Mortgage bond prices rallied Friday pushing mortgage interest rates lower. Bond friendly Core PCE inflation data came in lower than expected. The Fed's most recent estimates call for an increase in this figure by the end of the year. The fact that the data showed lower inflation helped mortgage bonds rally. Consumer confidence came in at a weaker than expected 46.6 mark. Analysts were looking for a reading of 48.7. The Treasury auctions were mixed. The 2 and 5 year note auctions received poor foreign demand while the 7 year auction showed strong foreign demand. The employment report will be the most important release this coming week. With so many data releases expect the market to be very volatile.
As you may be aware, the Mortgage Disclosure Improvement Act (MDIA) became effective July 30, 2009. Essentially, the Act further regulates fees that can be charged to a borrower along with some "waiting period" timelines associated with the GFE/TIL disclosures. Because NOVA Home Loans is the direct lender in nearly all of our transactions any changes made in the loan process come directly to us and can be made immediately and efficiently. Because of this, MDIA will have little affect on the closing times of NOVA funded loans. However, it appears that if you choose to send your loans to a pure broker, all changes must then be forwarded to their chosen lender which may cause delays to the closing deadlines.
Below are some of the important pieces of MDIA that I thought may interest you.
- The new MDIA rules applies to both purchase and refinance loans.
- A lender must provide a borrower with an "early" Good Faith Estimate / TIL within three business days of receiving the borrower's loan application.
- A lender cannot collect upfront fees from the borrower until the borrower has received the "early" disclosures in person or, if mailed, three business days after the early disclosures are mailed.
- A lender must wait seven business days after providing the early disclosures before the borrower can sign closing documents.
- If the final Annual Percentage Rate (APR) on the closing documents varies more than 0.125% (up or down) from the initial APR on the "early" disclosures, the lender must provide the borrower with a corrected disclosure and wait three business days before the borrower can sign the closing documents. Clarification - the borrower cannot sign closing documents until three business days after the borrower receives the corrected disclosure in person. If the corrected disclosure is mailed, the borrower is deemed to have received it three business days after it is placed in the mail.
For these rules, a "business day" is defined as all calendar days except Sundays and legal public holidays as specified.
NOVA's policy will be to provide the borrower with a "re-disclosed" GFE & TIL well in advance of the borrower signing in an effort to prevent delays in closing. Changes that occur at the closing table will need to be avoided at all costs. Early commincation of "accurate" fees and charges will be critical to insuring a smooth, on-time closing transaction. Please note: if you want to give a credit to the buyer or seller, you must do it a week before closing so we can prepare updated TIL/GFE's in order to be in compliance with MDIA.
Rates for July 31st, 2009. Rates Change Daily. Call for current pricing. #0902429
PROGRAM
30 Year Fixed Conventional 5.00%, 5.113%APR
30 Year Fixed Interest Only 5.75%, 5.863%APR
15 Year Fixed Conventional 4.375%, 4.448%APR
7/1 LIBOR ARM Conventional 4.25%, 4.363%APR
5/1 LIBOR ARM Conventional 3.75%, 3.863%APR
5/1 LIBOR ARM Interest Only 4.875%, 3.988%APR
30 Year FHA/VA 5.375 %, 5.627%APR
*30 Day Locks
JUMBO $417,001+
30 Year Fixed (to $600K) 5.75%, 5.851%APR
15 Year Fixed (to $600K) 5.625%, 5.726%APR
5/1 Treasury ARM 4.875%, 4.976%APR
7/1 Treasury ARM 5.125%, 5.226%APR
*30 Day Locks
ONE-TIME CONSTRUCTION
Conforming & Jumbo (to $8,000,000)
3/1 LIBOR ARM (Conforming) 6.125%, 6.507%APR
5/1 LIBOR ARM (Jumbo) 7.25%, 7.632%APR
*60 Day Locks
6,9,12 and 24 month construction phases available. Construction phase interest only rate = PRIME (5%) + up to 1.25%. Perm. rates guaranteed through construction.Prior to modification, a free one-time float down is available. (30 Year Amortization)
For Realtor purposes only; not for distribution to potential borrowers. Rates are calculated based on no discount points and one origination fee. Conforming rates based on loan amounts greater than $200,000, minimum FICO score 720.
