I walked into a McDonald’s with a
buy-one-get-one-free
coupon for a sandwich. I handed it to the girl and she
looked over at a little
chalkboard that said "buy one-get one free." "They're
already
buy-one-get-one-free", she said, "so I guess they're
both free"
She handed me my free sandwiches and I walked out the
door.
Is it too late to buy stock in
mortgage insurance companies?
Borrowers are increasingly moving to fixed-rate loans
instead of ARM’s,
and these loans often carry MI. Applications for
private mortgage
insurance, or PMI, rose 56% from February to March,
according to the Mortgage
Insurance Companies of America.
Volume fell in April, but remained well above rates from
last year. Private
mortgage insurance is typically required of a buyer who
wants a fixed-rate
mortgage but has a down payment of less than 20%. It
costs a fixed percentage
of the total loan, usually less than 1 percent, and
insures the lender against
default.
What’s ahead of us this week? Well,
so far prices
are a “tad” better than on Friday afternoon, which
might help locks
as apparently lock volume with many lenders was down
last week over 50%.
This week will likely prove to be very active in terms
of mortgage rate
movement due to the economic data and other events that
are scheduled –
the full calendar is below. In addition to the data,
another Federal Open
Market Committee (FOMC) meeting will be held this week.*
Together, we have the
makings of a potentially volatile week in the financial
and mortgage markets.
Tuesday brings us the first important report of the week
with the release of
June’s Consumer Confidence Index, important to the
financial markets
because it measures consumer willingness to spend, which
is important because
consumer spending makes up two-thirds of the U.S.
economy. Later this week the
markets will also absorb the Treasury’s 2-year and
5-year T-Note
auctions.
* Everyone expects the Fed to leave
their overnight rates
unchanged, and only a 50% chance of a rate cut during
the next year!
This
Week's Calendar
Click
on
a "Release" for Insight
