Thursday, July 2
Written 10:30 a.m.
WHEN BAD IS GOOD: The U.S. economy ditched a lot more jobs in June than observers had expected. Normally, you would expect mortgage rates to drop on this news. But that hasn't happened. This is one of those unusual times when bad news about employment doesn't translate into good news on mortgage rates.

Nonfarm payrolls declined by 467,000 in June, according to the Labor Department. That's about 100,000 more lost jobs than had been the Wall Street consensus guess.

The day is young as I write this, but so far, mortgage bond yields have barely budged. Markets are closed tomorrow, and maybe lots of traders took today off, too. I'd fly up to the Hamptons to investigate (on Bankrate's dime), but my son was born on the Fourth of July, so I'm staying home in my pretty beach town in South Florida. Hang out with the lad; pry him away from the Xbox.

It's been a madcap week at Bankrate Central and I've had little time for blogging. I'll get back on that horse next week to answer a few reader questions, tell you about new products and services, and bloviate.

Friday, June 26
Written 10:45 a.m. EDT
THE DIP: The advice is to lock your mortgage rate on the dips, and yesterday, we had a dip. The 30-year fixed fell about an eighth of a percentage point. There is minor upward pressure on rates this morning, but as I'm writing this, you probably can get the same deal that you could get yesterday afternoon.

In this week's Rate Trend Index, I predicted that rates will fall over the next few weeks. Implicitly, the advice behind that prediction is to float. But keep this in mind: Over the last 52 weeks, my RTI vote has been correct 26 times. And I track interest rate info daily, so I'm supposed to be knowledgeable.

People like to ask: "Should I float or should I lock?" Because you can't accurately predict the direction of interest rates, it's probably best to lock when you're satisfied that it will yield an affordable payment that you can live with. Yes, you might end up feeling disappointed if rates fall. It's not the end of the world.

WHAT ABOUT A JOB?: Susan, a prolific e-mailer, asks: "Do you have to have a full-time job to qualify for a mortgage? I don't know if you are the right person to ask, but any advice/pointers you might have would be very much appreciated."

What matters is your income and the security of your job, not the number of hours that you work. A secure, part-time job with a good income is just about as good as a secure, full-time job with the same income. If you're new to the job, or are a freelancer of some kind, the lender will take a close look at your prospects for maintaining sufficient income.

Thursday, June 25
Written noon EDT
UP BY A BIT: Mortgage rates went up this week, but not by much. The benchmark 30-year fixed went up 4 basis points, to 5.8 percent, this week. In the Rate Trend Index, a plurality of our experts predict that rates will fall in the next few weeks.

Yesterday was a quiet Fed Day. Here's my translation of the rate-setting panel's policy statement.

HVCC WATCH: They say a little knowledge is a dangerous thing, and Salon.com's Andrew Leonard proves it in his blog post, "Mortgage brokers go back on the warpath." I'm going to explain why Leonard is wrong because I fear that his interpretation will become the conventional wisdom.

Like a lot of people whom I talk to, Leonard seems to believe that mortgage brokers deserve more blame than anyone else for the housing bust. This leads him to some uninformed conclusions about the usefulness of the Home Valuation Code of Conduct.

(For what it's worth, I place the blame more on Wall Street investment banks than on anyone else, but they share culpability with many people and organizations.)

Leonard says the HVCC arose out of an investigation by New York's attorney general into collusion between Washington Mutual and appraisers. Not exactly. The alleged collusion was between WaMu and an appraisal management company called eAppraiseIT. That might sound like nitpicking but it's not. It's an important distinction to make.

"The clear purpose of the HVCC is keep mortgage brokers and appraisers from getting get together and inflating home values," Leonard writes. He's correct. But in his blame-the-broker myopia, Leonard doesn't ask whether that was the original purpose, or whether there were other problems that the HVCC should have fixed, too. And he doesn't question whether it's wise for a national appraisal policy to be decided by New York's attorney general rather than by Congress or the Department of Housing and Urban Development, which have committee systems and comment periods that are designed to reduce the impact of unintended consequences.

Before HVCC went into effect May 1, a mortgage broker could phone up a friendly appraiser and ask, "Do you think the home value will support a refinance for such-and-such an amount at such-and-such an address?" Now that call can't be made. As a result, people apply for loans that they can't get.

Instead, a broker has to hire an appraiser though an appraisal management company. The management company assigns an appraiser to visit the property and review comparable properties. This is where the myriad problems are cropping up.

Think of a barbershop or hairdresser where the hair cutters officially are independent contractors who rent their chairs and share a portion of their income with the shop. That's similar to the relationship between appraisal management companies and appraisers. Now, let's say you call the hairdresser and the receptionist says you can't make an appointment with a specific hair cutter. You have to take whoever is assigned to cut your hair. Appraisal management companies have similar power.

Independent appraisers and mortgage brokers complain that, under this system, appraisers are assigned to jobs that they're not fully qualified for. An appraiser who specializes in condos in Fort Lauderdale, Fla., might end up being assigned to appraise a single-family home 80 miles away in the small city of Stuart. That might not be the best appraiser for the job.

Independent appraisers complain that their fees are being cut by appraisal management companies. Meanwhile the appraisal management companies are charging higher fees to consumers. Borrowers are paying more for less service.

Why is this happening? Well, take a look at what I wrote seven paragraphs above: "The alleged collusion was between WaMu and an appraisal management company called eAppraiseIT." The New York attorney general initially probed business ties between lenders and appraisal management companies. But the legal settlement says these ties should be encouraged. Now a bank can own a stake of as much as 20 percent of an appraisal management company. From what I understand, this part of the settlement was added to the final draft over a weekend.

Think about that. Banks, always hungry for fee income (especially now, when they're reluctant to lend), are allowed to own minority stakes in appraisal management companies -- and suddenly, the appraisal management companies are charging higher fees to consumers while paying less to appraisers.

It makes you wonder. If New York's attorney general investigated a huge bank and an appraisal management company for collusion, why did the investigation result in a legal settlement that allows banks to partially own appraisal management companies? If the targets of the investigation were a big bank and a big appraisal management company, why did the settlement restrict the activities of small mortgage brokers and independent appraisers?

The legal settlement was supposed to result in creation of a watchdog agency called the Independent Valuation Protection Institute, with a hot line to field complaints about improper pressuring of appraisers. The hot line has been yet to be created.

My suggestion to Andrew Leonard and any other reporter looking into the HVCC is this: Don't assume that a policy is wise just because mortgage brokers complain about it.