Update #1/ Week of May 24, 2010/ Ara Melkonians-Chief Mortgage Banker

Good Morning Everyone and Happy Monday! When I said last week that you should lock in this 4.375% rate as quick as you can since big banks really don’t want to offer this rate . . . I didn’t think it would only be available for a couple hours. Seriously. The 4.5% note rate on our 30 year conforming product this morning does have a slight cost (nearly 3 bps) so it is definitely still available. However, Friday morning’s pricing had a (.529) rebate on the 4.5%, par on the 4.375%, and credit markets are basically the same level this morning as they were at that time. You need to have your finger on the trigger in case we see it again, ‘cause rates won’t be at these levels for long.

The only economic news on the calendar this morning is the Existing Home Sales report for April which showed a surprise jump upward of 7.6% m-o-m to an annualized rate of 5.77M units . . . just higher than the 5.62M anticipated. Not sure why this is supposed to be a big news story, since we all know the news story is clouded by the fact that April was the last month for the tax incentive. It will sure be interesting to see how May looks. Hopefully realtors can catch some wind going into Summer and keep these numbers from falling too far.

News out of Spain that their Central Bank took over a regional bank named CajaSur has spooked markets once again. The Euro is down 1.5% compared to the US dollar which is strong today not only vs. the Euro but also compared to a basket of foreign currencies. This is weighing on our stock markets here, too. However, weakness in equities has meant strength in credit markets (and commodities, today) and better pricing for us. So let’s enjoy these low rates and get some loans locked!