JD’s NOTE: This came through on Thursday; I just didn’t see it waiting for me.

Phoenix mortgage rates skyrocketed this week and are .5% higher than Monday. Two things have driven mortgage rates higher:

1- The threat of inflation is omnipresent in every economic report.
2- Two mortgage companies defaulted on their lines of credit.

Remember when I talked about how important it is to use a mortgage planner who subscribes to real-time MBS pricing?

Why am I so adamant about the fact that the ten-year treasury note is not the determining factor of mortgage rates? The statement is factually incorrect. While the two securities often move in concert, polarity can occur and sometimes does; this is one of those times. The ten-year T-note is considered the benchmark, not bellwether fixed-income security. This means that all other securities are compared to the 10-year T-note (we call that the “spread”). It is GENERALLY a guiding indicator of ALL rates, however, in times or crisis or exuberance, it can’t be relied upon for other fixed-income securities’ direction. Spreads to the T-note widen and narrow due to extraneous variables.

Today is what of those times. Most loan originators will be telling you to lock today because the treasury bond market is up. Today, I’m telling you to hold off your rate locks until the mortgage market goes through some price discovery.

I think that traders are overreacting to the defaults. New mortgages, funded today, do not have the same risk to investors as the loans funded in 2003-2006. The stricter underwriting guidelines will actually be the saving grace; mortgage rates will come back down when Wall Street realizes that the past doesn’t equal the present. Big economic news is due out on tomorrow; the employment report.

So, wait. Don’t lock your mortgage rate today. You should check Mortgage Rates Report often to see any developments. While I recommend that you float your mortgage rate (if you don’t have it locked already), I could change that recommendation on a dime.

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Two quick housekeeping items … first, I’ve switched to a different theme so all the fun stuff you’re used to on the left of the blog now is in the first of the two right columns. There was a logical reason for the change - the spacing issues in Internet Explorer were becoming a bear - but that’s neither here not there.

The second change is there’s now a photo widget on the right side with assorted photos from the Phoenix area as I take them. I’m not the biggest one for pictures. Many agents are doing far more with small portable cameras or iPhones. My camera’s still a little bit of a pain as far as the download and as far as using my phone … I don’t even get e-mail on my phone, so clear photos aren’t an option.

Okay, now that I think of it, there’s a third change. I’ve adjusted the Phoenix homes search button slightly and will be adding another for home valuation. You’ll see these are the top of the page across the board, making it a little more convenient to reach us.

Which makes me realize I probably should create something similar for e-mail. But that will be another day or so away.

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Since others around the country have taken the time to tell their local readers to change their clocks for daylight savings, I thought I’d take a moment to remind everyone here in Phoenix to leave them be and enjoy the year-round life in Mountain Standard Time (also known as Time Zone 7 on Microsoft products.)

Technorati Tags: Phoenix real estate

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If it seems like I’m picking on Trulia Voices these days, well, you’re probably right. Yesterday there was a thread asking how to go around a listing agent who “seem to be representing their own iterests vs. the interest of the Bank or the Buyer, on a REO???”

More than a half-dozen agents have jumped in to the fray with suggestions. Not a single one has asked what it is the listing agent’s doing that is being construed as being in their own interest versus that of the bank.

Side note: while agents who subscribe to NAR’s Code of Ethics owe fair dealings to the other side in a transaction, at no point is a listing agent charged with looking out for the best interest of a buyer as the questioner suggests. That’s their agent’s job.

Though tempted to ask the question everyone else has ducked, I decided not to do so because I really don’t need not want to know. And lines of questions such as this seem to dance so close to the code of ethics’ prohibition on slamming other agents, it’s not worth getting within a country mile of it.

But here’s the larger issue and the ultimate lesson for today’s post … this attempted purchase has been an ongoing soap opera with a dominant story line of a buyer looking for advice from everyone but their agent. If you can’t trust the person with whom you’re working enough to believe their advice, why are you working with them?

This has come up in my own business of late as well. The beauty of the Internet is there’s a lot of more information available for consumers. The danger is the information is woefully incomplete, but the sheer volume of it all makes it appear comprehensive. It’s not.

Most consumers buy a handful of homes in their lifetime. Most turn to family who also have bought a handful of homes in their lifetime. Collectively, their lifetime of experience equates to about a year’s worth of work in my business.

It’s my fiduciary responsibility to educate a buyer or seller about the process, not to tell them what they want to hear. There are plenty of agents who will tell people exactly what they want to hear. When that happens, it’s time to run.

I can’t tell you what you should value. But my experience in this business, my experience in corporate America, my experience in my own life says to value honesty over a yes man.

Technorati Tags: Trulia Voices, Phoenix real estate

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