Deb Vallow - Colonial 1st Mortgage

[03/16/20]   The Fed Rate is at 0%, mortgage rates must be lower, right?
Mortgage rates are not driven by the Fed. The Fed Funds Rate is a different animal than the mortgage rate. It applies to loans with a term of up to 1 day. That's a far cry from the average mortgage, and investors approach those loans with completely different sets of priorities. That's why we sometimes see longer and shorter term rates move in OPPOSITE directions (which accounts for the "inverted yield curve" phenomenon that made news in 2019 when 10yr Treasury yields were lower than all of the short-term rates under 2 years, including Fed Funds).
But even if long and short term rates always moved in the same direction, there's a more important reason that mortgage rates might not follow the Fed. The bonds that dictate mortgage rates trade thousands of times a day. Mortgage lenders themselves update their rates at least once a day. In contrast, the Fed only meets to consider changing its rate 8 times a year, barring emergencies. This means mortgage rates can and do move well in advance of Fed rate changes. Indeed, the behavior of longer-term rates like mortgages can often predict the market conditions that prompt the Fed to make a move.
Why have mortgage rates not dropped as much as the 10 year Treasury? The answer is both simple and complex.

The simple reason are margins at mortgage companies. The fastest way to control production is with pricing. When loans are hard to find, lenders cut margins to increase production. With the phone ringing off the hook and many mortgage shops well above capacity, lenders are taking this opportunity to increase margins for a change. Few have the stomach to hire staff hoping for a prolonged refinance binge. As their pipelines swell watch for rates to rise.

The complex answer brings in investors of Mortgage-Backed Securities.

Volatility is both disruptive and expensive. When an investor purchases an MBS they have certain assumptions on how the loans will pay off. When rates go into a free fall and investors see loans refinance from pools that are only months old, they grow cautious. Worse yet is if the price of the MBS was above par, the investors takes a direct hit. Mortgage rates can only fall as far as investors are willing to purchase them.

Fear of the coronavirus sent buyers into safe assets. The US 10-year Treasury is considered the bellwether of safe assets and thus attracted more buyers than MBS’s. Throw in higher margins and worried investors and the reason rates have not fallen in line with the 10 year makes more sense.

WRVA

Did you catch Dan Dougherty of Colonial 1st Mortgage, Inc. on Giving Tuesday yesterday on WRVA? Help John Reid and Dan take the Polar Plunge to benefit Special Olympics!

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Mortgage Rates Drop as Bond Gains Accelerate

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mortgagenewsletter.net Mortgage rates improved today, depending on the lender and the time of day! Underlying bond markets were only modestly stronger in the morning. As such, the average lender only offered modest improvements over yesterday's rates at first. But as the day progressed, market volatility favored bonds. On...

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[04/22/19]   It's a hot market out there, call me to get prequalified today!

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Colonial 1st Mortgage – Richmond, Virgina

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[04/11/18]   Hey Everyone, Colonial 1st offers the ability to give a full lender certified credit approval on a To Be Determined Property! It will allow you and your Realtor to submit a much stronger contract. We can underwrite a file without a property address for every program Conventional, FHA, VA and USDA!
Here is what we need from you:
◦ Signed Loan Application
◦ Signed Borrower Authorization
◦ Credit Report
◦ Income and Asset docs
In this market, sellers want to know their buyer can close. Call me today to get the details!

Yep, I am pretty sure...

We are a broker for UWM, so please give me a call with any questions you have!

Help your borrowers get the big house without the big down payment. Jumbo 90% LTV with no M.I. is a great way to build your Jumbo business and generate valuable referrals.

Lol, because it happens all the time....

They're giving you $500,000, whats with the crayons?!

Mortgage Broker Memez

So, please check with us before you open any new credit so we can make sure to get you closed on time! 🤣🤔😃

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Melissa Williams & Hope Parker, we need this!

That's right, all pages, all sides, even if they are intentionally blank!

It must be true because it was on the internet!

You see the commercials, but wouldn't you rather talk to a real person about a reverse mortgage instead of someone in a call center? Troy Vallow is our in-house specialist, call him today at 804.363.5003.

Be careful out there and stay warm tonight!

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