Greg's Blog

Happy Thanksgiving Everyone!

Greg Adelman (Midwest Home Center) — Wed, 26 Nov 2008 20:37:09 -0600

May your stuffing be tasty
May your turkey plump,
May your potatoes and gravy
Have never a lump.
May your yams be delicious
And your pies take the prize,
And may your Thanksgiving dinner
Stay off your thighs!

Happy Thanksgiving Everyone!

Thanks,
Greg Adelman

Midwest Home Center LLC.
715-483-0012
612-735-4414 cell
612-395-5444 fax

www.midwesthomecenter.com

Market update

Greg Adelman (Midwest Home Center) — Mon, 24 Nov 2008 11:38:37 -0600

Stocks are trading higher on news that Citigroup is set to receive a $306 Billion lifeline from the US Government, and an additional $20B in cash from the Treasury Department. In exchange, the Government will receive $27B of preferred shares, paying an 8% dividend. This is an enormous financial commitment by the US Government, but over time this deal could be a profitable one for taxpayers.

Also helping Stocks move higher are talks of a larger than expected stimulus plan by the Obama administration, which could top $1 Trillion.

Mortgage Bonds are trading near unchanged levels, and will likely take their direction from Stocks today. At 1pm ET, the Treasury Department will auction $36B of 2 Year Notes, and the additional Bond supply could weigh on Mortgage Bond prices later today.

Existing Home Sales will be released at 10:00am ET and the market is not expecting a strong number. Unless the report wildly misses expectations, there shouldn't be much of a reaction.

Mortgage Bond prices remain above support at the 200-day Moving Average, while attempting to overtake resistance at the Falling Resistance Trendline. We will continue to carefully Float, but be ready for any sudden changes.

Here is a link to the economic reports for this week. http://www.bloomberg.com/markets/ecalendar/index.html
BY THE NUMBER$
We hope you enjoy this edition of "BY THE NUMBERS" below - use these as talking points with your clients and referral partners this week!

1. THE RANGE - In the 1-year following the low point from each of the 9 bear markets that have occurred since 1957 (not counting the current 10th bear market) the S&P 500 has experienced a double-digit return. The best of the 9 produced a +58.3% return. The worst of the 9 was up +23.2%. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market (source: BTN Research).

2. 2008 ELECTION YEAR - 17 of the last 20 presidential election years (not including the current election year) have produced a positive total return for the S&P 500, including 15 of the last 16. With 5 ½ weeks remaining in calendar year 2008, the S&P 500 is down 44.4% (total return) YTD (source: BTN Research).

3. WOW - The YTD closing low for the S&P 500 (a value of 752) occurred on 11/20/08 (i.e., last Thursday). At the close of business on 11/20/08, 187 of the 500 stocks that are part of the index (i.e., 3 out of every 8 stocks) were down 60% or more YTD (source: NASD100.com).

4. U.S. DEBT - There are $4.4 trillion of Treasury bills, notes and bonds outstanding. The Chinese, with ownership of $585 billion of our Treasury debt, own more than any other foreign country (source: Treasury Department, FT).

5. U.S. STOCKS - The market capitalization of the S&P 500 has fallen by $4.4 trillion through the first 10 months of calendar year 2008. The total value of the stock index was $8.5 trillion as of 10/31/08 (source: S&P).

6. BACKSTOP - The Pension Benefit Guaranty Corporation (PBGC) insures the pension benefits of 44 million workers and retirees in the private sector. The PBGC was forced to take on 67 failed pension plans in its latest fiscal year. Over the last 5 years, the PBGC took over an average of 134 failed plans per year (source: PBGC).

7. STAY THE SAME - Only 4% of US employers anticipate that they will reduce their 401(k) matching contribution within the next year (source: Watson Wyatt).

8. BIG NUMBER - Through the first 9 months of 2008, the US imported $277 billion of crude oil, equal to more than $1 billion a day of oil imports (source: Commerce Department).

9. SUPPLY AND DEMAND - One week ago the president of OPEC said that the cartel will cut its daily oil production in order to raise the price of oil to $70-$90 a barrel. The price of oil closed last Friday at $49.93 a barrel. The last time the price of oil was $90 a barrel (10/07/08), the price of gasoline was $3.48 a gallon (source: Financial Times, BTN Research).

10. OIL INFLICTED PAIN - Inflation (using the CPI as the measurement) on a trailing 1-year basis (i.e., 11/01/07 to 10/31/08) is up +3.7%. 34 years ago as the nation was recovering from an oil crisis that began in 1973, inflation on a trailing 1-year basis (i.e., 11/01/73 to 10/31/74) was up +12.1%. The consumer price index (CPI) is a measure of inflation compiled by the US Bureau of Labor Studies (source: Department of Labor).

11. THEY TOOK THEIR TIME - 7 years ago this Wednesday (11/26/01), the organization responsible for determining the beginning and end dates of US recessions declared that a recession had started on 3/31/01. A later announcement that this particular recession had lasted only 8 months and that it had ended on 11/30/01 was made public on 7/17/03 or more than 1 ½ years later (source: National Bureau of Economic Research).

12. ELECTIONS AND RECESSIONS - The last time the US was in a recession during a presidential election year was 1980. The country endured a 6-month recession that ended in July 1980. Republican Ronald Reagan defeated Democratic incumbent Jimmy Carter in the November 1980 election (source: NBER).

13. HEALTH CARE - Medicaid provides health care to poor Americans. The program's cost is split between federal and state governments. Just 4% of Medicaid enrollees account for 50% of its expenses (source: USA Today).

14. GIVING - Legislation added to the $700 billion rescue plan signed by President Bush on 10/03/08 extended a tax benefit that had originally expired on 12/31/07. Americans at least age 70 ½ now have until the end of next year (i.e., 12/31/09) to make direct gifts from an IRA to a tax-qualified charity. Without this extension, an individual would have to take a withdrawal from his/her IRA, pay taxes on the distribution, and then make a contribution to a charity. This limited-time exception allows for a tax-free IRA distribution of up to $100,000 to be transferred directly to a charity (source: Kiplinger's Retirement Report).

15. COMPUTER KNOW-HOW - When Barack Obama becomes the 44th President of the United States on Tuesday 1/20/09 (8 weeks from tomorrow), he will be the 1st president in our nation's history to keep a laptop computer on his desk in the Oval Office (source: New York Times).

Thanks,
Greg Adelman

Midwest Home Center LLC.
715-483-0012
612-735-4414 cell
612-395-5444 fax

www.midwesthomecenter.com

Market update

Greg Adelman (Midwest Home Center) — Thu, 20 Nov 2008 12:37:35 -0600

Over the years, MMG has continued to help the mortgage community discover and understand the disconnect between the 10-year Note and Mortgage Bonds. In recent times that disconnect has been very clear to anyone in our world - but in the past 24 hours, the disconnect has been dramatic. Since yesterday the 10-year Note has risen by 285bp, while Mortgage Bonds have risen 12bp!!! Do you think the media knows this? NO. Use this to inform your relationship partners and clients of what really drives fixed rate mortgages.

So what happened? Yesterday the Fed Minutes from the October Fed Meeting were released. The Minutes expressed concern over the health of the economy and their future targets for employment and growth were lowered. But the big news was the "D" word. The Fed, after years of being concerned with inflation, now say they are concerned about deflation. This news shocked the financial markets, pushing Stocks sharply lower while directing enormous money flow into ultra-safe Treasury Notes.

Deflation is when prices drop, mainly due to decreases in money supply and credit. And we are sure seeing problems with available credit right now. And with the economy slowing down, we are hearing some people say we are in for a deflationary recession. In a deflationary environment, investors flee into fixed instruments like Bonds because the fixed payment received would actually buy them more goods and services over time.

For those of you in the business a few years, you may recall back in the Spring of 2003, when Alan Greenspan uttered the "D" word. Mortgage Bonds rallied 400bp in a couple weeks, setting off an unprecedented refi-boom. Things are quite different right now, but stay tuned, should more investors wake up to the value of Mortgage Bonds, we could again see a significant improvement in prices. Get your clients informed and ready - all refi-runs have a limited timeframe. And this time will certainly be more challenging as there are fewer programs with stricter guidelines, but the biggest hurdle will be appraised values. Now would be an excellent time to run some filters on your database and see who would best be able to benefit from the window of opportunity when it hits.

Initial Jobless Claims continue to worsen as 542,000 filed this past week, far more than the 503,000 that was expected and the highest in 16 years. The four-week average of initial claims climbed by 15,750 to 506,500, the highest since January 1983. While the numbers are ugly, comparing them to previous markers is a bit unfair because there are more people today.

At 10am ET, the Philly Fed Index will be reported and while this may influence pricing in a typical market, we don't expect it to reverse the course of Mortgage Bonds.

Prices have barely peaked above the 200-day Moving Average. We will continue to float, but be mindful that things can change quickly. And a reminder about 2003, when Alan Greenspan came back and later said there is no threat of deflation - the refi-boom quickly ended and rates shot up dramatically higher. Stay tuned - we are living history.

Thanks,
Greg Adelman

Midwest Home Center LLC.
715-483-0012
612-735-4414 cell
612-395-5444 fax

www.midwesthomecenter.com

Mortgage Rates

Greg Adelman (Midwest Home Center) — Thu, 06 Nov 2008 10:13:57 -0600

Mortgage backed securities were off about 40 bps this morning, but are only off 9 bps currently. I would continue to float and see if they continue to improve throughout the day.

Risks favor: Floating into Jobs Report
Current Price of FNMA 6% Bond: $101.31, -34bp
Mortgage Bonds are down sharply this morning after they have enjoyed a nice three-day 160bp rally higher. Prices are now resting just near important support at the 200-day Moving Average with the highly anticipated Jobs Report set for release tomorrow - read on for our Jobs Report Strategy.

Initial Jobless Claims were 481,000, slightly worse than the 476,000 expected. The continuing claims jumped to 3.84 million, the worst in 25 years.

A preliminary reading on 3rd Quarter Productivity, a measure of employee output per hour, rose at a 1.1% annual rate, slightly above expectations. Labor costs climbed at a 3.6% annual rate, also more than the anticipated 2.8%. The higher labor costs are inflationary and not bond friendly, causing some of the selling pressure we are seeing today.

Some huge global news - The Bank of England surprisingly cut their benchmark interest rate by 1.5% to a rate of 3%, bringing it to the lowest level since 1955. And if that weren't enough, the European Central Bank (ECB) also lowered interest rates by .50% to a 3.25% rate. In recent updates we have been discussing how it was likely that Europe would need to continue cutting rates and how that would have a positive effect on the US Dollar and thus Oil prices - at the moment Oil is down over $3.00, leaving Oil under $62 per barrel. It looks like more cuts in Europe are likely.

Jobs Report Strategy

We always have to consider both fundamental and technical factors. Fundamentally, tomorrow's Jobs Report is set up to be a stinker. However, the markets are already prepared for a lousy report, with estimates of 200,000 jobs lost during October. The recent ADP Report as well as the latest Initial Jobless Claims numbers indicate that the Job market is doing poorly. So while we will certainly see a bad number, it might actually be better than expectations which wouldn't help Bond prices. But we see more downward revisions and a potentially significant uptick in the unemployment rate, which will both work towards improved pricing.

On the technical side, both the 200-day and 50-day Moving Averages are near the same level, creating a strong dual layer of support. This floor has already been tested this morning and prices currently sit right at this important threshold. Although the Bond is down this morning we would like to be patient, float and look for an improvement tomorrow morning. We feel both fundamental and technical factors point towards floating into tomorrow's Jobs report and a continuation of the recent uptrend

Thanks,
Greg Adelman

Midwest Home Center LLC.
715-483-0012
612-735-4414 cell
612-395-5444 fax

www.midwesthomecenter.com

Interest rates and the Election

Greg Adelman (Midwest Home Center) — Mon, 03 Nov 2008 13:19:32 -0600

Risks favor: Floating, with a finger on lock trigger
Current Price of FNMA 6% Bond: $100.12, +19bp
Mortgage Bonds are trading a bit higher, but already far off the best levels of the day.
In a speech this morning, Richmond Fed President Jeffrey "The Dissenter" Lacker, said the US economy was definitely in a recession, but he believed it would be fairly moderate in size. "We are in a contraction. Up until the summer it was a fairly mild recession,". Mr. Lacker, is not a voting Fed member, but he will be back in the voting rotation in 2009.

The ISM Index for October was reported at 38.9, which was much worse than expectations of 42. And even after the poor economic news, Mortgage Bonds failed to improve.

Technically, Bond prices indicate indecision among Traders. The last five trading days show a sideways trading pattern, hovering near support. We will float for now, but be ready to lock in this jittery environment.

Here is a link to the economic calendar for this week. http://www.bloomberg.com/markets/ecalendar/index.html
BY THE NUMBER$
We hope you enjoy this edition of "BY THE NUMBERS" below - use these as talking points with your clients and referral partners this week

1. A TIE? - There are 538 electoral votes at stake in tomorrow's election. It will take 270 electoral votes to win the Presidency. There has been a tie in the Electoral College voting only one time in the nation's history. In 1800, both Thomas Jefferson and Aaron Burr each received 73 electoral votes (source: PresidentElect.org).

2. SENATE TO THE WHITE HOUSE - Only 2 Presidents in the history of our country have ever gone directly from the Senate to the White House. They were Warren Harding (President # 29) and John Kennedy (President # 35). Both John McCain and Barack Obama are US Senators and one of them will become US President # 44 (source: WhiteHouse.gov).

Thanks,
Greg Adelman

Midwest Home Center LLC.
715-483-0012
612-735-4414 cell
612-395-5444 fax

www.midwesthomecenter.com

3. MAJORITY VOTE - The 2004 presidential election broke a streak of 3 consecutive elections where no candidate won 50% of the popular vote. President George Bush won the last election with 50.7% of the national vote. Bill Clinton won the 1992 election with 43.0% of the vote and then won reelection in 1996 with 49.2% of the vote. President Bush won the 2000 election with 47.9% of the popular vote. Before 1992, the last President to win the White House with less than 50% of the vote was Richard Nixon in 1968 (source: PresidentElect.org).

4. SOUTHERN DEMOCRATS - The last Democrat to win the White House that wasn't from the South was John Kennedy (1960). Since 1964, the 3 Democrats that have won the White House have been from the South. The 3 are Lyndon Johnson (Texas), Jimmy Carter (Georgia) and Bill Clinton (Arkansas) (source: WhiteHouse.gov).

5. WE'RE OPTIMISTIC - A majority of Americans have a positive opinion of both presidential candidates, as indicated by the favorability rating of both Barack Obama (61%) and John McCain (57%) from a survey released on Friday 10/24/08 (source: Gallup, USA Today).

6. THE BUCKEYE INDICATOR - The candidate that has carried the state of Ohio has won the White House for the last 11 presidential elections. The last time that the winner of Ohio did not win the White House was Richard Nixon in 1960. Nixon beat John Kennedy in Ohio but Kennedy won the White House (source: PresidentElect.org).

7. 60-VOTE SENATE - If either political party was to achieve 60 votes in the 100-member Senate that party would be able to stop a filibuster by the minority party, or end floor debate and bring any proposed legislation to a vote. The last time when either party had a filibuster-proof majority in the Senate resulted from the 1976 elections when the Democrats achieved a 61-vote majority (source: Senate).

8. SONS IN THE MILITARY - John McCain, Sarah Palin and Joe Biden each have a son that is currently serving in the military. Jimmy McCain is in the Marines, Track Palin is in the Army and Beau Biden is a military attorney with the Delaware National Guard. The last US president to have a child serve in the military during his term in office was Dwight Eisenhower, our 34th president (source: Wall Street Journal).

9. SHORT LIST - 1,000 days before tomorrow's presidential election (i.e., 2/08/06), the most widely read newspaper in the USA had a story documenting the 20 most likely Republican and Democratic candidates for the White House in 2008. John McCain and Joe Biden were on that list but Barack Obama wasn't (source: USA Today).

10. REPUBLICAN VP - In a 7/26/08 Wall Street Journal article, the potential selection of Sarah Palin to be John McCain's VP was described as a possibility if he wanted to "go outside the box." The selection of Governor Palin was announced on 8/29/08 in Dayton, OH (source: Wall Street Journal).

11. WHERE IT BEGAN - Barack Obama announced his run for the White House in Springfield, IL on 2/10/07, almost exactly 146 years after Abe Lincoln did the same thing in the same city. John McCain announced his candidacy on 2/28/07 on the David Letterman Show (source: BTN Research).

12. ON THE JOB EARLY - Secret Service protection for presidential candidates is not required by law until 120 days before the November election date, or as of 7/08/08 for the 2008 election. The Homeland Security Department can authorize earlier coverage and did so on 5/03/07 for Barack Obama. John McCain accepted the government's protection on 4/27/08 (source: Houston Chronicle).

13. YALIES - Every president since 1988 has earned a degree from Yale (source: PresidentElect.org).

14. WIDE OPEN RACE - The 2008 presidential race is the first time since 1952 that no current president or vice president is running for the White House (source: PresidentElect.org).

15. PERSONAL STATS - Democrat Barack Obama stands 6 feet, 1 ½ inches, more than a ½ foot taller than Republican John McCain's 5 feet, 7 inch height. Both gentlemen are left-handed (source: Wall Street Journal).

Market update

Greg Adelman (Midwest Home Center) — Thu, 30 Oct 2008 11:26:11 -0500

Here is a new update for agents and customers:

-- Fannie Mae (NYSE: FNM - News) today announced that it will reinstate a requirement for homeownership counseling and education for first-time homebuyers obtaining a MyCommunityMortgage® loan or a loan that relies on nontraditional credit to qualify. Effective January 1, 2009, the requirement is geared toward helping borrowers better assess their options and responsibilities both before and after they purchase a home.

In otherwards, agents, customers, originators all have to pay for the sins of others. Sorry!

Thanks,
Greg Adelman

Midwest Home Center LLC.
715-483-0012
612-735-4414 cell
612-395-5444 fax

www.midwesthomecenter.com

Halloween

Greg Adelman (Midwest Home Center) — Thu, 30 Oct 2008 11:17:21 -0500

To all:

I know it's scary out there, but just a note to wish all a Happy and safe Halloween!

The markets are very volatile out there but with this uncertanty there is opportunity. I have found that in times like this that it only makes us stronger for the next challange that may arrive.

Thanks,
Greg Adelman

Midwest Home Center LLC.
715-483-0012
612-735-4414 cell
612-395-5444 fax

www.midwesthomecenter.com

BANKING

Greg Adelman (Midwest Home Center) — Sun, 19 Oct 2008 22:27:27 -0500

The first phase of the Troubled Asset Relief Program is being put in place. The first $250 billion will be used to provide a voluntary capital purchase program to rebuild bank capital. Citibank, JP Morgan, Bank of America and Wells Fargo will all receive $25 billion.
Second the treasury announced plans to guaranty commercial paper and inter-bank funding. Banks that participate will be charged 0.75% to protect their debt issuances. (this means that the banks should start lending to one another again but the rates will be more expensive, which ultimately means loan rates will go up, but at least the markets will start lending again.)
Third, deposit institutions can now offer full deposit insurance coverage on non-interest bearing deposit transaction accounts. Regardless of the deposit amount. The FDIC had recently increased coverage to $250,000 but institutions that participate will be charged an additional 0.10% on top of their current FDIC insurance. (what this means is that 100% of the deposits in checking are covered. This is very good for businesses since they do not get paid interest on their checking accounts. Not so good for consumers because they would have to move their funds to a non-interest bearing account to get the 100% insurance coverage.)

Housing starts fell to 817,000 annualized units. September starts were well below expectations. They are well below their lowest level since 1991. Housing permits are also falling off more than 8% nationally.

Thanks,
Greg Adelman

Midwest Home Center LLC.
715-483-0012
612-735-4414 cell
612-395-5444 fax

www.midwesthomecenter.com

Fall colors

Greg Adelman (Midwest Home Center) — Sun, 12 Oct 2008 23:11:05 -0500

Fall is hands down my favorite time of the year. It is sunny here in St Croix Falls, Wisconsin this afternoon. Crimson, rust, gold, bright yellow, evergreen all blend to create an incredible palate of color! The changing colors of the leaves is set off by the shadowy, dark grey stone and rock that line the St Croix River. The cold, clear water matches the sky's bright blue. I hope that you can take the time to thank God and appreciate the simple things that life has to offer. Big time problems and worries surround us all these days. But so do the promise of a better future and these beautiful colors of fall! For now, I am not going to worry about my MS. Or the stock market, or budgets, or meds. Today, at this moment, it is wonderful to be alive!

Thanks,
Greg Adelman

Midwest Home Center LLC.
715-483-0012
612-735-4414 cell
612-395-5444 fax

www.midwesthomecenter.com

Affordable Homes in the Midwest

Greg Adelman (Midwest Home Center) — Wed, 08 Oct 2008 17:25:42 -0500

The fourth in our series highlighting American Dream homes for under $500,000 takes us to sweet homesteads in the nation's heartland

Writing about the Midwest of his boyhood in Life on the Mississippi, Mark Twain famously observed: "This region is new, so new that it may be said to be still in its babyhood... (O)ne may forecast what marvels it will do in the strength of its maturity."

This week we offer some of the marvels the Midwest offers in its 21st century maturity -- affordable luxurious houses. In our Affordable Homes series so far, we've visited the Northeast, the Northwest, and the Southeast. The fourth leg in our search for affordable American Dreams under $500,000 takes us to the Great Middle, bounded by the Appalachians to the East and the Great Plains to the West. As you'll see, the grand cities of the nation's industrial and agricultural heartland offer some of the most distinctive and beautiful homes on the market. Affordable? You betcha.

As with other regions of the country, some of the best buys can be found in smaller cities and towns. But like the Southeast, the Midwest offers plenty of value in its metropolitan areas, too. Whatever style you're looking for, when it comes to the heartland, there's truly no place like home.

Thanks,
Greg Adelman

Midwest Home Center LLC.
715-483-0012
612-735-4414 cell
612-395-5444 fax

www.midwesthomecenter.com

Good News!

Greg Adelman (Midwest Home Center) — Thu, 11 Sep 2008 23:17:18 -0500

With all of the dismal news put in the papers, finally, something that will help you and your customers out! Here is a head lines for you I found:

Mortgage-rate drop bright spot in Freddie/Fannie takeover

If you closed on a house recently, prepare to kick yourself. One of the outcomes of the federal takeover of Fannie Mae and Freddie Mac is the lowest mortgage rate in five months.

That's right, mortgage rates have lowered, and are at the lowest rates in almost a half a year!

Thanks,
Greg Adelman

Midwest Home Center LLC.
715-483-0012
612-735-4414 cell
612-395-5444 fax

www.midwesthomecenter.com

Federal Government is finally taking out both Fannie Mae and Freddie Mac

Greg Adelman (Midwest Home Center) — Mon, 08 Sep 2008 11:38:03 -0500

Well its here, the Federal Government is finally taking out both Fannie Mae and Freddie Mac. While the national and world markets rose sharply over this news, the direct affect on real estate agents, brokers, investors and mortgage originators will have to be seen.

While bi-partisan support is noted on Capital Hill, the Republicans and Democrats both primarily use the two mortgage giants for different reasons. For Republicans, the primary use is for capitalistic investment purposes and for Democrats, the primary use is for the housing availability for low to moderate income families. Regard less of the exact outcome, there will be both pros and cons to this turbulent move.

I will continue to stay on top of it and will report our findings to keep you all abreast of what we feel will be the primary affects to you all. Hopefully, the pros will out weigh the cons.

Greg Adelman

715-483-0012

612-735-4414 cell

612-395-5444 fax

www.midwesthomecenter.com

5 Things Banks Won't tell You, Part 2

Greg Adelman (Midwest Home Center) — Wed, 03 Sep 2008 17:57:56 -0500

6. "We're excited about your trip to Europe, too!"

It's bad enough that the dollar is hovering near historical lows against most major currencies, but when you travel overseas, every transaction comes with big fees attached. Take out cash from an ATM in London, and you'll get hit with a foreign-transaction fee, plus a fee for using a competitor's ATM. All told, it can cost up to $7 just to withdraw $200.

Everyone needs an emergency fund
It's a stash of cash, but how much do you need? And why should this take priority over other savings goals?

Credit card purchases aren't much better. Visa and MasterCard charge 1% of the purchase price for converting currency. And the issuing banks may take another cut, which can bring the total to 3% of your purchase price, says CardRatings.com's Arnold. "If people don't travel overseas very often, they just don't think about it," he says.

The best thing to do is determine which of your cards charges the lowest overseas-transaction fee. For people who travel a lot, Arnold recommends a Capital One credit card, which charges no overseas-transaction fees (and even declines to pass on Visa and MasterCard's 1% fee to customers).

Also, ask your bank about partnerships with foreign banks. Bank of America, for example, partners with Barclays Bank, saving its customers $5 per withdrawal from Barclays' ATMs in the United Kingdom.

7. "For all the fine print, we don't disclose very much."

Bank documents come loaded with small type detailing terms and conditions. But good luck finding out exactly what you're signing up for when you open an account.

Last year, the Government Accountability Office sent investigators to see how well banks explained their fees and other conditions to potential customers. Though banks are required by law to make this information available, the GAO said one-third of the branches it surveyed didn't provide the required information. Worse, more than half didn't have any fee information on their Web sites.

Nessa Feddis, a senior counsel at the American Bankers Association, questions the report's methods -- banks failed the test if investigators waited more than 10 minutes for the information -- and defends the lack of data online. Banks are afraid of leaving old, inaccurate information on their sites if terms change, she says. But without details on fees, consumers can't make informed choices.

"Banks are not complying with the law," says Ed Mierzwinski, the consumer program director with the U.S. Public Interest Research Group. "People need more information so they can shop around for the best deal."

8. "Your money might be better off elsewhere."

Banks offer lots of ways to earn interest on your money. Among them are simple savings accounts, certificates of deposit, money market accounts and individual retirement accounts. But they don't always yield the best return. The average savings account, for example, pays about 0.5% interest. But even in this low-interest-rate climate, you can do better -- 3% or more -- if you shop around.

"It pays to be a free agent," says Bankrate.com's McBride. "There is tremendous disparity in the returns available."

Banks have been expanding into other financial services for a decade or more, including comprehensive wealth management and financial planning, brokerage services and even insurance. The well-off who use these services are a bank's most profitable customers, as they keep the highest balances and are least sensitive to fees, says Maryann Johnson, the senior vice president of wealth market management at the bankers association.

That's something to remember when you talk to a bank's investment advisers: Many are paid a commission on investment products, says certified financial planner Craig DuVarney, meaning they often go for the easy sales.

"They don't have the harder discussion about estate planning, tax bracket and liquidity," DuVarney says.

Johnson sees it differently. She says that banks take a more holistic approach and that their wealth managers serve much the same purpose as financial advisers, with bonuses not only for sales but also for dollars invested, new clients and even customer retention.

9. "When it comes to banks, smaller is sometimes better."

Banks have been consolidating like crazy over the past decade. In 1990, the top 10 banks controlled 25% of the market; now they have half. This gives customers of large banks vast networks of free ATMs and branches across the country.

But it hasn't been entirely good for consumers, says Arthur E. Wilmarth Jr., a professor at George Washington University Law School. Though big banks offer many conveniences, they can come at a price: high fees. In 2006, the 10 largest banks generated 54% of revenue from fees and service charges. By contrast, the 10 smallest banks generated just 28% from those sources.

Everyone needs an emergency fund
It's a stash of cash, but how much do you need? And why should this take priority over other savings goals?

Not only do big banks bring in more fee income, but they also pay out less interest. According to Federal Deposit Insurance Corp. data, smaller banks generally pay higher interest on savings accounts and other products. For example, in 2006, the 10 largest banks paid an average 1.87% in interest for savings accounts, while the smallest banks paid 4.37%.

"The largest banks are no longer worried about being undercut on price," Wilmarth says.

10. "Your online account information isn't necessarily accurate."

Online banking has changed the way people handle their finances. They can pay bills online, transfer funds, track payments and get a more detailed view of their bank accounts than ever before. Unfortunately, it may not always show the proper balance.

With electronic transactions, ATMs, check cards and direct deposits, banking has gotten more complicated. ATMs and online bank statements will show deposits available before the money is actually in your account. Using your debit card at a gas station or to reserve a hotel room, for example, can put a hold on funds. Some merchants may be slow to send in charges. And banks can sit on deposits, so an out-of-state check may take up to five days to clear.

Add to that the constant reordering of debits, and your account balance can quickly become a moving target that's hard to track accurately day to day.

"Banks use different algorithms to process payments than what you see online," Harvard's McGovern says. "It gives you a false sense of security."

This article is designed around products that banks sell you. They are a financial shopping mall to sell you products for the benefit of the bank!

5 Things Banks Won't Tell You, Part 1

Greg Adelman (Midwest Home Center) — Wed, 03 Sep 2008 17:49:48 -0500

Do you assume that your bank serves your best interests? That a big bank's products are better? That your online account information is accurate? Don't believe any of it.

1. "Our branches are there to sell you, not serve you."

In the late 1990s, bank branches were considered outmoded relics soon to be replaced by ATMs and Internet banking. But just the opposite happened. In 1998, there were 89,000 bank branches in the U.S., and by 2007, there were 97,000.

Why? The industry realized that consumer banking is profitable and that despite the predictions of Silicon Valley wonks, the main criterion consumers use in choosing a bank is proximity, SNL Financial analyst Jennifer Payne says.

But branches aren't just about convenience; they're a bank's primary sales floor. Brochures for services as varied as retirement accounts and home loans are on display, and everyone from the teller on up is trained to make a sale. That's because in the current low-interest-rate climate, it's harder to generate revenue from interest alone.

Many players in the industry have been trying to boost fee- and service-based income, so if a teller sees you have a mortgage, he might suggest you meet with a loan officer to discuss a home-equity loan. Greg McBride, a senior financial analyst at Bankrate.com, says, "The more products a customer has with a bank, the more likely he is to stay with that bank."

2. "Our fees will only go up."

With the economy slowing and big losses looming in the mortgage market, banks are looking for reliable revenue streams. Hence punitive fees -- for overdrawing your account, say, or using a competitor's ATM -- are increasing. The average ATM service charge doubled between 1998 and 2007, and overdraft fees brought in $17.5 billion in revenue in 2006, up from $10.3 billion in 2004, according to the Center for Responsible Lending.

Rubecca Hegarty, a married mother of three in Woodridge, Ill., says she often pays upward of $100 a month in overdraft fees to JPMorgan Chase because, like most banks, it changes the order of purchases so that large debts get paid first, increasing the likelihood that customers will incur fees on smaller purchases. Chase says it does this because big payments like a mortgage are more important to consumers and so get priority.

Revenue from penalties can be addictive for banks, Harvard Business School professor Gail McGovern says, but "they're going to face problems from angry customers, which leads to big call-center bills, employee dissatisfaction and turnover."

3. "We change our interest rates all the time."

Regardless of what your credit card agreement says, you can never be sure how much interest banks will charge you. For example, nearly all cards have a default rate -- as high as 30% -- which banks apply when you've done something wrong, usually after two late payments in 12 months. But some banks have cut that to one late payment, says Curtis Arnold, the founder of CardRatings.com.

Banks can also change the terms of your agreement, raising rates when they like (though you can opt out and pay off the balance at the old rate as long as you never use the card again). Bank of America did that recently, upping many cardholders' rates from 10% or 12% to 27% or more, even though they'd done nothing wrong.

Everyone needs an emergency fund
It's a stash of cash, but how much do you need? And why should this take priority over other savings goals?

"There's no clarity on what criteria can lead a bank to raise interest rates," says Robert Manning, the director of the Center for Consumer Financial Services at the Rochester Institute of Technology. "It's a black box."

A Bank of America representative says the company periodically reviews the credit risk of its accounts and adjusts rates accordingly, adding that in the past year 94% have had no increase.

4. "College campuses are gold mines for us."

Students are the customers of the future, and banks are increasingly courting them, sometimes right on campus. More than 120 universities have cut deals with banks to issue student ID cards that are also ATM and check cards. Schools can make millions from these deals, sometimes even taking a small cut of individual purchases.

Students are also a hot market for credit card issuers, and banks will make private deals with alumni associations to get contact information for students, parents and even people buying tickets to university athletic events. Card companies cut deals to set up booths on campus, and Chase even inked a deal with Facebook to display ads and set up a Chase group on its Web site.

The problem? Mounting credit card debt among college kids, for one.

"Universities don't negotiate on behalf of students," Manning says. "They're negotiating the best deal for the university."

A representative for the National Association of Independent Colleges and Universities says not to blame schools, as banks would market to students anyway, and universities at least try to get the best rates they can for students.

5. "In debt? The courts won't help."

Since the late 1990s, banks have been including mandatory-arbitration agreements in their contracts for many of their products, including auto loans, checking accounts, home-equity loans and credit cards. Such agreements prohibit you from suing and instead require you to use an arbitrator -- someone picked by the arbitration firm named in your card contract to hear the dispute and decide the outcome.

Though these clauses were originally designed to thwart class-action suits, the banks have also been using them for debt collection, says Paul Bland, an attorney with consumer-advocacy group Public Justice. There are even times when consumers, often victims of identity theft and unaware of the debt, aren't present when awards are handed down against them.

A recent suit against an arbitration firm brought by the San Francisco city attorney noted that arbitrators ruled in favor of banks in 100% of the 18,045 California cases brought against consumers from January 2003 through March 2007.

"From the consumer perspective, it's a nightmare," Bland says. If a bank brings arbitration against you,

Our model homes are now for sale in St. Criox Falls, WI

Greg Adelman (Midwest Home Center) — Fri, 29 Aug 2008 21:06:43 -0500

Our model homes are now for sale. Every few years we replace our model homes. This creates an opportunity for a homebuyers to buy a new home at a substantially reduced price.

Our loft home is 1779 square feet with three bedrooms,one andd three quarters baths, fireplace, knotty pine ceiling, hickory cabinets, solid core six panel doors, cedar siding and more.....Call now for details.

$110,000 sale price NOW, while the cost was over $150,000

SEE HOUSE NOW

Thanks,
Greg Adelman

Midwest Home Center LLC.
715-483-0012
612-735-4414 cell
612-395-5444 fax

www.midwesthomecenter.com

Attention all real estate agents that have clients with LOC

Greg Adelman (Midwest Home Center) — Wed, 27 Aug 2008 18:24:44 -0500

Here is a super article regarding home equity line of credits issued by lending institutions, specifically Savings and Loans. These lending institutions are arbitrarily decreasing and some times closing home equity lines of credit for you and your customers! Because of complaints, the OTS has issued a regulatory bulletin indicating when it is appropriate to do this. Based on the guidelines that I read, a great many of the decreased or closed lines are being done so illegally. If any of your clients have had this happen to them, please contact bank executive management to reverse their decision.

To have a bank illegally take away access to your customers money is a disgrace. If a customer qualified for a home equity mortgage line of credit, paid for the refinance, and signed the legal mortgage lending documents, they shouldn't have a banker arbitrarily take away this product.

See the following:

S&Ls given warning about freezing credit

The Office of Thrift Supervision warns against improperly lowering credit limits or altering rules for home-equity loans.

Finance

Greg Adelman (Midwest Home Center) — Tue, 26 Aug 2008 22:46:44 -0500

The end of summer is coming, unfortunately, the leaves will be turning and high school football games will be being played. Believe it or not, change is coming. As far as we are all are concerned, we are all used to change, especially in our industry. If fact with all of the changes that have happened in the real estate and finance arenas, we should be experts! In fact we should almost be chameleon-like!

Great financing options are still out there; however, it is more important that ever, to structure your customer's deals correctly from the beginning to make sure that they get through the ever tightening underwriting process. We are still having good success in succeeding in this area, because we have always done it that way!!! Is anyone sick of deals falling through because some finance person failed! Take control of your customer's finance!

New less espensive Model

Greg Adelman (Midwest Home Center) — Tue, 12 Aug 2008 22:59:53 -0500

We are getting a new model in. We have surveyed real estate agents, clients, lookers and other dealers and have found that the customer is looking for a lower priced new home. Since the foreclosed homes and lower end homes have been picked through, this offers a very good opportunity. In addition we are having the home with all standard features, so people don't get excited about an option and realize there is an additional cost to it since it's an upgrade.

Hot market selling NOW

Greg Adelman (Midwest Home Center) — Sun, 10 Aug 2008 18:41:53 -0500

We sold a new house for $73,000. It is a three bedroom two bath house.

The market under $100,000 is very active now in our area. There are many upper and mid scale foreclosure homes but the lower end has been picked through. People are just now seeing that they can save time and money with modular homes.

We live in a beautiful area but due to distance from a major city the growth has stopped.

Large potential realestate market

Greg Adelman (Midwest Home Center) — Sat, 09 Aug 2008 14:12:16 -0500

I met yesterday with a representative of Wisconsin Homesand he said that the company was going to start do business in Canada. I found that they have a huge housing need. This is due to the oil and gold they have up there.

Does anyone know the steps for a realtor to get licensed there? I think for the person with contacts, up there, it could be profitable.

"The Card", This is cute.

Greg Adelman (Midwest Home Center) — Tue, 05 Aug 2008 14:02:31 -0500

So this Department of Water Resources representative stops at a Texas
Ranch and talks with an old rancher. He tells the rancher,
"I need to inspect your ranch for your water allocation."

The old rancher says, "Okay, but don't go in that field over there."

The Water representative says, "Mister, I have the authority of the
Federal Government with me. See this card? This card means I am allowed
to go WHEREVER I WISH on any agricultural land. No questions asked or
answered. Have I made myself clear? Do you understand?"

The old rancher nods politely and goes about his chores.

Later, the old rancher hears loud screams and spies the Water Rep
Running for his life and close behind is the rancher's bull. The bull is
gaining with every step.

The Rep is clearly terrified, so the old rancher immediately throws down
his tools, runs to the fence and yells at the t of his lungs.....

"Your card! Show him your card!"

Interfaith Caregivers golf tournament ideas needed

Greg Adelman (Midwest Home Center) — Wed, 23 Jul 2008 22:48:45 -0500

Interfaith Caregivers assists seniors and adults living with disabilities to maintain their independence, dignity and quality of life at home.

They have announced a 18 hole charity best ball tournament to raise money for the organization. I have MS and have been very blest to have them help me. Now I would like to help them. Anyone with ideas? This is their first golf outing.

Important information from Fannie Mae‏

Greg Adelman (Midwest Home Center) — Wed, 16 Jul 2008 23:02:07 -0500

Fannie Mae has made some changes to its lending policies that will effect your customers. Please review the attachment. If you have any questions, please let me know. New Fannie Mae Announcement - Announcement 08-16 Please read in its entirety . Revisions to Bankruptcy and Foreclosure Policies Within this Announcement is a very detailed chart with regards to the recent changes for borrower's who have had bankruptcy and/or foreclosure issues. Conversion of Principal Residence to Second Home or Investment Property Three options are provided to borrowers who currently own their home: (1) Sell; (2) Convert to Second Home; (3) Convert to Investment Property Within this Announcement is also a detailed chart that includes a breakdown of the current requirements versus the new requirements. On any file where the borrower currently owns an existing home, these new guidelines will apply unless the borrower can qualify with the full "PITI" payment of their existing home. Please pay special attention to those converting an existing primary residence to either a second home or an investment property. These guidelines will effect purchase transactions and construction-perm transactions where an existing primary residence will not be sold prior to closing and the borrower's are unable to qualify with the existing "PITI" payment. Revised Property Value Representation and Warranty Please review this section since it is directly related to an acceptable age of an appraisal used for property valuation. This Announcement does not specifically state that property valuations (appraisals) are good for only 6 months, however, many individual secondary market investors have already interpreted this guideline as meaning that a new appraisal is required once the old appraisal reaches six months old. If you run into a situation where you have an older appraisal that is approaching six months old or older than six months, please refer to the individual investors requirements. As stated, many secondary market investors have already indicated that a new appraisal is required after six months. Note: I'm under the assumption that this will also apply to construction-perm products unless your investor currently has some form of waiver with Fannie Mae.

Here are some ideas that I am passing on to all of my contacts regarding credit scores

Greg Adelman (Midwest Home Center) — Thu, 10 Jul 2008 15:17:39 -0500

To all,

There is a new credit scoring model, used by our credit scoring repositories for 08. While they wont tell us the exact method to there analysis, here are a few things that will help. Any questions/comments, give me a jingle.

7 great moves, no matter who's counting

Scour your credit reports. Your credit score is derived entirely from the information on your credit reports at the three bureaus, and a single serious error can cost you big time. You're entitled to a free annual look at your reports from www.annualcreditreport.com. Dispute any accounts that aren't yours or any negative entries that are more than seven years old (or 10 years in case of bankruptcy). (Watch for impostor sites; see "How to get a credit report for free.")

Don't be late. Skipping a single payment can knock your score from prime to near subprime territory overnight. Make sure all your bills are paid on time. Consider setting up automatic or recurring payments for all your credit accounts.

Watch your balances. The less of your credit lines that you use, the better. Try not to use more than 30% of your credit card limits at any time during the month; using 10% or less is even better. Remember that the credit bureaus and your credit scores don't distinguish between balances you pay off and those you carry month to month; the balance that's reported to the bureaus is typically the one that shows on your most recent monthly statement. If you're in the habit of using a big portion of your credit limits -- because you travel on business or are chasing credit card rewards -- consider asking for higher credit limits. (You also could make two payments a month on each high-use card to lower the balance that's reported to the bureaus. To make this work properly, you'll need to make one payment just before the statement closing date on the account and a second after the closing date but before the due date. If you fail to make the second payment, you may be reported to the bureaus as being late.)

Don't close accounts. Fair Isaac has made it clear that closing accounts can never help a classic FICO score and may hurt it. With FICO 08, that's even truer. The new scoring formula wants to see evidence that you are actively and responsibly using credit. So you get more points for having open accounts in good standing; conversely, having a higher proportion of closed accounts can hurt you more.

Keep your accounts active. In the past, the biggest risk from letting accounts be inactive is that your lenders might close them, thus dinging your scores. Now simply having too many inactive accounts could count against you in some circumstances. Once again, the new scoring formula is looking for evidence you can responsibly manage credit. Consider keeping your oldest and highest-limit cards active by charging something to them each month (making sure to pay the balance off in full, of course).

Piggyback the right way. You still can benefit from someone else's good credit under both the old and new FICO formulas by being added as a joint account holder to a credit card. In most cases, the other person's history with the card will be added to your credit reports; as long as the account remains in good standing, it can help your scores. But being added as a joint account holder involves more risk: You're now jointly responsible for the debt, whereas an authorized user typically would not be. Getting taken off the account isn't easy, either. A phone call from the primary cardholder might remove the name of an authorized user, but you often can't be removed from a joint account until it's closed.

Consider an installment loan. There are two main types of credit: revolving accounts that allow you to build up and pay down balances, and installment loans that typically have fixed payments that require you to pay down your balance over time. Credit cards and lines of credit are examples of revolving accounts, while auto loans and mortgages are considered installment loans. The FICO formula has always rewarded folks who had and successfully managed both types, which is why getting an installment loan was often recommended as a way for people with troubled credit to rehabilitate their scores. The new scoring formula is even more sensitive to the mix of credit types people have and use. In the past, people were able to get and keep very high scores using only credit cards; it's not clear if that will still be true under FICO 08.

. Loans you've already paid off will continue to help your scores as long as they're still on your credit reports, and many lenders continue to report closed installment accounts for 10 years. But if you're trying to improve a low score, an installment loan is likely to help you even more under FICO 08 than it did under the classic FICO score.

Buyer

Greg Adelman (Midwest Home Center) — Tue, 08 Jul 2008 19:24:30 -0500

I just had an older guy in one of my models and he picked it apart then went over to another of my models, which I gave him a key too. After a half hour of looking at it he came back and said "I will take it and pay cash". What a nice surprise.

I have MS so I could not go over and walk him through the house but he might have liked being alone.