Consumer Awareness Expo  Providing Options for Underwater Home Owners http://www.homemortgagearizona.net/2011/05/04/consumer-awareness-expo-providing-options-for-underwater-home-owners/ May 4, 2011 By Jon The Consumer Awareness Expo is free but attendance is limited, so register today EVENT INFO: Saturday May 21, 9:30am-12:30pm Mesquite Library (4525 E. Paradise Village Parkway N., Phoenix, AZ 85032) FREE! LIMITED attendance, so RSVP at http://consumerawarenessexpo.eventbrite.com. The Consumer Awareness Expo will provide homeowners with information about the full spectrum of options available if they are underwater with their mortgage, experiencing financial hardship due to job loss, medical expenses, divorce or other life events. Some of the experts available include: Attorneys from Nagle Law Group will assist homeowners with information and options about short sale, foreclosure and bankruptcy options Attorneys from Nelson Law Firm will provide information about tax consequences of short sales or foreclosures on income taxes Real Property Management North Valley will provide information about finding a rental home or apartment, including application information Representatives from Nova Home Loans will be at the event to consult with homeowners who are ready to purchase again and take advantage of these low housing prices Home Affordable Modification Assistance Group will be available to discuss loan modification possibilities Instant Settle Consultants will discuss debt settlement and credit repair options We want to provide consumers with options and answers they can live and move forward with during difficult times,? said event organizer Lisa Capes, Chicago Title Insurance Company. ?This event is being held by a group of real estate professionals who are dedicated to educating the public with facts and options for underwater homeowners.? This Expo is FREE to the public and the law firms and agencies are providing their expertise at no charge. Attendance is limited and participants must register by May 18th at http://consumerawarenessexpo.eventbrite.com.     New Fannie Mae Home Path Financing Incentive http://www.homemortgagearizona.net/2011/04/21/new-fannie-mae-home-path-financing-incentive/ April 21, 2011 By Jon Fannie Mae has recently announced a special incentive effective with offers submitted on or after April 11th. HomePath® Buyer Incentive Fannie Mae is currently offering buyers up to 3.5% in closing cost assistance through June 30, 2011. The HomePath property buyer must meet the following qualifications to be eligible: Buyers and/or selling agents (the agent representing the buyer) must request the incentive upon submission of initial offer in order to be eligible. The initial offer must be submitted on or after April 11, 2011 and close by June 30, 2011. If an initial offer was made prior to the effective date, the offer is not eligible for the incentive. The sale must close on or before June 30, 2011. No exceptions will be made to this deadline. Only buyers purchasing a HomePath property as their primary residence may receive up to 3.5% in closing cost assistance. Second homes and investment properties are excluded from the incentive. Buyer must sign the Owner Occupant Certification Rider to the Real Estate Purchase Addendum. If a buyer's total closing costs are under 3.5%, the difference will not be available as a credit to the buyer. Note that this incentive will be clearly identified on the purchase contract, and these loans must close by June 30,2011.   4th Time Ever Metro Phoenix Home Sales Over 10,000, March 2011 http://www.homemortgagearizona.net/2011/04/08/4th-time-ever-metro-phoenix-home-sales-over-10000-march-2011/ April 8, 2011 By Jon For only the fourth time ever in a month residential sales were over 10,000 this March. The three other months of sales over 10,000 were June 2004, June 2005 and August 2005. Single family detached sales were 8,350 or 84% of the 10,000 sales. Seventy-seven percent of all single family sales were under $200,000. Single family sales under $50,000 were 862 with 90% purchased with cash. Page 9 breaks down how single family sales were purchased by sold price range. Overall, 46% percent of single family sales were purchased with cash, 26% with a conventional loan, 23% with an FHA loan, 4% VA loan and 2% with other financing. Pages 4-6 looks at the twenty cities in Greater Phoenix that had over 100 single family sales in March 2011. Phoenix led all cities with 2,024 sales. This was a 19% increase in sales over March 2010. The cities with the highest percentage increase in sales in March 2011 over March 2010 were San Tan Valley with a 66% increase, Tempe at 39% and Maricopa at 38%. Four cities had fewer sales in March 2011 than March 2010. They were Buckeye, Laveen, Casa Grande and Queen Creek. Queen Creek had the highest percentage decrease in sales at 31% decrease. Queen Creek however was the only city out of the twenty cities that had an increase in the single family median sales price in March 2011 over March 2010. When combining all residential sales 43% were lender-owned sales (REOs), 19% were short sales and 38% categorized were neither a short sale nor a lender-owned sale, though many of sales in the other category were recent lender-owned sales that were fixed and flipped. See page 7 for a breakdown of the eight residential categories. The single family rental market remained hot with a 1.5 month supply of single family rentals in Greater Phoenix. See page 10. See page 12 for the April 29 event Face-Off on the Future: What's Ahead for the Economy at Gainey Ranch Golf Club. PLEASE CONTACT ME FOR FULL REPORT     Annual Forecast 2011 http://www.homemortgagearizona.net/2011/04/04/31/ April 4, 2011 By Jon MMG Annual Forecast 2011: What to Expect and Why! By Mortgage Market Guide The economy and housing markets have seen some rough times the last couple of years. But the good news is that last year we saw some stabilization ? and 2011 should see us continue on the road to recovery. To help you prepare for the coming year, we?ve put together an overview of what to look for in 2011. We start out by looking at the big picture and discuss the outlook for the overall economy, the stock market, and the all-important employment market. From there, we dig into what to look for in terms of the housing market, including home prices, the foreclosure crisis, compensation, new legislation that impacts the mortgage industry, and finally the all-important forecast for home loan rates in 2011. Economic Outlook Overall, the economy looks to have stabilized from the crisis situation a couple of years ago. Although we still have global economic and political concerns, particularly regarding the situation in Europe, the U.S. economy appears positioned for continued growth and strengthening. We expect that the U.S. economy will be moderately stronger this year, and will get an additional boost from Quantitative Easing 2 (QE2), as well as the recently passed Tax Package. Over the past 5 quarters, Gross Domestic Product (GDP) in the U.S. has dramatically improved from where it was in 2008 and held on to those gains. Looking ahead, we see the United States? GDP finishing 2011 above where it ended last year ? growing by as much as 3%. This is inline with other industry experts and friends we spoke to, like Knight Kiplinger, CEO of Kiplinger Publications and one of the most revered financial writers of our time. He agreed that he expects GDP to finish the year around 2.8%. Bob Weidemer, author of the highly acclaimed book ?Aftershock?, told us he sees slightly more modest growth, perhaps around 2.5%, but still moving positively. That growth won?t happen overnight, however. Instead, it will start out slow in the first half of the year, and pick up steam in the second half. We see a portion of that growth coming from demand in other countries. Currently, the U.S. only derives about 12% of its Gross Domestic Product (GDP) from exports. As Knight Kiplinger said, ?While that equates to a lot of money, it means that the U.S. relies less on exports than many other countries ? and it means that there?s room to grow.? One of the reasons for a growth in exports during the coming year is the declining value of the U.S. Dollar, as one of the major ?non-stated goals? of the Fed?s Quantitative Easing program is that the U.S. Dollar will weaken. And we are already seeing U.S. exports tick up as the U.S. Dollar has weakened, because it makes our goods and services relatively less expensive to foreign buyers. The Fed would never outright say that this was a goal of QE2, as they have heavily criticized other countries such as China for acting similarly. However, the bump in exports is good news for the U.S. economy as a whole, as well as individuals, because it sets the stage for growth while still allowing U.S. consumers to catch their breath. After all, the tough economic climate over the last couple of years has hit U.S. consumers hard, and has forced many Americans to reprioritize their family budgets to focus more on their savings. Additionally, this will help large multi-national companies, which have a large influence on the economy, and in turn, the major Stock market indices. And stimulating our economy towards continued growth is the Fed?s main goal for QE2. There is a flip side to the weakening Dollar, however, and that is that a weakening Dollar can have some negative impacts. For one thing, the US is an importing nation and a declining US Dollar will make imports more expensive. The softening Dollar will also hurt imports of capital ? meaning foreigners investing money in US Dollar denominated securities. And as Bob Weidemer points out, ?we need capital imports more than exports of goods.? Foreign investment in our Bond market is what has fueled relatively low interest rates, including home loan rates, for a very long time?and should foreigners start to shy away from purchasing our Bonds, rates would climb higher over time. Additionally, Oil is priced in US Dollars and if the ?buck? weakens sharply it could cause oil and gas prices to rise.   Arizona unemployment rate falls; 19,500 jobs added 16 commentsby Betty Beard - May. 21, 2010 12:00 AM The Arizona Republic   Arizona's job picture brightened considerably with an increase of 19,500 jobs in April, the largest number of new hires in the month of April since 2005, the Arizona Department of Commerce reported Thursday. The state's unemployment rate fell to 9.5 percent in April from 9.6 percent in March and remained below the national rate of 9.9 percent.   The overall number of non-farm jobs was still below the level a year earlier, but by only 1.6 percent. The over-the-year job losses have been shrinking steadily since August. Many of the new hires were at leisure and hospitality businesses ? which include hotels, resorts, restaurants and bars ? and at retailers, temporary-service agencies and the U.S. Census Bureau, said Rick Van Sickle, a department analyst. For the second month in a row, the leisure and hospitality sector had the highest gains. It added 5,000 jobs in April. "There's an indicator of some confidence," Van Sickle said. "It looks like people are starting to spend discretionary money, at least last month." Unfortunately, hospitality businesses are the most vulnerable to travel boycotts announced by cities and groups objecting to Arizona's new immigration law       that takes effect July 29.   The law makes it a state crime to be in the country illegally. It states that an officer engaged in a lawful stop, detention or arrest shall, when practicable, ask about a person's legal status when reasonable suspicion exists that the person is in the U.S. illegally. Van Sickle said the department would not be able to accurately track the effects of the law because the job data it collects is not that detailed and the number of hospitality workers typically falls as hot weather approaches. "There's boycotts. There's buycotts (efforts to get people to buy Arizona products to protest boycotts). There's counter boycotts. There's hot weather coming. There's all those factors that are going to come into play," he said. But the boycotts are going to hurt, and probably for years, said Kristen Jarnagin, spokeswoman for the Arizona Hotel and Lodging Association. An estimated 30 to 40 groups have cancelled plans so far. Most of the cancellations came in the first weeks after Gov. Jan Brewer signed the law on April 23. "The problem is the phones aren't ringing," she said. Jarnagin said groups are making plans for conventions and meetings for 2011 to 2013 and apparently bypassing Arizona. "We are losing business for years to come," she said. Although Arizona's job numbers have improved, the state needs to add about 10,000 jobs every month for the rest of the year to avoid making 2010 the third consecutive year for job losses, said Arizona State University economist Lee McPheters. He said the state typically loses 20,000 to 25,000 jobs every summer and gets them back in August. "So the unexpectedly good April jobs report suggests that the Arizona labor market is starting to show some life, but the gains have to be sustained right through to the end of the year to avoid another year of job losses for the year as a whole," he said. The job market is still tight. A CareerBuilder.com career fair held Tuesday at the Sheraton Phoenix Downtown Hotel drew an estimated 3,500 registrants and only 40 employers, said David Fitzgerald, a University of Phoenix campus director involved in organizing the fair. Other employment fields that did well include: Construction has been alternately adding and shedding jobs all year and is still down a net 400 jobs from last year. It added 2,200 jobs in April. Educational and health services have added 9,800 more employees this year, or 3 percent, more than any other sector. That includes 1,200 added in April. The sector did well on continued strength in health-care jobs and because private educational-service companies added 5,400 jobs over the year. Professional and business services had a net gain of 3,900 workers over the month. That was largely due to 5,500 mostly temporary employees hired by employment agencies       .     4-30-10 Week in Review    Mortgage bond prices rose this week pushing mortgage interest rates lower. Trading was dominated by foreign influences as the Greek debt concerns spread throughout Europe. Analysts point to Spain and Portugal as additional areas of concern. Fortunately, this sent global investor funds into US Treasury bonds and mortgage-backed securities. This flight to quality buying helped rates improve this week. Weekly jobless claims came in as expected. The employment report to be released next Friday will be the most important event this coming week. The productivity data to be released Thursday also is a major release. It is important to remember that data releases often result in mortgage interest rate volatility.     Home prices inch up  http://money.cnn.com/2010/04/27/real_estate/home_prices_up/index.htm     Existing home sales soar in March http://cts.vresp.com/c/?NovaHomeLoans/6fbfba328e/TEST/65fdf6511b      How foreclosure impacts your credit score    http://cts.vresp.com/c/?NovaHomeLoans/6fbfba328e/TEST/d386c85d65       04/16/10  Housing starts, permits rise  http://www.azcentral.com/business/articles/2010/04/16/20100416biz-housingstarts0416.html       HUD Mortgagee Letter 2010-02: Increase in Upfront Premiums for FHA Mortgage Insurance

Tuesday, 26 January 2010 16:52

HUD has issued Mortgagee Letter 2010-02, Increase in Upfront Premiums for FHA Mortgage Insurance.  Effective for FHA loans for which the case number is assigned on or after April 5, 2010, FHA will collect an upfront mortgage insurance premium of 2.25 percent.  This policy change will increase premiums for purchase money and refinance transactions, including FHA-to-FHA credit-qualifying and non-credit qualifying streamlined refinance transactions.  To view the entire Mortgagee Letter, please click Read more...   MORTGAGEE LETTER 2010-02 January 21, 2010 TO:  ALL APPROVED MORTGAGEES SUBJECT:  Increase in Upfront Premiums for FHA Mortgage Insurance Effective for FHA loans for which the case number is assigned on or after April 5, 2010, FHA will collect an upfront mortgage insurance premium of 2.25 percent.  This policy change will increase premiums for purchase money and refinance transactions, including FHA-to-FHA credit-qualifying and non-credit qualifying streamlined refinance transactions. Programs Covered by Insurance Premiums Shown Below The upfront and annual premiums and the requirements described in this Mortgagee Letter apply to all mortgages insured under FHA's Single Family Insurance Programs except those listed below: - Title - Home Equity Conversion Mortgages (HECMs) - Hope for Homeowners (H4H) - Section 247 (Hawaiian Homelands) - Section 248 (Indian reservations) - Section 223(e) (declining neighborhoods) - Section 238(c) (Military Impact areas in Georgia and New York) Upfront Premiums FHA will charge an upfront premium in an amount equal to the following percentages of the mortgage: Purchase Money Mortgages and Full-Credit Qualifying Refinances = 2.5 percent Streamline Refinance (all types) = 2.25 percent HOPE for Homeowners (Delinquent Mortgagors) = 2.00 percent Home Equity Conversion Mortgages = 2.00 percent  Annual Premiums Annual premiums will not change at this time. For FHA traditional purchase and refinance products, the annual premium, shown in basis points below, is to be remitted on a monthly basis, and will be charged based on the initial loan-to-value ratio and length of the mortgage according to the following schedule:     LTV   Annual for Loans > 15 Years   LTV   Annual for Loans ≤ 15 Years   ≤ 95   50 BPS   ≤ 90   -None-   > 95   55 BPS   > 90   25 BPS HOPE for Homeowners (delinquent mortgagors) In accordance with guidance issued in Mortgagee Letter 2009-43, HOPE for Homeowners borrowers will pay 75 basis points (.75 percent of the base loan amount), regardless of the loan-to-value ratio, which is collected monthly. Home Equity Conversion Mortgages (HECMs) The annual premium for all HECM borrowers is 50 basis points (.50 of the outstanding mortgage balance) and is collected monthly. First-Time Homebuyer with HUD-Approved Pre-Purchase Counseling The National Housing Act, as amended by the Housing and Economic Recovery Act in 2008, authorizes upfront premiums of up to 3.00 and authorizes premiums of up to 2.75 percent for first-time homebuyers who complete HUD-approved pre-purchasing counseling.  Since the upfront premium rate of 2.25 percent remains below the statutory cap, no variable rate for counseled first-time homebuyers is provided for under this Mortgagee Letter. Click here to view a PDF of the Increase in Upfront Premiums for FHA Mortgage Insurance Mortgagee Letter

GDP expands 5.7 percent as companies boost output

Mortgage bond prices shot higher last week driving home loan rates lower. Mortgage rates found support from investors around the world following last week's Treasury auctions. The Treasury sold bonds totaling 104B that were well received by foreign central banks. The indirect bidder participation, an indication of foreign demand, was near all-time highs.

The employment report next Thursday will be the most important release this coming week. The ADP employment report will give an earlier glimpse into the employment situation though the two reports are derived from different data so there could be some divergence. Strength in the other economic data will do little to help mortgage interest rates improve. 
 
$8,000 Tax Credit will be gone soon!

It's time to get those 1st time buyers off the fence and purchase before December 1st so they can take advantage of the $8,000 tax credit.  For more information regarding the tax credit, click here.

Housing Demand Will Return 

Please make note that Nova Home Loans still allows FICO scores as low as 580 for FHA & VA loans. However, Nova is considering increasing our minimum FICO score requirements from 580 to 600. This change can happen as early as next week. If you have any FHA or VA buyers that have a FICO score of 580-599, they need to identify a property and allow us to lock their loan in under current guidelines before they change.   For loans with 620 or less credit scores:  Please allow for a 45 day close of escrow period due to increased underwriting turn times.

Please give me a call if you have any financial questions or if you need a second opinion on a loan scenario. If you are calling after hours or on weekends, please use any of the direct contact numbers for me and our assistants listed on the attached rate sheet for immediate pre-qualifications.Stocks rose on Friday, with the Dow scoring its biggest six-week gain since July 1938, helped by a reassuring report on the mood of consumers and stabilization in General Electric and Citigroup's quarterly results.  The Dow is up 22.7 percent over the past six weeks, making this the largest six-week gain since July 29, 1938. Friday's close also marked the S&P 500's longest weekly winning streak since 2007.

The Reuters/University of Michigan survey showed that U.S. consumers have more confidence in the economy than they have had since the sudden collapse of Lehman Brothers in September, the latest in a spate of data suggesting the economic slump may be easing.

GE and Citigroup both posted better-than-expected results, lifting the broader market, and bank stocks rallied as investors bet other financial companies could follow up with more news showing the sector is on the mend.

Mortgage bond prices rose last week helping mortgage interest rates improve. The mixed economic data released during the week provided no clear indication to the direction of the US economy. One bright spot was the consumer and producer price index data, which showed no signs of rising inflation. Inflation erodes the value of money received in the future, therefore, when inflation is on the rise so are interest rates to compensate for the reduced purchasing power.
 
So far the Fed has been able to keep mortgage interest rates relatively low while not destroying the functioning secondary market where investors buy and sell mortgage bonds. The potential negative is that the Fed has become the primary purchaser of these bonds. In the short term take advantage of these advantageous rates. There is uncertainty how things will play out once the Fed begins to unwind those positions in the futures.

Please give me a call if you have any financial questions or if you need a second opinion on a loan scenario.

Posted:  April 10th, 2009

Inflation is typically the most important focus for the mortgage interest rate market. Inflation remains a concern as the Federal Government continues to print and spend money in an effort to spur the economy. Unfortunately, mortgage interest rates also continue to be pushed around by gyrating stocks and weak demand as performance uncertainty looms and the Fed has become the primary buyer of mortgage-backed securities. Most of the recent increases in interest rates have come following stronger stocks. The Fed continues to pump billions of dollars into the market to try to keep mortgage interest rates relatively low and steady. Up until this past week they have done a pretty good job of accomplishing that task. Remember, the Fed is not the only player in the game and selling pressure continues.

Analysts will monitor this next week's consumer credit levels. There is much debate in the financial community about the future. Economists, market analysts, and traders all seem to have a different opinion about the future state of the economy and especially whether or not we have hit the bottom of the economic slide. One thing most market participants agree on is both the bond and stock markets are going to see additional volatility.

So far the Fed has been able to keep mortgage interest rates relatively low while not destroying the functioning secondary market where investors buy and sell mortgage bonds. The potential negative is that the Fed has become the primary purchaser of these bonds. In the short term take advantage of these advantageous rates. There is uncertainty how things will play out once the Fed begins to unwind those positions in the futures.

For assistance over the weekend, you can reach me on my mobile at 480-225-2987 for pre-qualifications and 2nd opinions on loan scenarios.

Posted:  March 20th, 2009

Valley Real Estate Analyst suggest housing has hit bottom

Mortgage bond prices fell last week applying upward pressure on mortgage interest rates. The bond market got a shock from a surprise increase in new home sales, stronger than expected durable goods orders, and some stock strength. There were also concerns about the US dollar in general and dollar denominated securities as China expressed interest in substituting the yuan to dollar peg in exchange for a new international currency. Fortunately the Fed continued to come to the rescue buying mortgage backed securities in an effort to keep interest rates relatively steady and low. For the week, interest rates on government and conventional loans rose by about 1/8 to 1/4 of a discount point.The employment report Friday will be the most important economic release this week.

For pre-qualifications or 2nd opinions on loan scenarios over the weekend, please call my mobile at 480-225-2987.

Posted:  March 20th, 2009

Mortgage bond prices rose last week applying downward pressure on mortgage interest rates. The bond market got a boost from the Fed announcement (read below) to buy more mortgage debt. There was some profit taking in bonds Thursday afternoon following the run-up in prices Wednesday. Higher than expected core readings of the consumer and producer price indices reignited some inflation concerns. The Fed's continued efforts to pump money into mortgage bonds helped keep mortgage interest rates favorable. 

This week the Federal Reserve announced it would pump another $750 billion into purchasing more mortgage-backed securities, the bonds that directly dictate 30 year and 15 year fixed rate Government and Conventional mortgage interest rates. This is in addition to the $500 billion being used between January and June to drive mortgage interest rates lower and help stimulate the economy.

So far the Fed has been able to keep mortgage interest rates relatively low while not destroying the functioning secondary market where investors buy and sell mortgage bonds. The potential negative is that the Fed has become the primary purchaser of these bonds. In the short term take advantage of these advantageous rates. There is uncertainty how things will play out once the Fed begins to unwind those positions in the futures.

For immediate pre-qualifications over the weekend or 2nd opinions on loan scenarios, please call me at 480-225-2987.

Posted:  March 13th, 2009

Mortgage bond prices rose last week applying downward pressure on mortgage interest rates. The bond market as a whole absorbed the additional debt supply the Treasury issued. There were some surprises with the retail sales figure not being as weak as expected and significant stock strength. However, the Fed's continued efforts to pump money into mortgage bonds helped keep mortgage interest rates favorable. U.S. stocks rose to complete the biggest weekly gain for the Standard & Poor's 500 Index since November as takeover speculation lifted health-care companies and financial shares capped the steepest advance on record. 

Fanne Mae Homepath Financing 

Fannie Mae works with all of its partners to help homeowners prevent and avoid foreclosure; however, sometimes it is unavoidable. When foreclosures occur on mortgages in which Fannie Mae is the investor, our goal is to sell properties in a timely manner in order to minimize the impact on the community.

• Low down payment and flexible mortgage terms (fixed-rate, adjustable-rate, or interest-only)
• You may qualify even if your credit is less than perfect
• Available to both owner occupiers and investors
• Down payment (at least 3 percent) can be funded by your own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer
• No mortgage insurance*
• No appraisal fees
• Also eligible for HomePath Renovation Mortgage

Posted:  February 28th, 2009

Mortgage bond prices rose last week applying slight downward pressure on mortgage interest rates. Weakness in the equity markets helped bonds recover from losses seen earlier in the week. On Thursday the Dow Jones index closed at October 2002 levels. The Federal Reserve continued buying mortgage bonds with the purchase of about $20 billion from February 12 through February 18. 

Fannie, Freddie to fund part of $75B foreclosure fix

Obama administration is only using $50 billion of financial bailout package to fund its loan modification program. Remaining $25 billion coming from Fannie Mae, Freddie Mac and Department of Housing and Urban Development.

Stimulus Plan and what it entails:

Tax Credit for Homebuyers
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. Remember a tax credit is very different than a tax deduction ? a tax credit is equivalent to money in your hand, as opposed to a tax deduction which only reduces your taxable income.

The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000. Buyers will have to repay the credit if they sell their homes within three years.

Keep in mind that market conditions as of late have been choppy and unpredictable. Any future data releases showing a rebound in the economy as well as the Fed's promise to buy Mortgage Bonds could lead to mortgage interest rate volatility, so lower rates are not a given.

Please give me a call if you have any financial questions or if you need a second opinion on a loan scenario. If you are calling after hours or on weekends, please call my mobile at 480-225-2987 for immediate pre-qualifications.

Posted:  February 13th, 2009

We still can get your FHA loans done in 2 weeks when needed and we can go down to a 540 fico score!!

For housing stimulus updates, click here.

Mortgage bond prices rose last week pushing interest rates lower. Stocks struggled throughout most of the week, which helped funnel some funds toward bonds. The Treasury auctions dominated trading along with headlines questioning the efficacy of continued bailout efforts. Fortunately the Fed continued to buy mortgage bonds with purchases of about $23.2 billion February 5 through February 11. This buying helped buoy mortgage bond prices.

Continued stimulus spending developments dominate the financial headlines. Political party and intra-party disagreements are a daily occurrence as the merits of the proposals both future and past are debated. The debate involves who should get the money, how the money will be tracked, what ultimate effect will the money have on employment, and much more. Even with the stimulus, past and future, most signs point towards continued economic uncertainty.

One positive development for lower mortgage interest rates appears to be the purchasing of mortgage bonds by the Fed. This is separate from the stimulus spending that regularly makes the news. The Fed continues to buy billions of dollars of mortgage bonds. While the ultimate outcome is debated, the short-term reality is that the Fed's purchasing has helped mortgage interest rates at the very least remain historically low. Whether the Fed can accomplish their goal of driving interest rates lower is still uncertain, but they obviously are trying. We know everyone would like to see lower rates but remember that stability is equally important. Sustained low rates generally are better than rapid fluctuations down and then quickly back up. Keep in mind that market conditions as of late have been choppy and unpredictable. Any future data releases showing a rebound in the economy as well as the Fed's promise to buy Mortgage Bonds could lead to mortgage interest rate volatility, so lower rates are not a given.

Please call me over the weekend at 480-225-2987 if you need 2nd opinions on loan scenarios or for quick pre-qualifications. Or, you can go directly to my website at www.creativefinanceaz.com


Posted:  February 6th, 2009

Mortgage bond prices fell last week pushing interest rates slightly higher. Governments across the globe continued to battle the credit crisis and economic instability. Billions of dollars of debt offerings by the US Treasury continued to be announced. Unfortunately, the additional supply caused bond prices in general to fall and rates to rise the middle of the week. Record weekly jobless claims, weak factory orders, and strong productivity data released Thursday provided much-needed boost for mortgage bonds.

Also - Click here for some information about Fannie Mae loosening their rules for refinancing:  dropping some credit-score requirements, reducing income-documentation standards, and waiving the need for appraisals in some cases.

Inside Story: False Illusions and What You Need to Know about current and future interest rates.

The Fed's been at it again, offering words that sound encouraging at first blush, confirming that their buying program of Mortgage Backed Securities is in full swing and will continue as needed. Of course, the media will pick this up and offer their own interpretation, saying "Good news, the Fed's words on continuing their purchasing program mean that rates will continue to drop lower, and remain low into the summer..." But is this really what that means? Not so.

Yes, the Fed has been buying Mortgage Bonds, but if you look at what they are purchasing, they are buying a lot of FNMA 30-yr 5.5% and 5.0% Bonds...which won't have much of an impact on present interest rates. Why? First, see the Fed's purchases for yourself by hitting this link: http://www.newyorkfed.org/markets/mbs/index.html

So why is the Fed buying these Bonds? Well if you think about it, it's very smart of the Fed...and maybe even a little sneaky...because 5.5% Bonds actually represent outstanding mortgages with rates of 6 - 6.50%, which are precisely the loans being refinanced at today's great interest rates. With rates at present low levels, many of the mortgages in these FNMA 5.5% pools being bought up by the Fed will be refinanced and paid, thus giving the Fed a quick recoup on some of their investment. And this is likely a big reason why the Fed said they could continue this purchasing program beyond June, if necessary. Bottom line, the Fed buying these higher rate coupons will not necessarily help rates to move lower, as their actions do not impact the loans being originated at today's low rates.

Keep in mind that market conditions as of late have been choppy and unpredictable. Any future data releases showing a rebound in the economy as well as the Fed's promise to buy Mortgage Bonds could lead to mortgage interest rate volatility, so lower rates are not a given.

Please give me a call if you have any financial questions or if you need a second opinion on a loan scenario.  If you are calling after hours or on weekends, you can reach me on my mobile at (480) 225-2987.  You can also fill out an application on my website.

Posted:  February 2nd, 2009

Last Week in Review:

"ACTION IS THE REAL MEASURE OF INTELLIGENCE." Napoleon Hill. Last week was definitely action packed, though only time will tell how intelligent each action was - here are the highlights.