Financing Homes in Lake Tahoe and Truckee since 1992.

Lake Tahoe Mortgage Rate Trends- February 11, 2015

Wednesday’s bond market has opened flat for the most part with little so far to drive trading. The stock markets are mixed with the Dow down 52 points and the Nasdaq up 8 points. The bond market is currently up 2/32 (1.99%), but we may still see a slight increase in this morning’s rates due to weakness late yesterday.

There is no relevant economic data set for release today, but we still may see some movement in the markets sometime soon. This is due to afternoon events and news from Europe where banking leaders are meeting regarding the Greek bailout issue. The new controlling political party in Greece is demanding modifications to the previous bailout plan and forgiveness of debt. It appears the European Central Bank and involved lenders are not in agreement. Depending on what comes out of today’s meetings, we can expect a reaction in the global markets, including bonds and mortgage rates.

The first of this week’s two important Treasury auctions takes place today, followed by the other tomorrow. 10-year Treasury Notes will be sold today while 30-year Bonds go tomorrow. Today’s 10-year sale is the more important of the two as it will give us an indication for demand of mortgage-related securities. If the sales are met with a strong demand from investors, we should see the bond market move higher during afternoon trading today and/or tomorrow. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds would result in upward afternoon revisions to mortgage rates. Results will be posted at 1:00 PM ET, so any reaction will come during early afternoon trading.

Tomorrow also has a key piece of economic data that is considered highly important to the financial and mortgage markets. The Commerce Department will post January’s Retail Sales data at 8:30 AM ET tomorrow morning. This report is very important to the financial markets because it measures consumer spending. Since consumer spending makes up over two-thirds of the U.S. economy, any related data is watched quite closely. If the report reveals weaker than expected retail-level sales, the bond market should thrive and mortgage rates will fall since it would be a sign that the economy is not as strong as many had thought. However, a stronger reading than the 0.4% decline that is expected could lead to higher mortgage rates tomorrow.

Also being posted tomorrow is last week’s unemployment figures. They are expected to show that 285,000 new claims for unemployment benefits were filed last week, up from the previous week’s 278,000 initial claims. The larger the number of claims, the better the news it is for the bond market because rising claims hint at a weakening employment sector. However, it is worth noting that this is only a weekly snapshot so unless we see a wide variance from forecasts, it is common to see this report have a minimal impact on mortgage rates, especially when it comes with a key piece of data.

Loan Modifications and Buying A Home in Tahoe

Can You Get a Tahoe Mortgage After Having Your Mortgage Modified?

 I have recently had several clients who have been requesting a new Tahoe Mortgage to buy a home after having a loan modified. Although the loan modification itself does little if nothing to hurt your credit score, the loan modification is a huge issue when applying for a new loan.
Conforming loans which are guaranteed by either Fannie Mae or Freddie Mac consider a loan modification to be derogatory credit even if all payments were made as agreed.  Most lenders providing conforming loans will require that the borrower season the modification for 48 months prior to extending a new conforming loan.  If the modified loan was delinquent for 120 days or more, the lender may require a seven year or 84 month seasoning before providing a new conforming loan.  FHA loans have shorter seasoning requirements; in most cases 24-36 months.
Before you do a loan modification, make sure you speak with a credit specialist in order to understand the likely consequences of the loan modification.