So long 4.x%...it was nice knowing ya!

NEW -> Contingent Buyer Assistance Program
[quote author="Soylent Green Is People" date=1244251719]. Next week you'll either see a great Treasury auction or a crappy one. If OCO buys a bunch, mortgage rates which are currently way oversold will settle into the upper 4's, low 5's. If the auction is a steaming pile, 6.0% mortgage rates are on their way.

</blockquote>


6% rates are here. Judging by the way the MBS market fell off a cliff today, bets have been place on the side of an unsucessful teasury auction this week. Below is a poll from <a href="http://www.mortgagenewsdaily.com/mortgage_rates/blog/">mortgage news daily blog</a>.



Your Loans In Process And Your New Pipeline?

Created By: Matthew Graham

GOOD/GOOD: Current Locks More Committed, New Biz More Motivated (5.8%)



GOOD/BAD: Current Locks More Committed, but it's killed the new applications (24.4%)



GOOD/BAD: It's hurt the current pipeline due to borrower reaction, but new apps increasing (3.6%)



GOOD/BAD: It's hurt the current pipeline due to lender reaction, but new apps are good (5.8%)



BAD/BAD: Hurt Current Pipeline (borrower reasons), Hurt New Apps (36%)



BAD/BAD: Hurt Current Pipeline (Lender reasons), Hurt New Apps (24.4%)



Total Votes: 225



<a href="http://www.mortgagenewsdaily.com/mortgage_rates/blog/81145.aspx">Checks out the comments from the people working in the industry.</a>



<blockquote>Pipeline is officially gone.....Unfreakin' real. Over at the Fed we hear what? Crickets. Hopefully they have been paying attention and will come up with a new plan because the housing market is going to fall even further now. Can anyone say 1991 prices?</blockquote>
 
Perhaps 6.0% is coming, but not as of yet. 10yr T held out today at 3.9% as a ceiling of resistance. Tomorrow through Thursday's auctions will be key to any kind of low 5% rate coming back. If things go well, we're back into the low 5's.



That mortgage blog is a good one for current stats and market news. The comments though are from people who swim in the refi market. They always crab about missed rates when they should have told their clients to lock from the get go.



Two words for them: One is Boo and the other is Hoo.



Most of the comments are reflective of the crappy advice given by newbie loan providers who stocked up on serial refinancers business which was never going to close in the first place. Floating rates into a bottoming mortgage market is "el bese de la muerte".



My .02c



Soylent Green Is People
 
[quote author="Soylent Green Is People" date=1244522411]Perhaps 6.0% is coming, but not as of yet. </blockquote>


What pricing did you see today? A few people I know in the industry said they re-priced in the 6's today for conforming with zero points.
 
[quote author="usctrojanman29" date=1244249585][quote author="IrvineRenter" date=1244248557]<a href="http://www.calculatedriskblog.com/2009/06/rising-rates-next-fed-meeting-will-be.html">Rising Rates: The Next Fed Meeting Will be Interesting</a>



"<strong>Based on this historical data, a Ten Year yield at 3.84% suggests a 30 year mortgage rate of around 5.75%.</strong>



Freddie Mac reported that 30 year mortgage rates were at 5.29% for the week ending June 4th, and the MBA reported rates at 5.25% for the week ending May 29th. These rates should jump again next week putting pressure on the Fed. "</blockquote>
6% here we come.</blockquote>
Wow, it happened a lot faster than I thought.
 
We had an 8:00 rate sheet, a 10:00 and a "nooner" - all for the worst today.



Some assumptions:



$417,000 , 30 day rate lock, 80% LTV, 720 FICO



General retail rate: 5.75% 1.0 point, 6.00% for -0- points.



Sub 720 FICO - add .75 in fee

Condo above 75% LTV - add another .75 in fee.



You could be a 719 FICO score client in a reasonable condo in Irvine, looking for a no cash out refi, and having to take 6.0% for 1.5 points today.... And that's if I like you!
 
Soylent Green (loved the movie!), does this also affect jumbo rates? Or is the credit component so high that it is not sensitive to where MBS is trading?
 
A rising tide lifts all boats. Jumbo and conforming rates have soared.



Soylent Green - a metaphor for our times. global peril, systemic collapse, corrupt government aligned with powerful business interest, the lower economic class feeding on itself while the unaccountable rich skim off the last remaining cream... visionary and apropos.



My 02c



Soylent Green Is People...mmmmm. yummy delicious people....
 
And who can claim they know what Cheerios are really made of...



I guess the question is this: Jumbos became so much more expensive than conforming, does the spread over conforming change daily or is it static? Are jumbo rates much more variable than conforming with regards to FICO and LTV?
 
True portfolio jumbo rates move as much as traditional FNMA/FHLMC/HUD loans. They may have different mechanisms in arriving at their price and rate, but they move in lock step with traded MBS loans.



Tuesday is Soylent Green Day.





My 02c



Soylent Green Is People.
 
So looks like I need to start aiming for 25% down (instead of 20%) to avoid any additional fees/rate increases for my future condo purchase.



Still hoping to be able to get into an SFR though!
 
[quote author="25inIrvine" date=1244598644]So looks like I need to start aiming for 25% down (instead of 20%) to avoid any additional fees/rate increases for my future condo purchase.



Still hoping to be able to get into an SFR though!</blockquote>


Look outside of Irvine and that 20% down on a condo is probably more like 25-30% down on an SFR. With a real yard.



And a garage.



And a driveway. Just in case you want to park on it and use your garage as a work shop. Or pool hall. Or weightroom. Or pack rat storage facility.



Oh, and don't worry about the HOA you won't have to deal with one unless you really want to find one.
 
Yes, but the 10yr T hit 4.01% and has since fallen. We had one rate sheet today, plus two improvements since. This isn't a trend, but rates will begin to moderate back a bit from the current highs.



My .02c



Soylent Green Is People
 
I have a relative working in the mortgage business and she was getting a lot of business through refi's, but now the rates are up, her business is drying up. She is worried about high interest rates as it will affect her business. Are mortgage workers worried?
 
[quote author="Soylent Green Is People" date=1244784497]Yes, but the 10yr T hit 4.01% and has since fallen. We had one rate sheet today, plus two improvements since. This isn't a trend, but rates will begin to moderate back a bit from the current highs.



My .02c



Soylent Green Is People</blockquote>
This will probably continue into the fed meeting as no one is gonna wanna be short treasuries until after they hear what the Fed may or may not say on June 24th. I think we blow through the 4% mark on the 10-year in July and 6%+ mortgages will be here to stay for a bit. The only thing that will reverse that is when equities start selling off because people begin to realize that the second half recovery is nowhere to be found.
 
Serious buyer (or knife-catcher, if you like) with cash and loan preapproval in hand speaking:



Back in April, we were preapproved for a jumbo loan with 5.875 APR, 0 point. I checked with our loan officer today and as per her, if we wanted to get the same loan today, our APR would be 6.75 with 0 point. We didn't want to get more than 1 mil loan back then to stay within our means and wanted to put down the rest in cash, and hence, the maximum we were willing to pay for a house we liked two weeks ago was ~$1.35 mil. Based on today's rate, to have the same monthly payment, we should limit our loan to no more than $900k, and with the same amount of down payment, our maximum offer for the same house today will be less than $1.25 mil. In other words, a property that "valued" $1.35 mil 2 weeks ago values at around $1.25 mil today.



I doubt we are alone and if the rates stays here or (more likely) keep climbing up, we should either see some quick falls in prices, or an even slower high-end market. Only time will tell, but we are already looking for our rental.
 
Mazy, You seem to be able to do math. You're ahead of the game. With property taxes, HOA, M-R assessment, we really all renters.

Only $6846 per month plus opportunity cost, maintenance cost, M-R (if any), HOA, etc. to own.

What can you rent alot for $5000 per month?

Sadly to say, most people will quickly buy before interest rates go up again. The sellers are quick to raise prices when interest rates drop and slow to adjust the prices down when the interest rate increases. They think their house is a steal at the high price, and the sad reality of the typical buyer and REA "representing" the buyer think they better buy before interest rate or price goes up.
 
[quote author="Mazy" date=1244805763]Serious buyer (or knife-catcher, if you like) with cash and loan preapproval in hand speaking:



Back in April, we were preapproved for a jumbo loan with 5.875 APR, 0 point. I checked with our loan officer today and as per her, if we wanted to get the same loan today, our APR would be 6.75 with 0 point. We didn't want to get more than 1 mil loan back then to stay within our means and wanted to put down the rest in cash, and hence, the maximum we were willing to pay for a house we liked two weeks ago was ~$1.35 mil. Based on today's rate, to have the same monthly payment, we should limit our loan to no more than $900k, and with the same amount of down payment, our maximum offer for the same house today will be less than $1.25 mil. In other words, a property that "valued" $1.35 mil 2 weeks ago values at around $1.25 mil today.



I doubt we are alone and if the rates stays here or (more likely) keep climbing up, we should either see some quick falls in prices, or an even slower high-end market. Only time will tell, but we are already looking for our rental.</blockquote>
The unfortunate part is that you are not alone, this market makes no sense other than there are limited organic sellers who have equity with the majority of homes being short sales and these sellers think they can get top dollar for their properties. They will come to realize that they felt a lot of money on the table when they look back a year from now. Oh well, their loss. I think renting for 6-12 months and letting things settle down might be the way to go.
 
Mish always seems to have a cogent analysis of the current situation.



<a href="http://globaleconomicanalysis.blogspot.com/2009/06/mortgage-market-remains-solidly-frozen.html">Mortgage Market Remains Solidly Frozen</a>



A question for the mortgage brokers and lenders on here: Is it really true -- as stated in the article -- that appraisals are now taking 15-25 days to come back because of the new home valuation rules? And the applicant has to pay for the appraisal upfront and is out the $500 if it comes in low?
 
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