MMG Weekly 1/25/16

Guy R. Vetrano NMLS# 183357
Mortgage Loan Originator
Bay Equity Home Loans
Phone: 480.500.6000 x 6017
Mobile: 602-692-7196
E-fax: 602.532.7304
gvetrano@bayeq.com
www.bayequityhomeloans.com/guy-vetrano

In This Issue  

Last Week in Review: Oil prices leave Stocks in a slippery mess.

Forecast for the Week: Will a data-rich week paint a rosy picture of the economy?

View: Don’t fall victim to these recent scams on small businesses.


Last Week in Review  

“I’ve got the crude oil blues.” Jerry Reed. Oil prices tanked, hitting a 13-year low at around $27 a barrel. Markets took notice.

The Dow posted its lowest close since August 25, reinforcing that January offered an incredibly rocky start for Stocks in 2016.

This latest sharp decline is fueled by more than oil and recognizes continued economic woes in China, weak U.S. manufacturing data stemming from the strong dollar and tame inflation. While some traction in Stocks was gained by week’s end, the seesaw trading pattern signaled extreme volatility.

So why is this important to homebuyers and homeowners who are considering a refinance?

When Stocks plunge, Mortgage Backed Securities and other Bonds usually improve. Because home loan rates are directly tied to mortgage Bonds, home loan rates can improve in the process. And right now, home loan rates continue to hover near all-time lows.

In housing news, December Existing Home Sales surged nearly 15 percent from November, the largest monthly jump in history. However, the big gains could be due to closings that were delayed until December because of new TRID or “Know Before You Owe” rules. While December Housing Starts declined slightly after big gains in November, the Commerce Department reported that this was the ninth straight month that Housing Starts were above 1 million units, the longest stretch since 2007. For 2015, Housing Starts were up nearly 11 percent.

If you or someone you know has any questions about the housing market, current rates or home loan products, please don’t hesitate to contact me.


Forecast for the Week  

The week is fully loaded with economic data on housing, inflation, consumer attitudes and more. Plus, we’ll get the Fed’s take on the state of the economy.
  • Housing data this week includes the S&P/Case-Shiller Home Price Index on Tuesday, followed by New Home Sales on Wednesday and Pending Home Sales on Thursday.
  • Consumer Confidence will be released on Tuesday, with the Consumer Sentiment Index hitting on Friday.
  • The FOMC Monetary Policy Statement release will wrap up this month’s Fed meeting on Wednesday.
  • Weekly Initial Jobless Claims and Durable Goods Orders will be delivered on Thursday.
  • The closely watched Gross Domestic Product data for 4th quarter of 2015 will be released Friday along with the Employment Cost Index and the Chicago PMI manufacturing index.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.

When you see these Bond prices moving higher, it means home loan rates are improving. When Bond prices are moving lower, home loan rates are getting worse.

To go one step further, a red “candle” means that MBS worsened during the day, while a green “candle” means MBS improved during the day. Depending on how dramatic the changes are on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, mortgage Bonds have drifted lower after their recent surge.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Jan 22, 2016)

Japanese Candlestick Chart


The Mortgage Market Guide View…  

Scams That Target Small Business

The Federal Trade Commission (FTC) recently updated its list of scams commonly targeting small businesses, places of worship and not-for-profit groups. Be on the lookout for the following scams:

The Directory Listing Scam: Perpetrators call to confirm contact information for a “free” listing. The person who answers the call may be coerced or inadvertently talked into agreeing to advertise in a nonexistent directory for which the company will be invoiced, often for hundreds of dollars. If you realize it’s a scam and refuse to pay, threats ensue. Avoid this scam by training employees to forward sales or confirmation calls to a designated person or ask your own questions to confirm what the directory is, who placed the initial listing and how you can get a hard copy of a contract before confirming anything.

The Supply Swindle: This scam targets small businesses and non-profits that may not have a process for ordering office supplies. When supplies show up out of the blue, they are often paid for without question because it’s assumed someone must have authorized the order. There may even be a call claiming to verify an existing order, which the scammer records and edits to blackmail the business into payment. Avoid this scam by refusing unsolicited orders, having a clear system for procuring supplies and dealing directly with a local office supply store.

The URL Hustle: Scammers claim your Web address is about to expire, emphasizing that time is of the essence. The scammer hopes you’ll be too busy to investigate the invoice, or simply pay now and ask questions later. Avoid this scam by knowing where your URL is located (for example, GoDaddy, HostGator or Google Domains) and manage it yourself, which takes just a few minutes each year.

Learn more about the FTC’s updated scam list, and even more ways to protect your business. If you believe you may be the victim of a similar scam, don’t pay; contact the FTC to file a complaint.

Please feel free to pass these helpful tips along to your team, clients and colleagues.

Source: Federal Trade Commission

Economic Calendar for the Week of January 25 – January 29
Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Tue. January 26
09:00
S&P/Case-Shiller Home Price Index
Nov
NA
5.5%
Moderate
Tue. January 26
10:00
Consumer Confidence
Jan
NA
96.5
Moderate
Wed. January 27
10:00
New Home Sales
Dec
NA
490K
Moderate
Wed. January 27
02:00
FOMC Meeting
Jan
NA
0.5%
HIGH
Thu. January 28
08:30
Jobless Claims (Initial)
1/23
NA
NA
Moderate
Thu. January 28
08:30
Durable Goods Orders
Dec
NA
0.0%
Moderate
Thu. January 28
10:00
Pending Home Sales
Dec
NA
-0.8%
Moderate
Fri. January 29
08:30
Gross Domestic Product (GDP)
Q4
NA
2.0%
Moderate
Fri. January 29
08:30
GDP Chain Deflator
Q4
NA
1.3%
Moderate
Fri. January 29
08:30
Employment Cost Index (ECI)
Q4
NA
0.6%
HIGH
Fri. January 29
09:45
Chicago PMI
Jan
NA
42.9
HIGH
Fri. January 29
10:00
Consumer Sentiment Index (UoM)
Jan
NA
92.6
Moderate

The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial services and other professionals only and is not intended for consumer distribution. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is without errors.
As your mortgage professional, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.
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