Quote For The Day!

An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today.

Laurence J. Peter

Market UpDate

On Friday, mortgages underperformed swaps as selling from money managers materialized late in the session and pushed the basis (the yield difference between MBS and swaps) wider. Originator selling totaled just over $1.25bln during Friday’s abbreviated trading session. In terms of dollar prices, the FNCL (30yr) 4.0s in June were -8/32 (100-19) and the FNCI (15yr) 4.0s in June were -4.5/32 (104-03). In agency swaps, Gold/Fannie swaps traded modestly lower (in Fannie’s favor) last week as real money buying in Golds subsided a bit. Currently, the Gold/Fannie 4.0 and 4.5 swaps are trading at -3.75/32 and -3.625/32, respectively.

Originator lock activity was reported to be mixed last week. However, on average it seemed that locks were mostly flat to slightly higher week over week. The pick up in volume that is normally associated with a rally like the market saw last week was probably tempered somewhat by borrower’s focus on the upcoming holiday. The 30yr primary rates remain in the 4.625 – 4.75% range. The primary/secondary spread (the difference between primary rates and the interpolated MBS par coupon) is currently at ~70bps, which is slightly tighter week over week but still within the recent range.

Treasuries were mixed on Friday as the 5-year was +2/32 (1.717) and the 10-year was -4/32 (3.074). In terms of economic releases, this week’s calendar is heavy and will be highlighted by the May employment report that will be released on Friday. Today the S&P/Case-Shiller home price index for March will be released and is expected to show ~-0.24% decrease month over month, which would be in line with February’s decline. In equities, futures are pointing markedly higher following gains in Europe. European indices have been trading higher today as concerns surrounding Greece’s sovereign debt abated following an announcement from EU leaders that a new aid package for Greece will be decided upon by the end of June. Right now, S&P futures are +12.4 and Dow futures are +107.0.

What Does Memorial Day Mean to YOU?

Memorial Day is the last Monday of May. It’s a day we commemorate the men and women who died while serving in the military. It goes way back to the civil war days; we fly our flag at half mass for half the day and at noon raise it up again to honor those who have died and for their sacrifice not be in vain, but to rise up in their stead and continue the fight for freedom. We honor them with respect and remembrance.

This special weekend marks the beginning of summer and is a time we share with family and friends at picnics and BBQ all over our great country. One of the longest-standing traditions is the running of the Indianapolis 500, an auto race which has been held in conjunction with Memorial Day since 1911.
We have to get up early in Hawaii with a 5AM start time..

For our family it's a Sunday family BBQ. Randy's sister Lynne is here from Washington. I am planning a trip to Punchbowl Cemetary to honor our veterans.

So tell me about your weekend and what you have planned.

Have a wonderful holiday weekend and stay safe!

Quote For The Day

"Our happiness depends on the habit of mind we cultivate. So practice happy thinking every day. Cultivate the merry heart, develop the happiness habit, and life will become a continual feast."

Norman Peale

Market UpDate

Disquieting economic news pushed Treasuries markedly higher on Thursday. The 10-year was +19/32 (3.061) and the 30-year was +30/32 (4.223). Yields on most government bonds fell to their lowest levels of 2011 following the announcement that Q1 GDP growth was lower than analyst expectations. Moreover, this week’s initial jobless claims report increased whereas pundits had predicted a decrease. Finally, the Treasury completed an auction sweep as the day’s 7-year T-note auction was well bid, similar to this week’s previous two auctions. Mortgages rallied dramatically on the day as MBS outperformed treasuries across the coupon stack. Lower coupons were the highest fliers as the spread on the FNCL 4.0% improved nearly 8/32.
Treasury prices have retreated some from yesterday’s heights ahead of today’s inflation reports. The 5-year is unchanged (1.734), the 10-year is -4/32 (3.074) and the 30-year is -11/32 (4.243). Both the April PCE deflator and April core PCE deflator are expected to increase, extending March’s gains. While both of these inflation measures are on the rise they remain low relative to historical standards. Elsewhere, the April pending home sales report is expected to fall, reversing a portion of March’s increase. Finally, today’s final-May U.S. consumer confidence index from the University of Michigan is expected to remain unchanged, clinging to the early-May increase. Mortgage prices are slightly lower this morning with the FN 30-year 4.0% for June settle trading at 100-23. Please note that the market closes early today so it may behoove one to complete necessary trades earlier rather than later in the day.

Market UpDate

Treasuries were mixed on Wednesday as short and medium term notes benefited from the day’s scintillating 5-year auction. The 5-year was +2/32 (1.762), the 10-year was -4/32 (3.129) and the 30-year was -18/32 (4.279). Yesterday’s government bond sale elicited even greater demand than Tuesday’s 2-year auction. Meanwhile, strength in equities weighed on longer dated bonds. In other news, April durable goods orders posted the largest decline in 2011, disappointing pundits’ expectations. Mortgages were mostly unchanged on another day of modest flows. There was greater support for lower coupon versus higher coupon MBS throughout the day.

Treasury prices are lower this morning due to strength in global equities. The 10-year is -7/32 (3.154) and the 30-year is -14/32 (4.304). Government bond prices may be showing the effects of this week’s abundance of supply. This week’s $99 bln auction carnival culminates with today’s $29 bln 7-year T-note offering. Also today, the Q1 GDP is expected to be revised higher, benefiting from an anticipated increase in Q1 personal consumption. Finally, both weekly initial unemployment claims and continuing claims are expected to fall, building on last week’s declines. MBS prices are a bit lower this morning on the last full trading day of the week, there is an early close tomorrow at 2:00PM ET. The FN 30-year 4.0% for June settlement is trading at a price of 100-03.

Market UpDate

There was little news on Friday other than the deteriorating saga of Greek debt, a story that is beginning to feel as old as the Acropolis. Markets were sorting through European solvency concerns causing the Dow to surrender 93.28 points. Meanwhile, the 10-year Treasury rose 6/32 (3.152%). Mortgages followed government bonds higher as MBS prices climbed 4/32 in the “origination coupons”. Mortgages benefited from real money demand which improved MBS spreads by 3/32 relative to treasuries on lighter origination volume.

Treasury prices are markedly higher this morning as European debt concern has U.S. bonds looking relatively attractive. The yield on the 10-year has fallen to 3.10, very near its recent resistance point of 3.08. Domestic debt prices appear to have a great deal of momentum to begin the week which bodes well for the Treasury’s scheduled 2-year, 5-year and 7-year T-note auctions totaling $99 bln. Also, this week will bear witness to the latest domestic economic data including April new home sales (Tuesday), April durable goods orders (Wednesday), revised Q1 GDP (Thursday) and the April core PCE deflator (Friday). Last week’s U.S. economic data was disconcerting and further worrisome data could cast doubt on the fitness of the recovery. There are no questions regarding the health of mortgages as prices continue to steam ahead. June settle Fannie 30-year 4.0% are 100-10 while 15-year 3.5% are 101-27.

Does Anyone Qualify for a Mortgage Anymore?

You would have to search back about 40 to 50 years to find rates equal to our current rates.
Then why aren’t people buying homes or refinancing? Well today Fannie and Freddie have set the bar so high very few people qualify under their guidelines anymore. The lending environment has pushed the regular Joes/Janes right out of the market.

The average credit score before the melt down was
680 – 720 this was considered an excellent score. Now you will need a 760 or above to get the same pricing for your home loan. Most lenders offering FHA before would go down to 580, then 620 and now recently increase it to 640.

What’s in a credit score; You would be surprised to hear that your score is your lifeline to the best rates available, high scores, low rates. Making sure you have and keep your high score is imperative to saving money on interest over the term of any loan you apply. Home, auto or student loans rates can and are affected by your score. Credit card companies offer lower rates to borrowers with high scores.

How can you control your score?

1. Pay all your debts on time. If you don’t know what a 30, 60, 90 day late is call your creditor and ask them to explain it. It’s important you know this. ONE 30 day late can drop your score 30 to 60 points.

2. Never go over 50% of your credit limit on credit cards, 33% is even better.

3. Try to keep your accounts to a minimum; having multiple credit cards is hazardous. Try not to go over four.

4. Check your credit often at least twice a year. 80% of American’s have errors on their report. Get them fixed promptly before they lower your scores.

You can get a FREE report at http://www.annualcreditreport.com/

With some effort you too can get your scores up and qualify for a loan.

Need help?

Contact me!

Back on Track After a Family Crisis

Blogging and writing is something in truly enjoy. Giving you all information you can use or may pass on is inspiring for me to continue. My last entry on 2/28/11 was just two days before my husband went into the hospital and had triple bypass heart surgery, he is recovering but it's been a long haul, shortly after he came home from the hospital I was diagnosed with kidney stones. We were quite a pair all medicated and trying to care for each other. Our daughter was very helpful and our son was here for a short time and was my rock.
He helped me through my husbands surgery and stay in the hospital but he eventually had to return to his family in California. My kidney stones have passed, except for one, guess I have something to look forward to in the future. I will start my posting again and have some plans to update my blog and what's offered on it. I'd like to thank all of my followers for their well wishes and prayers during this time. I hope to continue to hear from all of you and read your comments. I enjoy your input and questions. Join me on Facebook too!