THE BASIS POINT

Fed’s Credit Card Search Site, Rates Low But Refis Tough, Purchase Mortgage Apps Lowest Since 1997

Fed’s Consumer Credit Card Search Site
Looking for a credit card? Knock yourself out on this Federal Reserve website. In an intersting move by the Federal Reserve, they have placed 300 credit card compnay agreements (mostly companies with 10,000 or more open credit card accounts) online in a searchable database for public viewing. Can something for mortgages be far behind?

Rates Low But Refis Still Tough
Rates certainly continue to surprise folks who expected higher rates by this time in 2010. The 10-yr neared 3.10%, closed at the lowest yield in over a year and some were beginning to yap about the 10-yr down into the 2%’s. We have a different story today, as hedging mortgage pipelines continues to be difficult, as the 10-yr yield has shot back up into the 3.20%’s. Overall the news yesterday helped bonds: continued European fears, the Euro hitting an 8-year low versus the yen, Korean fears, the Case-Shiller index lower, Consumer Confidence slightly higher. We also had a $42 billion 2-yr auction, which is now under water. At one point the DOW was down over 300 points and the 10-yr was up a point. Mortgage prices did well, relative to Treasury prices, as servicers apparently have been buying pools. Large servicers and investors are, of course, worried about prepayment risk of recently originated loans.

Of course, one can argue that everyone who could possibly refinance and prepay their mortgage already has—meaning low rates don’t help homeowners underwater, in default, or headed for foreclosure (whether intentionally or not) because tight loan approval guidelines won’t allow for a refinance. Keep in mind that there is a large amount (in the trillions) of good quality mortgages at higher rates who may be interested in refinancing at no cost. Regardless, new origination being seen in MBS’s seems to be running at about $1.5 billion a day.

Purchase Loan Applications Lowest Since 1997
Today we have already seen the report on mortgage applications for last week. Apps were up over 11%, with refinancing (no surprise at these rates) up 17%, but purchase applications are at their lowest levels since 1997. Of total applications, refinancing accounted for over 72%! Later this morning we will have New Home Sales for April, expected to increase. We also have a $40 billion 5-yr auction, which typically goes pretty well. Durable Goods came out at +2.9%, with a back-month revision higher from -1.3% to unchanged. But ex-transportation the number was down, so cars and planes played a big role in this number. Stocks are pointing to a higher opening, the 10-yr is up to 3.21%, and down between .125-.250.

Less Loss For Toll Brothers
Toll Brothers, known as a builder in the luxury home market, reported that losses for the second quarter (through April) had narrowed. But still, homebuilder red ink flows: Toll Brothers lost $40 million in the quarter. Revenue fell 22% to $311.3 million from $398.3 million. Write-downs in the latest quarter were $42.3 million, a bit more than a third of the $119.6 million a year earlier.

Daily Humor
A Catholic priest, a doctor, a rich businessman and a mortgage banker were waiting one morning for a particularly slow group of golfers in front of them.

The mortgage banker fumed, “What’s with those jerks? We’re waiting fifteen minutes between shots!”

The doctor chimed in, “I don’t know, but I’ve never seen such poor golf!”

The rich businessman called out, “Move it, time is money!”

The Catholic priest said,”Here comes the greens keeper. Let’s have a word with him. Excuse me, sir! What’s wrong with that group ahead of us? They’re rather slow, aren’t they?”

The greens keeper replied, “Oh, yes. That’s a group of blind fire fighters. They lost their sight saving our clubhouse from a fire last year, so we always let them play for free anytime.”

The group fell silent for a moment.

The Catholic priest said, “That’s so sad. I think I will say a special prayer for them tonight.”
The doctor said, “Good idea. I’m going to contact my ophthalmologist colleague and see if there’s anything that he might be able to do for them.”

The rich businessman replied, “I think I’ll donate $50,000 to the fire fighters union in honor of these brave souls!”

The mortgage banker said, “Why the heck can’t they play at night?”

Comments [ 3 ]
  1. thanks for the tip on the gov't credit card site. I like that idea. could be good for mortgages too I think.

  2. Yes then mortgage people can look forward to receiving junk emails about “Don't Miss Out On This Hot New Fed Marketing Strategy To Win More Clients!!”

  3. Yes then mortgage people can look forward to receiving junk emails about “Don't Miss Out On This Hot New Fed Marketing Strategy To Win More Clients!!”

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