Goran's Blog

Mortgage Market Update for the week of 04/13/09

YOUR World Class Realty Team,Keller Williams Elite — Mon, 13 Apr 2009 07:44:47 -0500

"THE FACT THAT AN OPINION HAS BEEN WIDELY HELD DOESN'T MEAN THAT IT'S NOT UTTERLY ABSURD." Bertrand Russell. True words - and last week was one that was full of opinions that moved the financial markets - here are some highlights.

The week began with bank analyst Mike Mayo spewing out a negative forecast, which included his thoughts that loan losses by financial institutions would ultimately exceed levels from the Great Depression. This was followed by word from hedge fund giant George Soros that the US banking system is insolvent and that the economy won't recover in 2009.

However, as mentioned in many previous newsletters, the recent changes to mark-to-market should prove to have a positive impact on the economics and overall operations of financial institutions. Why? Because the recent ruling to look at mark-to-market accounting in a more relaxed light will free up the banks' capital ratios and allow them to do more lending, which will help their profitability, as well as ultimately help the economy unlock as businesses and consumers are once again able to borrow and use credit in a more normal fashion.

Lo and behold...as earnings season began last week, there was already evidence of this playing out as true, when Wells Fargo said Thursday that it expects record 1st quarter earnings and that their Wachovia acquisition was exceeding their expectations. In addition, the New York Times said Thursday that the US banking system overall may be in better shape than most people think.

As you can see in the chart below, Stocks hit an all time high in October 2007...until mark-to-market accounting practices were instituted. And notice also that Stocks reversed course, and have been on a strong rise since early March of this year, buoyed simply by the speculation that there would be a change in mark-to-market, which was finally announced on April 2nd by the Financial Accounting Standards Board.

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Chart: Dow Jones

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. And this is exactly what happened in the early part of the week when Stocks were plagued by the negative opinions mentioned above. However, Stocks rallied on the good news that ended the week, causing Bonds and home loan rates to give back some of the gains they had made, ending the week unchanged to slightly worse from where they began. The Bond market closed early Thursday and both the Stock and Bond markets were closed Friday in observance of the holiday weekend.

MOST PEOPLE SHARE THE OPINION THAT PAYING TAXES IS NO FUN, ESPECIALLY DURING TOUGH ECONOMIC TIMES. BUT FILING ON TIME IS IMPORTANT, EVEN IF YOU CAN'T FOOT THE WHOLE BILL ON TIME. CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW FOR IMPORTANT FILING INFORMATION.

Forecast for the Week

Last week may have been a quiet one in terms of economic reports, but the middle part of this week will be jam-packed with reports. Tuesday will bring the Retail Sales Report for March. We know that consumers continue to watch their spending, but how much they are still doing so will be interesting to see.

There's also news on the inflation front coming both Tuesday and Wednesday. Tuesday brings the wholesale measuring Producer Price Index (PPI) Report, while on Wednesday we get the Consumer Price Index (CPI) Report. It will be important to see if these reports are inflationary or deflationary in direction. Given the low interest rate environment we are in, along with all the recent economic stimulus provided, it seems a foregone conclusion that inflation will become an issue that must be dealt with. These reports will give us clues on any significant changes to the rates of inflation, which is the arch enemy of home loan rates.

Thursday will be a busy day as well, as we will get a read on the Housing Market with the Housing Starts and Building Permits Reports. The Philadelphia Fed Report will also be released Thursday, and this monthly survey of manufacturing purchasing managers conducting business around the tri-state area of Pennsylvania, New Jersey, and Delaware is one of the most-watched manufacturing reports.

As you can see in the chart below, stocks' late week rally pulled money out of the Bond market, and caused Bonds to fall below a key floor of support. I will be watching closely to see if Bonds and home loan rates can reverse direction this week and find some improvement.

Chart: Fannie Mae 4.0% Mortgage Bond (Friday Apr 10, 2009)

The Mortgage Market View...

File Your Taxes on Time. Even If You Can't Pay!

The deadline to file your taxes is practically here!

But what do you do if you've completed your tax returns only to find out that you owe way more to Uncle Sam than you were expecting - or worse, that your tax bill is more than you can possibly afford to pay right now?

Don't worry. If this is the case, you're not alone. especially in today's economy. And more importantly, you're not going to jail just for being a little short on cash.

Rest assured, the IRS only seeks criminal charges for those who the agency can prove intentionally chose not to file and pay taxes. So, even if you can't pay your bill right away, file your return on time, and not only will you stay off the IRS's bad side, you'll avoid some hefty financial penalties in the process.

Penalties

According to the IRS, the penalty for filing late is generally 5% per month, or up to 25% of the total tax amount due. Not to mention interest charges, which the IRS changes quarterly, and which range between 4% and 9%. This interest applies to the unpaid balance, penalties, and to any interest that has been charged to the account as well.

If no effort is made to pay back-taxes, the IRS can impose stricter penalties, including levying bank accounts, wages, other income, or taking other assets like houses and cars. A Federal Tax Lien could also be filed, which could ruin your credit history for years to come.

The penalty for filing on time but paying late, however, is only half of one percent or .5% per month, up to 25% of the total amount owed. If you choose an installment plan to pay your debt, interest will accrue on the unpaid debt amount only.

Therefore, when you file your return, pay as much as you can and cut down the penalties even more.

Extensions

It is possible to get a 30- to 120-day extension to pay your taxes after filing a return on time. Soon after filing, the IRS will send you a tax bill for the amount you still owe. Simply call the number on the bill and request an extension and explain your situation. If granted an extension, the penalties and interest will be much lower.

If you cannot pay any part of your tax bill, the IRS may temporarily delay collection until your financial situation improves, although interest and penalties will accrue throughout this time. But this extension is reserved for what the IRS calls "significant hardship."

The Week's Economic Indicator Calendar

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of April 13 - April 17

Date	ET	Economic Report	For	Estimate	Actual	Prior	Impact
Tue. April 14	08:30	Core Producer Price Index (PPI)	Mar	0.1%		0.2%	Moderate
Tue. April 14	08:30	Producer Price Index (PPI)	Mar	0.0%		0.1%	Moderate
Tue. April 14	08:30	Retail Sales	Mar	0.3%		-0.1%	HIGH
Tue. April 14	08:30	Retail Sales ex-auto	Mar	0.1%		0.7%	HIGH
Wed. April 15	02:00	Beige Book					Moderate
Wed. April 15	10:30	Crude Inventories	4/10	NA		1645K	Moderate
Wed. April 15	09:15	Industrial Production	Mar	0.9%		-1.4%	Moderate
Wed. April 15	09:15	Capacity Utilization	Mar	69.7%		70.9%	Moderate
Wed. April 15	08:00	Empire State Index	Apr	-35.0		-38.2	Moderate
Wed. April 15	08:30	Consumer Price Index (CPI)	Mar	0.2%		0.4%	HIGH
Wed. April 15	08:30	Core Consumer Price Index (CPI)	Mar	0.1%		0.2%	HIGH
Thu. April 16	08:30	Building Permits	Mar	550K		547K	Moderate
Thu. April 16	08:30	Housing Starts	Mar	550K		583K	Moderate
Thu. April 16	08:30	Jobless Claims (Initial)	4/11	NA		654K	Moderate
Thu. April 16	10:00	Philadelphia Fed Index	Apr	-32.0		-35.0	HIGH
Fri. April 17	10:00	Consumer Sentiment Index (UoM)	Apr	58.5		57.3	Moderate

Goran Jovanovic
YOUR World Class Realty Team
Keller Williams Elite
Ph:954-243-7570
http://www.goranflorida.com

Mortgage News for the week of 04/06/09

YOUR World Class Realty Team,Keller Williams Elite — Mon, 06 Apr 2009 08:12:37 -0500

"LET'S GIVE THEM SOMETHING TO TALK ABOUT..." Bonnie Raitt. Better believe that last week's news gave us plenty to talk about.and even a few things to smile about. Here are the highlights.

You know this newsletter has been talking about the mark-to-market issue for some time now, and everyone was talking last Thursday about the Financial Accounting Standards Board's (FASB) favorable vote to relax mark-to-market accounting, which will help to unlock the continuing freeze in the credit markets. The big change is to allow financial companies to use alternate models, like cash flow analysis, in valuing their assets. This was great news for the financial markets and our economy at large, as this will help money and credit flow more normally in our economy again.

In fact, since the March 12th Congressional hearing on mark-to-market, Stocks have risen 23% just on the speculation a change could be coming. And just one short day after the FASB mark-to-market ruling, there were stories of banks already saying they may not need to sell assets to raise capital, as they will no longer have to take massive paper losses by pricing their assets to the "fire-sale" comps that were created in some of the illiquid markets. Capital ratios are now more in line for many institutions, which will also help their ability to lend - in turn helping consumers and businesses alike. Yesterday's ruling is a dramatic step towards unwinding the negative spiral created by mark to market, and in fact, the ruling on mark-to-market accounting could well go down in history as a turning point in the US financial crisis.

Speaking of turning points, while Friday's Jobs Report certainly had its share of the bad (the economy lost 663,000 jobs in March) and the ugly (there have been 5.1 million jobs lost since the recession began in December of 2007), there was also some good. For the first time in a very long while, there were no downward revisions to a prior month's reading, as February's number came back with no change. This, as well the actual job losses for this month being improved from January's levels, and not much worse than expectations, could mean there is some level of stabilization at hand for the labor market. Something else worth smiling over on the job front was Wednesday's news that Challenger, Gray & Christmas, an executive outplacement company, found that planned layoffs at US firms fell in March to their lowest levels in six months.

While Stocks were buoyed by the Mark-to-Market announcement and optimism that the G20 meeting in London will lead to an agreement on ways to pull global economies out of the current recession, Bonds were unable to hold onto recent gains. As a result, Bonds and rates ended the week .125-.25 percent worse than where they began.

A BIGGER PAYCHECK IS ALWAYS SOMETHING WORTH SMILING ABOUT.AND THE NEW "MAKING WORK PAY" TAX PROVISION COULD MEAN YOUR PAYCHECK IS GROWING. CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW FOR THE DETAILS.

Forecast for the Week

There aren't too many scheduled economic reports to talk about this week, but don't expect the rest of the news to be quiet. First quarter earnings season begins, and while the change to mark-to-market take effect for the second quarter, it can be applied to first quarter earnings. In fact, rumors are already swirling that the change in mark-to-market will boost earnings of banks by 20% or more for the first quarter.

In addition, the US is prepared to sell an estimated $59 Billion in notes and inflation-indexed securities this week, and it will be important to see what impact that supply has on Bonds and home loan rates. And as we continue to watch the labor market, it will also be important to keep an eye on Thursday's Initial Jobless Claims report to see if the news is good, bad, or ugly.

But remember: Strong economic news will likely cause Stocks to move higher, and Bonds and home loan rates may worsen in response as we saw last week. As you can see in the chart below, Bonds worsened on the heels of last week's positive mark-to-market ruling, as well as Friday's Jobs Report failing to meet the worst fears.

Rates remain near historic lows, but last week, Jack Koskinen, interim chief executive of Freddie Mac, said that he feels home loan rates are near a bottom. We should talk to discuss if the current rates may present an opportunity for you or someone you know.

Chart: Fannie Mae 4.0% Mortgage Bond (Friday Apr 03, 2009)

The Mortgage Market View...

What the "Making Work Pay" Tax Credit Means For You

The economic recovery package that Congress passed in February included a "Making Work Pay" tax credit that eligible workers will receive through their paychecks in 2009 and 2010. Employers will use new withholding tables to lower the amount of tax that is withheld from eligible workers' paychecks. And since the Obama administration has asked that employers begin implementing these changes this month, you may have already noticed an increase in your paycheck.

While single filers can receive up to $400 a year from these changes, ($800 a year for joint filers), just how much extra money you will get depends on a number of factors, including your salary, marital status, and the allowances or exemptions you claim. Here are the highlights:

The full amount will be paid to single filers with modified adjusted gross incomes of $75,000 or less, ($150,000 or less for joint filers). Partial amounts will be paid to single filers earning between $75,000-$95,000, and to joint filers earning between $150,000-$190,000. Since the amount is based on modified adjusted gross income, any income earned in a foreign country, or in Puerto Rico or American Samoa, will also be factored in.
Anyone who is claimed as a dependent on another person's tax return is not eligible, even if the dependent works and earns income.
If lower-income workers do not make enough money to have taxes withheld, they won't receive any extra money in their paychecks but they can claim the amount when they file their 2009 tax returns.

In addition, it's important to make sure you aren't overpaid since you will have to repay the amount when you file your taxes next year, or have the amount deducted from your refund. Here are a few things to look out for:

If you are a joint filer and your spouse works... Both you and your spouse may receive extra money in your paycheck, resulting in an overage.

If you have more than one job... You may receive the amount from both of your employers, resulting in an overage.

If you receive investment or rental property income...If you are paid the amount from your employer, but the other income you earn increases your modified adjusted gross income above the eligibility limits, you may owe the IRS for the overage you receive.

Also, take note of when your company starts paying. The new withholding tables are structured so that payments starting in April will equal the appropriate amounts by the end of the year. If your payments started in your February or March paychecks, you may receive a bit more than you were due. And if your payments start later in the year and you receive less than you are entitled to, you can claim the difference on your 2009 tax return.

The above article is provided for informational purposes only. It's always a good idea to consult an accountant or tax professional if you have any questions about your specific situation. Let me know if you would like me to recommend someone.

The Week's Economic Indicator Calendar

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of April 06 - April 10

Date	ET	Economic Report	For	Estimate	Actual	Prior	Impact
Wed. April 08	10:30	Crude Inventories	4/03	NA		2840K	Moderate
Thu. April 09	08:30	Jobless Claims (Initial)	4/04	NA		669K	Moderate
Thu. April 09	08:30	Balance of Trade	Feb	-$36.5B		-$36.0B	Moderate

Goran Jovanovic
YOUR World Class Realty Team
Keller Williams Elite
Ph:954-243-7570
http://www.goranflorida.com

Mortgage News for the week of 03/30/09

YOUR World Class Realty Team,Keller Williams Elite — Mon, 30 Mar 2009 10:39:19 -0500

"IT REQUIRES A GREAT DEAL OF BOLDNESS AND A GREAT DEAL OF CAUTION TO MAKE A GREAT FORTUNE." Ralph Waldo Emerson. And last week's headlines contained a mix of items to inspire both boldness and caution. Here are the highlights.

Friday's news showed that consumers are being understandably cautious with their finances, as the Personal Savings rate remained above 4% once again in February and among the highest savings levels seen in a decade. The last five years can be seen in the chart. And notice it wasn't that long ago that the US had a negative savings rate - that's right, as a nation, we regularly spent more than we made.

Meanwhile, the government continues to make bold moves to help our economy. On Monday, Treasury Secretary Geithner unveiled a plan to remove toxic assets from financial institutions by using money from the $700 Billion TARP fund. The government will help mitigate the risk by offering private investors Billions of dollars in low-interest loans to help finance the purchases. Indeed, it's a bold strategy - let's see if it pays off!

And...there's room for cautious optimism on the economy, as good news was noted on several fronts last week. The housing market received good news when both Existing Home Sales and New Home Sales came in stronger than expected. Additionally, Durable Goods Orders for February came in better than expected, showing the first increase in six months, and the Core Personal Consumption Expenditure Index (Core PCE) showed inflation is presently at tolerable levels. Plus, the US Dollar received a boost when China said it will continue to purchase US Treasuries.

Bonds were jostled around mid-week, but home loan rates ultimately ended the week very close to where they began...near historic lows. Give me a call or email me if you want to discuss whether now may be the perfect time for you to add a bit to your own fortune through a smart purchase or refi.

WHEN IT COMES TO YOUR HOMEOWNER'S INSURANCE, GETTING THE MOST VALUE FOR YOUR MONEY IS ALWAYS A WISE CHOICE. CHECK OUT THIS WEEK'S SPECIAL MORTGAGE MARKET VIDEO VIEW FOR SOME IMPORTANT TIPS.

Forecast for the Week

A very important week is in store, with two important announcements due toward the end of the week. As you know, the "mark-to-market" accounting issue has been discussed in this newsletter many times, and this Thursday should be a big day on that front. The Financial Accounting Standards Board (FASB) is set to announce their ruling on whether to modify mark-to-market, and perhaps allow cash flow analysis to determine valuation of financial assets. Not a coincidence, the strength we have seen in Stocks over the past couple of weeks has been fueled by speculation that mark-to-market will be modified, thereby helping reinvigorate the financial system of our country. I will be watching very closely to see what happens and how the markets respond.

On Friday, the Labor Department will release their Jobs Report for March. Last month's report showed that 651,000 US jobs were lost in February, while revisions for the prior two months showed that an additional 161,000 jobs were lost between December and January. Given that last week's Initial Jobless Claims report showed that the number of people collecting state unemployment benefits has reached a record high - jumping to a seasonally adjusted 5.56 Million - it will be important to see what Friday's report reveals.

As you can see in the chart below, Bonds are currently trading between key technical levels, with a ceiling of resistance overhead, and a floor of support underfoot. But remember: Strong economic news - such as a positive change in the "mark-to-market" situation - will likely cause Stocks to rally, and Bonds and home loan rates may worsen in response. Please call me to discuss how the current rate situation may benefit or impact you.

Chart: Fannie Mae 4.5% Mortgage Bond (Friday Mar 27, 2009)

The Mortgage Market View...

Homeowner's Insurance: How to Get the Most for Your Money

The hurricanes and tornados we have seen over recent years have had an impact on homeowner's insurance rates, but there are several things you can do to make sure you get the most for your money. Check out this week's special video View for some great cost-saving tips.

Source: www.kiplinger.com

The Week's Economic Indicator Calendar

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of March 30 - April 03

Date	ET	Economic Report	For	Estimate	Actual	Prior	Impact
Tue. March 31	09:00	Consumer Confidence	Mar	28.0		25.0	Moderate
Tue. March 31	09:45	Chicago PMI	Mar	34.0		34.2	HIGH
Wed. April 01	08:15	ADP National Employment Report	Mar	-648K		-697K	HIGH
Wed. April 01	10:00	ISM Index	Mar	35.5		35.8	HIGH
Wed. April 01	10:30	Crude Inventories	3/27	NA		3300K	Moderate
Thu. April 02	08:30	Jobless Claims (Initial)	3/28	653K		652K	Moderate
Fri. April 03	08:30	Average Work Week	Mar	33.3		33.3	HIGH
Fri. April 03	08:30	Hourly Earnings	Mar	0.2%		0.2%	HIGH
Fri. April 03	08:30	Non-farm Payrolls	Mar	-656K		-651K	HIGH
Fri. April 03	08:30	Unemployment Rate	Mar	8.5%		8.1%	HIGH

Mortgage News for the week of 03/23/09

YOUR World Class Realty Team,Keller Williams Elite — Sun, 22 Mar 2009 19:44:19 -0500

"IF A WINDOW OF OPPORTUNITY APPEARS, DON'T PULL DOWN THE SHADE." Tom Peters. And last week, the Fed saw their regularly scheduled meeting as a window of opportunity to make a blockbuster announcement.

On Wednesday, the Fed announced that over the course of 2009, they will purchase an additional $750 Billion of Mortgage Backed Securities, as well as $300 Billion in long-term Treasuries, primarily to help shore up the housing market and keep home loan rates low. On the announcement, Bonds exploded higher, leaving Bond prices within whiskers of the best levels ever.

However, it's important to understand that while their actions may keep a lid on rates moving higher, they may not cause them to move dramatically lower... more on this in the Mortgage Market View article below. Additionally, due to many understaffed lenders and investors currently working at maximum capacity, we could once again see that improvements in Bond pricing may not all be passed through to our rate sheets.

Another factor that could impact whether Bonds and rates see significant improvement ahead are concerns of future inflation - the arch enemy of Bonds and home loan rates - brought on by all the recent aggressive moves by the Fed. While we know there is little inflation at the present time, the chatter of future inflation could have a negative impact on Bonds and home loan rates, or at least stifle any improvements.

Although the media is already spinning it differently, this is not a time to stay on the fence, hoping and waiting for lower rates. Home loan rates remain within inches of all-time historic lows, but may not necessarily move significantly lower based on this purchasing plan - waiting is a very risky move.

More good news last week, as Housing Starts for February came in better than expected and actually increased for the first time in eight months. In addition, Fed Chairman Bernanke stated the recession should end in 2009 and that he is confident of the long-term outlook for the US economy.

Also, an update on Mark-to-Market - the accounting rule which has had a devastating impact on the financial markets - which we have discussed many times, including in last week's issue. The Financial Accounting Standards Board (FASB) agreed that it will propose to allow companies to use more "leeway" in applying the accounting rules they use to value their assets, and planned a final vote for April 2nd. If this rule change is approved, it could result in better first-quarter financial statements for companies that have been affected by this rule. Stocks have been moving higher lately in the hopes that Mark-to-Market will be fixed, and a resolution could help Stocks further improve.

WANT TO KNOW MORE ABOUT WHAT THE FED'S ACTIONS REALLY MEAN FOR HOME LOAN RATES, AND WHAT OPPORTUNITIES MAY BE AVAILABLE FOR YOU? CHECK OUT THE MARKET VIEW BELOW FOR THE DETAILS.

Forecast for the Week

This week will be busy from start to finish, beginning with an opportunity to get a read on the housing market via Monday's Existing Home Sales Report and the New Home Sales Report following on Wednesday. With rates near historic lows and the tax credits available for first-time home buyers - and lots of buyers potentially ready to come off the sidelines - home purchases are likely to be picking up in the coming months.

Also on Wednesday, we will get an update on consumer and business consumption and buying behavior via the Durable Goods Report which shows data on items that are non-disposable, such as cars, furniture, appliances, games, cameras, business equipment, etc. And stay tuned for Thursday's Gross Domestic Product (GDP) Report, which is the broadest measure of economic activity, and Friday's Core Personal Consumption Expenditure (PCE) index, found within the Personal Income report. PCE is the Fed's favorite gauge of inflation, and given all the recent talk of potential inflation ahead, it will be interesting to see what this report shows.

Remember: Weak economic news normally helps Bonds and home loan rates improve, as money flows out of the Stock market and into the Bond market. As you can see in the chart below, Bonds were buoyed last week by the Fed's announcement regarding its Bond purchase program - but again, the improvements are not necessarily all making their way through to the rate sheets. As always, I will be watching closely to see what impact the inflation chatter and the news of the week has on Bonds and rates.

Chart: Fannie Mae 4.5% Mortgage Bond (Friday Mar 20, 2009)

The Mortgage Market View...

What the Fed's Latest News Means for You

As discussed above, the Fed announced last week that they are going to buy another $750 Billion in Mortgage Backed Securities, bringing their total commitment to $1.25 Trillion. But how does this really impact home loan rates?

The Fed's actions provide a demand for Mortgage Backed Securities, which should help keep the ceiling on home loan rates from moving much higher in the foreseeable future. That's good news for homebuyers who are seeing the bargains out there and understanding that now is the time to act.and also good news for those who can benefit from a refinance.

But.and this is very important.the Fed's actions do not necessarily mean home loan rates will move significantly lower.

It all depends on which Bond coupons the Fed purchases. If they purchase higher rate coupons - as they have been so far this year - their continued purchasing actions will likely keep a lid on rates, but not necessarily push them significantly lower. Rates are within inches of historic lows - so don't wait to miss a great opportunity to purchase the home of your dreams, or get more money back in your budget by a smart refinance.

There's never any pressure, so why not take five minutes to give me a call? We can discuss what makes sense for you right now - which might be just staying put in your current home loan. With a short conversation we can talk over the options, and you can then rest assured that given all the recent changes, you are making smart decisions on your home financing.

The Week's Economic Indicator Calendar

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of March 23 - March 27

Date	ET	Economic Report	For	Estimate	Actual	Prior	Impact
Mon. March 23	10:00	Existing Home Sales	Feb	4.45M		4.49M	Moderate
Wed. March 25	08:30	Durable Goods Orders	Feb	-2.0%		-5.2%	Moderate
Wed. March 25	10:00	New Home Sales	Feb	300K		309K	Moderate
Wed. March 25	08:30	Jobless Claims (Initial)	3/21	650K		646K	Moderate
Thu. March 26	08:30	Chain Deflator	Q4	0.5%		0.5%	HIGH
Thu. March 26	08:30	Gross Domestic Product (GDP)	Q4	-6.6%		-6.2%	Moderate
Thu. March 26	10:30	Crude Inventories	3/20	NA		1942K	Moderate
Fri. March 27	08:30	Personal Spending	Feb	0.3%		0.6%	Moderate
Fri. March 27	08:30	Personal Consumption Expenditures and Core PCE	Feb	NA		0.1%	HIGH
Fri. March 27	08:30	Personal Consumption Expenditures and Core PCE	YOY	NA		1.6%	HIGH
Fri. March 27	10:00	Consumer Sentiment Index (UoM)	Mar	56.0		56.0	Moderate
Fri. March 27	08:30	Personal Income	Feb	-0.1%		0.4%	Moderate

Goran Jovanovic
YOUR World Class Realty Team
Keller Williams Elite
Ph:954-243-7570
http://www.goranflorida.com

Mortgage News for the week of 03/16/09

YOUR World Class Realty Team,Keller Williams Elite — Mon, 16 Mar 2009 09:55:40 -0500

"I DO NOT THINK MUCH OF A MAN WHO IS NOT WISER TODAY THAN HE WAS YESTERDAY." Abraham Lincoln. Now more than ever, it's important for our country's leaders to heed yesterday's lessons and make wise choices today for our banking system and the economy. There were several key developments that happened on this front last week - here are some highlights.

On Thursday, the Securities and Exchange Commission's (SEC) Chief Accountant, the Financial Accounting Standards Board's (FASB) Chairman and the Deputy Comptroller for Regulatory Policy in the Treasury Department testified in front of the House Financial Services committee on the "Mark-to-Market" accounting rule. This rule was created so that there would be more transparency in business dealings, but fell prey to the law of "unintended consequences", and has played a major part in our current financial crisis. If you've been receiving this newsletter for awhile, you know this has been discussed several times - and we've even sent you a great explanatory video that breaks down what it all means, and why it has been such a major issue.

Because so many of you have been asking about this topic and great video - I am including the information and video once again in this week's issue - keep reading for the full scoop in the Mortgage Market View article below.

During Thursday's hearing, Congress demanded an answer for repairing this situation within the next three weeks, so right now, it looks like we will see some sort of coordinated action by both the FASB and the SEC to address the Mark-to-Market situation soon. Stocks certainly reacted positively to this news last week, as well as to Citigroup's announcement that it will not need more TARP money from the government. Stocks also liked the remarks from Federal Reserve Chairman Bernanke that the recession would be over by year-end if the banking situation is stabilized, and that major financial institutions would not be allowed to fail.

In other news, the Retail Sales numbers for February came in better than expected and the numbers for January were revised higher. This report is very volatile from month to month, but the last couple of readings have been encouraging. However, the job market continues to struggle as the number of people receiving unemployment reached a record 5.32 Million. And there was news that China is concerned the US may be spending too aggressively on the recession, which could lead to inflation down the road that would diminish the value of Bonds and China's investments in the US.

Overall, Bonds and home loan rates didn't worsen last week - even with the huge Stock rally - and ended the week relatively close to where they began.

Forecast for the Week

The middle of this week will be action packed with both scheduled economic reports and the Fed's next regularly scheduled meeting, including their policy statement and rate decision being delivered on Wednesday. With all the actions the government has been taking to stabilize our economy, it will be especially important to hear what the Fed has to say.and to see how the markets react.

This week also brings news on the inflation (or deflation) front, with Tuesday's wholesale measuring Producer Price Index (PPI) Report and Wednesday's Consumer Price Index (CPI) Report. Given China's concerns mentioned above about US spending to combat the recession and what that could mean for inflation, it will be important to see how these reports come in.

Also this week, we'll get a read on the new construction housing market with Tuesday's Housing Starts and Building Permits Reports. On Thursday, the Philadelphia Fed Report will be released. This monthly survey of manufacturing purchasing managers conducting business around the tri-state area of Pennsylvania, New Jersey, and Delaware is one of the most-watched manufacturing reports. We'll also have another Initial Jobless Claims report on Thursday, and with the number of people collecting unemployment reaching record highs as mentioned above, it will be important to keep an eye on this report, too.

Remember: Weak economic news normally helps Bonds and home loan rates improve, as money flows out of Stocks and into Bonds. As you can see in the chart below, Bonds were helped by important technical support and were able to hold onto recent gains even with the rally in the Stock market. I'll be watching closely to see how Bonds and home loan rates react to all of this week's events!

Chart: Fannie Mae 4.5% Mortgage Bond (Friday Mar 13, 2009)

The Mortgage Market View...

The current economic crisis is the top news story for nearly every media outlet. But until recently, one of the most important factors that led to this challenging market has also been one of the least discussed.

By popular demand, I am again sending along this highly sought after video and article, unpacking the "Mark-to-Market" accounting issue - with some help from Barry Habib. Barry is a highly respected expert on home loans, who serves as Chairman of MSS, an organization that helps me to stay informed as your trusted advisor.

With the help of some easy-to-understand terms and illustrations, you will learn what it has taken the media and politicians many months to take seriously and begin to address.

Link here now to get the real story: www.mortgagesuccesssource.com/go/markmarket/

The Week's Economic Indicator Calendar

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of March 16 - March 20

Date	ET	Economic Report	For	Estimate	Actual	Prior	Impact
Mon. March 16	08:30	Empire State Index	Mar	-32.0	-38.23	-34.65	Moderate
Mon. March 16	09:15	Capacity Utilization	Feb	71.1%	70.9%	71.9%	Moderate
Mon. March 16	09:15	Industrial Production	Feb	-1.2%	-1.4%	-1.9%	Moderate
Tue. March 17	08:30	Building Permits	Feb	510K		531K	Moderate
Tue. March 17	08:30	Housing Starts	Feb	453K		466K	Moderate
Tue. March 17	08:30	Core Producer Price Index (PPI)	Feb	0.1%		0.4%	Moderate
Tue. March 17	08:30	Producer Price Index (PPI)	Feb	0.4%		0.8%	Moderate
Wed. March 18	02:15	FOMC Meeting				0.00% - 0.25%	HIGH
Wed. March 18	10:30	Crude Inventories	3/13	NA		749K	Moderate
Wed. March 18	08:30	Core Consumer Price Index (CPI)	Feb	0.1%		0.2%	HIGH
Wed. March 18	08:30	Consumer Price Index (CPI)	Feb	0.3%		0.3%	HIGH
Thu. March 19	08:30	Jobless Claims (Initial)	3/14	NA		654K	Moderate
Thu. March 19	10:00	Index of Leading Econ Ind (LEI)	Feb	-0.6%		0.4%	Low
Thu. March 19	10:00	Philadelphia Fed Index	Mar	-40.0		-41.3	HIGH

Goran Jovanovic
YOUR World Class Realty Team
Keller Williams Elite
Ph:954-243-7570
http://www.goranflorida.com

Mortgage Market Update for 3/09/09

YOUR World Class Realty Team,Keller Williams Elite — Mon, 09 Mar 2009 07:03:30 -0500

"A good objective of leadership is to help those who are doing poorly to do well...And to help those who are doing well to do even better." - Jim Rohn. Let's hope that some of the actions that the Obama Administration took last week - intended to help millions of US homeowners - will show that kind of leadership for our country, as last week's Jobs Report and Stock Market losses showed that help is certainly needed.

Wednesday brought more details on the new "Making Home Affordable" program, which was created to help as many as 7 to 9 million homeowners who are making every effort to remain current on their mortgage payments. There are two important parts of this plan: The first of these is a program that is available to homeowners who have a solid payment history on an existing home loan owned by Fannie Mae or Freddie Mac, but who have been unable to take advantage of today's favorable rates because their homes have lost value. A second program, which involves loan modification, will help at-risk homeowners avoid foreclosure by reducing monthly payments. Give me a call, so we can help determine if either of these programs may be right for your situation.

Making it tougher for many to keep up with house payments, Friday's Jobs Report showed that 651,000 US jobs were lost in February, while revisions for the past two months showed that an additional 161,000 were jobs lost between December and January. December's decline was the largest since 1949. What's more, the US economy has now lost almost 4.4 Million jobs since the recession began in December 2007, which is the biggest employment malaise of any economic downturn in the postwar period. In addition, the unemployment rate soared to 8.1% versus expectations of 7.9%, the highest rate in over 25 years, as you can see in the chart below.

In other news from last week, the Dow fell below 7,000 for the first time since 1997, due to continued negative economic reports and headlines hitting the wires. Bonds and home loan rates were able to make some improvements last week as Stocks fell, and as a result, the week ended with Bonds and home loan rates slightly better than where they began.

At least we've got sunshine...And you know that daylight savings time happened on Sunday, March 8th. But do you know we're enjoying the extra daylight three weeks earlier than we used to? Learn why in this week's view below.

Forecast for the Week

The week ahead is a quiet one when it comes to scheduled economic reports being delivered, but with last week's plunge in the Stock market and the details of the Making Home Affordable program still being analyzed, it's unlikely the week ahead will be quiet overall.

In the way of economic news, Thursday will bring the Retail Sales Report for February. Consumers continue to rein in spending and many retailers continue to struggle, so it wouldn't be a surprise if this is a horrible report. It also wouldn't be a surprise for Friday's Consumer Sentiment Report to be a bit dismal as well. And given the current job market, Thursday's weekly Jobless Claims Report will be another one to watch.

Remember: Weak economic news normally helps Bonds and home loan rates improve, as money flows out of Stocks and into Bonds. As you can see in the chart below, Bonds and home loan rates reversed course and improved last week...and if the above mentioned reports are indeed negative, Bonds and home loan rates could build on their recent improvements during the coming week.

Chart: Fannie Mae 4.5% Mortgage Bond (Friday Mar 06, 2009)

The Mortgage Market View...

Spring Forward Began March 8

Daylight Saving Time (DST) began on Sunday, March 8, 2009. The way we refer to time zones also changes. For example, Eastern Standard Time (EST) becomes Eastern Daylight Time (EDT).

But remember, some areas of the United States don't use DST, such as Arizona, Puerto Rico, Hawaii, the US Virgin Islands and American Samoa.

More Sun... Daylight Saving Time Runs Longer

In case you hadn't noticed over the last two years, DST now begins earlier and runs longer. The extra time that we enjoy is actually the result of the Energy Policy Act, which President Bush signed into law in 2005 and went into effect in 2007. The Act changed the start date of DST to the second Sunday in March - three weeks earlier. It also moved the end date out one week to the first Sunday in November.

Benefits of Daylight Saving Time

Despite some concerns, Americans overwhelmingly like Daylight Saving Time. There is simply more sunlight in the evenings to enjoy the outdoors and get things done. Plus, additional hours of daylight can help save energy on a national scale - as much as 100,000 barrels of oil per day according to some estimates.

And brighter is safer. Studies have shown that the DST shift reduces traffic accidents. Additionally, a study by the US Law Enforcement Administration also determined that crime is consistently lower during DST, with violent crimes down as much as 10% to 13%. For many crimes, like mugging, darkness is a factor - so more light in the evening hours reduces these types of crimes.

Cons of Daylight Saving Time

Not everyone benefits from DST. For example, many farmers say that DST has a negative impact on their livestock's natural schedules. The airline industry also reports that it costs millions of dollars to adjust time schedules - and even then, airlines report numerous problems with international flight connections during the transition time since DST isn't followed uniformly worldwide.

Finally, since many electronic devices and computer programs are set to adjust to DST based on the old dates, they may not change automatically on March 8. So, you'll want to double-check all of your devices and confirm that the time is correct.

The Week's Economic Indicator Calendar

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of March 09 - March 13

Date	ET	Economic Report	For	Estimate	Actual	Prior	Impact
Wed. March 11	10:30	Crude Inventories	3/06	NA		-757K	Moderate
Thu. March 12	08:30	Jobless Claims (Initial)	3/07	640K		639K	Moderate
Thu. March 12	08:30	Retail Sales	Feb	-0.4%		1.0%	HIGH
Thu. March 12	08:30	Retail Sales ex-auto	Feb	-0.2%		0.9%	HIGH
Fri. March 13	08:30	Balance of Trade	Jan	-$38.2B		-$39.9B	Moderate
Fri. March 13	10:00	Consumer Sentiment Index (UoM)	Mar	56.3		56.3	Moderate

Goran Jovanovic
YOUR World Class Realty Team
Keller Williams Elite
Ph:954-243-7570
http://www.goranflorida.com

Mortgage News for the week of March 1st

YOUR World Class Realty Team,Keller Williams Elite — Mon, 02 Mar 2009 13:05:58 -0600

"BAD NEWS GOES ABOUT IN CLOGS, GOOD NEWS IN STOCKINGED FEET." Welsh Proverb. And while last week did have some negative economic reports clomping through the headlines, there was also some good news tiptoeing around.

The unemployment line is getting even longer, as Initial Jobless Claims showed that the number of people collecting benefits reached a record high of 5.11 million. Not surprisingly, Consumer Confidence fell to its lowest reading since records began in 1967. The sour report indicates that the fear of losing one's job has made the consumer more reluctant to spend.

Gross Domestic Product (GDP) is the broadest measure of economic activity - and for the 4th quarter of 08, came in worse than expectations and at its lowest reading since 1982. You can see the comparison for the last four years in the chart below.

The news on the housing front was also gloomy; as New Home Purchases dropped to the lowest level since data collection began in 1963. Existing Home Sales for January came in lower than expected; however, that number was probably influenced by buyers waiting to see what the government's Stimulus Plan might have in store for them.

The Treasury Department announced on Friday that they plan to take a 36% stake in Citigroup by converting $25 Billion of preferred shares into common stock. The move will dramatically dilute shareholder value, but should help bolster the struggling bank's capital base.

Some good news from Reuters, as they released the results of a survey of 47 professional forecasters, predicting that the economy will begin to recover in the second half of this year. Additionally, the Chicago Purchasing Managers Index was better than expected, and being a forward-looking indicator, gives another bright spot of hope down the road.

Despite the negative news, Bonds and home loan rates were not able to make improvements over the course of the week, and ended a bit worse than where they began.

MORE CLARIFICATION ON THE ECONOMIC STIMULUS PLAN...AND HOW IT MAY BENEFIT YOU! READ THE WEEK'S MORTGAGE MARKET VIEW BELOW FOR MORE DETAILS.

Forecast for the Week

The week ahead will be bookended with two very important economic reports, and could be volatile in between with more details on the Homeowner Affordability and Stability Plan due to be released on Wednesday.

Among the details to be released is information on whether loans that are in good standing, and which are already guaranteed by Fannie Mae and Freddie Mac, will be able to refi, even if the loan balance is 5% greater than the home's current value. This will determine the ability of many homeowners to benefit from lower rates.

Currently many homeowners would love to cut their monthly expenses with the lower home loan rates available today, but are unable to due to the drop in home values. This new provision could help many people solve that dilemma.

I will be watching this closely and would enjoy speaking with you more about this as details are released to see if this can benefit you.

Monday brings the details on the Fed's favorite gauge of inflation, the Core Personal Consumption Expenditure (PCE) index, found within the Personal Income report. Given the recent concerns on deflation, it will be interesting to see what this report shows.

On Friday, the Labor Department releases its Jobs Report for February. Last month's report showed that 598,000 jobs were lost in January, and that about 3.6 Million jobs have been lost since December 2007. Given the number of new Initial Jobless Claims filed last month, Friday's Jobs number probably won't be a pretty one.

Weak economic news normally helps Bonds and home loan rates improve, as money flows out of Stocks and into Bonds. However, Bonds and home loan rates worsened last week, despite the weak economic news, due to tough technical resistance and the enormous supply of Bonds being put out on the market. But as you can see in the chart below, an important floor of support kept Bonds and home loan rates from worsening further. I will be watching closely to see if Bonds and home loan rates can reverse course and find some improvement in the coming days.

Chart: Fannie Mae 4.5% Mortgage Bond (Friday Feb 27, 2009)

The Mortgage Market View...

Higher, Non-Jumbo Loan Amounts Extended

For those who are considering taking advantage of the $8,000 tax incentive for first-time homebuyers which is included in the president's economic stimulus bill, there is some more good news that could make doing so easier and more accessible.

An extension is now officially in place on the higher loan limits for mortgages in the tier that lies just below what is considered a "jumbo" loan.

First established last year, and now extended through the end of 2009, limits on this additional tier provide opportunities for many who are looking to either refi or, better yet, take the plunge into first time home ownership and grab a piece of the highly publicized $8,000 tax incentive.

Here are some key points about this higher loan limit extension, announced by the Fair Housing Finance Agency this past week:

The non-jumbo, middle tier of home loans begins at loan amounts greater than $417,000 for single-unit homes.
The top end for this tier is $729,750 for single-unit homes.
The rates for these loans will again be slightly higher than conforming loan rates, but less expensive than the standard "jumbo" loan rates.
This higher limit on the non-jumbo tier is available in 250 counties across the United States.

I can provide you with information about qualifying for the opportunities that are provided by the stimulus plan.

Speaking of qualifying, if you are not sure if you if you can take advantage of the $8,000 tax incentive, here are some examples to help you better understand the income limits and phase-out structure.

The $8,000 incentive starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000 and is phased out completely at incomes of $170,000 for couples and $95,000 for single filers.

To break down what this phase-out means, the National Association of Homebuilders (NAHB) offers the following examples:

Example 1: Assume that a married couple has a modified adjusted gross income of $160,000. The applicable phase-out threshold is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time homebuyer incentive to this couple, multiply $8,000 by 0.5. The result is $4,000.

Example 2: Assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer's income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible to reduce the tax liability by $2,800.

Remember, these are general examples. Borrows should consult a tax advisor to provide guidance relevant to their specific circumstances.

The Week's Economic Indicator Calendar

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of March 02 - March 06

Date	ET	Economic Report	For	Estimate	Actual	Prior	Impact
Mon. March 02	08:30	Personal Income	Jan	-0.3%		-0.2%	Moderate
Mon. March 02	08:30	Personal Spending	Jan	0.3%		-0.1%	Moderate
Mon. March 02	08:30	Personal Consumption Expenditures and Core PCE	Jan	0.1%		0.0%	HIGH
Mon. March 02	08:30	Personal Consumption Expenditures and Core PCE	YOY	NA		1.7%	HIGH
Mon. March 02	08:30	ISM Index	Jan	34.0		35.6	HIGH
Wed. March 04	02:00	Beige Book					HIGH
Wed. March 04	10:30	Crude Inventories	2/27	NA		717K	Moderate
Wed. March 04	10:00	ISM Services Index	Feb	41.3		42.9	Moderate
Wed. March 04	08:15	ADP National Employment Report	Feb	-613K		-522K	HIGH
Thu. March 05	08:30	Productivity	Q4	1.6%		3.2%	Moderate
Thu. March 05	08:30	Jobless Claims (Initial)	2/28	NA		667K	Moderate
Fri. March 06	08:30	Average Work Week	Feb	33.3		33.3	HIGH
Fri. March 06	08:30	Hourly Earnings	Feb	0.3%		0.3%	HIGH
Fri. March 06	08:30	Non-farm Payrolls	Feb	-615K		-598K	HIGH
Fri. March 06	08:15	Unemployment Rate	Feb	7.9%		7.6%	HIGH

Goran Jovanovic
YOUR World Class Realty Team
Keller Williams Elite
Ph:954-243-7570
http://www.goranflorida.com

Greener Grass Fast

YOUR World Class Realty Team,Keller Williams Elite — Mon, 02 Mar 2009 09:06:00 -0600

A lush, green lawn can enhance the beauty of your home and provide a pleasing setting for entertaining outdoors. What's the secret to obtaining one? In addition to vigilant weeding and trimming, it helps to keep these lawn care basics in mind:

Soil Condition

While conditions vary from region to region, a layer of organic matter will improve the condition of almost any type of soil. Likewise, most types of grass will benefit from nitrogen, phosphorus and potassium supplied through an annual dose of fertilizer.

Strategic Watering

Proper watering is important for a healthy lawn. Experts say that most people water too frequently, but with not enough water. It is best to water only when the grass needs it, and then to water slow and deep. Watering in this steady, penetrating manner is beneficial because it helps the grass develop a deep root system. Watering frequently and with less water, on the other hand, trains the roots to stay closer to the surface. As a result, the grass is less able to find moisture during periods of drought. When you do reach for the hose, it is best to do so early in the morning to avoid evaporation.

Grass Height

As a general rule of thumb, you should mow high, often and with a sharp blade. Longer grass takes in more sunshine, which helps develop a strong root system, fend off insects and disease, and retain more moisture. Most types of grass do best when maintained between 2½- and 3½-inches long. It is also best to mow frequently enough so that you never have to mow more than one-third of the blade's length. Never mow your lawn when it's wet and always use a sharp mower blade to prevent tearing and injuring the grass.

These are just a few of the basics of good lawn care. Consult with a professional at your local lawn and garden center for more advice on how to best care for your specific type of grass, and soon your lush lawn will make the neighbors green with envy.

Goran Jovanovic

YOUR World Class Realty Team

Keller Williams Elite

Direct: 954-243-7570

www.goranflorida.com

Greener Grass Fast

YOUR World Class Realty Team,Keller Williams Elite — Mon, 02 Mar 2009 09:05:27 -0600

Soil Condition

Strategic Watering

Grass Height

Goran Jovanovic

YOUR World Class Realty Team

Keller Williams Elite

Direct: 954-243-7570

www.goranflorida.com

Medicine Means Money

YOUR World Class Realty Team,Keller Williams Elite — Mon, 02 Mar 2009 09:04:41 -0600

In a time when many career fields are experiencing cutbacks and unemployment is on the rise, one field not only remains strong, but actually is quite lucrative.

With information from the U.S. Bureau of Labor Statistics, CNBC.com has compiled its 15 Highest-Paying Jobs and not surprisingly, a career in medicine tops the list; medical careers appear on the list not only at number one, but with only two non-medical jobs making the list, 13 other times as well.

Here is the complete list:

Anesthesiologists - $184,340 per year average

Surgeons - $184,150 per year average

Obstetricians and Gynecologists - $ 178,040 per year average

Orthodontists - $176,900 per year average

Oral and Maxillofacial Surgeons - $164,760 per year average

General Internists - $160,860 per year average

Prosthodontists - $158,940 per year average

Psychiatrists - $149,990 per year average

Family and General Practitioners - $149,850 per year average

Chief Executives - $144,600 per year average

General Dentists - $140,950 per year average

All Other Physicians and Surgeons - $142,220 per year average

General Pediatricians - $141,440 per year average

Airline Pilots, Copilots and Flight Engineers - $140,380 per year average

Podiatrists - $118,500 per year average

Goran Jovanovic

YOUR World Class Realty Team

Keller Williams Elite

Direct: 954-243-7570

www.goranflorida.com

Medicine Means Money

YOUR World Class Realty Team,Keller Williams Elite — Mon, 02 Mar 2009 09:04:00 -0600

In a time when many career fields are experiencing cutbacks and unemployment is on the rise, one field not only remains strong, but actually is quite lucrative.

Here is the complete list:

Anesthesiologists - $184,340 per year average

Surgeons - $184,150 per year average

Obstetricians and Gynecologists - $ 178,040 per year average

Orthodontists - $176,900 per year average

Oral and Maxillofacial Surgeons - $164,760 per year average

General Internists - $160,860 per year average

Prosthodontists - $158,940 per year average

Psychiatrists - $149,990 per year average

Family and General Practitioners - $149,850 per year average

Chief Executives - $144,600 per year average

General Dentists - $140,950 per year average

All Other Physicians and Surgeons - $142,220 per year average

General Pediatricians - $141,440 per year average

Airline Pilots, Copilots and Flight Engineers - $140,380 per year average

Podiatrists - $118,500 per year average

Goran Jovanovic

YOUR World Class Realty Team

Keller Williams Elite

Direct: 954-243-7570

www.goranflorida.com

Storage Solutions

YOUR World Class Realty Team,Keller Williams Elite — Mon, 02 Mar 2009 09:02:07 -0600

Always looking for a place to keep those magazines you haven't read yet? Tired of searching for your children's favorite toys amid the mess in their rooms? You're not alone. When asked what they would most like to change about their homes, the common answer from respondents is, "more storage."

Many new furniture designs include extra shelves and hidden compartments to meet increasing storage needs, but if replacing your furniture isn't in your budget, adding one or two space-saving pieces can be a big help.

Before shopping, think about your storage needs and measure your space. Ideally, you want a piece that maximizes storage without overwhelming the room.

Don't be afraid to bend the rules a little. For example, place a dresser in the dining room to organize table linens and dishes or set an armoire in an entryway to house coats and shoes.

You can also create more space in every room of your house with just a few simple, cost-effective solutions. Here's how:

Up, up, and out of the way. Shelves that reach all the way to the ceiling can really increase your storage space. Place items that aren't often-used on upper shelves.

Don't forget near the floor. The area beneath your kitchen or bathroom sinks can be ideal storage space. Use stackable bins with lids to keep items organized.

Or the back of the door. Used by every member of your household, the bathroom can quickly become cluttered with shampoo, lotions and cosmetics. Give each person a wooden hanger to hold his or her own towel and washcloth. Slip a cloth bag on the hanger to carry brushes and toiletries. When not using the bathroom, each person can keep his or her hanger on the back of their closet door.

From the garage to the kitchen. Pegboards have long been a clever storage solution for hanging tools in the garage or workshop. You can adapt this idea as a way to store your cooking utensils, measuring cups and other kitchen tools. Simply paint a pegboard and mount it on your backsplash or inside a cupboard door. This is also a great idea for children's rooms.

Pretty pots. A ceiling- or wall-mount pot rack is an attractive and practical way to store your favorite cookware.

And pretty boxes. Forget storing items in plain cardboard boxes; look for storage boxes with colorful designs that you can mix and match for an interesting arrangement. Trunks and storage ottomans are other appealing options to help clear the clutter and reclaim your space.

Goran Jovanovic

YOUR World Class Realty Team

Keller Williams Elite

Direct: 954-243-7570

www.goranflorida.com

Surviving a Layoff

YOUR World Class Realty Team,Keller Williams Elite — Mon, 02 Mar 2009 09:01:09 -0600

Unfortunately, job layoffs are a stark reality in times like this. Consider taking the following steps to protect yourself and be financially prepared:

Roll over your 401(k) into an individual retirement account. Unless you have no other option, do not liquidate your retirement account. If you do, you'll have to pay taxes on what you take plus a possible 10 percent withdrawal fee.

Raise the deductibles on your insurance policies. That way, you can lower premiums. Even if you are out of work, however, don't cancel your policies in an attempt to save money.

Spend sensibly to find a new job. Don't cut such job-hunting expenses as your Internet service fee or a newspaper subscription. Just remember that you'll have to spend some money, for things like telephone calls and printing your resumé, as you search for a new job.

Consider working as a temp. There is a market for part-time, temporary and freelance work in almost every job market. These kinds of assignments will put cash in your pocket while you look for something permanent. In fact, many temporary positions have the potential of turning into full-time employment.

Network more than ever. Don't be afraid to call on friends, family members and especially professional connections that you have made. These people can be very helpful in finding a new job.

Stay positive. If you are having difficulty finding another job, don't get discouraged. Times are tough. Try to learn from each interview and keep improving yourself.

Goran Jovanovic

YOUR World Class Realty Team

Keller Williams Elite

Direct: 954-243-7570

www.goranflorida.com

Mortgage News for 2/22/09

YOUR World Class Realty Team,Keller Williams Elite — Sun, 22 Feb 2009 11:46:42 -0600

"I WILL ACT NOW. I WILL ACT NOW. I WILL ACT NOW." Og Mandino. And acting now - more than once - is exactly what Congress and the President did last week, as two major economic plans were released that impact the mortgage and housing industries.

The first plan, the Economic Stimulus Plan for 2009, was finally approved by Congress and signed by President Obama. In addition, the President unveiled the initial details of his Homeowner Affordability and Stability Plan, which is designed to help stabilize the housing market and keep millions of borrowers in their homes. Many of the details of these plans are still being worked out, but read this week's Mortgage Market View article below for an overview of some benefits that may impact you.

In other news, the Stock market plunged last week on continued fears of a deepening recession, a failing banking system, weak corporate earnings and forecasts. The 113 year old Dow Jones Industrial Average closed the week down almost 7%, reaching a six-year low, which you can see in the chart below.

Not accounting for dividends, the Dow is at a level equal to what it was twelve years ago. Oftentimes Stock prices rebound once previous lows are tested...so let's hope that happens now, as the Stock market is due for a rally! The plunge in the Stock market did not lead to any significant improvement for Bonds or home loans rates last week, but the week ended with Bonds and home loan rates unchanged to slightly better from where they began.

THE NEW INITIATIVES THAT WERE ENACTED THIS WEEK COULD MEAN NOW IS A GREAT TIME FOR YOU TO TAKE ACTION ON YOUR HOME LOAN! CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW FOR MORE DETAILS!

Forecast for the Week

Several reports could cause some action in the markets this week. First, we'll get a look at the housing market with Wednesday's Existing Home Sales Report and Thursday's New Home Sales Report.

Thursday also brings the Durable Goods Report (i.e. items that are non-disposable, like cars, furniture, appliances, games, cameras, business equipment, etc), which will give us a read on consumer and business consumption and buying behavior. And we can't ignore Friday's Gross Domestic Product (GDP) Report, as GDP is the broadest measure of economic activity. Given the state of our economy, it might not be too much of a surprise if these reports are negative.

Remember: Weak economic news normally helps Bonds and home loan rates improve, as money flows out of Stocks and into Bonds. When Bond prices move higher, home loan rates move lower. As you can see in the chart below, Bonds and home loan rates continue to face some tough technical resistance overhead, hindering their path to improvement. I will be watching closely to see what happens this week.

Chart: Fannie Mae 4.5% Mortgage Bond (Friday Feb 20, 2009)

The Mortgage Market View...

'Stimulus' and 'Stability' Equal Help for Homeowners

Here is an overview of some benefits of the Economic Stimulus Plan for 2009 and the Homeowner Affordability and Stability Plan that may impact you.

Stimulus Plan - Tax Credit for Homebuyers

The $787 Billion stimulus bill is made up of tax cuts and spending programs aimed at reviving the US economy. Although the package was scaled down from nearly $1 Trillion, it still stands as the largest anti-recession effort since World War II. One of the major benefits of the plan is a tax credit for new homebuyers. According to the plan, first-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit.

It's important to remember that the $8,000 tax credit is just that... a tax credit. The benefit of a tax credit is that it's a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if you were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, you would owe nothing.

Better still, the tax credit is refundable, which means you can receive a check for the credit even if you have little income tax liability. For example, if you're liable for $4,000 in income tax, you can offset that $4,000 with half of the tax credit... and still receive a check for the remaining $4,000!

The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.

The tax credit is applicable to any home that will be used as a principle residence. Based on that guideline, qualifying "homes" include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principle residence also qualify. Buyers will have to repay the credit if they sell their homes within three years.

While details are sketchy - we will expect to get some clarity soon as to an additional tier of conforming loan amounts which had been first established in 2008. This tier of home loans are those greater than $417,000, and with a maximum that depends on the area, but is not greater than $729,750. These loans would be eligible for rates that are slightly higher than conforming loan rates, but less expensive than the standard "jumbo" loan rates.

Homeowner Affordability and Stability Plan

President Obama unveiled his plan to help stabilize the housing market and keep millions of borrowers in their homes. The Homeowner Affordability and Stability Plan includes two initiatives to help struggling homeowners. One is a refinancing program for homeowners with less than 20% equity in their homes, or who owe more than their home is worth. The second program attempts to lower monthly payments for homeowners at risk of losing their home. Many of the plan's details are still being worked out and will not be announced until March 4. Here is an overview of the plan's main components.

Refinancing Initiative

Under current rules, those families who own less than 20% equity in their homes have a difficult time refinancing and taking advantage of the historically low interest rates. This initiative is open to homeowners who have conforming loans which are guaranteed by Fannie Mae and Freddie Mac, and who owe up to 5% more than their home is worth.

According to the plan, "credit-worthy" or "responsible" homeowners can refinance their mortgage into a 30- or 15-year, fixed-rate loan based on current market rates. The refinanced loan, however, cannot include prepayment penalties or balloon payments. For many families, this low-cost refinancing may help reduce their mortgage payments by up to thousands of dollars per year.

As with the rest of the plan, details about this initiative will be released at a future date--including what, if any, credit score requirements will be included.

Stability Initiative

This initiative aims at providing help to individual families as well as entire neighborhoods by helping reduce foreclosures and stabilize home prices. It is intended to help homeowners who are struggling to afford their mortgage payments, but cannot sell their homes because prices have fallen significantly.

The goal of this initiative is simple: "reduce the amount homeowners owe per month to sustainable levels." To accomplish this, lenders are encouraged to lower homeowners' payments to 31% of their income by lowering their interest rate to as low as 2% or by extending the terms of the loan. In addition, lenders can also lower the principal owed by the borrower, with Treasury sharing in the costs.

Homeowners who are current on their mortgages but are struggling can still apply for this program. As such, this is one of the few programs designed to help homeowners who may face delinquency soon, but are current at the moment.

This initiative also includes a number of additional elements and incentives, including an extra incentive for borrowers to keep paying on time. The initiative will provide a monthly balance reduction payment that goes straight towards reducing the principal balance of the mortgage loan. As long as a borrower stays current on his or her loan, he or she can get up to $1,000 each year for five years.

Since the focus of this initiative is on helping families and neighborhoods, investment properties do not qualify.

The Week's Economic Indicator Calendar

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of February 23 - February 27

Date	ET	Economic Report	For	Estimate	Actual	Prior	Impact
Tue. February 24	10:00	Consumer Confidence	Feb	36.0		37.7	Moderate
Wed. February 25	10:00	Existing Home Sales	Jan	4.81M		4.74M	Moderate
Thu. February 26	10:00	New Home Sales	Jan	329K		331K	Moderate
Thu. February 26	08:30	Jobless Claims (Initial)	2/21	NA		627K	Moderate
Thu. February 26	08:30	Durable Goods Orders	Jan	-2.3%		-2.6%	Moderate
Thu. February 26	08:30	Crude Inventories	2/20	NA		-138K	Moderate
Fri. February 27	08:30	Gross Domestic Product (GDP)	Q4	-5.4%		-3.8%	Moderate
Fri. February 27	08:30	GDP Chain Deflator	Q4	-0.1%		-0.1%	Moderate
Fri. February 27	09:45	Chicago PMI	Feb	34.0		33.3	HIGH
Fri. February 27	10:00	Consumer Sentiment Index (UoM)	Feb	36.0		37.7	Moderate

Goran Jovanovic
YOUR World Class Realty Team
Keller Williams Elite
Ph:954-243-7570
http://www.goranflorida.com

Introductions Make a Difference

YOUR World Class Realty Team,Keller Williams Elite — Sat, 21 Feb 2009 18:51:04 -0600

Connie Schultz, a Pulitzer Prize-winning journalist, says the first time she heard the introduction, she laughed. She couldn't quite believe it. She was at a political gathering for her husband, Sherrod Brown, who was running for the Senate. The party chairman of the area stood up and introduced them in a booming voice: "Congressman Sherrod Brown - and his lovely wife."

Schultz was shocked by the cliché, but it happened nearly 100 more times over the next 10 months. Later when another county chairman introduced her as "Sherrod's lovely wife, Candy," she says she'd become so familiar with this "standard" way of introducing her that she ignored the fact he had gotten her name wrong as well. "I gave him points for originality and moved on," she says in her book ... And His Lovely Wife.

At some point, you will likely introduce people to one another and it's important to get three things right:

The names

The pronunciations of the names

The job titles of the individuals

Small errors at this stage can spur resentment or hurt feelings and set a bad tone for the future. Bear in mind that for many people, names and titles are the placeholders of their identity. Get those wrong and you've just taken something quite precious away from them.

Goran Jovanovic

YOUR World Class Realty Team

Direct: 954-243-7570

www.goranflorida.com

Keeping Key Employees

YOUR World Class Realty Team,Keller Williams Elite — Sat, 21 Feb 2009 18:49:59 -0600

With the unemployment rate on the rise, you may think that you don't need to be concerned with employee retention, but when you consider the cost of turnover, decreased productivity and recruiting expenses, you can see how losing one employee can quickly impact business.

Employees leave managers and supervisors more often than they leave jobs or companies. That's why your role in retention is so important. The following advice will help you take steps to keep employees:

Make your expectations known. Frequently changing an employee's duties can create stress and dissatisfaction because he or she never knows what to anticipate from one day to another.

Communication is key. Just as you need to be clear about your expectations, employees should feel free to ask questions or voice concerns without fear of recrimination. Provide a means for employees to share their ideas.

Be fair when it comes to choice assignments, raises or other perks of the job. Don't be hesitant to commend an employee if he or she deserves it, but realize these benefits rarely remain secret and it could impact other employees.

Goran Jovanovic

YOUR World Class Realty Team

Direct: 954-243-7570

www.goranflorida.com

Keeping Key Employees

YOUR World Class Realty Team,Keller Williams Elite — Sat, 21 Feb 2009 18:49:27 -0600

Make your expectations known. Frequently changing an employee's duties can create stress and dissatisfaction because he or she never knows what to anticipate from one day to another.

Goran Jovanovic

YOUR World Class Realty Team

Direct: 954-243-7570

www.goranflorida.com

Hurray for the Middle Class

YOUR World Class Realty Team,Keller Williams Elite — Sat, 21 Feb 2009 18:48:35 -0600

Despite economic troubles, you may be surprised to learn that, in a recent poll by the Pew Research Center, 53 percent of Americans describe themselves as middle class.

Many reported feeling stuck in their financial tracks; a majority of survey respondents said that in the past five years, they either haven't moved forward in life (25%) or have fallen backwards (31%).

And that may be true because while nearly eight-in-10 (79%) believe that it is more difficult now than five years ago for people in the middle class to maintain their standard of living, spending has not decreased. In fact, for the past two decades, middle-income Americans have been spending more and borrowing more.

Goran Jovanovic

YOUR World Class Realty Team

Direct: 954-243-7570

www.goranflorida.com

Hurray for the Middle Class

YOUR World Class Realty Team,Keller Williams Elite — Sat, 21 Feb 2009 18:47:28 -0600

Despite economic troubles, you may be surprised to learn that, in a recent poll by the Pew Research Center, 53 percent of Americans describe themselves as middle class.

Goran Jovanovic

YOUR World Class Realty Team

Direct: 954-243-7570

www.goranflorida.com

Top Tax Myths

YOUR World Class Realty Team,Keller Williams Elite — Sat, 21 Feb 2009 18:46:11 -0600

The tax code is complicated and changes frequently, so even if you think you understand it one year, the rules may be different the next.

Through the years, these changes and misunderstandings have morphed into myths; and these myths can cost you money. They may even lead to an audit. Here are four of the most common tax myths as explained by MSN® Money.

Myth: Students are exempt. Unfortunately, living on cafeteria pizza and study sessions does not qualify students for any special tax status. They can take advantage of certain tax credits like the Hope Credit and the Lifetime Learning Credit, but a student's earnings are taxable just like anyone else.

Myth: Working children cannot be claimed as dependents. Good news, if you provide more than half of the child's support, you can claim him or her as a dependent.

Myth: Sales tax is deductible. For most of us, sales tax has not been a valid deduction since 1986, but for purchases made in the course of business, the rule is if the item itself is deductible, the sales tax would be deductible as well.

Myth: Married people have to file a joint return. If you are married, you can file "Married Filing Separately." This usually results in having to pay more taxes. In some cases, however, it can be advantageous. For example, if one spouse has significant medical expenses.

Avoid getting caught in these myths or the many other pitfalls of the tax code by seeking the advice of a qualified professional.

Goran Jovanovic

YOUR World Class Realty Team

Direct: 954-243-7570

www.goranflorida.com

The 4 C's of Mortgage Lending

YOUR World Class Realty Team,Keller Williams Elite — Sat, 21 Feb 2009 18:45:27 -0600

In years past, a steady job and good credit were all you needed to realize the dream of homeownership. But due to the current state of the mortgage industry, today's lenders are forced to be much pickier.

If you are planning to purchase a home or refinance your mortgage, you may find that you will need more than a paystub in order to qualify. Here are the 4 C's that lenders look for on a prospective borrower's loan application:

Capacity - refers to the borrower's ability to cover the interest and principal due on the loan, plus the cost of maintenance, homeowner's insurance and property tax.

Capital - indicates the amount of the borrower's down payment as a percentage of the value of the home.

Character - alludes to the borrower's record of paying debts as seen by his or her credit rating.

Collateral - is the soundness of the investment as demonstrated by the aforementioned qualities, the value of the home as determined by a professional appraisal and the agreed-upon purchase price.

Mike Mueller, a mortgage broker in San Francisco, explains the way lenders look at prospective borrower's as a chair.

"If you're strong in all four corners, you're on a chair," Mueller says. "That's pretty stable. In theory, I can take away one of the corners - maybe your credit score has some dings or you need a stated-income loan - but the other corners are still pretty solid, so you have a tripod. That's not as stable as a chair, but it will still stand up. If you take away another corner, you have a ladder. Ladders don't work anymore."

To aid this process, your lender will require paperwork that substantiates your ability to repay the loan. At the minimum, you should be prepared to provide a month of paycheck stubs, two years of W-2 forms and three months of bank account statements.

If you are self-employed or earn more than 25 percent of your income from commissions or bonuses, you may need to provide additional tax returns.

And if you're divorced, the lender will want a copy of your settlement to ascertain how much alimony or child support you're obligated to pay or are entitled to receive and the duration of those payments.

The dream of becoming a homeowner is still attainable; you may just have to work a little harder to reach it.

Goran Jovanovic

YOUR World Class Realty Team

Direct: 954-243-7570

www.goranflorida.com

When I should place my home on the market? Q&A

YOUR World Class Realty Team,Keller Williams Elite — Mon, 09 Feb 2009 10:48:01 -0600

Q&A

We’re getting ready to relocate and we may have waited too long to put our home on the market. If it doesn’t sell before we move, it will be vacant when prospective buyers come to look. Will this hinder the sale?

Ideally, you should leave some furnishings in your home to help prospective buyers imagine how their belongings will look in it. An empty home can make it difficult for buyers to get a feel for the size of the rooms and the flow of the floor plan. This is why many builders go to the expense of renting furnishings for a vacant home before they put it on the market.

On the other hand, too much furniture can make your home less appealing. Many lived-in homes need to be cleared of clutter before they can be marketed.

If you can arrange to leave a few items in the main living spaces, your home will be more welcoming to buyers while it is on the market.

If you have not listed your home yet, call me today. As your trusted agent, I would be happy to answer all of your real estate questions and help make your move a good one. Let's get started

Goran Jovanovic

Your World Class Realty Team

Keller Williams Elite

www.goranflorida.com

The Unvarnished Truth

YOUR World Class Realty Team,Keller Williams Elite — Mon, 09 Feb 2009 10:42:41 -0600

Thanks to an increased awareness of air quality and environmentally-friendly products, many wood finish manufacturers offer "green" options that are low in volatile organic compounds (VOCs). You can now enhance and protect the beauty of your wood without the use of harsh chemicals.

To better understand your choices when it comes to preserving your wood, you first need to know the components that make up many finishes. These include:

Pigments or dyes to add color and hide flaws.

Resins or binders like acrylics, vinyls, alkyds, epoxies, polyurethanes and oils. These determine the finish's hardness and resiliency.

Solvents or thinners which maintain the finish in a liquid form making it easier to apply.

Wood finishes may also contain various other additives that affect drying time, increase durability and prevent mold growth. These additives are often the source of higher VOCs.

There are two types of wood finish – one that forms a thin coating on the surface of the wood and one that soaks into the wood. Film finishes include varnish, shellac, lacquer and stains. Penetrating finishes are often oils.

For a healthier finish, look for one that uses pure oils and other natural ingredients rather than chemicals like toluene, xylene and acetaldehyde. Water-based finishes are the best bet for lower air emissions and overall improved health concerns.

Goran Jovanovic

YOUR World Class Realty Team

Direct: 954-243-7570

www.goranflorida.com

How to find Recession-Proof House?

YOUR World Class Realty Team,Keller Williams Elite — Mon, 09 Feb 2009 10:37:51 -0600

If you have watched the news or read a paper in the past several months, you've likely heard tales of woe about the real estate industry and the economy in general. But there's one thing that agents know ... good homes sell, even in a slow market.

If you're thinking of buying a house, now is an ideal time. To get the most for your money, here are a few guidelines you should follow when looking at homes:

Location, location, location. Agents love this mantra because it always remains true. One of the most important aspects of a property's value is its location. Location, however, includes more than just a picturesque view; it also encompasses the neighborhood atmosphere, quality of schools, crime rate, accessibility, and public services.

To get a true feel for the neighborhood, visit the area during various times of the day. Try to be aware of traffic patterns and noise and activity levels. Are there barking dogs or honking horns?

To learn more about neighborhood safety and the schools, you can do an Internet search or contact the local police department and board of education.

Also keep in mind the distance to nearby parks and playgrounds, hospitals, fire and police departments, cultural opportunities, grocery stores and other shopping areas.

Good, but not the best. Compare the property to other nearby houses. The ideal home to purchase is one that is in good condition, but maybe not the biggest or best. The reason? Better homes raise the value of lesser homes on the block.

Be sure to have a qualified professional perform a thorough inspection of the property before purchasing to discover any defects with the home.

Choose classic over trendy. Just like clothing and music, housing goes through stylistic changes. Of course, you want a home that appeals to your personal sense of style, but a house that is wildly different from surrounding houses may be harder to sell in the future. Think timeless quality when shopping for your home.

If you're ready to begin looking, call me. With my knowledge and a comparable market analysis on your side, we can find a home that will meet your needs and hold its value for years to come.

Goran Jovanovic

YOUR World Class Realty Team

Keller Williams Elite

Direct: 954-243-7570

www.goranflorida.com

Market Update

YOUR World Class Realty Team,Keller Williams Elite — Mon, 09 Feb 2009 09:57:45 -0600

THEY SAY "NO NEWS IS GOOD NEWS"...and that sentiment was particularly true last week, as several pieces of news that arrived were far from good.

On Friday, the Labor Department reported that 598,000 jobs were lost in January. This was worse than expectations of 540,000 jobs lost, and is the worst number since December 1974. Overall, about 3.6 Million jobs have been lost since December 2007, with nearly half of them in just the past three months. And you can see this clearly in the chart below, which looks unusual because it's measuring a negative number, for something that is normally reported as a positive (i.e. the number of jobs created). The rate of unemployment jumped to 7.6%, but the number of part-time workers increased dramatically as well. Many part-time workers would rather be full-time, but are simply taking what they can get. Added up, the number of underutilized workers now represent over 15% of the workforce overall. Let's hope the Stimulus Plan spurs some job growth.

And with last Monday's news that the Personal Consumption Expenditure (PCE) index reported its smallest gain in five years, the argument of inflation being a threat to the economy has taken a back seat for now. While that may sound like good news, the bigger topic for the moment is the threat of deflation in the near term. Why is deflation considered worse? Deflation kills the over-all economy, as there is no incentive to spend today when prices look as if they'll be getting cheaper in the future. This consumer mind-set obviously destroys product sales, and in turn, adds to the already dismal amount of job losses. If deflation takes hold, the fear is that it can lead to a devastating economic cycle.

However, there was some possible good news from last week. There was renewed talk about relaxing the "mark-to-market" accounting rules, which is not only vital to the economy, but also to the mortgage industry as lenders need the ability to lend for the mortgage and housing industry to recover and thrive. "Mark-to-Market" rules led to the failure of many financial institutions that really weren't in bad shape, but simply made them appear to be over leveraged as they were forced to value their assets against distressed institutions selling assets at steep discounts. It will be important to watch this news story in the weeks ahead.

And when all was said and done, the news of the week wasn't so horrible for Bonds and home loan rates, as they ended the volatile week only slightly worse than where they began.

HAVE YOU BEEN THINKING OF BUYING A HOME OR REFINANCING YOUR LOAN? CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW TO MAKE SURE YOU AVOID A VERY COSTLY MISTAKE!

Forecast for the Week

This week is a quiet one when it comes to scheduled economic reports being delivered, but there's still plenty of news that could shake the markets, including updates on the Stimulus Plan still making its way through Congress, as well as the aforementioned mark-to-market rule. It should be noted that Stock prices, especially within the financial sector, have reacted very well anytime there is a mention of a possible relaxation of mark-to-market accounting.

In the way of economic reports, Thursday will bring the Retail Sales Report for January. Since many retailers are still struggling, as consumers continue to rein in spending, it wouldn't be a surprise if this is a horrible report...which could be friendly for Bonds and home loan rates. It also wouldn't be a surprise for Friday's Consumer Sentiment Report to be horrible as well. And given the current job market, Thursday's weekly Jobless Claims Report will be another one to watch.

Remember: Weak economic news normally helps Bonds and home loan rates improve, as money flows out of Stocks and into Bonds. As you can see in the chart below, Bonds and home loan rates have lost some ground and worsened in recent weeks. I will be watching closely to see what happens this week.

Chart: Fannie Mae 4.5% Mortgage Bond (Friday Feb 06, 2009)

The Mortgage Market View...

AVOID THIS COSTLY MISTAKE

If you've been following the financial news, you've probably heard that the Fed's been buying Mortgage Backed Securities and will continue to do so as needed. Unfortunately, some media outlets have picked up on the news and mistakenly reported that these purchases will continue to cause rates to drop lower into the summer.

But is that really what it means? No.

The truth is, the Fed has been buying Mortgage Bonds. BUT... more precisely, they're buying a lot of FNMA 30-yr 5.0% and 5.5% Bonds. Many of the mortgages in these pools are outstanding home loans with rates between 6.0% and 6.5%, as the rate that a borrower pays is different than the coupon rate given to an investor buying into that mortgage pool, with the difference being taken by Wall Street firms and government agencies. The loans in these pools the Fed is buying hand over fist are likely be refinanced and paid - because current rates make it very attractive to refinance a loan over 6.0% - and thus giving the Fed a quick recoup on some of their investment.

Bottom line: The Fed's purchase of higher rate coupons will not necessarily help rates to move lower, as their actions do not impact the loans being originated at today's low rates.

The Problem Is...

Many consumers are in situations where they can refinance now and save hundreds of dollars a month on their mortgage payments. But when they hear the media throwing around teases of lower rates ahead, they decide to hold off on making the decision to save, in the hopes of gaining a few more dollars of savings per month if a lower rate came their way. Of course, while they're waiting, rates could turn higher - and this window of opportunity could pass them by entirely.

Here's the Clincher.

Even if consumers are ultimately able to time the market perfectly and save another few bucks per month, they could still end up losing. That's because while they delayed, they lost the savings each month they could have gained by taking action sooner. In other words, they may have lost hundreds of dollars for every month they waited. So even if they got lucky and obtained the rate they were looking for, it could take years to make up what they lost by waiting.

I don't want anyone to miss an opportunity by either waiting or misunderstanding the media headline. Let's talk further on this. Call or email me, and let's discuss what this might mean for you.

The Week's Economic Indicator Calendar

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of February 09 - February 13

Date	ET	Economic Report	For	Estimate	Actual	Prior	Impact
Wed. February 11	08:30	Balance of Trade	Dec	-$37.0B		-$40.4B	Moderate
Wed. February 11	10:30	Crude Inventories	2/06	NA		NA	Moderate
Thu. February 12	08:30	Jobless Claims (Initial)	2./07	NA		NA	Moderate
Thu. February 12	08:30	Retail Sales	Jan	-0.3%		-2.7%	HIGH
Thu. February 12	08:30	Retail Sales ex-auto	Jan	-0.4%		-3.1%	HIGH
Fri. February 13	10:00	Consumer Sentiment Index (UoM)	Feb	61.5		61.2	Moderate

Goran Jovanovic
YOUR World Class Realty Team
Keller Williams Elite
Ph:954-243-7570
http://www.goranflorida.com