Mortgage Rates improving

Market Color:  Any Manheim Steamroller music lovers out there?  Went to their Christmas concert night before last and SI can heartily recommend. Nothing like 18th century rock and roll Christmas Carols.  Since Mr. Bernanke has been chosen Time magazine’s Man of the Year, he must be a shoe-in to have another four year term.  Senate panel just cleared his nomination to the second term.  As this market day unfolds, stock market has retreated with the increase in jobless claims and trading is represented as being cautious with the dollar improving against all other currencies and yet on the optimistic front, the statistic for leading economic indicators continued to rise for the 8th straight month which lends support to the rebound continuing into next year.  Right now, the futures market is pricing in an 85% chance that the Fed keeps rates somewhere between 0% and .25% through April 28th, 2010.  Currently, the Ten Year yield is at 3.52%(3.59% yesterday).  30 year fixed rate mortgages this AM are off the chart improving.  You will like these levels after the back up from last week.  Market is up over .75%.  Wow, could this improvement be related to the Bernanke nomination?  After the FED announcement to keep rates low from the close of their meeting yesterday, it just could be.  See next comment.

 

Market News:    Although the Federal Reserve conceded that the U.S. economy is gaining steam, the central bank unanimously decided to hold short-term interest rates between 0 and 0.25 percent for several more months. In addition, the Fed announced plans to complete its purchase of up to $1.25 trillion in mortgage-backed securities by the end of 2010’s first quarter. Some officials contend that the program should be granted an extension in order to continue bolstering the housing market, but that idea has yet to win majority support on the committee.

The House of Representatives last Friday passed a massive regulatory reform bill that, among other things, creates a new consumer protection agency with authority to set mortgage lending standards for all residential originators. The House passed the “Wall Street Reform and Consumer Protection Act” (H.R. 4173) by a 223-202 vote. The accepted language creates the Consumer Financial Protection Agency, a Washington regulatory body that would set industry wide rules for mortgage lending and take over enforcement responsibilities from the federal banking agencies. An industry-backed amendment to gut the CFPA and turn it into a consumer protection council representing 12 regulatory agencies failed by a close vote of 223-208. The American Bankers Association said it opposes several sections of the 1,200-page bill, including the CFPA. “The breadth of authority granted to the director of the proposed new consumer financial regulator is unprecedented,” said ABA president Ed Yingling. “This new regulator would not be responsible for considering institutional safety and soundness along with consumer protection.” (ABA believes it’s essential that the same regulatory body perform safety and soundness and consumer protection oversight.) The Mortgage Bankers Association also has issues with CFPA. But MBA and other industry groups were glad to see a bankruptcy cramdown amendment defeated by a 241-188 vote. “We are gratified that the House saw fit to vote down the bankruptcy cramdown amendment,” said MBA chairman Robert Story. Earlier this year, the House passed a bill that would allow bankruptcy judges to cram down or reduce the principal amount of a homeowner’s mortgage. The Senate rejected the cramdown bill.

 

The Department of Housing and Urban Development has issued a proposed rule that sets minimum standards for state licensing of loan officers and mortgage brokers. Congress directed HUD to set minimum licensing requirements for states under the Secure and Fair Enforcement Mortgage Licensing Act of 2008. If HUD determines a state does not meet the minimum standards, the department is charged with administering a licensing system for the state. “By introducing nationwide standards of uniform licensing for loan originators, the SAFE Act is taking an important step in returning integrity and accountability to the residential mortgage loan market,” said HUD assistant secretary David Stevens. The public comment period on the proposed SAFE rule ends in 60 days.