The Name of the Game

Nothing like starting the year off with a bang. The economic data releases are in full swing. This week, we have seen lots of data that once again that volatility is the name of the game. At the end of the day Wednesday, investors were ‘giddy’ with news of the 10 year treasury auction. The notes for sale were being gobbled up by investors (a good sign, and pushes the yield down). That means that investors are interested in buying our debt (whoever they may be: the Chinese, mutual fund managers, etc…..).

How could the investors wake up this morning, after yesterday’s good news, and now be on the fence again? Well, its because investors have the same temper tantrum level as my 5 year old. One minute things are great, and the next, he is wailing because I won’t let him watch TV, or have a chocolate or something ………… Yesterday Diego told me that I had no idea what I was talking about, and “You’re not inside of my brain mommy”. WHAT????????????????????

Back to real news, our economy continues to be on rocky waters, and will be for some time. Jobless Claims are ‘improving’ but is that just because more people have expired the EUC (Emergency Unemployment Compensation)? They don’t qualify anymore. And inflation is up (the PPI was up 1.1% this month). That is huge! There are only 2 ways to pay for the inflation (1) the economy has to absorb (eat) the cost- which has been happening for some time. And (2) the increased costs get passed onto the consumer.

Let’s dig further into option 2 (the costs getting passed onto the consumer), as it relates to mortgages. How do we think the cost of compliance (thanks Barney Frank) is going to get ‘absorbed’? Or the fact that Fannie and Freddie continue to lose MILLIONS each month! I can assure you with certainty that it is the consumer that is paying. They do it in the pricing. We have seen ‘small’ changes to our pricing, that is called risk based pricing. Not putting 25% down? The rate is .125% higher (that’s right, 25%, NOT 20%). There is no incentive for 20% anymore, there is a hit. Or credit score not 740? That is a .125% hit as well. Earlier in 2010, the best price was given at 720. These ‘hits’ to pricing are creeping into our rate sheets little by little. THAT IS HOW BIG BANKS WILL FUND COMPLIANCE AND LOSSES FROM FORECLOSURE. Who do we complain to? How do we change this? Contribute to your PAC. NAR is fighting for lender issues currently, because they realize the importance of the fluidity and availability of capital in order to save homeownership.

Have a FANTASTIC weekend. Call us if you need us, and remember……..we can close a conventional purchase (loans 417K or below) in under 21 days GUARANTEED.

Jennifer Hernandez

RATES as of January 14, 2011 (UNCHANGED FOR THE WEEK)
The following assumptions apply:
20% Down Payment (Conforming) / 25% Down Payment Jumbo (Lower down payments available – call for details)
1% Origination Fee
Escrows Required (if no escrow, higher fees may apply)
Purchase Transactions, Primary Residence (Refinances have different rates)
30 day closing
Credit Score 740 +
Debt to income ratio <=40%
Full Documentation of Income/Assets

Conforming ($200,000* - $417,000)
Jumbo ($417,001- $1,000,000*)
30 year (fixed) 4.750% APR 4.882%
30 year ( fixed ) 5.250% APR 5.368%
15 year (fixed) 4.125% APR 4.350%
15 year ( fixed ) 4.875% APR 5.072%
5/1 ARM 3.375% APR 3.434%
7/1 ARM 3.750% APR 3.623%
5/1 ARM 4.000% APR 3.642%
7/1 ARM 4.250% APR 3.847%
10/1 ARM 5.250% APR 4.645%
FHA/VA call for quote (max loan $270,000)




We do originate loans below $200,000. These amounts are chosen to show the most favorable rates.
For other product options or for loan amounts less than $200,000 or above $900,000 please call for quote.
Call for details!


If you know of someone who would appreciate my services, please contact me with their name and number and I will be happy to help them!


Jennifer Hernandez
Vice President/Mortgage Consultant
Patriot Bank Mortgage

Office: 713-337-8400
E-mail: jennifer@patriotbankusa.com
Blog: www.loanwithjennifer.blogspot.com