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Financial Insight

Better rates today

March 31st, 2008 3:09 PM

3/31/08

Quiet market today:
This morning the markets are relatively quiet, waiting for the Paulson speech mentioned above, although the 10-yr is down to 3.40% and some mortgage prices are better by .250 in price. In terms of economic news, the first relevant report of the week comes tomorrow morning when the Institute for Supply Management (ISM) will release their manufacturing index. Expected to show little change from last month's reading of 48.3, meaning business sentiment remained close to last month's level. Wednesday we have February's Factory Orders, similar to last week's Durable Goods Orders report, except that this report includes orders for both durable and non-durable goods. Forecasts are for a 0.7% rise. Friday we'll see the Labor Department release March's Employment report. It is expected to show an increase in the unemployment rate from February's 4.8% to 5.0% and that approximately 50,000 payrolls were lost during the month.

Sweeping new plans for banking regulation:

Treasury Secretary Henry Paulson will reveal in full sweeping new plans this morning for streamlining OTS and banking regulation , which many blame "for the mess we're in." The regulatory push is to give the Federal Reserve more power as a "market stability regulator", especially since it has been doing this for several months now anyway with arguably more success than the OTS. It would give the U.S. central bank authority to demand that all financial system participants supply it with full information on their activities and grant the Fed a right to collaborate with other regulators in setting rules for their behavior.

Restrictions on FHA loans:

Why are some investors putting restrictions on FHA loans that HUD doesn't have? If the United States government stands behind (issues) debt, why wouldn't the rates be very low? Many investors have put more restrictive guidelines in place, and it's not new to put overlays on guidelines on loans that Fannie or Freddie will buy, or that HUD will guarantee. For example, HUD will allow manufactured housing but some investors won't. Although the government insures loans, the difference in opinion on the value comes in servicing: does the lender invest in the servicing on these loans? HUD does not insure lenders against the cost of delinquencies, foreclosures, etc., or the servicing-released premium that lenders pay.

Q: What is the definition of a statistician?
A: Someone who doesn't have the personality to be an accountant.

If I were considering financing/refinancing a home, I would....

Lock if my closing were taking place within 7 days...

Float if my closing were taking place between 8 and 20 days...

Float if my closing were taking place between 21 and 60 days...

Float if my closing were taking place over 60 days from now...

This is only my opinion of what I would do if I was financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Posted by Ed Bilot on March 31st, 2008 3:09 PMPost a Comment (0)

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