TEAM EMPOWERMENT MORTGAGE CHATTER: Jan. 7: Fannie training on new data sets; unemployment drops but rates improve anyway; RENT vs. BUY

“If you are not willing to risk the unusual, you will have to settle for the ordinary.” Jim Rohn: Was an entrepreneur and motivational author and speaker
New data requirements will be here before we know it, and Fannie Mae does not want you to be caught unaware. Information for the Uniform Mortgage Data Program (UMDP), Uniform Loan Delivery Dataset (ULDD) and Uniform Appraisal Dataset (UAD) resources can be found at some training sessions that Fannie has coming up – probably a must for Ops folks:


January 19, 2:00 p.m. – 3:00 p.m., ET

January 20, 3:00 p.m. – 4:00 p.m., ET

January 26, 2:00 p.m. – 3:00 p.m., ET

January 27, 3:00 p.m. – 4:00 p.m., ET

On to the market! Regardless of what happened yesterday, this morning we have had the monthly unemployment data. The number that will grab the headlines will be the unemployment rate dropping to 9.4% – the lowest in quite some time. But non-farm payroll rosters were lower than expected, at least lower than expected given the strong ADP number Wednesday. In terms of mortgage pricing, not only have mortgage spreads (to Treasury yields) tightened, but fixed income securities have improved in general – two bonuses! Faster job growth is needed to keep consumer spending accelerating and ensure the economic recovery becomes self- sustaining. Payrolls need to grow about double December’s pace to make further progress in lowering the jobless rate, one reason why Federal Reserve policy makers have reiterated they will stick to their plan for more monetary stimulus. Construction payrolls declined by the most since May and professional and business services added the fewest number of jobs in five months.


Taking a quick glance at yesterday, the 10-yr yield improved to 3.42% – right now we’re down to 3.38%. MBS prices improved by .250-.375 yesterday, and are doing better again today by the same. 


We are starting to hear from real estate professionals that a growing number of purchasers are young adults being persuaded to buy now. Who are the people selling them on the American Dream? Their parents! It seems that parents of some adult children are strongly suggesting that their children take advantage of the low cost of homeownership available today. Some moms and dads are helping financially and are even co-signing for the mortgage. At first, it’s thought to be rather surprising. However, after thinking about it, it made complete sense. Here are the reasons why.


Lets look at the financial aspects of renting vs. buying. With house prices falling and rental prices rising in many markets, the possibility that owning a home could cost less than renting one is growing.

In an article from  CNN Money earlier this week, they looked at this issue as we move into 2011:

Perhaps not surprisingly, it makes more financial sense to rent than buy today in many U.S. cities…

But that may finally be about to change. Moody’s chief economist Mark Zandi expects the trend to reverse this year in many major cities.

“By mid 2011 and certainly by end of 2011, buying will be superior to renting in most parts of the country,” Zandi says. As one person said to us recently: Rents are like adjustable rate mortgages. They adjust often and most times they adjust upward!

 Talk to Mom

Middle age parents who have owned a home understand its true value. A home has always been a good long term financial investment. However, homeownership also has many other benefits.

As a matter of fact, Fannie Mae just came out with their National Housing Survey which asked the question directly: Is this a major reason to buy a home?The study broke up the answers into financial and non-financial reasons. The top four reasons and six of the top ten reasons were NON-FINANCIAL. The top four are below:

  1. It means having a good place to raise children and provide a good education.
  2. You have a physical structure where you and your family feel safe.
  3. It allows you to have more space for your family.
  4. It gives you control over what you do with your living space (renovations & updates).

Should this surprise us? Arent these the same reasons our parents bought their home? Arent these the same reasons we purchased our home?

These are the same reasons parents have suggested their children buy a home. They want the same things for their grandchildren that they believed to be important for their children.

Bottom Line

Now that the craziness of this housing market is beginning to show signs of settling, people are getting back to the core values that families have always embraced. Homeownership is definitely high on the list.





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