It’s been an exciting week in the bond market

It’s been an exciting week in the bond market. The Fed announced its new target rate to be 0-0.25% and slashed the rate from 1% to 0.50% This cut to rates affects what banks lend banks overnight and any instrument tied the prime interest rate like home equity lines of credit and credit. This is a new historic low for the fed funds rates.

Mortgage interest rates are at an all time low and it is a great time to think about refinancing. If you or someone you know can save several hundred dollars a month and it didn’t cost anything or the costs were justified by the savings wouldn’t you want them to do it? Call me for details.

Fed Likely to Cut

http://www.cnbc.com/id/15840232?video=857378303

Mortgage Bonds are soaring higher

Mortgage Bonds are soaring higher on this weekend’s announcement that Fannie Mae and Freddie Mac will come under control of the government.

The government’s move to create a line of $200 billion to back all Fannie Mae and Freddie Mac loans at all costs is great news for homeowners. First, it ensures the continued liquidity of conforming loans nationwide and, second, it ensures that buyers of this type of Bond have a safe investment going forward. There’s no doubt that this will help the US housing market move through the current crunch that we’re in.

So far this morning, the news has lead to a nice rally in pricing. When combined with the break above the 200-Day Moving Average, this may lead to attractive rates. Therefore, I recommend floating for now.

Market Update

Market Update

Mortgage Bonds are trading higher this morning, despite a report that manufacturing in NY is stronger than anticipated.

Normally a better-than-expected economic report would be bad for Bond prices. However, the declining prices of oil, precious metals and other commodities have decreased inflationary pressures and have helped push Bonds higher so far today.

We got a rally late today for the better I recommend floating for now.

The Fed announced on Tuesday

The Fed announced on Tuesday that they have decided to keep the Fed Funds Rate at 2%, and released a statement that hinted they may not raise the Fed Funds Rate in the near future.

Down Payment Assistance (DPA) is being threatened

Hello Friends and Real Estate Professionals,
You may be aware that Down Payment Assistance (DPA) is being threatened and we only have a couple of days left to prevent this new legislation.
79% of all mortgage transactions year-to-date have been backed by FHA (Federal Housing Administration). Over 80% of these FHA transactions involved some form of seller funded DPA.
If this legislation is approved it will drastically affect, impede and reduce ALL of our abilities to buy, sell or lend on a home.
I would like to ask you all to help by clicking this link http://capwiz.com/nehemia/issues/alert/?alertid=11598811and taking 60 seconds to send out an email that will go to HUD, Congress and our Local Senate Representative. I believe your efforts will help defeat a law that will facilitate a collapse of our local and national industry.
On a side note, while the legislation says no more DPA after Oct 1st 2008, please be aware that we must stipulate the last day of funding if the bill passes be August 29th in order to give time to get the loans sold off of bank lines.
To all Realtors:
We must get these people into houses by August 29th(CORRECTION SEPTEMBER 29TH) to be safe. Franklin Loan Center is a direct endorsement lender for FHA loans, which means we can underwrite FHA loans and prepare loan documents in our local offices. This will save your clients valuable time. Time is running out so please act now and get your FHA buyers off the fence and into their new home before it’s too late. Once Down Payment Assistance is gone, it’s gone. Feel free to call us so we can explain this and forward the information to your buyers to ensure they understand the magnitude of this legislation. It would be our pleasure to help in any way we can; be it marketing your listings, helping your buyers qualify for a loan or simply being an information resource for you.

Last weeks rates improved slightly

Last weeks rates improved slightly as bonds tried to rebound off the previous weeks losses. Philly Fed President is continuing to warn about inflation and it’s possible that fed rate hikes will be coming shortly. This is a good thing for the bond market because mortgage rates should come down. Following that your wallets at the pump should hopefully stay full. See the newsletter below to get some helpful gas saving tips that you can pass along to your clients.

Make it a great week!

Fed held constant the Fed Funds rate

Last week the Fed held constant the Fed Funds rate, which had investors ponder the stability of the market. We know the Fed should hike rates to hedge inflation, but the question is will they and when? As the Fed was cutting rates remember I warned that mortgage rates would go up and hey have. I want to mention that if the Fed hikes rates mortgage pricing will get better. I’ll keep you informed as I get the information.

It’s a short week for the Fourth of July weekend. I hope you are safe while enjoying the festivities!

-Sean

Ready for Spring Cleaning?

This is going to be an important week in the financial sector. There is a Fed meeting on Wednesday where we expect the Fed to cut another 0.25% to the Fed Funds rate. We also have the PCE index coming out on Thursday. Remember the PCE is the best indicator of inflation. The most important news though is how the Fed is treating inflation and their words in the report regarding inflation.

Investors feel like this may be the end of the credit crunch, which is certainly good news, and several banks are getting large cash infusions from investors which shows market confidence.

Ready for Spring Cleaning? There are also tips this week on how to do your spring cleaning.

Written by MMG...
In other headlines, Existing Home Sales met expectations, but New Home Sales numbers for March were worse than expected, possibly due to the large increase in the costs for materials needed to construct a home. But then there was a change in climate on Friday, as inflation news from around the World created some strong adverse headwinds for Bonds and home loan rates. Overall, home loan rates ended the volatile week unchanged to slightly higher.

Now is still a good time to take advantage of historically low home loan rates before more inflation talk pushes them higher. I'm always here to help advise you, your friends, and your colleagues...no matter the season!

After last week's relatively slow economic news calendar, things will heat up this week with several events that have the potential to move the market. On Wednesday, the Fed will announce their interest rate decision...and then the very next day, the Fed's most favored gauge of inflation will be released, the Personal Consumption Expenditure Index (PCE). It will be interesting to play armchair quarterback to the Fed's decision, and watch what the inflation numbers reveal! And let's not forget, on Friday we will see the important Jobs Report, where early estimates are for a net loss of 80,000 jobs.

As you can see in the chart below, Bond prices ended the week between a technical "floor of support" at the 200-day Moving Average and an overhead "ceiling of resistance" at the 50-day Moving Average...and that ceiling might just stop any improvement for Bonds and home loan rates for the short term, unless the news of the week is really Bond-friendly. We'll have to wait and see if the week's upcoming news leads to calm or stormy times ahead.

SPRING HAS SPRUNG...

...and that means it's time to wash away those winter blues! In fact, according to the Soap and Detergent Association - did you even know there was such a thing? - three-quarters of Americans engage in spring-cleaning. In fact, their surveys indicated that more than 80 percent of people who spring clean agree that it helps them save time throughout the year, and 96 percent of people donate or discard items during their spring-cleaning.

But the advantages can go much further than that. Check out these top ten spring-cleaning activities, compiled by www.medicinenet.com, that can help make your home healthier and safer:

Thoroughly dust your home. Also clean any air conditioning and heating filters, ducts, and vents to minimize pollens and other airborne allergens.
Organize your medicine cabinet. Throw away expired medications and old prescription medicines that you no longer need.
Inventory your garage and basement. Get rid of any old paint, thinners, oils, solvents, stains, and other similar items you no longer need. Note: You may need to take these items to a hazardous waste drop off center.
Inventory under your sinks and around your house. Dispose of old or potentially toxic cleaning products.
Have your chimney professionally cleaned. This will help you lessen the chances of carbon monoxide exposure when the cold weather returns.
Clean all mold and mildew from bathrooms and other damp areas. Use non-toxic cleaning products.
Check your rugs. Make sure that rugs on bare floors have non-skid mats and that older or dusty mats are either washed or replaced.
Inspect outdoor playground equipment. Make sure that all elements are sturdy and safe, especially guardrails, protruding bolts, and other potential sources of injury.
Change your batteries. Do so for both smoke detectors and carbon monoxide detectors.
Collect old batteries throughout the house for disposal. Dispose of them in a battery recycling or hazardous waste center.
And make it easy on yourself - take it one room, one cleaning task at a time. You'll be more likely to accomplish more if you tackle each spring-cleaning project separately. And that's great advice...any time of year!

Market Update April 25th

Market Update April 25th:

Rates have certainly been busy moving up and down, but no worries! This is just part of the market. Rates don’t typically move this much, but in this market anything can happen. Remember what goes up must go down and it’s all part of the market game. Stay tuned for more information.

· Wednesday the Fed has a meeting schedule and from what I understand there is a 75% chance the Fed will cut another 0.25% to the Fed funds rate
· Interest rates are down by about 0.125% this week when compared to last week
· Your client should float at least until Monday or Tuesday because rates are usually get a little better right before the Fed meeting

Make it a great weekend! Oh by the way, I’m NEVER too busy for any of your referrals.

Market Update April 18th

Market Update April 18th:

This morning’s rally in the bond market today has been good considering rising interest rates earlier in the week. Mortgage pricing went down for the day.

The chances of 50 basis points of easing at the FOMC meeting April 30 have evaporated and are now chomping away at the 25 basis point cut signaling that the credit crisis could be near the end.

***Do you know someone who wants a mortgage at less than 5%? Call me for details.***

***100% financing to $500,000? Ask me how.***

See the articles below: The big news for the day was Google reports a 30% profit increase which blew most analyst projects out of the water.

http://www.mydesert.com/apps/pbcs.dll/article?AID=/20080412/BUSINESS04/804120312/1043/business04
http://money.cnn.com/2008/04/18/markets/markets_newyork/index.htm?postversion=2008041817

Have a great weekend and by the way, I’m never too busy for any of your mortgage referrals!

Timely Tax Information

Welcome back to a beautiful Monday morning! Check out this week’s newsletter, which covers timely tax information to help you pass along to your clients. Taxes are a hot topic so pick a quick tip and spread the word. Also, the PCE index, or what I like to call the inflation report, is within the target range of 2% which is good news for mortgage rates. To learn more just read the newsletter below.

Make it a great week!

Although the newsletter is not attached to see the tips simply ask to be a part of the distribution list.

St. Patrick’s Day

I’m sure you’re off to a very green St. Patrick’s Day! Last week the financial markets were pretty green for you too with mortgage rates dropping by as much as 0.25% for most programs. But be careful! With inflation numbers down reported last week the Fed could cut Fed rates by another 0.75% in tomorrows meeting. These rates are tied to the Prime rate, consumer loans, and credit cards, but the Fed rates are what the Fed lends to banks overnight! With a Fed cut, inflation could rise and when inflation rises mortgage rates are likely to go up. I recently sent out an article explaining this. If you’d like to look at it again please let me know. Make it a great week!

Oh by the way, I’m never too busy for any of your purchase or refinance mortgage referrals! Have a safe and fun St. Patrick’s Day!

MMG Weekly For the week of Mar 17, 2008 --- Vol. 6, Issue 12
"JUST WHEN I THOUGHT I WAS OUT...THEY PULL ME BACK IN." Al Pacino in the 1990 film, The Godfather III And if Bonds and home loan rates thought they were out of the days of volatility...they got pulled right back in, as last week brought daily price swings of almost historic proportions. For the week overall, fixed home loan rates improved by about .25%.

What led to the dramatic action this week? The bipolar emotional state of the markets began deeply depressed on Monday, but then were filled with joy Tuesday, when the Fed made an interesting move by announcing the creation of the new Term Securities Lending Facility (TSLF). The TSLF will provide borrowing banks with $200 Billion to draw on to help inject liquidity into the credit markets, and further, will accept some mortgage-backed securities as collateral, which effectively may help to "upgrade" the value and perception of battered Mortgage Bonds.

But in the meantime...struggles are still being played out related to the downgrade and losses experienced by companies holding massive amounts of mortgage-backed securities. Headlines hit on Thursday about The Carlyle Group, which manages a portfolio of mortgage-backed securities, not being able to meet a margin call and being forced to sell off large amounts of mortgage paper into the markets at great financial losses. Then on Friday, the news broke that financial brokerage and investment banking giant, Bear Stearns had suffered enormous losses, and their lack of liquidity endangered them from going out of business...or "sleeping with the fishes". The new aforementioned TSLF is designed to help this type of liquidity problem, but it will not go into effect for a few weeks, and Bear Stearns would not last that long. Coming to the rescue with loans were both the NY Fed and JP Morgan Chase. These sure are exciting times.

One bright spot for the financial markets was a low consumer inflation reading. The Overall and Core Consumer Price Index (CPI) figures were reported unchanged, far cooler than the expected increases of 0.3% and 0.2% respectively. These tame inflation numbers give the Fed a green light to cut the Fed Funds Rate by another .75% at Tuesday's meeting...but read on to understand exactly how this cut may impact YOU.

IF THE IDEA OF KEEPING BUSINESS IN THE "FAMILY" CONJURES UP IMAGES OF MICHAEL CORLEONE AND OFFERS THAT CAN'T BE REFUSED - YOU'LL WANT TO READ THIS WEEK'S MORTGAGE MARKET VIEW TO LEARN SOME TIPS ON RUNNING A SUCCESSFUL FAMILY BUSINESS, WHERE YOU LIKELY WON'T HAVE TO WORRY ABOUT EITHER GUNS OR CANNOLI'S.


Forecast for the Week



So if you love all the excitement, drama, intrigue and crazy volatility of late...you'll love the week ahead, as it is loaded full with market movers. We'll get the latest readings on the health of the manufacturing and housing sectors, but the main event will take place on Tuesday when the Federal Reserve announces its latest interest rate decision and Policy Statement.

The Fed is expected to cut the Fed Funds Rate by another .75%. However, as we've seen following every Fed rate cut in the recent cycle, chances are very good that Bond pricing will worsen following the cut...which results in higher home loan rates. This happens because Fed rate cuts help to stimulate the economy, by making it less expensive to finance personal and business purchases...and this in turn fuels inflation, the arch-enemy of fixed return assets like Bonds, which home loan rates are based on.

So a word to the wise - if you or someone you know has been ready to move forward on a purchase or refinance, there's no time like the present. Be sure to get in touch with me, so I can explain your options and help plan a great strategy for your home loan.

Chart: Fannie Mae 5.5% Mortgage Bond (Friday Mar 14, 2008)


The Mortgage Market View...



BUT DON'T EVER TAKE SIDES WITH ANYONE AGAINST THE FAMILY AGAIN...EVER

These lines spoken by Michael Corleone to his brother Fredo could very well apply to small family businesses, which are critical to the nation's economy. In fact, according to the National Federation of Independent Businesses, more than 1.2 Million businesses across the country are owned and operated by spouses. While these thriving ventures in capitalism are great for the economy, they can cause a lot of stress on your family relationships. That's why experts recommend you follow a few simple suggestions to keep the business--and your family life--running smooth!

Only Fools Rush In. Starting a family business is a huge commitment. Although it sounds romantic, it's a lot of work to...well...make it work. Before you jump in, consider what type of business is truly right for you; how the business will impact your financial plans; and how you'll still make sure you have time in your schedule to enjoy non-business related family time. Because, as The Don says, "a man who doesn't spend time with his family can never be a real man".

Put It In Writing. The first step to making your dream a reality is putting together a business plan. The Small Business Administration has a great website that can help you write your business plan. You'll also need to apply for a business license, tax identification number, and even business loans. Again, you can find the most requested business documents on The Small Business Administration website.

Clarify Roles and Responsibilities. To help avoid frustrations and arguments in the future, make sure everyone agrees on who will be responsible for what. Give yourselves titles and draft job responsibilities...then make sure everyone is happy with their role, and that all of the important everyday duties are covered. Make sure you determine who will pay the bills, who will negotiate contracts, who's in charge of the marketing plan, who does the hiring, and so on. You don't want to risk overlooking something or arguing about it later.

Protect Yourself. More important than having Luca Brasi as your bodyguard is making sure you plan your finances and stock away plenty of money to hold you over, especially during the start up phase. Most experts recommend having three to six months worth of living expenses in savings, depending on whether one or two people in the family will be relying on the business as their main income. You'll also want to meet with a financial planner to make sure your retirement and other financial plans stay on track - and if you need a referral to a great financial pro, just let me know.

Set Boundaries... and Stick to Them! It's easy to let the business take over your family life. Little by little the business successes and setbacks slip into family conversations... it's only natural. But don't let them take over completely. To alleviate this problem, make sure you set up regular "business meetings" where you can talk about key issues and exchange ideas about the business. In addition, establish some off-limit times where you'll devote yourselves to each other and your family life. After all, even family businesses need some time "away from the office."

Starting a business with your spouse or family is an exciting time. The key is to harness that excitement while staying cool-headed enough to make smart personal and financial decisions. If you or someone you know needs help with these important details, please don't hesitate to call. I'll be happy to discuss your needs and put you in touch with other professionals that can help.

Fed cut 0.50%

This week has once again been volatile, but the good news is the Fed cut 0.50% on the Fed Funds and the Discount Rate. Although not directly tied to mortgage rates, these rates are tied to Prime and are also what the banks are charged by the Fed overnight. Mortgage rates are, however, continuing to trend down right now and with rates at 5.75% on a 30 year fixed at ZERO points, why isn’t it a good time to buy? Buyers are getting off the fence!

Mortgage bonds were trading higher this morning on the heels of a weak employment report that said non-farm payrolls fell by an estimated 17,000 jobs in January. This news is good for mortgage pricing.

Stocks are unchanged this morning and are being held down by the lower than expected jobs number--despite the fact that Microsoft Corp is making a bid to acquire the search engine giant Yahoo.

Attached is this week’s rate update. Make it a great day and a safe Super Bowl Weekend!

Another volatile week

Another volatile week is a head for our financial markets. There are several reports coming out in addition to the normally scheduled Fed meeting starting tomorrow. Mortgage backed securities are back up again this morning. This is good news for interest rates. As the market continues to change be sure I will be your reliable source of information.

News of the Fed Fund cut

This week has been more proof of the volatility of the market. Rates dipped earlier in the week and then bounced up with the news of the Fed Fund cut. However, they are only slightly higher than last week yet will continue to trend downward.

Many of you are getting information regarding declining market loan-to-values. I am continuing to do research on the policy changes and here’s the latest. If you are a borrower putting down 20% on a full documentation purchase and the maximum loan-to-value for the program is 95% you do not have to reduce the loan to value for the borrower by 5% it remains a 20% down payment. If you have any questions about current or future deals please contact me.

SOME INVESTORS HAVE NO DECLINING MARKET POLICY. It just depends on the bank and the borrower’s profile.

There is news that the conforming loan amount currently set at $417,000 will be temporarily increased to $750,000. See the article by clicking below.
http://www.latimes.com/business/la-fi-jumbo25jan25,1,2691497.story?ctrack=2&cset=true

Looking for Canadian financing? I've got the programs to get your home purchased fast.
I’m never too busy for any of your refinancing or purchase referrals! If you are interested in refinancing a loan now may be the time. Have a great weekend!

Countrywide and Bank of America

Well the rumors are true that Countrywide and Bank of America will soon be partners as Bank of America announced yesterday that they will by Countrywide for $4 billion. This comes as no surprise as Countrywide’s portfolio is reporting a delinquency rate over 7% up from 4%, and after letting nearly 11,000 employees go.

Mortgage back bonds are still getting better this week helping to rally mortgage pricing after news this week from Ben Bernake that the Fed will continue to cut rates. New fed target rate is 2.75 down from 4.25 today. The cuts will help Home Equity line interest rates tied to the Prime rate, credit cards, and other consumer driven interest rates. Stay tuned for more information.

8 Day Loan Close

This week the mortgage market proved to be volatile when we got news Tuesday about the Fed cut. With the Fed fund and discount rate cut by .25% this has pulled money out of bonds and into stocks this is driving mortgage pricing slightly higher today. Over the next week or two, rates should again stabilize and turn lower. Mortgage applications are at a two year high this week as refinancing has become a popular choice for many homeowners. If you have a friend or client interested in refinancing out of a pay-option ARM or Interest Only payments and wants a 30 year fixed mortgage I’d be happy to meet with them. I’m never too busy for any of your referrals! Have a great weekend!

-Sean La Rue

P.S. Need help getting a deal closed? This week I closed a loan in 8 days from loan application to funding! Call me to get your deals closed…