Mortgage Rate Forecast: July 2008

My Lock Advice for Today:

If I were considering financing/refinancing a home, I would...

• Lock if my closing was taking place within 7 days
• Lock if my closing was taking place within 8 and 20 days
• Lock if my closing was taking place between 21 and 60 days
• Float if my closing was taking place over 60 days from now

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Interest rates are based on numerous economic, financial and credit based factors that adjust daily. In addition, lenders can vary on qualification criteria from program to program. If you like the rate today, the safe bet is to lock. Even if rates improve, they wouldn't improve enough in the short term to make you cry about it. But if you are an ardent market bear, and accept the risk of negative mortgage headlines, and believe the economy will just get more bad news next week, and you have the money to risk, you may benefit from floating. Just remember, it always seems more painful to have not locked when you should have as opposed to locking and then watching rates get a little better.

Current Rates*:

• 30 Year Fixed - 6.875% with 0 Points
• Jumbo 30 Year Fixed - 6.75% with 0 Points
• 15 Year Fixed - 6.5% with 0 Points
• FHA / VA 30 Year Fixed - 6.875% with 0 Points
  
  *Rates and fees accurate as of 7/18/08. Rates and fees subject to change without notice.  This is not an advertisement for the purposes of the Truth-in-Lending Act or Regulation-Z. Terms and conditions apply. For qualified borrowers. Not a promise to lend.

Please keep in mind that the quotes above are generalized. For specific quotes or to get quotes on a variety of other mortgage programs, please give me a call.

My Lock Advice:

If I were considering financing/refinancing a home, I would...

• Lock if my closing was taking place within 7 days
• Lock if my closing was taking place between 8 and 20 days
• Lock if my closing was taking place between 21 and 60 days
• Float if my closing was taking place over 60 days from now

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Interest rates are based on numerous economic, financial and credit based factors that adjust daily. In addition, lenders can vary on qualification criteria from program to program. If you like the rate today, the safe bet is to lock. Even if rates improve, they wouldn't improve enough in the short term to make you cry about it. But if you are an ardent market bear, and accept the risk of negative mortgage headlines, and believe the economy will just get more bad news next week, and you have the money to risk, you may benefit from floating. Just remember, it always seems more painful to have not locked when you should have as opposed to locking and then watching rates get a little better.

Looking Back

Interest rates shot up last week as the bond market suffered through a resurgence in the stock market and escalating fears of unchecked inflation. Bonds are seen as a safe haven in times of economic uncertainty, and investors often shift assets depending on where sentiment lies.  Bonds and mortgage interest rates tend to track in the same direction.

In other news, the U.S. economic downturn gained steam Tuesday with a report of the highest inflation since the early 1980s.

Looking Forward

The most important financial data this week will be Fed Beige Book report on Wednesday which gives us a glimpse of the economic condition of the economy.

Other economic releases this week of interest will be Initial Home Sales on Thursday, and New Home Sales on Friday.

How do New Home Sales Influence the Economy?

New home sales data is compiled from builders across the US and divided into four geographic regions: the Northeast, the South, the Midwest, and the West. Information on the average price of a home, the number of homes for sale, and the supply of unsold homes are also provided.

The data is an indicator because it shows any strengths or weaknesses in the housing sector.  More importantly, housing sector data is important because when consumer spending changes, it appears in this sector first.  Consequently, a chain reaction typically occurs.  A slowdown in new home sales tends to a slowdown in housing starts, which will continue to affect the economy possibly resulting in a recession.

HOPE NOW Alliance and NeighborWorks America are organizing a Foreclosure Prevention Workshop at Gillette Stadium in Foxboro, MA on Tuesday, August 12^th, from 1pm to 8pm. The event is being hosted by the Federal Reserve Bank of Boston and the New England Patriots Charitable Foundation.

Homeowners who are at risk of losing their homes are being given a chance to meet  with their lenders face-to-face at the Patriot's Stadium and try and work out a solution to avoid foreclosure. To be able to try and work out a solution to foreclosure, be sure to bring evidence of income, expenses, and debts as well as your mortgage documents.

The lenders who will be attending this event include the following:

• Bank of America
• Chase
• Citigroup
• Countrywide
• EMC
• GMAC Rescap
• Home Loan Services
• HSBC
• Indy Mac
• Litton
• National City
• Option One/ American Home Mortgage
• Saxon
• SunTrust
• Washington Mutual
• Wells Fargo

For more information about this event, call toll-free 1-800-882-1600 or go online at www.theinformedhomebuyer.org.

In addition, a number of banks are reaching out to New England homeowners who have been or may soon be affected by the recent mortgage crisis. The banks' initiative, called the Mortgage Relief Fund, want to make it easier for homeowners who are paying high rates - and those who face a reset of an adjustable-rate loan - to refinance into a more affordable mortgage, to avoid becoming delinquent, and to avoid foreclosure.

For more information about the Mortgage Relief Fund, go to www.mortgagerelieffund.com.

My Lock Advice for Today:

If I were considering financing/refinancing a home, I would...

• Lock if my closing was taking place within 7 days
• Lock if my closing was taking place within 8 and 20 days
• Lock if my closing was taking place between 21 and 60 days
• Float if my closing was taking place over 60 days from now

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Interest rates are based on numerous economic, financial and credit based factors that adjust daily. In addition, lenders can vary on qualification criteria from program to program. If you like the rate today, the safe bet is to lock. Even if rates improve, they wouldn't improve enough in the short term to make you cry about it. But if you are an ardent market bear, and accept the risk of negative mortgage headlines, and believe the economy will just get more bad news next week, and you have the money to risk, you may benefit from floating. Just remember, it always seems more painful to have not locked when you should have as opposed to locking and then watching rates get a little better.

My Lock Advice for Today:

If I were considering financing/refinancing a home, I would...

• Lock if my closing was taking place within 7 days
• Lock if my closing was taking place within 8 and 20 days
• Float if my closing was taking place between 21 and 60 days
• Float if my closing was taking place over 60 days from now

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Interest rates are based on numerous economic, financial and credit based factors that adjust daily. In addition, lenders can vary on qualification criteria from program to program. If you like the rate today, the safe bet is to lock. Even if rates improve, they wouldn't improve enough in the short term to make you cry about it. But if you are an ardent market bear, and accept the risk of negative mortgage headlines, and believe the economy will just get more bad news next week, and you have the money to risk, you may benefit from floating. Just remember, it always seems more painful to have not locked when you should have as opposed to locking and then watching rates get a little better.

My Lock Advice for Today:

If I were considering financing/refinancing a home, I would...

• Lock if my closing was taking place within 7 days
• Lock if my closing was taking place within 8 and 20 days
• Float if my closing was taking place between 21 and 60 days
• Float if my closing was taking place over 60 days from now

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Interest rates are based on numerous economic, financial and credit based factors that adjust daily. In addition, lenders can vary on qualification criteria from program to program. If you like the rate today, the safe bet is to lock. Even if rates improve, they wouldn't improve enough in the short term to make you cry about it. But if you are an ardent market bear, and accept the risk of negative mortgage headlines, and believe the economy will just get more bad news next week, and you have the money to risk, you may benefit from floating. Just remember, it always seems more painful to have not locked when you should have as opposed to locking and then watching rates get a little better.

If you're in foreclosure and if you have an FHA-insured loan, did you know that you can easily stop the foreclosure process? FHA has a loss mitigation option that allows a borrower, with help from a lender, to get an interest-free loan from HUD to bring their mortgage payments up to date.

FHA loans come with a mortgage insurance premium. As such, you can file a "partial claim" to have your mortgage insurance help you with a one-time payment to get your mortgage caught up - and avoid foreclosure. You will need to contact your lender to file a partial claim.

Working together with The Department of Housing and Urban Development (HUD), your lender will agree to help you with a one-time payment from the FHA Insurance Fund. It doesn't matter if you're in foreclosure or not. You may qualify if:

1. Your loan is at least 4 months but no more than 12 months delinquent
2. You are able to begin making full mortgage payments
3. You have resolved the hardship that caused you to fall behind
4. You have the long-term financial stability to support the mortgage debt or make the payment
5. You are not financially qualified to support monthly mortgage payments on a modified mortgage or on a refinanced mortgage in which the total arrearage is included
6. You do not have the ability to repay the past due amount through a special forbearance or modification
7. The property is your primary residence
8. The partial claim must fully reinstate the loan. The partial claim advance may include only principal, interest and escrow advances required to reinstate the loan. In no event may the total arrearage exceed the equivalent of 12 months PITI.
9. You will have to pay all other charges (late fees, legal fees, administrative fees, etc.)

If you have filed for Bankruptcy, you may still qualify for a partial claim. However, the Bankruptcy Court must give its approval.

You will be required to sign a promissory note with HUD and they will place a lien on your property. This HUD loan is interest-free and will bring your account up to date immediately, but it is due when you pay off the loan or when you sell or leave the property.

Here are the terms for the Partial Claim:

1. The note will be interest free.
2. You will NOT be required to make monthly or periodic payments
3. The note will be due when the Mortgage is paid off (or refinanced), or when you sell the property
4. There will be no pre-payment penalty
5. You can apply for a refund in the mortgage insurance premium when the note is paid in full
6. The note is payable to HUD
7. You can make partial payments, but they must be by cashiers check or certified funds 

Mortgage Commentary

The dollar weakened, fuel prices rose, and the Fed kept short-term rates low. These are the ingredients for inflation. In addition, economic trends, inflationary concerns and the housing market numbers all indicate higher mortgage rates.

The turmoil in the mortgage market - not quite eerily quiet in the past couple of weeks - came thundering back into public view last week as Fannie Mae and Freddie Mac found themselves increasingly battered by the mortgage, housing and investment markets.

Mortgage rates remained pretty calm throughout most of last the week. However, along with a fair rout in equities, there was a considerable sell-off in T-bonds on Friday (the proceeds of which seemed to land in oil and gold), so T-bond yields rose appreciably late in the week. That and the continued fear of inflation may add slight upward pressure to mortgage rates this week, but the tug of a declining economy remains strong.

This week brings us the release of six important economic reports for the bond market to digest. Several of these reports are considered to be of high importance, meaning we will likely see volatility in the financial markets and mortgage pricing over the next several days. There are also plenty of corporate earnings releases scheduled for the stock markets this week along with the minutes from the last FOMC meeting. Throw in a couple of days of Fed testimony and we have the makings for a very interesting week.

It will likely be an active week for mortgage rates with a fair amount of volatility, so please maintain contact with your mortgage professional if you're still floating an interest rate.

• If you have an adjustable rate or need to get cash out of your home, don't wait for rates to go up even more.
• If you have found the right home to buy, secure your financing today.

Interest rates are based on numerous economic, financial and credit based factors that adjust daily. In addition, lenders can vary on qualification criteria from program to program. If you like the rate today, the safe bet is to lock. Even if rates improve, they wouldn't improve enough in the short term to make you cry about it. But if you are an ardent market bear, and accept the risk of negative mortgage headlines, and believe the economy will just get more bad news next week, and you have the money to risk, you may benefit from floating. Just remember, it always seems more painful to have not locked when you should have as opposed to locking and then watching rates get a little better.

Search today's mortgage rates anonymously. And, as always, you can call me at (508) 471-4144 with any questions about mortgage rates and to discuss your best loan options.

My Lock Advice for Today:

If I were considering financing/refinancing a home, I would...

• Lock if my closing was taking place within 7 days
• Lock if my closing was taking place within 8 and 20 days
• Float if my closing was taking place between 21 and 60 days
• Float if my closing was taking place over 60 days from now

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Interest rates are based on numerous economic, financial and credit based factors that adjust daily. In addition, lenders can vary on qualification criteria from program to program. If you like the rate today, the safe bet is to lock. Even if rates improve, they wouldn't improve enough in the short term to make you cry about it. But if you are an ardent market bear, and accept the risk of negative mortgage headlines, and believe the economy will just get more bad news next week, and you have the money to risk, you may benefit from floating. Just remember, it always seems more painful to have not locked when you should have as opposed to locking and then watching rates get a little better.