The 30 year fixed rate is at 6.25% today before adjustments, if any.
Mortgage/Economy news:
Lehman Brothers announced this morning that they believe they show a $2.8 billion loss in the second quarter. Therefore, they have set out to raise $6 billion, which they will do through issuance of additional common and preferred stock. Current shareholders will have mixed feelings. Although the extra capital will strengthen the company for the future, it also dilutes their current outstanding shares, thereby causing them to lose value in the short-term. The company has been pretty honest about their soft position, and they have gotten rid of 20% of their mortgage-related and other leveraged loans. It sends a message to the markets that writedowns have not been exhausted in the lending world yet, but traders will be glad to hear that the company is trying to raise reserves, which is what Fed Chairman Bernanke has recently been urging all financial institutions to do.
The Dow has bounced off its two and a half month low at 12,200. So far it has made back about 100 of the 400 points it lost on Friday. Some price retracement is normal after large declines as investors take profits on shorts and look for new bargains. The Dow needs to get back above 12,400 in order to break the short-term downward trend.
Oil prices have pulled back $3 off Friday’s high, but it is hard to get excited about oil at $136 per barrel. It could merely be based on some profit taking. A small increase in the value of the dollar may be assisting with the lower price as well.
Thought of the day:
You are the only problem you will ever have and you are the only solution.
Bob Proctor
(Provided by Steve Hale~Georgia Platinum Mortgage)
