Recent News

How To Get Ready For The NEXT Time Mortgage Rates Plunge

On January 22, 2008, mortgage rates fell quickly and without warning. They touched levels not seen in 5 years and then stayed there for a period of 28 hours. During those 28 hours, homeowners around the country received calls from their mortgage guy. The call went something like this: Mortgage...

A “New” Form Of Mortgage Insurance That Gives Tax Deductions To Everyone

Private Mortgage Insurance (PMI) came back in vogue in 2007 for a number of reasons, the most widely-known of which was that PMI was suddenly tax-deductible. But it came with a catch. Only families earning less than $100,000 could take the full tax deduction. For everyone else, PMI was same...

The 80/20 Rule Of Foreclosures in America (January 2008)

RealtyTrac released foreclosure data for January 2008 and its report includes a nugget about real estate repossessions. The full-size version is easier on the eyes. Breaking out the data state-by-state, we can see that the Pareto Principle holds: 80 percent of the bank repossessions last month came from 20 percent...

How To Use Interest Only Loans To Your Advantage When Planning Your Finances

One advantage of using interest only loans versus amortizing loans is that it opens the door to more sophisticated financial planning. One way in which that's possible is that interest only loan payments are re-calculated each month based on how much money you are currently borrowing. The industry term for...

How Mortgage Rates Went From (Relative) Riches To Rags In 30 Days

You are about to read a 3-minute summary of the last 4 weeks in mortgage lending. It's the second-best 3-minute summary you will get today -- the above recap of Airplane! ranks #1. January 21, 2008: While U.S. Markets are closed for Martin Luther King, Jr. Day, international stock indices...

The One-Day Change To Your Closing Date That Will Save You Money

A mortgage rates is born from the price of mortgage bonds and nothing else -- not the Fed Funds Rate, not the 10-year treasury note, and nothing else, either. But mortgage rate pricing doesn't end there; from the price of mortgage bonds, all we get is the "base mortgage rate"....

Why Mortgage Rates Don’t Look Like They’re Coming Back Down Any Time Soon

If you're shopping for mortgages right now, or are in the process of buying a home, this week was not your buddy. In early-January -- right up until the surprise 0.750% cut to the Fed Funds Rate January 22 -- mortgage rates were the lowest that they'd been in three...

How Ignoring Adjectives Can Improve Your Understanding Of Mortgages

If you spend enough time reading the papers and watching the news, you'll notice a subtle bias when reporters talk about mortgages and real estate. It's usually in the verb choice or use of adjectives. Reporters serve up a healthy dose of connotation to go with the facts. With respect...

Maintain The Mortgage Status Quo, or A Bunch Of Things You Should Do While Waiting For Your Home Loan Approval

The term status quo means different things to different people. In England, it's a quote-unquote rock band, for example. In America, "status quo" is something different. It's an expression often used as an allusion to old and stodgy social mores. Except in mortgage lending. In those circles, status quo is...

“Low Mortgage Rates” Is Not A Selling Feature, It’s A Planning Standard

When mortgage rates fell in early-January, it breathed life into a huge swath of loan officers that were getting ready to leave the business. It's a terrible turn of events for homeowners and homebuyers. With everyone focused on rate, rate, rate, the lowest-of-the-low loan officers are in their natural habitat....

Measuring The Statistical Insignificance Of The Monthly Jobs Report (February 2008 Edition)

The economy shed 17,000 jobs in January 2008 according to this morning's Non-Farm Payrolls report. Because markets had expected a job gain of 70,000, the negative number supports the idea that the economy is slowing down faster than markets had planned. This is because when fewer people work, there are...

Consumer Confidence Doesn’t Say Much, But We Have To Pay Attention Regardless

Using Google Trends, we can see that "recession" is overtaking "inflation" in import. Mortgage rates are highly dependent on inflation, and/or the absence of inflation. Because inflation erodes the value of the U.S. dollar, it also erodes the value of dollar-denominated mortgage bonds. This renders bonds less valuable to global...

The Mainstream Media Is Building Mortgage Market Awareness (And That’s A Good Thing)

First Business anchor Tom Hudson asked for commentary on the recent mortgage market volatility. The four-minute spot above is the result. We did keep our eyes open wide for most of the conversation despite the screenshot above. Tom and I covered a handful of important mortgage lending topics, many of...

How Active Mortgage Management Can Reduce Your Monthly Mortgage Payments

The swing in mortgage rates over the last week has been astronomical. Some mortgage products popped higher by one-half-percent Wednesday afternoon. You can exactly when it happened on the chart. And those losses continued through to Thursday, too. As money poured in the stock market and the Dow Jones rallied,...

How The “Mortgage Fringe” Can Keep You From Getting Low Rates

If your mortgage is more than 3 years old, it really likely that your mortgage rate is higher than it needs to be. It may be time to remortgage. Relative to any point in time since August 2005, mortgage rates are extremely low. If your mortgage is being professionally managed...

How Herd Mentality Determines The Direction Of Mortgage Rates

If there's one thing that drives mortgage markets batty, it's uncertainty. When the economy is an undecided issue, investors don't know how to place their bets and it leads to volatility. One day, the markets lean to the left. The next day, they lean to the right. There's no real...

Homeowners With “Orphaned Mortgages” Pay More Money

Each year, the mortgage industry loses some of its employees. Some leave through attrition; some through layoffs; some through natural selection. When business is growing, lost workers are replaced with new hires and the mortgage machine rolls ahead. When mortgage business is slowing, new workers aren't hired. Collectively, the industry...

What Will Happen To Mortgage Rates When The U.S. Dollar Strengthens

Broadly, mortgage rates fell in 2007. It's befuddling because there are two major reasons why mortgage rates should have increased in 2007: The U.S. dollar took a precipitous decline against world currencies, devaluing mortgage bonds Inflation ran beyond the top of the Fed's comfort zone for most of the year,...

High Unemployment Rates Are Good For A Lot Of People

December's Non-Farm Payrolls report shows that the economy may (finally) be slowing. Mortgage rates are improving this morning in response. The two key take-aways from the jobs report were that: Monthly payroll gains averaged 111,000 per month in 2007 versus 186,000 in 2006 The Unemployment Rate reached 5.0% in December,...

How Real Estate Markets Respond To Political Calamity Around The World

Real estate is a local phenomenon. Every street in the country has its own local real estate market and that's why "national sales data" is useless. A Cincinnati, Ohio home buyer doesn't (and shouldn't) care about property values in Boynton Beach, Florida. Cincinnati real estate is entirely different and is...