As a way to conserve fresh drinking water, a number of conservation groups are now calling for an end to toilets that flush. To which gas station owners say, “We are so ahead of you. We’ve been doing that for years.”
As expected, the FOMC left overnight rates unchanged yesterday. Some of the language contained in the release, however, caused rates to move up slightly, and the stock market to improve. “Economic activity has continued to strengthen and that the deterioration in the labor market is abating. Household spending is expanding at a moderate rate but remains constrained by a weak labor market, modest income growth, lower housing wealth, and tight credit. While bank lending continues to contract, financial market conditions remain
supportive of economic growth.” They believe that inflation is likely to be subdued for some time, and therefore expect to leave Fed Funds near 0% for “an extended period”.
More importantly to mortgage folks, once analysts picked apart every word of the announcement, is that the FOMC announced that its $1.25 trillion agency mortgage-backed security purchase program will be slowing down as the end of March nears, and ending March 30th. So it is now official. Personally, I believe that the sun will come up again this morning, my car will start, and life will be close to normal. But anticipation is running high for a steepening of the yield curve as long term rates move higher and the short end remains low. In a related story on mortgage production, an annual report on the ARM market published by Freddie Mac shows adjustable-rate mortgages accounted for just 3 percent of all conventional home purchase loans in 2009. That’s the smallest percentage for ARMs since at least 1982.
MGIC
reported a fourth-quarter loss but said it received fewer default notices and sold new policies that it hopes are better underwritten. On the news all of the publicly traded MI stock prices rallied. In the release, however, MGIC disclosed that Bank of America has ceased doing business with the company as a result of MGIC’s rescission practices. BofA/CW accounted for 12% of all new insurance written in 2008 and 8% of new insurance in the first nine months of 2009 at MGIC, so not having that business going forward, if that happens, will have an impact. This backlash from a major lender hampers income growth at a time when MGIC needs to bring in new income to offset rising claims payments on foreclosed mortgages.
My comments yesterday led to some e-mails about other hiring opportunities. As I have said in the past, I don’t want this to turn into a job bulletin board, but it is nice to see that those in the business have some options out there. For example, MegaStar Financial, Colorado’s largest privately held mortgage bank and who lends in 34 states, is looking to hire. Go to http://www.megastarfinancial.com/recruiting. Also, in Northern California, California Mortgage Advisors is actively recruiting for agents and branches – contact Scott Baer at [email protected]. Obviously the trend is for mortgage companies to staff-up on the loan agent side in order to maintain some market share and support their operations staff.