Rates Fall 6 Straight Weeks, and Stay Under 5% for 2 Weeks Straight

Rates Remain Under 5% for 2nd Week In a Row (see last paragraph for mention of possible extension of Tax Credit again!)

"The possibility of securing a mortgage rate below 5% has greatly improved in recent weeks, in a positive sign for would-be home buyers", said CNNMoney.com. All facts show, from Freddie Mac's report to Bankrate.com, rates have dropped.

After 6 straight weeks of rates dropping, we now wonder if forecasts for higher rates may be off on their expected timing. Maybe rates start their climb in late 2010 and we see the higher 6% rates in 2011...Warren Buffet said yesterday that he expected recovery in the housing market to be full on in 2010, so who do we believe?

Freddie Mac's (FRE, Fortune 500) weekly report said the 30-year rate slipped to 4.87% for the week ended Thursday, the lowest since May. According to the mortgage backer, last week's rates stood at 4.94%. On the other hand, Mortgage tracker Bankrate.com said the average 30-year fixed loan slipped to 5.22% from 5.25% the previous week. The 15-year fixed rate also fell, Bankrate said, to 4.6% from 4.64% the week before. Keep in mind, Bankrate.com always posts higher rates, I believe, because their main audience is Loan Officers and lenders of their competition because they do such a good job of posting cause in the daily fluctuation of mortgage rates as it pertains to stock and bond works daily. So, Freddie is more accurate as a whole.

Why are mortgage rates still dipping below 5%? Bankrate.com said that it's because of the poor employment reports. Poor stability in the growth, or at least having a lesser amount of unemployment from month to month, is a sign that economic rebound is not coming along as fast as we hoped. Therefore, investors in the stock and bond world are nervous, and when they are nervous, they pull money from risky stock and put it into bonds. When bonds are seeing more attention from investors than stock, in ratio terms, it's good for our mortgage rates. Also reported to cause this change in rates, CNNMoney said, "Now the central bank has less than $15 billion left to spend on its buyback program, which led some investors to worry that yields would soar again. So far, that's not the case."
On Wednesday, reports said Democratic congressional leaders were working to extend a $8,000 tax credit for first-time home buyers past the Nov. 30 expiration date and could even make it available to current homeowners who buy a new house...CNNMoney reported.

Extend Home Buyer Tax Credit of $8,000 for Frisco Home Buyers

The question I see as a mortgage person in Frisco Texas a lot this year is, "Do I think that the first time Home Buyer Tax Credit will be extended to 2010." My response is, "I sure should be", because it seems like it has given a lot of folks the extra steam they needed to get going in a job market and home market that isn't necessarily one that prods you toward buying a home right now.
In search of statistics to see who is doing their homework to show the government that this Tax Credit is the one stimulus that should be more permanent than any other, it seems like it's an overwhelming YES from the masses to extend it.
In a Weichart poll of around 1,000 Realtors, 71% revealed that the tax credit had the largest positive response in their business in 2009. Of that poll, 92% thought that the market would decline after November if the Tax Credit wasn't reinstated and 97% were in favor of reinstating it.
If you get the chance, vote to reinstate...it's good for the home market and what's good for the home market is good for you. Reason being, the Chief Economist of Stewart Title, the leader in the title industry in the United States, made note in a an economic forecast I attend earlier this year that every single recession that our nation has seen in it's history was turned around first by the housing market. If history defines the present as it normally does, we need to first stimulate our housing market before we expect to see any permanent positive changes in our nations overall economy, including consumer spending, decrease in unemployment, and increase in jobs, obviously.

August Mortgage Rates Starting to Hike...Mortgage Trend Last Couple Months

In July, the national average for the 30 year fixed mortgage at one point got as low as 5.25%. Please note, from my long experience in this industry, I'm not sure where the national average is derived because it's always .125% or .25% higher than what most people in my market are seeing. None the less, I'm just using this as an illustration of how rates have moved upward in the recent months. Today, the national average is 5.47%. That is a full .25% higher than July's best rates. Going back to May, rates were at 4.75%. So, from May to August 7th, rates have increased over a half a point, or more than .5%.
If this becomes the trend, like economic forecasters have said it would eventually this year leading into 2010, by January we could see rates hit the 7% mark. If you are waiting on buying a home, or have not checked out of your refinance "procrastinator's anonymous class" yet, this would be the time. Take a look at this first chart on BankRate.com to see what it looks like in an image...for you brain type people that need pictures to subscribe to your long term memory.
On the positive side of this mortgage interest rate hike, I received my investment portfolio statement today and I made some money. Come on economy!

Frisco Mortgage News, FHA and Taylor Bean and Whitaker

The Federal Housing Administration or FHA suspended Taylor, Bean & Whitaker Mortgage Corp. Tuesday from making loans insured by the federal agency. This is another blow to one of the largest FHA lenders left, and how long they will be suspended, I don't know yet.
JAMES R. HAGERTY and LINGLING WEI wrote,
"The FHA said the Ocala, Fla.-based lender failed to submit a required annual financial report and to disclose to the FHA "certain irregular transactions that raised concerns of fraud." Taylor Bean has 30 days to appeal the suspension.
More
Colonial and Taylor Bean Offices Raided
Taylor Bean was the 12th largest U.S. mortgage lender in the first six months of this year, according to Inside Mortgage Finance, a trade publication. Among originators of FHA loans, Taylor Bean was the third largest in May, with a market share of 4%, according to the publication. Only Bank of America Corp. and Wells Fargo & Co. were larger.
Taylor Bean's woes are a major blow for hundreds of brokers and smaller mortgage banks that sell the loans they originate to the privately owned company. Those small mortgage companies will have to scramble to find new partners if they are to remain in the booming FHA lending business.
FHA loans have surged in popularity over the past two years as other sources of mortgage funding have dried up.

Lee B. Farkas, chairman of Taylor Bean, said in response to questions that he was unaware of the FHA action.

Ginnie Mae, a government agency that guarantees payments to holders of securities backed by FHA loans, said Taylor Bean is also barred from issuing securities backed by Ginnie. Ginnie said it will take control of nearly $25 billion of mortgage securities issued by Taylor Bean.
The moves came a day after federal agents raided the Florida offices of Colonial BancGroup Inc. and Taylor Bean. Taylor had been leading a group of investors that proposed to shore up Colonial by taking a stake in the Alabama-based bank but that transaction fell through last week amid heavy losses at Colonial."

Wow, right!?!?! It was said over a year now that the true broker would slowly be pushed out of this industry, and this is another blow to support that fact.