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
| LAST WEEK CONV 6.0% – UP 1 CONV 6.5% – DOWN 6 GOVT 5.5%% – UP 3 GOVT 6.0% – DOWN 11 10 YR NOTE – DOWN 1 DOWN JONES – UP 683 |
| SO FAR TODAY CONV 6.0% – UP 13 CONV 6.5% – UP 9 GOVT 5.5%% – UP 13 GOVT 6.0% – UP 14 10 YR NOTE – DOWN 3 DOWN JONES – UP 97 |
THINGS TO SHARE WITH CLIENTS & REFERRAL PARTNERS
It is a good Monday because we had a good last week or at least we did not lose much ground. As you know I love to see what actually happened from Monday open to Friday close which gives you the opportunity when talking to realtors or clients you can give them the high level view as well as the daily volatility.
The higher 6% rates on the FHA side was the only area that saw a little bit worse pricing but not bad. We have already made up for it this morning. When it shows 11 BPS down that means pricing was $110 worse per 100K in loan size if comparing the same rate on Monday open to Friday close.
Stocks did great last week as well as this morning. As you know what is good for stocks usually is bad for mortgage bonds. What is good for bonds is usually bad for stocks. This rings true in a stable inflationary market but we are anything but that so stock increases or decreases do not necessarily bring bad news.
This week is all about Wednesday. The CPI (Consumer Price Index) is coming out Wednesday morning which means before rate sheets come out so you will want to inform borrowers they have a choice to lock before Wednesday.
Right now we are expecting a .3% CPI month over month which equates to a 3.6% annual inflation rate. If it is better or worse the markets will react so prepare your clients and your pipeline.
Today we have two Fed speakers. Tomorrow we have PPI (Producer Price Index) which is inflation numbers for those producing goods and services. It is an indicator of what is to come to consumers down the road so that could move the market as well tomorrow.
Make it a great Monday. The markets will do what they are going to do. You can only control what you do so do what you do and do it well.
Product & Guideline Highlight Knowledge That Gives You An Edge Over Your Competition
APPRAISAL RECONSIDERATIONS
One of the areas that the agencies have really been cracking down on is the quality of appraisals as well as fair lending in appraisals.
I was reading the new FHA Mtgee Letter 2024-7 this morning and I wanted to make sure you know you have options for a reconsideration of value for FHA as well as Fannie and Freddie.
The key to success in reconsideration of value is how you approach the process. If a value comes in lower than expected and believe it or not higher than expected and you do not need the value it can cause issues due to over valuation.
As we all know our appraiser population is mainly growing older in age and has been around for a very long time. Part of this is you typically must have a college degree to be an appraiser and with technology advancing rapidly not as many folks are going in to the industry.
Therefore, much like originators we have a lot of folks that do things the old school way yet we are in a new generation of technology and compliance requirements.
The AI CU score is designed to know more than the appraiser and it is causing issues that need to be addressed from time to time.
The Mtgee letter for FHA that just came out added a lot of verbiage on fair lending as in the mentioning of a protected class that has either lived in the home, next to the home or in the proximity of the home cannot be used to alter the value of a home.
We have always called it a form of redlining but just because a home is in the quote “slums” of a city does not mean you can alter value or because it is out in the sticks or because it is in the prime area based on the individuals who live there. None of that can be used to increase nor decrease value.
FHA as you know is hard core on using the initial appraisal. But if you see violations of this nature then it is something you can fight.
Here are a few items to consider when you do not get the value you need.
#1 – Read the CU Score and the comments. If it is above a 3 or 4 look to see why. See if it makes sense.
#2 – Before pushing for a reconsideration of value it is vital to explain why comps used are not accurate and provide comps from your realtor that support the home better than the ones used. You will have to back this up with comments. For FHA they say give it one shot and to provide up to 5 comps to reconsider the value.
#3 – Look at condition and quality rankings in the grid and truly see if what condition the property is in is truly superior or worse than the shown comps. This is an area many appraisers use to get value but then do not put supporting comments in explaining why it is superior.
The bottom line is that the same as you should look at an asset statement or a paystub in full detail to make sense of their finances you should thoroughly look at the appraisal if it does not come in as expected.
We especially need to look to see if the appraiser is actually correct in areas where the value comes in low. We all know people think their homes are worth more than they actually are sometimes and every realtor believe they are worth more : ) You have to be able to agree, disagree but most importantly know what to do about it.
Give a thorough presentation when doing a reconsideration of value and you will find greater success. Just saying this is wrong and getting frustrated will not get you anywhere.
Remember you are working in the best interest of your borrower and not just a paycheck. Make sure they are paying a fair price for what they are getting and know how to make it happen for all sides of the transaction.
Jackism of the Day Truths and Thoughts that make you go hmmm
BELIEFS ARE NOT FACTS
There is a part of your life that is called liminal thinking or liminal periods of time.
Think of liminal as the inbetween moments of life. You have your past and you have your future and liminal is where you are right now between the past and the future.
Dusk and dawn is a liminal time of day. It is not night nor is it day but it is inbetween.
If you have a mud room in your house. You enter from the outside and go in to your home. The mudroom is the liminal part of your home. It’s not the outside but it’s also not really the interior comforts of your home.
Right now you are experiencing liminal thinking and liminal time between what happened yesterday and how you are preparing for tomorrow. You are in the here and now and you know how much I love the here and now aka being where your feet are.
The thing about liminal times and thinking is that we fill our present with beliefs and routines and processes that get us from where we were to where we are going. That can be our thought processes but also our routines.
This time and this period is the most vital part of your life because what you do in the here and now will dictate where you end up in the future.
If you are going where you were yesterday and it is good then absolutely do what you did yesterday so that you can enjoy the same thing tomorrow. Consistency is the key to any form of success in every area of life.
The issue is what happens when you continue to do what you have been doing yesterday in to today but are not looking forward to tomorrows results. This is where most of us fail.
You see we believe we must do things a certain way. Think of things a certain way because we always have or someone told us that is what we should do.
Just because you believe this is the way you are suppose to do something or routine makes you continue to do something one way does not mean you should continue down that path. If you do not want to be tomorrow where you were yesterday then don’t do what you did yesterday or you will be there tomorrow.
In areas you desire change. Pick one, pick two or pick three. Look at them from different angles and what if rather than doing the same thing go out and discover something that you do not know but have always been interested in trying. Expand your knowledge and your horizons and see a different way.
Look at things and think in ways from others point of view. Who do you look up to in a specific area of your life and maybe rethink the lens you are looking through or doing things through.
Do not become them but understand the why behind what they do and then in areas you need growth see if your viewpoint may change.
How you love your spouse, how you lead your children, how you approach your work, how you market or make it rain in your position, how you interact with the community and how you manage your finances.
Right now, today, at this very moment you are liminal in some areas of your life. Make a change today that will make your tomorrow better than your yesterday.
PERKS TO GROW YOUR BUSINESS
MBS TRACKING SITE
HANDY DANDY GUIDES
