Mortgage rates move higher
The recent election result weighed heavily on the mortgage interest rate market. Surging stock prices and plummeting bond prices dominated headlines. While Mortgage rates benefit when mortgage bonds move higher, the reverse is true when those prices move lower.
Mortgage rates have continued to move higher in the post-election period, as investors worldwide are looking for increases in growth and inflation, with the 30-year mortgage rate reaching its highest weekly average since the beginning of 2016,
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) increased to its highest level since January 2016, 4.16 percent, with points at 0.39 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans.
The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) increased to its highest level since January 2016, 4.04 percent, with points at 0.37 from 0.26 (including the origination fee) for 80 percent LTV loans. Only time will tell if the recent increases in mortgage interest rates will continue.
However, there is a consensus that rates will correct lower in mid December, but record low rates are not expected to be revisited. With that said, rates are still historically low.
Only those mortgage professionals with Bond Charting skills and access to the Bond Traders, will be able to time the market for their clients in order to get a very low rate, as these rates move up and down all day.
Refinancing or buying a home doesn’t have to be Stressful
With rates so low many have refinanced at least once, even twice. But there are still many who have not, due to either not wanting to deal with the stress of gathering documents and not sure of qualifying for a loan. At North Atlantic you receive attentive personalized service
(see what our clients say).
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The average time to close a loan is about 30 days. We monitor real time interest rates, which is why our clients are able to access some of the lowest rates available. We understand the guidelines and know what different lenders can do, which incresaes your opportunites for a fast easy loan with a great rate.
Don’t put it off any longer and start saving with a lower mortgage payment. There are no salesman to speak with only qualified mortgage experts.
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877-794-5363
Email: JohnSauro@Gmail.com
Future Treasury Secretary pick will have impact on markets
If President-elect Donald Trump selects House Financial Services Committee Chairman Jeb Hensarling as his Treasury secretary, it would be a clear sign that he intends to embrace a more traditional GOP agenda when it comes to financial services issues.
The Texas Republican is a fierce opponent of the Dodd-Frank Act, and a conservative ideologue who has preferred to stick to his principles rather than compromise to move forward on legislation.
In virtually every banking issue of note during his 13 years in Congress, Hensarling has pushed toward the right. That includes housing finance reform, where the protégé of former Sen. Phil Gramm, R-Texas, has sought to eliminate Fannie Mae and Freddie Mac and dramatically curb any government role in the mortgage market.
He also has particular enmity toward the Dodd-Frank Act, which he has blamed for slow economic growth, the Consumer Financial Protection Bureau, which he views as an unaccountable agency run amok and the Financial Stability Oversight Council, which he wants to abolish.
“In my world [FSOC] would play probably no role,” Hensarling said in a speech last week. “I do not believe that FSOC is adding value to our economy.”
Ironically, if Hensarling is confirmed as Treasury secretary, he would be nominally in charge of FSOC, acting as its chairman. He would also be a key player in setting much of the Trump administration’s economic policy.
Among his likely first objectives is the passage of his own bill, the Choice Act, which dismantles much of Dodd-Frank, curbs the powers of federal banking regulators, and offers institutions a chance to ease regulations in return for holding higher capital.
His well-documented record on financial issues make him a known entity to the financial industry, which respects Hensarling’s knowledge and intellect, but views him as inflexible on certain issues, including housing finance reform.
Whether he would be confirmed is an open question. On the one hand, Senate Democrats may see Hensarling as a potential ally of big banks because of his deregulatory policies and his repeated attempts to roll back Dodd-Frank.
“If Donald Trump puts up a Treasury secretary nominee who will empower Wall Street… I will vigorously oppose that person,” said Sen. Jeff Merkley, D-Ore., in an email last week before the announcement was made, alluding to a number of deregulatory bills the House Financial Services Committee chairman has passed out of the committee.
Yet Hensarling may be a preferable alternative to many others who have reportedly been weighed by Trump and his advisers in the past couple weeks, including multiple alumni of Goldman Sachs or even Jamie Dimon, the head of JPMorgan Chase.
Hensarling is “a member of the Congress, and he’s got an impeccable reputation as a decent man and has a lot of experience in the area,” Sen. Orrin Hatch, R-Utah, told the Dallas Morning News last week.
Hatch chairs the Senate Finance Committee, which is responsible for confirming the Treasury secretary.
Despite his reputation as an ideologue, observers said Hensarling also knows when to bend to get things accomplished.
“He has passed over forty different bipartisan bills that have passed the committee on a bipartisan basis,” said J.W. Verret, a law professor at George Mason University and a former House Financial Services Committee staffer.
Unlike most Treasury secretaries, Hensarling would come into the job with a clearly stated agenda. Last week, he talked about pushing forward on the Choice Act, reform of the Federal Reserve system and even housing finance reform.
One item that would be unlikely to make his list is restoration of the Glass-Steagall Act, a Depression-era law that divided commercial and investment banking and was repealed by the Gramm-Leach-Bliley Act of 1999. Though Trump’s campaign embraced a return to Glass-Steagall this summer, the idea has not surfaced since — and Hensarling would almost certainly be opposed to any such move.
“As a protégé of Sen. Gramm, he stands in the way of serious consideration of Glass-Steagall restoration,” said Bartlett Naylor, a financial policy advocate at the watchdog group, Public Citizen, wrote in an email.
If chosen and confirmed to Treasury, it is not immediately clear who would succeed Hensarling as Financial Services chair. Verret said no matter who it is, the work Hensarling has done on the committee could be picked up by another Republican.
“The Choice Act has been developed in a way that it has been informed by all the Republican members of the committee,” said Verret of the Choice Act. “If he leaves and someone replaces him, I think the next chairman can take up the flag and charge up the Hill very quickly, very easily.”
Under Hensarling, the international Basel accords are likely to be further fractured. The U.S. and EU are already at loggerheads on how far to go in embracing the international committee’s capital and liquidity standards, with the U.S. taking a harder line.
But Trump and Hensarling are skeptical of such agreements.
“As regulations are given from Basel into the U.S. financial regulators, we now have kind of an agreement… where the U.S. is absorbing regulatory guidance, regulatory suggestions from the international community,” said David Malpass, a senior economic adviser to Trump, in a recent speech. “There is a giant problem of the international financial regulatory system being run in ways that work very well for New York and Washington. These are gigantic boom cities… and benefiting from an international financial system which is leaving millions and millions of people out so part of the goal is to create a financial system that works for the average person rather than the financial elite that involved in those markets.”
Hensarling’s distaste for the Basel accords manifested itself in the Choice Act which provided banks an “off-ramp” to Basel capital and liquidity requirements if they met a simpler leverage ratio.
Hensarling is also close to Vice President-elect Mike Pence, whom he served with in the House and succeeded as chair of the House Republican Conference. Hensarling has also embraced Trump’s populist message to “Drain the Swamp” in D.C.
Some consumer groups, however, see that as disingenuous.
“Hensarling is a gator-in-chief in D.C.” said Mary Bottari, deputy director at the watchdog group Center for Media and Democracy, while pointing out that hedge funds, commercial banks and insurance firms have been some of his largest contributors.
Sources: MBA, NMN, CNBC, Bloomberg