It’s been an exciting week in the bond market

It’s been an exciting week in the bond market. The Fed announced its new target rate to be 0-0.25% and slashed the rate from 1% to 0.50% This cut to rates affects what banks lend banks overnight and any instrument tied the prime interest rate like home equity lines of credit and credit. This is a new historic low for the fed funds rates.

Mortgage interest rates are at an all time low and it is a great time to think about refinancing. If you or someone you know can save several hundred dollars a month and it didn’t cost anything or the costs were justified by the savings wouldn’t you want them to do it? Call me for details.

Mortgage Bonds are soaring higher

Mortgage Bonds are soaring higher on this weekend’s announcement that Fannie Mae and Freddie Mac will come under control of the government.

The government’s move to create a line of $200 billion to back all Fannie Mae and Freddie Mac loans at all costs is great news for homeowners. First, it ensures the continued liquidity of conforming loans nationwide and, second, it ensures that buyers of this type of Bond have a safe investment going forward. There’s no doubt that this will help the US housing market move through the current crunch that we’re in.

So far this morning, the news has lead to a nice rally in pricing. When combined with the break above the 200-Day Moving Average, this may lead to attractive rates. Therefore, I recommend floating for now.

Market Update

Market Update

Mortgage Bonds are trading higher this morning, despite a report that manufacturing in NY is stronger than anticipated.

Normally a better-than-expected economic report would be bad for Bond prices. However, the declining prices of oil, precious metals and other commodities have decreased inflationary pressures and have helped push Bonds higher so far today.

We got a rally late today for the better I recommend floating for now.

Down Payment Assistance (DPA) is being threatened

Hello Friends and Real Estate Professionals,
You may be aware that Down Payment Assistance (DPA) is being threatened and we only have a couple of days left to prevent this new legislation.
79% of all mortgage transactions year-to-date have been backed by FHA (Federal Housing Administration). Over 80% of these FHA transactions involved some form of seller funded DPA.
If this legislation is approved it will drastically affect, impede and reduce ALL of our abilities to buy, sell or lend on a home.
I would like to ask you all to help by clicking this link http://capwiz.com/nehemia/issues/alert/?alertid=11598811and taking 60 seconds to send out an email that will go to HUD, Congress and our Local Senate Representative. I believe your efforts will help defeat a law that will facilitate a collapse of our local and national industry.
On a side note, while the legislation says no more DPA after Oct 1st 2008, please be aware that we must stipulate the last day of funding if the bill passes be August 29th in order to give time to get the loans sold off of bank lines.
To all Realtors:
We must get these people into houses by August 29th(CORRECTION SEPTEMBER 29TH) to be safe. Franklin Loan Center is a direct endorsement lender for FHA loans, which means we can underwrite FHA loans and prepare loan documents in our local offices. This will save your clients valuable time. Time is running out so please act now and get your FHA buyers off the fence and into their new home before it’s too late. Once Down Payment Assistance is gone, it’s gone. Feel free to call us so we can explain this and forward the information to your buyers to ensure they understand the magnitude of this legislation. It would be our pleasure to help in any way we can; be it marketing your listings, helping your buyers qualify for a loan or simply being an information resource for you.

Last weeks rates improved slightly

Last weeks rates improved slightly as bonds tried to rebound off the previous weeks losses. Philly Fed President is continuing to warn about inflation and it’s possible that fed rate hikes will be coming shortly. This is a good thing for the bond market because mortgage rates should come down. Following that your wallets at the pump should hopefully stay full. See the newsletter below to get some helpful gas saving tips that you can pass along to your clients.

Make it a great week!