The Veridian Blog

We have mixed results today in spite of the enormous potential from two highly influential reports today.  First, it was Retail Sales that rose 1.6% last month, much higher than what experts thought.  This means that consumers spent more last month than expected which is generally bad news for bonds and mortgage rates, especially since consumer spending makes up two-thirds of the US economy.  On the other hand, last month's Consumer Price Index came in slightly lower than most had forecasted.  The core reading showed no change when most were expecting a 0.1% increase.  This basically means that inflationary pressures were softer than expected at the consumer level of the economy.  Inflation is an ever present threat to low mortgage rates so whenever it is held in check, that is good news for borrowers.

Interest rates remain at or near all-time lows.  Gradually, wholesale lenders are releasing more products into the market, including the long-awaited Jumbo variety (for loans over $729,750 in the Bay Area), as well as very competitively priced 10/1 and 7/1 ARM loans.  We feel that in time, underwriting guidelines will begin to loosen as well after a period of cautious skepticism. 

Please call us for the latest no-cost quotes on your purchase or refinance loan.

You just realized that you must travel overseas during an important phase of the purchase transaction when the loan documents are about to be ready to sign.  As close of escrow is fast approaching, you cannot afford to wait until you return – what possible solutions are there?

Ideally for all, it is best for buyers to sign the loan documents themselves.  However, situations will arise where it is difficult, or too time-consuming to ship documents overseas, find a notary or comparable signing authority that will satisfy international laws as well as the lender’s guidelines.  Too often, a common error or a missed notary stamp can unhinge the entire fire drill and land you back at square one. 

In situations like these, it is a good idea for a buyer to execute a Limited Power of Attorney (POA) to authorize another person (usually the spouse) to sign on his or her behalf.  If there is no spouse to grant the power to, then we still recommend a trusted family member.  Beyond that circle of trust, too many complications can arise that may land you in a heap of legal mess if something goes awry.  So before leaving, be sure to execute the POA in front of a public notary and contact your lender to see if they need to review the document before docs are sent to escrow.  Some lenders will have to amend signature blocks to make sure the person granted the authority signs the documents properly.

Once the documents are ready, the person holding the POA will sign every initial and signature block as “Name of Client, by Name of Person, his/her attorney in fact”.  Sure, this is a lot of writing and hand cramps are likely, but it is certainly worth the headache of shipping documents back and forth with no guarantee that things will go smoothly.

Over the past two or three weeks, the bond market has shown a growing bias towards higher rates.  That bias only grew stronger last week after consumer and manufacturing sentiment reported higher than expected numbers.  The week ended during a shortened Good Friday session that saw the nation's unemployment rate remain unchanged at 9.7%.  More significant, jobless claims rose 162,000, but still less than many had forecasted at 184,000.  Any way we look at it, the economy is still heading in the right direction. 

This week is fairly light as far as scheduled economic reports.  Other than the FOMC meeting minutes and a couple of Treasury auctions, look for the stock markets to heavily influence bond trading and mortgage rates.  The benchmark 10-year Note has fallen out of favor and yesterday's yield hit 4.00% - the highest in over a year :-(  It might indeed  be time for me to go on vacation soon :-)