Last week proved once again: The Fed does not control mortgage rates. On Tuesday, after the Federal Open Market Committee lowered the Fed Funds Rate by 0.250%, mortgage rates began an ascent that carried all the way through Friday’s close. As a result, mortgage rates are dramatically higher today than just one week ago. Other [...]

In its biggest month-over-month jump since 1973, the Producer Price Index rose 3.2 percent in November. PPI is like a “cost of living” measurement for consumer, except that it applies to business. PPI measures how expensive it is to produce goods on a day-to-day basis. PPI spiking in November is an important development for all [...]

Conforming mortgages are getting more expensive — but not because of mortgage rates. To protect against further weakness in the housing sector, Fannie Mae and Freddie Mac are instituting “delivery fees” on all conforming mortgages, effective March 2008. Fannie Mae’s Adverse Market Delivery Charge and Freddie Mac’s Market Condition Delivery Fee will add a one-time, [...]

The Fed lowered the Fed Funds Rate by 0.250%. The rate decrease was not well-received, though, as many investors were calling for a deeper cut of a half-percent. In response, dollars moved from stock markets to bond markets and, therefore, mortgage rates fell. Because it is tied to the Fed Funds Rate, Prime Rate fell [...]

The Federal Open Market Committee meets today and will release a public statement at 2:15 P.M. ET. It is widely expected that the FOMC will lower the Fed Funds Rate by at least 0.250%. When the FOMC lowers the Fed Funds Rate, it is trying to “loosen” credit for American businesses and consumers. When credit [...]

Among lingering doubts about housing and credit markets, and a general uncertainty about the U.S. economy, the mortgage bond market tanked towards the latter part of last week. As investors moved away from mortgage bonds, mortgage rates forcefully bounced off their two-year lows. A major factor behind last week’s run-up in rates is the market [...]

Thursday, the White House revealed its HOPE NOW program, aiming to help sub-prime borrowers freeze their initial “teaser” rates for a period of five years. The program is receiving a lot of ink in the newspaper dailies but sometimes it’s unclear exactly what the program offers, and to whom. Let’s look at the details and [...]

Credit scores are the best predictor of how a homeowner will pay on a mortgage, so it’s no surprise that credit scores will play a bigger role in mortgage financing in 2008. Actually “that date” is more clearly defined. It’s March 1, 2008. For loans closing on or after March 1, 2008, Fannie Mae and [...]

As a homeowner, your financial obligations extend beyond your monthly mortgage payment. Periodically, you are also required to pay real estate taxes and homeowner’s insurance premiums. Each month, you pay your mortgage payment to a company called a “mortgage servicer” (because they “service” your mortgage each month). In addition to the risk of not getting [...]

October’s New Homes Sales report showed a modest month-over-month improvement from September. Before we interpret that to mean that the housing market is rebounding, though, let’s consider the fallibility of the New Home Sales report. On the Census Bureau’s Web site, there is a disclaimer about the validity of the data. Paraphrased, it reads: A [...]