I am out tomorrow so this is the final issue for the week!
FNMA 4.5% picked up 25 bps to close the day at $100.31...rates under 5% again soon? We are in that range currently on the 30 year fixed loans.
DOW picked up about 70 points today as well.
Feds announced $109 BILLION in t-note auctions to take place next week and in the past: this would have been HUGE news putting the markets
into a "tizzy"...but because we are "used" to numbers that large and the amount announced was about $3 billion LESS than expected: the markets yawned.
Feds bought 25 billion in Mortgage Backed Securities last week...putting the TOTAL purchased at about $766 billion...of the 1.25 TRILLION that was committed
to the program.
One comment on the feds purchasing BOTH MBS and T-notes: they are taking an interesting approach at controlling the availability of money out there.
Typically: to manage inflation money supply is "controlled" by encouraging borrowers with a low funds rate making money "cheaper"...or more "expensive" with
higher rates. NOW: Feds actually are "owners" of MASSIVE amounts of "US DOLLARS" in the form of "investments" in our markets and the money is NOT circulating
which for now is helping to control inflation according to some analysts. Interestingly: many also feel that this is building a "bubble" that will ultimately POP and encourage
massive inflation. There are other factors involved...but I thought that was an interesting point of view.
FHA change as of 10/1: There will no longer be "spot approvals"...it will be BETTER than that! Yes, "spot approvals" for FHA loans on condominiums ARE going away,
but they are being replaced with something better. See the attached if you wish...but the GIST: instead of a "spot approval"...banks with the authority to do so like METLIFE
Home Loans will be able to essentially "spot approve" a WHOLE project. SO: Met can "approve" a project in a similar manner to a spot approval and then Met can continue
to finance units in the project once it was "approved." The approvals are LENDER specific and ONLY lenders approved can process them.
Email me to get a copy of the memo from FHA for more details.
Have a great eve!
Chad
