Where R Rates / MBS Market Update
GREAT START TO RATES
What a great week we had in the mortgage rate markets as well as a fantastic week in stocks.
As I stated last week the key to seeing a potential mortgage rate rally for the better would be to watch the conv 6% coupon and see if we can keep it above 101.50. At the moment it is sitting at 101.63 which is a great sign if we can hold it there for a couple days.
We have a fully packed week of reports coming in with Chicago PMI (Purchasing Managers Index), JOLTS (Job Opening and Labor Turnover Survey) tomorrow, ADP Employment Report on Wednesday and then all of the payrolls coming in on Thursday. Each day will bring a little news and lots of employment numbers which are definitely market movers.
In addition, the bond market will close at 2 PM on Thursday and the Stock Market closes at 1 PM on Thursday and then both are closed for 4th of July on Friday, so it is a short week for the markets and very likely for many in this business enjoying some much-needed vacation time.
This morning rate sheets should look a bit better than Fridays close. A great way to start a Monday. Pricing should be 9 – 25 BPS better than Fridays close depending on the product and where you are on the rate sheet.
Make it a great holiday week and I will be here all week to keep you informed.
| LAST WEEK CONV 5.5% – UP 65 CONV 6.0% – UP 40 GOVT 6.0% – UP 29 10 YR NOTE – DOWN 9 DOW JONES – 1,640 |
| SO FAR TODAY CONV 5.5% – UP 13 CONV 6.0% – UP 9 GOVT 5.5% – UP 22 GOVT 6.0% – UP 25 10 YR NOTE – DOWN 2 TO 4.26 DOW JONES – UP 143 |
GREEN is GOOD for Rates – RED is BAD for Rates
Product & Guideline Highlights Ad Mortgage Products
NQM BY THE #’S
I love little lightbulb moments. Sometimes it is the smallest things that make the biggest difference.
As I continue to learn and delve into the NQM world I continue to find the value and importance it plays in every originators book of business.
Conventional and Govt business will always be my bread and butter. What I am finding in NQM is that it can be fun and adventurous and profitable to color outside the lines a little bit if you dare to do so.
One of the questions I get since we became A&D is Jack, I have this scenario. Does this fit in the NQM world? We go through it and sometimes it does and sometimes it doesn’t.
Today, I want to give you a stacking order of what to try first and then second and then on down the line. Today, I am talking about the order of things as it pertains to pricing.
You start with a NQM 2-year full doc loan. That is always going to be your best pricing. What then? What should you look for next if you want to get the best bang for your client.
The little lightbulb moment came to me during a training this past Friday. So, check this out!
For the most part our rate sheets in the LLPA section ranks the products from best product pricing to worse product pricing. There are some nuances based on LTV that restructures the best pricing.
The point I want to make here is look at the pricing differences between the different NQM products. Simply rank them in the order of price so you know what to try first.
Heck, look at our 24-month bank statement program. It is the same pricing as a full doc loan! You actually get better pricing by choosing 24-month bank statement using our base rate. Full doc 1 year does not even have a hit to pricing. How many times do you wish you could just forget the previous year???
Next would be asset utilization. Folks, with us you take their eligible assets and divide it by 60 months. The pricing hit is only .25 to .375 in price. That is almost nothing.
Then comes the 1099 program, followed by the WVOE and they max at .375 to .500 hits.
DSCR is a chart of its own and you can actually get .375 better pricing than our base rate for the right ratio. Check it out.
What I want to get across to you today. Whether you use me or other NQM lenders. Just know the pecking order of what you should be looking at. There are perks and downsides to each one of these products.
You do not even need to know what they are to start using them. That is why I am here.
If you cannot read below just click on it and it will blow up for you to read.
Got questions? Just ask.
Jackism of the Day
LIFE BY THE #’S
I figured I would stay with the theme of numbers today.
You can tell a lot about a person and what they are going to accomplish by their numbers.
Let’s take an example from business.
Let’s say you own a mortgage company and you hire a new loan officer. The loan officer says, Boss, what do I need to do to make it in this business? You respond with, Billy, if you make 10 calls per week you will find success in this business.
After the first week the boss calls Billy into his office. Billy, did you make 10 calls this week to begin your success in this business?
Billy’s answer will tell me exactly who Billy is and if he will succeed. You see, I would not be looking for a yes or no. I would be looking for a number.
If Billy says I called 10 people then Billy is going to be your average Joe originator. Doing just enough to make it. If Billy gives a long story of why he was not able to make the 10 even if it makes sense. Billy is likely not going to make it. If Billy says I made 35 calls and I can’t wait to call 50 next week then you know Billy will do what it takes to make it in the mortgage business.
Did you know you can assign a number to pretty much any area of your life. I am a big believer in disciplines. The key to a successful life is choosing the right disciplines and the right numbers associated with those disciplines.
In above example if Billy does 4 or 5 times the calls than anyone else does then that will be great for his origination life. Unfortunately, other areas of his life will likely suffer.
Who would agree health is extremely important to our longevity and quality of life. At age 55 how many pounds overweight is it advisable to be. The answer is quite simple. Zero. A normal body weight can be completed by a good and healthy exercise and eating program. It’s not rocket science. I lost 40 pounds and have kept it off for two years. I had been a dad bod or a little overweight my entire life til I added regular exercise and a healthy diet. I also quit drinking 15 months ago and that absolutely helped.
Then you have those friends on facebook. You know the ones. They went from large to absolute physical supreme. They eat, drink, live and post health. 90% of their pictures are before and after pictures of themselves and they post everything along the way. Those are the Billy’s of the health world. Cudos for them. I think it is great. It can be an inspiration as well to others. With their numbers very high on health, what is being left behind?
How are your numbers looking in different areas of your life? As a husband, wife, parent, business owner, employee, hobbyist, community member and of course your spiritual walk. That could be a fun number : )
No, of course life is not just a number. It’s just a way to measure where you want to be in different areas of your life.
For me, I want to be a high number on my walk with Christ as that impacts every area of my life. I value where I am in the disciplines of how I love my wife and spend time with my children. Then comes my number with exercise and health. If I get those three areas in equilibrium there is not much I cannot conquer.
Business for me I have always been a Billy mindset. At age 55 I will be honest with you. I may not want to go down to a 10 but I certainly would not mind going from a 50 to a 25.
The key to life is actually enjoying it. We must do some things like health to have longevity and to go and do things we want to do. What good is it doing these things if your spouse doesn’t like you, your kids don’t want to be around you, your Father in Heaven says away from me I never knew you and you have no finances to go anywhere.
I never want to be average in area of my life. Too many people are below or average in lots of areas of life and they see no change in any of them. In order to impact change you must be above average.
The key to being above average is reduce the number of areas of your life that are important to you. Figure out the 5 most important areas of your life. Get those right and performing in the right direction and you will likely find that many of the other things in life become less significant and less important to maintain.
