Is this the day to lock?

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cyborg7

116 Posts

Posted - 07/10/2008 : 07:54:41 AM

Do the rates go lower?

mcmoney

312 Posts

Posted - 07/10/2008 : 07:55:51 AM

No.

Drigotas

602 Posts

Posted - 07/10/2008 : 07:56:18 AM

Yes.

mcmoney

312 Posts

Posted - 07/10/2008 : 07:56:51 AM

Less Filling.

CoolMtgGuy

3704 Posts

Posted - 07/10/2008 : 07:57:46 AM

If you have a file to be locked, consider yourself fortunate and lock it. Lock or float games can be dangerous to your wallet.

hoangad

2931 Posts

Posted - 07/10/2008 : 07:57:58 AM

lock and load.

kmikkola

798 Posts

Posted - 07/10/2008 : 08:02:43 AM

Depends

mtgbeast

57 Posts

Posted - 07/10/2008 : 08:06:06 AM

I was just thinking the same thing.

The gambling rate game hasn't been around for awhile. I wouldn't let it go past today- tomorrow is some key economic reports. If it was 3 years ago, I would say play the game.

I will be watching rates very closely this afternoon with my finger on the trigger button just in case. Remember, banks do not price like they used to- today's pricing should've been a heck of a lot better than yesterday.

hertz

859 Posts

Posted - 07/10/2008 : 08:06:58 AM

quote:
Originally posted by mtgbeast

I was just thinking the same thing.

The gambling rate game hasn't been around for awhile. I wouldn't let it go past today- tomorrow is some key economic reports. If it was 3 years ago, I would say play the game.

I will be watching rates very closely this afternoon with my finger on the trigger button just in case. Remember, banks do not price like they used to- today's pricing should've been a heck of a lot better than yesterday.

Unless they had a reprice yesterday afternoon!

mtgbeast

57 Posts

Posted - 07/10/2008 : 08:10:06 AM

quote:
Originally posted by hertz

quote:
Originally posted by mtgbeast

I was just thinking the same thing.

The gambling rate game hasn't been around for awhile. I wouldn't let it go past today- tomorrow is some key economic reports. If it was 3 years ago, I would say play the game.

I will be watching rates very closely this afternoon with my finger on the trigger button just in case. Remember, banks do not price like they used to- today's pricing should've been a heck of a lot better than yesterday.

banks I used repriced for the better yesterday afternoon.

Unless they had a reprice yesterday afternoon!

LarryM

70 Posts

Posted - 07/10/2008 : 08:14:35 AM

Mortgage Backed Securities (MBS) are holding flat right now. I locked an FHA yesterday as we have had 3 days of nice improvement in rates. While the economic and global news aren't the best, I still feel that the MBS are over bought and ripe for a sell off.

I took advantage of a late reprice for the better yesterday, got my client a better rate by .125% and put an additional <.8> in my pocket. Nice!!

So far today, my decision looks good.

darkstar

18293 Posts

Posted - 07/10/2008 : 08:24:36 AM

http://www.mortgagenewsdaily.com/mortgage_rates/blog/

kmikkola

798 Posts

Posted - 07/10/2008 : 08:57:56 AM

A bird in the hand...

FundStar14

762 Posts

Posted - 07/10/2008 : 09:07:06 AM

Float

Shuggins

1011 Posts

Posted - 07/10/2008 : 09:20:57 AM

quote:
Originally posted by mcmoney

Less Filling.

Tastes Great!!!

mcmoney

312 Posts

Posted - 07/10/2008 : 09:21:56 AM

Less Filling!

Shuggins

1011 Posts

Posted - 07/10/2008 : 09:24:34 AM

TASTES GREAT

mcmoney

312 Posts

Posted - 07/10/2008 : 09:33:38 AM

LESS FILLING!!!!

kmikkola

798 Posts

Posted - 07/10/2008 : 09:36:18 AM

Shuggins

1011 Posts

Posted - 07/10/2008 : 09:38:50 AM

TASTES GREAT!!!

LarryM

70 Posts

Posted - 07/10/2008 : 09:41:22 AM

sitting back sipping his hand-crafted, Full Bodied, extra calorie NW microbeer... Oh, it's 9:40 AM!

sitting back sipping his small batch, dark roasted organic coffee...

mgraham224

1008 Posts

Posted - 07/10/2008 : 10:56:04 AM

Larry, we'll have to get together for a beer and a coffee some time!
we're both in metro area and both "follow" MBS.
although I'm not so sure last night was time to lock yet. TONS of strength being exhibited by MBS right now as stocks rally big time, treasuries are selling, more bad Fannie and Freddie news, yet MBS continues to hold steady. If they were overbought, I think we would have seen them sell off already.
Tomorrow's data will be key. (isn't it always!)

bestbet123

1577 Posts

Posted - 07/10/2008 : 10:59:21 AM

Send file to me and i will lock it for you,then close it and get PAID!

LarryM

70 Posts

Posted - 07/10/2008 : 11:03:41 AM

Let's do it.

My decision was in part due to an extremely nervous client, the inability to take the borrower to a higher interest rate if I was wrong due to DTI (51% already)and tired of taking it in the shorts to protect my integrity... Client is happy, I'm happy and if rates get significantly better, I'll take the loan elsewhere.

mrobichaud

12 Posts

Posted - 07/10/2008 : 11:11:41 AM

I agree with not playing the lock game..... unless something DRASTIC (9/11) happens, locking today may lose/gain you .25% ysp up or down by the time a loan closes. Floating when you are at 1.2 ysp in hopes of getting 2.2 ysp at close is a VERY foolish game to play, and frankly a waste of time. A guy in my office makes the first thing he does every day to read Marksman and try and determine to lock or float every loan in his pipeline.... He consistently closes loans at less than 1% ysp like a knucklehead. I know some are more savvy than others, but the reality is rates ebb and flow around .25%, losing that can hurt, gaining it is not that big of a deal. LOCK YOUR LOANS AND STOP BEING GREEDY OVER .25%!!

scramsey

550 Posts

Posted - 07/10/2008 : 11:14:06 AM

quote:
Originally posted by darkstar

http://www.mortgagenewsdaily.com/mortgage_rates/blog/

That link should just be put into a sticky and locked so it stays at the top permanently.

mgraham224

1008 Posts

Posted - 07/10/2008 : 1:29:08 PM

quote:
Originally posted by scramsey

quote:
Originally posted by darkstar

http://www.mortgagenewsdaily.com/mortgage_rates/blog/

That link should just be put into a sticky and locked so it stays at the top permanently.

I'd vote for that :-)

Don't get me wrong Larry, I agree with the philosophy that locking is always safer than floating. I just think thought that today would be another good day for MBS, and so it has!

Tomorrow is very data-dependent. If we get friendly data, we'll be picking up a whole lot more than the .25 YSP mentioned above. If it's negative data, we'll still probably be able to lock without losing ground compared to last night. I always like floating when the curve ends on a high note as it has the last 3 days and will today as well.

LarryM

70 Posts

Posted - 07/10/2008 : 2:35:51 PM

Normally I would agree. However, this client is too close to getting an "FHA refer". I've bettered my rate and YSP and taken the DTI issue off the table. My client is happy and that makes me happy.

Appraisal was today and we should be funding by month's end. On to the next one, which didn't get locked...

mgraham224

1008 Posts

Posted - 07/10/2008 : 2:47:09 PM

yeah, i never mess around when DTI is on the line.

LarryM

70 Posts

Posted - 07/10/2008 : 2:58:29 PM

So when and where?

mojojojo_1

846 Posts

Posted - 07/10/2008 : 3:03:42 PM

locking is for *****s! my old manager.

LOCK

mgraham224

1008 Posts

Posted - 07/10/2008 : 3:06:18 PM

quote:
Originally posted by LarryM

So when and where?

i heard about this belgian beer place near either the hawthorne or the fremont. Or since you're in newberg, you could always just take a quick jaunt down to sunny keizer!

Agent_Mike

375 Posts

Posted - 07/10/2008 : 3:12:34 PM

It's always a good day to lock ... for a purchase.

If I wanted to play with the market, I'd be a stock broker.

And if I could predict the future, I certainly wouldn't be here - and neither would most of us on this board.

Why take the risk when you can solidify your money NOW?

mrobichaud

12 Posts

Posted - 07/10/2008 : 3:14:22 PM

quote:
Originally posted by Agent_Mike

It's always a good day to lock ... for a purchase.

If I wanted to play with the market, I'd be a stock broker.

And if I could predict the future, I certainly wouldn't be here - and neither would most of us on this board.

Why take the risk when you can solidify your money NOW?

Bank your money and move on to the next deal..... that's what I'm talking about man

ngrabe

79 Posts

Posted - 07/10/2008 : 3:18:53 PM

Don't be greedy. It could really cost you.
Did anyone see 6% convensional with no points this week? I have a client that is saying someone could get that?

mgraham224

1008 Posts

Posted - 07/10/2008 : 3:44:44 PM

quote:
Originally posted by ngrabe

Don't be greedy. It could really cost you.
Did anyone see 6% convensional with no points this week? I have a client that is saying someone could get that?

Lol... This is exactly why it DOES make sense to pay attention to market movements. This guy is sitting here asking if a rate exists with no points when it is PAR at most lenders and .75 rebate with the price leaders. I don't know why mortgage brokers, unlike most any other professionals in the world, resign themselves to knowing so little about the higher level forces at work in their industry.

I'm not saying that applies to the poster, or anyone else in this thread for that matter. Simply saying that whether it's Mechanics understanding how cars work, Doctors understanding how the body works, or bakers understanding how bread rises, all of these folks understand a significantly higher amount, on average, about how their "stuff happens" than the average mortgage broker understands about how their "stuff happens."

Sure, you don't NEED to know to be successful, but you might WANT to know if it makes you better at your job and increases the level of professionalism with which the community is viewed.

LET ME BE HEARD LOUD AND CLEAR: I am ALL FOR the concept of "locking and moving on the the next deal." I really really am. It's just that there are some days where there is a clear time to lock and a clear time to float. if you could be right about that more than 51% of the time, you'd always be making more money. So if you had even ONE deal to lock on monday, and you saw the rates worsen, and you got panicked into locking, how much LESS money would you have made than someone who read the blog and had a better than 51% recommendation that rates would get better? A very very big lot my friends.

Again, I'm not saying "FLOAT FLOAT FLOAT! Let it ride! Chips on the line!"
I'm merely advocating that it's very important for us (well, for me at least... I guess I'll just speak for myself) to have a better understanding of what goes on in the back rooms of our industry. If you knew how much more than us the MBS traders and analysts know, you'd either be blown away or disgusted. I know I was, and STILL am. And if you do feel you have that level of knowledge, count yourself among the lucky few.

At any rate (pun intended), just a modicum of that higher level of knowledge would allow many of us, WITHOUT needlessly risking our client's rates or our YSP's, to earn a nominally higher income on each loan. It's not a lottery ticket or an IPO investment, but just a little "boost" which incidentally also helps people (or so I hear) to have happier and more committed clients.

I know this is a bit off-topic in response to the previous post, but it just "got me thinkin'." How little is too little for us to know about what we do? It certainly wouldn't be tolerated in the auto-shop, hospital, or bakery. (Well, I'm sure it is, but not for long). Anyway, I hardly ever take a firm stand on rate direction, but I did earlier this week. I know for myself, and anyone that has joined me in floating, the extra income from just one well-floated deal is probably over a thousand bucks in most cases. In my mind, well worth the calculated risk, and doubly so when you consider the ancillary knowledge-based benefits.

Look, I'm not trying to say "Yay Blog!" with this post, just maybe venting a little bit while playing devil's advocate for the "floating" opinion. Again, the blog's not all about float float float. Education allows increased knowledge allows calculated risks AND client retention which both allow higher income. But it's whatever works for your model. If the amount of time it takes you to have an internal debate over a lock decision would better be spent going and getting another deal, power to you. I wish it were that way for me, but sometimes the MBS price game is where the money's at.

hlsi

202 Posts

Posted - 07/10/2008 : 4:03:40 PM

I think people reading this thread need to keep in mind that in some states telling the customer they are locked and not locking them [if you are a broker and not a lender] is considered an unfair trade practice and if something goes wrong, you could be screwed.

You don't only have to worry about your direct regulator, but other consumer protection folks like your state Attorney General.

MisterVA

6630 Posts

Posted - 07/10/2008 : 4:06:05 PM

Yup.. Quote & float is a big no-no.

LarryM

70 Posts

Posted - 07/10/2008 : 4:24:58 PM

I couldn't stay in this business without Mortgage Market Guide's daily ticker. It has made me so much money by having an idea of where rates are heading, and where they have been.

I also let my clients determine if they want me to lock today or wait.

Once they sign an application with the intent to move forward immediately, they are expecting to get the rate on the application unless they have been specifically told otherwise. My former employer had a form that they needed to sign indicating that they understood that understood that the rate had or hadn't been locked and what the details were, or that they wished to float.

It solved a lot of problems.

vburek

522 Posts

Posted - 07/10/2008 : 4:47:13 PM

It amazes me as well why some mortgage professionals do not want to be professional and learn this business.

mtgbeast

57 Posts

Posted - 07/10/2008 : 4:56:01 PM

quote:
Originally posted by Agent_Mike

It's always a good day to lock ... for a purchase.

If I wanted to play with the market, I'd be a stock broker.

And if I could predict the future, I certainly wouldn't be here - and neither would most of us on this board.

Why take the risk when you can solidify your money NOW?

EXCELLENT POINTS!!!

the_mortgage_guy

1194 Posts

Posted - 07/10/2008 : 5:17:04 PM

Yes. Ive seen .25 price worsening by CITI at days end. F I got in at the low of the day. nice!!

Agent_Mike

375 Posts

Posted - 07/10/2008 : 5:57:28 PM

mgraham224,

I think there is a difference between understanding the economic forces and playing the market on someone else's purchase/ refinance rates. I also think there is a difference between understanding the economy, stocks bonds market, versus predicting the future.

I'm sure you're much smarter than I am - but even then, I'm very sure you can't predict the future even with understanding of the economy, just like I.

However you phrase the action - it still surmounts to one thing - risk. And that risk translates to the borrower as an end for the means of a possibly better rate - or more likely, more money for the broker.

Lock and move.

mgraham224

1008 Posts

Posted - 07/10/2008 : 10:26:30 PM

quote:
Originally posted by Agent_Mike

mgraham224,

I think there is a difference between understanding the economic forces and playing the market on someone else's purchase/ refinance rates. I also think there is a difference between understanding the economy, stocks bonds market, versus predicting the future.

I'm sure you're much smarter than I am - but even then, I'm very sure you can't predict the future even with understanding of the economy, just like I.

However you phrase the action - it still surmounts to one thing - risk. And that risk translates to the borrower as an end for the means of a possibly better rate - or more likely, more money for the broker.

Lock and move.

I have several problems with this. And no, I'm not talking about how you misused the word "surmount," but rather, some of your other points.

First of all, were you not reading when I said I am an advocate of the "lock and move on" policy? Then too, you must not have caught when I said there are always going to be times when you are deciding when to lock, and those are the times when it pays to know the market?

Second to last, here is a big problem: no, no one can predict the markets with utter certainty, however, considering the variables in play, plus a technical read of the charts, the chances that rates would improve from Monday afternoon were EXTREMELY high. There was literally no other way to read the data. So even ardent "lockers" like money right? It was all but guaranteed, but that's all beside the point. here is the biggest problem with your assumption, and it happens to be indicative of the lousy attitude shared by the rest of the loan industry.

You assume that I'm advocating "hurting" borrowers' rates or costs by floating a rate, when quite the opposite is true. I firmly believe that if you float someone's rate and lose, that the loss should come from your YSP. If you float and win, depending on how much you win, you should get more YSP and give the client another eighth. One of the coolest things that can happen for clients is to show up at closing with a lower interest rate than what was on the initial GFE. Yes yes yes, I know MOST loan officers don't adhere to these ethics, but I think they should. The good ones do and end up profiting because of it. More importantly though, clients should be educated on EXACTLY how pricing works. They should have the rate sheet. They should know how to price a loan. They should have the choice to lock or not. If you are going to float, they should still have the rate guaranteed from whatever day and time it was they wanted to lock, and if you can't deliver it, you better find a legal way to pay for the difference. Just this week, I funded a deal with Provident that was locked on the best day of the last 2 months. They blew the lock and I not only gave up all of my fees, but also paid 2300 out of pocket to honor the original rate. This wasn't even a case of a bad lock decision, but simply an attempt to deliver on the client's original expectations. That 5000 investment (2300 cash plus the 2700 of commission I lost) will come back to me many times over because I did the right thing. Or at least that's the belief under which I operate. I'm not trying to be on a soap-box here, and I know it's not how most of us do business, but rather than assuming i'm advocating "rolling the dice" with client's biggest asset, it would be great if this industry was full of professional enough people that the assumption would be that a botched float simply hurt the broker and not the borrower, unless of course it was the borrower's explicit decision to float.

yeah yeah yeah, i know i write too much...

mantixmortgage

2717 Posts

Posted - 07/10/2008 : 10:36:07 PM

quote:
Originally posted by mgraham224
I funded a deal with Provident that was locked on the best day of the last 2 months. They blew the lock and I not only gave up all of my fees, but also paid 2300 out of pocket to honor the original rate. This wasn't even a case of a bad lock decision, but simply an attempt to deliver on the client's original expectations. That 5000 investment (2300 cash plus the 2700 of commission I lost) will come back to me many times over because I did the right thing.

i respect your vast knowledge and uber ethical business practices, but thats just crazy, man.

at least to me.

mgraham224

1008 Posts

Posted - 07/10/2008 : 10:40:34 PM

quote:
Originally posted by mantixmortgage

quote:
Originally posted by mgraham224
I funded a deal with Provident that was locked on the best day of the last 2 months. They blew the lock and I not only gave up all of my fees, but also paid 2300 out of pocket to honor the original rate. This wasn't even a case of a bad lock decision, but simply an attempt to deliver on the client's original expectations. That 5000 investment (2300 cash plus the 2700 of commission I lost) will come back to me many times over because I did the right thing.

i respect your vast knowledge and uber ethical business practices, but thats just crazy, man.

at least to me.

it was a stretch for me too, but I had my reasons. Very good reasons that 3 or 4 of you that have talked to me about it totally understand. It's only the 2nd time I've ever lost money on a deal. But trust me, I agree, it's crazy. I'm not happy about it.

Agent_Mike

375 Posts

Posted - 07/11/2008 : 12:40:46 AM

mgraham224,

The problem is not everyone will simply honor the original rate and eat the hits if they play it wrong like you supposedly do. The problem is most brokers will take the YSP or pass it on to client if it goes either way.

Not every LO on these boards can simply eat fees. They have higher powers to answer to. So assuming that everyone is in a position like you are is simply foolish.

They ask a simple question - do I lock or float. If they're asking that simple question, the obvious simple answer is lock.

The people that know the markets and subscribe to various mtg news and economic calanders don't ask questions like these.

Albeit your condescending attitude may make a point for your own ego but it certainly won't help the people asking the question.

mgraham224

1008 Posts

Posted - 07/11/2008 : 09:30:16 AM

quote:
Originally posted by Agent_Mike

mgraham224,

The problem is not everyone will simply honor the original rate and eat the hits if they play it wrong like you supposedly Nice One! do. The problem is most brokers will take the YSP or pass it on to client if it goes either way. I know. They're ******s. And they're going to be doing that regardless of what you or I tell them.

Not every LO on these boards can simply eat fees. They have higher powers to answer to. So assuming that everyone is in a position like you are is simply foolish. sorry, i didn't realize not everyone owned their own shop... I'm new at this... If people aren't in a position where they can give up YSP, then they obviously shouldn't be floating. I think I've mentioned almost those exact words almost every day. "if you can't afford to lose money, then lock." Yeah, come to think of it, I DO say that!

They ask a simple question - do I lock or float. If they're asking that simple question, the obvious simple answer is lock. though i agree with you that locking is the better choice a majority of the time, saying that the "obvious simple answer" to such a complex topic is always one way or another is akin to saying "Even though the news says there's only a 50/50 chance of snow and even though I would make a lot of money if I went to work, I'm going to stay home today in case it does snow." It makes sense for a lot of people to think like that, but i don't think it's the obvious and simple answer.

The people that know the markets and subscribe to various mtg news and economic calanders don't ask questions like these. in fact, they ask MORE

Albeit your condescending attitude look pal, just because I said "i have a problem with this post," and I pointed out poor grammar, it's merely my direct communication style combined with my lifelong propensity to correct grammar, and was not intended to be condescending. may make a point for your own ego i'm not proud of losing the 5000 that you so kindly pointed out I only "supposedly lost." Do I have an ego about honorable actions in business? Note sure. Sure I'm proud of it, but I probably wouldn't be unless I felt like it was something that made me different than the average. I think more of my outspokenness on the topic comes from an earnest desire to improve our industry but it certainly won't help the people asking the question. Maybe so... At least we can agree that it certainly didn't help you. Amd without any sarcasm, I am sorry for that. But maybe someone else reading it might recall it the next time they are "on the fence" regarding money versus customer service, and the solidarity of knowing someone else "bit the bullet" might help them do the right thing. Look, I'm not proud of making the stupid business decision of locking with Provident for 30 days when I should have done 45. Like I said, that's not the kind of thing I TRY to do. The bottom line was that although I agree it is always the safest bet to lock, sometimes it is a "good enough" bet to float that it makes sense. The other part of that thought was that in the process of enabling one's self to make such a decision, they will inevitably have to learn more about their industry, which is good for everyone, regardless of whether people are locking or floating.

Lastly, I'm not much for conflict. I have strongly held beliefs. I talk (type) a lot, and sometimes use a style of prose that is normally associated with anger or sarcasm. Unfortunately, that's just the way I talk. It's not always a good thing. Please know that if I ever had a potentially inflammatory problem with someone on the forum, I would contact them directly without airing dirty laundry. I didn't take any offense to your first post, although I do take a bit to the "supposedly" part of this most recent one. Anyway, I know not everyone is going to agree with me or like what I say, but nonetheless, I'm sorry if the previous post was ill-received. I invite you to always have a healthy and collegial (and even spirited) disagreement and debate with me, provided we don't forget that latin root of collegial is the same as that of "colleague." You don't even have to like me (though I will cry). Still, we're all on the same team... Except for RacerX (in a league of her own?)...

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