Archives for May 2013

Mortgage Interest Rate Update 05.15.2013

Mortgage rates and bond yields remain under pressure today.  While the economic data continues to be mortgage rate and bond friendly the market still remains under pressure due to the strength of the stock market.  In fact gold, oil, lumber and other commodities are under pressure like the bond market.  The stock market seems to be the choice investment right now for investors.  Mortgage rates most likely will remain under pressure until stocks have a pull back and investors change their objectives.

Mortgage foreclosure settlement errors

Approximately 96,000 borrowers who received a check for being wrongly foreclosed on will receive an additional check due to errors according to the Federal Reserve.  The consulting company, Rust Consulting, made errors in their calculations according to the Federal Reserve and they are in the process of fixing the error.  These new checks will be mailed out latter in the month and were mostly associated with loans held by Goldman Sachs and Morgan Stanley.  This was apart of the settlement reached for  $9.3 billion between the federal government and some of the nations largest financial institutions.

Mortgage Interest Rate Update 05.10.2013

Mortgage rates are finishing the week higher.  Pressure on rates started last Friday when the unemployment numbers came in better than expected (good economic news is bad for mortgage rates).  California refinance activity remains low while the purchase market remains active in many areas of California including Los Angeles and Long Beach.  The mortgage rate weekly surveys all showed increases and the treasury market also sold off (along with Mortgage Backed Securities).  This week it was commentary from several Fed presidents along with industry players that continued the pressure on bond yields.  Mortgage rates for the most  part remained attractive even though their higher going into the weekend than last.  JB Mortgage Capital, Inc. provides low cost and low rate mortgages throughout California.

Weekly Mortgage Rate Survey

Every week Freddie Mac (and others) release their mortgage rate survey of member banks and lenders.  This week it was higher than last due to a rise in bond yields.  These surveys of mortgage interest rates with banks/lenders are an okay source for tracking rates.  Why just okay?  Because there is a lot of fine print with each survey, the surveys are mostly national so many not accurately reflect what is specifically going on in California and general the average rate published each week moves 1 -3 basis points (rather than the usual movement you see with mortgage rates).  Some of you may know that the main determining factor for mortgage rates is the Mortgage Backed Securities market (MBS).  Additional items that affect mortgage rates are submission flows, costs and general interest of a bank for a certain type of loan.  California mortgage rates can move up or down from week to week and that is not always represented accurately in these mortgage rate surveys.

Mortgage Interest deduction

With many politicians in Washington trying to figure out a way to reduce the budget deficit the mortgage interest deduction has come under fire over the last 6-12 months.  Some in Washington are actively trying to end or at a minimum reduce the deduction.  A few outside consumer groups say it is unfair a homeowner gets a deduction and renters don’t.  The pro-deduction groups say the deduction is an important part of the economy as it encourages citizens to buy homes which helps the economy and creates jobs.  The fact is less than 1/3 of those that filled tax returns actually claim the deduction and only half of all homeowners benefit from it.  So an elimination or a reduction would not be that big of a deal however those that think the elimination or reduction of the deduction will help solve the budget deficit are mistaken.  Over then next 6-12 months I would not be surprised to see a reduction of this tax deduction, rather than an elimination.