EXPECT A WILD WEEK WITH INTEREST RATE FLUCTUATIONS: There are a lot of events going on in the world (Japan and Libya) that are going to affect interest rates this week. Remember when the stock market goes down, interest rates usually follow. Here is a good article going over some of the the events that will move markets this week: http://www.msnbc.msn.com/id/42180200/ns/business-eye_on_the_economy/. If you are not prone to risk, I would suggest to lock. Right now 30 year fixed rates start at 4.75% ; 15 year fixed rates are still pricing better on an FHA Loan – 3.75% right now. 5/1 ARMS start at 3.125%.
MORE CONGRESS MEMBERS COME OUT TO DELAY LOAN OFFICER COMPENSATION REGULATION: Here is a great article explaining the anxiety of the industry about the new loan officer compensation scheduled to go into effect April 1st, 2011 : http://www.mortgagenewsdaily.com/03152011_regulation_z.asp. More and more lawmakers are asking for this rule to be delayed.
Now I know most consumers may not care about how loan officers get paid on writing a loan. But the fact is that this law affects the pricing a consumer will get on a new loan. A rule going into effect in less than 2 weeks that will have consequences on every loan going forward still has no written or communicated guidelines on how to implement the rule. The bank I work for and many of my associates that work for bigger banks still have not implemented their plan of action. It will be an interesting two weeks.
In two weeks, as a borrower you will be able to choose borrower paid loans – where you are paying a decent amount of costs to do a loan or lender paid loans, where you will not be charged origination fees and may get a credit towards third party title fees.