Financial Update by Maurice Soussé

As you can tell by the last few weeks rate sheets, we have been very steady as the 10 year treasury bills hover around 1.88 to 1.92%. These numbers are still near record lows. In every interview I watch with a Federal Reserve Board Member, I constantly hear how the FED is ready to raise interest rates. Remember that the raising of rates by the FED is a “bank to bank” transaction. This means the cost of money from the Federal Reserve to the banks who have borrowed has risen. It doesn’t necessarily mean that mortgage rates, which are guided by treasury bills, will increase dramatically. Many see mortgage rates rising .5% by years end.

What the FED’s signal does mean is that they want to increase rates to prevent inflation. The bell couldn’t be ringing louder for buyers to lock in their interest rates now. In a few years we will all look back and think how did we miss taking advantage of rates while they were so low??!!

Let’s take a moment to talk about the new TRID (TILA-RESPA Integrated Disclosure) disclosure and timing that will begin on August 1st. The delivery of upfront documents is not much different than what we have today. What is different is the back end closing time frames. The consumer must receive the closing disclosures 3 business days before consummation of the loan documents. For example, a closing disclosure is emailed to the borrower on Tuesday of a given week. The waiting period is 72 hours, so the first day loan documents may be signed is Saturday. Sundays don’t count as a business day. You will see escrow time periods be longer when financing is used. Our friends at First American were kind enough to send a flyer which I have attached for you. This helps you understand the new time frames. Remember that after August 1st, 30 day closings with loans will be pretty tough based on the new mandatory waiting periods.

I have copies of the new TIL and Good Faith Estimate drafts but until we are certain those are the final product, I will refrain from sending. I promise to have them to you soon.

In light of these new rules coming, our quote this week is from Nikos Kazantzakis who said “Since we cannot change reality, let us change the eyes which see reality.”