Action Lending - Mortgage News

     June retail sales were released today were rather weak at an increase of 0.1 % versus expectations of an increase of .3 %. It appears people are still reluctant to spend money being unsure about health care and its costs, taxes and wage growth. There are too many balls in the air.

     Consumer Price Index (CPI) for June came in at year over year increase of 1.6 % versus expectations of 1.7 %. This is pretty anemic growth and shows the economy is still growing but very slowly. Washington needs to start to resolve the health care issue. It will not be corrected in one bill I do not think. After that if they are going to give the worker bees a chance to thrive they need to ease the tax burden on us. Maybe their pay should be tied to performance. If the Congress passes a bill they get paid. Higher pay for more important bills and $ 5 for the easy ones. Would that motivate them? LET ME KNOW.

     Rates were pretty much unchanged. Mortgage backed securities improved 9 basis points for the week. Yield on 10 year Treasuries dropped 5 basis points for the week.

     A light week for economic data next week so we will be at the mercy of the technical, talking Feds and geo political events.

     Remember if you have a HELOC that has started to amortize ACTION LENDING can help you combine the 2 loans into one loan at a good rate to ease the sticker shock of that increased payment on the HELOC.

We are Realtors also, as Moonstone Real Estate.

REMEMBER COLLEGE FOOTBALL STARTS ON 8/25/17. FOR YOUR VIEWING PLEASURE TODAY WE HAVE A LINK TO THE TOP TEN COLLEGE MARCHING BANDS. LET ME KNOW IF YOU AGREE OR WHO ELSE SHOLD BE CONSIDERED!

Top Ten College Marching Bands

FORWARD THIS TO YOUR FRIENDS, SUBSCRIBE FOR FREE DOWN BELOW AND IF YOU HAVE ANY MORTGAGE OR REAL ESTATE QUESTIONS GIVE ME A CALL OR SEND ME AN EMAIL, TAKE CARE.

Posted in:General
Posted by Gene Tidgewell on July 14th, 2017 4:51 PM

      The jobs report came out today and was pretty good. New jobs increased by 222,000 and May was adjusted upward by another 14,000. Unemployment climbed to 4.4 % which is good because the growth was caused partially by an increase in the job participation rate to 62.8%. Average hourly wages increased 0.2 % which is considered good.

     The Fed minutes came out Wednesday and it appears the data supports that the Fed will raise rates one more time this year in December. They are concerned that inflation is not growing as fast as they want so the likelihood of 2 increases between now and January are pretty slim. The minutes also indicated that they plan to start downsizing their balance sheet most likely in September. As I stated in my last blog the plan is to do it gradually so as to not cause a spike in rates.

     Rates increased about an eight of a point this week due predominately to technicals. Nothing on the horizon to spark a big move up or down right now but wait until Monday, it could all change.

Saw this quote today “If you try to fail and succeed, which one have you done?”

Remember Action Lending now does REVERSE Mortgages as well as traditional Forward Mortgages

We are Realtors also, as Moonstone Real Estate.

FORWARD THIS TO YOUR FRIENDS, SUBSCRIBE FOR FREE DOWN BELOW AND IF YOU HAVE ANY MORTGAGE OR REAL ESTATE QUESTIONS GIVE ME A CALL OR SEND ME AN EMAIL, TAKE CARE.

Posted in:General
Posted by Gene Tidgewell on July 7th, 2017 5:16 PM

Well the Fed raised the Fed Funds rate by 1/4 % last week as expected and they also indicated they will probably have one more increase this year either in September or in December. This also raised the prime rate for everyone and increased the rate on all HELOCS that are still in their interest only period.

The other big news is they announced that sometime this year they would start to reduce their purchases of Mortgage Backed Securities and US Treasuries to gradually reduce their Balance Sheet which now contains trillions of dollars in these items. They are currently purchasing about $30 million in mortgage backed Securities per month.

When they start they will reduce their MBS purchases by $4 million a month and increase it $4 million per quarter until they hit $20 million a month in 5 quarters. By doing this they will eventually wean themselves of MBS without causing a spike in rates. It is expected mortgage rates will increase more gradually following this plan. They will follow a similar pattern with US Treasuries until they have reduced their purchases by $30 million per month.

Remember Action Lending now does REVERSE Mortgages as well as traditional Forward Mortgages

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Posted in:General
Posted by Gene Tidgewell on June 30th, 2017 1:36 PM

The Fed meets June 13 and 14, 2017 and comes out with their interest rate decision at 11:30 AM PDT.

WILL THEY RAISE RATES?

It is expected that they will raise the Fed Funds rate another 0.250 %. Most also expect them to indicate this may be the last increase of the year. The jobs report came out last Friday and wage inflation was down. In addition the jobs participation rate was down 2/10 % which causes the unemployment rate to drop.

JOLTS (Job Opening and Labor Turnover Survey)

The JOLTS Report was issued Tues day 6/6/17 and indicated there are 6,044,000 job openings in the US. That number grew by 344,000 from the March report. Why so many? Employers cannot find properly trained or educated candidates for the jobs they have. That is a problem.

The Mortgage Backed Securities have been moving pretty much sideways the last week and rates have been relatively flat.

BORROWER ALERT

I attended a real estate class today on the process of selling properties that have to go through Probate. Going through Probate can add up to a year to the process of selling an inherited property. I AM NOT AN ATTORNEY, but I would recommend to all my clients to investigate establishing a Living Trust and putting your home in it as part of your Estate Planning process. If you do not have a Trust attorney give me a call and I can refer you to a competent Trust attorney.

FORWARD THIS TO YOUR FRIENDS, SUBSCRIBE FOR FREE DOWN BELOW AND IF YOU HAVE ANY MORTGAGE OR REAL ESTATE QUESTIONS GIVE ME A CALL OR SEND ME AN EMAIL, TAKE CARE.

Posted in:General
Posted by Gene Tidgewell on June 9th, 2017 5:13 PM

The Fed meets June 13 and 14, 2017 and comes out with their interest rate decision at 11:30 AM PDT.

WILL THEY RAISE RATES?

Who knows? What we do know is that there decision is based, among other things, on the employment picture and on inflation.

EMPLOYMENT

Even though there may be underemployment the Fed feels we are full employment so that is no longer an issue.

INFLATION

The Fed favors Personal Consumption Expenditures (PCE) as a measure of inflation instead of the Consumer Price Index (CPI). April PCE was re\leased May 30the and came in at 1.5 % year over year down from 1.7 % in March and well below the 2.0 % inflation goal of the Fed.

Wage inflation comes out Friday with the jobs report. If it is strong then that may give the Fed the impetus to raise rates June 14. In April wage inflation was at 2.5 % year over year down from 2.7 % in March.

The Mortgage Backed Security market has not yet priced in a rate increase by the Fed on June14th. It has been trading in a narrow range for several weeks and will remain so UNLESS WAGE INFLATION IS STRONG ON FRIDAY or if North Korea keeps firing missiles.

If wage rate inflation is strong look for the Fed to raise the Fed Funds rate and for mortgage rates to move up. If not rates should stay in a tight range unless something on the Geo - political arena crops up.

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Posted in:General
Posted by Gene Tidgewell on May 31st, 2017 4:39 PM

A number of great games this weekend in both the Men’s and Women’s NCAA basketball Tournament. We have some video highlights of last night’s Sweet 16 games

A pretty quiet week as far as financial announcements this week affecting mortgage backed securities. Rates improved some this week as the market liked the fact that the Fed finally raised the Fed funds rate last week. Talking Feds this week seem to indicate no more increases until June at the earliest. Oil prices are down to 47 and change as supplies continue to be plentiful.

 

Gross Domestic Product and Personal Consumption Expenditure’s reports are due out next week. Other than that the economic calendar is pretty light next week.

 

Economic Factors that could cause mortgage rates to increase

 

  1. The Fed reducing their balance sheet by no purchasing new mortgage backed securities with the principal collected
  2. If and when the Tax Cuts are passed they are inflationary so they will cause rates to increase
  3. The Fed increasing the Fed Funds rate

FORWARD THIS TO YOUR FRIENDS,  AND IF YOU HAVE ANY MORTGAGE OR REAL ESTATE QUESTIONS GIVE ME A CALL OR SEND ME AN EMAIL.




 

Posted in:General
Posted by Gene Tidgewell on March 24th, 2017 4:13 PM

Enjoy a Beautiful rendition of Danny Boy to celebrate St. Patrick’s Day.  Watch the Embedded Video Below.

The Fed met this week and raised the Fed Funds rate .25 % as expected. They indicated they may raise it two more times this year. They will continue to reinvest all of the principal they collect on the mortgage backed securities into purchasing new mortgaged backed securities. This has been about 8 billion a week and is helping hold interest rates down. When they stop that reinvesting mortgage rates will increase more.

 

Reverse Mortgages

 

Reverse mortgages are not for everyone but for those who do not have a large retirement nest egg accessing the equity in their home while still living there and retaining ownership can make their retirement more comfortable. If you or any one you know has any questions please feel free to give me a call or send me an email and we can help educate you on this mortgage product.



Economic Factors that could cause mortgage rates to increase


  1. The Fed reducing their balance sheet by no purchasing new mortgage backed securities with the principal collected
  2. If and when the Tax Cuts are passed they are inflationary so they will cause rates to increase
  3. The Fed increasing the Fed Funds rate



FORWARD THIS TO YOUR FRIENDS, SUBSCRIBE FOR FREE DOWN BELOW AND IF YOU HAVE ANY MORTGAGE OR REAL ESTATE QUESTIONS GIVE ME A CALL OR SEND ME AN EMAIL.TAKE CARE.?

Posted in:General
Posted by Gene Tidgewell on March 17th, 2017 6:01 PM

DO NOT FORGET WE LOSE AN HOUR’S SLEEP SATURDAY NIGHT AS WE SPRING FORWARD INTO DAYLIGHT SAVINGS TIME

Today’s jobs report was strong and met expectations. The job participation rate came in at 63.0% up 0.3% since the election.

 

The Fed meets on March 14 and 15 and will release their statement at 11:00 PDT on Wednesday. Jobs, wages and unemployment (even though it is not accurate) are approaching where the Fed wants them to be and the markets feel it is 90 % chance that the Fed Funds Rate will increase 0.25% on Wednesday. Most of that expectation is already priced into mortgage rates. If they do not raise the Fed Funds Rate then mortgage rates will improve.

  

Reverse Mortgages

Reverse mortgages are not for everyone but for those who do not have a large retirement nest egg accessing the equity in their home while still living there and retaining ownership can make their retirement more comfortable. If you or any one you know has any questions please feel free to give me a call or send me an email and we can help educate you on this mortgage product.

 

Tax Cuts are Inflationary

The current administration is busily putting together a tax cut package for businesses, middle class and lower tax payers. This could be a real boon to the economy. However also keep in mind that tax cuts are inflationary therefore to keep inflation in check the Fed will raise the Fed Funds rate. When inflation increases mortgage rates increase. If you are in an adjustable rate loan you may want to look at refinancing into a fixed loan or a new adjustable rate loan to lengthen the period that your interest rate is fixed. Whether it is residential or commercial/apartment properties give us a call and we can help you assess the situation.

 

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Posted in:General
Posted by Gene Tidgewell on March 10th, 2017 5:48 PM
Today Fed Chair Janet Yellen stated today that the current economic conditions support three rate hikes this year. She also said that the economy has essentially met the Fed's goals. Lastly, she deemed a March rate hike appropriate given the current economic situation. 

A rate increase by the Fed on 3/15/17 is now almost a certainty

Please let us know your thoughts on whether the Fed should raise rates now or wait by emailing your thoughts to gene@actionlending.com.


Jobs report
The jobs report is due out next Friday and if it is weak that could have some bearing on Fed rate hike.

Tax Cuts are Inflationary
The current administration is busily putting together a tax cut package for businesses, middle class and lower tax payers. This could be a real boon to the economy.
However also keep in mind that tax cuts are inflationary therefore to keep inflation in check the Fed will raise the Fed Funds rate.

When inflation increases mortgage rates increase. If you are in an adjustable rate loan you may want to look at refinancing into a fixed loan or a new adjustable rate loan to lengthen the period that your interest rate is fixed. Whether it is residential or commercial/apartment properties give us a call and we can help you assess the situation.


FORWARD THIS TO YOUR FRIENDS, SUBSCRIBE FOR FREE DOWN BELOW AND IF YOU HAVE ANY MORTGAGE OR REAL ESTATE QUESTIONS GIVE ME A CALL OR SEND ME AN EMAIL.TAKE CARE.

Posted in:General
Posted by Gene Tidgewell on March 3rd, 2017 4:30 PM
Getting some more rain here in Southern California. Wonder when we will be out of drought conditions.

Jobs report
Jobs report came out this morning and there were 227,000 new jobs created in January as compared to an estimate of 175,000. Wage inflation was less than expected at 2.5 % year over year. 2.9 % was expected. That is good for bonds and mortgage rates
The unemployment rate increased to 4.8 % from 4.7 % but not because more people were unemployed. It increased because the job participation rate improved for the first time in a number of months.

Inflation and Mortgage Rates
Inflation is not the friend of mortgage backed securities. If the wage rate inflation had been at the 2.9 % expected with the jobs report then mortgage backed securities would sell off.
Congress is expected to start to work on a tax rate cut for Corporations and a large portion of individual taxpayers. This will have a negative effect on mortgage back securities and cause mortgage rates to increase. 
If you are in an adjustable rate mortgage your margin will not change but expect the Index rate to increase at a more rapid rate as inflation increases. If that is the case now may be the time to refinance into a fixed rate loan or into a new adjustable rate loan to reset the rate for another 5 or 7 years.


Fed Meeting Was This Week
The Fed met this week and did not increase the Fed Funds rate nor did they lower the amount they are reinvesting in mortgage backed securities. I feel they will increase rates at least one more time this year. Note that the voting members on the Fed for 2017 are more dovish than the voting members from 2016 and 2015.
Currently the Fed is reinvesting all of the principal and interest they are collecting on mortgage backed securities they own into new mortgage backed securities. This is helping keep rates down so when they decide to reduce this reinvestment that will also put pressure on mortgage rates to increase.


FORWARD THIS TO YOUR FRIENDS, SUBSCRIBE FOR FREE DOWN BELOW AND IF YOU HAVE ANY MORTGAGE OR REAL ESTATE QUESTIONS GIVE ME A CALL OR SEND ME AN EMAIL.TAKE CARE.

Posted in:General
Posted by Gene Tidgewell on February 3rd, 2017 3:53 PM

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