Archive for January, 2015

MM Recap for January 12th

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The holidays are over, and it’s time to get back to work. Even the schedulers are looking at five-day weeks, with the exception of Martin Luther King, Jr. Day, which will be observed Feb. 16.
No economic reports came in last Monday, but the plummeting price of oil took its toll on stock prices. We are enjoying the lowest gas prices in decades, and the big bucks that drivers can save over the coming months could boost our economy. Slow economic growth in Europe and Asia would likely take a bite out of our economy, but a rosy outlook for the job market could soften that nip. In addition, 3rd quarter GDP hit 5% for the first time since 2003.
The plummeting bond market should increase home sales over the next few months. Low rates could inspire homebuyers to save big money in interest payments and get them to make the move to home ownership.
When the markets closed last Monday, stocks had a horrible session. The Dow dropped 331.34 points, or 1.86%. The Nasdaq and S&P 500 suffered similar losses, with the Nasdaq dropping 74.24 points, or 1.57% and the S&P 500 falling 37.62 points, or 1.83%. To no one’s surprise, the yield on the 10-year note plummeted eight basis points to 2.04%.
On Tuesday there was no notable difference in the markets. The price of oil continued to decline and stock prices followed, although the downward drift slowed. Two economic reports were released. Factory orders in November fell 0.7%, unchanged from the previous month. The ISM index on the service sector fell to 56.2 in December from 59.3 the previous month.
There is speculation that the FOMC will be boosting interest rates in the not too distant future. We will definitely hear more about that once the current dilemmas have been either accepted or digested.
When the markets closed on Tuesday, the Dow had lost 130.01 points. The Nasdaq dropped 59.84 points, and the S&P fell 17.97 points. Bad numbers, but so much better than Monday’s. The interest on the 10-year bond fell 7 basis points to 1.97%.
On Wednesday the Fed said the economy would be strong in 2015, and that was an attitude changer. So was the admission that the Fed is in no hurry to raise rates. The ADP employment change report showed some good numbers as it appears that employers are hiring. Their report for December related an increase to 241K new hires, compared with 227K in November. Stocks headed up on Wednesday, and the Dow rose 212.88 points, or 1.23%. The Nasdaq followed, adding 57.73 points or 1.26%, and the S&P 500 jumped 23.29 points, or 1.16%. There was even good news about the trade deficit. It came in below $40B for the first time in years, if not decades. It posted a deficit of $39B, down from $42.2B the previous month. The 10-year Treasury bond went down 1 basis point to close at an amazing 1.96%.
On Thursday, first-time jobless claims for the week ended Jan 3 fell by 4,000 to 294K while continuing claims for the week ended December 27 rose to 2452K, compared with 2451K from the week before. Consumer credit for November went down to $14.1B. It was at $16.0B in October — yet another sign that the economy is improving. The Dow closed up 323.35 points, for a gain of 1.84%. The Nasdaq and the S&P 500 also rallied, with the Nasdaq gaining 85.72 points, or 1.84% and the S&P rising 36.24 points, or up by 1.79%. The bond market moves inversely to the stock market, and the 10-year yield closed the day at 2.03%.
There were a couple of reports Friday that seemed to have a negative effect on the markets. Nonfarm payrolls for December came in at only 240K. The total for November was 345K. Hourly earnings dropped by 0.2% for December. Wholesale inventories were up by 2% in November and registered at 8%. But the unemployment rate for December dropped to 5.6% from 5.8%, although that didn’t impress the markets. At Friday’s closing, the losers outpaced the gainers and all indices were down. The Dow closed down 170.50 points. The Nasdaq finished the week down 32.12 points, and the S&P 500 slid 17.33 points. The 10-year Treasury bond ended the week at 1.98%.
The MBA was back from its winter break and reported that mortgage applications for the week ended January 2 decreased 9.1% from two weeks prior to the holidays. The refinance share of mortgage applications increased to 65% from 63%. This is not a surprise, considering how low interest rates are right now. The average rate for a 30-year fixed mortgage dropped to 4.01% from 4.04%.
This week will be busy, but the impact of the reports will depend on what they have to say. Today and tomorrow offer no market-moving reports, but the rest of the week is a different story.
On Wednesday the retail sales report for December comes out; the analysts are not optimistic. The forecasters believe they could fall as much as 0.2% after rising 0.7% in November. And sales, excluding autos, are expected to come in flat at 0.0% or 0.1% compared with 0.5% in November. Business inventories are expected to rise between 0.3% and 0.4%, which would be up 1% from the previous month. It doesn’t look like Christmas was that great for the brick and mortar retailers.
After we get all those reports, the Fed will come out with its Beige Book, which looks at economic activity in each of the nation’s 12 federal districts — typically not a market-mover.
On Thursday first-time jobless and continuing claims start things off. For the week of Jan. 10, analysts agree that first-timers will come in at around 295K. Continuing claims should come in at 2400K which would be down from 2452K. Two additional reports will be released at the same time: the producer price index and the core PPI, which eliminates food and energy prices.
Those will be followed by a couple of regional manufacturing surveys. The Philly Fed index for January, which checks prices of manufactured goods in the area, is forecast to come in at 10.0. That’s a huge drop from the previous 24.3. However, the Empire State manufacturing numbers are expected to rise to 5.0 or even 7.0 after coming in at -3.6 in December.
The week closes out Friday with five additional reports, beginning with December’s consumer price index data. It includes almost everything you buy, from a house to alcohol to airline tickets, etc., but changes are coming. We’ll let you know when.
Industrial production in December is expected to slow. Analysts believe it will edge down to 0.0% or even -0.2%. Capacity utilization, the percentage of machines working at top capability, is forecast to come in at about 80%, which isn’t bad. The final report will be the University of Michigan’s consumer sentiment survey. It attempts to discover how ordinary shoppers look at the economy. Big numbers indicate that shoppers are satisfied with the economic outlook and feel comfortable spending money. It is predicted to come in at between 94.1 and 95.0, which is an increase from 93.6 from the previous report.
Let’s hope that 2015 is a great year for all of us.

About Scoreinc.com

Scoreinc.com, Inc., headquarter in Mayaguez Puerto Rico USA, with offices in Mobile Alabama, is a leading provider of services to the derogatory credit sector of the financial service industry through its Scoreway® Software Solution and credit report accuracy dispute services. The Scoreway® platform provides an end-to-end management solution that helps the companies that we serve manage the credit review and dispute process and to improve controls and profitability. Scoreinc.com services an ever growing list of mortgage company’s, banks, credit unions, Realtors®, builders and credit service organizations through its innovative technology and credit report accuracy service.

Contact Score for more information at 877-876-5921 or by visiting the following pages:
Credit Repair Merchant Service
Fair Debt Collection Practices-learn to earn from FDCPA
Credit Repair Business Training
Credit Repair Software
Credit Repair Solution

For more details please visit Scoreinc.com

HSH.com’s 2015 Outlook

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Each year, HSH.com details important factors we think are most likely to influence the mortgage and real estate markets in the coming year. Here are seven factors which will affect the markets in 2015:
No. 1: Mortgage rates should firm somewhat
While volatility could see mortgage rates drop, especially in the early part of 2015, any rate declines will likely be driven by forces outside of the U.S. Absent any significant new global issues, we expect all mortgage rates to be mostly firmer in 2015, especially later in the year. Reasons?
The Federal Reserve will likely begin to raise short-term interest rates mid-year, largely affecting initial interest rates for ARMs.
A growing U.S. economy is likely to be joined by modest improvement overseas, as central banks there are starting to move toward greater use of QE-style programs to boost both economic growth and inflation.
Inflation should not be a significant concern, but continuing growth here and perhaps less deflationary drag from abroad would also allow fixed rates to float upward somewhat.
We might see a maximum peak for mortgage rates over the course of 2015 of maybe 4.75 percent for conforming 30-year fixed-rate mortgages, comparable to peak-2014 levels. Depending on how aggressively the Fed begins to move short-term rates as the year progresses, ARMs may or may not move as much, but common 5/1 ARMs might see a peak of 3.5 percent or so.
Falling oil prices are another variable. Lower oil costs will free up billions in spendable cash that will be widely spread around the economy. Falling prices act as a tax cut (or a raise) for consumers, and the push of more cash out into the economy will tend to lift growth somewhat.
No. 2: Fed tries normalcy for a change
October 2014 saw a soft end to the Fed’s manipulation of long-term interest and mortgage rates. We say “soft end” because they stopped accumulating new Treasury Securities and MBSs in their portfolio but will, for a time, continue to “recycle” inbound money from maturing bonds into new purchases as replacements. This will keep the amount of their holdings level while supporting the markets in a smaller and gentler fashion. When this recycling process ends, it will be the first time since 2008 that the Fed isn’t directly involved in manipulating long-term mortgage rates.
We do expect the Fed to begin to raise rates in 2015, but cautiously and in small steps. Our best guess is that the Fed will begin liftoff with the June 16/17 meeting (possibly July 28/29); more clues will come from the next four or five Fed meetings to prepare the market for the change. Regardless, interest rates will remain well below “normal” throughout next year.
No. 3: New closing cost forms by August
No Later than August 1, 2015, the new “Loan Estimate” and “Closing Disclosure” closing cost forms are coming to a lender near you.
As prescribed by Dodd-Frank and implemented by the Consumer Financial Protection Bureau (CFPB), mortgage seekers will find new (and hopefully less confusing) mortgage disclosures when they obtain a new mortgage. As of August 1, 2015, all lenders will need to have their systems in order to present the new Loan Estimate form when you “apply” for a mortgage. This new disclosure will combine and replace the Good Faith Estimate (GFE) of Closing Costs and the initial Truth-in-Lending (TIL) documents, and must be presented to a borrower when an “application” has been placed.
The definition of an “application” has changed a little, too. A lender will be required to issue a Loan Estimate form as soon as they have collected the name, income, social security number (to obtain a credit report), property address, estimated value of the home and the desired amount of the mortgage.
The new Loan Estimate and Closing Disclosure documents will be coded so the consumer will be able to better match line items of fees quoted upfront versus those actually charged at the end of the process. Overall, it’s hoped that the new forms will result in less confusion, but a cynic might say that this has generally been the goal for all previous revisions and updates, too.
No. 4: Credit standards should ease
The FHFA finally provided greater clarity for lenders of the conditions of which they would be required to re-purchase a failed loan (aka “buybacks”). The actual details of the FHFA’s change are thick and incomprehensible to most humans, but the end result is that lenders are less likely to be penalized for minor and curable deficiencies in the loan file.
The net result is the lenders will be less afraid to write more mortgages for those at the lower end of the credit scale; coupled with improving housing market and economic conditions (which make defaults less likely, too), overlays are starting to be lowered or removed. With lenders evaluating their stances as we go, this is a process which should persist all year long.
All in all, access to mortgage credit should improve throughout the year and become less costly.
No. 5: FHA: Back in black
In the early days of the mortgage crisis, the FHA accumulated too many loans that failed, wiping out the reserve position required by FHA’s charter. The FHA responded by ratcheting up mortgage insurance by about 125 percent over a few years’ time and even made mortgage insurance non-cancelable, but the damage was done. Undercapitalized, the FHA turned to Congress for backing in 2013 for the first time in its history and continued insuring new loans.
Although there is pressure, there is little likelihood that premiums will drop back to 2010 levels anytime soon. That said, the annual MIP was 110 basis points from April 2011 to April 2012, and if the FHA does bow to this political pressure, it’s possible that a return to this level might occur, especially if losses continue to diminish and the economy continues to improve.
No. 6: Home sales should increase
Home sales should benefit from improving conditions again in 2015. Another year past the recession means millions more folks with jobs, plus another year to get savings, credit and documentation in line with mortgage underwriting standards. The mortgage underwriting pendulum is starting to swing from tight levels to somewhat less tight ones, and this “expanding of the credit box” should allow a few more folks the chance to buy homes. Much of the required rulemaking for mortgages under Dodd-Frank is now complete, allowing the market for non-Qualified Mortgages (non-QM) loans to finally begin to form. This could mean better and cheaper borrowing opportunities for self-employed borrowers, those who are carrying high amounts of debt and other niches.
About a total of 4.5 million new and existing homes were sold in 2014; with still favorable mortgage rates in place, a slightly wider credit box and other factors, it seems reasonable to us to expect perhaps a 7 percent rise in total sales next year, resulting in 4.8 million or so total home sales for the year.
No. 7: Home equity borrowing should continue to increase
Over the past year, borrowing of home equity has kicked higher; estimates by Equifax suggest a 21 percent rise in borrowing on home equity lines of credit in the first half of 2014. With home prices expected to continue rising, more homeowners will get the chance to use some of their home equity. Rising prices and the advent of shorter-term refinances are both contributing to deepened equity stakes to the point where more homeowners have at least some borrowable equity.
We expect to see considerable increases in equity use in 2015. Equity usage remains low compared to the boom years of the mid-2000s, so there is plenty of upside for growth, and it wouldn’t be a surprise to see another double-digit increase for 2015.

By: Keith Gumbinger, www.hsh.com

About Scoreinc.com

Scoreinc.com, Inc., headquarter in Mayaguez Puerto Rico USA, with offices in Mobile Alabama, is a leading provider of services to the derogatory credit sector of the financial service industry through its Scoreway® Software Solution and credit report accuracy dispute services. The Scoreway® platform provides an end-to-end management solution that helps the companies that we serve manage the credit review and dispute process and to improve controls and profitability. Scoreinc.com services an ever growing list of mortgage company’s, banks, credit unions, Realtors®, builders and credit service organizations through its innovative technology and credit report accuracy service.

Contact Score for more information at 877-876-5921 or by visiting the following pages:
Credit Repair Merchant Service
Fair Debt Collection Practices-learn to earn from FDCPA
Credit Repair Business Training
Credit Repair Software
Credit Repair Solution

For more details please visit Scoreinc.com

MMRecap for January 5th

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Last week was a bad one for stocks. Fortunately, there were only three days featuring economic reports due to schedule changes brought about by the holidays.
Monday there were no economic reports, but MarketWatch, an economic news site, reported that employers are unlikely to release current employees. This, in turn, should lead to a stronger labor market and increased economic growth, but the markets remained oblivious. Stocks more-or-less drifted, with the Dow closing down 15.48 points. The Nasdaq edged up 0.05 points, which was unchanged from the previous Friday. The S&P 500 index gained 1.80 points. The 10-year Treasury note closed the day at 2.22%.
Tuesday was a little livelier, but the results were disappointing. The Case-Shiller report on home prices in the nation’s 20 largest cities showed October prices dipped to 4.5% from 4.8% the previous month. However, consumer confidence rose to 92.6 — from its 88.7 in December. When the markets closed on Tuesday, the Dow was down 55.16 points, the Nasdaq fell 29.47 points and the S&P 500 dropped as well, losing 10.22 points. The 10-year Treasury went down a couple of basis points, closing at 2.20%.
There were a few reports on Wednesday starting with the weekly jobless claims. For the week ended on December 27, the initial jobless claims went up to 298K, a sharp rise from the 281K claims from the week before. The Chicago PMI decreased a bit in December, registering a 58.3. This was down from 60.8 in November. Pending home sales seemed to do well in November showing a 0.8% rise, compared to a 1.1% decline from the month before. On Wednesday the traders at all of the indices decided to take their year-end profits and sell. When the closing bell rang, the Dow was down 160.00 points, or 0.89%. The Nasdaq followed with a loss of 41.39 points, or 0.87% and the S&P 500 dropped 21.45 points, or 1.03%. The Dow closed the year below the 18,000 mark, ending 2014 at 17,823.07. The 10-year Treasury note dropped three more points to end the day at 2.17%.
Markets were, of course, closed New Year’s Day, and to no one’s surprise, nothing much happened on Friday. Trading was light, but the ISM index on manufacturing fell to 55.5% from 58.7%. And the report on construction spending for November showed a drop to -0.3% from the previous +1.2%, although weather issues probably were at fault. When the markets closed, the Dow was up 9.92 points, the Nasdaq closed down 9.24 points and the S&P 500 was barely changed, closing at -0.70 points. But there was one bright spot. The 10-Treasury note waved goodbye to 2014 with a smile. It closed at 2.12%!
There was no report from the MBA last week, but they’ll be back on the job this Wednesday.
After a light week last week, this week has many reports, but none to speak of for today.
Tomorrow, however, we get factory orders for November, which are expected to come in at -0.3% — better than the previous -0.7%. It will be followed by the ISM index on the service sector for December, which should come in a tad above 58.5. We will also get the employment change report from ADP, the payroll processing giant. They expect 245K to be added to the work force versus 208K in December.
Wednesday is a relatively light day; the only report that might move the markets will be the FOMC minutes for the week ended December 17th. Other reports of less significance include the trade balance for November; some analysts expect it to fall by almost $3 billion, which is not a common occurrence, but a good one if it happens.
We’re back to a normal schedule with the initial and continuing jobless claims reports coming out on Thursday. The forecasters are expecting continuing claims to go up a bit for the week ended December 27, with a prediction of 2375K. This compares to 2353K from the week before. This might be due to the end of seasonal work for 2014. Initial claims for the week ended on January 3 might go down to 290K, which would be an improvement from the 298K reported the previous week. On Thursday we also get the consumer credit report for November. Not surprisingly, consumer credit is expected to hit $16.0B, up from $13.2B in October. In a sense, this is a good sign that people were a little more confident as we went into the holiday season.
On Friday the nonfarm payrolls report for December will be released. Analysts are looking for 240K workers to have been added. This compares with 321K jobs added in November. The unemployment rate report follows and is expected to hold at 5.8%. The remaining reports on Friday have little significance. Wholesale inventories are expected to go down by 1% for November.

About Scoreinc.com

Scoreinc.com, Inc., headquarter in Mayaguez Puerto Rico USA, with offices in Mobile Alabama, is a leading provider of services to the derogatory credit sector of the financial service industry through its Scoreway® Software Solution and credit report accuracy dispute services. The Scoreway® platform provides an end-to-end management solution that helps the companies that we serve manage the credit review and dispute process and to improve controls and profitability. Scoreinc.com services an ever growing list of mortgage company’s, banks, credit unions, Realtors®, builders and credit service organizations through its innovative technology and credit report accuracy service.

Contact Score for more information at 877-876-5921 or by visiting the following pages:
Credit Repair Merchant Service
Fair Debt Collection Practices-learn to earn from FDCPA
Credit Repair Business Training
Credit Repair Software
Credit Repair Solution

For more details please visit Scoreinc.com