Copyright (c) 2009 Christian Amstadter
Leaders of the G-20 summit in PA began there 2 day summit. The big indications that were things are still not strong enough to end the governments huge injections into the economy.Speaking of this fragile economy, the Fed's yesterday announcement was nearly identical to previous meetings
"...economic activity has picked up following its severe downturn...conditions in financial markets have improved further, and activity in the housing sector has increased...household spending seems to be stabilizing, but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit. Businesses are still cutting back on fixed investment and staffing, though at a slower pace; they continue to make progress in bringing inventory stocks into better alignment with sales. Despite the economic happenings is likely to remain relatively weak for some time, the Committee anticipates that actions regarding policy to stabilize the institutions and markets, fiscal and monetary stimulus, and forces in the market will support a strenghtening of economic growth and a steady return to larger levels os utilization in a context of stability regarding price...inflation will remain stagnent for awhile."
An important item to note is that "the Federal Reserve will continue to employ a wide range of tools to promote economic recovery and to preserve price stability." This includes keeping overnight rates near 0% for an extended period, and purchasing a total of $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt. "The Committee will gradually slow the pace of these purchases in order to promote a smooth transition in markets and anticipates that they will be executed by the end of the first quarter of 2010. The Federal Reserve, as announced before, purchases of 300 billion of Treasury Securities will be finished no later than Oct. 2009."
In recent weeks, the Fed has been buying mortgage-backed securities (remember, NOT whole loan deals backed by private-label or jumbo production) at a steady pace of $25 billion per week. This many slow, but only marginally so, in the immediate future.
No one told this to the buyers of the Treasury's 5-yr note. The results of the 5-year note auction were not pretty, but not terrible, coming in at 2.47% versus the existing 5-yr at 2.44%. But the bid to cover seemed to be in line with other auctions from before, and bidders indirectly took down .forty five percent of the auction, that which compares to fifty percent for the 5 years priors note auctions. As of this morning wee have had jobless claims and should see existing home sales at 8am. We also have a $29 billion 7-Year Note auction. Claims for jobless benefits fell by 21,000 last week to 530,000 - better (for the employment picture) than expected. The four-week moving average of new claims dipped to 553,500, the lowest since late January. Following the jobless claims posts the fresh five year is at two.40%, the 10-yr is at 3.forty percent, and thirty year mortgage prices (securities) are higher (better).
Regarding the new TILA requirements, Wells Fargo correspondent channel made clients aware that they "tweaked" their view on the timing of the initial TIL and disclosure. Wells has to decided to expand the options to accomodate different deliver methods allowing shorter post time if documented as follows: Fax: Initial and re-disclosed TILs delivered to the borrower(s) by fax will be considered "received" by the borrower(s) on the date they sign and date the TIL disclosure. Other methods of documenting receipt, such as time/date stamps in the fax header, or fax confirmation sheets, are not sufficient. Overnight delivery: Initial and re-disclosed TILs shipped overnight to the borrower(s), will be considered "received" by the borrower(s) on the date they sign and date the TIL disclosure. Other methods of documenting receipt, such as a signature on an overnight courier receipt, are not sufficient. E-mail/E-Sign: Because the Truth-in-Lending Act requires that delivery of disclosures electronically be done in compliance with the federal E-SIGN Act, initial and re-disclosed TILs may only be delivered to the borrower(s) electronically by Sellers who are approved by Wells Fargo for E-Disclosure, and who deliver the documents through their approved E-Sign Technology software." The subject tends to be very sticky and Wells clients should look to the bulletin for more specifics.
CitiMortgage came out with their Reg. Z notice and "higher-priced mortgage loan" note. "Each loan that you sell to CitiMortgage comes with your representation and warranty as to compliance with these provisions and any other federal, state or local law or regulation governing the origination of consumer mortgages." Citi goes on to mention HPML ineligible products, including FHA Fixed Rate and ARM loans, VA ARM loans, VA IRRRL, conventional ARM loans with an initial fixed rate period of less than 7 years, partial term buy downs, and loans with a DTI greater than 45%, or as limited by the process or program. Citi also has new fields for their web registration screen, so check those out.
With regards to of Citigroup, Citi, according to a article in the WSJ, plans to "cut back its U.S. locations to six large metro areas, and also plans to limit its client lending business in the US primarily to Jumbo Mortgages and credit Cards, catering to the more afluent consumers." The article stated that the institution would" put more emphasis on Washington, New York, Chicago, Los Angeles and San Francisco, but would pair its business in Pennsylvania, Boston and TX."
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The Mortgage and Real Estate world are affected many different areas. With changes taking place daily, it became important for me to help educate the public on daily events that ultimately could affect them. In addition to acting as a consumer advocate, Christian Amstadter successfully closes hundreds of loans of all types. For your FREE state of the art mortgage calulators and No Closing Cost Loans visit>>>
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