Jumbo Mortgage Pricing - The Healing Has Begun

Theron Wall has some very good news to share with you regarding the
condition of the mortgage credit markets. As you are surely aware, we are
back close to record low rates on conforming Fannie Mae, Freddie Mac, and
Government loans, courtesy of the recent announcements by the Federal
Reserve. However, there is some more good news that is not getting the
attention it deserves.

Recently there is more and more evidence that banks are beginning to dip
their toe back into the Jumbo mortgage market. A handful of Jumbo mortgage
investors are making announcements they will be re-entering the market with
new loan products in the near future. In addition, investors currently
offering Jumbo Mortgages are becoming more competitive on pricing. These
loans will require excellent borrowers with proof of income and assets, but
this is an excellent sign. Currently Jumbo 30 year fixed mortgages are
priced about 1% over a comparable conforming 30 year fixed loan. Look for
that spread to improve in the weeks and months ahead.

In the mean time, rates on Jumbo Adjustable Rate Mortgages (ARMs) are
excellent. As of the week of 3/23/09 rates on a 5/1 Jumbo ARM are slightly
over 5% w/ 1 pt, depending on the specifics of the transaction. That is
actually a little better than conforming 5/1 ARM pricing. Rates on 3/1
Jumbo ARMs are at or slightly below 5% with 1pt, quite a bit better than 3/1
ARMs at a conforming loan amount. Keep in mind; with most Jumbo borrowers
the risk tolerance is different than First Time Homebuyers and other buyers
with more limited income. There are ways to build a mortgage strategy for a
Jumbo client using an ARM that, while perhaps not ideal, are effective and
not dangerous or financially irresponsible. Given that we have some high
end listings that are 40% or more below their peak value, this presents some
good opportunities for high end clients.

HERE IS THE MOST IMPORTANT PART OF THE STORY.

Improving Jumbo pricing, regardless of loan product, is an important sign
the credit markets as a whole are beginning to thaw. For the last year and
a half almost all of the mortgages originated in the entire system were
securitized and brought to the secondary market only with the help of
government agencies - Fannie/Freddie, FHA, VA, etc. Jumbo loans are not
packaged and securitized by government controlled agencies, so competitive
pricing on these products means PRIVATE money is beginning to make its way
back into the system. This is tangible proof that the healing process is
underway - one step in a long road, but significant.

Warm regards,

Theron Wall
Sr. Mortgage Consultant, CMPS
(928) 778-7167
theron@theronwall.com

MMG Weekly: Fed Announcement Opens Window of Opportunity

 

Last Week in Review

 

 

"IF A WINDOW OF OPPORTUNITY APPEARS, DON'T PULL DOWN THE SHADE." Tom Peters. And last week, the Fed saw their regularly scheduled meeting as a window of opportunity to make a blockbuster announcement. On Wednesday, the Fed announced that over the course of 2009, they will purchase an additional $750 Billion of Mortgage Backed Securities, as well as $300 Billion in long-term Treasuries, primarily to help shore up the housing market and keep home loan rates low. On the announcement, Bonds exploded higher, leaving Bond prices within whiskers of the best levels ever. However, it's important to understand that while their actions may keep a lid on rates moving higher, they may not cause them to move dramatically lower... more on this in the Mortgage Market View article below. Additionally, due to many understaffed lenders and investors currently working at maximum capacity, we could once again see that improvements in Bond pricing may not all be passed through to our rate sheets. Another factor that could impact whether Bonds and rates see significant improvement ahead are concerns of future inflation - the arch enemy of Bonds and home loan rates - brought on by all the recent aggressive moves by the Fed. While we know there is little inflation at the present time, the chatter of future inflation could have a negative impact on Bonds and home loan rates, or at least stifle any improvements. Although the media is already spinning it differently, this is not a time to stay on the fence, hoping and waiting for lower rates. Home loan rates remain within inches of all-time historic lows, but may not necessarily move significantly lower based on this purchasing plan - waiting is a very risky move. More good news last week, as Housing Starts for February came in better than expected and actually increased for the first time in eight months. In addition, Fed Chairman Bernanke stated the recession should end in 2009 and that he is confident of the long-term outlook for the US economy. Also, an update on Mark-to-Market - the accounting rule which has had a devastating impact on the financial markets - which we have discussed many times, including in last week's issue. The Financial Accounting Standards Board (FASB) agreed that it will propose to allow companies to use more "leeway" in applying the accounting rules they use to value their assets, and planned a final vote for April 2nd. If this rule change is approved, it could result in better first-quarter financial statements for companies that have been affected by this rule. Stocks have been moving higher lately in the hopes that Mark-to-Market will be fixed, and a resolution could help Stocks further improve. WANT TO KNOW MORE ABOUT WHAT THE FED'S ACTIONS REALLY MEAN FOR HOME LOAN RATES, AND WHAT OPPORTUNITIES MAY BE AVAILABLE FOR YOU? CHECK OUT THE MARKET VIEW BELOW FOR THE DETAILS.

 

Forecast for the Week Error! Filename not specified.

 

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This week will be busy from start to finish, beginning with an opportunity to get a read on the housing market via Monday's Existing Home Sales Report and the New Home Sales Report following on Wednesday. With rates near historic lows and the tax credits available for first-time home buyers - and lots of buyers potentially ready to come off the sidelines - home purchases are likely to be picking up in the coming months. Also on Wednesday, we will get an update on consumer and business consumption and buying behavior via the Durable Goods Report which shows data on items that are non-disposable, such as cars, furniture, appliances, games, cameras, business equipment, etc. And stay tuned for Thursday's Gross Domestic Product (GDP) Report, which is the broadest measure of economic activity, and Friday's Core Personal Consumption Expenditure (PCE) index, found within the Personal Income report. PCE is the Fed's favorite gauge of inflation, and given all the recent talk of potential inflation ahead, it will be interesting to see what this report shows. Remember: Weak economic news normally helps Bonds and home loan rates improve, as money flows out of the Stock market and into the Bond market. As you can see in the chart below, Bonds were buoyed last week by the Fed's announcement regarding its Bond purchase program - but again, the improvements are not necessarily all making their way through to the rate sheets. As always, I will be watching closely to see what impact the inflation chatter and the news of the week has on Bonds and rates. Chart: Fannie Mae 4.5% Mortgage Bond (Friday Mar 20, 2009) Error! Filename not specified.

 

The Mortgage Market View... Error! Filename not specified.

 

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What the Fed's Latest News Means for You As discussed above, the Fed announced last week that they are going to buy another $750 Billion in Mortgage Backed Securities, bringing their total commitment to $1.25 Trillion. But how does this really impact home loan rates? The Fed's actions provide a demand for Mortgage Backed Securities, which should help keep the ceiling on home loan rates from moving much higher in the foreseeable future. That's good news for homebuyers who are seeing the bargains out there and understanding that now is the time to act.and also good news for those who can benefit from a refinance. But.and this is very important.the Fed's actions do not necessarily mean home loan rates will move significantly lower. It all depends on which Bond coupons the Fed purchases. If they purchase higher rate coupons - as they have been so far this year - their continued purchasing actions will likely keep a lid on rates, but not necessarily push them significantly lower. Rates are within inches of historic lows - so don't wait to miss a great opportunity to purchase the home of your dreams, or get more money back in your budget by a smart refinance. There's never any pressure, so why not take five minutes to give me a call? We can discuss what makes sense for you right now - which might be just staying put in your current home loan. With a short conversation we can talk over the options, and you can then rest assured that given all the recent changes, you are making smart decisions on your home financing.

 

The Week's Economic Indicator Calendar Error! Filename not specified.

 

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Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of March 23 - March 27 Date ET Economic Report For Estimate Actual Prior Impact Mon. March 23 10:00 Existing Home Sales Feb 4.45M   4.49M Moderate Wed. March 25 08:30 Durable Goods Orders Feb -2.0%   -5.2% Moderate Wed. March 25 10:00 New Home Sales Feb 300K   309K Moderate Wed. March 25 08:30 Jobless Claims (Initial) 3/21 650K   646K Moderate Thu. March 26 08:30 Chain Deflator Q4 0.5%   0.5% HIGH Thu. March 26 08:30 Gross Domestic Product (GDP) Q4 -6.6%   -6.2% Moderate Thu. March 26 10:30 Crude Inventories 3/20 NA   1942K Moderate Fri. March 27 08:30 Personal Spending Feb 0.3%   0.6% Moderate Fri. March 27 08:30 Personal Consumption Expenditures and Core PCE Feb NA   0.1% HIGH Fri. March 27 08:30 Personal Consumption Expenditures and Core PCE YOY NA   1.6% HIGH Fri. March 27 10:00 Consumer Sentiment Index (UoM) Mar 56.0   56.0 Moderate Fri. March 27 08:30 Personal Income Feb -0.1%   0.4% Moderate

 

Meghan Knoy 115 E Goodwin Street Suite C Prescott, AZ 86303

 

AZSTCU - Mortgage rates - New lows!!

WITH RATES THIS LOW… BUY A HOME.

 

DAILY RATE SHEET

The quotes below are only a sample of the wide variety of loan programs and rates available. Products & rates listed below include the member paying a 1% Origination Fee.  Please contact me for any questions regarding pricing and/or discount points.   Loan Type Interest Rate Discount Points APR Monthly Mortgage Payment (P&I) 15 Year Fixed 4.375% 0 4.771% $910 30/15 Year Fixed 5.250% 0 5.542% $663 30/15 Jumbo 6.500% 0 6.873% $3,160 30 Year Fixed 4.500% 0 4.727% $608 3/1 Year ARM 4.000% 0 5.271% $573 5/1 Year ARM 4.250% 0 5.336% $590 7/1 Year ARM 4.500% 0 5.299% $608   Rates effective as of: 3/23/2009 9:18:21 AM.  Rates quoted as of the date and time indicated above are subject to change, with the markets, without notice.  Your actual rate and/or points may be different, as many factors go into providing you with a home mortgage loan.  The examples above assume a loan amount of $120,000 for all loans with the exception of the 30/15 Jumbo which assumes a loan amount of $500,000.  Again, rates change often, and Arizona State Credit Union will confirm rates for you at the time of application. Please Note:  Rates disclosed do not apply to manufactured housing.

 

Contact me with any questions or for more information on all our programs.

 

Louise Weeks

AZ State Credit Union

Residential Real Estate Loan Officer

550 E Gurley St

Prescott, AZ  86301

Tele: (928) 777-6150  Mobile: (928) 830-8877

Fax:  (928) 777-6151

www.homeloansforyou.org

 

"We deliver the most personal and memorable service you will ever experience"

 

 

Historic Move By Feds = Low Mortgage Rates

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Big news hit the wires yesterday afternoon, as the Fed made a blockbuster
announcement.  Over the course of 2009 they will purchase an additional
$750B in Mortgage Backed Securities in an effort to help shore up the
housing market and keep home loan rates low.

Their actions are intended to keep a lid on interest rates and although the
rates dropped on the Feds announcement yesterday, it may not necessarily
push them dramatically lower in the future.

Since yesterday's Fed Meeting the US Dollar has gotten clocked in the global
market, as this aggressive Fed move appears to be quite inflationary.  While
we know that there is no inflation at the present time, the chatter of
future inflation could have a negative effect on mortgage rates.

Bottom line - although the media is already spinning it differently, this is
not the time for clients to stay on the fence, hoping and waiting for lower
rates.  Home loan rates remain within inches of ALL-TIME historic lows. 
Waiting is a risky move.

With rates at historic lows and houses on sale, now is the time for your
clients to get off the fence and buy!

Encouraging PPI and Housing Data: Has Spring Sprung?

 

James Picerno submits: Is the Fed's liquidity attack winning the war on deflation? This morning's update on wholesale prices, new housing starts and new building permits offers a few reasons for answering with a tenuous "yes." Maybe. Even if that's true, we're a long way from a "recovery" that's worthy of the name. But perhaps the blood will run a little slower; perhaps it'll stop flowing altogether. Stranger things have happened. First let's take a look at prices. The Producer Price Index ((PPI)) for February rose a modest 0.1%, the Bureau of Labor Statistics reports. That follows January's roaring 0.8% jump. And not a moment too soon, in the wake of large back-to-back monthly declines last year in PPI from August through December. A similar run of deflation has weighed on consumer prices as well. Complete Story »

View article...

Housing Starts Rebound: Don't Get Too Excited

 

Tim Iacono submits: The Commerce Deparment reported(.pdf) that housing starts rose for the first time in eight months, up 22.2 percent in February from record lows in January, largely as a result of a rebound in condominium and apartment building. While a 22 percent gain sounds impressive, it is important to recall just how low last month's record low numbers were. Housing starts rose from an annualized, seasonally adjusted rate of 466,000 in January to a rate of 583,000 last month, but the January totals were a full 42 percent below the previous record low of 798,000 in January of 1991, a rate that is not adjusted for the increase in population. Complete Story »

View article...

MMG Weekly: Congress Finally Gets Wise on Mark-To-Market

 

 

Last Week in Review

 

 

"I DO NOT THINK MUCH OF A MAN WHO IS NOT WISER TODAY THAN HE WAS YESTERDAY." Abraham Lincoln. Now more than ever, it's important for our country's leaders to heed yesterday's lessons and make wise choices today for our banking system and the economy. There were several key developments that happened on this front last week - here are some highlights. On Thursday, the Securities and Exchange Commission's (SEC) Chief Accountant, the Financial Accounting Standards Board's (FASB) Chairman and the Deputy Comptroller for Regulatory Policy in the Treasury Department testified in front of the House Financial Services committee on the "Mark-to-Market" accounting rule. This rule was created so that there would be more transparency in business dealings, but fell prey to the law of "unintended consequences", and has played a major part in our current financial crisis. If you've been receiving this newsletter for awhile, you know this has been discussed several times - and we've even sent you a great explanatory video that breaks down what it all means, and why it has been such a major issue. Because so many of you have been asking about this topic and great video - I am including the information and video once again in this week's issue - keep reading for the full scoop in the Mortgage Market View article below. During Thursday's hearing, Congress demanded an answer for repairing this situation within the next three weeks, so right now, it looks like we will see some sort of coordinated action by both the FASB and the SEC to address the Mark-to-Market situation soon. Stocks certainly reacted positively to this news last week, as well as to Citigroup's announcement that it will not need more TARP money from the government. Stocks also liked the remarks from Federal Reserve Chairman Bernanke that the recession would be over by year-end if the banking situation is stabilized, and that major financial institutions would not be allowed to fail. In other news, the Retail Sales numbers for February came in better than expected and the numbers for January were revised higher. This report is very volatile from month to month, but the last couple of readings have been encouraging. However, the job market continues to struggle as the number of people receiving unemployment reached a record 5.32 Million. And there was news that China is concerned the US may be spending too aggressively on the recession, which could lead to inflation down the road that would diminish the value of Bonds and China's investments in the US. Overall, Bonds and home loan rates didn't worsen last week - even with the huge Stock rally - and ended the week relatively close to where they began.

 

Forecast for the Week

 

 

The middle of this week will be action packed with both scheduled economic reports and the Fed's next regularly scheduled meeting, including their policy statement and rate decision being delivered on Wednesday. With all the actions the government has been taking to stabilize our economy, it will be especially important to hear what the Fed has to say.and to see how the markets react. This week also brings news on the inflation (or deflation) front, with Tuesday's wholesale measuring Producer Price Index (PPI) Report and Wednesday's Consumer Price Index (CPI) Report. Given China's concerns mentioned above about US spending to combat the recession and what that could mean for inflation, it will be important to see how these reports come in. Also this week, we'll get a read on the new construction housing market with Tuesday's Housing Starts and Building Permits Reports. On Thursday, the Philadelphia Fed Report will be released. This monthly survey of manufacturing purchasing managers conducting business around the tri-state area of Pennsylvania, New Jersey, and Delaware is one of the most-watched manufacturing reports. We'll also have another Initial Jobless Claims report on Thursday, and with the number of people collecting unemployment reaching record highs as mentioned above, it will be important to keep an eye on this report, too. Remember: Weak economic news normally helps Bonds and home loan rates improve, as money flows out of Stocks and into Bonds. As you can see in the chart below, Bonds were helped by important technical support and were able to hold onto recent gains even with the rally in the Stock market. I'll be watching closely to see how Bonds and home loan rates react to all of this week's events! Chart: Fannie Mae 4.5% Mortgage Bond (Friday Mar 13, 2009)

 

The Mortgage Market View...

 

 

The current economic crisis is the top news story for nearly every media outlet. But until recently, one of the most important factors that led to this challenging market has also been one of the least discussed. By popular demand, I am again sending along this highly sought after video and article, unpacking the "Mark-to-Market" accounting issue - with some help from Barry Habib. Barry is a highly respected expert on home loans, who serves as Chairman of MSS, an organization that helps me to stay informed as your trusted advisor. With the help of some easy-to-understand terms and illustrations, you will learn what it has taken the media and politicians many months to take seriously and begin to address. Link here now to get the real story: www.mortgagesuccesssource.com/go/markmarket/

 

The Week's Economic Indicator Calendar

 

 

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of March 16 - March 20 Date ET Economic Report For Estimate Actual Prior Impact Mon. March 16 08:30 Empire State Index Mar -32.0   -34.65 Moderate Mon. March 16 09:15 Capacity Utilization Feb 71.1%   72.0% Moderate Mon. March 16 09:15 Industrial Production Feb -1.2%   -1.8% Moderate Tue. March 17 08:30 Building Permits Feb 510K   531K Moderate Tue. March 17 08:30 Housing Starts Feb 453K   466K Moderate Tue. March 17 08:30 Core Producer Price Index (PPI) Feb 0.1%   0.4% Moderate Tue. March 17 08:30 Producer Price Index (PPI) Feb 0.4%   0.8% Moderate Wed. March 18 02:15 FOMC Meeting       0.00% - 0.25% HIGH Wed. March 18 10:30 Crude Inventories 3/13 NA   749K Moderate Wed. March 18 08:30 Core Consumer Price Index (CPI) Feb 0.1%   0.2% HIGH Wed. March 18 08:30 Consumer Price Index (CPI) Feb 0.3%   0.3% HIGH Thu. March 19 08:30 Jobless Claims (Initial) 3/14 NA   654K Moderate Thu. March 19 10:00 Index of Leading Econ Ind (LEI) Feb -0.6%   0.4% Low Thu. March 19 10:00 Philadelphia Fed Index Mar -40.0   -41.3 HIGH

 

Meghan Knoy 115 E Goodwin Street Suite C Prescott, AZ 86303 i

 

AZSTCU - Mortgage rates are down!!

 

DAILY RATE SHEET

The quotes below are only a sample of the wide variety of loan programs and rates available. Products & rates listed below include the member paying a 1% Origination Fee.  Please contact me for any questions regarding pricing and/or discount points.

 

 

Loan Type Interest Rate Discount Points APR Monthly Mortgage Payment (P&I) 15 Year Fixed 4.375% 0 4.784% $910 30/15 Year Fixed 5.250% 0 5.553% $663 30/15 Jumbo 6.500% 0 6.888% $3,160 30 Year Fixed 4.875% 0 5.117% $635 3/1 Year ARM 4.000% 0 5.278% $573 5/1 Year ARM 4.250% 0 5.343% $590 7/1 Year ARM 4.500% 0 5.307% $608
Rates effective as of: 3/16/2009 9:18:14 AM.
Rates quoted as of the date and time indicated above are subject to change, with the markets, without notice.  Your actual rate and/or points may be different, as many factors go into providing you with a home mortgage loan.  The examples above assume a loan amount of $120,000 for all loans with the exception of the 30/15 Jumbo which assumes a loan amount of $500,000.  Again, rates change often, and Arizona State Credit Union will confirm rates for you at the time of application.  Please Note:  Rates disclosed do not apply to manufactured housing.   Please contact me for specific guidelines and rates.

 

Contact me with any questions or for more information.

 

Thanks.

 

Louise Weeks

AZ State Credit Union

Residential Real Estate Loan Officer

550 E Gurley St

Prescott, AZ  86301

Tele: (928) 777-6150  Mobile: (928) 830-8877

Fax:  (928) 777-6151

www.homeloansforyou.org

 

"We deliver the most personal and memorable service you will ever experience"

 

**************************************************************************************************************** This email and any files transmitted with it are confidential and are intended solely for the use of the individual or entity to whom they are addressed. This communication may contain material protected by the attorney-client privilege. If you are not the intended recipient or the person responsible for delivering the e-mail to the intended recipient, be advised that you have received this e-mail in error and that any use, dissemination, forwarding, printing, or copying of this e-mail is strictly prohibited. If you have received this e-mail in error, please notify Arizona State Credit Union by telephone at 602-467-4000. You will be reimbursed for reasonable costs incurred in notifying us. ****************************************************************************************************************

Omnibus Appropriations Includes Permanent Ban

To:  L-Team, Regional Vice Presidents, Liaisons, State Presidents, State President-Elects,         Local Presidents, State and Local Association Executives, State and Local         Government Affairs Directors From:  Charles McMillan, 2009 NAR President              Dale Stinton, NAR Chief Executive Officer RE:  Omnibus Appropriations Includes Permanent Ban on Banks in Real Estate   On Wednesday, President Barack Obama signed H.R. 1105, the Omnibus Appropriations Bill, into law. In doing so, he ended our nearly eight-year battle to preserve the separation between banking and commerce. Specifically, this new law permanently bans large national banking conglomerates from entering the real estate business by preventing the Treasury and Federal Reserve, by rule, order, or any other way, from opening the door to such activities. Below is a link to more information and a Q&A that can help you respond to inquiries you may receive from your members. http://www.realtor.org/banks_and_commerce.nsf On behalf of NAR, we thank all of you for your support and leadership on this issue during the past many years. This is a great victory for the real estate industry and consumers. Congratulations! Sincerely, Charles McMillan, CIPS, GRI 2009 NAR President Dale Stinton, CEO National Association of REALTORS®   Questions or comments? Please email us at presidentsreport@realtors.org. National Association of REALTORS® M&BD 430 N. Michigan Ave. Chicago, IL 60611 As a member of the NATIONAL ASSOCIATION OF REALTORS®, you are entitled to receive the most updated information on the programs, products and services offered by the association.

 

 

This message was sent to brad@welcometoprescott.com. Visit your subscription management page to modify your email communication preferences or update your personal profile. To stop ALL email from Prescott Area Association of REALTORS, click to remove yourself from our lists (or reply via email with "remove or unsubscribe" in the subject line).

B of A 4th quarter

 

Bank of America

 4^th Quarter Performance

14648 N. SCOTTSDALE RD. SUITE 250    SCOTTSDALE,   AZ 85254    480-624-0385  Karen.D.Jones@BankofAmerica.com

 

 

Supporting Customers

 

In the fourth quarter of 2008, we:

• Originated more than $60 billion in new loans for consumers, including

– $45 billion in mortgages

– $5 billion in home equity

– $2 billion for vehicles, boats, RVs

– $8 billion in domestic card and unsecured consumer credit

– $800 million in student loans

• Opened 130,000 net new checking accounts

• Opened 380,000 net new savings accounts

• Opened nearly 400,000 Risk Free CDs

• Grew overall retail core deposits by 15% year-over-year

 

Supporting Businesses

 

In the fourth quarter of 2008, we:

• Made $49 billion in commercial loans

• Made $7 billion in commercial real estate loans

• Extended nearly $1 billion in new credit to more than 47,000 small business customers

• Grew overall commercial deposits by 12% year-over-year

• Raised more than $30.6 billion in debt and equity capital for our clients

 

.          

“2009 is the Year of Recovery….One Home at a Time!”

 

 

 

Brad Bergamini

GRI, CBR, ABR, REALTOR 

Realty Executives Northern Arizona

503 East Gurley Street

Prescott, Arizona 86301

Email: Brad@WelcomeToPrescott.com 

Web: WelcomeToPrescott.com 

Group: 928.237.4400

Main: 928.777.0257 ext 43

Cell:  928.533.1633

Fax:  928.237.4401

"Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it." --Warren Buffett

                                                                                                         

 

A New Precedent for America

When you find a post like this you have to repost it.

Mike Stathis submits: The following article was originally published elsewhere in early November 2008. I thought it would be a good idea to publish it here because, as you will see, it's been quite accurate. Please have a look. As a desperate attempt to stop the bleeding, banks are stepping up with further efforts to protect delinquent homeowners. To date, this represents the most radical effort to stop the avalanche of foreclosures. It is believed that these ridiculous bailouts will help restore the housing market which will provide more stability to the economy. The problem is that these plans are still insufficient to make any impact. And there is nothing to absorb the massive inventory of housing. If Washington wants to help homeowners make mortgage payments, they need to stop letting corporations send jobs overseas. Similar to the banking bailout, the latest "solution" from Washington will continue to waste taxpayer money. More important, it will reward the wrong people and punish responsible homeowners. Complete Story »

View article...

Ain't No Sunshine in Stock Market

 

 

 

Meghan Knoy Certified Mortgage Planner Cherry Creek Mortgage Direct: 928-925-6082 Toll Free: 866-386-2597 E-Mail: MKnoy@ccmclending.com Website: www.MeghanKnoy.com

 

For the week of Mar 09, 2009 --- Vol. 7, Issue 10

 

 

Last Week in Review

 

 

“A good objective of leadership is to help those who are doing poorly to do well…And to help those who are doing well to do even better.” — Jim Rohn. Let’s hope that some of the actions that the Obama Administration took last week — intended to help millions of US homeowners — will show that kind of leadership for our country, as last week’s Jobs Report and Stock Market losses showed that help is certainly needed. Wednesday brought more details on the new “Making Home Affordable” program, which was created to help as many as 7 to 9 million homeowners who are making every effort to remain current on their mortgage payments. There are two important parts of this plan: The first of these is a program that is available to homeowners who have a solid payment history on an existing home loan owned by Fannie Mae or Freddie Mac, but who have been unable to take advantage of today's favorable rates because their homes have lost value. A second program, which involves loan modification, will help at-risk homeowners avoid foreclosure by reducing monthly payments. Making it tougher for many to keep up with house payments, Friday’s Jobs Report showed that 651,000 US jobs were lost in February, while revisions for the past two months showed that an additional 161,000 were jobs lost between December and January. December's decline was the largest since 1949. What’s more, the US economy has now lost almost 4.4 Million jobs since the recession began in December 2007, which is the biggest employment malaise of any economic downturn in the postwar period. In addition, the unemployment rate soared to 8.1% versus expectations of 7.9%, the highest rate in over 25 years, as you can see in the chart below. In other news from last week, the Dow fell below 7,000 for the first time since 1997, due to continued negative economic reports and headlines hitting the wires. Bonds and home loan rates were able to make some improvements last week as Stocks fell, and as a result, the week ended with Bonds and home loan rates slightly better than where they began. At least we've got sunshine...And you know that daylight savings time happened on Sunday, March 8th. But do you know we're enjoying the extra daylight three weeks earlier than we used to? Learn why in this week's view below.

 

Forecast for the Week

 

 

The week ahead is a quiet one when it comes to scheduled economic reports being delivered, but with last week’s plunge in the Stock market and the details of the Making Home Affordable program still being analyzed, it’s unlikely the week ahead will be quiet overall. In the way of economic news, Thursday will bring the Retail Sales Report for February. Consumers continue to rein in spending and many retailers continue to struggle, so it wouldn't be a surprise if this is a horrible report. It also wouldn't be a surprise for Friday's Consumer Sentiment Report to be a bit dismal as well. And given the current job market, Thursday's weekly Jobless Claims Report will be another one to watch. Remember: Weak economic news normally helps Bonds and home loan rates improve, as money flows out of Stocks and into Bonds. As you can see in the chart below, Bonds and home loan rates reversed course and improved last week…and if the above mentioned reports are indeed negative, Bonds and home loan rates could build on their recent improvements during the coming week. Chart: Fannie Mae 4.5% Mortgage Bond (Friday Mar 06, 2009)

 

The Mortgage Market View...

 

 

Spring Forward Began March 8 Daylight Saving Time (DST) began on Sunday, March 8, 2009. The way we refer to time zones also changes. For example, Eastern Standard Time (EST) becomes Eastern Daylight Time (EDT). But remember, some areas of the United States don’t use DST, such as Arizona, Puerto Rico, Hawaii, the US Virgin Islands and American Samoa. More Sun… Daylight Saving Time Runs Longer In case you hadn’t noticed over the last two years, DST now begins earlier and runs longer. The extra time that we enjoy is actually the result of the Energy Policy Act, which President Bush signed into law in 2005 and went into effect in 2007. The Act changed the start date of DST to the second Sunday in March — three weeks earlier. It also moved the end date out one week to the first Sunday in November. Benefits of Daylight Saving Time Despite some concerns, Americans overwhelmingly like Daylight Saving Time. There is simply more sunlight in the evenings to enjoy the outdoors and get things done. Plus, additional hours of daylight can help save energy on a national scale — as much as 100,000 barrels of oil per day according to some estimates. And brighter is safer. Studies have shown that the DST shift reduces traffic accidents. Additionally, a study by the US Law Enforcement Administration also determined that crime is consistently lower during DST, with violent crimes down as much as 10% to 13%. For many crimes, like mugging, darkness is a factor — so more light in the evening hours reduces these types of crimes. Cons of Daylight Saving Time Not everyone benefits from DST. For example, many farmers say that DST has a negative impact on their livestock’s natural schedules. The airline industry also reports that it costs millions of dollars to adjust time schedules — and even then, airlines report numerous problems with international flight connections during the transition time since DST isn’t followed uniformly worldwide. Finally, since many electronic devices and computer programs are set to adjust to DST based on the old dates, they may not change automatically on March 8. So, you’ll want to double-check all of your devices and confirm that the time is correct.

 

The Week's Economic Indicator Calendar

 

 

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of March 09 – March 13 Date ET Economic Report For Estimate Actual Prior Impact Wed. March 11 10:30 Crude Inventories 3/06 NA   -757K Moderate Thu. March 12 08:30 Jobless Claims (Initial) 3/07 640K   639K Moderate Thu. March 12 08:30 Retail Sales Feb -0.4%   1.0% HIGH Thu. March 12 08:30 Retail Sales ex-auto Feb -0.2%   0.9% HIGH Fri. March 13 08:30 Balance of Trade Jan -$38.2B   -$39.9B Moderate Fri. March 13 10:00 Consumer Sentiment Index (UoM) Mar 56.3   56.3 Moderate

 

Meghan Knoy 115 E Goodwin Street Suite C Prescott, AZ 86303

 

FW: The Mark-to-Market Bank Trade This Week

I had to repost this one it gives you some perspective…

Robert Perrego submits: Currently, there are approximately 45.4 million mortgages on houses, condos and co-ops in the United States. Of this number 11.18% or about 5 million of these mortgages are either in foreclosure or delinquent (at least 1 month behind) on their payments. The homes in foreclosure are 3.3% or about 1.5 million mortgages. Using these numbers and considering that collateralized mortgage obligations [CMOs] comprise the bulk of the now infamous 'toxic' loans that are cramming up the banks loan portfolios and balance sheets these days, you might think that these bonds should now be valued at between 96.7 cents (3.3% foreclosure) and 88.8 cents (11.18% delinquent) on the dollar. The reality of where these mortgages are being 'valued' at is far different. Complete Story »

 

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INFO on the Homebuyer Tax Credit & Stimulus

 

Meghan Knoy Certified Mortgage Planner Cherry Creek Mortgage Direct: 928-925-6082 Toll Free: 866-386-2597 Email: MKnoy@ccmclending.com Website: www.MeghanKnoy.com             For the Month of March 2009 --- Vol. 4, Issue 3       IN THIS ISSUE...               New Stimulus and Stability Plans Equal Opportunities! Over the past few weeks, we've seen the birth of unprecedented stimulus plans and legislation that impact the housing and home loan industries. The provisions of these plans could have huge implications for those who are considering purchasing or refinancing a home. The articles below provide an overview of some benefits of the Economic Stimulus Plan and the Homeowner Affordability and Stability Plan that may impact you. For example, the first article offers an easy-to-understand overview of two new initiatives introduced by the Obama Administration to help struggling homeowners. In addition, the $8,000 tax incentive article explains what the new tax incentive entails, as well as who qualifies for this benefit. Finally, the third article explains how you can take advantage of the higher loan limits that have now been extended! These plans may be helpful to many of your friends, family members and coworkers. So please forward this newsletter on to them or let me know if they'd like to enjoy their own free subscription. And if you need any personal assistance at this time, simply call or email.         HOMEOWNER AFFORDABILITY AND STABILITY PLAN               President Obama unveiled his plan to help stabilize the housing market and keep millions of borrowers in their homes. The Homeowner Affordability and Stability Plan includes two initiatives to help struggling homeowners. One is an incentive for homeowners who have less than 20% equity in their homes, or who owe more than their home is worth. The second part attempts to lower monthly payments for homeowners at risk of losing their home. Here is a brief overview of both initiatives. Less than 20% equity in your home? Under current rules, those families who own less than 20% equity in their homes have a difficult time taking advantage of the historically low interest rates. This initiative is open to homeowners who have conforming loans that are guaranteed by Fannie Mae and Freddie Mac. The plan would enable them to move to a new loan for up to 105% of their homes value. According to the plan, "credit-worthy" or "responsible" homeowners can refinance their mortgage into a 30- or 15-year, fixed-rate loan based on current market rates. The new loan, however, cannot include prepayment penalties or balloon payments. For many families, this low-cost option may help reduce their monthly payments by up to thousands of dollars per year. As with the rest of the plan, details about this initiative will be released at a future date-including what, if any, credit score requirements will be included. On the verge of default? This initiative aims at providing help to individual families as well as entire neighborhoods by helping reduce foreclosures and stabilize home prices. It is intended to help homeowners who are struggling to afford their monthly payments, but cannot sell their homes because prices have fallen significantly. The goal of this initiative is simple: "reduce the amount homeowners owe per month to sustainable levels." Homeowners who are current on their loans but are struggling can still apply for this program. As such, this is one of the few programs designed to help homeowners who may face delinquency soon, but are current at the moment. Since the focus of this initiative is on helping families and neighborhoods, investment properties do not qualify. These plans-combined with today's historically low interest rates-have created an unprecedented opportunity for homebuyers. If you have any questions or would like to discuss how this may specifically impact you, I'd be happy to sit down with you. Just call or email me to set up an appointment.         $8,000 TAX CREDIT FOR HOMEBUYERS               The $787 Billion stimulus bill is made up of tax cuts and spending programs aimed at reviving the US economy. Although the package was scaled down from nearly $1 Trillion, it still stands as the largest anti-recession effort since World War II. One of the major benefits of the plan is a tax credit for new homebuyers. According to the plan, first-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit. It's important to remember that the $8,000 tax credit is just that... a tax credit. It's a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if you were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, you would owe nothing. Better still, the incentive is refundable, which means you can receive a check for the credit even if you have little income tax liability. For example, if you're liable for $4,000 in income tax, you can offset that $4,000 with half of the tax incentive... and still receive a check for the remaining $4,000! Who Qualifies? The $8,000 incentive starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000 and is phased out completely at incomes of $170,000 for couples and $95,000 for single filers. To break down what this phase-out means, the National Association of Homebuilders (NAHB) offers the following examples: Example 1: Assume that a married couple has a modified adjusted gross income of $160,000. The applicable phase-out threshold is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time homebuyer incentive to this couple, multiply $8,000 by 0.5. The result is $4,000. Example 2: Assume that an individual homebuyer has a modified adjusted gross income of $88,000. The buyer's income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible to reduce the tax liability by $2,800. Remember, these are general examples. Borrows should consult a tax advisor to provide guidance relevant to their specific circumstances. What Type of Home Qualifies? The tax credit is applicable to any home that will be used as a principle residence. Based on that guideline, qualifying "homes" include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured homes and houseboats used for principle residence also qualify. Buyers will have to repay the credit if they sell their homes within three years.         HIGHER, NON-JUMBO LOAN AMOUNTS EXTENDED               For those who are considering taking advantage of the $8,000 tax incentive for first-time homebuyers, there is some more good news that could make doing so easier and more accessible. An extension is now officially in place on the higher loan limits for mortgages in the tier that lies just below what is considered a "jumbo" loan. First established last year, and now extended through the end of 2009, limits on this additional tier provide opportunities for many who are looking to either refi or, better yet, take the plunge into first time home ownership and grab a piece of the highly publicized $8,000 tax incentive. Here are some key points about this higher loan limit extension, announced by the Fair Housing Finance Agency: The non-jumbo, middle tier of home loans begins at loan amounts greater than $417,000 for single-unit homes. The top end for this tier is $729,750 for single-unit homes. The rates for these loans will again be slightly higher than conforming loan rates, but less expensive than the standard "jumbo" loan rates. This higher limit on the non-jumbo tier is available in 250 counties across the United States. For more information about qualifying for the opportunities that are provided by the stimulus plan, simply call or email to set up an appointment.                 Meghan Knoy 115 E Goodwin Street Suite C Prescott, AZ 86303 .