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Mortgage rates in Long Beach, California  for July 14, 2008.  Loan amounts up to $417,000:

3/1 ARM              5.125%
5/1 ARM              5.250%

7/1 ARM              5.625%

10/1 ARM            5.750%

30 Yr Fixed          6.000%

All rates offered to the borrower with 1 point cost.  Rate quotes assume a purchase transaction with a 20% down payment, 720 credit score, and full income qualification.  Rates are subject to fluctuation.  Custom rate quotes and rate lock advice are available by calling at the number below..

LONG BEACH CALIFORNIA  MORTGAGE RATE TREND:

Next 7 days:       Neutral 

Next 30 days:      Higher 

Next 3 months:    Higher

Last week was a scary one if you've been following the mortgage industry:

Senator Schumer (NY) caused an old-fashioned bank run when he wrote a letter to the San Francisco Fed President concerned about IndyMac Bank's ability to weather the storm....then, he made that letter public. IndyMac Bank ceased new loan operations, in an effort to manage the loans they have on their books, on Monday. On Friday, the Feds closed IndyMac Bank down.

This was political grandstanding at its worst:

Sen. Schumer rejected that, saying that, while banking regulators do their work in private, lawmakers typically do theirs in public. Sen. Schumer, the head of Senate Democrats' re-election effort, threw in a political jab as well. "Clearly what was happened here was the OTS, having the second-biggest bank failure on their watch, sought to blame the messenger. In sum, it's sort of classically what this administration does. Blame the fire on the guy who called 911."

The New York Times asked if Fannie Mae and Freddie Mac were insolvent and Wall Street went nuts.  Treasury Secretary Paulson stepped in and offered government support SHOULD the big mortgage guarantors fail.  Are Fannie and Freddie too big to fail?  Well, they insure almost half of this nation's $12 trillion worth of mortgage debt.  A failure would be a major disruption to housing capital and drive mortgage rates to the a MUCH higher level.

Read more »

Mortgage rates in Long Beach, California for July 10, 2008.  Loan amounts up to $417,000:

(Be sure to watch the video commentary, directly below)

3/1 ARM              5.125%

5/1 ARM              5.375%

7/1 ARM              5.625%

10/1 ARM            6.000%

30 Yr Fixed          6.125%

All rates offered to the borrower with 1 point cost.  Rate quotes assume a purchase transaction with a 20% down payment, 720 credit score, and full income qualification.  Rates are subject to fluctuation.  Custom rate quotes and rate lock advice are available by calling at the number below..

LONG BEACH CALIFORNIA  MORTGAGE RATE TREND:

Next 7 days:        Lower

Next 30 days:      Slightly Lower 

Next 3 months:    Higher

Long Beach mortgage rates for June 30, 2008.  Loan amounts up to $417,000: 

3/1 ARM              5.250%
5/1 ARM              5.500%
7/1 ARM              5.750%
10/1 ARM            5.875%  

All rates offered to the borrower with 1 point cost.  Rate quotes assume a purchase transaction with a 20% down payment, 720 credit score, and full income qualification.  Rates are subject to fluctuation.  Custom rate quotes and fixed rate mortgages are available by calling at the number below. 

LONG BEACH MORTGAGE RATE TREND:

Next 7 days:       Slightly Lower

Next 30 days:     Slightly Higher

Next 3 months:   Higher 

Brian Brady
(858)-777-9751
Apply for a loan online

No recommendation until tomorrow.  All eyes are on the Federal Reserve Open Market Committee today.  At 2:15PM (EDT), 11:15 (PDT), they will release their interest rate decision and statement.  The fixed income securities market believe there is a 43% chance that the Fed will RAISE rates, to stifle inflation, in August and that there is a 61% chance that the hike will come in November.

The eyes will be on the Fed's commentary, though:

"We expect the Fed to keep the funds rate at 2% today but to shift to a more hawkish statement by placing more emphasis on inflation over growth risks," strategists at Credit Suisse wrote in a research report. "The Fed will likely use this meeting as an opportunity to set the stage for a potential rate rise in August."

If the Fed signals that rates could rise as early as August, expect Long Beach mortgage rates to jump .25% higher, from today's 6.375% 30 year fixed rate, over the next few weeks.  If the Fed signals rate hikes are "possible" as a way to fight inflation, expect rates to stay level through in July (6.25% to 6.5%).  Finally, if the Fed shifts back to its anti-recessionary talk, we could see rates drop down to 6%.

As you can see, there are a lot of "ifs".  This is why today's Fed commentary is all important.  The Fed's ambiguity has traders convinced that higher rates are a foregone conclusion.  Here's the silver lining hidden in this dark cloud; mortgage rates are equal to what they were in July, 2007.  The Fed Funds rate was at 5.25%, then.  Today, the Fed funds rate is at 2.25%.  What that means is that mortgage rates SHOULD be able to withstand some 5-6 rate hikes and stay under 7%.

Alas, markets are discounting mechanisms.  We still think there is a lot of risk to higher mortgage rates until the commodities bubble bursts.