July 12th, 2021 11:55 AM by Richard Sardella MLO.100007700/NMLS 233568
'How do I love thee; let me count the ways' offer letters have the potential to violate Fair Housing laws
It was bound to happen sooner or later. In these days of frenzied multiple offers, every agent and every homebuyer wants an edge — something that would impress a seller to accept their offer over all the others just — because. That "love letter" some buyers use to woo sellers, telling of their motivation to buy the home, is now banned in Oregon, and other states may soon follow. Why? Communications from buyers to sellers that contain information outside of the traditional offer may violate Fair Housing laws.
According to Realtor Magazine, buyers' use of love letters has become a common tactic to help make a buyer's offer stand out. Buyers will write to sellers about how much they love the home, how they can envision their family living there, or how they'll spend the holidays. But the National Association of REALTORS® has been waving a red flag about it for some time, warning its members to be aware of the risks involved in using this tactic.
"While this may seem harmless, these letters can actually pose fair housing risks because they often contain personal information and reveal characteristics of the buyer, such as race, religion, or familial status, which could then be used, knowingly or through unconscious bias, as an unlawful basis for a seller's decision to accept or reject an offer," says the NAR.
They continue to stress that all parties in a real estate transaction consider only legitimate, non-discriminatory criteria when making business decisions. Failing to do so could also leave REALTORS® in a compromised position. "We also recommend that our members explain potential pitfalls to their clients while stressing the importance of sticking to objective criteria in order to adhere to federal and state Fair Housing laws."
With the average home receiving five offers, these letters may seem harmless on the surface. But when a letter describes a family situation or circumstances, whatever that may be, or indicates or gives a clue to a religious or any other protected class, there's always the risk that a seller could be accused of making a decision based upon inappropriate factors.
Source: RealtorMag | TBWS
How Rates Move:
Conventional and Government (FHA and VA) lenders set their rates based on the pricing of Mortgage Backed Securities (MBS) which are traded in real time, all day in the bond market. This means rates or loan fees (mortgage pricing) moves throughout the day, being affected by a variety of economic or political events. When MBS pricing goes up, mortgage rates or pricing generally goes down. When they fall, mortgage pricing goes up. Tracking these securities real-time is critical. For more information about the rate market, contact me directly. I’m among few mortgage professionals who have access to live trading screens during market hours.
Rates Currently Trending: Neutral
Mortgage rates are trending sideways this morning. Last week the MBS market improved by +6bps. This caused rates to move sideways for the week. We saw high rate volatility at the end of the week.
This Week's Rate Forecast: Neutral
Three Things: These are the three areas that have the greatest ability to move rates this week. 1) Inflation, 2) Central Bank, and 3) Treasury
1) Inflation: We get several key inflationary data points this week, with CPI and PPI getting the most attention. Core CPI YOY is expected to rise by 4.0%, and Core PPI YOY by 5.1%. Both are at least double the Fed's "target" rate of 2%.
2) Central Bank: We get interest rate decisions and policy statements from the Bank of Japan, Bank of Canada, and Bank of New Zealand this week, but the focus will be on our Fed Chairman Powell's semi-annual testimony as well as the release of their Beige Book, which prepared specifically for the next FOMC meeting.
3) Treasury: There is a tremendous amount of debt that the U.S. is auctioning off this week. We have two note auctions today, with the 3-year at 11:30 am ET and the 10 yr at 1:00 pm. Tuesday's 30 year Treasury bond auction will be much more important for mortgage rates, as it will be after the CPI release.
This Week's Potential Volatility: High
We get a lot of inflationary data this week that can move rate markets; the most significant is the CPI released on Tuesday. Fed Chair Powell's testimony on Wednesday will get a lot of attention from rate markets. We have a ton of debt hitting the markets this week; the most important is the 30 year Treasury on Tuesday. While today we don't expect a lot of rate volatility, this week will likely be a volatile week for rate markets.
If you are looking for the risks and benefits of locking your interest rate in today or floating your loan rate, contact your mortgage professional to discuss it with them.
Richard Sardella has been actively managing and providing services in the mortgage industry for over 27 years. Richard serves on the board of directors as President of Colorado Home Mortgages Inc.
All information furnished has been forwarded to you and is provided by thetbwsgroup only for informational purposes. Forecasting shall be considered as events which may be expected but not guaranteed. Neither the forwarding party and/or company nor thetbwsgroup assume any responsibility to any person who relies on information or forecasting contained in this report and disclaims all liability in respect to decisions or actions, or lack thereof based on any or all of the contents of this report.
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