Monday's bond market has opened relatively flat with no relevant economic news scheduled for release today. The stock markets are kicking the week off in positive territory with the Dow up 70 points and the Nasdaq up 14 points. The bond market is nearly unchanged from Thursday's close.

This week brings us the release of only two economic reports for the bond market to digest. It also is the beginning of corporate earnings season. Those quarterly earnings reports can lead to significant volatility in the stock markets, which could influence bond trading and mortgage rates.

The first piece of economic news that may affect mortgage rates is Thursday's weekly unemployment figures from the Labor Department. Analysts will be paying a little more attention to this week's release than usual because last week's report showed that claims had crossed above 400,000 the previous week. This is an important benchmark that will be watched closely. Last week's numbers didn't get much attention because they were posted at the same time as June's monthly Employment report. But with little data scheduled for release this week, I believe more focus will be made on Thursday's report.

Also worth mentioning are a couple of public speeches by Fed members including Fed Chairman Bernanke and a 10-year Treasury auction of inflation protected notes. The speeches will be watched closely for any possible hint of the Fed's next move. The Treasury auction likely will not have an impact on rates, but could influence bond trading slightly if it is met with a strong or weak demand from investors. In a very light week of economic news such as this week is, events like these sometimes have a greater impact on the markets than if they took place during a busy week of news.

Overall, I am e xpecting to see a fairly calm week in mortgage rates. Friday will be the most important day with two economic reports scheduled for release. If the corporate earnings reports that are scheduled for this week are a disappointment, we could see stocks move lower and investors seek safe-haven in bonds. This would likely help push bond prices higher and mortgage rates lower for the week.

If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 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.

In today's news, consumer confidence is higher (no idea were that information came from) which totally baffles me. New home sales were up 530k units from June higher by market predications of 503k. Durable goods are up. The dollar is improving and oil is down today.

The biggest news is the Housing and Economic Act which is going to change the landscape of business for a lot of us. Check out  my blog from Thursday July 24th for more infomation.

Locking in an interest rate is my recommendation for the week.

The House and Senate have reached agreement on the omnibus Housing bill this week. The House yesterday passed H.R. Bill 3221 also known as the Housing and Economic Recovery Act and it is completely expected the Senate will do the same very soon. President Bush is expected to sign as soon as it hits his desk early next week.

Here is what we are expecting to see:

* Seller participation in downpayment assistance loans is being terminated. Must have obtained credit approval prior to October 1^st.

* Risk-based pricing moratorium is effective October 1^st.

* FHA Downpayment Requirments going up to 3.5%

* FHA Rescue (Foreclosure relief) this is basically a modification of what is currently in place but it adds to the mix allowing a conventional borrower to refinance into a FHA as long as the lien holders accept a 85% LTV payoff.

* GSE Reform which will increase loan limits for all governmental and conventional mortgages.

* Tax provisions (Maximum tax credit was lowered to $7,500 for first-time homebuyers.)

* Secure and Fair Enforcement for Mortgage Licensing Act of 2008 or “S.A.F.E. Mortgage Licensing Act of 2008

All of this will be effective on October 1, 2008 so this is our last chance to do any type of down payment assistance and start looking more closely to our local Housing Authority Programs that will survive and fit with in the new guidelines.

 

 

 

    Thursday's bond market has opened down slightly after this morning's Employment report failed to deliver any significant surprises. The stock markets are reacting favorably with the Dow up 90 points and the Nasdaq gaining 6 points. The bond market is currently down 5/32, which will likely keep this morning's mortgage rates at yesterday's afternoon levels.

The Labor Department gave us today's only relevant economic news, saying that the unemployment rate remained at 5.5% last month when it was expected to slip to 5.4%. The report showed that 62,000 jobs were lost during the month, which nearly matched forecasts of 60,000. The report also revised May's job loss from 49,000 to 62,000, meaning that there was little difference between May's employment situation and June's. This lack of ?further deterioration? is being taken as good news for stocks and helped prevent bonds from moving higher this morning.

Also worth noting was the Labor Department's w eekly release of unemployment claim figures. They said this morning in a separate release that 404,000 new claims for benefits were filed last week. This was the first time that claims crossed the important benchmark of 400,000 since March. Claims exceeding 400,000 is believed to be a recessionary sign and indicates that the employment sector is weakening. However, this news is being overshadowed by the much more important monthly report that was released today rather than its typical Friday posting day.

Keep in mind that the bond market will close at 2:00 PM today and all markets will be closed tomorrow in observance of the Independence Day holiday. All markets will reopen Monday morning.

Next week is pretty light in terms of economic releases, especially compared to this week's data. There are only a couple of reports scheduled that are even relevant to bonds and mortgage rates, but none are considered to be of high-importance. Look for more det ails on next week's events in Sunday's weekly preview.

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... 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.