Napa Mortgage News

June Fed Rate Hike & Trended Credit Implementation

May 23rd, 2016 7:34 AM by Dale DiGennaro

More changes coming our way in June!

Looks like June has the potential to be a "game changing" month in the mortgage industry! With the more certain information that the FED rate will increase (see below) and the signs we are already seeing that the "Trended Credit Data" the credit bureau's have been collecting on us, is already making a difference when it comes to underwriting your loan.....

"the times they are a changin' "

...again!

"Trended credit" is now quickly making its way to the forefront of our industry and changing the way our lenders utilize the info on your credit report!

Yes...even for those who have higher credit scores!

At a California Association of Mortgage Professionals (C.A.M.P.) event in San Francisco last week...my peers shared their stories, and the reality of how this is already affecting the underwriting of your loans and the way your use of credit is analyzed..regardless of your FICO score or whether you've been making your payments on time !

While the focus is mainly on your revolving credit card accounts, your credit report now includes the minimum payment due, the actual payment amount made and the remaining balance each month.

This way lenders can see whether you are "trending up or trending down."

The 3 credit bureau's are now reporting two years of revolving credit payments so the lenders can see exactly what you paid on each account each month and whether you carry a balance, pay more than just the minimum payment or pay it off each month. Any sudden change in that pattern will be a red flag to the lender.

Even a "paid in full" will alert the lender! Especially if it is done right before your loan application is submitted and is not your normal trend!

Lots to think about when considering a new loan these days so feel free to call us for guidance even if you are not ready to apply at this time. The more you know in advance (about your particular situation) these days....the better!

You can also visit our website at www.CustomLending.net to get a lot of your questions answered.

CLICK HERE for more specifics on Trended Credit along with TIPs on creating the most positive long term credit picture.

VISIT OUR WEBSITE

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Below you will see the "Daily Rate Lock Advisory" tool which will assist you in knowing when the best time is to lock in a loan. In addition, our "Home Price Index" will take into consideration your original purchase price & date of home purchase to determine...

according to the appreciation rate for the region you live in...whether it is a good time for you to refinance now. You can also sign up to receive a quarterly report of your homes value based on the up to date analysis of your region.

Just a couple of ways that Custom Lending keeps you informed of our changing market place so you can make the best financial decisions for you and your family!

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DAILY RATE LOCK

Friday, May 20th | Get Full Report

	4/32

BONDS

30 yr - 1.85%

	130

DOW

17,565

	56

NASDAQ

4,768

A few factors potentially impacting mortgage rates right now include:

Existing Home Sales from National Assoc of Realtors

Get the full report on how these factors could influence your mortgage rate on our mortgage commentary page.

CLICK HERE to sign up and Get the full report (daily or weekly) on how these factors could influence your personal mortgage rate and receive suggestions on when to lock.

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Shift in Outlook for Fed Policy

Stronger than expected economic data and a shift in expectations for Fed policy were negative for mortgage rates over the past week. As a result, mortgage rates ended the week higher.

Speeches made by Fed officials during the first part of the week alerted investors that the Fed may be much closer to another federal funds rate hike than investors expected. On Wednesday, the release of the minutes from the April 27th Fed meeting confirmed this. In the minutes, Fed officials made it clear that they will consider raising rates as soon as June if economic conditions continue to improve. Investors currently view tighter Fed policy as negative for mortgage rates, so rates rose as the Fed's position became better understood.

One factor supporting the case for tighter monetary policy is stronger than expected improvement in the recent housing data. Existing home sales in April rose for the second straight month and were 6% higher than a year ago. Inventories of existing homes available for sale jumped 9% from March. Sales of existing homes make up about 90% of the market. Housing starts, an indicator of future sales activity for newly built homes, increased 7% in April from March.

Complicating the decision for the Fed a little is the recent inflation data. The core consumer price index (CPI) in April was 2.1% higher than a year ago, down from a multi-year high of 2.3% in February. After rising significantly for several months, core inflation has declined for the last two months. If this trend continues, it would make the Fed less likely to raise rates.

Looking ahead, the new home sales data will be released on Tuesday. Durable orders and the pending home sales data will come out on Thursday. The second estimate of first quarter GDP, the broadest measure of economic growth, will be released on Friday. There will be Treasury auctions Tuesday, Wednesday, and Thursday. Several Fed officials are scheduled to make speeches next week as well. Mortgage markets will close early on Friday in observance of Memorial Day.

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Last weekend, I attended "Carnivale Fantastico: Italian Renaissance Fair" at Blue Rock Springs Park in Vallejo, with my daughter Jenae' and some friends. Somehow I ended up on stage with a sword in my hand! Great way to amuse your 14 year old daughter!

Thank you for always trusting in us to do the best for you and your family and please feel free to call me anytime with your questions. I will be happy to share with you whatever information you may need!