A rainy economy means amazing rates

On this much deserved long weekend, we at Patriot hope you enjoyed a safe and restful holiday. For me, the rain was a good thing, giving me further excuse (other than 38 weeks pregnant) to sit on my sofa watching Criminal Minds reruns, or to play super heroes with my son. His favorite phrase now is ‘ I know Mommy, you can’t sit on the floor, baby in your tummy’. So we play from my permanent spot on the couch! He does the moving around of the figurines, bolting around the living room catching the bad guys. It is so entertaining!

Lots of news this week, including rates down since Monday! Enjoy!

RATES: This week mortgage bonds had a party with all the sour news around the globe. With strikes in Greece and Spain, and concern over the European Bank’s Thursday deadline to repay the European Central Banks over 442 Euro ($539B USD), the stock market took a nosedive, and that was great for bonds! Remember the inverse relationship. Bad news in the economy, good news in the bond market, hence lower yields (rates). Enjoy it while it lasts. Or will it continue? I thought for sure rates would be almost 6.0% by now. If your buyers are sitting on the fence or unsure, NOW IS A GREAT TIME! Rates are about .50% lower than a month ago. A .50% reduction in rate on a $200,000 loan translates to $60/month! That is a facial in my playbook. I’ll take it.

JOBS REPORT – released this morning, the results were better than expected, but still bad. Translation: Economy still weak, many still unemployed, so stocks remain low. We need some good news people!

HOUSE REFORM BILL: Passed. A load of financial reform for banks, lenders, financial institutions. Loaded with compliance (translation: costs) which will increase the cost of doing business. But nowhere in the reform bill was anything that applies to the ratings institutions that rated all the mortgage bonds AAA to begin with. Isnt that what got us in this mess? Investors bought the mortgage backed securities, because the ratings agencies graded them as AAA. They relied on the information . How come they are not regulated? Hmmmm…………to view a summary of what’s in the bill go to http://money.cnn.com/2010/06/25/news/economy/whats_in_the_reform_bill/index.htm?postversion=2010063018

HOMEBUYER CREDIT EXTENSION: has passed both the Senate and the House, and just needs sign off from Obama. As of right now, I can find no research saying he has signed off. Expect after the holiday. It would extend the deadline (for those already under contract by April 30) to September 30.

FLOOD INSURANCE : As anticipated, the National Flood Insurance Program (NFIP) funding has once again been extended until September 30, 2010 in the latest extension granted by Congress until they can consider more meaningful changes to the Federal flood insurance program.