Category Archives for "News"

Cum arcu pretium, sed sed. In nonummy, tempor molestie id, omnis tellus. A risus dolor, vitae et donec, mauris amet posuere.

Coronavirus vs Interest Rates

coronavirus

Last week, in the midst of our pandemic, Saudi Arabia and Russia initiated an oil price war – tumbling prices by 34% (down to $31.73 per barrel). That combination sent the stock market into a tailspin. After equity investors fled to safe-haven holdings, the DJIA dropped 10% to 23,185 (it was down 18% at one point during the week – 28% off the February 12 high of 29,551).

Although 10-Year Treasuries (the rate that typically sets the direction of fixed mortgage rates) have averaged 2.27% over the past 5 years, the buy-up last week resulted in a record low 0.318% 10-Year yield.

But if mortgage rates usually reduce when investors flee the stock market, why did 30-year fixed mortgage rates increase from 3.19% to 4.0% during this commotion???

For several reasons due to huge uncertainty, volatility and panic – all of which increased costs to lenders… which in turn were passed to borrowers via higher mortgage rates:

  • Profits to mortgage servicing companies (who manage borrowers’ monthly payments and escrows for lenders) were significantly reduced after many mortgages were repaid/refinanced early – i.e., servicing fees to lenders increase if there may be less mortgages to manage
  • Pools of residential mortgages (mortgage-backed securities/MBS’s) became difficult to value – so investors paid less to the lenders who were selling these mortgages
  • Lenders, thinking Treasury rates had bottomed, paid higher fees to hedge against rising rates – and were also subjected to margin calls as the 10-Year rate quickly dropped further (because they had to continue paying the higher, hedged rate)

Here's the Point: In a market with unprecedented volatility, there are several reasons why mortgage rates actually go in a direction opposite to what you might expect.

New Rotary Board to Focus on Environment

Rotary BOD 2018-19


Rotary Club of Vero Beach 2018–19 Officers and Board of Directors: Daniel Fourmont, Past President; Kathryn Barton, Treasurer; Ken Ligon; Michael Kanuka, President; Richard Carlin; Brenda Bradley, Secretary; Stuart Kennedy, President-Elect; Camille Yates, Vice President; Jim Brumbaugh and Larry Parks. (not pictured – Tom Mitchell).

The Rotary Club of Vero Beach (Vero’s 1st Club) recently celebrated its 92nd birthday. Chartered on June 9, 1926, club members through the years have exemplified Rotary’s motto, “Service Above Self,” by donating their time and resources to the local community.

“Rotary is all about connecting and providing service to the community, fellowship with members, and personal and professional development,” says Michael Kanuka, President of the Rotary Club of Vero Beach. “We are the oldest Rotary Club in the area and have proudly helped at least 45 local charitable organizations who serve thousands of people. We have raised money in various ways, and established our Vero Beach Rotary Charities Foundation which has donated more than $100,000 to help local children and adults in need.”

In addition to helping those in need locally, the Rotary Club of Vero Beach works on international projects including ones that bring clean water and dental care to people in the Dominican Republic. They also participate in a Homestay program hosting international Rotarians to give them a perspective of what it’s like to live in Indian River County.

“We are committed to continuously improving our community and our strategic focus is now on the environment,” says Kanuka. “Our recently installed Board of Directors have been brainstorming new civic projects which we will soon be announcing.”

Rotary is an international organization boasting more than 1.2 million members in almost 35,500 clubs around the world. The Rotary Club of Vero Beach meets every Thursday at 11:45 am at the Vero Beach Yacht Club, 3601 Rio Vista Blvd., Vero Beach, FL 32963. For membership information contact President, Michael Kanuka at kanuka@oceanmortgage.com or visit www.rotaryofverobeach.com.

image_pdfimage_print