Mortgage News

When a Borrower applies for a Mortgage for a purchase or refinance the Credit Bureau’s Experian, Equifax and Transunion sell these leads that contain the customers name, contact information and other data within 24 hours of the application. Clients can get over 50 phone calls a day.

We in the Lending Industry cannot stop this from happening but the borrower can stop these Trigger Leads from being generated.

Our mortgage applications are Soft Pull only until we verify the client has opted out or direct them to opt out.

Click link below to opt out of all Bureau’s at once.

https://www.optoutprescreen.com/

“A trigger lead is a prescreened offer or firm offer of credit or insurance that occurs when a lender pays a credit reporting agency to generate a report on a list of consumers. The most common trigger event is applying for a mortgage. When a lender pulls a borrower’s credit report, the action triggers an inquiry, which is then sold to other lenders as a lead. These leads contain the consumer’s name, contact information, and other data. The leads are created and sold within 24 hours of a loan application.”

Please share and call/email with any questions.

The Conference Board released their Leading Economic Index, which decreased in July by 0.6%. We expected -0.3. The index has been negative 27 of the 28 months.

The LEI has been trending down but the long-term growth has become less negative. Meaning the economy is decelerating but at a slower pace “soft landing”.

With Mortgage Rates decreasing and likely to drop further, this trend could encourage more sellers to reenter the market. Lower rates can lead to increased buyer activity. Sellers are anticipating stronger demand and favorable conditions for selling.

Many of us are sitting on the sidelines, waiting to get in the game. Well, we’re already halfway through the first quarter, so it’s time to put on your helmet and get on the field.

Every year, the central banks from around the world meet at the Jackson Hole Symposium in Jackson Hole Wyoming. This is an important meeting the Feds have used to signal policy changes and long-term outlook for the Fed Fund Rate.

The meeting starts Thursday, with Fed Chair Powell speaking on Friday.

Everything has changed in the economy except the Fed. Back then the Fed Funds rate was between 5.25% and 5.50% as it still is today. Lets look at the numbers.

2023

• Core PCE: 4.3% – Personal Consumption Expenditures
• Core CPI: 4.7% – Consumer Price Index
• Unemployment Rate: 3.5%

2024

• Core PCE: 2.6% – Personal Consumption Expenditures
• Core CPI: 3.2% – Consumer Price Index
• Unemployment Rate: 4.3%

The August Jobs Report will be released September 5th with the anticipated unemployment rate at or above 4.3%. The Feds will be pressured to cut 50pp but if the unemployment rate drops, they may only cut 25pp.

Thinking about Refinancing, what if we not only drop your rate but drop it down a point lower for the first year on us… Lets talk

With that said, lets talk refinance and the raw numbers.

The example below is every point drop for a $100k loan start rate 7.50% Principle and Interest payment is $699 per month 30y term.

• @6.50% $632
• @5.50% $567
• @4.50% $506

If you have a $500k loan 30y term monthly savings.

• @7.50% $3,496
• @6.50% $3,160 -Savings $336 annual savings $ 4,032
• @5.50% $2,838 -Savings $658 annual savings $ 7,896
• @4.50% $2,533 -Savings $963 annual savings $11,556

We do a soft credit pull and can get you pre-qualified now before the rates drop.

YourApplicationOnline.com click to apply for your custom graphical analysis.

The 10-year Mortgage Bond is holding below 4%. This is a positive sign for Mortgage rates moving forward.

Fed Governor Michelle Bowman seems unaware of the shift in unemployment, which has risen from 3.4% in April 2023 to 4.3% today. To put this into context, every time unemployment has increased by that much since 1948, a recession has followed.

“the unemployment rate, while higher, is still historically low at 4.3%” – Michelle Bowman – voting member

Another aspect of the unemployment rate is how it’s collected and the participation level. The Business Survey, which provides the headline jobs figure, has seen a significant decline in participation, dropping from the usual 60% to 43%. Meanwhile, the Household Survey, which determines the unemployment rate, has also declined but still remains at 70%.

She goes on to talk about PCE and Core PCE still being above the target 2.0%.

This week, we’ll kick off with inflation data. The Producer Price Index (PPI), which measures wholesale inflation, is expected to rise by just 0.1% in July.

The year-over-year headline figure is projected to decrease from 2.6% to 2.3%. This is likely to be bond-friendly, indicating rate-friendly news.

My point is, when the wind is blowing, don’t just watch the trees swaying back and forth—look closer to see what’s actually hitting the trees.

The weight of everything overwhelms its importance. What is the right choice? What if we are wrong? There is also a dilution of impact—if every action is critical, it becomes difficult to prioritize.

We need freedom or liberation from overthinking.

So, what am I getting at? Simply put, the Federal Reserve has overthought everything and needs to take a deep breath and step back. The Data is pointing to a slowing economy and lower inflation.

• Tom Barkin Richmond Fed President -Stock Market Selloff this week, Not something monumental. We can Steadily cut rates.
• Jeff Schmid Kansas City Fed President – Gives more confidence inflation headed to 2% goal.
• Austan Goolsbee Chicago Fed President – Central Bank’s policy is too tight.

Below graph shows the rate improvement to the right. Up is lower rates. I am encouraging clients to get pre-approved for a refinance or purchase. we do soft credit pulls so no harm looking under the hood.

The stock market has somewhat rebounded from the selloff on Monday.

The 10-year and 2-year bond yields reversed the inverted curve this week, meaning the 10-year yield is now higher than the 2-year yield.

Here are two links to the same video I put together yesterday, on YouTube and TikTok.

@homeloandad

Get readymortgage homeloan rentals

♬ original sound – jackkammer1 – jackkammer1

Sixteen of the nineteen members did not foresee the unemployment rate rising above 4.1% in 2024. We are now at 4.3%. Over the last two months, I have repeatedly emphasized the importance of understanding the real unemployment numbers and questioning the accuracy of the data.

I am genuinely surprised by the Fed’s initial Summary of Economic Projections.

The Federal Reserve has access to more detailed information than we do and is specifically qualified to interpret that data. It baffles me how they missed this when many of us were loudly warning anyone who would listen.

Here is the bottom line: the 10-year bond yield is back above the 2-year bond yield, as logic would dictate. Longer hold periods mean higher yields.

Rates have improved their gains from last week but remain somewhat volatile as the stock market reacts to the sell-off caused by the jobs report news.

Mortgage rates continue to improve as real economic and job market data emerge.

Today, we’re seeing one of the biggest rate drops in six months. The graph below shows today’s movement, with green/up indicating lower rates.

the Bureau of Labor Statistics – BLS reported only 114,000 jobs created in July. Well below the 185,000 estimates. We also had 29,000 negative revisions to the previous two months.

BLS also relies on the faulty Birth/Death model which is notoriously inaccurate.

Truflation Inflation Data looks at 18M data points opposed to the 80k used by CPI and PCE inflation reports. Truflation is only showing year over year inflation at 1.5% vs 3% in CPI and 2.5% in PCE.

This week, I’ve outlined detailed reasons and strong indications that mortgage rates are likely to drop. It’s not smoke and mirrors.

When choosing your lender, ask them where interest rates come from and what they foresee for the future of rates.

Our team knows our stuff inside and out. When you’re ready, come on over and let’s talk.

www.YourApplicationOnline.com

There is a spread between mortgage rates and the 10-year yields that is worth exploring. Currently, the spread is 260 basis points (bps), which is wide from a historical perspective.

This indicates that those holding these mortgages will likely refinance sooner rather than later. This is caused by the servicing premium associated with these loans. Lenders bake in that cost to protect against an early refinance.

As rates start to drop, so does the yield spread.

Currently, the 10-year yield is under 4% and likely to drop below 3.80%. When the 10-year yield falls to 3.80%, the spread narrows to 230 basis points. At that point, the 30-year fixed mortgage rates could fall to 6.125%. If the 10-year yield drops below 3.65%, those mortgage rates could hit 6% or lower.

The Federal Reserve met yesterday and sounded more dovish than before but still maintained the 2% inflation target. The Fed left rates unchanged unanimously. Powell’s comments below:

• We gained confidence on inflation, just want to see more good data
• We can afford to start dialing back restriction with current PCE at 2.5% and core at 2.6%
• The time is approaching, if we get the data we think, September cut is on the table.

Initial Jobless claims rose 14,000 to 249,000. This is the highest level in a year.