Tuesday, July 15, 2008

Update of Mortgage Interest Rates

Another week! The fed made our job pretty interesting yesterday! To say the least rates have been pretty volatile the last couple of days, but it looks like they are staying pretty steady as of this morning, that could change so just give us a call!

Fixed Rates
30 Year: 6.125
15 Year: 5.875

Brad White
Northern Utah Mortgage
The Fed approved a plan Monday that would crack down on dubious lending practices. The Fed’s plan would bar lenders from making loans without proof of a borrower's income, require lenders to make sure risky borrowers set aside money to pay for taxes and insurance, restrict lenders from penalizing risky borrowers who pay loans off early (prepayment penalties are banned if the payment can change during the initial four years of the mortgage, or a penalty can't be imposed in the first two years of the mortgage), prohibit lenders from making a loan without considering a borrower's ability to repay a home loan from sources other than the home's value. Other practices also would be clamped down on. Lenders, for instance, have to credit a mortgage payment to the homeowner's account on the day it is received. And, brokers and others are forbidden from "coercing or encouraging" an appraiser to misrepresent the value of a home. Much will hinge on effective enforcement. The plan would apply to new loans made by thousands of lenders, including banks and brokers, not current loans. Those different lenders fall under a patchwork of regulators at the federal and state levels. So it will be up to each of these authorities to enforce the new provisions.
We had some important economic news out today. The Producer Price Index, expected to increase +1.3%, was +1.8%. The core PPI, useful for folks that don’t eat or drive, was expected +0.3% and came out at +.2% - slightly better. Producer Prices for the last year are +9.2%, the largest increase since 1981! June Retail Sales, expected +0.4% overall, were only +.1%, so analysts believe that the Fed stimulus checks didn’t have quite the impact previously thought. Auto sales were -3.3%, the biggest drop in over two years, and are down almost 10% versus a year ago.  The July Empire manufacturing index, expected +0.7 points, went from -4.9 from -8.7, better than consensus expected. The components generally back up the headline as orders and shipments both improved. Employment, however, deteriorated. Ahead we have May business inventories, which are expected to show another +0.5% increase.  Fed Chairman Ben Bernanke will testify before the Senate Banking Committee on monetary policy and the economy at 10AM EST

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