Mortgages Remain Flat on T-Bill Auction and Weak Economic Data

January 14, 2011

Daily Mortgage Updates

Doug Katz Mortgage Broker 14 January 2011 – Never has flat felt so good. For weeks, lenders have been living with the specter of further rate spikes looming like the sword of Damocles. Luckily the thread has held and, although the sword remains, we have lived another week without the aforementioned drop. In this “take what you can get, while you can get it” mortgage market, this is great news indeed.

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The week started a bit dicey with some disappointing treasury auctions, but, when the 10-year auction went off well, pricing improved. While this did not manifest in better mortgage rates the consumer cost the obtain the rates got better. This momentum was aided by a RealtyTrac report that foreclosures reached record levels in 2010 and that 2011 will likely be even worse. This was followed by disappointing news on the jobs front as first time unemployment claims rose.

I would like to take a moment to cover some new changes at Fannie Mae that will increase borrowing cost regardless of economic data. The mortgage giant announced that they will apply new adjustments to many loans that they purchase. These adjustments will increase consumer mortgage costs, even for borrowers with credit scores of 800. While the may help stem Fannie’s hemorrhaging, it might also put the kibosh on the housing recovery.

My mortgage rate lock advice for my clients is unchanged and still based heavily in defensive thinking. IF closing in 7 days or less LOCK. If closing in 7 to 30 days, I would suggest FLOATING with extreme caution. With this much volatility, I would LOCK on any improvements as well as any major upward repricing. You do not want to miss the boat.

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About Doug Katz

As the Senior Mortgage Banker and Sales Manager for Chicago Bancorp, Doug not only originates loans for his personal business, but also oversees affiliations with banks and other financial institutions that depend on Chicago Bancorp to meet their client’s lending needs. In this role, Doug directs the day-to-day mortgage sales operations of over 25 branches in a multitude of Chicagoland’s diverse communities. He brings to these relationships a wealth of industry experience and a dedication to an exceptional client experience that has established Chicago Bancorp as Chicago’s pre-eminent mortgage solution providers. Prior to joining Chicago Bancorp, Doug attended and graduated from West Point. Upon graduation, he was commissioned as an officer in the United States Army Artillery, where served 5 years in numerous roles and in various deployments include service in Kuwait. In addition to his Bachelor’s Degree from West Point, Doug holds an M.B.A. from Loyola University Chicago, where he was also inducted into the Beta Gamma Sigma Honor Society. He also served as President for the West Point Society of Chicago from 2003 to 2005 and still serves on the Board of Directors. When not working, he spends his time with his wife and three children in their hometown of Oak Park, as well as pursuing his passions for fitness, cooking and the banjo. Doug can be reached by phone at 312.738.6079, by email at doug@chicagobancorp.com, on his own blogs, BankerDoug.com and Vet Money Matters. He's also on LinkedIn.

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