Good News and Bad News - The Fed, YSP, and Home Sales

By
Mortgage and Lending with CNN Mortgage

First the good news.  Home sales activity released today by the National Association of Realtors: Home owner Vacancy rate has dropped 2.5% (from 2.7% in 1st Qtr ‘09).  Existing home sales rose in June 3.6% over the previously month.  The median sales price increased in June compared to May to $181,800 in June, up from $174,700 in May.  Now if only the Banks and appraisers would admit it.   And, although the number of homes for sale has dropped, the number of properties in the "other" category (Banks holding into properties) has increased.  If the banks have all this foreclosure inventory why is it not on the MLS? 

Friday, July 24th, 2009.  MBS markets are somewhat flat this morning.  Next week's 2,5, and 7-yr Treasury note auctions next week may keep MBS quiet today.  Fed Chief Bernanke in the news today and speaking on regulatory reform and Yield Spread Premiums (YSP) are on the chopping block.  Some mortgage brokers have really abused YSP for personal gain.  If this goes through, the few brokers who earn modest incomes (using YSP to limit up front points and fees paid by the homeowner/homebuyer at closing) will now find even more barriers for those clients seeking entry into home ownership.

Interest Rates

Conforming Conventional 30Yr Fixed 5.5%

Conforming Conventional 15Yr Fixed 4.75%

Conforming Conventional 5/1 IO ARM 4.25%

FHA 30Yr Fixed 5.5%

* Above Conventional rate quotes are as of 7/24/09 on a Conventional $165,000 loan amount, primary residence at 80% loan to value, with a 720 FICO score. APR includes $1,200 in lender fees and 980 in title charges (title charges may vary). FHA Quote assumes a $125,000 loan amount and a 680 FICO score, and a 96.5% LTV. Documentation of income and assets required. No origination or discount points.

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Rainmaker
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Allen Tate - Concord, NC

Good post. Thanks for sharing. I hope you have a great weekend!

Jul 24, 2009 11:38 AM #1
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Julie Messina

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