Financial Update by Maurice Soussé

Interest rates are nearing their lowest levels in history. Chairmen Janet Yellen spoke for two days in front of Congress this week talking about the uncertainty of interest rates. The most hair raising statement was her admittance of a “negative interest rate policy” which was not out of the question. What does that mean?

A negative interest rate policy means that a bank would have to “pay” the FED to keep their cash at the Federal Reserve. This incentives banks to lend their cash out versus holding money in house, which in turn helps to stimulate the economy.

This leads us to part 2. Low rates and low housing inventory will help to push up values for Spring home sellers. Brace yourselves for another housing rush.

When rates drop as low as they are now, our underwriters are instructed to complete 2 purchase files for each refinance file we have. This helps keep the purchase transactions in contract moving forward to close as timely as possible. While that policy helps, make sure you plan for underwriting times that could elongate due to an increase in volume. Our underwriters continue to work 6 days per week to keep up with volume which is a true benefit to us all. The majority of our transactions are closing in 30 days or under on conforming loans.

Because it is Valentine’s Day we have to quote from Dr. Seuss who stated “when you are in love you can’t fall asleep because reality is finally better than your dreams.”

Have a blessed weekend and let us know if we can help in any way.