Mortgage Times

[Adam in CO]

Mortgage Times
Mortgage Market News for the week ending August 3, 2007

Compliments of
Colorado Real Estate Finance Group
Real Estate Investment Bankers
Lending in All 50 States


PHONE: 303-770-2262
FAX: 303-770-2276
adam@corefinancegroup.com
5310 DTC Pkwy
Greenwood Village, CO 80111


Events This Week:

Employment Weak
Inflation Steady
Manufacturing Down
Housing Mixed

Events Next Week:

Tues 8/7
FOMC Meeting
Productivity

Wed 8/8
10-yr Auction

Thurs 8/9
30-yr Auction
Jobless Claims

Fri 8/10
Import Prices

Unprecedented Change!


It was a wild, wild ride as the mortgage market experienced an unprecedented shift last week. What began as a disruption in the subprime sector a few months ago spread this week to almost all mortgage products, as investor demand for anything other than mainstream mortgages essentially dried up, forcing lenders to drastically scale back their product offerings.

Daily changes to program guidelines were common. Products offered one day were gone the next. A top 10 lender shut its doors. Rates increased. You name it, we saw it this week. The constantly changing market made it very difficult to find solutions to problems thought to be solved just the day before. Where non-conforming loans (Alt-A or Niche products) were found to be available, rates were considerably higher than just the week before.

All is not lost, however. Hardly noticed was that rates on conforming loans actually fell during the week. Demand for secure, agency-backed mortgages was still strong, as investors sought alternatives to the non-conforming market. Weak economic data released during the week also helped push conforming rates lower. Friday's highly anticipated Employment report showed that the US economy added fewer new jobs in July than the consensus forecast, and on Tuesday the Fed's preferred inflation indicator, the Core PCE inflation index, came in slightly lower than expected. In addition, the two national manufacturing indexes both were significantly weaker than predicted by economists.

• Also Notable:
• The July Unemployment Rate unexpectedly increased to 4.6% from 4.5%
• June Pending Home Sales jumped 5%, easily surpassing the consensus forecast
• The Fed lowered its forecast for economic growth in 2007
• As expected, the central banks of the European Union and England held interest rates unchanged

Average 30 yr fixed rate: Last week:-0.03%This week:-0.05%

Stocks (weekly): Dow:13,407+13NASDAQ:2,559-26

Week Ahead


Next week's main event will be Tuesday's FOMC meeting. No change in interest rates is expected, but the Fed's statement will be eagerly scrutinized for clues about future policy moves. In addition, investors will be looking for the Fed's perspective on the issues for non-conforming mortgages. The Productivity report will also be released on Tuesday. Productivity gains are important for limiting inflation and for the long term health of the economy. No other major economic data will come out next week. Treasury auctions will take place on Wednesday and Thursday.

But certain to command attention as well will be the state of flux in the non-conforming loan arena as the winds of change continue.

[Boss Hoss]

This has not been my favorite week of being a mortgage broker. ABConduit was one of my fav lenders so guess where most of my pipeline was?

[Boss Hoss]

How long till stated is history??? Bad news is my entire pipeline this month is jumbo, good news is i still have my hand in the conforming pot and rates are looking sweet!

[Adam in CO]

I sent ABC at least 10M/year, too.

The best part is that they sold all the files in their pipeline as leads to other mortgage brokers.

I got calls from every one of my clients that ABC had asking about some random call from another broker.

Pissed me off.

[Adam in CO]

Originally Posted by Boss Hoss

How long till stated is history??? Bad news is my entire pipeline this month is jumbo, good news is i still have my hand in the conforming pot and rates are looking sweet!

Stated = Hard money now, Boss.

All I can say is LOCK, LOCK, LOCK. That loan may not be there tomorrow.

[Interleukin]

I locked in 6.75% for 30 years 2 weeks ago, hope this was a good move.

[Adam in CO]

Originally Posted by Interleukin

I locked in 6.75% for 30 years 2 weeks ago, hope this was a good move.

Probably not. Rates edged down quite a bit this week.

I could be wrong. If you have a 400 credit score and you filed for bankruptcy in 2007 and you have no job and your bank account is overdrawn, and your Hummer payment is 1400/mo, etc. then it is a REALLY good rate.