Lending 911 -- Marc Gold, Broker, Mortgage Blogger

What's Ahead For Mortgage Rates This Week : March 16, 2009

Mon, 16 Mar 2009 08:21:23 -0700

Mortgage markets lost a little bit of ground last week, edging mortgage rates higher in a week marked by the largest stock market gains since November.

Once again, mortgage rates couldn't sustain a rally of more than 5 days. Not since late-2008 have mortgage rates managed to fall two weeks in a row.

Last week's market was impacted by three distinct factors:

Bank balance sheets weren't as bad as feared
Discussion started on new bank valuation methods
Traders got optimistic that "the worst is over"

The rally will likely continue into this week, too. This after the 60 Minutes interview with Ben Bernanke in which the Fed Chief said he won't let big banks fail and that the recovery will likely begin later this year.

It's the first interview with a sitting Federal Reserve Chairman in history.

Coincidentally, the Federal Reserve will be in the spotlight this week as it concludes a two-day meeting Wednesday after which the Fed will issue its standard, post-meeting press release at 2:15 P.M. Although it's not expected to make Fed Funds Rate changes, the markets will closely watch the Fed's language for clues about the next phase of monetary policy.

In general, when the Fed indicates that inflationary pressures may build, mortgage rates rise. Moreover, in the above interview, Bernanke alluded to such inflation and the need to control it in the future.

Despite the small rise in rates last week, mortgage rates remain low and favorable for high-credit scoring borrowers. Volatility is still a factor, however, so if you're nervous about rates rising, it may be best to lock early in the week -- before the Fed's Wednesday announcement.

4 Minutes Of Guidance For Soon-To-Be Real Estate Investors

Fri, 13 Mar 2009 08:49:40 -0700

"Most of the biggest real estate fortunes were not made in good times, but in bad times like this" Barbara Corcoran reminds us in this talk with NBC.

It's important perspective for Americans wondering how to invest in foreclosed properties without losing their cash or their credit rating.

In the 4-minute interview, Corcoran quips on the basics and the essentials of foreclosure investing,

"Everyone who loses their shirt loses it somewhere else."
"Every big shark started small."
"The house on the corner sets the tone for the block."

She also lends some personal perspective to rent rolls, the cost of losing a tenant, and finding a good business partner.

Banks are anxious to sell their foreclosed homes and that makes this an ideal time for shrewd real estate investors. If you're new to the game, watch the video and take good notes.

Mark-To-Market : How An Obscure Corporate Accounting Rule Might Impact Your Mortgage Rate

Thu, 12 Mar 2009 09:18:00 -0700

You know you're in the middle of an economic crisis when an accounting issue become Front Page News, and that's exactly where we're at today.

Mark-to-market accounting is having its day in the sun and people in need of mortgage sometime soon would do well to pay attention.

If you've never heard of mark-to-market accounting, don't worry. Not many people have. Mark-to-market is a method of valuing an asset based on its what-if-it-was-sold-today value. Mark-to-market is officially known as FASB Statement 157.

Mark-to-market is one reason why bank balance sheets look so awful right now. Banks have to assign firesale-like values to their mortgage-backed assets even if those loans are performing, and even if there's no plans to sell them. Assigning low values to assets, then, in turn, forces the banks to seek TARP funds and take other measures to solidify their mandated capital requirments.

Wall Street and Washington are taking notice of mark-to-market's impact on banking and, by extension, the economy. Even Fed Chairman Ben Bernanke has expressed an interest in opening a dialogue about the matter.

So, today, starting at 10:00 AM ET, the House Committee on Financial Services meets with key members of the Securities and Exchange Commission, the Treasury, and the Financial Accounting and Standards Board to talk about mark-to-market accounting and whether it should be modified.

It's unlikely that change will come immediately, but if enough evidence shows that mark-to-market is unduly damaging to the economy, expect changes to the way we value banks to happen soon.

For homeowners and home buyer, a reversal in mark-to-market rules would be a bad thing. Almost overnight, bank balance sheets would recapitalize and the economy would spring forward. This would reverse most of the pressures that have held mortgage rates low for so many months.

A healthy economy, in other words, may be bad for mortgage rates.

Simple Real Estate Definitions : FICO

Wed, 11 Mar 2009 08:45:00 -0700

The basis of most mortgage lending is credit scoring. In general, the higher a person's credit score, the lower his offered mortgage interest rate.

Despite the many credit scoring models in use today, however, just 3 are relevant to American homeowners:

The Equifax BEACON^� score
The Experian Fair Isaac Risk Model
The TransUnion EMPIRICA^�

Generically, these scoring models generate what are commonly known as "FICO" scores.

FICO scores are measurements of probability. The higher a person's credit score, by definition, the less likely a person is to default on his home loan. This is one reason why credit scoring has added importance lately -- mortgage lenders are very careful about what they're lending and to whom.

Notably, minimum FICO thresholds have been added to all types of mortgage loans.

FICO scoring has 5 main components as listed above. Payment history and credit capacity are two of the largest pieces, but a myriad of other factors contribute to a credit score, too. For example, the longer your reported history of managing credit, the more favorably your credit score will respond.

The myFICO.com website does a terrific job with credit education, explaining in plain language the ins-and-out of credit scoring and ways to boost your score. It also makes a free, 20-page PDF available for download.

Whether you're a homeowner or lifetime renter -- consider it required reading.

The Half-Truth Of The Headline "1 In 8 U.S. Homes Are Late Paying Or In Foreclosure"

Tue, 10 Mar 2009 08:45:00 -0700

USA Today ran this 2008 Foreclosures By State heatmap last week, reminding us of a simple truth: Headline statistics can be misleading.

According to data compiled by RealtyTrac, 1 in 8 U.S. homes were in various stages of default or delinquency at the end of 2008. This is a fact and it was widely reported by the press.

However, as the heatmap plainly shows, in stripping out just 35 of the nation's 3,232 counties, we can decrease the number of foreclosures nationally by half.

In other words, yes, 1 in 8 U.S. homes face mortgage trouble. In your neighborhood, though, the ratio is likely much, much lower. Real estate is a local phenomenon. National statistics rarely apply.

What's Ahead For Mortgage Rates This Week : March 9, 2009

Mon, 09 Mar 2009 08:45:00 -0700

Mortgage markets improved last week with investors' renewed aversion to risk. To the benefit of home buyers, as major stock indices touch 12-year lows, investors are moving investible cash to the bond market.

For only second time this year, mortgage rates ended the week lower than where they opened.

Some of the bigger stories that caused mortgage rates to fall last week included:

Unemployment reaching 8.1 percent nationwide
The Fed reducing its economic outlook for 2009
Investor concerns for blue chip General Electric

In addition, US Bank and Wells Fargo cut dividends by roughly 85 percent each. Both banks are considered well-run and positioned their respective cuts as a way to bolster balance sheets. Markets took it as a negative instead.

This week, there isn't much economic news upon which to trade, save for Thursday Retail Sales data. Therefore, markets will look for other clues about the future of the U.S. economy.

Tuesday, Fed Chairman Ben Bernanke has a scheduled speech on financial reform and then Thursday Congress takes up mark-to-market accounting. It sounds like a dry topic, but mark-to-market is the accounting rule that makes banks take losses on assets they've yet to sell.

Some experts think mark-to-market accounting makes the financial system appear weaker than it is so this is why Congress is starting a debate.

If mark-to-market rules are loosened, it would likely spell good news for the stock market and bad news for mortgage rates. In effect, money would flow in the opposite direction as it did last week.

For now, though, mortgage rates are low. If you're currently floating a mortgage rate with your lender, consider locking in. If there's even a whisper that mark-to-market accounting rules will change near-term, mortgage rates should rise.

(Image courtesy: The Wall Street Journal Online)

Homes Listed For Sale Plummet Across 96% Of Major U.S. Markets

Fri, 06 Mar 2009 10:00:07 -0700

If you asked an economist why home prices have broadly fallen over the past 2 years, you'd get a short lesson in Supply and Demand.

Too many homes for sale and not enough people to buy them pushed values lower until a balance point can be reached. Looking at the chart at right, that balance point may be fast approaching.

According to data compiled by ZipRealty, the total number of homes listed for sale fell in February 2009 in 23 of 24 major housing markets.

This is an especially important data point because home inventories typically rise in February, ahead of the Spring Home-Shopping Season.

Since 1982, February home inventory has been up 3 percent on average. Last month, it fell.

So, in support of the Supply and Demand Theory, we shouldn't be surprised that the rate of price decline as shown by the Case-Shiller Home Price Index is easing in a lot of markets, too.

We may not have reached the housing market bottom yet, but if we haven't, the data shows us we're likely very close.

Source
Home Listings for February Stayed Steady
James Hagerty
The Wall Street Journal, March 5, 2009
http://online.wsj.com/article/SB123620588396833321.html

Some Homeowners Are Eligible For Mortgage Relief. Are You One Of Them?

Thu, 05 Mar 2009 08:44:27 -0700

When the White House first introduced the Making Home Affordable program in February, it was positioned as a mortgage program with two goals:

To help financially-needy homeowners get mortgage relief
To help homeowners who've lose equity qualify for today's low rates

Wednesday, in a much-anticipated announcement, the U.S. Treasury introduced new details about Making Home Affordable.

It also created an "Am I Eligible For Making Home Affordable" form on its website.

In the press release, the Treasury detailed the President's original blueprint. Namely, it provided explicit loan modification instructions that will assist up to 4 million delinquent homeowners and their respective mortgage servicers.

The modification guidelines are a thorough 17 pages long and leave little question about the loan modification process, and how it must be carried out.

But for as much ink committed to helping delinquent homeowners, the Treasury gave surprisingly little guidance to the estimated 5 million homeowners for whom deteriorating home equity has rendered refinancing impossible.

For these Americans, the Treasury instead offers a basic Q&A and directs homeowners to call Fannie Mae and/or Freddie Mac to confirm their eligibility. The "refinance plan", in summary, says that a homeowner who has paid his mortgage as agreed and whose home value is "about the same or less" as the amount owed on his first mortgage may be eligible.

That's about as much as the Treasury could say.

If after browsing the website, you still have questions about the Making Home Affordable program, call your mortgage lender with specific questions.

From The IRS : The First-Time Homebuyer Credit Form

Wed, 04 Mar 2009 08:45:00 -0700

As part of the American Recovery and Reinvestment Act of 2009, the IRS has officially released Form 5405 -- better known as the First-Time Homebuyer Credit Form.

True to tax code standards, the 10-field form is accompanied by 3 pages of instructions.

Form 5405 is a helpful, go-to resource for home buyers with questions about the tax credit.

For example, the form distinguishes tax consequences for homes bought in 2008 versus 2009, and clearly defines the term "first-time home buyer".

In addition, Form 5405 highlights the math behind the tax credit. In general, the First-Time Homebuyer Credit is equal to the lesser of:

$8,000 for homes bought in 2009
10 percent of the home's purchase price

Married couples filing separately are entitled to half of the expected credit, and homes sold within 3 years are subject to a credit repayment in the year the home ceases to be the "main home".

Form 5405 is a comprehensive reference. However, be sure to check with your accountant for specific questions about your personal returns and how the First-Time Homebuyer Credit may impact your finances. There is no substitute for professional, paid advice.

Can You Guess What Percentage Of Mortgages Are Still Paid On-Time?

Tue, 03 Mar 2009 08:55:00 -0700

Mortgage delinquencies are on the rise nationwide, but the news may not be as bad as it appears at first glance.

Using anonymous data from its national credit database, TransUnion reports that 4.58 percent of American homeowners were at least 60 days past due on mortgage payments last quarter.

Comparing the statistic to the data from a year ago, the credit reporting agency goes on to say that mortgage delinquencies are up 53 percent.

Although fair, the comparison carries a distinct, negative connotation because if we flip the data to its positive, the statistics don't seem nearly as menacing.

Consider: In the last quarter of 2008, 4.58 percent of homeowners were delinquent on their respective mortgages. The positive sign, therefore, is that 95.42 percent of homeowners were not delinquent on their home loans.

Furthermore, in looking at TransUnion's data for the 5 largest states in the Union, it's clear that the national delinquency rate is being skewed by California and Florida. New York and Texas, for example, exhibit delinquency rates below the national 4.58 percent marker.

North Dakota's delinquency rate hovers near 1 percent.

Headlines are designed to attract eyeballs and nothing else. To get the complete story, therefore -- the real story -- it never hurts to dig a little deeper into the facts.

(Image courtesy: TransUnion)

What's Ahead For Mortgage Rates This Week : March 2, 2009

Mon, 02 Mar 2009 07:15:00 -0700

Mortgage markets worsened last week, taking interest rates with them.

A steady drip of sour economic news plus concerns about the banking system outmuscled Fed Chairman Ben Bernanke's congressional testimony in which he said the recession would likely end later this year.

Overall, mortgage rates have risen in 9 of the last 12 trading days.

This week, it's unclear in what direction mortgage rates will go. However, it won't be because of a lack of action.

The week starts with the 8:30 A.M. ET release of the Personal Spending report, a closely-monitored report that should make a broad market impact. Economists expect that spending increased in February, providing key support for economy.

If economists are wrong, though, and spending fell, it will cast doubt on the speed at which an economic recovery will occur. Consumer spending, after all, makes up two-thirds of the economy. No spending means no recovery.

Next, on Wednesday, the White House is expected to release the details of the Homeowner Affordability and Stability Plan. Again, markets are watching for the broader impact of the news. If analysts and traders deem the plan effective, watch for stock markets to improve and bond markets to weaken.

This would cause mortgage rates to rise.

Then, Friday, we'll get to see February's official jobs number. Job loss is expected to exceed 600,000 for the month and unemployment may reach 8 percent. On many levels, if the jobs data meets the expectations, it would be okay with respect to mortgage rates.

As always, it's recommended that you float your mortgage rate cautiously. Wall Street is nervous for its turf and hyper-sensitive to Beltway influence. Markets can change in an instant and when they do, they usually change for the worse.

This week, have a game plan. It'll be easier to take advantage of daily mortgage rate movement.

(Image courtesy: USA Today)

What Are The Country's Best Affordable Suburbs?

Fri, 27 Feb 2009 09:01:00 -0700

Nationwide, home affordability has received a serious boost from the combination of falling home prices and falling mortgage rates.

Today, because of the sagging economy, in most parts of the country, the cost of owning a home versus renting one is now very close to its historical average.

That said, though, near every major city, there are some neighborhoods in which home affordability and quality of life are stand-out. Using real estate data from OnBoard Informatics, Business Week highlights these areas in a report it calls the "Best Affordable Suburbs".

Now, the country's "Best Affordable Suburbs" doesn't list the nation's most affordable suburbs, but instead, a group of cities, towns, and villages in which the populace sits between five and sixty-thousand, and the economy, the schools, the lifestyle and the crime levels are all within a desirable range.

As concluded by Business Week, these are areas in which buying a home is a good value.

At the top of the list is Awake, Wisconsin, a suburb 20 minutes west of Milwaukee, prized for its outdoor lifestyle and healthy jobs market. The complete 50-state listing is posted at Business Week's website.

The Key Fact Missing From Today's Existing Home Sales Headlines

Thu, 26 Feb 2009 10:17:57 -0700

In reading the headlines this morning, you'd think that last month's Existing Home Sales figure signaled more trouble ahead for the housing market.

Quite the contrary.

Beyond the attention-grabbing headlines is the real story; the one that shows -- once again -- that housing market fundaments are coming back into balance.

As home values tick lower, it appears, value buyers are stepping in and snapping up supply. It's true that the number of homes sold fell to its lowest levels in 12 years, but we can't ignore the fact that the number of homes available to buy fell, too.

Banks have put the brakes on foreclosures
Economic uncertainty is reducing job-related relocations
Builders have all but stopped building new homes

The national housing supply is as low as it's been in more than a year.

Based on the current rate of sales activity, the national housing supply would be 100% sold in 9.6 months -- a two-month improvement from the high point set in June 2008.

Demand for homes is expected to rise, too:

The Federal Reserve is trying to hold mortgage rates low
Fannie Mae is opening its checkbook to real estate investors
The stimulus package is granting tax credits to first-timers

So, it's not that the headlines are wrong; it's just that they're incomplete.

In looking at all of the data and not just one sliver of it, we can find hope. Falling supply plus rising demand leads home values higher and that's the basis for a recovery.

(Image courtesy: Wall Street Journal Online)

The Relative Cost Of Owning Versus Renting Is Back At Historical Norms

Wed, 25 Feb 2009 08:45:00 -0700

One popular housing theory is that -- before a bona fide housing recovery can begin -- the cost of owning a home versus renting one must return to historical levels.

If that belief is a truth, a national return to rising home prices may be in store for 2009.

Falling home prices coupled with falling mortgage rates, too, have dropped the relative, after-tax cost of owning a home to 125% of the cost of renting a home.

This is the exact 18-year historical average and not since 2001 has the gap been this small.

As reported by the Wall Street Journal, though, the study has some flaws. For example, the data doesn't account for ongoing home maintenance costs, nor does it consider real estate tax bills and insurance policies.

But, combining a relatively low cost of ownership with the government's $8,000 tax credit for first-time home buyers is likely to convert long-time renters into never-before homeowners.

This, too, is thought to be a key element of the housing recovery.

In many markets (but not all), home prices are expected to edge lower through 2009. Provided mortgage rates stay low, the cost gap between owning and renting will shrink even more.

(Image courtesy: Wall Street Journal)

County-By-County: The 2009 "High-Cost" Conforming Loan Limits

Tue, 24 Feb 2009 08:45:00 -0700

As part of the stimulus package passed last week, Congress authorized a temporary increase to conforming loan limits in certain high-cost parts of the country.

"High cost" is defined by a regions' median sales price.

With the temporary increase, a greater share of Americans can now qualify for Fannie Mae- and Freddie Mac-backed loans, usually the least expensive source for mortgage money.

Higher loan limits can be good for the housing market and the broader economy for two reasons:

Cheaper money can spur new home demand, supporting home values.
Higher loan limits render more homeowners refinance-eligible, freeing up cash for spending, saving, or investing.

The complete county-by-county loan limit list is available on the OFHEO website.

Of the 3,232 U.S. counties, 10 percent are considered "high-cost". Residents of these areas can expect the same low rates offered to the rest of the country, but with a slight premium. Be sure to ask your loan officer about how it works.

What's Ahead For Mortgage Rates This Week : February 23, 2009

Mon, 23 Feb 2009 08:45:00 -0700

Traders brushed off Tuesday and Wednesday's passage of the American Recovery and Reinvestment Act and the President's mortgage relief plan, respectively.

It showed how unsure markets remain about the stimulus package and its probable impact on the economy.

As a result, mortgage markets worsened last week, albeit slightly. It marked the 4th week out of five in which mortgage rates rose.

However, there were a few notable new items for American homeowners and home buyers last week:

The signed-into-law stimulus package includes a first-time home buyer tax credit
Additional banks joined the "no foreclosure" movement
Fannie Mae re-opened guidelines so that real estate investors can own and finance 10 properties, up from 4

Taken separately, these points aren't especially noteworthy. Together, however, they're very important.

In reducing the number of homes for sale while, in turn, spurring demand for them, last week's policy shifts should provide key support against falling home values nationwide. More buyers competing for fewer homes tend to make prices go up, after all.

This week, we'll see if buyers are responding. Two housing-related data points are released.

On Wednesday, it's January's Existing Homes Sales report. After soaring 6-plus percent in December, economists expect another big increase. This makes sense because falling prices make homes more affordable and banks are getting more efficient with selling foreclosed properties.

Then, on Thursday, the New Home Sales report hits the wires. It's expected to show little or no change.

As for mortgage rates, expect the same unpredictability we've seen since the start of the year. As Wall Street comes to terms with the various stimulus plans and the fate of our nation's largest financial companies, money will flow in and out of securities markets with fluidity and speed and that includes mortgage-backed bonds.

Rates should carve out a wide range this week. If you're not currently floating, consider locking in to avoid the risk of higher monthly payments.

(Image courtesy: Wall Street Journal)

2009 Conforming Loan Limits Return To $729,750 In High-Cost Areas

Fri, 20 Feb 2009 08:45:00 -0700

Everything old is new again.

Conforming mortgages are limited by loan size, based on "typical" housing costs around the country. The current conforming limit on a single-unit property is $417,000.

In 2008, as part of the Economic Stimulus Act of 2008, Congress authorized conforming loan limits increases in "high-cost" areas around the country. In Los Angeles County, for example, a mortgage could be as large as $729,750 and still be considered "conforming".

Those temporary increases rolled back effective January 1, 2009, to a maximum of $625,500.

However, as part of the American Recovery and Reinvestment Act of 2009 signed into law this week, conforming loan limits in high-cost areas have been returned to their elevated levels of 2008.

You can see the text on the bottom of page 111 of 407.

Changes to conforming loan limits impact everyone with a stake in real estate, even if their neighborhoods are not considered "high-cost". This is because conforming mortgages offer the widest selection of home loan products, and often at the lowest rates. The widespread availability of conforming mortgages helps to support home sales nationwide as well as providing ample refinancing options for people that need it.

Lenders have yet to pick up the change, but are expected to shortly. Once they do, more homeowners will be eligible for cheap home financing.

To lookup your neighborhood's conforming loan limits, visit the HUD Web site. Or, if you have specific questions related to your home or an upcoming purchase, contact me directly anytime.

What The Homeowner Affordability and Stability Plan Doesn't Mean To Homeowners

Thu, 19 Feb 2009 09:24:00 -0700

In Mesa, Arizona, Wednesday, the President presented the Homeowner Affordability and Stability plan, a multi-pronged effort to support the housing market.

The story made the front page of nearly every newspaper in the country.

The president's plan is sweeping:

Incent mortgage servicers to work with at-risk homeowners before delinquency starts
Let homeowners with good credit but little equity refinance to today's low rates
Fund Fannie Mae and Freddie Mac to support mortgage markets

It's a broad plan with many positive angles, but for now, we can't forget that it's just a plan. Although the White House shapes and influences housing policy, Congress, Loan Servicers, and the Federal Agencies must still implement and execute it. Until that implementation occurs, these reforms exist only on paper.

It's a key aspect of the speech that's not getting coverage.

One thing we learned during the stimulus package debate was that just because the President wants something to happen doesn't mean that it will. There are always details to be worked out and that's one reason why the Homeowner Affordability and Stability Plan couldn't go into effect immediately. There are still loose ends to tie and details to define.

According to its website, the White House lists March 4, 2009 as the plan's effective date. Until March 4, therefore, nothing in Wednesday's speech is guaranteed.

(Image courtesy: Birmingham News)

How The Stimulus Bill Indirectly Lowered Mortgage Rates

Wed, 18 Feb 2009 08:45:00 -0700

The American Recovery and Reinvestment Act of 2009 was signed into law Tuesday in Denver, Colorado. Also Tuesday, stock markets fell near their November 2008 lows.

The two moves are related.

With each new stimulus; with each potential jumpstart of the economy, Wall Street questions whether the federal push will be enough to make an impact.

Traders ended undecided on that issue today, but resolute in something else -- that whatever change the stimulus bill will bring, it's not going to come fast enough to help.

The sell-off in equities was a boon to home buyers. For the first time since early-December, mortgage markets gave a sustained rally, extending gains from the 8:30 AM market open through the 4:00 PM market close.

Conforming mortgage rates were down on the day. Longer-term, though, this pattern won't likely last. Not only will the stock market regain its balance and draw dollars back, but, more importantly, the stimulus bill contained verbiage increasing the national debt ceiling by 53.4 percent. Government debt is often financed by printing more money and this leads to inflation, the enemy of mortgage rates.

For now, the stimulus plan is helping mortgage markets, albeit indirectly. If you're shopping for home loan, consider locking quickly. When markets flip -- and they always do -- it figures to be sudden.

(Image courtesy: Recovery.gov)

What's Ahead For Mortgage Rates This Week : February 17, 2009

Tue, 17 Feb 2009 08:45:00 -0700

In anticipation of a strong, government-led stimulus plan, mortgage markets improved with fervor early last week only to fizzle with equal speed as efforts fell short of expectations.

Neither the Fed, nor the Treasury nor Congress gave markets what they wanted.

Between Monday and Friday, mortgage markets were essentially unchanged, ending a 4-week slide. From day-to-day, however, rates were quite volatile.

The biggest shift of the week occurred late-morning Friday, in advance of the early-market closing. As the terms of the Congress' pending stimulus package became more clear, the piling-on of national debt suddenly spooked Wall Street, re-igniting traders' fear of inflation.

It's strange, in a way, because the final package represented fewer dollars than originally announced and markets had all week to come to terms with the government's three-pronged response to economy.

Nevertheless, traders saved their angst all for the last 90 minutes of the week. Fears of inflation led to a sudden and massive sell-off in all types of bonds, including the mortgage-backed kind. Bond sell-offs are linked to higher mortgage rates, of course, and that caused mortgage rates to spike Friday afternoon.

This week, the selling is expected to continue but hope for reversal to lower rates is possible. It all depends on the news and it changes every day.

Tuesday: Will GM and Chrysler's viability plans be rejected?
Wednesday: Will the Fed's January meeting minutes show fear of depression?
Thursday: Will Congress and the Treasury have clarified their respective stimulus plans?
Friday: What will the Cost of Living index say about inflation?

There's news to make mortgage rates move up or down every day week. Unfortunately, unlike in the past when it was very clear what sort of news was good for rates or bad for rates, right now, it's not so apparent. There are so many expectations cooked in to the market already that it's hard to know what traders expect.

What we do know, though, is that markets are on edge and that can be dangerous for a mortgage rate shopper. Rates may fall by a lot this week on the right type of news. Or, they may rise by the same. We can't know for sure but we can know that -- historically -- rates remain low.

If you haven't joined the Refi Boom yet, this week may be one of your last chances. One bad bounce on Wall Street and we're back to 6 percent.

(Image courtesy: The Wall Street Journal Online)