Fed Raises Rates; Mortgage Rates PLUMMET; Why? JVM’s Here to Stay!

JVM’S HERE TO STAY; BACKUP FOR BANKS PULLING OUT JVM was officially founded in 2006, and effectively founded in 1999 under another name by my wife, Heejin – with much of her operation carrying over to JVM in 2006. All this is to say that we are definitely here to stay, as we have ridden […]Read More

Please Do NOT File Your Taxes IF…

TODAY’S “FED DAY” & POWELL’S PICKLE The Fed announced a 0.25% hike Fed Funds Rate today, and the markets are digesting the news (focusing heavily on Powell’s comments). Powell’s pickle was this: raising rates might exacerbate the still looming banking crisis, but not raising rates could exacerbate inflation. We should expect market volatility (movement in […]Read More

Europe Raised Rates by 1/2%, and Rates FELL

The European Central Bank (ECB) raised its short-term rate (its equivalent to the Fed Funds Rate that the Fed raises here in the U.S.) by a full 1/2% yesterday. It shocked many observers because Europe is facing a banking crisis that is potentially much worse than what we face here in the U.S. (for reasons […]Read More

Jumbo Loans In Peril Because Of Commercial Bank Issues

EVERYTHING IS FINE…UNTIL IT ISN’T The former owner of RPM Mortgage (now merged with Cross Country) told me about a particularly harrowing ordeal he went through in 2008. His company had locked tens of millions of dollars of loans with the intention of selling them to particular investors when they closed. RPM underwrote and funded […]Read More

Uh Oh… 2023 Financial Crisis? 2008 All Over Again? Maybe Yes, and Definitely No

Rates fell sharply again today as inflation news was very good (PPI fell sharply), retail sales were down, and a key manufacturing index (Empire) was frighteningly weak. This is all playing out exactly as Jeff Snider has been predicting, and it is proving him correct once again – making his series of tweets last night […]Read More

Rates Plummet! Barry Was RIGHT! THIS IS HUGE!

WHO THE HELL IS BARRY? Barry Habib is the founder of MBS Highway, a subscription service that thousands of mortgage industry insiders subscribe to at a cost of $120 to $170 per month – and it is worth it! Barry and his team go way out of their way to provide value on every front […]Read More

Why Is The Fed SO DETERMINED To Push Rates Higher? (Not What You Think)

WHAT IS THE UNITED STATES’ MOST POWERFUL WEAPON? 1. It’s Ohio-class nuclear-powered submarines? 2. It’s B83 nuclear bombs? 3. It’s Tomahawk cruise missile? 4. It’s AC-130U gunships? Or 5. It’s Ford-class supercarriers? ANSWER: None of the above. The United States’ most powerful weapon is… the dollar. This is because the bulk of international trade is […]Read More

Rates Climbed 1% in February! Great Opportunity For Buyers!

WHY IS MY CLIENT’S RATE SO HIGH? That is a question we have heard from several agents over the last week. The primary reason is usually just a misunderstanding of just how much rates have risen over the last month – almost 1%! I have included a screenshot of The 30-Year Fixed-Rate Mortgage Chart from […]Read More

Fannie Mae Is Raising Rates for STRONG Borrowers

Approximately 85% of FHA loans are for first-time homebuyers. In contrast, about 50% of Fannie Mae’s and Freddie Mac’s “conforming loans” are for first-time homebuyers. As a quick reminder, FHA loans only require 3.5% down – and they are much more flexible with respect to debt ratios, credit, and other underwriting criteria. Fannie Mae and […]Read More

MBA “Purchase Index” Falls to Lowest Level Since 1995! Panic Time?

Rates have climbed almost a full 1% point since early February, as this Mortgage News Daily Chart indicates. In direct response to this increase in rates, purchase money mortgage applications plummeted – showing once again how sensitive buyers are to interest rates. And – the Mortgage Bankers Association “Purchase Index” (based largely on mortgage applications) […]Read More

Inflation Concerns Push Rates Up – Opposite of My Predictions

Mortgage applications fell precipitously recently in direct response to a rise in interest rates. We have seen the opposite effect too over the last several months in response to falling rates. All this is to say (or prove) that mortgage applications and purchase activity are extremely sensitive to interest rates – surprising many people, including […]Read More

Why I HATE Permanent Rate Buydowns

“Homebuyers prefer permanent buydowns rather than temporary buydowns.” That was a headline today in this National Mortgage News article. So, even though I just blogged about this in November, I am hitting it again because “I hate permanent interest rate buydowns.” According to the article, 57% of buyers in the third week of January paid […]Read More

How Can Builders Offer 3%+ Rates In a 6%+ World?

There are some major home builders offering substantially discounted interest rates along with the purchase of one of their homes – as long as buyers use the builder’s mortgage lender. And many buyers think they are getting the deal of the century when they get this “special financing.” But – here’s the thing: The financing […]Read More


“IF A RECESSION IS COMING, HOW DO YOU EXPLAIN THE STRONG JOBS REPORT?” That was an email I received this morning from the most prominent voice/blogger in the mortgage industry. He is very successful, a great guy, and much more knowledgeable than I am overall, but it is interesting to see how even he follows […]Read More

Fannie Mae’s Greatest Hits! (You Don’t Want To Miss This)

We recently locked a refinance for a borrower at 6.875% – after he was quoted 5.25% by another loan officer. The borrower did not use the other loan officer because that loan officer failed to account for many of Fannie Mae’s greatest hits! Fannie’s “hits” are actually just increases in an interest rate for the […]Read More

Deciphering The Terrifying Housing Decline Numbers from Case-Shiller

RATES FALL IN THE FACE OF FED RATE INCREASE Rates fell today even though the Fed will increase “rates” today. I encourage everyone to re-read or re-share this blog: The Fed Does Not Control Interest Rates! BUT – our jumbo rates are largely the same today because the CFPB pushed Wells Fargo out of the […]Read More

GREAT NEWS! 10 Year Treasury Yields No Longer Track Mortgage Rates

The 10 Year Treasury Yield is 3.46%, as I am typing this blog. The average 30-Year Mortgage Rate is 6.21%, per Mortgage News Daily. That is a spread of 2.75%. What makes that so interesting is the fact that prior to 2022, the spread between the 10 Year and Average Mortgage Rates was about 1.7%, […]Read More

Quoting Rates Honestly (Seems Obvious, But…)

We recently quoted an interest rate to a borrower in contract, but before we had a chance to lock the rate, rates improved by 1/8%. So naturally, we locked the lower rate and let the borrower know. We did this even though we did not have to (the borrower was very happy with our initial […]Read More

Housing Data Remains Strong – Despite “Imminent Crash”

Steven Van Metre is a macro analyst and financial planner who has been predicting an “imminent housing crash” for over a year, including here, here, here, here, and… here. Despite Steven’s constant “sky is falling” rhetoric, I actually enjoy his videos, as they are data-laden and always interesting. I am bringing him up today because […]Read More

The Fed Does NOT Control Interest Rates! Follow the Data Guys!

  The Fed raised “rates” last year at the fastest pace in history! There were 7 “rate” increases in total: 0.25% in March 0.50% in May 0.75% in June 0.75% in July 0.75% in September 0.75% in November 0.50% in December BUT – DESPITE INCREASES TOTALING 1.25% OVER NOVEMBER AND DECEMBER, 30-YEAR MORTGAGE RATES HAVE […]Read More

Rates Fell 1/2% … Almost.

The Most Important News Report Of The Year Dropped Today! The most important news report was today’s inflation data, as depicted in the Consumer Price Index (CPI) report. It is extremely important for those of us in the mortgage and real estate industries because almost nothing drives interest rates more than inflation news. And, as […]Read More

The Cost of Waiting To Buy a Home

Purchasing a home is a significant financial decision that requires careful consideration and planning. For this reason, it is reasonable to expect prospective buyers to get cold feet when faced with a less than ideal homebuying market. But does this mean you should pull out of the housing market to wait for the perfect time […]Read More

1.5% Lower Rates For First-Time Homebuyers! Please Understand How HUGE This Is!

In late October, Fannie Mae eliminated most of the fees (that effectively increased the interest rates) for first-time homebuyers (FTHBs). I blogged about it in November – Fannie Mae Made Rates Way Lower for First-Time Homebuyers – and I strongly recommend re-reading that blog, as I want to make sure readers know how HUGE this […]Read More

Why Did Rates Shoot Up 3/8% Over the Last 10 Days?

Dear Congress, Please stop spending money. I know it helps your careers… but it really hurts the rest of us. Sincerely, Jay That was the letter I wrote to Congress, but they ignored me – again. It was unfortunate too because the $1.7 trillion spending bill Congress just passed is just one of the reasons […]Read More

Inflation DOWN; Rates UP; What Gives? Housing Inventory Still Tight

15 DEGREES LAST NIGHT IN AUSTIN, TX This has nothing to do with mortgages, but I have to share it because I find it so interesting.  Austin saw a low last night of 15 degrees – which is amazing given that Austin is hundreds of miles SOUTH of cities like Phoenix and Los Angeles that […]Read More

Why DEFLATION Is Now Likely and SO SCARY!

HERE’S WHAT’S SCARY: MY NEIGHBOR WAITING TO BUY HIS MERCEDES! You have no idea how scary that is! My neighbor grew up poor in Boston, played college football at the highest levels, and is now a very successful enterprise software salesman. He is also very cheap – so cheap in fact that he went without […]Read More

Inflation Down; Rates Down & More To Come; The Fed Does NOT Control Interest Rates

Inflation (CPI) reports came in lower than expected yesterday – and that pushed rates lower because inflation expectations are probably the biggest single driver of interest rates. According to this tweet by MacroAlf, the lower-than-expected inflation report surprised 65 out of 67 economists surveyed by Bloomberg. It did not, however, surprise Barry Habib or Jeff […]Read More

Surge In Contracts, Pre-Approvals, And Returning Clients

Rates fell again today, exactly like macro pundits Jeff Snider and Barry Habib have been predicting for about a year now. Once again – they both told us earlier this year that rates would fall in response to signs of economic weakness and slowing inflation. I make such a big deal about this over and […]Read More

When Great Economic News Is Actually Bad News

I Was Slapped in the Face With Very Good Economic News! For months now, I have been explaining how weak our overall economy is and why that portends much lower interest rates in the near future – no matter what the Fed does. I of course was just repeating what Jim Rickards, Jim Rogers, Stephanie […]Read More

Why Timing Interest Rate Locks Never Works

BORROWER REFUSES TO LOCK! We have a borrower who did not want to lock this week because “rates are on a downward trend.” He is totally correct about the trend, but utterly wrong about not locking. This is because it is impossible to time the market and because rates never move in a straight line […]Read More

Inflation Slows & Rates Drop AGAIN; WHY SO IMPORTANT?

Rates plummeted yesterday after Fed Chair Jerome Powell made some comments indicating that the Fed will start to slow its rate increases. Rumor has it that he got early notice of today’s delightfully tame inflation reports, and thus decided to back off on his “hawkish” efforts to keep pushing up rates. 10-YEAR TREASURY YIELDS FELL […]Read More

Which Mortgage Loans Are Assumable?

We are getting questions about Assumable Loans again, as there are a lot of sellers with very low-rate mortgages selling homes in our current high-rate environment. If those sellers could offer their low-rate mortgage along with the house, their house would no doubt be worth a lot more. Up until the 1980s, many loans were […]Read More

Why I Hate “Points” Now More Than Ever (Permanent vs. Temporary Buydowns)

I just read a blog by a mortgage underwriter in which she was explaining how loan officers are stupid because they are not explaining the benefits of “Permanent Rate Buydowns” (vs. “Temporary Buydowns”) to listing agents. Ironically though, she may be the one who is lacking on the intelligence front. A “Permanent Buydown” is where […]Read More

Much Lower Interest Rates By March; Why & What It Means

On Thursday, CPI (inflation data) came in lower than expected – and we saw one of the largest one-day rate drops ever. I of course blogged about it here: THIS IS HUGE! Inflation & Rates PLUMMET. My biggest takeaway though wasn’t just that inflation and rates dropped; it was to point out how correct the […]Read More

THIS IS HUGE! Inflation & Rates PLUMMET!

Inflation Came In Cool – Exactly As Barry Habib And Jeff Snider Predicted! In 2021, I told a group of mortgage bankers at a lunch how and why rates were going to shoot past 7% in 2022 – and NONE of them believed me. Despite their pushback, I remained very confident in my position because […]Read More

The Effect of the Election on Interest Rates

Rates fell yesterday as soon as investors digested the likely results of the midterm elections. As I often repeat, rates fall when investors expect the economy to weaken or when they expect less inflation or even deflation. Conversely, inflation expectations and/or strong economic signals push rates up. So, yesterday, as it became clear that the […]Read More

How Interest Rates Impact Home Values (Not What You Think)

“Jay, How Naïve Are You?” That was the response I got from a past client last spring when I was noting how higher interest rates had not yet impacted home values. I made the further mistake of saying I was not sure how much higher rates would impact values too, in light of all the […]Read More

The Fed Did NOT “Raise Rates 3/4% Yesterday” – Deflation/Lower Rates Coming Soon Part II

The Fed raised rates 75 basis points or 3/4% yesterday – so my rate quote at the bottom of this blog went from 6.0% yesterday to 6.75% today. FALSE!! THAT DID NOT HAPPEN! My rate quote today is the same rate as yesterday’s even though the Fed “raised rates 3/4%” yesterday. I typed the top […]Read More

Why I Am Convinced Rates Will FALL By March

I have myriad acquaintances in the mortgage industry (mortgage bank CEOs even) who insist rates will continue to rise throughout 2023. They tell me I am crazy to think they will fall as early as March – with inflation surging and the Fed on the warpath. They further tell me that the Fed cannot get […]Read More

The Beauty of BUYDOWNS – To Lower Payments & Save Deals

In Friday’s blog, I explained why ARMs are NOT the solution for payment relief (because ARM rates are so close to 30-year rates) in today’s high-rate world. BUT – there is another solution for payment relief that is nothing short of awesome: TEMPORARY RATE BUYDOWNS, aka 3-2-1; 2-1; or 1-0.5 buydowns (NOTE: these are NOT […]Read More

Why ARM Rates Are So Close to 30-Year Rates

Apparently, in 2002, it was “Hot In Herre” – or at least it was according to Nelly. I, however, had no idea because I had never heard the song, and I probably wouldn’t have trusted Nelly’s assessment in any case, given his inability to spell. I bring that up though because yesterday’s rates hit 2002 […]Read More

Inflation RED HOT! Rates WAY UP! Relief On The Way?

Today’s inflation report (Consumer Price Index/CPI) came in much hotter than expected and rates shot through the roof in response. BUT – as Barry Habib (of MBS Highway fame) has been explaining again and again – this was expected – and should not be alarming. In addition, Mr. Habib carefully explains WHY future inflation reports […]Read More

Are Home Equity Lines (HELOCs) Still A Thing?

The Prime Rate today is 6.25% – a full 3% higher than where it was last year at this time. Prime Rate is the rate that commercial banks charge their most creditworthy customers, usually large corporations. It matters to us though because it is also the rate that most Home Equity Lines of Credit (HELOCs) […]Read More

Why Are Banks Not Paying Higher Rates for Deposits? Why Did Rates Plummet Today Too?

Why Interest Rates Are Rising Everywhere – Except Your Savings Account That was the headline from this recent WSJ article. Back in the 1980s, a general lack of savings in America was one of the many reasons why America was going to collapse, and we were all going to die… This was ostensibly because Japan […]Read More

Everything Lags…Making The Media & The Fed Wrong (AGAIN)

In 1992, the rock band R.E.M. released the annoying song, Everybody Hurts. And, sensitive Gen Xers everywhere played it loudly and proudly on their Sony Walkmans and boomboxes to prove just how sensitive they really were (and they were sensitive!). But, fortunately for us, Michael Stipe retired from R.E.M. so he could watch macro videos […]Read More

Are Rates Really Over 7%? Not Really; Rates Up 2% Since August; Surveys Lag Market

Today’s average interest rate is 6.82% per Mortgage News Daily (about 1/2% higher than where they were last week). The average is up almost 2% from early August when it bottomed near 5% – amazingly. The average rate was in fact over 7% yesterday, but they plummeted today (and I will explain why below). The […]Read More

U.S. Dollar at Record Highs & Twitter Is Panicking! Why?

The U.S. dollar is again hitting record highs, and it is much stronger than it was even a few months ago when I last blogged about it: Why a Strong U.S. Dollar Is Terrifying! My favorite way to gauge the dollar’s strength is by watching the DXY Index. The chart at the bottom of this […]Read More

DEFLATION Coming Soon To A Theater Near You!

Stephanie Pomboy is the founder of a macro research firm called MacroMavens, and she was on this Wealthion Podcast recently, and it was so interesting I had to blog about it! I was fascinated by her insistence that we face DEFLATION as early as next year because everyone is talking about how entrenched INFLATION is […]Read More

The Fed Raised Rates And Something VERY UNUSUAL HAPPENED!

The Fed raised the Fed Funds Rate yesterday by 0.75% and long-term rates actually increased (a lot) after the announcement. This is very unusual for several reasons: The markets had long anticipated the 0.75% hike and had “priced it in” already. The Fed only controls short-term rates and not long-term (30-year fixed) rates, so long-term […]Read More

Investors Dumping Inventory vs. Mortgage Rate Lockdowns!

BIG PROBLEMS AHEAD FOR REAL ESTATE INVESTORS! That was the title of this tweet from Nick Gerli, a real estate guru on YouTube. He said: “The 6-month US Treasury now yields…the same as Buying & Renting Out a House in America…Translation: Big Real Estate Investor selloff coming. Especially among Wall Street owners.” And, in response […]Read More