Friday’s Rates and How Frequently Rates Change
Rhonda Porter on 04 20, 2007
As of 9:00 a.m. PST, mortgage interest rates are the same as what I posted last Friday. By the time I’ve [photopress:Blue_20Man_20Group.jpg,thumb,alignright]pressed the “publish” button…these rates may not be accurate.
On a recent post, Ardell commented “If they say it changed in the 3 hours it took you to call them all, they were lying in the first place”. This is in regards to getting rate quotes from loan originators. As a matter of fact, rates change throughout the day.
Some lenders have rate sheets that are issued when they decide to reprice for better or worse and others have “live” pricing similar to what you might see with the stock/bond markets. As a Correspondent Lender, we work with both types of pricing depending on which lender we’re using.
Here’s an example from just one of the lenders we work with, Wells Fargo, issued new rates sheets for the last week of March 2007 (CST):
Monday, March 26 at 8:30
Monday, March 26 at 10:25
Tuesday, March 27 at 8:30
Wednesday, March 28 at 8:30
Wednesday, March 28 at 2:15
Thursday, March 29 at 8:30
Friday, March 30 at 8:30
Depending on economic events, mortgage rates can and do change during the day. If on Monday, March 26, you began calling first thing in the morning and then waited two hours to call the next person, your rates may be different (assuming your Loan Originator is obtaining the most updated rates and not relying on their “morning rate sheet”).
I’ll keep saying this, until I’m blue in the face…selecting a Mortgage Professional by shopping interest rates alone is a fools game and not in your best interest.
About the Author: Rhonda Porter
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15 Responses to “Friday’s Rates and How Frequently Rates Change”
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I have seen two seriously volatile days, or remember two. One was when Desert Storm hit and people who didn’t have their rates locked, and no time to wait for rates to calm down, were seriously affected. Of course there was a “rate cap” in the Finance Contingency to cover events like this, unlike the Seattle common practice Finance Contingency.
The other time was before I was in real estate. Me and my Mom were buying a house after my Dad died. It was at the beginning of double digit rates back in 80 or so. Rates were climbing 1/4 point an hour! just after we were in agreement on the property, and just after we applied for the mortgage. But in those days rates locked automatically at time of application. I expect that day was one of the days responsible for lenders NOT auto-locking at time of application.
Rates jumped from 9% to 18% from the time we made an offer to the time we closed on the house, but our rate was locked on the day of application at 10%.
But Rhonda, there are weeks you report that rates haven’t changed much in a whole week. Rates fluctuating in one day is not as common. In fact often a lower than average rate is often created because some lender is pushing some specific product on a given day. We sometimes forget that lenders do use rates to push consumers into certain products. Like when the 7 year rate is higher than the 30 year rate, for example.
I have seen some on the fence loans pushed to the closed vs. not closed IF it can close NOW as the lenders end of month numbers need a little beefing up. There are a lot of influences in the lending marketplace.
Reality is that yes, most people need a lender that actually “works with them” and some don’t. Those who do still need to have some checks and balances and not just “go blindly into the good night” without checking the rate, cost and terms agains the going market rate and terms.
How do YOU suggest that a consumer be sure they are getting ” a fair shake” if not by rate shopping? Maybe there’s another method that should be used? How do you answer someone who wants to know if the rate you are providing is “a good deal”?
Rate shopping alone can lead a consumer to a LO who is simply the best liar du jour. There are, in my mind, too many potential issues by going for the best rate. It’s really the individual that you should be shopping for and what they can offer from their company resources as far as product and performance. I think the only way to know this is from referrals from people you trust. (I know…I know…I’m blue in the face again). If a consumer were merely getting a rate and there was nothing else to a transaction…then maybe you could “rate shop” and do well (assuming you’re dealing with honest lenders who won’t provide you a “short term” quote or who aren’t gambling rates or flat out lying). I’m preaching the choir by telling you that there is more to the transaction than the rate.
From a mortgage standpoint, right off the bat:
Be the buyers resource after closing for questions or needs….hopefully for years to come.
1) Determining the right mortgage plan (hopefully, if the mortgage is structured correctly from the beginning factoring in the consumers financial goals, they may not have to refinance unless there is a significant improvement in rates–I’ve had to fix a lot of wrong programs from other lenders in my career….I love the business…but why not do it right from the get-go?). And making sure the client understands their program and their available options.
2) Getting preapproved for the program and taking a complete loan application up front (avoids having to switch programs down the road).
3) Find the best rate (We have over 80 lenders that we work with…I probably “actively” work with 7 prime and 3 alt-a/subprime lenders). This involves ME shopping for the rate so the consumer doesn’t have to.
4) Pricing the loan correctly. Not everyone should pay a point or maybe should pay a point.
5) Oversee the transaction to closing. Keep the buyer and agents informed of the process and answer any and all questions if they arise. (I try to answer them in advance–the blog has been great for that!)
6) Reviewing the HUD before the agents and buyers see it to make sure that it meets my GFE.
7) Be available during the signing time for any possible questions.
Ardell…this comment is TOOOO long… I could have made another post–sorry about that!
9/11 was also a very crazy time for rates…and for a long time following.
Overall, rates have been stable, but to say they don’t change within a 3 hour period is not correct. We’re looking a Friday and a Friday. There may be changes within the week as well. I’m glad they’ve been pretty steady!
hey Rhonda…just stopping in for a friendly hello.
Oh…and if you want to see the latest type of mortgage cooked up here in So Cal (available in WA also) check out this site.
http://www.whypaydouble.com
The loans are for RE investors only and are in Yen. Yup…Japanese currency. Read over the FAQ on their website. Myself…I don’t like loans where there is not only an adjustable rate but also a concern regarding currency exchange rates over the life of a loan…especially when it is 30 years on a currency that everybody and their mother (including our government) considers to be undervalued. It appears that Lloyds of London is somehow involved.
That is amazing, EconE…(I’m just getting your email now)…I have never heard of that! Thanks for the scoop.
Oh for crying out loud. What kind of crap is this?
http://www.whypaydouble.com
There is only two people listed as contacts on this website, no office address is given, it looks like the site is being run by two loan originators from California.
If you google their phone numbers, you’ll see that the guy is advertising all over the bulletin boards and the gal runs a pre-paid legal services company.
I really like how they point out that the interest-only rate is adjustable with NO caps and no negative amortization. Can anyone spot the most obvious federal law violation on their website?
Interesting how the official Lloyds of London website mentions nothing of this miraculous 2% loan for “investors only.”
Interesting how they are advertising that they can do business in a handful of different states, including WA, but they are not shown as holding a WA state license to originate loans. I ran their company name and both individual names through the state database: nothing.
If it sounds too good to be true……
Hi All,
After I typed in the above comment #5, I sent an email to Lloyds of London. They are confirming my observations. Here is a copy/paste of their email to me.
*****
Dear Ms Schlicke,
Thanks for your e-mail about the recent loan you have been hearing about.
The message you have received sounds as though it is from fraudsters working a very common type of fraud known as Advanced Fee or ‘419′ fraud. We’ve been made aware of fraudsters using our name to try and trick unsuspecting parties to send money in return for large sum of money which doesn’t exist.
We strongly advise you not to respond to the sender or release any money to their account.
Further information on Advanced Fee fraud can be found on the following Metropolitan Police website:
http://www.met.police.uk/fraudalert/index.htm
If there’s anything else we can help you with, please let us know.
Many Thanks
Jennifer Ramsay
E-mail Support
Lloyds TSB
Darn, Jillayne. I was just getting ready to do a HUGE mailing campaign…NOT! Seriously, thanks for debunking that offer. In this day and age, consumers must be so careful!
BAM…sweet detective work Jillayne…I really didn’t care enough to bother looking into it as it seemed so…fishy.
with regards to 419 letters…I might have a little fun with this…who knows.
Have you heard of the online sport called “scambaiting”?
read all about it on http://www.419eater.com
it looks like it could be dangerous…but fun!
Hi EconE,
I am out the door at the moment but will take a look at another notorious EconE link later on tonight! No, I have not had time yet to check the mortgage implode meter today. What have I missed and did you read the ongoing dialogue with a couple of former MILA employees on my other blog article?
you know that I’m always good for an interesting link.
I’ll be sure to check up on the other thread.
[...] Mortgage interest rates can, and do, change daily as reported by Jon Ribary at Rain City Guide. Real estate buyers, sellers and mortgage loan applicants are paying good money to have the best representation that they can possibly have, and don’t want to hear excuses when their agent/mortgage loan officer missed a deadline to lock their loan or inform them of a substantial rate change. [...]
Jon got real pretty all of the sudden
He quotes some pretty mean and lean rates too! Did you catch my 2 seconds of fame on the evening news? That was from a 10 minute interview!
I’m sure Jon thanks you for the compliment, BTW. I do, too!
[...] Friday’s Rates… April 27, 2007 ….are the same as last Friday! I was stalling…almost hoping for a rate change to try to prove my point to Ardell on how much rates can change. Alas…I may have to wait until next week to prove my point. Rates did increase a bit during the week and have come back to the same point as this time last Friday. 30 year fixed rate under 6%–who’s complaining? [...]
[...] Friday s Rates and How Frequently Rates Change | Rain City Guide | A No, I have not had time yet to check the mortgage implode meter today. What have I missed and did you read the ongoing dialogue with a couple of former MILA employees on my other [...]