This week will be interesting for the bond market and mortgage rates. There are five remaining economic reports scheduled for release, but only one of them is considered to be of high importance to the markets. With data being posted all but one day of the week, we may see some noticeable fluctuations from day to day in mortgage pricing.  Generally speaking, despite the lack of a data-packed calendar, I would still maintain constant contact with your mortgage professional.

Interest rates remained volatile last week as worries about inflation continued to influence the mortgage market.   Comments from the Federal Reserve indicated that the current rate of inflation is above desired levels.  When the Fed is concerned about inflation, they tend to raise interest rates.  We recommend locking now before they go up.

Inflation data continues to hammer headlines and our wallets. News this week demonstrated what we have all been feeling; prices are higher at the pump, the grocery store and anywhere else you use your debit card. Interest rates trade off of bond prices and bonds HATE inflation. Coupled with this is concern about a declining economy which could hold rates back a bit, but the overall trend is higher for those seeking a mortgage in coming months.

Volatility being what it is these days, mortgage rates bounce around a lot. Upward pressure for rates one day gives way to downward pressure the next, only to succumb to upward pressure again.

The see saw between concerns about growth and fears about inflation tilted toward the inflation side again this week, after Fed Chairman Ben Bernanke addressed Congress in the semi-annual report on monetary policy. While detailing the challenges facing the economy, Bernanke noted that inflation was above desired levels and that upside risks for higher prices have “intensified” lately. A Fed seeing higher inflation usually can be expected to react with an upward move to the Fed Funds and Discount Rates at some point in the not-too-distant future. In fact, the Federal Reserve Open Market Committee explicitly noted at its last meeting that “with increased upside risks to inflation and inflation expectations, members believed that the next change in the stance of policy could well be an increase in the funds rate.”

WASHINGTON - Faith-based organizations are making a huge difference in the Bush Administration’s efforts to reduce homelessness, U.S. Department of Housing and Urban Development Secretary Steve Preston said today. Addressing the White House National Faith-Based and Community Initiatives Conference, Preston highlighted the Administration’s partnership with faith-based and community organizations and steps being taken to reduce chronic homelessness, especially among veterans.

“The Faith-Based and Community Initiative combines the strengths of the public and private sectors to make our social programs work better,” said Preston. “There is a vast, network of partnerships between HUD, local communities and nonprofit organizations around the country. These partnerships are incredibly effective in helping to reduce the number of persons who are calling the streets their home.”

See the rest of the article…US Department of HUD

Homeowners file a class action lawsuit in a $60 Million Mortgage Fraud case from Maryland, Washington DC and Virginia.

The U.S. Justice Department says more than 400 real estate brokers have been arrested since March, including dozens over the last two days, in a crackdown on Mortgage Fraud that has contributed to America’s housing crisis.

The Federal Reserve Board on Thursday announced its approval of the notice of Bank of America Corporation, Charlotte, North Carolina, to acquire Countrywide Financial Corporation ("Countrywide"), Calabasas, California, and thereby indirectly acquire Countrywide Bank, FSB, Alexandria, Virginia, and certain other nonbanking subsidiaries of Countrywide.

Attached is the Board’s Order relating to this action.

Attachment (1.38 MB PDF)

Fed Funds Implied Probability

Ben Bernanke says US Monetary Policy is ‘well positioned’; Wachovia fell for second day after ousting CEO Kennedy Thompson; Analysis by Mark Howard, Barclays Capital Head of Credit Analysis.

Shakeups at Washington Mutual and Wachovia. Roundtable Discussion with Andrew Seibert of Nextier Wealth Management and Forbes CEO Steve Forbes.

Washington Mutual shares are down after Kerry Killinger stepped down as chairman. Shares of Wachovia are falling below it’s lowest value in almost 13 years after Ken Thompson was ousted.

Chairman Lanty Smith has been appointed interim CEO. Is this new management what these companies need to get back on track? Are there more troubles for financials?

I think their values will go lower until they get a feel for who will take over. There are probably more Writedowns to come.

These banks have not gone beyond the problem of the Subprime Mortgage Industry and there is possibly another shoe to fall.

If the Credit Deterioration continues, there will be many more problems.

Wachovia has big news today. Shares of falling in the premarket after the company ousted CEO Ken Thompson.

Wachovia stated he is stepping down at the request of the board, saying no single precipitating event calls because the board to reach the decision, but a series of previously disclosed disappointments and setbacks cumulatively have negatively impacted the company and performance. Perhaps you can call it an understatement.

Shares down 57% in the past 12 months.

Washington Mutual , hard-hit by the mortgage and credit crises, will replace Chief Executive Kerry Killinger as chairman of the board.