Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Arcanaut
novahockey
quarterback
ScottC
yellojktVital Statistics:
| Last | Change | |
| S&P Futures | 2168.3 | 5.0 |
| Eurostoxx Index | 343.8 | 2.5 |
| Oil (WTI) | 42.8 | -0.2 |
| US dollar index | 88.0 | 0.2 |
| 10 Year Govt Bond Yield | 1.56% | |
| Current Coupon Fannie Mae TBA | 103.3 | |
| Current Coupon Ginnie Mae TBA | 104.2 | |
| 30 Year Fixed Rate Mortgage | 3.53 |
Markets are calm ahead of the FOMC decision this afternoon. Bonds and MBS are up small.
The FOMC decision is set to come out around 2:00 pm EST today. Beware of locking around that time. Since there is no press conference scheduled, the odds of a rate hike are extremely low. Investors will parse the language of the statement closely. Note the next time Janet Yellen speaks will be in late August at Jackson Hole, so markets will have all sorts of time to fret without any sort of real input from the Fed.
Mortgage applications fell 11% last week as purchases fell 3% and refis fell 15%. Rates rose 2 basis points last week, but they increased 17 basis points the week before.
Durable Goods orders fell 4% MOM and are down 6.4% YOY. Ex transportation they were down .5% MOM and 3.6% YOY. Capital Goods orders fell as well. For all the talk about an acceleration in the economy, these numbers are a warning sign.
Pending Home sales rose 0.2% last month. Tight inventory remains a problem, and the increase was mainly due to the Northeast which doesn’t have the inventory problem we see on the West Coast. Lawrence Yun, NAR’s chief economist had this to say: “With only the Northeast region having an adequate supply of homes for sale, the reoccurring dilemma of strained supply causing a run-up in home prices continues to play out in several markets, leading to the last two months reflecting a slight, early summer cooldown after a very active spring,” he said. “Unfortunately for prospective buyers trying to take advantage of exceptionally low mortgage rates, housing inventory at the end of last month was down almost 6 percent from a year ago,1 and home prices are showing little evidence of slowing to a healthier pace that more closely mirrors wage and income growth.”
Lost in all the focus on falling / negative bond yields is the rise in LIBOR. LIBOR is a short-term rate that is the basis for lots and lots of financial products, from everything to auto loans to ARM mortgages. New money market regulations have been pushing up LIBOR. The explanation is really inside-baseball sort of stuff, but just be aware as this does affect ARM pricing.
Just one more note on ARMS – in this interest rate environment, where long term rates are steady / falling and short term rates are rising – ARMs are unattractive for borrowers. If there are any borrowers out there who still have ARMs now is the time to refi to a 30 year fixed rate mortgage.
Fannie Mae has announced changes to its 3% down HomeReady program.
Changes that go into effect immediately include:
- Income limits have been raised to 100 percent of area median income (AMI) in all areas except for low income market tracts which have no limit. The company says this will expand access to affordable credit and also make it easier for lenders to determine eligibility for the loans.
- The occupant borrower will now be allowed to own other residential properties.
- Homeownership education courses that fulfill the HomeReady mortgage requirement have been expanded to include one-on-one pre-purchase advising from HUD-approved providers. Fannie Mae will offer lenders a $500 credit to encourage borrowers to take advantage of this option. Homebuyer education will continue to be available through Framework, Fannie Mae’s education partner.
The requirement for homeownership education has been removed for limited cash-out refinances and borrowers for loans secured by two- to four-unit properties will no longer be required to take landlord education although homeownership education will remain a requirement.
- The Seller Guide announcing the above changes also noted that Fannie Mae expects to make additional enhancements later this year, including:
- Allowing a maximum loan-to-value up to 97 percent on limited cash-out refinance transactions in Desktop Underwriter (DU) if the existing mortgage is owned or securitized by Fannie Mae.
- Expanding current HomeReady eligibility for buydowns and adjustable-rate loans to include three- to four-unit properties.
Adding additional incentives for the one-on-one homeownership counseling implemented with the current changes.
The strange, strange world of jumbo lending in the Bay Area. Lenders are now taking into account stock and stock option compensation for determining whether a borrower can afford a mortgage. In a place where the median house price is $1.13 million, lenders have to get creative in finding ways to get working stiffs into a home. I guess if real estate prices and the stock market continue to hit new highs, everything is okay until the music stops.
Speaking of crazy lending, car loans are the new subprime, with 8 year car loans at mortgage rates. As investors reach for yield, they inevitably take more risk. That said, fears of this causing a 2008 style calamity are overblown. Residential real estate bubbles are a fundamentally different animal than this sort of thing.
If you missed the Democratic Convention last night, here is the cliff notes version:
Filed under: Economy, Morning Report |
All Things in Moderation 
No Democrat has ever advocated spying on the GOP by Russia. Is this finally a bridge too far for the GOP?
LikeLike
Mich:
No Democrat has ever advocated spying on the GOP by Russia.
Did Trump advocate for Russian spying on the DNC?
LikeLike
Mich:
I guess you are talking about this:
http://www.politico.com/story/2016/07/trump-putin-no-relationship-226282
It sounds to me more like a sarcastic attempt to keep Hillary’s corruption on the front page, not a genuine request for Russian to hack her wiped-clean servers.
LikeLike
I’ll take that as a “no”.
LikeLike
Mich:
I’ll take that as a “no”.
I can’t speak for the GOP, especially given that I am no longer a member of the party. But as you know, I’m hardly a knee-jerk defender of Trump. In fact I left the party precisely because I cannot associate myself with a party that would nominate a person like him. So he’s already a bridge too far for me.
That being said, both the media and the Dems are no strangers to deliberately misconstruing the words of their political opponents in order to portray them as beyond the pale, and this strikes me as just another example of the same. Ironically, the left’s past dishonesty about traditional R candidates, routinely portraying them outrageous racists and reprobates, is going to make it harder for them to smear a guy like Trump, who is actually the closer to their caricature than any past candidate. The boy who cried wolf, etc.
LikeLike
This is an epic troll attempt, and I think the media and the Democrats (BIRM) will find the bait irresistible.
He is going to do this sort of thing the whole way through..
LikeLike
Brent:
This is an epic troll attempt, and I think the media and the Democrats (BIRM) will find the bait irresistible.
Sean Davis is saying the same thing over at The Federalist:
http://thefederalist.com/2016/07/27/donald-trump-just-got-hillary-clinton-to-admit-her-e-mails-are-a-national-security-issue/#disqus_thread
After taunting Hillary Clinton by asking Russian hackers to release 30,000 e-mails she deleted, Donald Trump finally forced Clinton’s campaign to admit that her unsanctioned e-mail server scheme was a “national security issue.”
He also points out that even if he was serious, it wouldn’t be the first time that a US politician sought the Russian’s help in undermining a domestic political opponent.
Contrary to Sullivan’s assertion about the unprecedented nature of Russian meddling in U.S. elections, former U.S. Sen. Ted Kennedy (D-Mass.) begged the Soviets to help him get rid of President Ronald Reagan in 1984.
http://thefederalist.com/2015/03/10/ted-kennedy-secretly-asked-the-soviets-to-intervene-in-the-1984-elections/
LikeLike
“Shut up!” She argued.
LikeLike
Shouldn’t HRC want those emails released? Wouldn’t it help put to rest any concerns voters might have that she could be blackmailed?
I guess I don’t understand her butthurt.
LikeLike
“I guess I don’t understand her butthurt.”
Would YOU want your emails about your yoga routines broadcast all over the world? I would think not!
LikeLike
Has anybody here said they were voting for Trump?
LikeLike
I don’t know, McWing. I know NoVA and jnc support Johnson, but that’s about it. But the lack of comment from any Republican politician is pretty noticeable.
LikeLike
Republicans should comment every time he makes a sarcastic joke?
LikeLike
Republican politicians are ducking and covering and hoping he goes away, and not to get anything on their Brooks Bros. suits if and when he explodes/implodes/collapses-the-universe.
LikeLike
I took it as a joke, to be honest… And no, I am not voting for Trump either..
LikeLike
“No Democrat has ever advocated spying on the GOP by Russia. Is this finally a bridge too far for the GOP?”
Seriously? No. Even if Trump was to be taken at face value, which he shouldn’t be, it’s not 1984. If he was addressing Al Qaeda or ISIS in such a manner, it might be different.
But politics is tribal and local. No enemy is more important than the other team. If you’re supporting Trump as a “Republican” or as a “Conservative” or even as an “Outsider” than team trumps everything else.
Congressman who was actually on the USSR payroll (one of them, anyway):
http://www.politico.com/magazine/story/2014/10/samuel-dickstein-congressman-russian-spy-111641_Page3.html#.V5kxFmOQfBA
Democrat. Most people have never heard of him. McCarthy didn’t even name him during his hearings. He’s got a plaza named after him, apparently. Doesn’t touch on the Democrats who cooperated with the USSR for free (Ron Dellums, ahem).
Donald has been a birther, he’s been pro-abortion and anti-abortion, he’s said Hillary would make a fine president . . . anyone who still takes him seriously and thinks he’d be a good president isn’t judging him by what he says. GOP pols, on the other hand, have another problem when it comes to their personal political fiefdoms, as would Democrats in a similar situation. And experience is taught me the first instinct of the partisan is to defend, dismiss and explain away in every situation.
LikeLike
oh my god, Did Trump just troll the Clinton campaign into admitting their nothingburger” is actually a “national security issue.
LikeLike
The Democrats have never faced a media-savvy Republican before. They have never ever had to play defense. In fact, I wonder if they even know how.. This campaign is going to be very entertaining..
Edit: They haven’t faced one since Reagan…
LikeLike
He followed the comment with “I think you will probably be mightily rewarded by our press. Let’s see if that happens..”
Trolling the democrats and the press (BIRM)… a two-fer
LikeLike
How did our most travelled SoS have this happen to her post Reset? It doesn’t make sense because we’ve been informed that her skills as a statesmen and diplomat are unparalleled?
LikeLike
Why can’t they just be happy with their uranium?
LikeLike
People just don’t stay bought!
LikeLike