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Scott Sistilli's Blog

By Scott Sistilli | Mortgage Broker
or Lender in Granada Hills, CA
  • Home Sales Increase to Near Two Year Highs

    Posted Under: General Area, Home Buying, In My Neighborhood  |  April 30, 2012 12:04 PM  |  1,175 views  |  No comments

    Contracts to purchase previously owned homes increased solidly to a near two-year high in March, suggesting the spring selling season got off to a firmer start and offering hopes of a pickup in housing.

    The National Association of Realtors said on Thursday its Pending Home Sales Index, based on contracts signed in March, jumped 4.1 percent to 101.4, the highest level since April 2010.

    March's strong rise in signed contracts pointed to a pick up in home resales after they stumbled in the past two months.

    "First quarter sales closings were the highest first quarter sales in five years. The latest contract signing activity suggests the second quarter will be equally good," said Lawrence Yun, chief NAR economist.

    Signed contracts were up 12.8 percent in the 12 months to March.

    What Happened to Rates Last Week?

    Mortgage backed securities (MBS) lost just -1 basis point from last Friday to the prior Friday which caused mortgage rates to move sideways.   The highest rates of the week were on Wednesday and the lowest rates of the week were on Monday.  MBS traded in a very narrow range all week as we had a mixed bag of economic news.  Durable Goods Orders, New Home Sales, Initial Jobless Claims and the 1st quarter GDP were all worse than expected and provided some support for bonds. But Consumer Sentiment, Pending Home Sales and Fed action were negative for bonds and kept a cap on any material gains.   The Federal Reserve Open Market Committee (FOMC, aka "The Fed") left their key interest rate alone and basically made a carbon copy of their last policy statement.  They basically told the market that there was no need for any additional stimulative measures at this time, nor do their projections show that further easing would be needed in the future. However, if the economy did turn from its current positive direction they are prepared to step in.

    What to Watch Out For This Week:

    The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages.

    DateTime (ET)Economic ReleaseEstimatePrior
    30-Apr8:30 AMPersonal Income0.20%0.20%
    30-Apr8:30 AMPersonal Spending0.50%0.80%
    30-Apr8:30 AMPCE Prices - Core0.20%0.10%
    30-Apr9:45 AMChicago PMI6062.2
    1-May10:00 AMISM Index5353.4
    1-May10:00 AMConstruction Spending0.50%-1.10%
    1-May2:00 PMAuto Sales5.4M5.1M
    1-May2:00 PMTruck Sales5.7M5.7M
    2-May7:00 AMMBA Mortgage IndexNA-3.80%
    2-May8:15 AMADP Employment Change170K209K
    2-May10:00 AMFactory Orders-1.80%1.30%
    2-May10:30 AMCrude InventoriesNA3.978M
    3-May7:30 AMChallenger Job CutsNA-8.80%
    3-May8:30 AMInitial Claims375K388K
    3-May8:30 AMContinuing Claims3300K3315K
    3-May8:30 AMProductivity-Prel-0.60%0.90%
    3-May8:30 AMUnit Labor Costs3.00%2.80%
    3-May10:00 AMISM Services55.556
    4-May8:30 AMNonfarm Payrolls162K120K
    4-May8:30 AMNonfarm Private Payrolls167K121K
    4-May8:30 AMUnemployment Rate8.20%8.20%
    4-May8:30 AMHourly Earnings0.20%
  • Notice of Right to Rescind

    Posted Under: General Area, Financing, In My Neighborhood  |  April 4, 2011 3:04 PM  |  895 views  |  No comments

    One of the most common documents a borrower may encounter is the "Notice of Right to Cancel".  This document is also referred to as the “rescission document” or the “3-day Notice of Recession.”  This notice will be found in the loan document package, and it states that the borrower can cancel or rescind their loan transaction within three business days after signing the loan documents.  Borrowers get confused as to when the right to cancel applies, and if so, exactly what day the borrower can rescind their approval of the loan transaction.

    When does the right to cancel apply?

    The right to cancel applies to refinances or “home equity lines of credit” on a borrower’s “Primary Residence.”  The right to cancel does not apply to borrowers who are purchasing a home, borrowers who are refinancing their second home or on investment property or rental properties.

    Understanding the important dates on the document.

    There are two important dates on the document.  The first is the date of signing.  The second is the rescission date, or final date to cancel.  When the lender prepares final loan documents for an anticipated signing, the lender may indicate these dates by printing them in advance for the borrower on the Notice of Right to Cancel.   However, many lenders prefer to leave the dates blank on the document because the exact date of signing may not be known.  In this case, the lender may print instructions on the document for determining the correct dates, or the lender may insert an instruction sheet into the loan package with the Notice of Right to Cancel. 

    Determining the Rescission Date.

    The borrower has the right to cancel until midnight on the third day after signing.  To determine the correct rescission date after signing, you will count three days beginning with the first day following the signing date (the transaction date is not counted).  Sundays and legal federal holidays are not counted, and are therefore skipped.  Saturdays are counted because banks conduct lending business on this day. 

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