Where R Rates / MBS Market Update

RATES TOPPING OUT

We got our first hit of red yesterday that we have not seen in almost 13 days. Thankfully it was more like a topping out rather than a big loss. We were only down 3 – 6 BPS on the day which is not even enough to move rate sheets.

For some strange reason the 10 year went down 12 BPS yesterday which is the opposite reaction of what we would normally see on a MBS (Mortgage Backed Security) down day and 12 BPS is significant for the 10 Year Note. Hey, we will take it!

We are starting out pretty level this morning with rates which is another indicator of hitting a ceiling of resistance and maintaining. If we do get a bounce the direction will likely be down which is worse for rates although anything can happen.

Week over week the average 30 year fixed rate mortgage went from 6.88% to 6.73%. That is a huge drop for one week and worthy of letting your referral partners and clients.

We saw a crazy high increase in mortgage applications and I pray you are a recipient of some of those. Overall mortgage applications were up 20.4% week over week. Applications to purchase a home were up 9% and applications to refinance a home were up an astounding 37% over last week. WOW! I strongly suggest you are marketing refinances today.

ADP Employment Change came in today way under expectations. This report measures non-farm private employment. It covers data from about 25 million employees. Expectations were to add 140K workers to their payrolls. What we actually received was 77K new workers. The markets do not seem to be overly reacting to this yet. 

Curious who is adding jobs? Numero uno is leisure and hospitality, then professional business and financial jobs. The big job losses were in trade/transportation/utilities then education and health and then IT.

One other point of interest is that oil is down to $66 a barrel this morning. That is pretty low and great for the pumps and inflation. Saudi Arabia announced a plan to increase production is the leading explanation as to why.

Make it a great day folks and may you make a difference in the life of someone today just because you can : ) 

GREEN is GOOD for Rates – RED is BAD for Rates

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Product & Guideline Highlights Ad Mortgage Products

OMITTING PENDING SALE

Sometimes we get a little rusty on things we can do and forget it is an option. This is a great one to share with your referral partners and clients who can afford two mortgage payments but the timing is not right to sell before they close on their new home.

Both Fannie and Freddie (Not Govt Loans) allow for this exception to exclude the PITIA of a pending home for sale that will not close prior to closing on the new primary residence.

The PITIA being excluded must be the borrowers primary residence and they must be purchasing a new primary residence.

If you have an executed sales contract with proof that all financing contingencies have been cleared then you can omit the payment. If no financing contingencies are on the agreement then you can just use the executed purchase agreement. Yes, this does mean the buyer of your property will have to give this to them.

OR

An executed buyout agreement that is part of an employee relocation plan where the employer or relocation company takes responsibility for the outstanding mortgage. In this scenario there can be no financing contingencies as well and no right to cancel.

With Freddie only you can use an unexecuted buyout agreement from an employer relocation company if the following two items are met.
#1 – Borrower has reserves above what the LP findings show that are needed to pay the PITIA throughout the term listed on the buyout agreement.
#2 – Signed letter by the borrower stating they do intend to accept the buyout agreement if the current primary residence is not sold prior to the expiration date of the agreement.

Many realtors are not aware of this and may be sending potential buyers away thinking they will not qualify. Make sure they know they do have options.

Jackism of the Day

WORKOUT YOUR ROLES

Much of the inspiration that I receive comes from what happens in daily life. It is amazing the lessons and truths we can pull from everyday things.

This mornings inspiration came yet again during working out this morning and it really made me realize some areas of my life I could be doing better in.

I was comparing my workout of all areas of my life with my morning workout routine with weights. It made me really think twice about what kind of life workout I am truly working on each day.

Each day I do 8 different exercises. I do 3 or 4 sets of each exercise with usually 6 to 15 reps of each of those exercises.

I began to think about my role as a father to my two children which are 25 and 28 years old and live about 20 minutes away from my wife and I. Many of you have your children still in your home which makes this even more important.

If I looked at my role as a father as one of the 8 exercises that I do in a day. I began to think about the 3 or 4 different sets I would do as a father on the days I was focused on that part of my life. The part that made me think is what am I doing to grow my role as a father in different areas of their lives. The same as we work out different muscles on different days to help our body overall. Am I working out different areas of my children’s lives with them in my role as a father. Also, am I putting in the reps to make sure I build on those areas.

For example, in my role as a father I try to have conversations with each of my kids at least 3 – 5 times per week. It can be a quick catch up, a how’s life or whatever conversation we may have and that is one exercise that is helpful in growing my relationship with my children.

But that cannot be the only exercise I do with them on a daily basis. If you do that then that is the only muscle group that would ever get worked out. On a different day it may be working with time spent with them doing something together. Another may be mentoring them in something that they need guidance on. Another may be enjoying a hobby together that we equally share enjoyment with.

For those with children in your home. It may be spending time playing video games or helping with homework a couple nights a week or always showing up for their games or events they participate in or sets of eating dinner at the dinner table on designated nights or just sitting down with some popcorn and a movie. Each one of these is a different exercise that needs to be worked out and it needs the right number of repetitions to do so.

What exercises do you use in your week each week? How many sets are you doing in each of these areas and how many reps (time) are you spending doing this to grow these areas of your life?

My main exercises I focus on are my walk with Christ, husband, dad, brother, son, Account Rep, board president and community member.

If I do not have specific sets and repetitions for each of these areas of my life or if I focus on one and ignore all the others life will get lopsided.

A well worked out routine in all areas of life keeps life well balanced.

How is your workout looking and where may you need to add a few more exercises, sets or reps?