Everyone Needs Guidance? Do They Really?

Did You Know Your Clients Need Guidance to Purchase a Home?

“Consumers need and deserve the best guidance when making the decision to purchase a home,” said CFPB Director Richard Cordray. “Buying a home may easily be the largest investment a consumer makes, and we want to make it easier for them to find a housing counselor that is a good fit for them.”  These are the words of the director of the “gorilla in the room” – the Consumer Financial Protection Board – the king of the regulators that anyone involved in consumer credit must deal with.
Effective January 10, 2014, the CFPB is requiring lenders to provide consumers with a list of homeownership counseling organizations.  Consumers should be given such a list at the time they apply for a mortgage so they know where to get help or guidance to decide which loan is the best for them.
I think now I’ve heard it all.  I can certainly understand requiring homeownership counseling for a first time buyer or someone using a government insured or guaranteed loans, but I’m going to feel awful silly providing a list of housing counselors to my clients that are buying an $500,000 to $2,000,000 2ndhome at the beach.  Especially the ones with financial planners, CPA’s, stock brokers, and attorney’s all providing them with advice on the best way to structure the transaction.  You have to love the government watching out for our welfare.
If you are interested, consumers and lenders can access the new tool athttp://www.consumerfinance.gov/find-a-housing-counselor/.
Market Comment
Mortgage bond prices finished the week lower, which pushed mortgage interest rates sharply higher.  Rates were relatively steady throughout most of the week trading within a narrow range.  Unfortunately the employment report was stronger than expected and rates skyrocketed Friday morning.
The unemployment rate in October stood at 7.3% and the economy added 204,000 jobs. Traders expected the unemployment rate at 7.3% and the creation of 110,000 jobs. Mortgage interest rates finished the week worse by approximately 7/8 of a discount point.
Rates
As a result of the unexpectedly high number for job creation in October, investors think the economy may be showing more strength that originally thought and that sentiment droves rates higher today going into the weekend.  Our 30 year fixed rate conforming mortgage with 20% down increased to 4.50% today while our Jumbo (> $417,000 loan amounts) are still at 4.125%.  Think about that for a second!  Jumbo rates continue to be below conventional, conforming rates, partly driven by banks competing more aggressively in the jumbo space and partly because of the large increases in fees charged by Fannie and Freddie for the purchase of conforming loans.
Have a great weekend – the weather looks cool, brisk and sunny.  The perfect time to sell the shoulder season at the beach.  Call, text or email me if you need anything over the weekend.
Here is our current rate sheet:  BAXTER RATES

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