Open Letter To Congress: Your Indecision Is Making Rates Rise On A Day When They Should Be Falling

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Dear Congress,

My clients are shopping for mortgages and your ongoing debates are causing problems.  Mortgage rates are rising this week when all the data points to them falling.

This is happening because the whole world is waiting for your vote.

For example, the September jobs report showed extreme weakness in employment nationwide.  The economy shed nearly double the amount of jobs as was expected.  This would normally pull money out from the stock market to the benefit of mortgage rates but, today, this isn't happening.

Everyone is watching you instead.

As another example, the U.S. dollar is headed for its biggest weekly gain ever this week. This would normally be good for mortgage rates because mortgages are repaid in U.S. dollars and a rising greenback attracts bond buyers.  More demand means lower rates.  But, today, this isn't happening.

Everyone is watching you instead.

And as a third example, Fannie Mae rolled back its Adverse Market Delivery Charge yesterday, reducing mandatory conforming mortgage loan fees by 0.250 percent. 

I expected that mortgage lenders would pass on those savings in the form of lower rates but, so far today, this isn't happening.

Presumably, everyone is watching you instead.

Honestly, it really doesn't matter what you do, just as long as you do something.  Your inaction is created tremendous amounts of uncertainty, causing markets to display volatility not seen since another Washington-area favorite -- Earl Weaver. 

You know how markets work -- nobody reacts worse to uncertainty than markets.

Your vote will change the lending industry -- no doubt about that.  You should carefully consider your decision and it should be debated.  However, no matter what you decide, it's not going to change the fundamental fact that people buy homes, and that they need money to finance those homes. 

Regardless of how you vote:

• The newlyweds in Chicago will still buy their starter condo
• The family in Manhattan will still outgrow its apartment
• The P&G employee in Los Angeles will still get transferred to Cincinnati

Until your vote is made, however, the banks are running scared and mortgage rates are rising.

Vote yes, vote no, vote with your heart, vote with your constituency -- it really doesn't matter.  Just vote.  Just do whatever it is that you're going to do so we can all get on with our lives.

The market fundamentals say that mortgage rates should be falling today but nobody's watching the fundamentals right now -- they're all watching you. So, please, let's get this over with so we can all move on with our lives. 

Plus, I'm tired of my family asking me "how are you doing?".  I'm fine, thank you.  Business is going well.

Thank you for your time,

Dan Green
Loan Officer