Mortgage Market Update

With little economic data this week to influence trading in the capital markets, Stock prices are mixed to start the holiday shortened week, while Mortgage Bonds are trading near unchanged levels. All markets were closed yesterday in observance of Martin Luther King Day. The two reports that will be released will be Thursday’s Weekly Initial Claims report and Existing Home Sales data.

In global labor news, the International Labor Organization (ILO) warned today that global unemployment is a current problem and it is set to rise. The ILO said that there were 202 million people unemployed in 2013, an increase of five million over 2012. The agency predicts that there will be 200 million new jobs created in the next four years, but the number won’t be able to keep up with unemployment that will exceed 215 million by 2018.

Several large banks across the nation are exiting from granting short term loans that carry high interest rates or so-called “Payday Loans.” Federal regulators are looking into whether or not these short term loans violate consumer protection loans. Instead of calling them Payday Loans, they have issued short term loans of several hundred dollars or less and are repaid from the customers checking account on payday. The loans often carry triple digit interest rates when calculated on an annual basis.