Aloha Friday,

The rates are up a touch this week as the bond market is very nervous about of the government bonds coming to market and the actual demand for these bonds worldwide.

People are looking at the U.S. Treasury explode and then questioning what it is being used for," said Nick Kalivas, vice president of financial research at MF Global. "Once these programs go into place, it is very hard to cut them," said Kalivas. He said that if stimulus doesn't deliver strong growth, the government could have trouble finding long-term buyers of the debt.

"Investment markets are looking for a short-term fix and to date, nothing has been offered that will effectively turn the economy around in the short term," said Kenneth Naehu, managing director and head of fixed income at Bel Air Investment Advisors.

The Treasury market is particularly concerned about demand for U.S. debt from abroad. "The Chinese and Indians and a lot of countries are issuing a lot of debt to do their own stimulus packages, so the market is kind of nervous about who is going to buy all the supply we are going to be issuing," said Kalivas.

To complicate matters, Fannie and Freddie have now added a .75% fee to the points for ANY condominium purchase regardless of loan to value, credit score or qualification. Their reason is that condo’s have great defaults then homes. As if we weren’t struggling as a nation to keep the first time and move up buyers in the game, they will now charge more for the rate. In addition, the Private Mortgage Insurance industries have announced that they will only take condo purchases with 10% down for buyers who have a 720 FICO score or better. So, the people who do not have that high of a score will be required to go FHA. What happens if the tract is not FHA approved you ask? We must get a spot approval.

If you don’t like what is happening with today’s loan rules, hang around an hour longer. They will all change again. Our lending industry is a moving target right now so let’s make sure we talk about each deal and borrower as every transaction is unique.

Have a great President’s weekend.