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Rate Lock Advisory - Wednesday Dec. 10th www.AaronAbed.com

Aaron Abed (River City Mortgage & Financial) — Wed, 10 Dec 2008 11:09:39 -0600

Rate Lock Advisory - Wednesday Dec. 10th

Wednesday's bond market has opened in negative territory following a strong opening in stocks. The stock markets are rebounding from yesterday's sell-off with the Dow currently up 120 points and the Nasdaq up 26 points. The bond market is currently down 17/32, but we will likely still see an improvement in this morning's mortgage rates of approximately .250 - .375 of a discount point due to strength in bonds late yesterday.

There is no relevant economic news scheduled for release today. October's Goods and Services Trade Balance report will be posted early tomorrow morning along with weekly unemployment figures. The Trade Balance report gives the size of the U.S. trade deficit, but it is the week's least important release. It is expected to show a $53.5 billion trade deficit. Unless it varies greatly from forecasts, I don't expect it to affect mortgage pricing.

The Labor Department will post last week's unemployment claims figures tomorrow also. They are expected to show that 525,000 new claims for benefits were filed last week. While a larger number would be good news for bonds, the truth is that this data is not very influential to bonds and mortgage rates because it covers only a week's worth of claims. But, with no highly important data scheduled for release, if it varies much from forecasts we may see bonds react enough to slightly impact mortgage rates.

Also, there is a 10-year Treasury Note auction tomorrow that may hurt or help boost bond prices, depending on how strong of a demand there is in the sale. Results will be posted at 1:00 PM ET. If there was a strong demand for the sale, we may see bonds move higher and mortgage rates revise lower during afternoon trading. However, a lackluster interest could lead to higher mortgage pricing.

Friday morning brings us the release of a couple of important reports. The two most important are November's Retail Sales and Producer Price Index (PPI) reports. The sales report tracks consumer spending while the PPI gives us an important measurement of inflationary pressures at the producer level of the economy. Both can lead to large swings in the markets and mortgage pricing. The third report of the day will be December's preliminary reading to the University of Michigan's Index of Consumer Sentiment, but it less important than the first two.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Lock if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Daily Rate Lock Recommendation - 12/09/2008 www.AaronAbed.com

Aaron Abed (River City Mortgage & Financial) — Tue, 09 Dec 2008 11:22:18 -0600

Rate Lock Advisory - Tuesday Dec. 9th

Tuesday's bond market has opened flat with no relevant economic news scheduled for release today. The stock markets are mixed with the Dow down 103 points and the Nasdaq up 12 points. The bond market is currently nearly unchanged from yesterday's close, but we will still see an increase in this morning's mortgage rates of approximately .250 of a discount due to weakness late yesterday.

This week is moderately busy in terms of the number of economic releases scheduled for release. There are four on the agenda but two of them are considered to be very important that can heavily influence the markets and mortgage pricing. In addition, there is a 10-year Treasury Note auction Thursday that may hurt or help boost bond prices, depending on how strong of a demand there is in the sale. Since all of the data is scheduled for release Thursday and Friday, the most movement in rates will likely be the latter part of the week.

There is no relevant economic news scheduled for release today or tomorrow. The first data is October's Goods and Services Trade Balance report early Thursday morning. This report gives the size of the U.S. trade deficit, but it is the week's least important release. It is expected to show a $54.0 billion trade deficit. Unless it varies greatly from forecasts, I don't expect it to affect mortgage pricing.

Friday brings us the release of all of this week's important data with November's Retail Sales and Producer Price Index (PPI) being posted. I am expecting to see the most movement in rates Friday, but I believe the general atmosphere for mortgage rates is still negative.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Lock if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Daily Rate Lock Recommendation - 12/02/2008 www.AaronAbed.com

Aaron Abed (River City Mortgage & Financial) — Tue, 02 Dec 2008 12:08:53 -0600

Tuesday's bond market has opened in negative territory following a rebound in stock prices. The stock markets are bouncing off yesterday's beating with the Dow up 250 points and the Nasdaq up 47 points. The bond market is currently down 8/32, which will likely push this morning's mortgage rates higher by approximately .125 of a discount point.

There is no relevant economic news scheduled for release today. It is the only day of the week that we will not get some type of relevant data. The next report that we need to be concerned with comes tomorrow morning with the release of the revised 3rd Quarter Productivity report. This index is expected to show a downward revision from the preliminary reading of worker productivity. Higher levels of productivity are thought to allow the economy to expand without inflationary pressures rising. This is good news for the bond market because economic growth itself isn't necessarily bad for the bond market. It is the cond itions around economic growth, such as inflation that hurt bond prices and mortgage rates. Current forecasts are calling for an annual rate of 0.9%, down from the previous estimate of 1.1%.

The Fed Beige Book will be posted tomorrow afternoon. This report, which is named after the color of its cover, details economic conditions by region. It is relied on heavily during the FOMC meetings when determining monetary policy, so it results can influence bond trading and mortgage rates if it shows any significant surprises.

The recent bond rally has driven bond prices higher and mortgage rates lower, however, I am concerned that we may see an increase in rates before they fall much further. The rally creates a situation where bond traders may sell holdings to capture profits from it. If there is a concern in the market whether bonds can improve much more, that move may happen sooner than later and can lead to a spike in mortgage rates. Therefore, I strong ly recommend that you maintain contact with your mortgage professional if still floating an interest rate because rate usually move higher much quicker than they improve.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

TIME TO MAKE A MOVE!!! Daily Rate Lock Recommendation - 12/01/2008 www.AaronAbed.com

Aaron Abed (River City Mortgage & Financial) — Mon, 01 Dec 2008 12:09:26 -0600

Monday's bond market has opened strong following weaker then expected economic news and a major sell-off in stocks. The stock markets are kicking the month off in the tank with the Dow down almost 400 points and the Nasdaq down 81 points. The bond market is currently up 30/32, which will likely improve this morning's mortgage rates by approximately .500 of a discount point.

The week's first piece of economic news was November's manufacturing index from the Institute for Supply Management (ISM) late this morning. It showed a reading of 36.2 that was below forecasts and is the lowest reading since May 1982. That indicates that manufacturer sentiment was weaker than many had thought last month. Since that hints at slower manufacturing activity it is good news for bonds and mortgage rates.

The recent rally in bonds has put us in uncharted waters in terms of their yields. The benchmark 10-Year Treasury Note is currently yielding 2.82%, which is it lo west on record. It broke below 3.00% last week for the first time since the Notes were issued in 1962. While mortgage rates have not recently plummeted as quickly as the yield has, they have fallen quite a ways and show signs of continuing to slide. The downside to that is the possibility of rates spiking higher at any moment. Bond yields and mortgage rates can worsen much quicker than they usually improve. Therefore, we need to remain extremely cautious during this rally as we could see an entire week's worth of gains erased in a single morning if any of the major influences on bonds turns negative.

The next piece of data that we need to be concerned with comes Wednesday morning with the release of the revised 3rd Quarter Productivity report. This index is expected to show a downward revision from the preliminary reading of worker productivity. Higher levels of productivity are thought to allow the economy to expand without inflationary pressures rising. This is good news for the bond market because economic growth itself isn't necessarily bad for the bond market. It is the conditions around economic growth, such as inflation that hurt bond prices and mortgage rates. Current forecasts are calling for an annual rate of 0.9%, down from the previous estimate of 1.1%.

The Fed Beige Book will be posted Wednesday afternoon. This report, which is named after the color of its cover, details economic conditions by region. It is relied on heavily during the FOMC meetings when determining monetary policy, so it results can influence bond trading and mortgage rates if it shows any significant surprises.

Overall, the most important day of the week is Friday with the employment figures being released, but today will also likely be one of the more important. Tomorrow will probably be the lightest day of the week, assuming we don't see another major sell-off or rally in stocks.

If I were considering financing/ refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Daily Rate Lock Recommendation - 11/24/2008- www.AaronAbed.com

Aaron Abed (River City Mortgage & Financial) — Mon, 24 Nov 2008 14:02:00 -0600

Monday's bond market has opened well into negative territory as investor interest turns back towards stocks. The stock markets are posting strong gains during morning trading with the Dow up 289 points and the Nasdaq up 52 points. The bond market is currently down 14/32, which will likely push this morning's mortgage rates up slightly from Friday's levels.

The National Association of Realtors reported this morning that home resales in the U.S. fell more than analysts had expected last month. This is fairly good news for bonds but since this data is not considered to be of high importance it has had little impact on today's rates.

The first important data of the week comes early tomorrow morning when we will get the first revision to the 3rd Quarter Gross Domestic Product (GDP) reading. The GDP revision is expected to show a downward revision from last month's preliminary reading of -0.3%. Current forecasts call for a reading of approximately -0.6 %, meaning that there was less economic growth during the third quarter than previously thought. This would be good news for the bond market and mortgage rates.

Late tomorrow morning, November's Consumer Confidence Index (CCI) will be posted. The Conference Board will release the CCI for the month of November at 10:00 AM ET, giving us a measurement of consumer willingness to spend. If consumer confidence is rising, analysts believe that consumers are more apt to make larger purchases, essentially fueling economic growth. This raises inflation concerns and usually pushes mortgage rates higher. Analysts are expecting a small increase from last month's 38.0 reading to somewhere around 39.5. A weaker than expected reading should be good news for mortgage rates, but a stronger than expected reading could push mortgage rates higher tomorrow.

Overall, I believe that it is going to be an active week for the mortgage market. Today or Friday will be the least i mportant day of the week and either tomorrow or Wednesday will be the most important. The bond market will close early Wednesday and remain closed Thursday in observance of the Thanksgiving Day holiday. I still expect to see plenty of movement in rates the remaining days, so please be careful and maintain contact with your mortgage professional if you have not locked an interest rate yet.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Daily Rate Lock Recommendation - 11/19/2008

Aaron Abed (River City Mortgage & Financial) — Wed, 19 Nov 2008 12:21:00 -0600

Wednesday's bond market has opened in positive territory following favorable results from today's CPI release. The stock markets are showing another round of early losses with the Dow down 150 points and the Nasdaq down 40 points. The bond market is currently up 17/32, which will likely improve this morning's mortgage rates by approximately .250 of a discount point.

The Labor Department gave us today's big news with the release of October's Consumer Price Index (CPI). They reported that the overall reading fell 1.0% last month while the core data fell 0.1%. Both of these readings were below forecasts, indicating that inflationary pressures at the consumer level of the economy were not as bad as many had thought. This is very good news for bonds and mortgage rates.

October's Housing Starts was also posted this morning, showing a stronger level of new starts than what forecasts were calling for. That could be considered bad news for the bond ma rket and mortgage pricing, but this data is not considered to be of high importance to the markets therefore has had little impact on today's pricing.

The minutes to the last FOMC meeting will be released at 2:00 PM ET. These may be a major mover of the markets or could be a non-factor, depending on what they say. The key will be concerns over inflation and the Fed's next move. If the Fed members were concerned about inflationary pressures, we may see the bond market move lower and mortgage rates higher tomorrow afternoon. However, if they indicate a likelihood of another rate cut in the coming months, we should see the bond market rise and mortgage rates drop during afternoon trading.

Tomorrow brings us the release of weekly unemployment figures and October's Leading Economic Indicators (LEI). The Labor Department will post weekly unemployment claims but unless it varies greatly from the 503,000 that is expected, I don't believe this data will affect tomorrow's mortgage pricing.

The LEI will be posted by the Conference Board at 10:00 AM ET and is expected to show a decline of 0.6%. This means that the report is predicting economic activity to slow relatively quickly in the next three to six months. That would be good news for bonds because a slowing or weakening economy generally speaking makes bonds more attractive to investors and usually leads to lower mortgage rates.

If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Daily Rate Lock Recommendation - 11/18/2008 www.AaronAbed.com

Aaron Abed (River City Mortgage & Financial) — Tue, 18 Nov 2008 12:17:30 -0600

Tuesday's bond market has opened in positive territory again, despite early stock gains. The stock markets are rebounding from yesterday's 223 point loss in the Dow with fairly strong gains during morning trading. The Dow is currently up 181 points while the Nasdaq has gained 11 points. The bond market is currently up 9/32, which will likely improve this morning's mortgage rates by approximately .125 of a discount point.

The Labor Department gave us the first of the week's two key inflation readings. They reported that the PPI fell a whopping 2.8% that was a much larger drop than analysts had forecasted. However, the more important core data reading that excludes more volatile food and energy prices rose 0.4% when analysts were expecting to see a 0.1% rise. This means that prices for non food and energy costs rose more than expected, which is considered bad news for bonds and mortgage rates.

Today's markets are being boosted by favorable comme nts by Treasury Secretary Paulson that the Fed bailout program was making progress. Many lawmakers had questioned the usage of the money for the program but market participants liked what they heard, helping to fuel this morning's buying in stocks and bonds.

Tomorrow's only data is October's Housing Starts. This data gives us an indication of housing sector strength, but usually does not have a noticeably impact on mortgage rates. I don't expect this month's version to be any different unless it varies greatly from analysts forecast. It is expected to show a decline in starts of new homes.

Tomorrow afternoon brings us the release of the minutes to the last FOMC meeting. These may be a major mover of the markets or could be a non-factor, depending on what they say. The key will be concerns over inflation and the Fed's next move. If the Fed members were concerned about inflationary pressures, we may see the bond market move lower and mortgage rates highe r tomorrow afternoon. However, if they indicate a likelihood of another rate cut in the coming months, we should see the bond market rise and mortgage rates drop during afternoon trading.

If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Daily Rate Lock Recommendation - 11/17/2008 www.AaronAbed.com

Aaron Abed (River City Mortgage & Financial) — Mon, 17 Nov 2008 11:27:24 -0600

Monday's bond market has opened in positive territory following another round of stock weakness that has bonds looking more attractive to investors. The stock markets are continuing Friday's selling with the Dow currently down 162 points and the Nasdaq down 30 points. The bond market is currently up 11/32, which should improve this morning's mortgage rates by approximately .125 - .250 of a discount point.

Today's Industrial Production report revealed a much larger than expected increase in manufacturer output. The 1.3% increase greatly exceeded analysts' forecasts of a 0.1% decline in output, meaning that U.S. factories, mines and utilities were busier than many had thought. This is considered to be negative news for bonds and mortgage rates.

The rest of the week brings us the release of four more monthly reports for the markets to digest along with the minutes from the last FOMC meeting. The first of the week's two key inflation readings will be posted early tomorrow morning when October's Producer Price Index (PPI) is released. The PPI measures inflationary pressures at the producer level of the economy. There are two portions of the index that are used- the overall reading and the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices.

If the core data reveals stronger than expected readings, indicating that inflationary pressures are rising, the bond market will probably react negatively and should drive mortgage rates higher. If we see in-line or weaker than expected numbers, mortgage rates should fall. Current forecasts are calling for a decline of 1.8% in the overall reading and a 0.1% increase in the core reading.

Overall, look for tomorrow or Wednesday to be the most important day of the week with the PPI and CPI reports scheduled for release those days. They are the two most important releases of the week and ca n individually lead to large swings in the markets and mortgage rates. The FOMC minutes may also heavily influence trading and deserve to be watched also. I think this will be a fairly active week for mortgage rates, so please maintain regular contact with your mortgage professional.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Rate Lock Advisory - Thursday Nov. 13th - www.AaronAbed.com

Aaron Abed (River City Mortgage & Financial) — Thu, 13 Nov 2008 13:11:44 -0600

Thursday's bond market has opened in negative territory, erasing part of yesterday's late rally that came as a result of strong stock losses. The stock markets have opened in negative ground, continuing yesterday's selling. The Dow is currently down 90 points while the Nasdaq has lost 27 points. The bond market is currently down 4/32, but we will still likely see a small improvement in this morning's mortgage rates of approximately .125 of a discount point due to strength in bonds late yesterday.

This morning's first piece of news was the release of September's Goods and Services Trade Balance report. It gave us the size of the U.S. Trade Deficit, showing a $56.5 billion deficit. That was a little smaller than forecasts of $57.0 billion, but this data is not considered to be of high importance to the markets and has had little impact on this morning's trading or mortgage pricing.

The other news released this morning was weekly unemployment figures from the Labor Department. They reported that new claims for benefits jumped to 516,000 last week, exceeding forecasts of 479,000. The previous week's figures were revised to 484,000, meaning analysts were expecting to see a small decline in claims when we actually saw a sizable jump. While this data is not considered to be of high importance because it tracks only a week's worth of filings, it can influence trading and rates when it varies from forecasts such as today's variance.

There are two reports scheduled for release tomorrow morning with one of them considered to be very important to the markets. October's Retail Sales report is the first and the highly important one because it measures consumer spending. Since consumer spending makes up two-thirds of the U.S. economy, any related data is watched closely. If this report reveals weaker than expected sales, the bond market should thrive and mortgage rates will fall. Current forecasts are calling for a drop in sales of approximately 2.1%.

The second report comes late tomorrow morning when November's preliminary reading of the University of Michigan's Index of Consumer Sentiment will be released. This index measures consumer confidence, which gives us an indication of consumer willingness to spend. It is expected to show a reading of 57.0, down from October's final reading of 57.6.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Daily Rate Lock Recommendation - 11/12/2008- www.AaronAbed.com

Aaron Abed (River City Mortgage & Financial) — Wed, 12 Nov 2008 11:39:52 -0600

Wednesday's bond market has opened in positive territory as investors shift funds from stocks into bonds. This has pushed the stock indexes significantly lower again with the Dow down 312 points and the Nasdaq down 46 points. The bond market is currently up 14/32, which should improve this morning's mortgage rates by approximately .125 - .250 of a discount point over Monday's rates. The bond market was closed yesterday in observance of the Veteran's Day holiday.

There is no relevant data being released today, but we will get the results of today's 10-year Treasury Note auction at 1:00 PM ET. These results can influence bond trading enough to affect mortgage rates this afternoon. If the sale was met with a strong demand from investors, bonds will likely rally and mortgage rates should fall. However, a lackluster interest could lead to weakness in bonds and higher mortgage rates.

The first economic data of the week is September's Goods and Service s Trade Balance report Thursday morning. It helps us measure the size of the U.S. trade deficit, but usually is not a major influence on bond trading or mortgage pricing. It does affect the value of the U.S. dollar, which makes U.S. securities more attractive to international investors when the dollar is strong. This is because the securities' proceeds are worth more when sold and converted to the investor's domestic currency. However, its results will not likely directly lead to changes in mortgage rates.

Overall, look for a fairly quiet week in the mortgage market compared to previous weeks unless something totally unexpected transpires. The two Treasury auctions that are of the most interest are today's and Thursday's since they can impact mortgage rates the most. But there is only one important report being posted and that doesn't come until Friday morning.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Daily Rate Lock Recommendation - 11/11/2008- www.AaronAbed.com

Aaron Abed (River City Mortgage & Financial) — Tue, 11 Nov 2008 13:02:46 -0600

TUESDAY'S UPDATE:

The bond market is closed today in observance of the Veterans Day holiday and will reopen tomorrow morning. The stock markets are trading today but in negative territory. The Dow is currently down 240 points while the Nasdaq has lost 42 points. Some lenders may post rates today, but will likely use yesterday's afternoon rates.

This week brings us the release of only three relevant economic reports with only one of them being considered highly important. There is no relevant news scheduled for release tomorrow except for the results of the 10-year Treasury Note auction. Results will be posted at 1:00 PM ET and can influence bond trading enough to affect mortgage rates. If the sale was met with a strong demand from investors, bonds will likely rally and mortgage rates should fall. However, a lackluster interest could lead to weakness and higher mortgage rates.

The first economic data of the week is September's Goods and Services Trade Balance report Thursday morning. It helps us measure the size of the U.S. trade deficit, but usually is not a major influence on bond trading or mortgage pricing. It does affect the value of the U.S. dollar, which makes U.S. securities more attractive to international investors when the dollar is strong. This is because the securities' proceeds are worth more when sold and converted to the investor's domestic currency. However, its results will not likely directly lead to changes in mortgage rates.

Overall, look for a fairly quiet week in the mortgage market compared to previous weeks unless something totally unexpected transpires. The two Treasury auctions that are of the most interest are Wednesday's and Thursday's since they can impact mortgage rates the most. But there is only one important report being posted and that doesn't come until Friday morning.

If I were considering financing/refinancing a home, I would.... Lock if my cl osing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Federal Funds Rate Drop v.s. 30 Year Fixed Rate Mortgages

Aaron Abed (River City Mortgage & Financial) — Mon, 10 Nov 2008 13:30:11 -0600

Great information.

Via Bill Gassett Metrowest Massachusetts Real Estate:

One of the biggest misconceptions in the mortgage and Real Estate industries is the fact that the when the Federal Funds Rate is dropped that it also means there will be a corresponding rate drop in 30 year fixed rate mortgages. People wake up - It does NOT! In fact many times the exact opposite occurs.

I can't even tell you the number of times I have been hearing lately people making the comment "Hey the Fed is thinking of dropping the rates again...Mortgage rates should be heading down". What can be even more shocking is when Realtors don't realize how things work either! A good Real Estate agent should have at least a basic understanding of how the mortgage market works - Many do not!

The underlying belief is that lower 30 year fixed rates stimulate sales. This of course is true but there is a disconnect between this happening when the government cuts the Federal Funds Rate.

Since January the Federal Funds Rate has been cut a number of times. In January of 2008, 30 year fixed rate mortgages stood at around 5.5%. In March they have been moving around between 6.25% and 6.5%. So since January when the Federal Funds Rate was cut longer term interest rates have moved up between 3/4% to 1%. This is the perfect illustration of why there is no connection.

The Federal Funds Rate helps determine what banks charge each other for over night loans. Long term rates (30 year fixed) are mostly tied to the ten year treasury yield which is determined by bond traders. Inflation drives long term mortgage rates. When bond traders demand higher long term rates it drives up long term mortgage rates too.

There is a much bigger correlation between The Federal Funds Rate and short term mortgage vehicles know as adjustable rate mortgages (ARMS).

These rates tend to move closer in step to the Federal Funds Rate. The adjustable rate mortgage market is influenced by a number of measures including the one year treasury yield and the International Libor.

So the next time you hear "The Fed is dropping rates" Do not assume that 30 year fixed rates will also drop!

___________________________________________________________________________________________________________

The above information regarding the Federal Funds Rate & fixed rate mortgages was provided by Bill Gassett, the team leader for the #2 RE/MAX Team in Massachusetts in 2006.

Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-435-5356. Bill has helped people move in and out of Hopkinton Massachusetts and other Metrowest towns for the last 22 Years. Bill's office is conveniently located in the center of Hopkinton MA at 77 Main Street.

I have a passion for Real Estate and love to share my marketing expertise! I would welcome the opportunity to earn your business.

Selling your home in Metrowest Massachusetts see Metrowest Massachusetts Real Estate. Want to have MLS access to beat other buyers to your dream home? Sign up with no obligation at my MLS Property Finder Site.

I service the following towns in Metrowest MA: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Grafton, Northbridge, Uxbridge, Douglas, and Framingham MA.

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Daily Rate Lock Recommendation - 11/10/2008 - www.AaronAbed.com

Aaron Abed (River City Mortgage & Financial) — Mon, 10 Nov 2008 11:38:35 -0600

Monday's bond market has opened down slightly following early stock gains. The stock markets have started the week in positive territory with the Dow up 54 points and the Nasdaq up 3 points. The bond market is currently down 2/32, which will likely keep this morning's mortgage rates at Friday's levels.

This week brings us the release of only three relevant economic reports with only one of them being considered highly important. It is a holiday shortened week with the bond market closing at 2:00 PM today and remaining closed tomorrow in observance of the Veterans Day holiday. I am not expecting this early close to impact bond trading enough to affect mortgage pricing.

The first data of the week is September's Goods and Services Trade Balance report Thursday morning. It helps us measure the size of the U.S. trade deficit, but usually is not a major influence on bond trading or mortgage pricing. It does affect the value of the U.S. dollar, which m akes U.S. securities more attractive to international investors when the dollar is strong. This is because the securities' proceeds are worth more when sold and converted to the investor's domestic currency. However, its results will not likely directly lead to changes in mortgage rates.

Overall, look for a fairly quiet week in the mortgage market compared to previous weeks unless something totally unexpected transpires. As long as the stock markets remain fairly calm, I am expecting to see mortgage rates follow suit. The two Treasury auctions that are of the most interest are Wednesday's and Thursday's since they can impact mortgage rates the most. With only one important report being posted and that doesn't come until Friday morning, I am expecting the bond market and mortgage rates to step back and take a breath per se, most likely until Friday's data.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking plac e within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Daily Rate Lock Recommendation - 11/07/2008--- www.AaronAbed.com

Aaron Abed (River City Mortgage & Financial) — Fri, 07 Nov 2008 11:42:56 -0600

Friday's bond market has opened in negative territory despite the release of a much weaker than expected Employment report. The stock markets are showing gains after a couple of sizable down days this week. The Dow is currently up 84 points while the Nasdaq has gained 17 points. The bond market is currently down 19/32, but we should still see an improvement in this morning's mortgage rates of approximately .250 of a discount due to a strong rally in bonds late yesterday. This morning's losses are taking back some of yesterday's late gains, but mortgage rates are still lower than yesterday's morning rates.

The Labor Department gave us some surprising readings this morning, saying that the U.S. unemployment rate jumped from 6.1% in September to 6.5% in October. They were expected to show a 6.3% unemployment rate. This was the highest rate of unemployment since March 1994.

The number of payrolls added or lost during the month also opened some eye s. The economy lost 240,000 jobs last month, which was worse than the 200,000 that was forecasted. But equally as bad was a large revision to September's payrolls. What was previously announced as a loss of 159,000 jobs in September is now being estimated at 284,000. This was the 10th consecutive monthly drop in payrolls and brings the yearly total to 1.2 million jobs lost and the first time we have seen 1 million jobs lost since 2001.

Today's report gives us little to be optimistic about in regards to the employment sector. It is becoming more and more clear to many analysts that the economy is actually in a recession despite the lack of an official announcement or other benchmark indicators. What is equally concerning is that many think the problems are going to get worse before better. This could be good news for bonds and mortgage shoppers, but the crazy volatility we have seen in the markets recently makes it very difficult to follow historical patter ns or make realistic predictions. There is little doubt that we will see more volatility in the coming weeks.

Next week is light in terms of the number of relevant economic reports scheduled for release. We will get some important data late next week, but the first part of the week there is nothing scheduled for release to be concerned with. This make sit very likely that the stock markets will be the biggest influence on bonds and mortgage rates the first couple of days of the week. But look for more details on next week's event sin Sunday's weekly preview.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion an d cannot be guaranteed to be in the best interest of all/any other borrowers.

~Rates Drop~~Daily Rate Lock Recommendation - 11/05/2008- www.Aaronabed.com

Aaron Abed (River City Mortgage & Financial) — Wed, 05 Nov 2008 11:08:48 -0600

Wednesday's bond market has opened in positive territory, continuing yesterday's late rally. The stock markets are well into negative ground this morning with the Dow down 171 points and the Nasdaq down 37 points. The bond market is currently up 3/32, but due significant strength in bonds late yesterday, we will likely see an improvement of approximately .500 - .625 in today's mortgage rates.

There is no important data scheduled for release today. Tomorrow's sole important report is the 3rd Quarter Productivity reading. The productivity index is expected to show a level of worker productivity during the third quarter much lower than last quarter's final reading of 4.3%. Analysts have forecasted a 1.0 rise in worker output. A larger increase would be good news for the bond market because high levels of productivity helps the economy to expand without inflationary pressures being a concern.

We also will get weekly unemployment figures from the Lab or Department early tomorrow morning. It is expected to show that new claims for benefits fell slightly to 476,000 last week. While this data usually does not have much of an impact on the markets because it tracks only a week's worth of claims, tomorrow's release may be a little more influential than usual. This is because the release will cover the last full week of October and with Friday's monthly report coming out for the entire month, traders will be looking for any significant change in claims that may alter their estimates for the monthly report.

Friday's Employment report is expected to show that the economy lost 200,000 jobs, that unemployment rate moved from 6.1% to 6.3% and that average earnings rose 0.2% during the month. The large drop in payrolls and 0.2% jump in the unemployment rate are numbers of concern to the markets, therefore, I don't believe that we will need to see weaker than expected results to see bonds improve and mortgage rates move lower. However, stronger than forecasted readings could give back this morning's improvements to rates since the markets are expecting weak numbers.

I am expecting to see more volatility in bonds and mortgage rates in the days ahead. Accordingly, it may be a good time to lock if closing in the immediate future. Regardless though, I strongly recommend maintaining contact with your mortgage professional over the next week or so.

Daily Rate Lock Recommendation - 11/04/2008- www.AaronAbed.com

Aaron Abed (River City Mortgage & Financial) — Tue, 04 Nov 2008 10:57:32 -0600

Tuesday's bond market has opened up slightly despite sizable stock gains during early trading. The stock markets are strong this morning with the Dow up 262 points and the Nasdaq up 42 points. The bond market is currently up 2/32, which will likely improve this morning's mortgage rates by approximately .125 of a discount point.

Today's only relevant data came from the Commerce Department who posted September's Factory Orders report. It showed a decline of 2.5% that was an improvement from August's 4/3% drop, but was also much weaker than the 0.8% decline that was expected. This means that new orders at U.S. factories fell much more than thought and indicates a rapidly slowing manufacturing sector. This is good news for bonds and mortgage rates.

There is no important data scheduled for release tomorrow. Thursday's sole important report is the 3rd Quarter Productivity reading. The productivity index is expected to show a level of worker productivi ty during the third quarter much lower than last quarter's final reading of 4.3%. Analysts have forecasted a 1.0 rise in worker output. A larger increase would be good news for the bond market because high levels of productivity helps the economy to expand without inflationary pressures being a concern.

We also will get weekly unemployment figures from the Labor Department early tomorrow morning. It is expected to show that new claims for benefits fell slightly to 476,000 last week. While this data usually does not have much of an impact on the markets because it tracks only a week's worth of claims, tomorrow's release may be a little more influential than usual. This is because the release will cover the last full week of October and with Friday's monthly report coming out for the entire month, traders will be looking for any significant change in claims that may alter their estimates for the monthly report.

If I were considering financing/refinanci ng a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Daily Rate Lock Recommendation - 11/03/2008- www.AaronAbed.com

Aaron Abed (River City Mortgage & Financial) — Mon, 03 Nov 2008 11:56:28 -0600

Monday's bond market has opened in positive territory following weaker than expected economic news. The stock markets are posting gains with the Dow up 42 points and the Nasdaq up 15 points. The bond market is currently up 3/32, but we may still see slight increase in this morning's mortgage rates due to weakness late Friday.

The week's first report came late this morning from the Institute for Supply Management (ISM). They posted their Manufacturing Index for October, showing a reading of 38.9 that was well below forecasts and a 26-year low. The index measures manufacturer sentiment and this morning's release indicated sentiment is softening. This is good news for bonds and mortgage rates because slowing manufacturing activity usually means a weakening economy and eases inflation concerns.

Tomorrow's only relevant news is September's Factory Orders report. This report is similar to last week's Durable Goods Orders release except it includes o rders for both durable and non-durable goods. It is expected to show 0.8% decline in orders from August's level. A larger decline would be good news for the bond market and mortgage rates while a smaller than expected drop is bad news.

There is no important data scheduled for release Wednesday. Thursday's report is the 3rd Quarter Productivity reading. The productivity index is expected to show a level of worker productivity during the third quarter much lower than last quarter's final reading of 4.3%. Analysts have forecasted a 1.0 rise in worker output. A larger increase would be good news for the bond market because high levels of productivity helps the economy to expand without inflationary pressures being a concern.

The last report of the week is the most important. Friday brings us the release of one of the most important monthly reports- the Employment report. The Labor Department will post October's employment stats early Friday morning. The report is comprised of many statistics and readings, but the most important ones are the unemployment rate, the number of new jobs added or lost during the month and average hourly earnings. Current forecasts call for a 0.2% rise in unemployment to bring the national rate to 6.3%, a drop in payrolls of approximately 200,000 and a 0.2% increase in average earnings. Weaker than expected readings should rally bonds and lead to improvements in mortgage rates, especially if the stock markets react poorly to the news.

Overall, I am expecting to see a moderately active week in mortgage pricing. The key to the week will be Friday's employment numbers, but any significant swings in the stock markets may also influence whether mortgage rates close the week higher or lower than this morning's levels.

If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Daily Rate Lock Recommendation - 10/29/2008-WEDNESDAY AFTERNOON UPDATE:

Aaron Abed (River City Mortgage & Financial) — Wed, 29 Oct 2008 15:37:19 -0500

WEDNESDAY AFTERNOON UPDATE:

This week's FOMC meeting has adjourned with an announcement of a half-point rate cut by the Fed in an effort to stimulate economic activity. The move was widely expected by market participants, but has still boosted stocks and hurt bonds. The Dow is currently up 218 points while the Nasdaq has gained 44 points. The bond market is currently down 17/32, which will likely push this afternoon's mortgage rates higher by approximately .250 of a discount point.

The post-meeting statement indicated that the Fed was still concerned about the economy and was expecting further weakness. This led to speculation that the Fed may lower short-term rates again in the future despite the fact that the Federal Funds rate is now at a record low of 1.00%. It has not been this low since June 2003 to June 2004. The fact that it appears the Fed has conceded more measures may be needed and is ready to act has helped drive stock prices higher during afternoon trading. This has made bonds less attractive to investors and is the reason we likely will see upward revisions to mortgage rates this afternoon.

The Commerce Department reported this morning that Durable Goods Orders for September rose 0.8% when they were expected to fall 1.0%. This means that manufacturing activity was stronger than expected, which is bad news for bonds and mortgage rates.

Tomorrow morning brings us the release of the preliminary reading of the 3rd Quarter Gross Domestic Product (GDP). The GDP is considered to be the benchmark measurement of economic growth because it is the sum of all goods and services produced in the U.S. and therefore is likely to have a major impact on the financial markets and mortgage pricing. There are three versions of this report, each a month apart. Tomorrow's release is the first and usually has the biggest impact on the markets. Current forecasts call for a decline of approximately 0. 5% in the GDP. If this report shows a larger decline, I am expecting to see the bond market rally and mortgage rates to fall tomorrow.

If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Daily Rate Lock Recommendation - 10/29/2008- www.AaronAbed.com

Aaron Abed (River City Mortgage & Financial) — Wed, 29 Oct 2008 11:14:16 -0500

Wednesday's bond market has opened in negative territory again as investors await today's FOMC meeting adjournment. The stock markets were trading higher earlier but are now in negative territory after yesterday's huge rally. The Dow is currently down 32 points while the Nasdaq is down 14 points. The bond market is currently down 5/32, which will likely push this morning's mortgage rates slightly higher.

The Commerce Department reported this morning that Durable Goods Orders for September rose 0.8% when they were expected to fall 1.0%. This means that manufacturing activity was stronger than expected, which is bad news for bonds and mortgage rates. However, since the markets are directing their attention to today's FOMC results, the higher than expected orders has not had much of an impact on this morning's mortgage rates.

The FOMC meeting began yesterday and will adjourn at 2:15 PM ET today. There is now a pretty large consensus that the Fed w ill lower key short-term interest rates at this meeting, but what is being debated is the size of the cut. Some analysts are calling for a .750 cut while the majority think a half-point reduction is coming. This makes the post meeting statement even more important than usual as traders will try to figure out if the Fed thinks this is the last cut or if they are prepared to make another in the future.

Look for an update to this report shortly after the markets have had an opportunity to react to the Fed move and the post-meeting statement.

If I were considering financing/refinancing a home, I would.... Float if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guarant eed to be in the best interest of all/any other borrowers.

Daily Rate Lock Recommendation - 10/28/2008- www.AaronAbed.com

Aaron Abed (River City Mortgage & Financial) — Tue, 28 Oct 2008 13:37:09 -0500

Tuesday's bond market has opened well in negative territory despite a new record low reading on consumer confidence. The stock markets are showing sizable gains as investors speculate about another Fed rate cut tomorrow. The Dow is currently up 115 points while the Nasdaq has gained 9 points. The bond market is currently down 22/32, which with yesterday's late weakness will push this morning's mortgage rates higher by approximately .750 of a discount point.

The Conference Board reported late this morning that their Consumer Confidence Index (CCI) fell this month to its lowest reading ever. The reading of 38.0 was significantly lower than the 52.0 that was forecasted and indicates that consumers are too concerned about their own financial situations to make large purchases in the near future. This is actually favorable data for the bond market and mortgage rates, but traders are preparing for tomorrow's FOMC meeting and reacting to this morning's stock gain s. This has prevented bonds from moving higher as a result of this report.

The week's FOMC meeting began today and will adjourn tomorrow afternoon. There is now a pretty large consensus that the Fed will lower key short-term interest rates at this meeting, but what is being debated is the size of the cut. Some analysts are calling for a .750 cut while the majority think a half-point reduction is coming. This makes the post meeting statement even more important than usual as traders will try to figure out if the Fed thinks this is the last cut or if they are prepared to make another in the future. The meeting will adjourn at 2:15 PM ET, so look for any reaction to come during afternoon trading.

Tomorrow also brings us the release of some important economic data. The Commerce Department will post Durable Goods Orders for September at 8:30 AM tomorrow. This report gives us a measurement of manufacturing sector strength by tracking orders at U.S. factor ies for big-ticket items. Analysts are currently calling for a drop in new orders of approximately 1.0%. If we see a smaller than expected decline in orders, mortgage rates will probably rise as bond prices fall. A weaker than expected reading should be good news for the bond market and mortgage rates, but this data can be quite volatile from month to month and is difficult to forecast.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Daily Rate Lock Recommendation - 10/27/2008- www.AaronAbed.com

Aaron Abed (River City Mortgage & Financial) — Mon, 27 Oct 2008 11:38:59 -0500

Monday's bond market has opened fairly flat with the stock markets mixed and despite stronger than expected economic news. The stock markets are in another volatile session after the international markets that had another significant sell-off. The Dow is moving in a range of 250 points between its high and low of the morning, but currently stands up 30 points. The Nasdaq is also fluctuating between positive and negative ground and is currently down 6 points. The bond market is up 2/32, but we will likely see an increase in this morning's mortgage rates of approximately .125 - .250 of a discount point due to movements late Friday.

Today's only economic data is the week's least important. September's New Home Sales report was posted late this morning, showing an increase in sales of 2.7% when it was expected to reveal another decline. However, offsetting that increase was a downward revision to August's sales figures. Still, this data is not considered to be of high importance and has not influenced bond trading or mortgage rates today.

Tomorrow morning brings us the release of the Consumer Confidence Index (CCI) for the month of October. This Conference Board index will be posted at 10:00 AM and gives us a measurement of consumer willingness to spend. It is expected to show a sizable decline in confidence from last month's 59.8 reading, indicating that consumers are less likely to make large purchases in the near future. As long as the reading doesn't exceed the forecasted 52.0, we will likely see the bond market react favorably to this report. This data is watched closely because consumer spending makes up two-thirds of the U.S. economy.

The week's FOMC meeting is a two-day meeting that begins tomorrow and adjourns Wednesday afternoon. Assuming the Fed stands pat and leaves rates unchanged, traders will be looking at the post-meeting statement for any indication of the Fed's next move. Since there is a fair amount of uncertainty and a lack of a strong consensus of what the Fed will do here, the move itself, if it happens, will likely cause plenty of volatility in addition to the post-meeting statement. The meeting will adjourn at 2:00 PM Wednesday, so look for quite a bit of volatility during afternoon hours.

Overall, it is difficult to peg a single day of the week as being the most important but I am expecting to see plenty of movement in rates this week. The data being posted tomorrow, Wednesday and Thursday is all very important to the markets. The FOMC meeting is the single most important event of the week, but we may see noticeable movement in mortgage rates several days this week. Accordingly, please maintain contact with your mortgage professional.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my clo sing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Daily Rate Lock Recommendation - 10/24/2008- www.AaronAbed.com

Aaron Abed (River City Mortgage & Financial) — Fri, 24 Oct 2008 12:33:56 -0500

Friday's bond market opened in positive territory following early stock weakness. The stock markets are continuing their downward spiral with the Dow down 300 points and the Nasdaq down 40 points. The bond market is currently up 20/32, but we will still see an increase in this morning's mortgage rates of approximately .250 - .375 of a discount point due to weakness late yesterday.

The only economic news released today was September's Existing Home Sales data from the National Association of Realtors. They reported an increase of over 5% in home resales last month when the report was expected to show an increase of approximately 1%. This means that sales activity was stronger than expected last month. That can be considered a negative for bonds and mortgage rates, but the market seems to be giving that data little weight.

The recent rapid improvement in bonds has me concerned that we may see profit taking by traders that could push mortgage rates higher. It appears that there is no consensus in the markets regarding whether or not this is the bottom for the stock markets. It seems there is still room for the major indexes to fall further, but this may not necessarily mean that rates will improve as a result, indicating that the risk versus reward factor of continuing to float an interest rate is leaning heavily to the risk side in my opinion. Accordingly, please maintain constant contact with your mortgage professional if you have not locked an interest rate yet.

Next week is packed with economic releases along with the next FOMC meeting. The first data comes Monday when we will get New Homes Sales for September. This is the sister report to today's Existing Home Sales release and is also not considered to be of much importance to the markets. It is next week's least important report.

The rest of the week brings us important reports every day. There is another FOMC meeting that adjourns W ednesday afternoon that will likely lead to plenty of volatility in the markets. Look for details on next week's data and events in Sunday's weekly preview.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

An unfiltered recap of the $700 billion “rescue” package straight from the Senator.

Aaron Abed (River City Mortgage & Financial) — Thu, 23 Oct 2008 09:55:23 -0500

Subject: Responding to your message

Dear Aaron:

Thank you for taking the time to contact me to voice your concerns with the financial crisis we're facing. I hear you loud and clear and want to assure you that I took your thoughts to heart prior to casting my vote. I appreciate having the chance to respond to your well-founded frustration.

I am deeply concerned about the financial crisis and its impact on our already troubled economy. While this crisis may seem to be only about Wall Street, in reality it touches each and every Minnesotan. Jobs, personal and retirement savings, loans for businesses, college and car loans, and mortgages are all at stake. Prior to the vote, I received a multitude of real-life stories from Minnesotans who were facing issues such as the inability to make payroll or get a student loan.

I am frustrated that the case-by-case approach up to this point in dealing with the financial crisis had failed to solve the problem. Unfortunately, we entered a new and dangerous phase in which our entire financial system hangs in the balance. Dramatic action was required to respond to economic disaster. I did not take lightly for one minute allocating $700 billion in taxpayer money. In fact, I am infuriated that we are at this point, but I did come to the ultimate conclusion that it was necessary.

In response to the crisis, which was brought on by outright greed, mismanagement and a failed financial regulatory system, the Administration proposed on September 19, 2008, a $700 billion plan to systematically stabilize the financial system and protect the economy by buying toxic mortgage-related assets that have been paralyzing the financial system. As originally proposed, I could not support the Administration's plan. In fact, on September 29, I sent a letter to Senate Banking Committee Chairman Dodd, Ranking Member Shelby, House Financial Services Chairman Frank, and Ranking Member Bachus making it known that in order to gain my support, any financial rescue plan needed to uphold the principles of Wall Street accountability, taxpayer protections, and no blank checks or golden parachute payouts to Wall Street executives.

As you may know, on October 1, 2008, I joined 73 of my colleagues in passing revised financial stabilization legislation that included my required principles. More specifically, the financial stabilization legislation doesn't give a blank check for Wall Street, provides for strong oversight and judicial review, limits executive compensation, and prohibits golden parachutes for participating institutions. Signed by President Bush on October 3, this legislation provides $700 billion, in installments, for programs to buy and insure these toxic assets. $250 billion will be given upfront; another $100 billion if the President certifies need, and the last $350 billion will be subject to Congressional disapproval.

It is important to point out that these assets have underlying value. In fact, the Congressional Budget Office has determined that the net cost to the taxpayer would be "substantially less than $700 billion." Moreover, a number of well-respected market observers have suggested that the government could actually earn a profit on these assets. In the event that a profit is not made, the President must report to Congress with a plan on how to make up any shortfall from the financial industry. And if there are profits, they must be used for debt reduction.

In addition, this legislation directs the Securities and Exchange Commission (SEC) to suspend mark-to-market accounting if it is found to be in the public interest, raises the Federal Deposit Insurance Corporation (FDIC) insurance limit from $100,000 to $250,000, provides responsible homeowner relief such as a three-year extension of mortgage debt forgiveness, and protects middle-class Minnesotans from higher taxes.

Going forward, we cannot go back to business as usual. The need to aggressively undertake financial regulatory reform is a top priority of mine and will remain so until we pass much-needed legislation. Our current system is broken - we must have a forward looking regulatory system for our 21st century economy. We need greater transparency and accountability across our entire financial system so that regulators and consumers fully understand financial products and their possible risks. We also need to put more "cops on the beat" to better police Wall Street.

You may also be interested to know that I have called on Wall Street executives to repay any and all ill-gotten bonuses they may have received, and I have also asked Attorney General Mukasey to investigate whether Wall Street executives engaged in criminal conspiracy and fraudulent activities. Executives who clearly helped to create this crisis must be held accountable, and those who have broken our laws should be punished through fines and jail time.

This was not an easy vote. In fact, this was one of the most politically unpopular votes I have had to take. But the thing is, I don't think Minnesotans sent me to Washington to cast easy votes. You sent me here to weigh pros and cons and do what is best for our state. At the end of the day, and after laying everything out on the table, the dangers of not acting far outweighed any political fallout that may come because of my vote.

These are extremely challenging times. Please know I will continue to do everything in my power to support the economy and protect the taxpayer.

While we may not view this issue the same way, I do appreciate the chance to respond. I respect and appreciate your advice and hope you will continue to share your thoughts and ideas with me.

Sincerely,
Norm Coleman
United States Senate

Freddie Mac: Fixed-rate mortgages fall in latest survey

Aaron Abed (River City Mortgage & Financial) — Thu, 23 Oct 2008 09:24:33 -0500

Freddie Mac: Fixed-rate mortgages fall in latest survey

By Michelle Donley Last update: 10:07 a.m. EDT Oct. 23, 2008 Comments: 4 NEW YORK (MarketWatch) -

- U.S. fixed-rate mortgages declined in the latest week, according to Freddie Mac's survey released Thursday. The national average interest rate on the benchmark 30-year, fixed-rate loan averaged 6.04% in the week ending Thursday, down from last week's 6.46% and the year-ago 6.33%. The 15-year fixed-rate loan averaged 5.72%, down from the week-ago 6.14% and the year-ago 5.99%. The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 6.06%, compared with 6.14% a week ago and 6.03% a year ago. One-year Treasury-indexed ARMs averaged 5.23% this week, up from last week's 5.16% and down from the year-ago 5.66%. "Long-term mortgage rates fell this week amid news of tame inflation and a weaker housing market," said Frank Nothaft, Freddie Mac vice president and chief economist.

The "First-Time Homebuyer Tax Credit" broken down. FYI

Aaron Abed (River City Mortgage & Financial) — Wed, 22 Oct 2008 15:18:15 -0500

First-Time Homebuyer Credit

•Establishes a first-time homebuyer refundable tax credit equal to 10% of the purchase price of a principal residence, not to exceed $7,500.

•This is a tax credit claimed on the Federal income tax returns.

•This is not a down payment assistance that can be used at closing.

•Requires taxpayers receiving the credit to repay it over 15 years in equal installments by imposing a surcharge on the taxpayers' annual income.

•Allows the credit for purchases on or after April 9^th, 2008 and before July 1^st, 2009.Phases out the credit for taxpayers with incomes over $75,000 ($150,000 for joint returns).

Aaron Abed
Sr. Mortgage Banker
Email: AAbed@LakelandMortgage.com
Web: www.AaronAbed.com
Direct: 952.908.9425
Cell: 612.386.6575
Fax: 952.224.1862