Mortgage Rates and News for This Week -

January 20th, 2012 2:24 PM

This week we saw a slight rise in mortgage rates from the week prior but we expect mortgage rates to stay near historic lows for the foreseeable future unless some major event causes hyper-inflation.
On a side note the bigger banks continue to have problems with thier mortgage products. This week Bank of America announced that it was backing out of the Cash-out refinance market.
Once again, if you are looking refinance or if you need to get a pre-qualification in order to shop for a new home please do not forget about me. Or, if you are a merchant and you want to be able to offer financing for your clients to purchase your product, I now have a product for you.
What is going on this week with mortgage rates? (See below)
Average Rate Given to Consumers This Week and Last

Product	Rate	Last Week
30 Year Fixed Mortgage	3.92% Up from	3.91%
15 Year Fixed Mortgage	3.26% Up from	3.22%
5/1 Fixed ARM	2.88% Up from	2.87%

Rates shown are sourced from Bankrate.com and may include points.

Samuel Morales
Residential and Commercial Loan Officer
Office: (210) 257-0642
Mobile: (210) 286-7267
Fax: (210) 257-0510
www.yourloanofficer4life.com
www.streamlinefha.org
www.streamlinefha.net
www.texasjumbomortgage.org
NMLS: 295626
Recommended credit Repair Company: Sky Blue Credit Repair

What Does the Congressional Super Committee Failure Mean for Mortgage Rates and Real Estate?

              As expected the Congressional Super Committee did not meet its deadline.  What does this mean for mortgage rates in Texas and across the nation?  The Dow has already started down as of yesterday and is continuing the same trend as of today, so far as of 11:00am the DOW is down almost a hundred points.  Typically the 10-year bond drops shortly after the DOW goes down so we should see a dip in mortgage rates shortly.  Being that rates are already rock bottom there is not much room to go down to much further so expect a drop of no more than .25 of point.

                We are in some scary times right now but also exciting times as we are living in a historic moment.  How we handle this fragility in our situation will dictate policy that impacts all Americans for generations to come.

                Much of what we hear in the news about the housing market making a comeback is not correct.  Over the past 12 months I’ve seen stories claiming that many areas have seen housing sales increase and home prices have been inching up.  While this may be true the numbers are being doctored; let me explain.  Last year in the USA there were a total of about 5.5 million foreclosures.  So far this year Bank of America alone has over 5 million foreclosures, this figure does not account for Wells Fargo, Chase, Citibank or any other lending institution.  The banks are holding on to inventory and in some cases are renting homes back to the parties that have been foreclosed on.  Should the banks flood the market with this inventory what do you think will happen to the home prices across Texas and the rest of USA?  You guessed it; the housing market which is the biggest indicator of how an economy is doing would completely collapse and home prices would plummet.  Immediately, this situation is killing the refinance market because banks are going with the most conservative appraisal approach when approving refinances.  Just in the past 6 months I have lost several refinance deals due to appraisals coming in lower than market value.  However; we are not having the same issue with purchases as banks need to get rid of inventory.

                What’s the flip side?  I do see a possibility of recovery.  In a previous blog post I noted that during the mortgage and real estate boom we saw rental rates go down and mortgage rate along with home prices go up.  Which meant it was more expensive per month to purchase a home than it was to rent.  That trend has now reversed, we will be seeing home prices continue to drop and mortgage rates will stay very low (unless hyper-inflation occurs) for at least 2-5 years.  Rental rates are skyrocketing so now it is less expensive per month to purchase a home than it is to rent.  This reversal, in my opinion is what will get us out of our current situation and help in the reset of our economy.  Assuming our congress gets their act together the recovery mentioned above has a high probability; if not, hyper-inflation will happen and we may be screwed for a long time to come.  I don’t know about you but I’m crossing my fingers and hoping for best in this historic moment in time.

 Samuel Morales

Residential and Commercial Loan Officer

Office: (210) 257-0642

Mobile: (210) 286-7267

Fax: (210) 257-0510

www.yourloanofficer4life.com

www.streamlinefha.org

www.streamlinefha.net

www.texasjumbomortgage.org  

NMLS: 295626   

Recommended credit Repair Company: Sky Blue Credit Repair

The House Voted In Favor of Increaseing FHA Loan Limits

As of yesterday the House voted in favor of increasing FHA loan limits back up to their previous limits prior to Oct 1, 2011.  We should be hearing if congress is to OK the legislation in the coming days.  If I had to make an educated guess I would say the legislation will pass considering the amount of inventory the large banks are holding in regards to foreclosures; they need all the help they can get. 

Average Overnight Mortgage Rates Per BankRate.com

Product	Rate FHA	Rate Conventional
30 Yr Fixed	4.03%	4.4%
15 Yr Fixed	3.38%	3.75%

On average I am .02 - .25% lower than the overnight average.