Posts Tagged ‘home mortgage’

Is the Euro Really a Burro?

Well, it appears the Eurozone is under seige again as Italy and Spain are now in the crosshairs of the debt crisis. Remember when it was all about Greece and their impending default? It now appears that the contagion is snowballing through Europe. The Troll had a beat on this story a couple of months ago (see Greek Mythology). If a stop gap isn’t instituted soon to soak up a lot of the debt exposure (a Central Bank perhaps) the Euro might become……wait for it……a “Burro”. That’s Spanish for Donkey of course and one of the few words that convey negativity while rhyming with Euro. See what the Troll did there? When you think about it the Burro is the perfect animal to symbolize the French. They smell and are quite disagreeable…….He’s here all week folks!

The Troll

The Troll is on a Roll

If you haven’t heard from the Troll in a couple of weeks it’s because he has been feverishly working on a record month of closings. Rates are low you see and home prices are down as well. For people in the know it means opportunity is at hand. If you haven’t refinanced or thought about purchasing a new home or investment property you might want to consider it. Give the Troll a call to see how much money he can save you with a new lower interest mortgage, you might be surprised. You can also hire the Troll to find your dream home or the perfect rental property.

In recent news……The Troll was last seen in public at the Seahawks/Ravens game. And what a game it was. Nothing like an unexpected win for the home team to start the week off right.

The Troll

Are you Confident?

The American consumer is not confident. The numbers released today show our consumer confidence at a 2 1/2 year low. The last time the numbers were this low was in the spring of 2009 when we were in a recession. What does that mean you may ask? Well, it means people are worried about their jobs and job prospects. It means people are underwater in their houses and must chose between buying things and paying their mortgage.  These choices do not exude confidence.

The flip side of course is that those with solid jobs and confidence are finding incredible deals in housing. They have found desperate sellers whether they are selling short or competing with those that are. It is becoming more frequent to purchase a property that will cash flow with rental income especially in the Seattle area. The Troll is not so sure that this is a good thing with desperate people selling so they can rent, but it is the unfortunate reality.

If you are confident give the Troll a call so that he can help you find a great opportunity in todays’ real estate market. You can also call him if you are interested in refinancing to a historic low interest rate. Or even better, call him to get pre-qualified for the loan that purchases the property that he finds for you. Whether it’s your first purchase or a rental property it’s a great time to invest in Seattle real estate.

The Troll

Mortgage Market Update for 9-14

The Troll wanted to post earlier this week but his loan processor is on vacation and he had to close some loans. Remember he is still a mortgage broker and real estate broker first. It must be this way because he has little trolls to feed. Did you know that little trolls have voracious appetites? Food for thought anyway and now onto the mortgage news.

The releases today were helpful to bonds and mortgage interest rates. The Producer Price Index (PPI)which measures the average change over time in selling prices received by domestic producers for their output came out at zero today. These prices are typically the first commercial transaction for many products and some services. It means that prices are not increasing for manufacturers and inflation is not problematic. Retail sales were also completely flat. These numbers are not indicative of an economic recovery. The Troll doesn’t see a recovery for quite some time. The immediate issues of the day are in Europe, U.S. housing and unemployment. Until these problems are solved, we can expect pretty low interest rates, with some occasional scares along the way.

Sec Treasury Geithner on CNBC this morning saying Europe has the financial strength to avoid defaults in the countries that are on the edge with debt. He said the obvious, that Europe’s problems are causing a lack of confidence in the US. He encouraged Congress to pass the jobs bill offered up by the Administration. He also admitted US growth isn’t what the Administration had expected.

Pessimism about the economy has deepened and confidence in both U.S. political parties has fallen, with only 20% saying the country is on the right course. As little as 9% of Americans say they are confident the economy won’t slide into a recession, according to a Bloomberg National Poll.

As long as the 10 yr note doesn’t climb above 2.10% the positive outlook will continue, a break above it would set up a run up to 2.30% and take mortgage rates up with it. Next week the FOMC will hold a two day meeting, some traders are looking for more Fed help, while others including some FOMC members don’t believe more quantitative easing (QE) is necessary.

The Troll

Obama Jobs Speech and the 10 Year Bond

This evening the President will discuss his proposal to encourage job growth in the United States. The Troll is interested to hear what he has to say about the subject. He is also surprised to hear that the President will not be speaking to the housing crisis in tonight’s speech. It seems to the Troll that the two go hand in hand. You see after every recession/depression in the United States, the job market has historically built its’ way out of malaise. Construction jobs are paramount to the recovery and they have been nearly nonexistent for the past 4 years. The Troll believes that without a housing recovery there will be no economic recovery in any substantial means. We shall see.

The Troll also wanted to address the 10 year bond market. As you may or may not know, the 10 year bond yield affects long term interest rates. Specifically, it affects 30 and 15 year fixed mortgage rates. It has been 60 years since the 10 year bond yield has traded as low as it is today. The yield has broken a significant resistance level of 2.00%. The result of this dramatic development is historic low interest rates.

For those of you that have a 30 year fixed mortgage and have solid income, credit and equity position you may want to consider moving to a 15 year fixed mortgage. Depending on your qualifications, you can obtain a rate on that program in the low 3% range. Truly Unbelievable!

The Troll

Little Trolls go Back to School

Well, the Troll has been in a difficult predicament over the past few days. You see, his little Troll’s are still out of school and they are fierce consumers of the Trolls time when they are not at school. Don’t forget the Troll has 2  jobs (mortgage and real estate broker). One could also consider his soon to be award winning blog a part time gig and you get the idea. Think of the Jamaican Family skit on the old SNL.

We left off last week with the stage set for Bernanke. He took the stage and said nothing new would be implemented in the form of economic stimulus (QE). The door is obviously still open in that regard but as of right now nothing is in the works. Rates remain near all time lows and it is the Trolls humble opinion that they will remain low for the foreseeable future. If Bernanke can’t hold off on another round of QE then interest rates will likely move slightly higher as investors seek better returns in the stock market. If you haven’t taken advantage of the current climate (low rates), give the Troll a call. You might be surprised to find out that he can save you some cash.

The Troll

Tomorrow’s the Big Day

There’s a lot going on today and in all different directions. Yesterday’s Durables numbers were an unfriendly surprise for bonds yesterday. The 5 year treasury auction was met with ho-hum action causing us to break through support and maintain our recent slide. Then today we get the weekly unemployment numbers that continue to disappoint (417,000) and maybe we aren’t quite out of the woods yet.

The bottom line is tomorrows GDP numbers and anything Fed Chairman Bernanke says will direct the market. Hold on your hats people, it might get a little crazy.

At 1:00 this afternoon Treasury will complete its borrowing with $29B of 7 yr notes auctioned. While we didn’t think yesterday’s 5 yr auction went that badly, markets took it as not as well bid as what was expected. The strength of today’s 7 yr will be closely watched, farther out on the curve; if it isn’t a solid auction treasuries will likely back off and prices may decline taking mortgages with them.

Most of the day’s trading will be in preparation for Bernanke’s speech tomorrow from Jackson Hole. Markets are with mixed thoughts about what the Fed chairman will have to say about the economy and economic outlook, both in the US and globally. Lot of talk that he will announce another Fed easing program, mostly based on last year at this conference is when he announced QE 2. While some believe the Fed will act, there are many traders not buying into another easing. QE 2 was only considered a success from the what if perspective; what if the Fed didn’t buy $600B of treasuries? Would US interest rates increased? It didn’t help the economy, it didn’t increase employment and it didn’t increase consumer confidence.

Warren Buffett stepped up this morning to stop the decline in BofA’s stock, BofA stock has plummeted recently on increasing losses from mortgage operations. The bank made a huge mistake in hindsight when it bought Countrywide and all its bad loans. Buffett bought 50K shares of preferred stock for $5B. The bank stock jumped 25% in minutes after the news hit the wires. That Buffett is in the game will likely stabilize BofA’s stock and increase confidence in the leadership at the bank.

The Troll

Washington State. The Big Layoff

In yesterdays Seattle Times a front page article caught the Trolls eye. It was titled “State government offices-Where are all the people?” The article states that the recent decline in state employment is unprecedented in the 26 years they have tracked the data. I must admit that it comes as no surprise to the Troll that government layoffs have and will continue to play a big role in employment numbers for the foreseeable future. You see, there are a lot of foreclosures and short sales out there. These properties are not current on their debt and therefore are not contributing to the states tax pool in the way of property taxes. Without property taxes coming in there is no where to run and cutbacks are the result. Something else to consider, unemployment benefits are also at unprecedented levels. Unemployment benefits have been extended to a nearly unbelievable 2 year duration which has exhausted the state coffers. As companies layoff employees there is less and less money available to social programs in the way of payroll taxes. A viscous cycle indeed.

It’s tough out there people, we need to look no further than those rioting in England last week over current economic opportunities. It’s a little scary to contemplate the typical 6 month lag for things happening in Europe to reach the United States. And while the domestic economy continues to make tough cuts, this Troll hopes the 6 month lag still only pertains to fashion.

Still, as the Troll wrote yesterday, conditions couldn’t be better for those that have the means to purchase a rental or qualify to refinance at a lower interest rate.

The Troll

Daily Pfenning 8-24

The Troll is posting a shortend version of today’s Daily Pfenning. Although he loves what Chuck brings to the table, he wants to keep the blog flowing with more useful mortgage and real estate information. Currency trading will not be a featured part of the blog so the Troll has “edited” today’s Daily Pfenning. I hope you understand Chuck.

 

In this issue

* More thoughts on Gold.

* The dollar fights back in U.S. trading.

* Regional manufacturing indexes disappoint.

Gold Gets Taken To The Woodshed.

Well the tag team match yesterday didn’t work, as the currencies just couldn’t
hold off the dollar, and they lost ground all day. It really looks to me to be
much like the partisan battles on Capitol Hill. The overnight markets moving
currencies one way, and the U.S. markets moving them the other!

The losses were big. But not at the same pace as Gold! OMG! Gold got taken to
the woodshed all day, and by the end of the day it was an ugly scene with Gold,
as it lost over $68 on the day, in HUGE volume. So, we’ll have to hold off on
the printing of those “Gold $2,000 Baseball Caps”! But, to prove it
was a one day phenomenon. Gold is back on the rally tracks this morning, rising
$20 in early morning trading.

So after looking at all this stuff being said about the expectations regarding
Big Ben Bernanke’s speech on Friday, I’ve got this thought. If the Fed DOESN’T
talk about additional stimulus needed, and deep sixes QE3, we could see a harsh
correction of Gold’s price. It’s due, and that could very well be the catalyst.

But then, I still suspect that he’s going to at least discuss the Fed’s options
to stimulate the economy, to prove there are still arrows in his quiver. And if
that happens, we’ll have to see what the markets think of it. Usually, the
markets react to “options” being discussed.

Here in the U.S. July New Home Sales were very disappointing, falling -.7%, and
June’s figure was revised downward from -1% to -2.9%! We won’t see the Home
Price Index until next week, but if sales are slowing like this, the prices if
they haven’t already, will be coming down more to a place where buyer and
seller meet and agree.

And in the last 10 days we’ve had manufacturing indexes in New York (Empire),
Chicago, Philly and now Richmond, all show some serious rot on the vine. That’s
not a good sign folks.

Today, we’ll see the color of the latest print of Durable Goods Orders
(Durables) for July. This data will try to reverse June’s horrible showing of
-2.1%…

To recap. Gold got sold like funnel cakes at a state fair yesterday, losing $68
on the day. But is back on the rally tracks this morning. Along with the
currencies that got sold in the U.S. market yesterday.
Chuck Butler
President
EverBank World Markets

Mortgage Market Update 8-24

Prior to 8:30 the DJIA futures was down over 100 points
after the strong 322 point rally yesterday.

At 8:30 July durable goods orders, expected up 1.9%,
was reported up 4.0%; excluding the volatile transportation orders durables was
expected down 0.4%, as reported up 0.7%. A very good report that turned the
trade in stock indexes around to trade unchanged at 9:00. Bookings for goods
meant to last at least three years rose the most in four months, after falling
a revised 1.3% in June. The bond and mortgage markets were a little stronger
prior to durables, and then fell back some but still not much change from
yesterday’s levels.

All markets continue to increase focus on Bernanke’s opening
speech Friday at Jackson Hole.

Risk trades coming off in equities and the bond market as well as currency trading. Gold fell $62 yesterday this
morning down again another $42 at 9:00. Will we get another money printing QE? Or
has the Fed recognized it has run out of bullets in terms of increasing
economic growth? Keeping interest rates low is already a given from the Fed
after the statement from the FOMC two weeks ago; so far the historic low long
term interest rates, including mortgage rates, has had no real impact on the
economy. With many believing another easing will occur, maybe Bernanke feels
cornered and has to do something. What he should do is chastise politicians and
the Administration for failing to accept that spending cuts are now mandatory
as well as increased revenues. Not going to happen.

Earlier this morning the weekly MBA mortgage applications were
weaker again.

The purchase index fell steeply for a second week, down 5.7% in the August 19
week and now at its lowest level in 15 years. Low interest rates aren’t helping
with applications falling across the board including a 15% fall for jumbo loans
and an eight percent fall for government housing programs. Low rates had
triggered a surge in refinancing applications which however eased back 1.7% in
the latest week. Rates moved slightly higher in the week with the 30-year up
seven basis points to 4.39%.

At 9:30 the DJIA opened -50, the 10 yr note -3/32 at 2.17%
and mortgage prices up 1/32 (.03 bp) form yesterday’s close.

After the lower open, by 9:45 the DJIA began to improve and interest rate markets backed off
to trade lower in price, the 10 yr note yield at 9:45 at 2.19% +3 bp while
mortgages were down 5/32 (.15 bp). Lenders that priced prior to 9:30 are
watching closely, anymore weakness will set up re-pricing.

Like yesterday, we are not looking for much in the way of
movement, but the very near
term bias is slightly negative for the
bond and mortgage markets as long as equity markets don’t
crack.

Short covering and positioning ahead of Bernanke on Friday is providing a little support in
equities on the idea another easing from the Fed would drive investors back
into stocks. Frankly, I don’t understand that logic; QE 2 didn’t help, another
easing that will push interest rates lower—so low that investors have little
choice but to buy stocks—-seems like a huge stretch. Low interest rates and
some improvement in stock prices have had no positive impact on the economy.

At 1:00 this afternoon Treasury will auction $35B of 5 yr
notes, yesterday’s 2 yr auction met with good demand, most expect the 5 yr
today will also be well bid.

At 10:00, the June FHFA housing price index, not much of a market
mover, fell 4.3% yr/yr; from May to June +0.9%. No reaction to it as it isn’t
new news.

The Troll

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