ALLIED EQUITY A Diversified Mortgage Company
400 North Mountain Ave., Suite 223, Upland, CA 91786
Phone  909-932-9226 Fax  909-803-9840

Mortgage Related News

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Mortgage Rates Moving Higher to Start New Week

Posted To: Mortgage Rate Watch

Mortgage rates hit new all-time lows last week. In fact, for many lenders, records were broken on more than one day. That raised the risk of a bounce back this week and if today is any indication, that's what we're seeing. The average lender is back in line with last Tuesday's rate offerings for top tier conventional 30yr fixed scenarios. All that having been said, rate movement is pretty minimal by normal standards as the bond market (which underlies interest rate momentum) has been relatively calm and sideways after coming to terms with the initial shock of the coronavirus market impact. In many cases, borrowers would see the same note rate they saw last Friday (in those cases, the upfront costs associated with that rates would likely be slightly higher). Loan Originator Perspective Bonds...(read more)

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April New Home Sales Crush Forecasts

Posted To: MND NewsWire

New home sales, rather than dropping like a rock, rose 0.6 percent in April according to the U.S. Census Bureau and the Department of Housing and Urban Development. Part of the gain is due to a revision of the March sales numbers from an original estimate of 627,000 seasonally adjusted annual units to 619,000. This added to the month's 15.4 percent decline from February. While April's sales of newly constructed homes were down 6.2 percent from a year earlier, the April estimate of 623,000 units is totally unexpected. The consensus of analysts polled by Econoday was for an annual pace of 495,000 units with the highest estimate at 592,000 units. They weren't alone; the consensus from MarketWatch was 480,000 units while Trading Economics expected a decline of 21.9 percent. While sales estimates...(read more)

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Home Prices Still Moved Higher in March

Posted To: MND NewsWire

Even as the COVID-19 pandemic began to hobble home sales in many locations, home prices continued to increase. the Federal Housing Finance Agency's (FHFA's) House Price Index (HPI) held to its 5.7 percent gains the prior month while the S&P CoreLogic Case-Shiller U.S. Home Price Indices posted larger annual increases in March than in February. The S&P CoreLogic Case-Shiller U.S. National Home Price NSA Index, covering all nine U.S. census divisions, reported a 4.4 percent annual gain in March , up from 4.2 percent the previous month. The 10-City Composite's annual increase came in at 3.4 percent, up from 3.0 percent and the 20-City Composite rose from a 3.5 percent growth in February to 3.9 percent. The National Index posted a 0.8 percent month-over-month increase, while the 10-City...(read more)

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MBS Week Ahead: Beatings Can Continue Until Market Morale Deteriorates

Posted To: MBS Commentary

No need to overcomplicate the current narrative: the overall financial market is attempting to balance the reopening of the economy with the risk of COVID resurgence, all the while receiving a boost from massive global stimulus efforts. No matter how pessimistic anyone wants to be about the longer-term economic damage associated with coronavirus, the Fed and Treasury are throwing so much money and accommodation at the problem that markets are chanting the age-old mantra "don't fight the Fed." And that can be extrapolated to include the world's other major central banks. Bonds are realistic. They know there is massive economic damage that can't be immediately healed by stimulus efforts. That's why the 10yr yield is trading around 0.7% despite a massive glut of supply...(read more)

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Broker, eSign, Marketing Products; USDA, FHA, Freddie, Fannie News and Trends

Posted To: Pipeline Press

I doubt if I have ever pressed “7” or “8” on my microwave oven keypad. Speaking of 7 & 8 (I know, a weak segue), originators are keenly aware of what builders are seeing, economy-wise, and 78 percent of them did not lower their prices in April. Not only that, but 41% of home sales had bidding wars, according to Redfin . “Demand for homes has picked back up after hitting rock bottom in April, and that uptick paired with a lack of supply is a recipe for bidding wars. Homebuyers are getting back out there, searching for more space as they realize using their home as an office and school may become the norm. But sellers are still holding off on listing their homes, partially due to economic uncertainty and concerns of health risks. In some hot neighborhoods, there...(read more)

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The Sun Also Rises For The Housing and Mortgage Markets

Posted To: Mortgage Rate Watch

There's no shortage of bad news when it comes to the economy and the housing market. But that's no surprise considering the circumstances. The sheer size and speed of the economic contraction makes it easy to worry about what the future will look like. Has coronavirus changed things forever? Is it true that many jobs have been permanently destroyed? I don't know. No one can really know. Many of the more troubling questions won't be able to be answered any time soon. No one can deny things are bad and that some things may stay bad for a long time. But hidden amid the understandable sea of pessimism, there are some reasons for hope. We're not talking about the kind of hope that makes us complacent to the ongoing economic risks. Rather, there are simply some positive counterpoints to the abundant...(read more)

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First Wave of Forbearances Almost Doubles Delinquency Rates

Posted To: MND NewsWire

The years-long downward trend of mortgage delinquencies appears to have come to an abrupt end in April. Black Knight, in its "first look" at the month's loan performance data, said the national delinquency rate shot up 90 percent compared to March and is 86 percent higher than in April 2019 at 6.45 percent. That rate indicates the percentage of active loans that were 30 days or more past due but not in foreclosure with 3.40 million loans in that category, 1.61 million more than the prior month and 1.59 more than in April 2019. Black Knight reported earlier this month that, as of April 30, more than 3.8 million home mortgages had entered forbearance plans. They subsequently reported that some 46 percent of borrowers in forbearance at the end of April, had continued to make at least part of their...(read more)

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More Evidence That Forbearance is Widely Being Taken as a Precaution

Posted To: MND NewsWire

The number of homeowners in mortgage forbearance plans continues to increase, reaching 4.75 million by May 19. This is 9.0 percent of all active borrowers nationwide and represents a little more than $1 trillion in unpaid principal. The number of plans grew by 93,000 borrowers between May 12 and May 19. Black Knight, in its weekly report on the forbearance program, offered to homeowners who have been financially impacted by the COVID-19 pandemic, notes that the most recent increase is down 70 percent from the 325,000 new plans during the first week of May , and is 93 percent lower than the 1.4 million plans opened the first week of April. This slowdown suggests that volumes may be beginning to flatten , warranting a shift in servicer focus from forbearance pipeline growth to forbearance pipeline...(read more)

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MBS Day Ahead: Not Reading Too Much Into Things Ahead of 3.5-Day Weekend

Posted To: MBS Commentary

Treasuries started out stronger after overnight drama between China and Hong Kong caused a " risk-off " trade (i.e. sell stocks, buy bonds). MBS continue lagging Treasuries. What's up with that? The performance between MBS and Treasuries can always vary to some extent. Divergences are more easily seen in a few specific situations. One of the most common situations is an obvious risk-off rally (or "flight-to-safety," if you prefer). This type of rally benefits the most basic, most liquid, least risky bonds first and foremost. Treasuries fit that bill better than anything. None of this is a very big deal in the bigger picture. MBS are still in a process of finding their range versus Treasuries, and there has been far more drama in the past few months than we could ever...(read more)

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LO Jobs; CRM, Marketing, Lending Products; Tools for Borrowers; Rates: a Global Snapshot

Posted To: Pipeline Press

The Friday before a three-day weekend (honoring the men and women who died while serving in the U.S. military)! Can’t you just feel that anxiousness to go and hike, to have a meal out, to see people, to sit in a restaurant? No one can argue that social distancing has increased the rate of infection, right? Many are “chomping at the bit,” weighing statements from scientists & politicians, especially as news continues to come out from people about catching COVID supposedly having never left their house . Or statistics, like as of May 17, about 91,000 lives have been lost to the coronavirus but those aged 65 or older accounted for 80 percent of these deaths , and residents or employees of long-term care facilities accounting for one third of all deaths . And so many working...(read more)

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Mortgage Rates Are Actually Lower This Week

Posted To: Mortgage Rate Watch

Mortgage rates were mostly steady today for most lenders. Those who changed generally did so in a friendly direction. Either way, that means today's rates remain in line with all-time lows. It also makes them markedly lower than last week. Despite that fact, you're more likely to see news about rates rising just a bit week-over-week. Who's telling you the truth? To be fair, no one is lying to you. It's just a question of timing and data sources. Freddie Mac publishes a weekly rate survey every Thursday morning. It's widely relied-upon as source material for all manner of media outlets. The issue is that it is based primarily on responses received on Monday and Tuesday. The 2nd half of the week isn't even counted. That means Freddie's data missed the week's best improvement yesterday afternoon...(read more)

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Existing Sales hit 10-Year Low, But Low Rates are a Silver Lining

Posted To: MND NewsWire

Existing home sales fell hard in April, the numbers coming in about where analysts expected them but breaking a nine-month string of annual gains. The National Association of Realtors® said total sales of single-family homes, townhouses, condos, and cooperative were at a seasonally adjusted annual rate of 4.33 million, down from the 5.27 million sold in March, a 17.8 percent decline. It was the lowest level of sales since July 2010 (3.45 million) and the largest month-over-month drop since July 2010 (-22.5 percent). The loss, which NAR said was due to the coronavirus pandemic, brings the aggregate decline over the last two months to 26.3 percent. Sales are now down 17.2 percent from the 5.23 million rate in April 2019 The rate of sales almost matched the 4.325 million-unit consensus estimate...(read more)

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Refis Dominated April Closings as Lenders Tackle Constant Changes

Posted To: MND NewsWire

Interest rates on closed loans continued to decline in April, falling from 3.65 percent in March to 3.48 percent according to the Origination Insight Report from Ellie Mae. That prompted another surge in refinancing , with that portion of originations jumping from 55 percent in March to 65 percent. The refinancing share of conventional loans also rose 10 percentage points to 73 percent. The share of conventional loans also surged , from 76 percent to 81 percent and continuing a trend that began in January. Conventional loans accounted for 71 percent of originations that month. The April share of FHA loans dropped 3 points to 10 percent in April and the VA share dipped to 1 point to 6 percent. The time to close all loans increased from 40 to 42 days, although refinancing time lengthened by four...(read more)

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FHFA Pushes Forward With Fannie/Freddie Conservatorship Exit

Posted To: MND NewsWire

Maybe all of the talk about ending the GSE's long term incarceration in conservatorship is more than talk this time. Earlier this week both Freddie Mac and Fannie Mae announced they would be issuing Requests for Proposals (RFPs) seeking to hire financial advisors to that end. Then, late Wednesday, the Federal Housing Finance Agency (FHFA), the GSE conservator, said it was seeking comments on proposed revisions to its own 2018 proposal to establish a new regulator capital framework for the two companies. FHFA said the changes to its proposal "ensure each [GSE's] safety and soundness and its ability to fulfill its statutory mission across the economic cycle, in particular during periods of financial stress. The re-proposal is also a critical step toward responsibly ending the conservatorships...(read more)

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MBS Day Ahead: Two Potential Targets For Today's Potential Bond Rally

Posted To: MBS Commentary

Treasuries held onto yesterday's gains in the overnight session and are starting the day in slightly better shape (MBS are roughly unchanged). This means that 10yr yields continue adhering to a technical pattern we've been following for the past few weeks AND that we may get to see that pattern put to the test in the day ahead. The pattern in question is one of the simplest: a trend channel consisting of parallel lines drawn along the recent highs and lows in any given market instrument. Placement of these lines is open to some degree of interpretation. For instance, in our version, I have the lines set based on opening and closing levels and some of the intraday noise has been tuned out. That doesn't mean the intraday levels are irrelevant, just that I needed/wanted lines that...(read more)

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Recruiting, LO Jobs; Appraisal, QC Products; Loan Processing is Changing: Beeline/SnapFi

Posted To: Pipeline Press

Some lenders and vendors are easing back into offices, or at least planning voluntary phases. (Hmmm… wear a mask and have 2 per elevator, or work from home with no commute and wear sweats. Let me think.) Instead of thermal scanners in every office lobby, can’t we just have our mothers kiss our foreheads to test our temperature like when we were kids? And when we were kids, we could get away with saying, “I don’t wanna!” Apparently some still can say that when it comes to making mortgage payments, since 4.1 million borrowers are in forbearance right now but, per Forbes, over 70% don't need the help ! The FHFA is keeping abreast of forbearance trends, and it released a notice of proposed rulemaking (NPR) outlining a new capital rule for the Enterprises (aka, Freddie...(read more)

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Another Week, Another Trip to All-Time Lows For Mortgage Rates

Posted To: Mortgage Rate Watch

Mortgage rates fell again today. Whereas yesterday's improvements arrived in choppy fashion only after many lenders quoted higher rates in the morning. Today's improvement was more conclusive and more consistent from lender to lender. While there were a handful of mid-day improvements in response to bond market strength, most lenders were at least as low as they'd ever been to start the day. Many lenders were decidedly lower, bringing the average top tier conventional 30yr fixed quote dangerously close to cracking below the 3.0% barrier. If you're hearing about rates in the high 2% range, shaking your head, and scoffing , know that you are not alone. It continues to be the case that rate offerings vary quite a bit from lender to lender. They can also be vastly different for different scenarios...(read more)

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Vast Majority of Forbearances Going to Those Who Don't Need Them

Posted To: MND NewsWire

With the number of homeowners under forbearance plans nearing 10 percent of all of those having a mortgage, a Lending Tree survey indicates that most of those borrowers did not actually need the help. One quarter of the homeowners surveyed by the company said they had applied for forbearance because of a COVID-19 hardship, and of those, 80 percent were granted one. However, only 5 percent said they wouldn't have been able to pay their mortgage without forbearance. Lending Tree says that lenders typically require borrowers to prove they're experiencing a financial hardship in order to qualify for forbearance. However, the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress lets homeowners with government-backed loans apply for forbearance without having to prove a hardship...(read more)

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MBS Day Ahead: What is MBS 'Outperformance' And Why Are We Seeing It?

Posted To: MBS Commentary

I've been mentioning MBS outperformance and underperformance quite a bit recently, but what do these terms really mean and why do we care? First off, we always care about strength and weakness in mortgage bonds as they are the primary building block in determining mortgage rates (i.e. higher MBS prices = lower rates , all other things being equal). We also care about strength and weakness in Treasuries because mortgage bonds typically correlate amazingly well with Treasuries (so much so that many mistakenly believe 10yr Treasury yields serve as a basis for mortgage rates). The type of volatility seen in March exposed a few eye-opening truths. The first was that mortgage bonds can and do deviate from 10yr yields at times. March offered the most extreme example we've seen since the financial...(read more)

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Broker, Correspondent, LOS, CRM Products; Agency Shifts; Remember Non-QM?

Posted To: Pipeline Press

Jury trial by Zoom? Leave it to Texas to give it a shot. Michigan and Indiana are now offering the bar exam online for aspiring attorneys. Out of Pennsylvania comes news that Gov. Tom Wolf issued an executive order that allows real estate to open on a statewide basis effective yesterday, subject to certain guidelines. Florida has entered “Phase 1” of re-opening, with gyms, retail stores, and restaurants at 50 percent capacity. California , home to nearly 25% of the residential mortgage production of the United States, has entered “ Phase 2 ” but of great concern to every residential lender is AB 2501 with its draconian penalties. (Here’s an analysis of the bill which yesterday moved from the Assembly Banking Committee to its Appropriations Committee.) Nationwide...(read more)

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A Silver Lining in Mortgage Apps? Purchases Continue to Grow; Forbearance Requests Slow

Posted To: MND NewsWire

Purchase mortgage applications extended their recent run of gains through the week ended May 15. The Mortgage Bankers Association (MBA) said its Purchase Index rose 6 percent compared to the previous week on both a seasonally adjusted and unadjusted basis. It was the fifth straight week of improvement, and the index, which was down by as much as 35 percent from a year earlier in much of April has narrowed that gap to 1.5 percent. MBA's Market Composite Index, a measure of overall application volume, was down 2.6 percent on a seasonally adjusted basis and 2 percent unadjusted, dragged down by the 5 th consecutive decline in refinancing. The Refinancing Index fell back by 6 percent compared to the prior week, but was still 160 percent higher than during the same week in 2019. Refinancing applications...(read more)

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Mortgage Rates Fall Back Toward All-Time Lows

Posted To: Mortgage Rate Watch

Mortgage rates were mixed this morning, depending on the lender. The more responsive lenders had already bumped rates higher yesterday in response to weakness in the bond market and were thus able to offer modest improvements this morning, or at least relatively flat pricing. Other lenders were noticeably weaker (aka higher in rate). As the day progressed, the underlying bond market improved fairly decisively. This allowed most every lender to offer lower rates by the end of the day. While this wasn't enough to get us back to the all-time lows seen at times in the previous 2 business days, it was definitely a step in the right direction. It remains to be seen if this was a sign of things to come or merely a correction to yesterday's bigger market movement. The average lender remains in the...(read more)

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Borrowers in Forbearance Can Still Get a Mortgage, Probably...

Posted To: MND NewsWire

Homeowners who have been granted forbearance from making full payments on their GSE guaranteed loans during the COVID-19 crisis may still be able to refinance or buy a new home when the crisis ends. The Federal Housing Finance Agency (FHFA) has announced that Fannie Mae and Freddie Mac will permit borrower to obtain a new mortgage under the following conditions . 1) They have reinstated their mortgage or have continued to make their mortgage payments despite being in forbearance or 2) where forbearance has ended, eligibility will be dependent on making three consecutive payments under a repayment plan, a loan modification, or the recently announced payment deferral option. "Homeowners who are in COVID-19 forbearance but continue to make their mortgage payment will not be penalized ," said Director...(read more)

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April's Harsh Residential Construction Numbers Meet Expectations

Posted To: MND NewsWire

The April residential construction numbers are, of course, horrible. But they aren't out of line with expectations, and builders did continue to plan for expansion and to build. The U.S. Census Bureau says that construction permits fell 20.8 percent compared to March, and housing starts were down 30.2 percent. Here are the gruesome details. The April decrease in permits put the seasonally adjusted annual rate at 1,074,000 units, down 19.2 percent year-over-year. The March estimate, which had represented a 6.8 percent decrease from February as the COVID-19 shutdowns were starting to happen, was actually revised slightly higher, from 1,353,000 to 1,356,000. Analysts has expected permits to be in the range of 750,00 to 1,150,000 units on an annual basis. The consensus of those polled by Econoday...(read more)

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Correspondent, Audit, Construction Products; Lots of Webinars This Week; September's State Conferences!

Posted To: Pipeline Press

It’s one thing to have confusion & bickering over whose turn it is to put the Scrabble tiles away face down after the game. It’s a whole different level when it comes to forbearance. As STRATMOR’s Seth Sprague puts it, “The forbearance airplane is being built as we’re flying it!” Servicers report that borrowers fall into four broad categories: No forbearance requested, forbearance requested but still making their payments, forbearance requested and being carried out, and borrowers who were delinquent pre-COVID but do not qualify for forbearance. But wait, there’s more! Investors for Agency loans further segregate those loans into (price/approval/product/purpose) buckets based on when the loan was sold to an investor, or to an Agency, and any events...(read more)

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Joe Sanchez
Allied Equity
Ph: 909-932-9226Fax:909-803-9840
400 North Mountain Ave., Suite 223
Upland, CA 91786 US
CA DRE License # 01201910, NMLS: 359382, Company ID: 359090
www.alliedequity.com
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