Mortgage Blog

It's very interesting to read Malcolm Gladwell's
"What the Dog Saw". I am more interested in the part
that when the people communicate with each other,
there is "other minds" problem.

Recently, I got a lot of phone calls and emails
saying that I predicted right on the ARM rates
hit the history low again, even when the rate
was very high the end of 2010 & beginning of 2011.
And if you check the blogs, someone questioned
me about those as well.

Even for the rate trend, some readers got the
impression that the rates will go even lower
and decided to wait for a lower one. What I
am trying to say is that no one want to miss
the current low rate, and there are not much
room down from here(2.5%-2.625%). When the ARM
rates around 2.25%, most lenders will not make money.
So 2.375% should be the bottom of the ARM conforming
rates.

Also, for the rate trends, I always like to say
"it's trading within the range". For us mortgage
brokers, since we work on 10s or 100s loans at the
same time, we lock the rate as the clients agreed.
It could be locked higher or lower, depends on the
market. For any one loan, it's just one loan for me
but it's his clients' 100%, I can understand their
needs for the lower the better rates. And that's
another reason I analyze teh rate trends.

This reminds me of some fund managers. It should be
not their intention to have the riskier investment for
higher returns. They should invest as their clients
agreed to, some like take higher risks, some like
conservatives.