Mortgage Market Update

So, what’s been happening in the markets since the last time I did a Mortgage Market Update on Wednesday?  A couple of things:

• Citibank is suffering a variety of issues this week, but I’ll write about that later.
• Personal incomes were up, mainly because of the stimulus plans.  Personal savings was up as well.   That’s a good thing, except that consumer spending most likely won’t be what brings the economy back from recession.
• The “country” of California is in such dire financial straits that they are “paying” their bills with IOU’s.
• The Treasury held a number of auctions this week and a number of foreign investors showed up.  That’s a good thing.

With all of that, rates have drifted down slightly.   Today, I’m quoting:

30 year fixed, owner occupied, refinance, 80% loan to value, 5.5% with 0 pts.

30 year fixed, purchase, owner occupied, 95% loan to value, 5.125% with 0 pts.

30 year fixed, purchase, investment property (1 to 4 units), 75% loan to value, 6.375% with 0 pts or 5.875% with 1 pt.

All quotes assume a loan amount of $417,000 or less and credit scores of 740 or higher.

Recommendation – I’m still recommending that we lock all loans.  The volatility in the markets leads me to believe that the risk for rate increases is greater than the possibility of rate decreases.