SUPER-CONFORMING RATES ($417,001 to $625,500 cap* by county) 0 POINT:
30 Year: 4.0% (4.12% APR)
FHA 30 Year: 3.75% (3.87% APR)
5/1 ARM: 3.25% (3.37% APR)

JUMBO RATES ($625,501 to $2,00,000) 1 POINT:
30 Year: 4.25% (4.37% APR)
10/1 ARM: 3.5% (3.62% APR)
5/1 ARM: 2.625% (2.745% APR)

Better or worse rates apply to specific borrower and property profiles. Better or worse rates available using tax deductible points or zero-cost transactions. These rates assume full doc pricing on Single Family Home purchase loans for borrower with 740 FICO score or greater, at least 20% equity (unless FHA), and 6-12 months reserves left over after close (retirement assets counted at 60% of value for reserves). ARM rates adjust the first month after initial fixed period shown, and once per year thereafter until year 30. Adjusted rate calculated by adding 2.25% margin to 1yr LIBOR index at time of adjustment. At first adjustment LIBOR+margin cannot exceed start rate+5%, subsequent yearly adjustments can never be greater than 2% per year, total of all adjustments for 30yr life of loan can never exceed start rate+5%. Rates based on loan amount ranges shown and rates available at the time of production. Rates aren’t a loan commitment nor a loan guarantee, and are subject to change without notice.

*Conventional Super-Conforming cap = $625,500. FHA Super-Conforming cap = $729,750.

If you look at the most recent U.S. jobs and manufacturing data summarized below as well as better retail earnings this morning (WSJ, IBD), it’s a picture of modest improvement. Normally this would mean higher rates as investors shift out of safe bets into riskier assets. But the overhang of the Eurozone debt crisis proves to be too much.

It doesn’t help that Bernanke implied the U.S. could be Greece in his testimony this morning. Read the link for why it’s really not, but that doesn’t matter on short-term sentiment. The bond rally continues on this, and of course the week’s hot Eurozone topic: Greece, which is still trying to get private investors to agree on a debt deal.

The deal calls for Greek bond investors to exchange outstanding bonds for new ones with coupons as low as 3.6-3.75%, and take losses of about 70% in the process. If most private investors don’t agree, it could trigger credit default swaps (CDS) on these securities, leading a European bank liquidity issue, which is really a global issue.

That plus the fact that the deal may not save Greece is why investors are seeking refuge in MBS and Treasuries (which are yielding 1.84 right now, also staggeringly low).

And now for the stat/chart rundown…

Jobless Claims
-367,000 for week ended January 28, seasonally adjusted
-Down 12,000 from previous week’s revised 379,000 (was 377k)
-4-week moving average was 375,750, down 2,000
-The 4-week average translates into 1,637,000 Jobless Claims/month
-While this week’s data is modestly better, this is not an indication of a healthy jobs market. It is healthier that it was but still not well. Tomorrow’s BLS Employment Situation Report will give another look.

Challenger Job-Cut Report
-Announced layoffs for January were 53,486 up from previous month’s 41,785

ISM Manufacturing Index (January 2012)
-ISM Manufacturing Index 54.1. Previous was 53.9.
-50 is dividing line between expansion and contraction
-This is the 30th straight month of (albeit modest) expansion
-The data are consistent. The wholesale part of the economy seems unaware that consumer spending had flattened. Either Consumer Spending will increase or manufacturing will decrease. The last GDP report showed significant growth in inventories.

The point is that this is perilous for 1Q2012 GDP. If Consumer Spending is flat and Government Spending is down and the Investment part of GDPis down because inventories are too large then GDP will be flat or even negative.

Here’s a summary of all ISM Manufacturing trends:

Worker Productivity and Costs (4thQ2011)
-Nonfarm productivity – Quarter/Quarter change +0.7%
-Unit labor costs – Quarter/Quarter change (seasonally adjusted, annualized) – +1.2%
-Productivity growth slowed (it was +2.3% in the previous Q/Q comparison) while compensation rose 1.9% after falling 0.3% in 3rdQ2011.

ADP January 2010 Jobs Report
-ADP showed +170,000 new private jobs
-Previous was +325,000, Consensus was +172,000
-These are private sector jobs only: +170,000 private jobs is not an indication of economic growth and just barely keeps pace with population growth.

Mortgage Applications Week Ended January 27
-Purchase Index, Week/Week -1.7%
-Refinance Index, Week/Week -3.6%
-Composite Index, Week/Week -2.9%

- Purchase Index, 4-week Moving Average +4.11%
- Refinance Index, 4-week Moving Average +4.22%
- Composite Index, 4-week Moving Average -2.9%

-Full mortgage app report.

Construction Spending (December 2011)
-Construction Spending, Month/Month +1.5%
-Construction Spending, Year/Year +4.3%
-New single-family construction was 1.5%

by Julian Hebron & Dick Lepre

If this plan requires Congressional approval, it will probably have a very low likelihood of succeeding in 2012.

And investors wonder if this plan impacts mortgages securitized in the agency MBS market (FN/FH/GN MBS), mortgages securitized in the non-agency MBS market, or mortgages on bank balance sheets in unsecuritized form.

Changes to help underwater borrowers refinance that could be made without Congressional approval, however, such as further easing of recently revamped HARP refis, further streamlining, eliminating LLPA’s, or further reducing buyback risk were seen as having a better chance.

Not that what anyone says in the mortgage industry matters anymore in Washington, but the FHFA director is likely to argue against a mass refi program of agency mortgages considering that such a program could actually hurts the retained portfolios of the GSE’s by up to $30-$35 billion.

But what if the government cuts the GSE’s preferred dividend payment to make up for some of it? Still, existing investors won’t be in favor of it.

And what if, in some miracle, the government used some of the $25 billion-or-so in the proposed settlement between the bank and the state AG’s to fund a plan? Stay tuned – maybe the government will just use that money to help fund the temporary payroll tax cut extension a few more months.
___
Related:
-Analysts Think Obama’s Refi Plan Is Dead On Arrival: WSJ
-Obama’s State Of Union Housing Proposals
-DO I QUALIFY FOR A HARP UNDERWATER REFI?
-FHFA Head Says Banks Reducing Loan Balances Won’t Work (WSJ) (MortgageNewsDaily)

A memo written by BofA home loans sales executive Matt Vernon notes that:

While we regret the inconvenience this will cause to some of our customers in the short term, we are making the responsible choice that is in the best interest of our long-term capabilities to provide a predictable customer experience.

The memo was provided to National Mortgage News by a confidential source.

In spite of arguments that this is some of the cleanest product ever to be originated, and profit margins being solid for many in the business, BofA seems to be backing off a bit. They produced just over $22 billion in mortgages during 4Q2011, a 75% decline from 4Q2010.
___
Source:
Another Mortgage Shoe Drops At BofA – National Mortgage News
___
Related:
Mortgage Banker View: BofA Cuts Off Mortgage Bankers

SUPER-CONFORMING RATES ($417,001 to $625,500* cap by county) 0 POINT:
30 Year: 4.125% (4.245% APR)
FHA 30 Year: 3.75% (3.87% APR)
5/1 ARM: 3.25% (3.37% APR)

JUMBO RATES ($625,501 to $2,00,000) 1 POINT:
30 Year: 4.375% (4.495% APR)
10/1 ARM: 3.625% (3.745% APR)
5/1 ARM: 2.875% (2.995% APR)

Better or worse rates apply to specific borrower and property profiles. Better or worse rates available using tax deductible points or zero-cost transactions. These rates assume full doc pricing on Single Family Home purchase loans for borrower with 740 FICO score or greater, at least 20% equity (unless FHA), and 6-12 months reserves left over after close (retirement assets counted at 60% of value for reserves). ARM rates adjust the first month after initial fixed period shown, and once per year thereafter until year 30. Adjusted rate calculated by adding 2.25% margin to 1yr LIBOR index at time of adjustment. At first adjustment LIBOR+margin cannot exceed start rate+5%, subsequent yearly adjustments can never be greater than 2% per year, total of all adjustments for 30yr life of loan can never exceed start rate+5%. Rates based on loan amount ranges shown and rates available at the time of production. Rates aren’t a loan commitment nor a loan guarantee, and are subject to change without notice.

*Conventional Super-Conforming cap = $625,500. FHA Super-Conforming cap = $729,750.

SUPER-CONFORMING RATES ($417,001 to $625,500 cap* by county) 0 POINT:
30 Year: 4.25% (4.37% APR)
FHA 30 Year: 3.875% (3.995% APR)
5/1 ARM: 3.5% (3.67% APR)

JUMBO RATES ($625,501 to $2,00,000) 1 POINT:
30 Year: 4.5% (4.62% APR)
10/1 ARM: 3.625% (3.745% APR)
5/1 ARM: 2.875% (2.995% APR)

Better or worse rates apply to specific borrower and property profiles. Better or worse rates available using tax deductible points or zero-cost transactions. These rates assume full doc pricing on Single Family Home purchase loans for borrower with 740 FICO score or greater, at least 20% equity (unless FHA), and 6-12 months reserves left over after close (retirement assets counted at 60% of value for reserves). ARM rates adjust the first month after initial fixed period shown, and once per year thereafter until year 30. Adjusted rate calculated by adding 2.25% margin to 1yr LIBOR index at time of adjustment. At first adjustment LIBOR+margin cannot exceed start rate+5%, subsequent yearly adjustments can never be greater than 2% per year, total of all adjustments for 30yr life of loan can never exceed start rate+5%. Rates based on loan amount ranges shown and rates available at the time of production. Rates aren’t a loan commitment nor a loan guarantee, and are subject to change without notice.

*Conventional Super-Conforming cap = $625,500. FHA Super-Conforming cap = $729,750.

SUPER-CONFORMING RATES ($417,001 to $625,500 cap by county) 0 POINT:
30 Year: 4.25% (4.37% APR)
FHA 30 Year: 3.875% (3.995% APR)
5/1 ARM: 3.75% (3.87% APR)

JUMBO RATES ($625,501 to $2,00,000) 1 POINT:
30 Year: 4.5% (4.62% APR)
10/1 ARM: 3.625% (3.745% APR)
5/1 ARM: 2.875% (2.995% APR)

Better or worse rates apply to specific borrower and property profiles. Better or worse rates available using tax deductible points or zero-cost transactions. These rates assume full doc pricing on Single Family Home purchase loans for borrower with 740 FICO score or greater, at least 20% equity (unless FHA), and 6-12 months reserves left over after close (retirement assets counted at 60% of value for reserves). ARM rates adjust the first month after initial fixed period shown, and once per year thereafter until year 30. Adjusted rate calculated by adding 2.25% margin to 1yr LIBOR index at time of adjustment. At first adjustment LIBOR+margin cannot exceed start rate+5%, subsequent yearly adjustments can never be greater than 2% per year, total of all adjustments for 30yr life of loan can never exceed start rate+5%. Rates based on loan amount ranges shown and rates available at the time of production. Rates aren’t a loan commitment nor a loan guarantee, and are subject to change without notice.

SUPER-CONFORMING RATES ($417,001 to $625,500 cap by county) 0 POINT:
30 Year: 4.25% (4.37% APR)
FHA 30 Year: 3.875% (3.995% APR)
5/1 ARM: 3.75% (3.87% APR)

JUMBO RATES ($625,501 to $2,00,000) 1 POINT:
30 Year: 4.5% (4.62% APR)
10/1 ARM: 3.75% (3.87% APR)
5/1 ARM: 3.0% (3.12% APR)

Better or worse rates apply to specific borrower and property profiles. Better or worse rates available using tax deductible points or zero-cost transactions. These rates assume full doc pricing on Single Family Home purchase loans for borrower with 740 FICO score or greater, at least 20% equity (unless FHA), and 6-12 months reserves left over after close (retirement assets counted at 60% of value for reserves). ARM rates adjust the first month after initial fixed period shown, and once per year thereafter until year 30. Adjusted rate calculated by adding 2.25% margin to 1yr LIBOR index at time of adjustment. At first adjustment LIBOR+margin cannot exceed start rate+5%, subsequent yearly adjustments can never be greater than 2% per year, total of all adjustments for 30yr life of loan can never exceed start rate+5%. Rates based on loan amount ranges shown and rates available at the time of production. Rates aren’t a loan commitment nor a loan guarantee, and are subject to change without notice.

SUPER-CONFORMING RATES ($417,001 to $625,500 cap by county) 0 POINT:
30 Year: 4.125% (4.245% APR)
FHA 30 Year: 3.875% (3.995% APR)
5/1 ARM: 3.75% (3.87% APR)

JUMBO RATES ($625,501 to $2,00,000) 1 POINT:
30 Year: 4.5% (4.62% APR)
10/1 ARM: 3.75% (3.87% APR)
5/1 ARM: 3.0% (3.12% APR)

Better or worse rates apply to specific borrower and property profiles. Better or worse rates available using tax deductible points or zero-cost transactions. These rates assume full doc pricing on Single Family Home purchase loans for borrower with 740 FICO score or greater, at least 20% equity (unless FHA), and 6-12 months reserves left over after close (retirement assets counted at 60% of value for reserves). ARM rates adjust the first month after initial fixed period shown, and once per year thereafter until year 30. Adjusted rate calculated by adding 2.25% margin to 1yr LIBOR index at time of adjustment. At first adjustment LIBOR+margin cannot exceed start rate+5%, subsequent yearly adjustments can never be greater than 2% per year, total of all adjustments for 30yr life of loan can never exceed start rate+5%. Rates based on loan amount ranges shown and rates available at the time of production. Rates aren’t a loan commitment nor a loan guarantee, and are subject to change without notice.