Weekly Rate Update
All programs quoted are with zero points.
30 Year Fixed
To $417,000 - 5.000%
To $729,750 - 5.125%
Jumbo
Jumbo to $2,000,000 - 5.625%
5 Year Fixed
To $417,000 - 4.000%
To $729,750 - 4.375%
Jumbo to $2,000,000 - 5.250%
Rates
Rates have stabilized over the past few weeks and remain extremely buyer friendly. Fears that the Feds pulling out of the mortgage backed securities markets have been unfounded. Investors have not reacted to losing the largest purchaser on mortgage backed securities the way the markets had predicted. There is some sense of comfort to the markets that there are buyers waiting in the wings to pick up where the Feds leave off. Good news for buyers who are still on the fence. It appears that the markets will remain range bound for the next few weeks until the real impact of the Feds ending the MBS purchase program can actually be felt.
Economic News
Three economic releases this week—industrial production, the Philadelphia Fed index and the leading economic index—all support the view of continued economic growth. Meanwhile the housing starts data suggest that this recovery will be more modest than other recoveries.
Inflation remains low as measured by the Consumer Price Index. The details of this report highlight the slow pace of inflation, which partly reflects the ongoing housing correction. Medical price inflation continues to outpace the overall price index.
Showing posts with label Wells Fargo. Show all posts
Showing posts with label Wells Fargo. Show all posts
Monday, March 22, 2010
Thursday, April 30, 2009
Rates on Bigger Mortgages Finally Should Come Down
Home loans from $625,500 to $729,750 in high-cost regions, including most of the Bay Area, should get cheaper in the next few weeks.
To make bigger mortgages cheaper, the economic stimulus act passed in February increased the conforming loan limit in high-cost regions to a maximum of $729,750 from $625,500 for single-family homes through the end of this year. The conforming-loan limit is the biggest mortgage that can be purchased by Fannie Mae and Freddie Mac. Anything over the limit is called a jumbo loan, and they cost considerably more than conforming loans because Fannie and Freddie can't buy or guarantee them.
Raising the limit should bring down the price of loans between $625,500 and $729,750. But more than two months after the stimulus bill was signed, loans in that zone are still being priced like jumbo loans.
Why?
Lenders say they couldn't lower their rates until Fannie and Freddie issued underwriting criteria. Fannie issued its criteria March 30 and Freddie on April 16. Both will start buying loans of up to $729,750 from lenders on May 4.
That opens the door for lenders to begin making them.
Wells Fargo says it will start making conforming loans of up to $729,750 on Monday.
Bank of America will begin making them "by mid-May," says Vijay Lala, a product executive with the bank.
As they and other lenders start making these loans, the price should come down. By how much remains to be seen.
Source: Kathleen Pender
Thursday, April 23, 2009
To make bigger mortgages cheaper, the economic stimulus act passed in February increased the conforming loan limit in high-cost regions to a maximum of $729,750 from $625,500 for single-family homes through the end of this year. The conforming-loan limit is the biggest mortgage that can be purchased by Fannie Mae and Freddie Mac. Anything over the limit is called a jumbo loan, and they cost considerably more than conforming loans because Fannie and Freddie can't buy or guarantee them.
Raising the limit should bring down the price of loans between $625,500 and $729,750. But more than two months after the stimulus bill was signed, loans in that zone are still being priced like jumbo loans.
Why?
Lenders say they couldn't lower their rates until Fannie and Freddie issued underwriting criteria. Fannie issued its criteria March 30 and Freddie on April 16. Both will start buying loans of up to $729,750 from lenders on May 4.
That opens the door for lenders to begin making them.
Wells Fargo says it will start making conforming loans of up to $729,750 on Monday.
Bank of America will begin making them "by mid-May," says Vijay Lala, a product executive with the bank.
As they and other lenders start making these loans, the price should come down. By how much remains to be seen.
Source: Kathleen Pender
Thursday, April 23, 2009
Wednesday, January 28, 2009
Instant Analysis of Today’s FOMC Decision
Instant Analysis of Today’s FOMC Decision
by Dr. Scott Anderson, Senior Economist for Wells Fargo & Company
The Fed sees economic fundamentals continuing to deteriorate and credit conditions for households and firms as "extremely" tight. In the December statement they only characterized credit conditions as tight. They still anticipate that economic activity will begin later this year, but see the downside risks out-weighing the upside risks at this point.
The Fed kept the federal funds target rate in its present range of 0 to ¼ of a percentage point, and promised to keep the Fed funds target rate at "exceptionally low levels for some time."
The statement acknowledges that the economy has weakened further since December, citing steeply declining industrial production, housing starts, and employment, as consumers and businesses cut back on spending.
The FOMC added a comment about global prospects, perhaps a nod to the IMF’s substantial downward revision in their global growth forecasts today from 2.2 percent to 0.5 percent in 2009, the worst global growth performance in the post-war period. The FOMC statement says today that "global demand appears to be slowing significantly."
Finally, the Fed doesn’t mention the word deflation in the statement, but did highlight the prospect for inflation to persist below rates that best foster economic growth and price stability in the long-term. That’s central bank code for a period of deflation!
Expect further expansion and utilization of the Fed’s existing credit facilities, as well as the addition of new ones in 2009 as the Fed moves further down the path of "credit easing". The FOMC said it was prepared to purchase longer-term Treasury securities if it could help improve credit conditions in private credit markets. This will be somewhat of a disappointment for the bond market, which was hoping for an actual announcement of the plan today.
I believe there are some members of the FOMC that want to move slowly on the plan to buy long-term Treasuries, since in doing so the Fed is basically "monetizing" the debt, trading government IOUs for Federal Reserve IOUs, that could ultimately be destabilizing for the dollar and U.S. inflation down the road.
Right now, 10-Yr Treasury bond yields are up about 13 basis points from yesterday’s close, though stocks are holding on to substantial gains.
by Dr. Scott Anderson, Senior Economist for Wells Fargo & Company
The Fed sees economic fundamentals continuing to deteriorate and credit conditions for households and firms as "extremely" tight. In the December statement they only characterized credit conditions as tight. They still anticipate that economic activity will begin later this year, but see the downside risks out-weighing the upside risks at this point.
The Fed kept the federal funds target rate in its present range of 0 to ¼ of a percentage point, and promised to keep the Fed funds target rate at "exceptionally low levels for some time."
The statement acknowledges that the economy has weakened further since December, citing steeply declining industrial production, housing starts, and employment, as consumers and businesses cut back on spending.
The FOMC added a comment about global prospects, perhaps a nod to the IMF’s substantial downward revision in their global growth forecasts today from 2.2 percent to 0.5 percent in 2009, the worst global growth performance in the post-war period. The FOMC statement says today that "global demand appears to be slowing significantly."
Finally, the Fed doesn’t mention the word deflation in the statement, but did highlight the prospect for inflation to persist below rates that best foster economic growth and price stability in the long-term. That’s central bank code for a period of deflation!
Expect further expansion and utilization of the Fed’s existing credit facilities, as well as the addition of new ones in 2009 as the Fed moves further down the path of "credit easing". The FOMC said it was prepared to purchase longer-term Treasury securities if it could help improve credit conditions in private credit markets. This will be somewhat of a disappointment for the bond market, which was hoping for an actual announcement of the plan today.
I believe there are some members of the FOMC that want to move slowly on the plan to buy long-term Treasuries, since in doing so the Fed is basically "monetizing" the debt, trading government IOUs for Federal Reserve IOUs, that could ultimately be destabilizing for the dollar and U.S. inflation down the road.
Right now, 10-Yr Treasury bond yields are up about 13 basis points from yesterday’s close, though stocks are holding on to substantial gains.
Tuesday, December 16, 2008
Instant Analysis of Today’s FOMC Decision
The Fed’s all in and throwing in the kitchen sink for good measure.
"The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability"
Stock and bond markets are celebrating in the wake of an FOMC statement that exceeded nearly all expectations for a substantial easing of policy today. At the time of this writing, the Dow is up about 340 points, and the 10-Yr Treasury yield has plunged to 2.36 percent from 2.50 percent yesterday. Throwing all caution to the wind, the Fed is betting that drastic rate cuts are needed immediately in order to support consumer and business borrowing in the face of a rapidly deteriorating economy and the specter of deflationary forces afoot. Such drastic measures only highlight the scale and scope of the current economic and financial crisis that still lies ahead. The Fed is now pulling nearly all its policy levers and only time will tell if it is pushing on a string, or if monetary policy still has a viable channel in which to operate.
For the first time in its history the Fed has decided to establish a target range for the Fed funds rate of between zero and 0.25 percent, effectively making 0.25 percent its interest rate ceiling. This is also an admission that the Fed has been having trouble maintaining its target as massive injections of about $1.0 trillion into various credit facilities, bank re-capitalization, and the payment of interest on bank reserves make an explicit target nearly impossible to achieve. The movement to a target range also rightly puts the focus of additional policy actions on the scope and scale of outright purchases of MBS, and agency debt. The committee is also exploring the potential benefits of purchasing longer-term Treasury securities as well.
Moreover, the FOMC signaled that they expect to maintain an exceptionally low fed funds rate target of some time. This signal is designed to push longer-term Treasury yields even lower, and from today’s action it seems to have worked.
The FOMC statement begins by describing an economy mired in a deepening recession, with little prospect for near-term relief, stating that labor market conditions have deteriorated, and consumer spending, business investment, and industrial production have declined. The Fed’s view of credit market conditions has not improved, and their outlook for the economy has weakened further.
Finally, the Fed doesn’t mention the prospect of deflation in the statement, but did highlight the prospect for inflation to moderate further in the coming quarters.
Expect further expansion and utilization of the Fed’s existing credit facilities, as well as the addition of new ones in 2009 as the Fed moves further down the path of quantitative easing.
Scott A. Anderson, Ph.D.
Senior Economist
Wells Fargo Economics
"The Federal Reserve will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability"
Stock and bond markets are celebrating in the wake of an FOMC statement that exceeded nearly all expectations for a substantial easing of policy today. At the time of this writing, the Dow is up about 340 points, and the 10-Yr Treasury yield has plunged to 2.36 percent from 2.50 percent yesterday. Throwing all caution to the wind, the Fed is betting that drastic rate cuts are needed immediately in order to support consumer and business borrowing in the face of a rapidly deteriorating economy and the specter of deflationary forces afoot. Such drastic measures only highlight the scale and scope of the current economic and financial crisis that still lies ahead. The Fed is now pulling nearly all its policy levers and only time will tell if it is pushing on a string, or if monetary policy still has a viable channel in which to operate.
For the first time in its history the Fed has decided to establish a target range for the Fed funds rate of between zero and 0.25 percent, effectively making 0.25 percent its interest rate ceiling. This is also an admission that the Fed has been having trouble maintaining its target as massive injections of about $1.0 trillion into various credit facilities, bank re-capitalization, and the payment of interest on bank reserves make an explicit target nearly impossible to achieve. The movement to a target range also rightly puts the focus of additional policy actions on the scope and scale of outright purchases of MBS, and agency debt. The committee is also exploring the potential benefits of purchasing longer-term Treasury securities as well.
Moreover, the FOMC signaled that they expect to maintain an exceptionally low fed funds rate target of some time. This signal is designed to push longer-term Treasury yields even lower, and from today’s action it seems to have worked.
The FOMC statement begins by describing an economy mired in a deepening recession, with little prospect for near-term relief, stating that labor market conditions have deteriorated, and consumer spending, business investment, and industrial production have declined. The Fed’s view of credit market conditions has not improved, and their outlook for the economy has weakened further.
Finally, the Fed doesn’t mention the prospect of deflation in the statement, but did highlight the prospect for inflation to moderate further in the coming quarters.
Expect further expansion and utilization of the Fed’s existing credit facilities, as well as the addition of new ones in 2009 as the Fed moves further down the path of quantitative easing.
Scott A. Anderson, Ph.D.
Senior Economist
Wells Fargo Economics
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