 6.0% – UP 9 GOVT 5.0% – UP 11 GOVT 5.5% – UP 4 10 YR NOTE – DOWN 3 TO 3.83 DOW JONES – DOWN 51 |
THINGS TO SHARE WITH CLIENTS & REFERRAL PARTNERS
Yesterday we stayed in the green and we are up a little bit today. Anytime you seen green that is positive and anytime you see red that means we are getting hit a little bit.
I know BPS (Basis Points) can be confusing sometimes and figuring out what they really mean is important. My main caution is do not let the colors intimidate you or move your mood based on what it is saying as it moves all throughout the day so you need to look at the big picture.
For example, today you see we are up 11 on the 5.5% coupon and the Govt 5% coupon. Those are going to be your lower rates with less premium and closer to those pricing with discounts or smaller premiums. The higher bonds where you see up 9 today and up 4 on the Govt side are paying a little more premium so more like lender paid models if you are in the broker channel or making your origination in the rates.
On average a pricing desk at a lender will not change your rate sheet until the markets move about 13 BPS. Any movement less than that amount is likely not going to cause a lender to reprice unless they know something big happened and need to adjust before it happens or as it is happening.
Pricing can also be adjusted by lenders based on the amount of volume that they need to take in and vice versa if they have taken in too much volume they may worsen pricing so repricing alerts do not always make sense. Of course, not too many lenders complaining about too much volume right now : )
Today we had the redbook economic report come out which measures sales increases or decreases when comparing retail sales from the same week last year to this past week. Retail sales were up 4.9% more than they were last year. This is taken from about 9,.000 general merchandise stores across the country to get these numbers.
Today is just market fluctuation and no big items impacting the markets. We have no further economic reports coming out today although we do have two Fed Speakers this morning which can move markets but nothing substantial.
We are waiting on tomorrows FOMC (Federal Open Market Committee aka The Fed) minutes to be released and the Jackson Hole Symposium results from Thursday and Fridays meetings.
It is a pretty slow economic week which is good for stability within the mortgage market. This is a blessing to you because when borrowers are not watching drama on the news about mortgage rates then that means they are not calling around as much as they would if they heard rumors that rates are dropping or going up.
Use this time of stability to your advantage and get folks locked in.
Product & Guideline Highlight Knowledge That Gives You An Edge Over Your Competition
MORE FANNIE APPROVE ELIGIBLES
Fannie Mae did an update over this past weekend that will seem confusing and easy to pass by if you do not fully understand the change. It can be a big deal for certain situations though.
Here is the update:
“To enable more loan casefiles to receive this exemption earlier in the process, DU will be updated to use the sales price to make this determination when an appraised value is not provided on a purchase transaction” and “The difference between the sales price and the appraised value when an appraised value is provided may result in a change in the DU recommendation.”
You have to go back to February of 2023 when Fannie rolled out the LIP (Low Income Purchase) and the VLIP (Very Low Income Purchase).
These particular programs allowed a little perk that most people do not know about. Depending on the appraised value that is input in to the DU system and if the borrower income level fell under the LIP (80% of AMI) or the VLIP (50% of AMI) you could get an exemption from receiving an approve/ineligible findings.
This means if you ran findings with the exact same borrower using different appraised value amounts or if appraised value field was left blank then one could receive an approve/eligible and another could receive an approve/ineligible (aka refer).
The exemption was used for borrowers with LIP/VLIP and using the HomeReady product or if they fell in areas where the borrower/property fell under the Fannie Mission Index goals which just means properties or borrowers that meet their criteria.
The issue up to now is that the number that is used to determine if the approve/ineligible can be exempted and an approve/eligible findings will be received instead is based on the appraised value field. Side note: You can still get a refer. This only takes an ineligible to an eligible findings.
The issue is that the appraised value field is many times not filled in until the file receives the appraisal back which is completed later on in the process. This means that findings with ineligible would never move forward and therefore the borrower nor LO would never know it is approvable due to the field that needs to be completed.
DU has now been updated to use the purchase price as the value vs the appraised value field. This will allow LO’s to get true results upfront when a loan is eligible.
The warning sign though is if the appraised value comes in low that can impact findings. The system is driven by a number in that field and if that number changes the findings could revert back to ineligible.
This is very small in the grand scheme of things and also very important in understanding how DU works and how to get more approvals.
Jackism of the Day Truths and Thoughts that make you go hmmm
APPRECIATE THE 97%
One of the worst things about being a politician is that you are defined by the few things in your life and not by the majority.
I want you to think about the last 30 days of your life. Just this one single month. Now I want you to think about every instance where you feel you were likely not doing your best. It may be a time you lashed out at someone or got frustrated in traffic or said something to your spouse or child that you regret. How you thought about or reacted to a co-worker or a comment you made to a client. Think of anything that does not represent who you desire to be as a person.
Now, let’s imagine that for every one of those situations each of those moments were posted on the front page of the newspaper and sent out to your community, that they were sent via a blast email to your family and friends and co-workers and clients with the subject line in all caps being “The Real Jack Keeler” or insert your name. Think of being a politician and CNN or FOX is following your every move.
What if the entire world based their thoughts about you on the 3% of actions you make in your life and the other 97% is not mentioned at all. The 97% that defines who you actually are.
Do you feel that is a fair way to be judged by others?
Now let me ask you this question. How often do we let an outburst or a comment or an action that others do dictate how you feel about others? How much of their 3% err of their ways impact how you view them?
Think of your spouse or a child or a co-worker or client or someone in your community that does something that really drives you crazy. That it bothers you to a point where you let it impact your relationship as a whole.
I see it all the time where I am talking to a friend who is frustrated by something their wife or child does and they cannot seem to get over it. What happens if you take that one or two nuances and remove them from the picture you have created about them? How are they then?
Chances are that they are a pretty amazing person that likely has a couple faults as we all do.
If you see something in someone that bothers you then you can do a couple things.
#1 – Address it with them. Duh!
#2 – Let it go and accept the person for who they are and love the true them.
Suppose you see a spider crawling on your wall. If you are like me that messes me up. I hate spiders and snakes and any creepy crawly things and I do not like dealing with them. When my wife says to kill the spider I man up and do it but I do not like it one bit.
What if I saw a spider on the wall and said ok let me take care of this spider. I go upstairs and pull out my 44 magnum (really big gun) and I point it at the spider and pull the trigger. Yep, I killed the spider for sure. The issue is I also blew a hole in my wall and then through the other wall and in to the driveway and the bullet ended up in my car windshield.
Sure, I dealt with the spider but I ruined a lot more when all I really needed to do was get a paper towel and gently remove the spider from my wall,
Many times in our relationships we are pulling out the 44 magnum when we should really only be grabbing a paper towel to address a concern in a relationship.
Today, I want you to do one simple thing. Whether it is a spouse, child, co-worker, client, person in your community or family member. Think of what drives you crazy about them and if you were to remove one or two nuances what kind of person are they then? This holds especially true for spouses. We tend to be the hardest on those that are the closest to us and matter the most in our lives.
Today, celebrate the 97% of a person vs condemning the 3%.
PERKS TO GROW YOUR BUSINESS
MBS TRACKING SITE
HANDY DANDY GUIDES
