Mortgage rates began the day lower, with several lenders releasing their best rate sheets in nearly 5 months.  The day progressed well in the secondary mortgage market with MBS prices (the "mortgage backed securities" that most directly affect rates) rising steadily into the Federal Reserve's policy announcement.  When MBS prices move higher, rates move lower.

The Fed wasn't seen as likely to change monetary policy in any way at this meeting, but market participants may have justifiably been expecting a more cautious tone than they got.  The Fed even removed verbiage alluding to the risks associated with recently tight financial conditions.  Bond markets, including MBS, weakened quickly following the announcement, and many lenders revised rate sheets to fall more in line with yesterday's.  

This is interesting because yesterday, we'd looked forward to today's data and events as holding the most promise for breaking the ongoing trend of "unchanged" (or close to it) rate sheets.  As it happened, we did get a break of that monotony this morning, but rates returned to the same levels in the afternoon.   As such the most prevalent Conforming 30yr fixed rate  (best-execution) remains at 4.125%.

Loan Originator Perspectives

"Fed Statement released today confirmed markets' conviction that tapering is on hold pending improved data. Rates did lose some ground (after AM gains) following the Fed release, but stayed within recent ranges. Nice opportunity for buyers and refinance borrowers to obtain the lowest best execution rates since June, loan volume picking up as borrowers moved to obtain these desirable rates." -Ted Rood, Senior Originator, Wintrust Mortgage

"Following the FOMC statement, the rates markets took a turn for the worse, but not sure why. I think the losses today will be recouped over the next day or so. If you were unable to lock prior to the FOMC statement and the reprices for worse that followed, I would float over night as I suspect we will get most of these loses back." -Victor Burek, Open Mortgage

"I've been on a stream of recommending locks and exercising them for clients over the past several days. My bias is lock at this point, and today's FOMC announcement rattled the market, so my clients are happy. Outside of 45 day lock, I'd still recommend the client watch and try to get inside of 30 days. For those happy with the rate, lock now, don't look back." -Matt Hodges, Charlottesville Sales Manager, Presidential Mortgage Group

Ongoing Lock/Float Considerations

    Uncertainty over the Fed's bond-buying plans and more recently over Fiscal Policy has been making for a tough interest rate environment.
    A lack of data due to the government shutdown caused rates to experience moments of paralysis while headlines suggesting the shutdown might/might-not end, as well as a seizing-up of short term funding markets caused unexpectedly high volatility--enough to be felt in longer term rates like mortgages.
    After a deal was reached to avoid going over the debt ceiling, funding markets thawed and rates returned to the same 'wait and see' range that existed before the Fiscal drama. 
    Markets continue to be most interested in economic data and its suggestions about the longer term trajectory of the economy.  This will shape expectations for Fed policy in the coming months, and thus inform the direction of interest rates.
    The stronger the data the more likely the Fed is seen as reducing asset purchases.  Rates would rise under this scenario, but the most recent FOMC Meeting (and more importantly, the Fed's decision to hold off on tapering) suggests that they'll attempt to keep the pace of rising rates moderate as long as inflation isn't adversely affected.  The delayed release of the September jobs numbers on October 22nd helps confirm that.
    (As always, please keep in mind that our Best-Execution rate always pertains to a completely ideal scenario.  There are many reasons a quoted rate may differ from our average rates, and in those cases, assuming you're following along on a day to day basis, simply use the Best-Ex levels we quote as a baseline to track potential movement in your quoted rate).

source: http://www.mortgagenewsdaily.com/consumer_rates/329853.aspx

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Rising mortgage interest rates could curtail refinancings by 57 percent next year, but purchase originations are expected to rise 9 percent, as home sales and prices continue to post gains, the Mortgage Bankers Association (MBA) said in a forecast released today.

Overall mortgage originations are projected to fall 32 percent in 2014, to $1.2 trillion, from an upwardly revised $1.7 trillion this year. Purchase loans would make up about 60 percent of that $1.2 trillion, compared to about 38 percent of originations in 2013.

“We are projecting home purchase originations will increase in 2014 due largely to gains in home sales and home prices. We expect to see a decline in the share of sales paid for with cash, and higher average LTVs on purchase mortgages, due to the rise in home prices,” said Jay Brinkmann, MBA’s chief economist, in a statement.

The trade group anticipates mortgage rates to rise above 5 percent in 2014 and to 5.3 percent by the end of 2015.

“As a result, mortgage refinancing will continue to drop, and borrowers seeking to tap the equity in their homes will be more likely to rely on home equity seconds rather than cash-out refinances,” Brinkmann said.

The MBA forecasts 2015 originations will total also $1.2 trillion, but that purchase loans will make up an even bigger proportion of the total. Purchase loan originations are expected to grow by 10 percent from 2014 to 2015, to $796 billion, while refinancings fall 6 percent, to $433 billion.

Source: http://www.inman.com/wire/purchase-loans-to-buck-declining-mortgage-originations-trend-in-2014/ 

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It's all over right? The most recent glory days of real estate investments, when we could buy foreclosed homes for pennies on the dollar are disappearing fast with shrinking foreclosure inventories. We can't hire construction trades people on-the-cheap as easily either, as they are finding jobs in improving real estate markets. This increases our fix-and-flip costs.

With an improving economy we're seeing interest rate increases as well. It looks like the party's over right? Well, not my party!

If you leave this party too soon, you'll regret missing some great fun. We humans tend to make decisions based on the information right in front of us, and we sometimes have a tough time looking at "today" from a historical point of view. We also discount what's come before as no longer applying in today's world. These are big mistakes, particularly when we're looking at real estate investment in the post-crash recovery, currently underway.

Inflation will Ruin the Real Estate Investment Party

Inflation is defined as increases in costs of goods and services. Goods and services are what home building is all about. The cost of a home is the result of material and labor costs, and new home prices generally rise in tandem with inflation. When new homes become more expensive, more buyers move to existing home purchases, and those prices start to rise. If you're a rental property investor, your rental homes are increasing in value right along with inflation.

That's nice, but the party must be over for buying rental properties if prices have risen, right? Not at my party, as I'm buying a rental property with multiple profit streams in mind, and equity appreciation is only one of them. In fact, the monthly cash flow from rents is your major objective. When home prices rise, rents normally rise as well. Rising prices move more people to renting, and this increase in demand raises rents. We take our rent checks to the bank without complaints. Just because you have to pay more for that 2 BR, 2 BA rental home this year than last doesn't mean that your profit stream has been damaged in any way.

Rising Mortgage Interest Rates Send Partiers Home

Let's take a breather from crying over rates rising a point or so and think about historical mortgage rates. Rental property investors were making money when rates were higher, even when they were double what they are today. Sure, it makes it more of a challenge to buy right and to get that positive cash flow we want. Calculating what you lost from yesterday's rates to today's is like crying over getting to the fair two hours after the gates open. There's still a lot of fun to be had in the remaining hours.

Like inflation, rising mortgage interest rates change home buying habits. Rising rates push buyers out of the market, and those buyers become renters. More renters put upward pressure on rents and the rental property investor profits. If our monthly debt service cost rises but our rents rise with it, it's still a party.

Real estate investing enjoys another great advantage over other asset classes. If we experience an increase in mortgage interest rates and our cash flow will be damaged, we have control over structuring our next investment. We can take a more aggressive approach to our purchase and buy at a steeper discount. Reduction of our cost can bring the investment back in line with our cash flow goals if we're paying a higher mortgage rate.

The recovery following the real estate and mortgage crash is expected to be prolonged and not the "boom" experience that preceded the crash in 2006. Sure, interest rates and inflation will fluctuate over the next five to ten years, but you have the ability as real estate investors to adjust your techniques to adapt, and this party can go on for a long time. I've been throwing a real estate investment party for years now and no matter what the markets do or how they fluctuate, I'm always having fun and making money. I just modify the theme and refreshments to fit the guests.

source: http://www.huffingtonpost.com/dean-graziosi/are-inflation-and-mortgag_b_4171031.html

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Mortgage rates tumbled this week as economic data disappointed investors. Concerns about the nation's debt ceiling lingered, even after Congress reached a temporary deal.

Compare Mortgage Rates in Your Area

The benchmark 30-year fixed-rate mortgage fell to 4.27% from 4.42% last week, according to the Bankrate.com national survey of large lenders. The mortgages in this week's survey had an average total of 0.32 discount and origination points. One year ago, that rate stood at 3.61%. Four weeks ago, it was 4.47%.

This is the lowest level the 30-year fixed has reached in the last four months, according to Bankrate's weekly survey.

The benchmark 15-year fixed-rate mortgage fell to 3.37% from 3.49% last week, and the benchmark 5/1 adjustable-rate mortgage fell to 3.27% from 3.31%. The benchmark 30-year fixed-rate jumbo fell to 4.38% from 4.55%.

Weekly national mortgage survey

Results of Bankrate.com's Oct. 23, 2013, weekly national survey of large lenders and the effect on monthly payments for a $165,000 loan:

30-year fixed 15-year fixed 5-year ARM
This week's rate: 4.27% 3.37% 3.27%
Change from last week: -0.15 -0.12 -0.04
Monthly payment: $813.63 $1,169.05 $719.90
Change from last week: -$14.58 -$9.70 -$3.64

When the shutdown ended last week and Congress sealed an agreement to fund the government until January, some industry observers feared mortgage rates would rise. Instead, mortgage rates dived as investors digested the news that the U.S. debt ceiling debacle has merely been postponed.

"While we did get an agreement, they just delayed the problem for three months," says John Stearns, a mortgage banker at American Fidelity Mortgage Services in Mequon, Wis. "I think rates are going to stay low until we start hearing the rhetoric again in January. Plus, we are not getting consistently good economic data."

The Labor Department released the September employment report this week, and it was disappointing at best. The economy added only 148,000 jobs during that month. That's at least 30,000 fewer jobs than economists had expected.

The weak employment report helped push rates down, as it was another indication that the Federal Reserve will not pull back on the economic stimulus program this year. The Fed says it will begin to cut back on the $85 billion-per-month bond-purchasing program once the labor market is strong enough.

"The Fed is not going to withdraw the stimulus for now, given the poor performance of the jobs market," says Cameron Findlay, chief economist for Discover Home Loans.

Findlay expects mortgage rates to stay somewhat stable until the end of the year.

Rates might even drop a little more as the debate over the debt ceiling heats up again and if economic reports continue to point to a weak economy, says Derek Egeberg, a branch manager for Academy Mortgage in Yuma, Ariz. "For the next two months, I think (mortgage and Treasury bonds) become very attractive and mortgage rates might continue to decline," he says.

Don't expect rates to tumble back into the 3% range, Egerberg says.

"If they continue to decline at this pace, I don't think we would see more than a quarter of a percent reduction," he adds.

Refinancers and homebuyers should take advantage of the extra time and lock as soon as they feel comfortable with the rate and the deal they are getting, mortgage professionals say.

Several factors will put upward pressure on rates early next year, including the new deadline to raise the debt ceiling, the possibility that the Fed will trim the bond-purchasing program then and new mortgage rules that go into effect January.

"Everybody now thinks 4% is the new normal," Egeberg says. "But it's artificial." He predicts that if the Fed pulls back on the stimulus next year, the 30-year fixed could shoot up to 5% or 6%.

"I think some people might be shocked that they missed the rates we have today, given how quickly this is going to change," he adds.

Source: http://www.foxbusiness.com/personal-finance/2013/10/24/mortgages-swoon-to-lowest-level-since-june/
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NEW YORK (TheStreet) -- To get the lowest mortgage rate available, just how good does your credit score have to be?

Try 740 and above out of a possible 850. Unfortunately, that figure, from a study by mortgage-info firm Zillow.com (Z_), relegates a lot of would-be borrowers to the sidelines. Zillow says just 40.3% of Americans have such enviable scores. The industry has tightened up -- in 2010, bottom-rate loans required a score of 720, a threshold met by 47% of potential applicants.

Even worse, Zillow figures three in 10 Americans, those with credit scores of 620 or below, are unlikely to qualify for any mortgage at all. Zillow drew these conclusions by looking at 13 million loan quotes and more than 225,000 requests for home-purchase loans on its Mortgage Marketplace in September. The results were compared with a similar study three years earlier.

Despite improvements in the housing market, falling delinquency and foreclosure rates, slightly lower unemployment and other signs of economic improvement, that 30% rejection rate is unchanged since September 2010. Even a high down payment of 15% to 25% won't get these folks a loan.

Getting a less-than-rock-bottom rate can cost you serious money in the long run. In September, applicants with scores of 740 and above got rates averaging 4.42% for conventional 30-year fixed-rate loans. Scores from 620 to 639 qualified applicants for rates averaging 5.09%. There were so few loans approved for applicants below 620 that a meaningful average could not be calculated.

At 4.42%, a $200,000 30-year fixed-rate loan would cost $1,004 a month, with interesting totaling $161,397 over 30 years. At 5.09%, the payment would be $1,085, with total interest at $190,482.

"Your credit score is the single most important factor in determining your mortgage interest rate and monthly payment," said Erin Lantz, director of mortgages at Zillow. "To avoid any surprises when buying a home, check your credit score and report at least six months before you intend to buy to see if there are any costly inaccuracies, pay down high-balance lines of credit and make sure your bills are always paid on time."

After doing, all that, try to save more every month to make a bigger down payment. The smaller your loan compared with the home's value, the better your chances of approval. Of course, you can look for a less expensive home as well.

But what if you can get approval, but for now would be stuck with a higher rate? Would it make sense to postpone your purchase or refinance until you can nudge your credit score higher?

That could be risky. It would be annoying to pay 5% instead of 4.5%, but if you wait six months or a year you might find that those bottom-level rates have gone up. You might end up paying 5% or more even with a score over 740.

No one knows for sure, but most experts agree rates will drift up. They're already up quite substantially since spring, when you could get a 30-year fixed loan for 3.5%.

Also, home prices will probably continue to rise, though perhaps not as fast as during the past year or so. So even if waiting did get you a lower rate than you'd pay today, that saving might be wiped out by a higher purchase price.

Source: http://www.thestreet.com/story/12067136/1/only-40-of-americans-can-get-the-good-mortgages.html
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Rank Name City State Section District Points
1  Berenbaum, David  Paramus  NJ  Eastern  New Jersey Region  1008
2  Adler, Richard W.  Southampton  NY  Eastern  Long Island Region  738
3  Lurie, Jonathan  New York  NY  Eastern  Metropolitan Region  666
4  Henderson, Jan Mark  East Brunswick  NJ  Eastern  New Jersey Region  592
5  Moss, Paul S.  New York  NY  Eastern  Metropolitan Region  588
6  Hoffman, John B.  New York  NY  Eastern  Metropolitan Region  510
6  Boutillette, Michael J.  Somerset  NJ  Eastern  New Jersey Region  510
8  Titcomb, John  Lloyd Harbor  NY  Eastern  Long Island Region  466
9  Brill, Steven C.  Great Neck  NY  Eastern  Long Island Region  448
10  Clooney, Jim  oyster bay cove  NY  Eastern  Long Island Region  400
11  Serebro, Boris  White Plains  NY  Eastern  Southern Region  398
12  Andersen, Glen A.  Wharton  NJ  Eastern  New Jersey Region  376
13  Slott, Joseph  Brooklyn  NY  Eastern  Metropolitan Region  358
14  Stillman, Richard  Mountain Lakes  NJ  Eastern  New Jersey Region  322
15  Johns, Mark  Great Neck  NY  Eastern  Long Island Region  275
16  L'allier, Jean  Flushing  NY  Eastern  Metropolitan Region  224
17  Tanis, Robert J.  Oak Ridge  NJ  Eastern  New Jersey Region  192
18  Rolfe, Chevas William  Astoria  NY  Eastern  Metropolitan Region  168
19  Coglietta, Fred F.  Saint James  NY  Eastern  Long Island Region  164
20  Farley, Robert C.  Saratoga Springs  NY  Eastern  Northern Region  134
21  Udis, Andrew  New York  NY  Eastern  Metropolitan Region  132
22  Hanchrow, James P.  White Plains  NY  Eastern  Southern Region  128
23  Ackerman, Philip  Rensselaer  NY  Eastern  Northern Region  126
24  Checa, Luis P  New York  NY  Eastern  Metropolitan Region  106
25  Smith, Gerard J.  Garden City  NY  Eastern  Long Island Region  104
25  Chizever, Richard S.  Aquebogue  NY  Eastern  Long Island Region  104
27  Evans, Dwight R.  Westfield  NJ  Eastern  New Jersey Region  96
28  Winnitzki, Walter J.  Manhasset  NY  Eastern  Long Island Region  88
29  Scheibner, Peter J.  Stony Point  NY  Eastern  Southern Region  82
29  Mutch, Robert D.  Ramsey  NJ  Eastern  New Jersey Region  82
29  Sussman, Gary A.  Highland Mills  NY  Eastern  Southern Region  82
29  Lamonaca, Donato  Brooklyn  NY  Eastern  Metropolitan Region  82
29  Dunning, Dennis J.  Poughquag  NY  Eastern  Southern Region  82
29  Scammacca, Michael  Waterford  NY  Eastern  Northern Region  82
35  Weisberger, Mike  New York  NY  Eastern  Metropolitan Region  68
35  Wawrzyniak, Piotr  Forest Hills  NY  Eastern  Metropolitan Region  68
37  Deutsch, Ron Edward  Chappaqua  NY  Eastern  Southern Region  66
37  LIEMER, DAVID  Chappaqua  NY  Eastern  Southern Region  66
39  Simel, Peter B.  Douglaston  NY  Eastern  Metropolitan Region  64
39  Underwood, Steven  Minoa  NY  Eastern  Western Region  64
39  Hoekstra, Mark  Baldwinsville  NY  Eastern  Western Region  64
42  Chavez, Peter  Cortlandt Manor  NY  Eastern  Southern Region  52
42  Rudina, Solee E.  Basking Ridge  NJ  Eastern  New Jersey Region  52
44  Neubauer, John  Patterson  NY  Eastern  Southern Region  22
45  Kier, Nelson  New York  NY  Eastern  Metropolitan Region  6
46  Darris, Cranston  New York  NY  Eastern  Metropolitan Region  4
46  Eskenazi, Jack  Levittown  NY  Eastern  Long Island Region  4
46  Kalb, Scott E.  Greenwich  CT  Eastern  Southern Region  4
46  McIntyre, Mark J.  New York  NY  Eastern  Metropolitan Region  4
46  Cooper, Judson A.  Armonk  NY  Eastern  Southern Region  4
46  Wilkinson, Alan W.  New York  NY  Eastern  Metropolitan Region  4
46  Harvey, Michael  Boca Raton  FL  Florida  Region 6  4
46  Yonkers, Paul J  Sea Cliff  NY  Eastern  Long Island Region  4
54  Prasad, Narayan  New York  NY  Eastern  Metropolitan Region  3
55  Silbiger, Thomas  New York  NY  Eastern  Metropolitan Region  2
55  Guernsey, Steve G.  Poughkeepsie  NY  Eastern  Southern Region  2
55  Schechner, Robert M.  Hazlet  NJ  Eastern  New Jersey Region  2
55  Schneider, David I.  Springfield  NJ  Eastern  New Jersey Region  2
55  Ambrose, Eric  Rosedale  NY  Eastern  Metropolitan Region  2
55  Rahbari, Raymond K.  North Babylon  NY  Eastern  Long Island Region  2
55  Gash, Gary M.  White Plains  NY  Eastern  Southern Region  2
55  Lease, Jack  Newburgh  NY  Eastern  Southern Region  2
55  Donnelly, James G.  Richmond Hill  NY  Eastern  Metropolitan Region  2
55  Wilkinson, Kenneth  Brooklyn  NY  Eastern  Metropolitan Region  2
55  De La Cruz, Augusto C.  New York  NY  Eastern  Metropolitan Region  2
55  Hickey, Tom  Hopewell Junction  NY  Eastern  Southern Region  2
55  Bart, H Ted  New York  NY  Eastern  Metropolitan Region  2
55  Lerner, Peter  New York  NY  Eastern  Metropolitan Region  2
69  Glanzman, Robert L.  Carmel  NY  Eastern  Southern Region  1
69  Makuch, Bish  Woodside  NY  Eastern  Metropolitan Region  1
69  Eleby, Larry  Valatie  NY  Eastern  Northern Region  1
69  Dowling, Robert E  Castleton  NY  Eastern  Northern Region  1
69  Ruiz, Hugo  Jackson Heights  NY  Eastern  Metropolitan Region  1
69  Dirusso, Steve  Great Neck  NY  Eastern  Long Island Region  1
69  Landau, Donald Alan  Goldens Bridge  NY  Eastern  Southern Region  1

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Rising home prices, especially in cities located in the West, are helping to boost origination levels for home-equity lines of credit. A shift from refinances to purchase financing is a good sign for the housing market.

HELOC originations during the second quarter of this year soared compared to the prior three-month period, with volume up 30 percent from the first quarter.

The story was the same for year-over-year HELOC production, which was also up 30 percent compared to the second-quarter 2012.