June 13, 2011
June 13, 2011 by admin
The stock market tried to mount a rally on Monday, but finished the day relatively flat, a growing signal that the pessimism in the market may be around to stay for the summer. The DOW was up almost 100 points in early trading action as investors were looking to buy into some bargains from the sell off over the last thirty days, the market was not able to hold in the gains and failed to hold the 12,000 point level in trading. The news regarding Greece and mounting concerns over their ability to maintain their financial obligations could have a lingering impact on the markets this week.
News on the home mortgage front remains good for the lending industry as interest rates remain on a downward trajectory. The dip in stocks has benefited interest rates, specifically long term fixed mortgage rates which are now at or below four and a half percent with almost every major national mortgage lender. The dip in the market has also brought down the yield on shorter term bonds, helping bring variable rates down as well. The MBS reported today that 1 year arms are now also at historical low levels and available under three percent. Most consumers are still choosing more stable, longer term options on both refinance and purchase loans due to the cloudy future of the real estate marketplace. Several large loan servicing companies today lost their financial incentive from the government to modify mortgages, including Bank of America as the government believes they have not been aggressive enough in assisting borrowers through the making home affordable program. This remains one of the biggest challenges in both banking and policy as there has been little to no progress in helping slow down home foreclosures or come up with a meaningful long term solution to keep people who are underwater in their homes. While the government believes they will “shame” the large banks outed in today’s report to modify more loans, the program remains voluntary and the lack of oversight and assistance to homeowners a huge burden on the economic recovery.