Colorado Home Mortgage Loan

We saw another .25% hit on Colorado Home Mortgage Refinance Loan rates sparked by another day of inflation talk by the Federal Reserve.  Inflation seems to be a very hot topic and will create issues for Colorado Home Mortgage Refinance Loan rates until something else makes the headlines.  For two days now members of the Federal Reserve have been commenting on the state of the economy and have expressed very clearly that inflation remains their top priority.  Fisher the southern states representative on the Federal Reserve Board is known for his tough stance on inflation, but yesterday Bernanke continued the trend by reaffirming his position on inflation.  The mortgage backed securities market went on a selling spree and have not stopped in the last 48 hours.  We have seen some of the sharpest increases in Colorado Home Mortgage Refinance loan rates for the year.  Most lenders are offering Colorado Home Mortgage Refinance loan rates in the 6.5% range and if you have not locked in yet you may want to talk to your lender to see if the rates quoted 10 days ago will still be honored.  It is hard to make a FLOAT or LOCK recommendation on your Colorado Home Mortgage Refinance Loan rates today especially when the market is acting so irrational.

Global fears should be a real concern in the market today and should be monitored especially if it’s impacting your Colorado Home Mortgage Refinance Loan rates.  We should remember that much of the impacts are based on speculation about inflation not facts.  Not that I don’t think it is warranted, but none of the hard data being reported on inflation appears to be out of line.  Investors should come back to terms with their fears once we have more economic data to report on.  Colorado Home Mortgage Refinance Loan rates may improve as investors jump back in the market to buy at a bargain.  Obviously if this happens we may see some slight improvements in Colorado Home Mortgage Refinance Loan rates. 

The only Economic report coming out today was the trade balance which came in right in line with expectations.  The report had very little impact on what the market did.  Increases seen today with Colorado Home Mortgage Refinance Loan rates came from the continued upward spiral created by comments made earlier this week by the Federal Reserve.  We are probably not going to see much relief in Colorado Home Mortgage Refinance Loan rates until Friday the 13^th, which will be when or next Core inflationary report comes out.  Consumer Price index is expected to be released on that day which will give investor a much needed piece of the puzzle to determine whether Colorado Home Mortgage Refinance Loan rates will go up or start coming back down.

Right now we believe Colorado Home Mortgage Refinance Loan rates are set too high, but heck if you told me gas would be $4 a gallon 6 months ago I would have thought it to be highly unlikely as well.  Investors are driven on emotion and every investor appears to be fearful that the next person knows more then they do.  Investors being the lemmings they are will reaction to what everyone else is doing. The tendency in the market is to sell when everyone else is selling, and buy when everyone else is buying.  Colorado Home Mortgage Refinance Loan rates will react up or down Depending on what action investors are taking in the market.  Right now everyone is in a sell mode which has created an upward movement for Colorado Home Mortgage Refinance Loan rates.  How far it will go and when it will slow down is hard to say.  What can be said is that if the next couple economic reports come in as expected, then Colorado Home Mortgage Refinance Loan rates will settle down.  If the CPI report comes in like last month which was better then expected, we will see some rapid improvements in Colorado Home Mortgage Refinance Loan rates.  LOCKING now will have you locking at this year’s highest interest rate lock.  I believe that the trend will continue over the next week or so but not to the extent felt over the last two days.  We may see some of the conservative price approaches used by investors today lighten up.  This would relieve some of the upward trends being realized in the Colorado Home Mortgage Refinance Loan markets today.  Friday the 13^th can be a day of horrors or a day of reckoning.  My only fear is the superstitious tendency for that day, which is normally bad news, but everything else tells me things will improve and I will remain with my FLOAT recommendation.  If 6.0% is on the table taking it would be your best bet, but right now I don’t believe it is an option on your Colorado Home Mortgage Refinance Loan rate.  We do have other options to look at.  Does 5.375% appeal to anyone?  You should ask me about that one it may be the Colorado Home Mortgage Refinance Loan program you are looking for.

Daniel

Colorado Home Mortgage Loan rates take another hard hit today.  New and old concerns related to inflation continue to make the headlines and Colorado Home Mortgage Loan rates are reacting negatively towards it.  The only major economic report released today were the Pending Home Sales numbers which came in considerably higher then expected.  Colorado Home Mortgage Loan rates already impacted by inflationary concerns saw an even greater loss when the report was released.  Colorado Home Mortgage Loan rates jumped up about .25% today and about .5% since last week.  Most Colorado Home Mortgage Loan lenders have hedged their pricing to a point where Locking just does not make sense.  The fear hear is how bad will inflation be, and to what extent will it play in the Colorado Home Mortgage Loan market.  Most experts believe that Colorado Home Mortgage Loan rates will continue to rise on concerns that inflation will increase due to the continued price increases related to oil.  So if you are closing in the near future and have not Locked in a rate then LOCKING may be a good idea.  I would recommend a LOCK today at 6.0% if you can still get that rate.  Colorado Home Mortgage Loan rates do have some room to drop especially if investors regain some confidence lost during current inflationary concerns. 

Colorado Home Mortgage Loan rates are impacted by economic conditions.  One condition not mentioned in awhile, but appears to be a perfect explanation to the economic status of our country today is “Stagflation”.  Colorado Home Mortgage Loan rates always do well during bad economic times, but mixed in with inflationary pressures Colorado Home Mortgage Loan rates have no other direction to go then up.  Stagflation is an economic condition first proposed back in the 1970’s.  It is controlled by two principal contributors inflation and economic slow downs.  We are currently experiencing both these conditions and should be talking about managing our decisions based on lessons learned during our last “Stagflation period”.  Colorado Home Mortgage Loans are greatly impacted by monetary policy.  Monetary policy is controlled by the Federal Reserve.  The Federal Reserve has two major concerns on their hand, Inflation and decreasing economic growth.  Depending on what policy the Federal Reserve implements can and will create a negative influence on the policy not being enforced.  For example if the Federal Reserve fights inflation then they will jeopardize stimulating economic growth.  Like wise Federal Reserve policy to stimulate economic growth will negatively impact inflation.  Kind of a damned if you do and damned if you don’t. 

Colorado Home Mortgage Loan rates also react positively or negatively depending on the policies being implemented by the Federal Reserve.  If the Federal Reserve combats inflation Colorado Home Mortgage Loan rates will react positively.  Likewise several techniques used to stimulate economic growth, like increasing the money supply will have a negative result on Colorado Home Mortgage Loan rates.   Stagflation was last felt during the late 1970’s, and though the Federal Reserve recognizes the issues on hand, they are conflicted on how the resolve the issue.  Fishers concerns on inflation lead to a steep increase in Colorado Home Mortgage Loan rates today and appears to be his biggest concern, however Bernanke and the other Federal Reserve Board members all feel Economic stimulation should be their primary concern.  This is why we are seeing Colorado Home Mortgage Loan rates increase and it is also why we are in the making of another possible “Stagflation Period”. 

As I stated before Stagflation can result when and economy is slowed by an unfavorable supply shock, such as an increase in the price of oil hear in the U.S. As inflation increases Economic conditions tend to worsen.  When the Economy faces times of uncertainty and an obvious decrease in production monetary policy is used to kick start the sluggish economy.  When the Federal Reserve jumps in and begins to increase the supply of money they increase the pressure centered around inflation.  As a result inflation increases even more.  The increased inflation causes Colorado Home Mortgage Loan rates to go up. Stagflation only becomes a problem when the marginal impact on Policies used to combat the economic issues cause more harm then good.  Generally the Federal Reserve can either stimulate the economy or attempt to rein it by adjusting interest rates making it cheaper to borrow money.  Adjusting the rate down tends to improve growth but it also increases the pressure on inflation. Adjusting the rate up tends to fight inflation but it hinders economic growth. During periods properly described as stagflation both problems co-exist. Major economic conditions of unusual proportion will have already created near-crises on both fronts before stagflation can set in.  I don’t have a solution to where Colorado Home Mortgage Loan rates will go but our government needs to improve on policy decision especially during such a fragile moment in time.  Let’s not have history repeat itself or we may find our unemployment rate hit 10% and Colorado Home Mortgage Loan rates will hit 10%.

Now with that said, I am confident that the Federal Reserve will do the right thing for the best long term results.  Now we may not like what they are doing, but so far they have shown no signs of repeating bad economic decisions.  Especially over supply issues in the money supply.  Call me with your Colorado Home Mortgage Loan questions and give me a chance to help you find the right Colorado Home Mortgage Loan.

Daniel 

Colorado Foreclosures are at an all time high.  These Colorado Foreclosures have followed the same statistics found in many other markets throughout the U.S.  So in short we are not experiencing anything that is not in line with national averages.  However, we are experiencing some of the worst Colorado Foreclosures ever recorded in Colorado History.  There are many reasons for the Colorado Foreclosures.  I will try to break some of these reasons down for you today.  The first and most obvious reason for Colorado Foreclosures is that Home owners are not making their payments due to economic hardships.  Loss of employment for one or both members of a house hold will play havoc on their ability to make payments.  This is really self explanatory and based on the state of the economy we are seeing many households faced with this issue.  Colorado Foreclosures have always had these factors contributing to its statistics, but there are even bigger issues going on.  Colorado Foreclosures are experiencing new phenomenon’s in the industry with the adjustments of the once popular Adjustable Rate Mortgages or ARM’s. 

There are many types of ARM products available and not all ARM products are bad.  The issues that Colorado Foreclosures are facing are the Subprime ARMS commonly know in the business as 2/28 or 3/37.  These programs were designed to force homeowners to refinance after 2 or 3 years.  We called these band aid loans because when the adjustment period starts it will actually adjust 2% every 6 months until it hits the market cap rate around 12.5%.  You can see why Colorado Foreclosures were impacted so quickly.  Home owners that got into a 5.5% 2/28 program actually jumped up to 7.5% and 9.5% before the 3rd year ended.  Colorado Foreclosures spiked because homeowners had to make payments that got out of control.  As I stated before these programs were designed to get out of after the 2 or 3 year period but something held them back.  What held them back was the fact that homes were not appreciating to a point where refinancing was possible.  FHA home loans require a minimum of 5% equity in the home and were designed to be the loan these clients got into after the adjustment period began.  Colorado Foreclosures and bad economic conditions forced many homes on the market and with the supply so high Home prices tanked.

Colorado Foreclosures began to see more and more homes entering into Colorado Foreclosures status.  Homes were not maintaining the value needed to qualify for a new loan and interest rates were adjusting out of control.  Home owners were faced with a decision; continue making a payment they can’t afford or stop making payments all together.  If they choose to stop making payments the home owner was able to save the money needed to get into a rental property shortly before the official Colorado Foreclosures took place.  It is clear why so many people are electing to go into Colorado Foreclosures when the only repercussion was that they had to move.  I can’t blame just the homeowner in this situation.  Mortgage Brokers failed and Lenders failed by allowing such loose standards in underwriting the homes.  Ultimately these brokers and lenders were the primary contributors to the number of Colorado Foreclosures being put on the market today.  A lot of money was made by everyone involved.  These individuals choose income over doing what was right for the industry and the consumer. 

Realtors were simply pricing homes for what the market would allow so they probably could have seen what was happening, but ultimately are the least likely to blame for Colorado Foreclosures running as high as they are.  Brokers and Lenders top my list of who to blame for Colorado Foreclosures being where they are.  Lenders for allowing bad credit individuals to qualify with debt ratios so high that any increase of payment would send the consumer out of control.  They knew what these loans would do and should have seen that Colorado Foreclosures would be the result.  Brokers who used aggressive appraisals to qualify people on over inflated properties and failing to educate their consumers on the repercussions of the loan they were getting into.  Can you imagine a broker that would push an unethical appraiser to value a home 25% above the actual value and then put their client into a loan they could barely afford knowing it would go up by 2% every 6 months two years later?  On a $200,000 loan the payment went up over $250 a month and $500 a month in the 3^rd year. These loans had no other outcome to be had but to have them enter into Colorado Foreclosures.  These brokers should be prosecuted and the Lenders fined to a point where their ability to do business goes away. 

The reason I feel so passionate about holding people accountable is that WE ALL PAY for these mistakes.  We pay in the sense that our homes are not appreciating the way they should.  We pay in the taxes that are given to these lenders in Federal Aid or Cheaper bailout money issued in Treasury bills.  We also pay in the losses suffered in portfolios that were tied to the perception that the paper sold in these portfolios were in a risk category not expected to default.  When Colorado Foreclosures spiked the people that bought these mortgage backed securities suffered greatly and even had some people loosing their entire portfolios.  The money in these portfolios were counted on for retirement, College funds, health care, and so on.  So the question to ask yourself when thinking about Colorado Foreclosures is that when World Com, Enron and Adelphia all committed billions of dollars in fraud to their investors, people were held accountable and some of these individuals were prosecuted.  So why is it that the Trillions not Billions that were lost in Mortgage Backed Securities not getting the attention that these companies had.  Just like Enron and World Com people were defrauded and many people lost their entire savings and retirement plans.  Yet because the guilty pool is so big no one wants to hold them accountable.  It’s sad and at this point I don’t have an answer, but Colorado Foreclosures will always be an issue when there are no measures to hold people accountable.  We at 1^st Metropolitan Mortgage are passionate about our client’s welfare and want to make sure that what ever loan you get into does not result in Colorado Foreclosures in the future.

Colorado Home Loan rates hit a new summer high.  Most Colorado Home Loan providers are quoting around 6.25% or 6.5% for a conventional 30 year fixed Colorado Home Loan rate product.  We will continue to honor 6.0% and will not charge any points.  The hit for the new rate will be absorbed by us.  Colorado Home Loan rates took on some extra baggage when today’s Jobless Claims report came in better then expected.  Keep in mind that when Economic data shows signs that our economy is on a path to recovery, Colorado Home Loan rates will take a hit.  The reason for that is that investors will pull money out of the Mortgage Backed Securities market and will in return leave it in the equities market. 

Jobless Claims came in at 357K and the expectations were set at 370K.  Colorado Home Loan rates reacted negatively to the data.  Initial jobless claims measure the number of first time filings for state jobless benefits. Claims are quite volatile from week to week; therefore many analysts track a four-week moving average to get a better sense of the underlying trend. The report also contains two other statistics- the number of people receiving state benefits and the insured unemployment rate.
This report impacts Colorado Home Loan rates because if unemployment goes low enough it can put the demand for higher wages in the market.  The higher wage demand puts pressure on the economy and can cause increases in Colorado Home Loan interest rates.  The Bank of England, which has similar responsibilities to the Federal Reserve did not move interest rates up or down which was expected by the market.  The combination of the two reports normally would not have drastic impacts on the Colorado Home Loan market, but tied to comments made by the Federal Reserve yesterday, made a bigger impact on Colorado Home Loan rates then it normally would have.

Inflation continues to be the #1 influencer on where Colorado Home Loan rates are expected to go.  Higher inflation will devalue long term investments.  The lower price pressure requires a higher Colorado Home Loan rate to attract other investors.  We have implemented a FLOAT recommendation which you can read in detail at www.coloradomortgagebanking.com.  In the mean time we will need to prepare ourselves for the Nonfarm Payrolls and the unemployment rates which will create some movements in the Colorado Home Loan rate market.  Industry experts have been extremely low in their estimations as it relates to forecasting these economic data reports.  If the trend continues and the consensus on where the data will come in is still low, Colorado Home Loan rates will go up again.  6.0% is sounding more and more like the rate of choice and if it is offered to you would not be a bad Colorado Home Loan rate to lock in.  We have jumped a bit in the last 3 weeks and if you believe Colorado Home Loan rates may improve then wait until you feel like locking your Colorado Home Loan.  I only recommend the FLOAT option today, because much of the data released today have already had the impacts hit the market.  Colorado Home Loan rates started the day off worse and it appears that as the day progresses that much of the loss from today’s economic reports will be regained in the Colorado Home Loan rate market. 

As I stated before tomorrows two economic reports will create movement in the Colorado Home Loan market who much movement will be realized when the reports are released.  Nonfarm Payroll data is the top number of the Employment Report, one of the most highly anticipated pieces of economic data. The headline figure is often a major Colorado Home Loan market mover with the labor market a strong predictor of the strength of the economy. The Unemployment Rate is obtained from a different data sample, and together the two reports provide the most comprehensive picture of the labor market. The monthly reports are, however, very volatile and subject to large revisions in future releases. Long term trends in the report’s data are a better gauge for the true state of the labor market. Strength in the labor market implies a strong economy and is usually negative for Colorado Home Loan markets.  Unemployment will also be released with this report and is the second component in what investors look at in the reported employment numbers.  Colorado Home Loan rates will either jump or of go down after the release of these figures.

It is very hard to determine where we need to lock your Colorado Home Loan in the next 24 hours, but it appears that for the moment the Mortgage Backed Securities market is trying to make up for some of the ground lost earlier this morning.  I would FLOAT your Colorado Home Loan rate until late this afternoon and would lock then if you want to take the risk out of the market.  For those willing to ride it out, it appears that we have a lot of ground that we could make up that could be regained if the employment numbers come in worse then expected. 

Remember to call me with your Colorado Home Loan questions.  My Colorado Home Loan Rate Lock Recommendation remains at 6.0% we will see what Friday brings us until then.

Best of Luck

Daniel