This week brings us the release of only three pieces of economic data that are likely to affect mortgage rates. However, the biggest event of the week will be the Federal Open Market Committee (FOMC) meeting Tuesday. We may see some pressure in bonds tomorrow as investors prepare for the meeting, but most traders will likely make their moves post-meeting Tuesday.
The first important release is June's Personal Income and Outlays data tomorrow morning. The Income & Spending report helps us measure consumer ability to spend and current spending habits. If it shows sizable increases, bond selling could lead to higher mortgage rates. Current forecasts are calling for a decline of 0.1% in income and an increase of 0.5% in spending.
801-649-5883
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Marina Vialtsina
Showing posts with label decline. Show all posts
Showing posts with label decline. Show all posts
Monday, August 4, 2008
Friday, April 25, 2008
Loan Application
According to Real Estate Purchase Contract, one of the buyer's duties is to apply for a loan before loan application deadline:
What does it mean to apply for loan: following events should occur before the application deadline:
1. the application should be completed, signed and delivered to the leander
2. all loan application fees, if they apply, should be paid
3. Buyer should diligently work to obtain the Loan and provide any additional information which can be required.
Procedure if Loan Application is denied:
There are several scenarios, all of them depend of the calendar, in other words, did it happen before or after the loan denial deadline? /em>
Buyer receives written notice from the Lender that the Lender does not approve the loan ("A Notice of Loan Denial"), first of all, the Buyer should no later than 3 calendar days thereafter, provide a copy to the Seller.
Buyer or Seller may, within 3 calendar days after Seller's receipt of such notice, cancel this contract by providing written notice to the other party. It is the only clear reason for the Seller to cancel the agreement. There are other possible situations, but it is the only obvious one.
In the event of cancellation, what happens with deposit (Earnest Money)?
1. if the notice of loan denial was received by the Buyer no later than the loan denial deadlines referenced in deadline section, the deposit shall be returned to the Buyer. Please pay attention, if you are a seller, if the notice was received the the BUYER..., not seller...
2. If the notice was received after that date, the deposit shall be released to the seller, and seller agrees to accept it as seller's exlusive remedy, deposit as liquidated damages. Please pay attention, if you are a seller, if buyer last minutes decides to cancel the agreement, no matter what true reason is, if the buyer indicates that loan is denied (he may know people in loan indusry to ask him to write the loan denial notice), you will have a right only to keep a deposit because it is your exlusive remedy, in other words, you would not be able to sue.
3. The failure to cancel shall have no effect on thte Financing Condition set in previous section.
Tomorrow, I will review in more details what is DATE PLUS THREE DAYS WARNING NOTICE?
What does it mean to apply for loan: following events should occur before the application deadline:
1. the application should be completed, signed and delivered to the leander
2. all loan application fees, if they apply, should be paid
3. Buyer should diligently work to obtain the Loan and provide any additional information which can be required.
Procedure if Loan Application is denied:
There are several scenarios, all of them depend of the calendar, in other words, did it happen before or after the loan denial deadline? /em>
Buyer receives written notice from the Lender that the Lender does not approve the loan ("A Notice of Loan Denial"), first of all, the Buyer should no later than 3 calendar days thereafter, provide a copy to the Seller.
Buyer or Seller may, within 3 calendar days after Seller's receipt of such notice, cancel this contract by providing written notice to the other party. It is the only clear reason for the Seller to cancel the agreement. There are other possible situations, but it is the only obvious one.
In the event of cancellation, what happens with deposit (Earnest Money)?
1. if the notice of loan denial was received by the Buyer no later than the loan denial deadlines referenced in deadline section, the deposit shall be returned to the Buyer. Please pay attention, if you are a seller, if the notice was received the the BUYER..., not seller...
2. If the notice was received after that date, the deposit shall be released to the seller, and seller agrees to accept it as seller's exlusive remedy, deposit as liquidated damages. Please pay attention, if you are a seller, if buyer last minutes decides to cancel the agreement, no matter what true reason is, if the buyer indicates that loan is denied (he may know people in loan indusry to ask him to write the loan denial notice), you will have a right only to keep a deposit because it is your exlusive remedy, in other words, you would not be able to sue.
3. The failure to cancel shall have no effect on thte Financing Condition set in previous section.
Tomorrow, I will review in more details what is DATE PLUS THREE DAYS WARNING NOTICE?
Wednesday, March 12, 2008
A "Short Take" on "Short Sales"
When real estate values decline, a number of homeowners find that their mortgage is greater than the value of the property and the owner is said to be fianancially "upside down". If the property is sold at a loss, the owner is still responsible for repyaing the entire mortgage. Sometime owners do not have enough cash to re-pay the loan and so they try to work out a deal with the lender to pay less than is owed, thus a "short sale"
If you have questions regarding this form of sale, please give me a call,
Marina at 801-649-5883
If you have questions regarding this form of sale, please give me a call,
Marina at 801-649-5883
Monday, October 1, 2007
Three monthly economic reports
from 9/30/07
This week brings us the release of only three monthly economic reports for the bond market to digest. The first report of the week comes late tomorrow morning when the Institute for Supply Management (ISM) will post their manufacturing index for September. This index gives us an indication of manufacturer sentiment. Analysts are expecting a small decline from the 52.9 reading last month to 52.5 this month. The 50.0 benchmark is extremely important because below that level means more surveyed executives felt business worsened than those who said it had improved. This data is important not only because it measures manufacturer sentiment, but it is very recent data. Some economic releases track data that are 30-60 days old, but the ISM index is only a few weeks old. If we get a smaller than expected reading, I expect to see the bond market rally and mortgage rates fall further tomorrow morning.
The next release is Thursday when the Commerce Department will post August's Factory Orders data. This manufacturing sector report is similar to last week's Durable Goods Orders release, but includes orders for non-durable goods. It can usually impact the financial markets enough to change mortgage rates if it varies from forecasts by a wide margin. Current forecasts are calling for a decline in new orders of approximately 2.5%. An unexpected rise could drive mortgage rates higher, while a weaker than expected reading should push them lower Thursday.
This week brings us the release of only three monthly economic reports for the bond market to digest. The first report of the week comes late tomorrow morning when the Institute for Supply Management (ISM) will post their manufacturing index for September. This index gives us an indication of manufacturer sentiment. Analysts are expecting a small decline from the 52.9 reading last month to 52.5 this month. The 50.0 benchmark is extremely important because below that level means more surveyed executives felt business worsened than those who said it had improved. This data is important not only because it measures manufacturer sentiment, but it is very recent data. Some economic releases track data that are 30-60 days old, but the ISM index is only a few weeks old. If we get a smaller than expected reading, I expect to see the bond market rally and mortgage rates fall further tomorrow morning.
The next release is Thursday when the Commerce Department will post August's Factory Orders data. This manufacturing sector report is similar to last week's Durable Goods Orders release, but includes orders for non-durable goods. It can usually impact the financial markets enough to change mortgage rates if it varies from forecasts by a wide margin. Current forecasts are calling for a decline in new orders of approximately 2.5%. An unexpected rise could drive mortgage rates higher, while a weaker than expected reading should push them lower Thursday.
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