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June 2, 1995
Really awful, recession-style data have driven mortgage rates to new lows, down near 7.625% at zero and zero.
Payrolls contracted by 101,000 jobs in May against expectations for a gain of the same size, and the Purchasing Managers' Index fell to 46.1% from 52.0%. Anything under 50% reflects a shrinking economy.
While rates are likely to go lower yet, they have fallen too far too fast. An easing move by the Fed is one of several available triggers for a bounce up in long rates.
Once every six years there is an accident involving the Fourth of July. This Independence Day disaster is completely predictable, but seldom anticipated. There are leap year breathers, but otherwise, every sixth year the Fourth of July falls on a Tuesday.
Real estate old-timers know that holidays can cause closing confusion. Even the rawest rookie quickly discovers the prevailing chaos at end-of-the-month closings.
The all-time champion for ruining relationships between bankers, Realtors, title companies, clients, and United Van Lines is Š. Tuesday, the Fourth of July.
In these years, the fireworks begin on the preceding Friday. The Friday before Tuesday the Fourth is not only the last Friday in June (moving day!), but the 30th of June (FHA and VA payoffs! Prorations! Sufficient cash to close!).
The following Monday is the day everyone in America wants to have off, and doesn't. Many of those who don't either call in sick, or are extremely annoyed to be working. If they are working while at work.
Of course, nobody wants to be back on the Wednesday after the Fourth. Many professional conversations that day are either a little sleepy, or abrupt.
Christmas and New Years suffer the same rotation, but when those holidays fall in mid-week, expectations are low, and skeleton staffs cover for mass escapes. Everybody is gone on Thanksgiving Friday. President's Day, Memorial Day, Labor Day -- no sweat, just long weekends. Wednesday and Thursday the Fourth are clumsy, but a safe distance from the last Friday in June.
Compounding the Tuesday the Fourth problem is the "modern" world of electronic money -- money which takes longer to get to mortgage closings than paper money used to. Most mortgage money has to be ordered 48 hours before the closing. Two business days. Lenders can order money on Friday, June 30 (good luck) to arrive for a Wednesday July 5 closing, if the bank doesn't mind losing five days' (calendar days, for money) interest. They all mind.
It's just a suggestion (we'll be working, of course), but try not to schedule closings for Monday the 3rd and Wednesday the 5th. Unless you have to, and unless everyone (including the movers) has been warned that some little something might go wrong.
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