Where R Rates / MBS Market Update

JOBS REPORT IMPACT

You see a mix of red and green on the chart below. The most important part is the number that is red or green. As you can see 9 is the highest and 3 is the lowest. Anything less than 10 is pretty much a non-event and part of fluctuations. 

As an example on average it takes a lender to see a 13 BPS increase or decrease before they will put out a new rate sheet for the better or worse. So far yesterday and today we have not seen much volatility and stability can be a good thing.

JOLTS (Job Openings and Labor Turnover Survey) came out this morning. This is one of those reports that can impact the markets because it has to do with our job and labor market which is a big mover and shaker for stocks and bonds.

We saw a massive increase in job openings over the last month. Openings increased by 259K month over month to 8.08 million job openings nationwide. The largest areas of increase were in the business services, finance and insurance and private educational services. Information services sector saw a decline of 89K openings to give you an idea of what is and what is not hoppin right now.

On top of that in case you are curious 3.06 million people quit their jobs in November. Before you say oh my! You must know that is the lowest number of job quits since August of 2020. That number represents 1.9% of all jobs out there someone quit. That is down from 2.1%. That is a good number for the labor market.

We have a 10 Year Note Auction at 1 PM today which can be a market mover as well if we get a dud or a high demand auction. The better the demand for a 10 Year Treasury Note the better it is for mortgage rates since we compete with the 10 Yr. If they are buying those then they are buying mortgage bonds and the more investors that are buying the better our rates. Of course, the opposite is true if we get a dud.

We also got the ISM (Institute For Supply Management) report in today for non-manufacturing business activity. It came in at 58. To give you an idea 50 or less is a declining industry and 50 and above is an expanding business activity. This means business is doing well as it was 53 last month and 58 this month. Another part of this report is inflation related items like how much they paid for goods to produce products and it was way up.

What is good for the jobs and labor market is bad for mortgage rates. Remember whatever is good for the economy is typically bad for mortgage rates but it is combined with everything else happening globally and domestically. Honestly, we should be seeing a larger hit to mortgage rates this morning than we have which means we may still see a bit of a hit today based on the good labor and manufacturing numbers and potential for inflation to consumers as it is hitting manufacturers now.

So why do I tell you all this? It is very simple folks. So you can sound more intelligent when talking to clients, referral partners and people at your local get togethers. Be the expert in your field and use the little things I give each day to stay up to date with what is happening and how it impacts our economy, our rates and your future clients.

Drop a comment or two in your conversations to show you are in the know.

See ya tomorrow!

GREEN is GOOD for Rates – RED is BAD for Rates

Click Here to Understand BPS

Product & Guideline Highlights

APPRAISAL DEFICIENCIES

What are appraisers looking for when they go to a home to rate what condition a property is in? Getting the subject to or that as-is appraisal with a C5 or C6 condition can make any heart sink.

Make sure your realtor and clients know what they are looking for especially if they are thinking about fixer uppers or homes that need a little TLC.

Fannie and Freddie are mainly all about the health, safety and structural integrity of a property. They do not look near as close to deferred maintenance as FHA, VA and USDA with their MRP (Minimum Property Requirements).

Property condition is rated from C-1 to C-6. Flagstar and Mr. Cooper will not lend on C5 or C6 properties. Freddie will not lend on as-is properties in C5 or C6 either. Fannie per it’s guidelines will allow a C5 rating as-is if you have a lender that will accept one.

So what causes a property to get hit with a C5 or C6 rating?

HERE ARE SOME OF THE C5 & C6 ITEMS
– Active roof leaks
– Water seepage or significant plumbing leaks
– Uncapped wiring
– Curled, cupped, or missing roof shingles
– Damaged or falling foundations
– Mechanical system that has exceeded its expected life or non-functioning
– Sanitary system that is evident of failing

Those are the no-no’s for Fannie and Freddie. What are the ehhhh’s it could work items that appraisers look for?

HERE ARE SOME OF THE C4 & LESS ALLOWABLE ITEMS
(SUBJECT TO LENDER DISCRETION)
-Worn floor finishes or covering like carpet
– Minor cracks in windows
– Minor damage to interior walls
– Damaged or missing interior doors
-Damaged or missing window screens or cabinet doors
– Missing handrails (Very discretionary)
– Damaged or deteriorating countertops
– Missing hardware such as handles
– Missing light fixtures, electrical switches or faceplates
– Damaged or missing trim
– Minor plumbing leaks that do not cause damage (dripping faucet)
– Deteriorated sidewalks

What can you do with this info?
OMG! Write up a marketing piece like I just did and send it to all your referral partners to know what to be on the lookout for when listing or viewing a home.

Jackism of the Day

THE ONLY ONE

Something special happens when you get to realize how special that you really are. How unique and amazing you specifically are. 

Each day we have in our lifetime will never be like one in the past nor like one in the future. What happens today will only ever happen today. It is impossible to duplicate a day exactly the same as another day.

Even more enlightening is that nobody in this world of billions of people will ever have the exact same day as you. Not in the past, not in the future and not today. It is impossible for someone else to experience a day the exact same way as any of us do, ever.

Your spouse, your kids, your marriage. Not a single other family has the same family as you do. Not one. No one has the same marriage problems, blessings, dilemmas, opportunities the exact same as you have in your home.

A new day has begun ……… Where will it take you this day? What shall you find that you can enjoy and embrace? What moments can you appreciate that you may not even realize is as wonderful as it actually is? What will you be a part of today that nobody else in this world will be a part of?

This is something we can ask ourselves every day of every week of every month of every year we get to be part of this world. It is a privilege to be able to experience what we do each and every day.

It is my privilege to spend it with my wife. To love my wife in the unique way that I do. To embrace her. To be her friend, her lover and her husband. That is a privilege because there is not another human in this world that gets to do what I do specifically with her.

My wife and I are an original masterpiece joined together by God. There is not another one like us. Not one amongst the billions of people in this world. Only one me, one her, one Jacob (my son) and one Alison (my daughter).

Nobody else has what we have. That means if nobody else has it then we can be whatever we decide to be. Without comparison, without following others and without expectations of keeping up with or not being what others are because it is impossible. Impossible for them to be us and us to be them.

Whether you are a husband, wife, child, grand parent, originator, processor, underwriter, owner, community leader or helper. You are the only one that does it your specific way in your specific place. It is never the title of the person that creates amazing things. It is the person behind the title that that makes each of us special and unique and able to do amazing things only we can do and be.

Today, be you. Because nobody else in this world can be you. Forget about what others are doing. Just be the you that only you can be.