Posted by: cfigueira | April 1, 2011

TILA Compensation Rule

A stay on the TILA Compensation Rule has been ordered by the U.S. Court of Appeals with a hearing scheduled for April 5, 2011.  East Coast Mortgage Corp. and all it’s lender / broker outlets have rolled back operational implementation of the rule until further notice.  Finally, a bit of good news for all the honest, hard working loan officers.

Posted by: cfigueira | March 31, 2011

April 18: FHA Increases MIP

Reminder: the annual Mortgage Insurance Premium for FHA forward mortgages will increase effective for FHA case numbers assigned on or after April 18, 2011. FHA will increase annual premiums collected on a monthly basis for traditional purchase and refinance products. There are no changes to the Upfront Mortgage Insurance Premium.

The rate will go up by .25% more, to a total of 1.15%.  This will equate to a MI payment of approximately $191.66 on a $200,000 mortgage.  The consumer gets socked with $41 more in cost per month, from which they see no additional benefit.

Posted by: cfigueira | December 7, 2010

Key Economic News

Consumer credit and confidence….

15:00: Consumer credit for Oct…back to a declining trend? Credit increased in September for only the third time in two years (the other two times were in January 2009 and January 2010) due to an increase in student loans held by the federal government. Expectations for October are for a resumption of the declining trend.
Median forecast (of 33): -$1bn, ranging from -$5bn to +$3bn; last +$2.1bn.

17:00: ABC consumer comfort index…It’s been bouncing between -47 and -45 lately, last at -45.

Posted by: cfigueira | December 2, 2010

Key Economic News

After an early morning reading on on-line advertising, we have claims, pending home sales, and the Fed’s balance sheet.

The Monster index of on-line job advertising fell two points in November, but on a seasonally adjusted basis it was unchanged. On a year-to-year basis, the increase in this measure of on-line advertising remains up about 13%, a smaller gain than in the early summer (up about 20% in June and July). Yesterday, the Conference Board reported a 47,000 (about 1%, month-on-month) increase in its count of on-line advertised vacancies.

Reversing most of last week’s improvement, but trend still down.
Claims reverse most of prior week’s decline, but four-week average continues to fall.

Key Numbers:
Initial claims up 26k to 4236k in week ended Nov 27 vs.. median forecast 424k.
Continuing claims up 53k to 4.27 million in week ended Nov 20 vs.. median forecast 4.2 million.

Main Points:
1. Initial claims rose 26,000 in the week of Thanksgiving. Coupled with a 3,000 upward revision to the prior week, this amounts to a reversal of more than 80% of the prior week’s decline. Still, the four-week average of claims continues to come down, to 431,000, as this calculation sheds the last observation above 450,000. So the report is consistent with some improvement in the labor market while also suggesting that the tantalizing drop reported a week ago reflected the difficulty of nailing down seasonal patterns on a weekly basis. As we move into the holiday season, it will be important to focus on the trends over several weeks.

2. Continuing claims likewise took back a significant part-in this case just over half-of the 107,000 decline reported for the preceding week. The number of individuals receiving extended/emergency benefits rose by about 235,000, reversing most (about 90%) of the prior week’s 262,000 decline.

10:00: Pending home sales index for Oct…another decline? This index lost ground in September following the recovery from its post tax credit slump. Estimates are biased toward another decline in October.
Median forecast (of 40): -1%, ranging from -4.8% to +3.0%; last -1.8%.

16:30: Federal Reserve balance sheet…Last week’s report showed the first effects of the large-scale asset purchases (LSAPs). Expect more of the same for the next seven months.

Posted by: cfigueira | December 1, 2010

Key Economic News

A ton of data today, covering the labor market, conditions in manufacturing and construction, auto sales, and productivity. We also hear from Vice Chairman Yellen, two other members of the FOMC (Gov. Tarullo testifying on mortgage servicing at 10:00; Dallas Fed President Fisher speaking on the economy at 13:00), and the beige book.

The mortgage Bankers Association’s index of mortgage applications tumbled 16.5%, though all of this wa due to a sharp drop in applications for refinancing. The purchase loan index eked out a 1.1% gain on top of the 14.4% surge reported last week…

Private Hiring Firms Up; Productivity also Up on Revision
ADP report stronger than expected in November with significant upward revisions to October. Results suggest either a bit of upside risk to our +125k payroll estimate or, alternatively, an offset in state and local layoffs. Productivity firmer on revision in Q3, as widely expected after the GDP revision, with unit labor costs a bit less weak on trend.

Key Numbers:
ADP employment report predicts private payrolls +93k in Nov vs.. median forecast (of ADP) +70k.
Nonfarm productivity +2.3% in Q3 (mom, +2.5% yoy) vs.. median forecast +2.3%.
Unit labor costs -0.1% in  Q3 (mom, -1.1% yoy) vs.. median forecast -0.2%.

9:10 Federal Reserve Vice Chairman Janet Yellen speaks on “Fiscal Responsibility and Global Rebalancing”…to the committee for Economic Development in New York. This could pick up on some of the themes discussed by Chairman Bernanke in his recent speech at the European Central Bank.

10:00: ISM manufacturing index for Nov…steady and sturdy? With most regional surveys showing robust growth in manufacturing, we think the ISM manufacturing index will hold onto last month’s gain.
Median forecast (of 82): 56.5, ranging from 54 to 58.1, last 56.9.

10:00: Construction outlays for Oct…flat or down? We  expect an increase in construction outlays but do not hold this view with strong conviction.
Median forecast (of 53): -0.3%, ranging from -1.0% to +1.2%; last +0.5%.

14:00: Federal Reserve beige book…Most of the news since the last report has been at or above expectations, so this one should have a more upbeat tone. The Cleveland Fed is due for the summary.

Late morning/early afternoon: Lightweight vehicle sales for Nov…slowly grinding higher? Anecdotel reports from the manufacturers suggest little change from the October levels.
For total sales: median forecast (of 43): 12.1mm, ranging from 11.7mm to 12.5mm; last 12.25mm.
For domestic: median forecast (of 20): 9.0mm, ranging from 8.8mm to 9.2mm; last 9.27mm.

Posted by: cfigueira | November 29, 2010

Economic News

One lone indicator today…

10:30: Dallas Fed manufacturing index for Nov…will it hold? After three months in seriously negative territory, this index recovered to a slightly positive reading in October. The detailed indexes had not been quite as bad as the headline during the third quarter, they were more mixed in October-up for production (to +6.9 from +4.0) but down a bit for new orders (to -2.5 from 0) and more than a bit for number of employees (to -4.1 form +1.8). The three economists who forecast it expect little change, on balance, in the headline reading. This report follows three other Fed surveys, which have given sharply divergent messages (Richmond and Philadelphia both up; New York down sharply).
Median forecast (of 3): +3, ranging from 0 to +7; last +2.6.

Posted by: cfigueira | November 18, 2010

Mortgage News

10:00: Philadelphia Fed business index for Nov…will it follow the Empire index? Earlier this week, the Empire index surprised sharply to the downside. with a big slump in the orders index. As a result, we suspect this report will likewise show a setback in manufacturing activity in the Philadelphia Federal Reserve District.
Median forecast (of 60): +5, ranging from -5 to +12; last +1.0.

10:00: Index of leading indicators for Oct…a solid gain. The main drivers this month should be the yield curve (+25bp), stock prices (+16bp and real M2 (+13bp) with most other components either trivially positive or flat. The only decline comes from supplier deliveries (-8bp).
Median forecast (of 58): +0.5%, ranging from -0.5% to flat; last +0.4%.

10:00: Mortgage delinquencies and foreclosures for Q3…Last quarter the delinquency rate fell 21bp points from a record 10.06% to 9.85%, and the percentage of loans in foreclosure proceedings dipped 6bp, also from a record to 4.75%.

10:00: Federal Reserve Governor Elizabeth Duke testifies on “Foreclosure Documentation Issues”…to a subcommittee of the House Financial Services Committee.

16:30: Federal Reserve balance sheet…This report should start to show the balance sheet effects of the large-scale asset purchases (LSAPs), as it incorporates the first three operations under the new program. The total sales amounted to roughly $20bn, though some of this would include the reinvestment of repayments of principal on holdings of MBS and agency securities.

Posted by: cfigueira | November 10, 2010

Mortgage Industry News

Better trade, Better claims, Higher import prices
Initial claims reverse the previous week’s increase while continuing claims trend lower and claims for extended benefits fall. Four-week average of initial claims now at lowest level since the week before the Lehman filing. Trade balance improves, adding to other (inventory) indications of a modest upward revision to third-quarter growth. Import prices surge, reflecting higher crude oil and food prices.

Key Numbers:
Initial claims fall by 24k to 435k in the week ended Nov 6 vs.. median forecast 450k.
Continuing claims -86k to 4.301 million in week ended Oct 30 vs.. median forecast 4.305 million.
Trade balance -$44bn in Sept vs.. median forecast -$45bn.
Import prices +0.9% in Oct (mom, +3.6% yoyo) vs.. median forecast +1.2%.

Main Points:
Initial claims fall by 24k to 435k in the week ended Nov 6 and thus revert back to their level two weeks before. The four-week average of initial claims is now at its lowest level since September 13, 2008, an interesting symbolic benchmark as this was the week prior to the Lehman bankruptcy filing. Continuing claims declined by 86k to 4.3 million in the week ended Oct 30, but from a level that was revised up by 47k. Extended benefits-which are not seasonally adjusted-fall by almost 300k in the week ended Oct 23.
2. The US trade deficit narrowed in September, adding to other information suggesting that third-quarter growth was firmer than originally reported. In it preliminary estimate of that growth, the Commerce Department had assumed essentially no change in the balance on goods. The improvement came largely from 1% drop I imports; exports rose 0.3% on the month. By itself, this report would add about 1/4 point to the third-quarter growth rate, pushing our guesstimate of this revision close to 2 1/2% (vs.. a preliminary figure of 2.0%) with data on retail sales and inventories yet to come.
3. Rising crude oil prices accounted for most of the 0.9% increase in US import prices reported for October. However, prices of other imports also rose 0.4% on the month, largely in foods and beverages, as the weakening dollar appears to have filtered into prices of these inbound goods as well.

14:00: The US budget balance for Oct…off to a running start. The CBO estimates that the US Treasury started the new fiscal year with a $140bn deficit. The apparent improvement from October 2009 is due to a calendar-related shift in outlays.
Median forecast (of 35): -$140bn, ranging from -$130bn to -$164.9bn; last (Oct 2009): -$176.4bn.

Posted by: cfigueira | November 4, 2010

Mortgage News:

Key Economic News:

Reports today on Monster index, initial claims, productivity and cost.

The Monster index of on-line job advertising fell two points in October. This was also a two-point loss after seasonal adjustments. Although the index is still about 13% above its year-earlier level, since June it has dropped 5% in seasonally adjusted terms and 31/2% in unadjusted terms.

Claims disappoint; Productivity better; Reducing Oct payrolls to +25k; Private still at +75k
Initial claims reverse the previous week’s decline while continuing claims keep trending lower. Claims for extended benefits rise sharply. Revising total nonfarm payrolls to +25k from +50k, private stays at +75k. Productivity firmer than expected as increases in hours worked are smaller implied by monthly data.

Key Numbers:
Initial claims up 20k to 457k in week ended Oct 30 vs. median forecast 442k.
Continuing claims down 42k to 4.34 mm in week ended Oct 23 vs. median forecast 4.378mm.
Nonfarm productivity +1.9% in Q3 (qoq, annualized, +2.5% yoy) vs. median forecast +1.0%.
Unit labor cost -0.1% in Q3 (mom, -1.9% yoy) vs. median forecast +0.6%.

Main Points:
1. Following last week’s surprise decline, initial claims increase by 20k to 457k in the week ended Oct30. (Initial claims in the prior week were revised up by 3k). Continuing claims declined by 42k to 4.34mm in the week ended Oct 23, but from an upward revised level. (Continuing claims in the previous week were revised up by 26k). Extended benefits-which are not seasonally adjusted-rise by 357k in the week ended Oct 16.
2. With all the data now in hand, we are reducing slightly our call on total nonfarm payrolls in October to +25k from +50k. Our estimate of the private-sector change remains at +75k. Most of the 50k difference is due to an expected additional loss of state and local jobs.
3. Productivity was firmer than expected in Q3 as hours worked rose less than indicated by the monthly data. The firm year-to-year trend, at 2.5%, illustrates why job growth is so sluggish in an economy that has grown only slightly more over the past year. Meanwhile, unit labor costs edged down in Q3 as total compensation was about in line with the 3% annualized growth rate in nonfarm output reported for Q3. Once upon a time, flat to falling unit labor costs were regarded as a good thing…

16:30: Federal Reserve balance sheet…Yesterday the FOMC told us the balance sheet, currently just under $2.3 trillion, is heading to about $2.9 trillion by mid-2011. The increase should start in the second half of November.


With the ECB keeping rates at a record low and not following the Fed with further easing, has caused the dollar to slide, and Oil increase to over $86 dollars per barrel. And with today’s news coming out mainly weaker than expected, we should see the market rally today.

Posted by: cfigueira | November 3, 2010

Mortgage Industry News

:00: Quarterly refunding announcement…will they announce more TIPS auctions? We expect a package of $31bn in 3-year notes, $24bn in 10-year notes, and $16bn in 30-year bonds to raise $55bn in net cash. This represents no change in the 10s and 30s from what was auctioned back in August and a $3bn reduction in the 3-year note from that time. The statement will also address what changes, if any, are to be made in the auction schedule for TIPS; if there are any, we suspect they would go to a full monthly calendar with two 10-year notes, one 5-year note, and one 30-year bond, each being reopened twice during the year. But we are not highly confident of this.

10:00: ISM nonmfg index for Oct…will it also surprise to the upside? This index has shown more slowing in growth than its manufacturing cousin, which surprised significantly to the upside on Monday. The employment index is helpful in predicting nonfarm payrolls; in September it was 50.2.
Median forecast (of 76): 53.5, ranging from 52 to 55.2; last 53.2.

10:00: Factory orders for Sept…a modest increase. As  it usually the case, we expect this report to mimic – in subdued fashion – the patterns drop already reported for durable goods bookings. For August, this means an increase in the headline, though one dominated by bookings for civilian aircraft. Data on inventories will be important as well, to see how they stack up against the assumption of a 0.7% increase built into the preliminary GDP report for the third quarter.
Median forecast (of 68): +1.6%, ranging from +0.3% to +2.4%; last -0.5%.

Late morning/early afternoon: Lightweight vehicle sales for Oct…slowly grinding higher? Anecdotal reports from the manufacturers suggest modest gains.
For total sales: median forecast (of 41): 11.8mm, ranging from 11.5mm to 12.1mm; last 11.73mm.
For domestic only: Median forecast (of 18): 8.9mm, ranging from 8.7mm to 9.1mm; last 8.82mm.

14:15 FOMC statement….This is one of the most previewed statements we can remember. The centerpiece will be an announcement of about $500bn in purchases of longer-term Treasury securities over roughly the next six months or an equivalent program expressed at a rate of about $100bn per month, with a clear indication in either case that more will be coming if conditions warrant. This is in addition to the reinvestment program for repayments of agency and MBS principal, which will continue to be directed to the Treasury market. The purchases are apt to tilt ward somewhat longer durations than have been done so far, though information on any such detail may come through a separate New York Fed communication.

We also would not be surprised to see the committee alter the “extended period” language in an effort to push expectations of rate increases out even farther. In the paragraphs describing recent economic and inflation developments, only a couple of tweaks appears likely – to make it clear that inflation is more than “somewhat” below the “mandate-consistent” range and to recognize that growth has not slowed further since the last FOMC meeting. President Hoenig is apt to remain the lone dissenter among the 11 members who can cast a vote at this meeting.

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