Two days after the President's Day holiday, the 10 year treasury spent most of Wednesday sliding lower, regaining some of last week's losses. The long bond peaked this morning at 2.06% then turned and ended the day at 2.0%. If the rate holds in the morning we should see 30 year mortgage rates back down to 4% from their recent high of 4.125% and possibly heading for the high 3's again. The drop in bond yield was attributed mostly to economic reports showing softness in Europe and China.
Home sales in January were at a one and a half year high and inventory dropped to the lowest level since March 2005, a good sign for the depressed housing prices. This great news was dampened somewhat by a sharp downward revision to the December sales numbers. Over 30% of January sales were foreclosures or short sales. Investors are now in a position of having to compete with first time home buyers for short sales and foreclosures.
Chase, BankAmerica and Wells are now offering incentives on their REO of up to $35,000 depending on where the home is located. All three are said to be considering the expansion of the program to other states.
Citi Mortgage paid a $158.3 million dollar fine to FHA and admitted it certified and sold loans to FHA that didn't qualify. The whistle blower and her attorneys received a cool $31 million of the settlement. It pays to tattle, I guess.
We'll see how the week ends.
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