Archive for the 'Mortgage News' Category
The Case-Shiller: Home Prices Edge Closer to 2009 Lows as both the 10 and 20 city indexes fell 1.1% in February. Adjusted for seasonal factors, both the 10-area and 20-area indexes declined 0.2%. Year over year, unadjusted February prices fell 2.6% for the index of 10 metro areas, while the 20-city index declined 3.3%. Prices rose in one of 20 cities, already hard-hit Detroit. “There is very little, if any, good news about housing,” said David M. Blitzer, chairman of S&P’s index committee. All of the major areas saw prices decline from a month earlier, with Minneapolis seeing the biggest drop at 3.1%, followed by San Francisco at 2.6%.
Conference Board’s confidence index increased slightly to 65.4 from a revised 63.8 reading in March. “Consumers’ short-term outlook improved slightly, suggesting that the uncertainty expressed last month is easing,” said Lynn Franco, director of the Conference Board’s consumer research center. “Although confidence remains weak, consumers’ assessment of current conditions gained ground for the seventh straight month, a sign that the economic recovery continues.”
U.S. 10-Year Yields Reach One-Month Low as Central Bank Officials Convene. UST rates are lower as the Fed began it two day FOMC meeting today, with the 10yr UST yield at 3.34%, the lowest level in a month, on speculation the central bank will keep the target rate for overnight lending at a record low and consider steps to stop yields from rising as the June end of the $600 billion “QE2″. The Fed may announce a plan to reinvest the interest and principal payments from its bond holdings in Treasuries in the second half of the year. The U.S. will sell $35 billion of two-year securities today, $35 billion of five-year debt tomorrow and $29 billion of seven-year notes on Thursday. There is still uncertainty in Euro- area as Greece’s budget deficit in 2010 was 10.5% of gross domestic product, significantly higher than forecast by either the Greek government or the European Union authorities.
Fed Searches for Next Step. New Focus on Interest-Rate Plan as Controversial Bond-Buying Strategy Winds Up. There will much focus on how the Fed views the outlook for growth and inflation, which could signal when they will shift to tightening monetary policy. It is widely expected that the central bank will keep the target rate for overnight lending at a record low and consider steps to stop yields from rising as the June end of the $600 billion “QE2″. The Fed may announce a plan to reinvest the interest and principal payments from its bond holdings in Treasuries in the second half of the year.
Fed Sweats Details of News Conference. The Federal Reserve will hold it’s first-ever public news conference Wednesday afternoon following a two-day policy meeting.
Geithner Says U.S. Needs ‘Credible Strategy’ for Deficits in order to be reduce its budget deficits over time, without moving too quickly and choking off economic recovery.
The National Association of Home Builders/Wells Fargo Housing Market Index fell by a point to 16 in April, the level it’s been at for five of the last six months.. “While builders in some areas are starting to see a pickup in traffic of prospective home buyers, many consumers remain skittish about the health of the housing market and overall economy, particularly in view of recent legislative and regulatory proposals that could make it much harder to get a mortgage,” noted NAHB Chairman Bob Nielsen. The seasonally adjusted index is calculated so any number over 50 indicates that more builders view sales conditions as good than poor — which hasn’t been the case in five years.
Stocks, 10-Year Treasuries Fall as S&P Reduces U.S. Outlook. Standard & Poor’s Ratings Service cut the nation’s long-term credit outlook to negative. Ten-year Treasuries erased earlier gains, 30yr UST’s are down about 1 point, and the short end of the curve remained well-bid. The announcement caught a fairly sleepy market off guard as investors were getting ready for a shortened week ahead of the Easter holiday.
Text of S&P’s downgrade of U.S. ratings outlook: it affirmed its ‘AAA’ long-term and ‘A-1+’ short-term sovereign credit ratings on the U.S. Standard & Poor’s also said that it revised its outlook on the long-term rating of the U.S. sovereign to negative from stable. “More than two years after the beginning of the recent crisis, U.S. policymakers have still not agreed on how to reverse recent fiscal deterioration or address longer-term fiscal pressures,”
Bernanke Briefings May Offset Fed Hawks With Words as New Tool. When Federal Reserve Chairman Ben S. Bernanke convenes his first press conference next week, he may emphasize a point the markets seem to have forgotten: He’s serious about keeping interest rates low for an “extended period.”
Provided by your Mortgage Professional at RPM Mortgage
MBA Applications Decrease: The Market Composite Index decreased 2.0%, The Refinance Index decreased 6.2% and the Purchase Index increased 6.7%. “Purchase application volume increased last week reaching the highest level of the year, but remains relatively low by historical standards, at levels last seen in 1997,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “The increase last week was due to a sharp increase in applications for government loans. Borrowers were likely motivated to apply before a scheduled increase in FHA insurance premiums that became effective last Friday. Rates were flat last week, but refinance activity fell, as the pool of borrowers who have both the incentive and the ability to qualify for a refinance continues to shrink.” The refinance share decreased to 61.2% and the ARM share increased to 6.1%. The average 30-year rate increased to 4.93% and the 15-year rate decreased to 4.14%.
Treasury Five-Year Break-Even Reaches 33-Month High on Inflation Outlook UST prices are slightly lower across the curve as of 10:30 AM, and MBS prices are off slightly to unchanged. Today the Fed will buy $1.5 billion to $2.5 billion in long-dated Treasurys as part of QE2. According to a BB forecast, the 2yr UST yield will rise to 1.37% by 4Q11, the 10yr UST yield will rise to 3.92%, and the 30-year UST yield will advance to 4.94%.
FOMC Minutes: There was some divergence of opinion of QE2, though discussion seemed to favor of completing the program. “In their discussion of monetary policy for the period ahead, Committee members agreed that no changes to the Committee’s asset purchase program or to its target range for the federal funds rate were warranted at this meeting. The information received over the intermeeting period indicated that the economic recovery was on a firmer footing and that overall conditions in the labor market were gradually improving. Although the unemployment rate had declined in recent months, it remained elevated relative to levels that the Committee judged to be consistent, over the longer run, with its statutory mandate to foster maximum employment and price stability. Similarly, measures of underlying inflation continued to be somewhat low relative to levels seen as consistent with the dual mandate over the longer run.”
Lockhart Not “Leaning’ to Fed Policy Tightening By Year-End. Federal Reserve Bank of Atlanta President Dennis Lockhart said he doesn’t expect the central bank to tighten U.S. monetary policy by the end of the year with inflation still low and the economic recovery fragile. Late Tuesday, St. Louis Federal Reserve Bank president James Bullard said he intends to push to reduce the “quantitative easing” program, dubbed QE2, by $100 billion at the April meeting, though he expects little support
Initial jobless claims decreased by 10,000 to 382,000. The four-week moving average declined by 5,750 to 389,500, remaining below the 400,000 mark considered to be a strong sign that the economy is gaining more jobs than it’s shedding. Continuing claims decreased by 9,000 to 3,723,000.
Treasuries Pare Losses After Trichet Damps Further Rate Rise Speculation. Bonds are mixed overnight with the curve a bit steeper, the front-end through fives trading well while bonds are a little softer.
ECB Raises Key Interest Rate to 1.25% to Stem Faster Inflation by raising its main interest rate by a quarter percentage point to 1.25%, making it the first central bank among the world’s large, developed economies to raise interest rates since the world fell into a deep recession in 2008. The increase was widely expected after ECB President Jean-Claude Trichet last month strongly hinted that an increase was likely. Earlier Thursday, the Bank of England kept its benchmark rate unchanged.
Bonds Show Investors Don’t See Risk of Fiscal Crisis in U.S. As the political debate over budget cuts in Washington threatens to bring the government to a partial shutdown, bond markets are showing little concern about the nation’s fiscal health.
Could a Government Shutdown Hit Housing? The housing market could face a bit of a screwball just as the spring sales season. Obama said: “It may turn out that somebody who was trying to get a mortgage can’t have their paperwork processed by the FHA and now the person who was going to sell the house, what they were counting on, they can’t get it,” he said.
Treasury: Sold $3.9 Billion In Mortgage-Backed Securities In March, and has plans to sell up to $10 billion a month of the $142 billion MBS portfolio. “The MBS market has improved considerably since Treasury purchased these securities. Based on current market conditions, Treasury expects to make a profit for taxpayers on this investment,” Assistant Secretary for Financial Markets Mary Miller said in a blog post on Treasury’s website.
Although Congress passed this law back in 2007 and extended it through this year (2011), this remains a common question for owners of real estate. Mortgage insurance is typically a monthly expense that occurs when a property is purchased with less than 20% down payment or refinanced with less than 20% equity.
Homeowners who itemize their income tax deductions on the Federal Schedule A tax form can claim the PMI by entering it on line 13, in the section entitled “Interest You Paid”. You should find this figure on the form 1098 mailed to you by your lender at the beginning of each new year. The deduction may be taken for coverage issued by the Federal Housing Administrations (FHA), Veterans Administration and the USDA Rural Housing Service as well as private insurers.
There are, of course, limitations and restrictions. For example, the PMI deduction is allowed provided you took out the mortgage on or after January 1, 2007. The total amount you may deduct may be limited or reduced based on your income and how you file (for example, married filing jointly vs. married filing separate returns). Above those maximum income limits the percentage of PMI you may deduct is reduced for every $1,000 that your income exceeds your particular limit. The current law allows this deduction through the end of this year.
For more general information checkout the following link on Bankrate.com:Deducting private mortgage insurance http://www.bankrate.com/finance/taxes/deducting-private-mortgage-insurance.aspx#ixzz1Gand6lk2
Nothing discussed above should be construed as tax advice. Heed the caveat and always seek advice from a tax professional.
Paul Gonzales, Countywide Mortgage Lending (760) 746-7388 [email protected] NMLS CA-DOC290493