Online Payday Loans Online Payday Loans

Archive for the ‘Appraiser News’ category

Brexit & Mortgage Interest Rates

June 28th, 2016

Impact of Brexit on Mortgage Interest Rates.

Once again, it appears as though the long expected upward movement in mortgage interest rates may be reversed by global events, in this instance by Britain’s vote to exit the European Union.  HSH Marketplace discussed the likely impact on mortgage interest rates in their report last Friday:

“…Along with accommodative and unusual Fed policy, global turmoil is the American mortgage shopper’s best friend. This message has been repeated time and time again in the wake of last decade’s financial crisis and ensuing recession, and is as true now as then, perhaps more so.

We’ve been in uncharted waters on a number of occasions since the early days of the crises and recovery. We’ve witnessed unconventional monetary policy, and (for a time) a possible EU exit by Greece (remember “Grexit”?), negative interest rate policies by central banks and more, and now we will need to see if the remainder of the Euro common market can hold together, and how much economic growth across the world will be impacted by the change. It’s not unreasonable to expect to see exits contemplated by other members in the weeks and months ahead, as well.

…For now, the impact of Brexit is such that it has fostered lower interest rates here and around much of the globe. It also means there’s a zero chance of the Federal Reserve raising interest rates in July, and a move in September, although still pretty far off, is also in question. On Friday, there was some buzz in the markets that the Fed might actually need to lower interest rates to ward off any reduction in growth that comes from Brexit, but aside from a statement allowing that they would make dollars available to markets as needed, there was no indication of an imminent change to Fed policy.

In her semi-annual testimony on monetary police before the Congress this week, Fed Chair Janet Yellen reiterated that monetary policy was not on a preset course…policies will evolve as new data about the health of the domestic (and global) economy become available. She also rightly noted that ‘considerable uncertainty about the economic outlook remains’, and noted that ‘Vulnerabilities in the global economy also remain.’ In short, and although it would generally like to be raising rates as we go, the Fed isn’t certain about where it is going or how fast it expects to get there… but that we’ll all find out together over time.

…Mortgage rates are headed lower. How much is a matter of speculation, though: the headlines are full of ‘interest rates plummeting’-type messages, but that mostly refers to sovereign debt, like Treasury bonds. Fixed mortgages are of course influenced by falling yields, but to a lesser degree and certainly not on a full lockstep basis.

We will inch closer to all-time (or at least 60-plus year) lows for 30-year fixed rates next week, but it will be harder to reach those low levels than you might think. Back in December 2012, when we hit record lows of 3.44 percent for the conforming 30-year FRM, the Fed had essentially pledged to buy GSE, Treasury and MBS as fast as markets could make them available. That’s not the case by a longshot at the moment, and although the Fed is recycling inbound proceeds of prepaid and maturing instruments into replacement buys for its portfolio, any excess needs to be absorbed by investors, who aren’t exactly clamoring for low-yielding fixed-rate debt than can be prepaid at any time. As such, the market climate for mortgages now is rather different than then.

We’ll at least start next week with lower rates in the market. However, it is unclear how the week will progress as the repercussions of the vote are considered…The end of the week brings us into the Independence Day holiday weekend, and mortgage rates as tracked by HSH’s FRMI may be down perhaps 10 basis points or so from this week’s figure”.

Erin Lantz, vice president of mortgages at Zillow concurred, saying that “When there’s uncertainty outside of the U.S., investors move to safer investments. And in this particular case, we’re seeing an interest in U.S. mortgage-backed securities”.  She also noted that “Consumers worried about buying or ref-ing before interest rates rise will now have more time to enjoy these historically low rates thanks to Brexit”.

(Unsurprisingly) Lawrence Yun, the Chief Economist of the National Association of Realtors (NAR) was quoted on Friday as saying that “Demand for U.S. real estate could rise”.  Besides the stimulating effect of low interest rates, Mr. Yun noted that a possible turning away from the U.K. could occur “especially in London, as it becomes a less attractive place to conduct global business.” Early speculation as to possible relocations included some of the 16,000 employees that JP Morgan Chase has in the U.K.  Daniel Pinto, head of their global and investment banking operations, told Reuters Friday that it was too soon to speculate as to relocations.  This sentiment was echoed by many since Brexit became evident: the impact on U.S. housing, mortgage rates, commercial real estate and other areas will become clearer only after the passage of time, with some effects seen in several months while others will take years.

Negative Interest Rates anyone?

While negative interest rates have not been seriously entertained by U.S. policymakers, Brexit has brought this “crazy” policy option into discussion again.  Morgan Stanley describes the theory behind negative interest rates:

“When a central bank has a negative interest rate policy, deposits that are held within that central bank do not generate interest income. Instead, the depositors must pay to keep their money within the central bank. The intention is to spur lending and spending, deflate the currency, and increase inflationary pressures”.

The Eurozone, Denmark, Sweden, Switzerland and Japan have all adopted negative interest rates and there is now growing speculation that the Bank of England will resort to this measure.  The following link to a Morgan Stanley report on negative interest rates provides a graphical depiction of this “crazy” policy alternative.

Negative Interest Rate Policies

​​AppraiserNews is a FREE publication, supported by advertising and sales of products designed to help appraisers support and grow their businesses. Please consider supporting us today by seeing what we and our sponsors have to offer.

RedStone Advanced Analytics from Bradford Technologies


AppraiserNews is a FREE publication, supported by advertising and sales of products designed to help appraisers support and grow their businesses. Please consider supporting us today by seeing what we and our sponsors have to offer.

Superior E&O insurance from the Landy Insurance Agency- click here to apply and receive your policy in about two hours!Random online posting: ”What happens if the Universe is not infinite and there is an actual edge…


Appraiser Help’s 2015 Directory of AMCs and National Appraisal Companies is Available for Download at a reduced price!

To help appraisers evaluate how AMCs will work for their appraisal practices, we have compiled this expanded directory of over 275 AMCs and National Appraisal Companies, listing complete, contact information and other details for each company.

If you’re looking to maintain or expand your mortgage appraisal practice, our Directory of Appraisal Management and National Appraisal Companies is a great place to start. Order it today at the reduced price of $49.99 and download it immediately!

Please visit our website now to make your purchase securely or contact us at (877) 434-2825 for more information on this comprehensive directory!

back top

Rates & Dates

Freddie Mac, the Mortgage Brokers Association (MBA) and HSH Market Trends reported mixed results in mortgage interest rate movement last week.  These reports, of course, do not reflect the extreme downward pressure on rates caused by “Brexit” which became evident after two of these reports were published (please see our discussion of the projected impact of Brexit on mortgage interest rates earlier in this newsletter).

In their survey on June 23rd, Freddie Mac reported that 30-year fixed-rate mortgages rose to 3.56% from 3.54% the previous week. They also noted that last year at this time the 30-year rate was at 4.02%.

The MBA reported on June 22nd (for the week ending June 17th) that 30-year rates with conforming loan balances ($417,000 or less) declined, from 3.79% to 3.76%.   The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) fell to 3.70% from 3.75%.  Rates for FHA backed mortgages were unchanged from the previous week at 3.61%%.

Mortgage applications increased by 2.9% from the previous period.  Refinance applications as a percentage of all applications moved up from 55.3% to 57.7%. The FHA share of applications declined to 11.7% from 11.8% and the VA was unchanged at 11.1%%.

On June 24th, HSH.com Market Trends reported that 30-year mortgage rates rose from 3.62% to 3.66% while rates for FHA-backed mortgages also moved upward, to 3.50% from 3.49%.

Additional information from Freddie Mac can be found by going to: Primary Mortgage Market Survey PMMS – Freddie Mac

Additional information from the Mortgage Bankers Association can be found by going to their site at: Research and Forecasts – Mortgage Bankers Association

Additional information from HSH can be found by going to: HSH.Com

Ask Angie

Angie would like to congratulate the winners of her last contest: Michigan appraiser Gord Hoerner; Connecticut appraiser Renee Healion; Washington appraiser Dave Towne; Arizona appraiser Gary Vieth; New York appraiser Bill Smolen; Florida appraiser Marvin Kaleky; and Virginia appraiser Tom Martin.

They responded correctly that Mohammad Ali was the author of all three quotes: “Float like a butterfly, sting like a bee”; “If you even dream of beating me you’d better wake up and apologize”; and “Service to others is the rent you pay for your room here on earth”.

Today’s Questions:

1. Who said: “We shall defend our island, whatever the cost may be, we shall fight on the beaches, we shall fight on the landing grounds, we shall fight in the fields and in the streets, we shall fight in the hills; we shall never surrender”.

a) Queen Elizabeth
b) Winston Churchill
c) Hillary Clinton
d) None of the above

2. Who said: “I may be drunk, Miss, but in the morning I will be sober and you will still be ugly”.

a) Prince Charles
b) Winston Churchill
c) Donald Trump
d) None of the above

3. Who said: “The best argument against democracy is a five-minute conversation with the average voter”.

a) David Cameron
b) Winston Churchill
c) Bernie Sanders

d) None of the above

The first to respond with the correct answers win a choice of one of the following:

One Free Regular Listing on AppraiserHelp.com

A Free Copy of the 2015 Directory of Appraisal Management Companies (Available to Members of AppraiserHelp.com and FHAAppraisers.com FREE!)

back to top


Appraiser Help has Released its 2015 Directory of AMC’s and National Appraisal Companies. Click the link above to learn more and to download your copy today!


Tell us what you think!

We invite your responses to any of the issues raised in this newsletter. Please e-mail us at: bill@appraiserhelp.com with your thoughts!

back to top

We really hope you find our newsletter to be informative!  If you have any input on future topics for discussion, please email me your questions and I will do my best to address them in the next issue.  If you want to look back at past issues you can see our archive at www.appraisernews.com

Regards,

Bill Collins, Appraiser Help Inc.

Appraiser Help Real Estate Appraiser Directory

Appraiser News Homepage

2015 Directory of AMCs and National Appraisal Companies

Landy E&O Insurance Agency

Redstone from Bradford Technologies

FHA Appraiser Directory

FHA Roster . com

Tax Grievance and Tax Appeal Appraiser Directory

twitter.com/appraiserhelp

Appraiser News on Facebook

 

AppraiserNews and the AppraiserNews Logo and all original content ©AppraiserHelp, Inc. 2009-2016