May 8th, 2011

Weekly Recap (05/02/11-05/07/11)




Mortgage rates and auto insurance…there’s a connection?

Ironically, yes. The connection lies in something called loan-level pricing adjustments (LLPAs). Just as car insurers make the riskier drivers pay more, for about four years now Fannie Mae and Freddie Mac have used the same risk-prevention technique with mortgage borrowers.

Loan officer and contributing writer Dan Green explains the relationship between car insurance customers and mortgage borrowers like this


At QE2’s end, will mortgage rates decline even more?

As they have likely planned all along, the Fed has decided to let its program of purchasing $600 billion of Treasuries run its course. Quantitative Easing II, or QE2 as the program was dubbed, will come to a close sometime by the end of June. To the extent that economic activity was boosted by the program, we could very well see a falloff in growth of a like amount. The markets’ discounting of this future growth may be at the heart of the recent decline in mortgage rates and market interest rates.

The popular belief is that the Federal Reserve started their program to spur economic growth. However, we have been of the mind since late last year that QE2 was more intended to act as a sponge, keeping interest rates from rising too much, rather than trying to influence them downward…


Tornado victims to get mortgage relief

The news from Alabama, Mississippi and other states hit by the April tornadoes is hardly good. As this is written, more than 300 people have died and property damages will total billions of dollars. Utilities are out and may well be out for weeks in the worst-hit areas, meaning that it will take a substantial amount of time to recover.

During events such as these, most mortgage lenders and servicers extend as much help as possible to victims in order to re-establish local communities.


Both HUD and Freddie Mac have issued press releases outlining the types of mortgage relief that will be made available to those affected by the tornados…


New homebuyer and seller page live on

The latest addition to comes in the form of a new Web page dedicated specifically to homebuyers and sellers. The new page has several different things to offer buyers and sellers: a slideshow, a suite of videos, the latest mortgage news, articles, and more.

Are you ready to buy a home?


Chances are your home purchase will be the largest transaction you embark on over the course of your lifetime. That in itself is reason enough to make sure you’re not only prepared but well-educated when it comes time to buying your home. Shopping for your mortgage is at least as important as shopping for your home, because the right home loan can save you tens of thousands of dollars. Especially for first-time homebuyers, the more you understand about your mortgage and the homebuying process, the better off you’ll be and the more money you’ll save…


Did Osama bin Laden influence mortgage rates or home prices?

The instant reaction to the death of Osama bin Laden was as it should be: oil prices dropped, stock futures rose and decent people celebrated. But these were temporary blips on the economic scene, events which will quickly fade in terms of financial impact.

Does bin Laden’s death affect mortgage rates?


If the question is whether bin Laden had any material impact on mortgage rates or U.S. home prices, the answer is plainly no.

However, the same cannot be said for another radical player on the international scene, Libya’s Colonel Muammar Gaddafi.


Mortgage rates continue to fall with future conditions still unclear

Overall, mortgage rates dipped again last week as the future direction of inflation and our economic recovery remain unclear. Last Wednesday, the fed concluded a two-day meeting in which Federal Reserve Chairman Ben Bernanke held an unprecedented press conference immediately following the meeting.

As we anticipated, the chairman revealed little new information about how present and future conditions will influence the mortgage market.

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About the HSH Blog's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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