Where R Rates / MBS Market Update
HUGE RATE BOOST
Today is a good day my friends. Let us rejoice and be glad in it as we have not seen many of these lately.
PPI (Producer Price Index) came in light yesterday meaning it was showing lower inflation than expected on the producing side of the economy. We did not get much action on that yesterday as we were waiting for CPI (Consumer Price Index) to come out this morning and it came out and the markets loved it.
I cannot guarantee we are going to keep these gains long but enjoy them while you have them this morning and lets hope they stick til morning rate sheets come out. Even the stock market is up 600 points due to the lower inflation numbers.
Core CPI came in 1/10th less than expected at .2% month over month vs the expected .3%. 1/10th may not seem like a lot but annualized it equals 1.2% less inflation. On the year over year it came in at 3.2% vs 3.3%.
I personally believe another reason for the big boost in pricing today was due to the markets were prepping for higher inflation and so this may be a bigger swing for some of the investors who are watching the markets.
Now check out this DOOZY of a number. Mortgage applications week over week rose by 43.5%. I don’t think I have ever seen that before. Applications to refinance soared by 43.5% and applications to purchase a home rose by 26.9%. I hope your pipelines reflect these great numbers.
We also have 4 Fed Speakers today so we shall see what they put in their comments about CPI.
All in all a good day thus far to share with your referral partners and clients.
| YESTERDAY CONV 5.5% – DOWN 3 CONV 6.0% – DOWN 6 GOVT 6.0% – DOWN 7 10 YR NOTE – UP 1 TO 4.78 DOW JONES – UP 149 |
| SO FAR TODAY CONV 5.5% – UP 69 CONV 6.0% – UP 56 GOVT 5.5% – UP 66 GOVT 6.0% – UP 38 10 YR NOTE – DOWN 12 TO 4.66 DOW JONES – UP 600 |
GREEN is GOOD for Rates – RED is BAD for Rates
Product & Guideline Highlights
FHA BOARDER INCOME
On Monday FHA rolled out Mortgagee Letter 2025-04 allowing more flexibility when it comes to boarder income.
According to HUD, recent research shows a significant increase in living arrangements over the last decade and a large increase in recent years due to COVID and other economic challenges.
With these changes boarder income is becoming a larger trend as well as a stable and viable option to manage housing costs and allow people to afford higher priced homes by supplementing with boarder income to pay the Notes.
This mortgagee letter is for boarders only. Meaning they are renting out a room or a basement or whatever within the same dwelling unit as the owners. This does not apply to ADU’s (Accessory Dwelling Units). That is a different guideline all together.
This change is geared towards helping first time homebuyers and low to moderate income borrowers be eligible for homeownership.
SO WHAT CHANGED?
Previously FHA required 24 months history shown on the tax returns of boarder income to qualify. They have reduced that down to only requiring 12 months and is currently receiving boarder income. The requirement to be on the tax returns has been removed.
In addition, you can use the income whether you received it while you were renting a property prior to purchasing the new home or had boarder income on the departing residence that was owned. Previously you had to have received boarder income on a home they owned vs rented. This is a pretty big change.
DOCUMENTS REQUIRED TO USE BOARDER INCOME
– Proof of 12 months history of receipt of boarder income.
– Proof of receipt for at least 9 of last 12 months via either tax return or bank statements, cancelled checks, deposit slips showing rental payments received. (This is if they have 12 months experience only).
– Must prove boarders address is same as borrowers address.
– Copy of written and executed agreement of income (Think Lease).
CALCULATING BOARDER INCOME
– Use LESSER of 12 month average or current rent as documented in agreement (lease).
– If only received 9 of last 12 months you AVERAGE over 12 month period.
– You can use boarder income UP TO 30% of total qualifying income.
TO VIEW THE FULL MORTGAGEE LETTER CLICK HERE
Mtgee Letter 2025-04
Market this to show those who have boarder income have options. Both referral partners and potential clients need to know.
Jackism of the Day
A NEW ENDING
Isn’t it funny how when you see someone from your past and you introduce them to people in your present how much different you are to the new people than you were to your past?
Sometimes it is uncomfortable and sometimes it is revealing of who you were then and who you are now. That could be better or that could be worse as well.
It is like showing up to the reunion and everyone still sees you as you were. They make comments about the present as if you were still the person they saw you to be back then.
I have overcome a lot in my life over the years. When I was growing up I could define my childhood with the words “not good enough”. I never truly achieved anything that I recall as a young person.
I was never a starter on the soccer team. Instead I was known as the crowd favorite who would get on the benches and mess with the crowd. I spent a lot of time being the class clown if you will.
In Boy Scouts I never achieved all of the patches or advanced to the next levels like my brother or my peers around me. I was kind of just filling the space.
I definitely did not excel in school. I passed with B’s and C’s. I got my 2 year college degree in 5 years with a 1.96 GPA. My teachers loved me and also I was there worst nightmare. I was fun to have around and also a disturbance usually cracking jokes of some sort.
I never got the ladies. I was always the jocks and popular kids girlfriends guy they spoke to about their boyfriends. I was fun and easy to talk to but not the one they chose to kiss behind the bleachers.
I actually had a Leave it to Beaver family. Fantastic family, great neighborhood full of friends and I was blessed. I was just there and never did anything exceptional. I am not saying that is bad.
I was a follower in most things in my life and did not see anybody lined up behind me following where I was going.
This impacted a big part of my life as I got older. I never realized how much of an impact the past had on my future. Understanding this explains a lot about why I do what I do now. I am a very driven and disciplined and goal oriented individual that likes to achieve things in life. Mainly spiritual disciplines, importance of relationships with my wife, family and others, financial disciplines, business success as well as community involvement.
I was treated for so long that I was not good enough that I made the decision that I would be good enough and not only good enough but I wanted to be the best in every area of my life that I truly valued.
This is a positive thing and can absolutely be a very negative attribute as well. It is simply just part of my story. I have experienced many moments of what I pray about daily to make sure I keep in check with the acronym P.L.E.G.S.
Pride, Lust, Envy, Greed and Selfishness.
It was not until I realized who I was competing with did I find true abundance and life. We all tend to compare ourselves to someone or all of those around us. It is hard not to. We see it so we think it and we go what if.
I only compare myself to one person these days. Not to say I don’t fall in to the lack of wisdom of the world but I attempt to only compare myself to one person.
For me it is this person. For you it can be anyone you like. My person is Jesus Christ. Yep, good luck with that one Jack. The good news is I can get better every single day and I will never achieve perfection. That just motivates me to be better every day. The good part is what I compete in with business, life, relationships, finances is what He is pretty wise about.
How do I achieve great success in business? Well, the example He set for that is if you want to be first then you must be last. Translated that means the more I serve others and be there to support them the closer I come to experiencing what He experienced.
How do I walk down the road of life and see others behind me looking for a similar path? Well, the more humility I have in my life the greater I can see others and how wonderful and amazing their talents are.
How do I love my spouse and my family? Quite simply, when I look in the mirror and I see myself I see all of the wrong I have done, I do see the good as well. Then I realize my example loves me exactly as I am. Past, present and future. Without condition. There is nothing I can do that will take that away. This means by His example I get to love my wife and my children as He loves me. Without blemish, without wrinkle and without stain.
Who are you comparing yourself to? Why are you comparing yourself to them? Is who or what they are truly what you desire to be and to become?
If you do have people you look up to then maybe choose a person in each area of your life and not as a whole. Unless it is my guy then He is pretty tough to beat : ) For example, I would love to have the patience and calming tone of my grandfather. I respected the way he held himself so much and is a great model of what it means to be a good man.
Whoever or whatever you are desiring to become. Don’t let your past dictate who you are today. Use it for what it is. It is part of who you are and it makes up who you can become. Just make sure you are comparing yourself to that which you truly want to become.
Nobody can go back and make a new beginning … Anyone can start over and make a new ending.
