Ex-insurance chief may face charges

A former chief executive of General Reinsurance Corp. has been notified that he could face civil charges as a result of a federal probe of the firm's nontraditional insurance products, its parent Berkshire Hathaway Inc. said Friday.

Ronald E. Ferguson, who stepped down on Oct. 1, 2001, has received a Wells notice from the Securities and Exchange Commission that said the SEC staff is considering a recommendation that Ferguson be charged with securities violations.

The notice gives Ferguson a chance to respond before the SEC staff makes its formal recommendation.

Berkshire, which is led by Omaha billionaire Warren Buffett, said it was informed about the notice by Ferguson's legal representative. A Berkshire news release also said Ferguson had been consulting for General Re and some of its affiliates until May 20 of this year.

A call to General Re's Stamford, Conn., headquarters, seeking comment was not immediately returned. Attempts to reach Ferguson were unsuccessful.

Mortgage Rates Hold

The bond markets closed early prior to the three-day weekend, and final numbers were little changed from those of yesterday. This left mortgage rates at Thursday's levels.

At 4 p.m. EDT, AVERAGE mortgage rates (zero discount points) based on rates collected nationwide were:

The 30-year Conventional Fixed-Rate Mortgage was at 5.747 percent from 5.739 percent at Thursday's close.

The 15-year Conventional Fixed-Rate Mortgage was at 5.343 percent from 5.337 percent at Thursday's close.

Coming Up:

There are a number of influential reports slated for the week of October 10, but they won't be released until the end of the week, which leaves the equity markets to reflect on the employment report, rate hikes and inflation concerns. They won't even have Treasuries to look at, as the bond markets are closed Monday to observe Columbus Day. The minutes of the Sept. 20 meeting of the Fed are due Tuesday and could sway the markets, but key reports such as Retail Sales and the Consumer Price Index for September, which looks for inflation at the retail level, won't be out until Friday.

Because Treasury yields held their ground today and bonds won't trade again until Tuesday, it is likely that mortgage rates, which are based on yields, will hold fairly steady over the weekend and into Monday.

Mortgage Rates Firm

U.S. Treasury securities began Thursday up, bolstered by the increase in first-time jobless claims. But buying soon turned to selling as bond traders digested yet another statement by a Fed official - this time from Kansas City Fed president Hoenig, who cited rising wages and commodity prices as reasons to rein in inflation. Dallas Fed president Fisher reaffirmed his Tuesday message regarding the Fed's vigilance in controlling inflation, which would necessitate further short-term rate hikes.

At 4 p.m. EDT, AVERAGE mortgage rates (zero discount points) based on rates collected nationwide were:

The 30-year Conventional Fixed-Rate Mortgage was at 5.739 percent from 5.742 percent at Wednesday's close.

The 15-year Conventional Fixed-Rate Mortgage was at 5.337 percent from 5.358 percent at Wednesday's close.

Coming Up:

The big news on Friday is the September Employment Report, the most-anticipated of the economic indicators. Analysts are expecting a decline in non-farm payroll jobs - the first since May 2003. Estimates are all over the map, however, ranging from a loss of 129,000 jobs to as many as 200,000. These numbers will likely be subject to big revisions, however, due to the impact of the hurricanes. A loss of jobs at the high end of the range might give Treasuries a little boost, but this is a tough one to call. New jobs in August hit 169,000, and the unemployment rate came in at 4.9 percent. This number is expected to escalate to 5.1 percent, but it is taken from a separate survey.

Two additional reports will pale compared to the jobless numbers. There are wholesale inventories for September and the August report on consumer credit. Inventories are expected to rise 0.4 percent - a big increase over the minus 0.1 percent reading in August. Consumer credit is also expected to swell to $7.5 billion in August - close to double the $4.4 billion in July.

Treasury yields rose slightly today, but it is unlikely that mortgage rates will move any higher -- at least until traders have scoured the employment report.

Mortgage Rates Continue North 10-4

U.S. Treasury securities found buyers on Tuesday thanks to falling oil prices, but activity fell well short of a rally. Prices ticked up and yields, which move in the opposite direction of prices, came off two-month highs reached on Monday.

At 4 p.m. EDT, AVERAGE mortgage rates (zero discount points) based on rates collected nationwide were:

The 30-year Conventional Fixed-Rate Mortgage was at 5.752 percent from 5.712 percent at Monday's close.

The 15-year Conventional Fixed-Rate Mortgage was at 5.358 percent from 5.335 percent at Monday's close.

Coming Up:

The Institute of Supply Management's (ISM) index on non-manufacturing conditions in September, i.e., the service sector, is the only report scheduled for release on Wednesday, and its impact is generally minimal. The weekly report on oil inventories is also due and could move the markets. Excerpts from the speeches made this evening by Fed officials might also have a major impact on trading Wednesday. If FOMC members continue with hawkish comments regarding inflation and the potential for more rate hikes, this would keep upward pressure on Treasury yields and mortgage rates.

If you haven't already refinanced your mortgage...run don't walk

It seems like Mortgage rates have begun a steady climb over the last 3-4 weeks.

If you haven't already refinanced, your opportunity to save money is closing.

and if you have a new mortgage instrument like an interest only loan, it might be wise to lock in now. A year from now, rates could be a lot worse....

My .02 cents

Mortgage Rates remain at higher levels 9-30

It was the worst quarter for U.S. Treasury securities in the last year. Prices fell as traders fretted about the recurrence of inflation, while yields, which move in the opposite direction of prices, climbed. The steady increase in yields over the past three months sent the rate on the 30-year fixed-rate mortgage to 5.667 percent, up from 5.375 percent on July 1.

Higher oil prices and repercussions from the recent hurricanes have continued to spawn inflationary pressure. Additionally, the Fed has vowed to keep raising short-term interest rates to contain this inflation. Fed rate hikes paired with inflation is the “worst case scenario” for bond traders, and it doesn't sit well with mortgage lenders, either. Higher yields have resulted in higher mortgage rates across the board.

The 30-year Conventional Fixed-Rate Mortgage was at 5.667 percent from 5.678 percent at Thursday's close.

The 15-year Conventional Fixed-Rate Mortgage was at 5.261 percent from 5.258 percent at Thursday's close.

Coming Up:

Over the weekend and into Monday mortgage rates will likely continue to move up in response to Friday's sell-off in the bond market.