CWC Financial  
  Weekly Newsletter June 21, 2004  


CWC Financial

1505 Bridgeway, Suite 121
Sausalito, CA 94965
Local: 415-331-3744
Toll-free: 888 711-5454

U.S. Treasury Bonds
Maturity Yield Last
Week		 Last
Month
5 Year 3.92 4.00 3.89
10 Year 4.70 4.79 4.76
30 Year 5.37 5.46 5.47

Treasury Market Summary:

The treasury market had a long and difficult day, with traders stepping to the sidelines going into the weekend and taking their money with them.  Treasuries drifted lower through the day after an initial push higher, the range was tight and volume light.  The 10-years bounced yields back up to 4.712% from 4.65%, and players were wary of putting on naked positions so much of the day's action involved unwinding of curve trades.  The 2-10-year saw a bit of steepening as a result, ticking up to 194.5 from the early 192 level.   The lightness of the trade was underlined when news reports of the murder of the American hostage in Saudi Arabia did not cause a flight-to-quality rally.   Geopolitical risks, however, will help support treasury prices through the summer, as few want to establish and hold large short positions in the constant shadow of terror issues.  Players note that the terror risk and particularly those threatening the late summer political events will "lend a bid to the market into September.  There is no question it only takes the action of one nut-job to push the market 5 points higher. "  The market had little to say about the record -$144.9 bln account deficit, and some felt that the big moves mid-week, specifically the huge rally that knocked yields off to 4.65% from 4.88% had "exhausted and injured" the market.  Unfortunately, expected volatility ( with rumors of intervention) on the  yen never materialized and the buck remained under pressure.

 

 

CWC Financial is a Viking Capital, Inc. affiliate - a full service Mortgage Banker and Mortgage Broker. We proudly serve Bay Area homeowners and home buyers. Our business philosophy is to offer the highest level of personalized service and great rates.

The purpose of the newsletter is to inform our readers of current consumer topics that affect the mortgage and real estate markets.

Private Mortgage Insurance (PMI)

Private mortgage insurance is a type of insurance that helps protect the mortgage company against losses due to foreclosure. This protection is provided by private mortgage insurance companies and allows mortgage companies to accept lower down payments than would normally be allowed.

Private mortgage insurance also enables mortgage companies to grant loans that would otherwise be considered too risky to be purchased by third party investors like the Federal National Mortgage Association (FNMA) and the Federal Home Loan Mortgage Corporation (FHLMC). The ability to sell loans to these investors is critical to maintaining mortgage market liquidity, which in turn, allows mortgage companies to continue originating new loans.

PMI Payment Options

Private mortgage insurance can be paid on either an annual, monthly or single premium plan. Premiums are based on the amount and terms of the mortgage and will vary according to loan-to-value ratio, type of loan, and amount of coverage required by the mortgage company.

Under an annual plan, an initial one year premium is collected up front at closing, with monthly payments collected along with the mortgage payment each month thereafter. Monthly plans allow a borrower to pay only 1 or 2 months worth of premium at closing, and then on a monthly basis along with the regular mortgage payment. Under a single premium plan, the entire premium covering several years is paid in a lump sum at closing. Typically, homebuyers choose to add the amount of the mortgage insurance premium to the loan amount. By doing this, homebuyers can reduce their closing costs and increase their interest deduction.

PMI Cancellation

Mortgage insurance can usually be canceled by the home buyer after he or she has at least 20 percent equity in the home. Borrowers should contact their servicer to find out the procedure for canceling mortgage insurance when they think they have achieved 20 percent equity. Guidelines for canceling private mortgage insurance are set by investors. Typically, investors will require an appraisal on the property. The servicer can recommend qualified local appraisers.

The purpose of this newsletter is to stimulate thought for our clients and those professionals with whom we network. One should consult with a qualified insurance planning professional prior to implementing any insurance planning strategies. If you are an mortgage planning, real estate, trust or financial planning professional receiving this newsletter, please call our office and introduce yourself to us.  We are always seeking to grow our referral network and expose more service professionals to our client base. 

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Note: This is not an advertisement or solicitation of loans. The purpose of this newsletter is to inform you of changes that can impact the real estate or mortgage environment. Viking Capital, Inc. is a full service mortgage banker and brokerage approved with many lending sources throughout the state. CWC Financial is a Viking Capital, Inc affiliate and provides conventional, non conforming, and jumbo loans. We assist customers with great credit or bad credit. We also assist individuals who are self-employed and require both full documentation and no documentation loans.  ©2004 CWC Financial. All Rights Reserved.

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