Greg's Blog

Will FHA Save the Day?

Greg Vogel (The Financing Group) — Fri, 13 Jun 2008 11:26:33 -0500

A few years back, FHA loans accounted for 3% of transactions. Yesterday, my title guy said he's seeing FHA accounting for almost 70% of the transactions in the last few months. Dang!

What is FHA?

*Federal Housing Administration - Government program created to foster homeownership.

*FHA's allows individuals to qualify who have been previously denied for a home loan by conventional underwriting guidelines

*FHA insures mortgage loans in case of default

Why is FHA so popular? Well, let me tell you!

FHA rates are generally .25 to .375% lower than conventional mortgage rates!
Mortgage Insurance is only around 1/2 the monthly fee as private mortgage insurance with conventional loans.
FHA is not credit driven! With a conventional loan and bad credit, your rate is going to be sky high! FHA doesn't alter their rates like conventional does.
Get an FHA loan with a 580 FICO score!
FHA goes to high LTV's (97%) and works with most down payment assistance programs.
It is very easy to structure 100% financing and true no-money-down deals with FHA.
FHA allows for unlimited gift funds from family, employers, non-profits, churches, etc.
FHA allows for more flexibility with underwriting guidelines. I just has a borrower approved at a 59% back end DTI!
FHA is not affected by declining market policies.
FHA works with most down payment assistance programs: seller funded (i.e., Nehemiah), state/federal, local/county/city, and other nonprofits!

Did you know that the seller, builer, real estate agent can contribute up to 6% towards closing costs & prepaids?!

Did you know that they can also contribute up to 3% towards down payment assistance?!

This totals 9% concessions!

Creative Marketing for Listings

DON'T lower your sales price - offer incentives!

◦Seller to contribute down payment and closing costs

◦Prepay HOA

◦Buy down Interest Rate

"Buy this house with no money down!" [Yes, you can structure deals so the borrower gets their earnest money back at closing.]

Market Update: Rates Headed Up for Good?

Greg Vogel (The Financing Group) — Thu, 29 May 2008 12:25:42 -0500

Just wanted to keep you on the cutting edge of what's going on in the mortgage market, so you can better serve your clients. I thought today would be a good day for an update as things have the potential for shifting. Read on....

Mortgage Rates are determined by Bonds that are bought and sold on Wall Street. When bonds fall, rates go up, and vice versa. Today, bonds dropped below a very important level of support, the 200-day Moving Average. This has only happened on three separate occasions in the past three years. This tells us that, barring a timely reversal, we are likely seeing a shift in the market towards higher interest rates in the future.

In a nutshell, some things fueling the poor performance in bonds are serious inflation concerns, better-than-expected economic data coming out, and a lack of investors' demand for buying bonds and Treasury Notes from the United States.

Yesterday was not a good day for mortgages, and bond yields, as the 10-year note pushed through 4.0% and prompted mortgage selling. This pushed rates .375% higher just this morning.

Just today, the GDP report came in higher than expected. Jobless Claims were stable and near expected levels, indicating the labor market is doing okay. Later today, the Treasury will auction off $19 Billion in 5-year Notes at 1:00pm ET. Yesterday's 2-year Note auction wasn't received well by investors and was part of the reason for Bonds moving lower. Today's auction, if not well received, could once again hurt bonds. At 2:30pm ET, Fed Chairman Ben Bernanke is scheduled to speak about liquidity provisions at a risk transfer mechanism conference in Basel, Switzerland. This speech could potentially move the markets also.

Today's Rates:

Current FHA 30 Yr. Rate: 6.0%

Current 30 Yr. Conventional Rate: 6.25%

5 Yr. ARM Rate: 5.5%

Overall, just an update about where it appears the market is heading. As we all know in our industry, things could change tomorrow.

Economic Meltdown?

Greg Vogel (The Financing Group) — Mon, 28 Apr 2008 19:32:45 -0500

Today as I was checking my email, I saw several notices that gave me a little chill.

It appears that several major lenders are still having liquidity issues. It looks like Wells Fargo is shutting down more and more products, along with other big lenders like Wachovia, rumored to be shutting down wholesale divisions. I know this isn't new news, but the fact that it keeps on coming disturbs me a bit.

It is becoming clear that the problems are far from over. If you haven't checked out www.ml-implode.com, check it out. This site keeps tabs on all the mortgage companies that have 'imploded' or are in trouble.

I met with an economist about a month ago who had some pretty crazy ideas.

He talked about the FED continuing to print and print and print money to bail us out of this economic crisis....basically pushing the problems of the past 10 years forward and forward. We'd devaluate our $ so much that it'd end up hurting us in the end. Combine this with the energy crisis, real estate meltdown, loss of jobs, inflation, baby boomers retiring, consumerism mindset, [insert calamity here], and we're in for a perfect storm!

This particular economist thinks the U.S. economy is going to have to RESET. We're causing ourselves to implode and we literally will have to start over and base everything off the gold standard.

Is this happening? Hard to say. There's too many signs pointing in both directions. The real questions though, is 'COULD this happen'? I think there's a possibility. I'll tell you this, I just bought shares of GOLD!

Investment Club of the Rockies (ICOR)

Greg Vogel (The Financing Group) — Mon, 21 Apr 2008 20:54:24 -0500

Come check out the Investment Club Of the Rockies (ICOR), serving those eager to network, learn and engage in building wealth and relationships.

The Investment Club Of the Rockies was created to bring together a community of like-minded individuals and businesses, in order to combine our efforts and share our knowledge to enrich lives, grow wealth, and liven spirits.

ICOR seeks to become a reliable source for solid, truthful information without the hype. It is a venue where investors of all experience levels can connect and become educated on the many different ways to achieve financial freedom.

Our organization is open to any and all interested in creating wealth and expanding their network of investors, entrepreneurs and professionals. Our goal is to help members gain practical knowledge of real estate investment through education, discussion, and networking.*

With members consisting of real estate agents, mortgage brokers, attorneys, accountants, property managers, renovation specialists, appraisers, bankers, commercial investors and first time landlords, as long as the interest to drive and succeed is there, ICOR can help you surpass even your own expectations.

We teach, learn from each other, share opportunities, and enjoy ourselves while we strive to grow individually and as a network.

ICOR meets the 4th Thursday each month at the Best Western Hotel & Conference Room located at the intersection of I-25 and Hwy 34 in Loveland, CO.

*This organization is focused primarily on real estate investing but is also open to other means of creating passive income and wealth.

Weekly Market Update

Greg Vogel (The Financing Group) — Mon, 10 Mar 2008 09:42:19 -0500

Last Week in Review

"I'M GOING OFF THE RAILS ON A CRAZY TRAIN..." OZZY OSBOURNE And speaking of going off the rails crazy...Bonds and home loan rates just experienced one of the most volatile, crazy weeks ever seen, with fixed home loan rates rising by about .375% by the time the smoke cleared.

During the first four days of last week, Bonds underwent a crazy 313 basis point sell-off - more than they sometimes move over the course of six months. Why the insane action? Uninspiring commentary from Federal Reserve officials, renewed fears of inflation...and another very interesting story playing out last Thursday. Losses from The Carlyle Capital Group and Thornburg Mortgage decreased their capital to the point where their financial backers had asked for cash back in the way of a "margin call". What does this mean?

Imagine a home that received a loan for 50% of the value...but a provision in the loan stated that under no circumstances could the equity fall below 50%. And the home would need to be appraised every day to evaluate this. If the home lost significant value, the lender would be entitled to an immediate payment to retain the 50% equity position. So if the home did indeed decline in value, the lender would make a call for capital to make sure their 50% margin of loan-to-value remains intact...hence the name margin call. If the homeowner had the cash to meet this call - all is well. But if the homeowner did not have the cash, the only way to satisfy the lender would be a sale of the home. And that is basically what Carlyle Capital Group and Thornburg Mortgage had to do last Thursday...they didn't have enough cash on hand to meet their margin call, so they were forced to sell home loans that they were hold ing. This flood of mortgage paper on the market pushed Mortgage Bond prices lower...much lower.

The week was shaping up to be one of the worst in history for Bonds and home loan rates - but then, remembering that weak financial news is good for Bonds and home loan rates, Friday's utterly dismal monthly Jobs Report came to the rescue. On the report that there were a net loss of 63,000 jobs in the US last month - as well as negative revisions to previous months reports - Bonds rocketed back higher, at least enough to erase the previous day's losses, but still ended significantly worse off for the week overall.

"I'D GLADLY PAY YOU TUESDAY FOR A HAMBURGER TODAY"...BUT DID WIMPY REALLY EVER PAY POPEYE BACK? OR DID POPEYE SOMEHOW GET OUT OF MAKING THE LOAN IN THE FIRST PLACE? IF YOU'VE EVER HAD A FRIEND OR FAMILY MEMBER HIT YOU UP FOR MONEY, YOU KNOW IT CAN BE AWKWARD. READ THIS WEEK'S MORTGAGE MARKET VIEW FOR SOME TIPS ON HOW TO HANDLE THOSE APPEALS.

Forecast for the Week

And don't think the wild ride is over...Bonds and home loan rates are probably not pulling into the station just yet, so stay strapped in and keep your hands on the safety bar. Another week of potential volatility lies ahead, with several key economic reports due for release, including Retail Sales, Initial Jobless Claims, Consumer Sentiment and the inflation-measuring Consumer Price Index.

Remembering that when Bond prices move lower, home loan rates move higher - the chart below shows just what kind of dramatic volatility has been seen of late. The 200-day Moving Average shown in blue has traditionally been a very strong "floor of support" or "ceiling of resistance", depending on which side of the line Bonds are trading. Last Thursday's action saw a deep dip below this benchmark line in the sand - but Friday's strong positive move helped Bonds power their way back above the line.

The news in the days ahead will dictate which side of this important line Bonds will head next, and could determine the trend for the next several weeks...and perhaps even months.

Chart: Fannie Mae 5.5% Mortgage Bond (Friday Mar 07, 2008)

The Mortgage Market View...

NEITHER A BORROWER NOR A LENDER BE?

Ever have a friend or family member ask for a loan? It can be awkward, and for many the knee-jerk reaction is to just pull out the checkbook. But having the funds available to extend a loan is often not the point when it comes to lending money... it's knowing when or if you will ever receive your hard earned funds back.

According to a Federal Reserve survey, over 8% of Americans have loans that have been extended to friends and family. By some estimates, these loans total a whopping $89 billion and an eyebrow-raising default rate of 14%, versus just 1% for those who borrow from a bank. So before you decide to play banker with your friends and family, consider these steps to help avoid a potentially ugly situation.

Don't Commit Right Away. When asked for a personal loan, don't say yes right away, especially if the sum of money is large. It has been said that "quick to borrow is always slow to pay." So while you want to show compassion for the friend or family member and tell them you would like to help, explain that you need a few days to review your financial situation and make a decision. Perhaps another solution will come to them in the meantime.

Just Say No. If possible, try to avoid lending the money. Statistics suggest that the risk of not getting repaid is very high, which could be damaging to your relationship. HOWEVER... before you blurt out a blunt "NO," consider the amount requested, provide an explanation that will not hurt your relationship, and offer to help in a non-financial way. Or consider giving a smaller amount as a gift, with no expectations of repayment. This allows you to be generous on your own terms, and removes the potentially heated issue of non-repayment.

Be Specific. If you do decide to extend a loan, sit down with your friend or family member and set expectations. And don't beat around the bush... be very specific about the term of the loan, interest rate, payment plan, even the penalty that will be incurred should a payment be missed.

Get It In Writing. Always put the terms in writing. Seven out of ten personal loans are not put in writing... but again, consider the markedly higher default rate of non-documented loans. A written agreement reinforces that you are serious about the repayment terms discussed, and it prevents any potential misunderstandings. Promissory notes can be purchased online at http://www.nolo.com/ for a reasonable price. If the loan is large or complex it may be most beneficial to have an attorney draw up an agreement. Make sure the loan papers are filed away in a safe location, and then keep good records.

One important note, if the loan is in excess of $10,000 or the money will finance income-producing activities, the IRS expects you to charge a certain amount of interest...and claim it as taxable income, of course. To find the current rates, visit http://www.irs.gov/ and search for AFR (Applicable Federal Rates). You can also contact your trusted CPA for advice--or if you don't have one, ask me--I may be able to provide a referral.

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 10 - March 14

Date	ET	Economic Report	For	Estimate	Actual	Prior	Impact
Tue. March 11	08:30	Balance of Trade	Jan	-$59.5B		-$58.8B	Moderate
Wed. March 12	10:30	Crude Inventories	3/08	NA		-3056K	Moderate
Thu. March 13	08:30	Jobless Claims (Initial)	3/08	360K		351K	Moderate
Thu. March 13	08:30	Retail Sales	Feb	0.1%		0.3%	HIGH
Thu. March 13	08:30	Retail Sales ex-auto	Feb	0.2%		0.3%	HIGH
Fri. March 14	08:30	Consumer Price Index (CPI)	Feb	0.3%		0.4%	HIGH
Fri. March 14	08:30	Core Consumer Price Index (CPI)	Feb	0.2%		0.3%	HIGH
Fri. March 14	10:00	Consumer Sentiment Index (UoM)	Mar	70.5		70.8	Moderate

The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial services and other professionals only and is not intended for consumer distribution. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is not without errors.
As your trusted advisor, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.
In the unlikely event that you no longer wish to receive these valuable market updates, please USE THIS LINK or email: greg@thefinancinggroup.com
If you prefer to send your removal request by mail the address is:
Greg Vogel
3615 Mitchell Drive Fort Collins, CO 80525

Mortgage Market Guide, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated. Mortgage Market Guide, LLC does not grant to you a license to any content, features or materials in this email. You may not distribute, download, or save a copy of any of the content or screens except as otherwise provided in our Terms and Conditions of Membership, for any purpose.

Weekly Market Update: Gentle Ben Claws Stocks, Cuddles Bonds

Greg Vogel (The Financing Group) — Mon, 03 Mar 2008 11:29:42 -0600

Last Week in Review

"I DON'T MEASURE A MAN'S SUCCESS BY HOW HIGH HE CLIMBS...BUT HOW HIGH HE BOUNCES WHEN HE HITS BOTTOM." General George S. Patton And the General himself would certainly consider Bonds to be a success last week, as they moved lower to hit a technical "bottom" at the 200-day Moving Average, but then bounced significantly higher throughout the course of the week, helping fixed home loan rates improve by about .25 to .375%.

What caused all the activity? Remember that weak economic news tends to be bad for Stocks, but good for Bonds and home loan rates, as money flows out of Stocks and into Bonds. And last week had its share of weak economic news, combined with testimony before Congress by Fed Chairman Ben Bernanke.

The news included higher wholesale inflation with the Producer Price Index (PPI) jumping to its highest level since October 2004 on surging energy and food prices. But price inflation on the producer or wholesale side can't always get passed directly on to the consumer on the retail side. Friday's Personal Consumption Expenditure (PCE) reading showed consumer inflation to be higher, but just slightly, as expected. The PCE is the Federal Reserve's most highly watched measure of inflation, and the current overall rate of year-over-year inflation at 2.2% does remain just above the Federal Reserve's comfort zone for consumer inflation.

And speaking of the Fed, Chairman Ben Bernanke testified before Congress last week, making comments that prompted Stock investors to sell off and move money over into Bonds. The Bond market also enjoyed "dovish" comments made by Gentle Ben about inflation and the recent aggressive cuts made by the Fed, and his testimony was largely responsible for the improvement in Bonds and home loan rates. But read on, and learn how the next official Fed Meeting and Rate Decision on March 18th could impact home loan rates...it might surprise you.

THE ECONOMIC STIMULUS PLAN HAS BEEN ALL OVER THE HEADLINES...BUT DO YOU KNOW HOW IT WILL IMPACT YOU? LEARN ABOUT REBATE CHECKS AND MORE IN THIS WEEK'S MORTGAGE MARKET VIEW!

Forecast for the Week

Here we go again...another action packed week in store, with the main event being Friday's monthly official Jobs Report. This report is always of high interest, as it gives a good read on the health of the economy. Boiled down simply - if businesses are hiring, it means their outlook is good for the future growth of their business and the economy overall. Additionally, the more employed workers there are, the more dollars being earned that can be used to buy goods and services - also good for keeping the economy thriving.

But the headline number often comes with "revisions" of past numbers - which is often the wildcard within the report. Some past revisions have actually added more jobs to the count than the current month's number in total. And for added excitement, in advance of Friday's official Jobs Report, gigantic payroll company ADP will release their own count on job growth on Wednesday. And while the numbers are not "official" and are sometimes seen as unreliable - the markets won't be able to help but take notice of their findings, and may react to their release.

Bottom line - volatility remains in vogue. The chart below shows how Bonds improved significantly over the past week, helping home loan rates improve as well. But remember - another Fed Cut is likely in the cards, just a few short weeks away. As we've discussed in the past, a Fed Rate Cut can often result in a move higher for home loan rates, as a Fed Rate Cut often spurs on spending and therefore inflation, the arch-enemy of Bonds and home loan rates. So while Bonds and home loan rates have seen nice improvement of late, they are heading towards both a technical "ceiling of resistance", as well as a March 18th Fed meeting that could cause rates to worsen. If you - or one of your friends, family members, neighbors or coworkers - have been considering a refinance or purchase, feel free to reach out to me to discuss taking advantage of current low rates.

Chart: Fannie Mae 5.5% Mortgage Bond (Friday Feb 29, 2008)

The Mortgage Market View...

TAX REBATES: SHOULD YOU SAVE OR SPEND?

The government's Economic Stimulus Plan has been in the news a lot lately, and the $168 Billion package is intended to jumpstart the economy by distributing tax rebates that should be arriving in your mailbox as early as spring. The question is: what should you do with your rebate check? The info below can help you estimate how much you'll receive, consider your options, and start planning now so you're prepared.

HOW MUCH MONEY WILL YOU RECEIVE?

The amount you receive ultimately depends on how much you make. For instance, individuals with adjusted gross incomes up to $75,000 will receive a rebate check of $600. If you're married filing jointly and earn up to $150,000, you can expect to receive $1,200. Those who earn at least $3,000 but don't pay taxes will receive about half as much-$300 for individuals or $600 for married couples filing jointly.

If you make more than $75,000 as an individual or $150,000 as a married couple, your rebate check starts to shrink. That doesn't mean you're out of luck... most high-income taxpayers will still receive a check. But you can plan on receiving $50 LESS for every $1,000 you earn over those limits.

Finally, if you have children, you can expect to receive a $300 credit for each child.

SO...WHAT SHOULD YOU DO WITH YOUR REBATE?

Do Nothing...At Least for Now - Don't start mentally spending those dollars just yet. At the minimum, you should hold off until you file your 2007 tax return. That's because the gross income listed on your 2007 return will actually determine how much you'll receive. And unless you absolutely need to, try not to spend the money at all until you have it in hand. Too often, we make purchases on the credit card or with money from savings with the intention of paying it back...only to have some other expense come up in the meantime. To avoid falling into this trap, make a commitment to yourself to wait for the check to arrive before you spend it.

Don't Overspend - Regardless of how much you receive, make a budget and stick to it. We all know how easy it is to go to the store with a specific amount in mind, only to walk out over budget. In this case, not only could you end up spending your entire rebate check, but may actually come out negative by spending additional money that could be budgeted for your regular bills.

Consider NOT Spending At All -The government is issuing these tax rebates with the hope that Americans will help bolster the economy by spending it. However, "spending" isn't always the best plan. If you have high-interest credit cards or other loans, use the rebate to help pay down the debt...and get out from underneath those payments sooner! If your debt load isn't very high, consider saving the rebate check in an interest-bearing account, funding or starting a college savings plan, or even putting the money in a retirement account that will earn you more and more money as time goes on.

The Economic Stimulus Plan features a number of benefits you may not be aware of. In addition to rebate checks, it includes new conforming loan limits that may allow you to refinance and save money every month, or purchase a home more affordably. If you have any questions about your overall financial picture and how you can make the most of this opportunity, please call today. Remember... a little planning goes a long way!

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 03 - March 07

Date	ET	Economic Report	For	Estimate	Actual	Prior	Impact
Mon. March 03	10:00	ISM Index	Feb	49.0		50.7	HIGH
Wed. March 05	08:30	Productivity	Q4	1.8%		1.8%	Low
Wed. March 05	10:00	ISM Services Index	Feb	49.0		44.6	Moderate
Wed. March 05	10:30	Crude Inventories	3/01	NA		3231K	Moderate
Wed. March 05	02:00	Beige Book					Moderate
Thu. March 06	08:30	Jobless Claims (Initial)	3/01	360K		373K	Moderate
Fri. March 07	08:30	Unemployment Rate	Feb	5.0%		4.9%	HIGH
Fri. March 07	08:30	Hourly Earnings	Feb	0.3%		0.2%	HIGH
Fri. March 07	08:30	Average Work Week	Feb	33.7		33.7	HIGH
Fri. March 07	08:30	Non-farm Payrolls	Feb	40K		-17K	HIGH

As your trusted advisor, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.

In the unlikely event that you no longer wish to receive these valuable market updates, please USE THIS LINK or email: greg@thefinancinggroup.com

If you prefer to send your removal request by mail the address is:

Greg Vogel
3615 Mitchell Drive Fort Collins, CO 80525

Mortgage Market Guide, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated. Mortgage Market Guide, LLC does not grant to you a license to any content, features or materials in this email. You may not distribute, download, or save a copy of any of the content or screens except as otherwise provided in our Terms and Conditions of Membership, for any purpose.

Financing Mistakes by Real Estate Investors: #1

Greg Vogel (The Financing Group) — Mon, 18 Feb 2008 17:26:54 -0600

#1: Quitting your Day Job before Establishing a 2 Year Self-Employment History

I got 3 calls just last week from Real Estate Investors inquiring about financing. All 3 had recently (in the last 2 years) quit their day jobs to invest in real estate full time.

Kudos to these brave souls for 'damning the man' and going off to make it on their own. But, this strategy runs some risks - there's a lot more to paying the bills than living off a few rental properties and some hopeful fix 'n flips - especially in a market as volatile as ours.

While paying the bills is one risk...obtaining conventional financing is another! To qualify for most conventional financing, a borrower needs to have at least a 2 year history of self-employment (or at least 2 years history with their LLC, doing business investing in real estate). The thought behind this is that statistically, most businesses fail in the first year and even fewer make it past the 2 year mark. So why would an investor want to lend money to someone who falls in this high risk category?!

A year ago, this wouldn't have been as big of a problem. There were a plethora of loan options available for people who couldn't verify their employment (granted these options were expensive!). With the lending industry's recent transformation into a risk-averse climate, these 'no documentation' loan options are rare to find and not worth the cost. Plan ahead!

RECOMMENDATIONS to avoid this problem:

1.) Keep the day job! Start your LLC early and keep your day job until you have established a solid 2 year history. This will save you lots of $$ and headaches in the long run.

2.) Find a partner! Invest in your deals with a partner who has a more solid history - work something out so you both benefit and help each other.

3.) Use private/hard money! If you're flipping a property or you are very close to that 2 year self -employment mark, finance your property with hard money and by the time it's rehabbed and ready to be refinanced, you'll be in the clear. If you plan to flip your property with hard money and won't be able to qualify for conventional financing, make sure you have enough equity to 'fire-sale' the property at rock bottom prices if it's slow to sell. Or plan for the worst and beef up your holding costs estimate (keep in mind that most hard money loan terms are only for 6 months to a year) to cover the expensive interest.

Financial Markets Update: Can you say Volatile?

Greg Vogel (The Financing Group) — Mon, 18 Feb 2008 15:13:46 -0600

Last Week in Review

"CUTS LIKE A KNIFE, BUT IT FEELS SO RIGHT" Bryan Adams And financial pros will tell you it's wise to never try and catch a falling knife. Seems like decent advice in general - but in the financial world, it means that when the price of a Stock or Bond is in the midst of a severe decline, be very cautious about stepping in to buy...even if it feels so right because the price starts to look cheap. That's because when prices declines sharply, it often gets even worse, making it hard to call the bottom. That's why many investors, who attempt to buy on the way down, say the feeling cuts like a knife. And over the past week - Bonds have been dropping much like a knife, and home loan rates have risen by about .25% across the board.

And speaking of sharp objects, Cupid's arrows might have been flying around everywhere last week - but little love came calling for the Bond market. First, Retail Sales for January were far better than expected - which was good news for Stocks, but as money flowed into Stocks, pulled money out of Bonds and caused Bond prices to move lower. Next, Fed Chairman Ben Bernanke gave it to us straight from the heart, as he testified that the Fed would keep the door open to more rate cuts, which worried Bond Traders about the risk of more inflation ahead. And unlike the media seems to believe, cuts to the Fed Funds Rate generally cause home loan rates to rise, not decline. Why? Because Fed Rate Cuts can spur on more inflation, as it becomes less expensive to finance business and personal purchases. And as a result, inflation erodes the value of the fixed return provided by a Bond - so in the face of inflation, Bond prices fall, and home loan rates rise.

Finally, Moody's credit rating agency downgraded FGIC - one of the very largest Bond insurers in the world. This is another concern for Bonds, as the downgrades of Bond insurers in turn threaten the ratings of the Bonds they insure. If the added safety from insurance on Bonds is in doubt, the yield or rate on those underlying Bonds must increase to compensate investors for the additional risk. All in all - a tough week for Bonds and home loan rates - read on to find what's in store for the week ahead.

AND DON'T MISS THIS WEEK'S MORTGAGE MARKET VIEW - ALERTING YOU TO IRS SCAMS, TO WHICH EVEN THE SAVVIEST HAVE FALLEN PREY.

Forecast for the Week

After a closed market on Monday, all of the coming week's economic reports will be delivered on Wednesday and Thursday - but don't expect that any volatility will be limited to those days.

The most recent read on inflation will come via the Consumer Price Index, being reported on Wednesday alongside the latest Housing Starts and Permits data. And of particular interest - the "Meeting Minutes" from the last Federal Reserve meeting will be released as well. These Minutes give the inside commentary between members - and remember, Dallas Fed President Richard "Loose Lips" Fisher was not in agreement with the most recent cut to the Fed Funds Rate. His seemingly uncontrollable remarks regarding his concerns over inflation have rocked the markets of late, with Mortgage Bonds losing 187 basis points since his tirade on February 7th - that translates into about .375% higher for home loan rates. Bottom line - the inflation data and Fed Meeting Minutes could be real market movers. Since inflation erodes the value of the fixed return provided by a Bond, if the news of the week continues to reek of inflation - this could spell more bad news for Bonds and home loan rates.

Chart: Fannie Mae 5.5% Mortgage Bond (Friday Feb 15, 2008)

The Mortgage Market View...

THE TAX MAN COMETH...

And along with the tax man come the inevitable new breed of scam artists. Be on guard - criminals who want your personal information use this hectic and confusing time of year to prey on unsuspecting individuals.

Watch out for unscrupulous scammers, who are sending emails that appear to be from the IRS. The content of the emails are often written to persuade you to link to a website that will allow you to update your data or receive important information. Remember, these phony emails are quite sophisticated, and the links send you to what usually appear to be legitimate IRS or government websites. In reality, they are not. These sites will prompt you to divulge private information under the guise of the IRS requiring it, to offer a larger refund, or sometimes, ironically, to protect you from identity theft or loss of privacy.

There are some simple steps you can take to avoid falling prey to one of these scams.

Always Be Suspicious of Emails. Remember, the IRS does NOT initiate communication with taxpayers through email, but rather through the regular mail. If you receive an email that says it's from the IRS, you should immediately be suspicious and should forward it in its entirety to the IRS, so that they can take steps to shut down the fraudulent and bogus websites. The IRS requests that you forward all questionable emails to phishing@irs.gov.

Double Check the URL Address. Keep in mind that all IRS websites begin with the following web address: http://www.irs.gov/. So, if you ever click a link in an email or visit a website that you believe is related to the IRS, the first thing you should do is confirm the website begins with the correct URL address. Remember, sometimes it may "look" legitimate, but is actually an imposter site that is "phishing" for information. So always, always double check the actual URL address before you type any information in the site.

Exercise Extreme Caution with Attachments. When it comes to questionable emails, the best practice is to never open any attachments. That's because attachments are an extremely common method that hackers use to infect your computer with programs that may harm your computer or steal your personal information--often without you even knowing!

In today's technological environment, electronic communication offers us tremendous speed and convenience. But it can also be used for unethical purposes by scammers. Most organizations have worked very hard to put strict privacy policies in place. As a result, government agencies and financial institutions will rarely, if ever, ask you to divulge personal information via email.

If you receive any email asking for personal information of any kind, you should immediately be suspicious. When in doubt, call the customer service lines listed on your statements or documents and discuss the email that you received.

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 18 – February 22

Date	ET	Economic Report	For	Estimate	Actual	Prior	Impact
Wed. February 20	08:30	Building Permits	Jan	1035K		1068K	Moderate
Wed. February 20	08:30	Housing Starts	Jan	1000K		1006K	Moderate
Wed. February 20	08:30	Core Consumer Price Index (CPI)	Jan	0.3%		0.2%	HIGH
Wed. February 20	08:30	Consumer Price Index (CPI)	Jan	0.3%		0.3%	HIGH
Wed. February 20	10:30	Crude Inventories	2/16	NA		1066K	Moderate
Wed. February 20	02:00	FOMC Minutes	1/30				HIGH
Thu. February 21	08:30	Jobless Claims (Initial)	2/16	355K		348K	Moderate
Thu. February 21	10:00	Index of Leading Econ Ind (LEI)	Jan	-0.1%		-0.2%	Low
Thu. February 21	10:00	Philadelphia Fed Index	Feb	-10.0		-20.9	HIGH

As your trusted advisor, I am posting the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.

Weekly Market Update

Greg Vogel (The Financing Group) — Tue, 12 Feb 2008 17:07:42 -0600

Last Week in Review

"LOOSE LIPS SINK SHIPS." Slogan from World War II Not just clever words of good advice, this phrase was actually part of the US Office of War Information's attempt to limit the possibility of people inadvertently giving useful information to enemy spies. Now fast forward to present time, as Dallas Fed President Richard "Loose Lips" Fisher's careless comments last week worked to sink the Bond market, and caused home loan rates to rise about .125%.

Fisher lived up to his nickname last week, almost uncontrollably blurting out off-topic comments and rhetoric during his speech in Mexico City, and roiling the financial markets every step of the way. Long recognized as an "inflation hawk", he was the lone dissenter against the .50% cut to the Fed Funds Rate on January 30th.

Fisher stated, "Monetary policy acts with a lag. I liken it to a good single malt whiskey or perhaps truly great tequila: It takes time before you feel its full effect. The Fed has to be very careful now to add just the right amount of stimulus to the punchbowl without mixing in the potential to juice up inflation once the effect of the new punch kicks in. ...My dissenting vote last week was simply a difference of opinion about how far and how fast we might re-spike the monetary punchbowl. Given that I had yet to see mitigation in inflation and inflationary expectations from their current high levels...I simply did not feel it was the proper time to support additional monetary accommodation."

The negative outburst by Lose Lips Fisher, which was again a departure from his prepared speech topic, didn't sit well with the Bond market. Bonds hate inflation, as higher inflation erodes the fixed payment return they offer over time. This sparked a sharp sell-off, causing home loan rates to rise.

AND THE ECONOMIC STIMULUS PLAN IS ALSO ON THE RISE, WITH SOME GREAT BENEFITS IN STORE FOR HOMEOWNERS AND HOMEBUYERS...BUT DO YOU KNOW HOW A BILL LIKE THIS ACTUALLY BECOMES LAW? DON'T MISS THIS WEEK'S INFORMATIVE MORTGAGE MARKET VIEW!

Forecast for the Week

This week's economic calendar holds mostly mid-level reports, but the Retail Sales report on Wednesday will definitely draw some attention, as we get a chance to see how consumers have been spending money out there. Additionally, Thursday's Initial Jobless Claims and Balance of Trade reports and Friday's Industrial Production report will also be of interest.

Bond prices had been hanging from a ceiling of resistance, shown in blue on the chart below...almost reminiscent of a Salami hanging in a butcher shop or meat store - and last week saw prices fall off that ceiling, straight down through a floor of support at the 25-day Moving Average. And now - what was a floor becomes a ceiling, and Bonds have not yet been able to recover and climb back above this level.

The economic news and headlines in the coming week will determine if Bonds are able to drive back higher, through the 25-day Moving Average and help home loan rates improve. Weak, negative economic news would be bad news for Stocks, but help money flow over into Bonds and find improvement for home loan rates. Positive, strong economic news will have just the opposite effect though, and cause Bonds and home loan rates to worsen.

The Mortgage Market View...

I'M JUST A BILL... AND I'M SITTIN' HERE ON CAPITAL HILL

The campaign trail isn't the only place you'll find politicians posing for the media and shaking hands. This week, members of the Senate reached across the aisle to pass an amended version of the $168 Billion Economic Stimulus Plan, including rebates for taxpayers, tax breaks for businesses, and new conforming limits for home loans. The bill now heads back to the floor of the House for approval of their amendments and then onto the President.

All this back and forth prompts the question... how does a bill actually become a law? The answer is... well... it's a long process. But, we can sum it up in a handful of major steps.

First, a bill is proposed in the House of Representatives and is sent to the appropriate committee for discussion. Next, the committee discusses and amends the bill, and then approves the bill for full House consideration. From there, the bill moves to the full House of Representatives for additional discussion and amendment before a vote is taken. If the House vote passes, the bill is sent to the Senate--where it is discussed, amended, and voted on again.

Of course, it's not over yet. Once the bill passes the full Senate vote, it moves to a conference committee to iron out any differences between the Senate and House versions of the bill. After the conference committee, the bill finally lands on the President's desk, where he (or who are we kidding, maybe she) can sign it into law or veto it.

The bottom line is, it typically takes a long time for a bill to become a law, and there are lots of discussions and amendments along the way. For a more humorous overview of the process that may bring back some memories, check out the old School House Rock - How a bill Becomes Law.

And, remember, the new Economic Stimulus Plan--with its new conforming loan limits--will go into law soon. If you've been thinking about refinancing or purchasing a new home, now is an excellent time and you could save big with the limits. Contact me to discuss how these new limits may help 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 11 - February 15

Date	ET	Economic Report	For	Estimate	Actual	Prior	Impact
Wed. February 13	08:30	Retail Sales	Jan	0.0%		-0.4%	HIGH
Wed. February 13	08:30	Retail Sales ex-auto	Jan	0.2%		-0.4%	HIGH
Wed. February 13	10:30	Crude Inventories	2/09	NA		7052K	Moderate
Thu. February 14	08:30	Jobless Claims (Initial)	2/09	360K		356K	Moderate
Thu. February 14	08:30	Balance of Trade	Dec	-$61.0B		-$63.1B	Moderate
Fri. February 15	08:30	Empire State Index	Feb	7.5		9.0	Moderate
Fri. February 15	09:15	Capacity Utilization	Jan	81.5%		81.4%	Moderate
Fri. February 15	09:15	Industrial Production	Jan	0.1%		0.0%	Moderate
Fri. February 15	10:00	Consumer Sentiment Index (UoM)	Feb	76.5		78.4	Moderate

The Truth About the Mortgage Market

Greg Vogel (The Financing Group) — Thu, 07 Feb 2008 15:28:01 -0600

Anywhere, USA - Subprime mortgages have now been credited for bankrupting well over 110 lenders and seriously damaging operations at many major mortgage firms. They've reportedly wiped out 5 hedge funds, tens of thousands of jobs, and have led to millions of foreclosures with millions more on the way. And, as if that weren't enough, subprime mortgages are also blamed for massive volatility in the stock, bond, credit, futures, and real estate markets here in the US and around the globe. Some say losses in the mortgage securities market alone could reach hundreds of billions of dollars this year.

This means that, for any Americans looking to buy, sell, or refinance a home, they are confronting a very different market from the one that existed just 6-12 months ago.

How did this happen?
The recent real estate boom was fueled by a period of record home appreciation and historically low interest rates. Banks, in order to compete, loosened guidelines and began offering more funding to more borrowers through riskier, non-conforming or "exotic" mortgages.

These ideal lending conditions persisted for several years, supported by high demand, historical real estate data, home prices, and massive trading volume/profits on mortgage-backed securities and other financial instruments on Wall Street.

Then, in 2006, a slowdown in real estate led to a deterioration of home values, an increase in inventories, and ultimately to today's tightening of credit guidelines, leaving many investors unable to sell or refinance out of their existing positions. Many Americans who had tapped into their equity were suddenly tapped-out and overextended as home values fell. Foreclosures followed in record numbers and a re-valuation of mortgage bonds and other financial instruments created the credit/liquidity domino effect we're now experiencing.

Unfortunately, it's going to get a lot worse before it gets better. According to the latest estimates, over 2 million subprime and Alt-A adjustable rate mortgage (ARM) holders will face payment increases of up to 30%-100% when their loans reset in the next 2 to 18 months. These loans make up less than 40% of the total mortgage market, but the negative effects, as we have seen, of increased foreclosure activity can have a ripple effect throughout the industry and around the globe.

What does this mean to you and your mortgage?

Sellers: If you're planning on selling your home, be prepared for an even smaller pool of qualified buyers. While some experts predict a settling of this credit crisis over the coming year, tightened credit guidelines and diminishing mortgage products could knock out as many as 15%-30% of potential qualified buyers. Now is not the time to sit and wait for the best possible price. Have a serious talk with your real estate agent. Having experienced buying/selling transactions in your area, he or she can help you price your home accordingly. He or she can also help ensure that your buyers are pre-approved and stay pre-approved throughout the entire transaction.

Buyers: Get pre-approved by your mortgage professional. While there are a lot of great deals out there, getting credit is becoming tougher and tougher, and it's taking longer and longer to complete a transaction. Remember, what you qualify for today could change tomorrow in a volatile market. For those looking to refinance, keep this in mind. There is no time to delay! Communicate with your lender. Don't do anything that could negatively affect your credit, and make sure you get all your documentation in on time.

ARMs Borrowers: If your ARM is scheduled to reset in the next 2-18 months, you need to schedule an appointment with a mortgage professional right away. Whether your ARM is subprime, Alt-A, or even if you have a pre-payment penalty, don't let a default or foreclosure situation sneak up on you. Did you know that your monthly payments can increase anywhere from 30% to 100% once your loan resets? At the very least, give yourself the peace of mind of knowing what your adjusted payment will be.

Borrowers with less-than-perfect credit: Each week it seems lenders are shedding more and more mortgage products. Many lenders have stopped offering No-Doc loans and are reducing all forms of Stated-Income loans. While it might be challenging, borrowers with credit issues need to see a loan expert. Often they have credit repair resources and other strategies to help you reach your financial goals.

Finally, there's an important concept to embrace: all markets, while cyclical in nature, are self-correcting, be it credit, real estate, stocks, or bonds. For the last 6 or 7 years, real estate was booming and riding high. The correction we're experiencing now - while it seems harsh and could get much worse - is, in a sense, "natural" and directly related to the extremely loose guidelines and perhaps overzealous lending and leveraging during the boom cycle.

Fed and Med...Conspiracy Theory?

Greg Vogel (The Financing Group) — Mon, 04 Feb 2008 14:33:45 -0600

Provided to you Exclusively
By	Greg Vogel

Greg Vogel
The Financing Group
3615 Mitchell Dr.
Fort Collins, CO 80525
Office: 970-223-5369
Fax: 970-207-0666
E-Mail: greg@thefinancinggroup.com
Website: http://www.thefinancinggroup.com/

For the week of Feb 04, 2008 --- Vol. 6, Issue 6

Last Week in Review

"A GOOD CONSPIRACY IS UNPROVABLE. I MEAN, IF YOU CAN PROVE IT, IT MEANS THEY SCREWED UP SOMEWHERE ALONG THE LINE." Mel Gibson as Jerry Fletcher in the movie, "Conspiracy Theory" And those who believe in the conspiracy theory that the Fed has access to economic data in advance of the official release dates sure felt their position was proven correct last week...let's take a look.

The main financial event of the week was the Fed, cutting the Fed Funds Rate another .50%, on top of their surprise .75% cut just eight days before. This brings the Fed Funds Rate down to 3.00% and will lower rates for business and consumer loans as well as Home Equity Lines of Credit and Adjustable Rate Home Loans - so please give me a call to discuss how this may help you. Bonds and home loan rates moved with volatility throughout the week, yet ended up close to where they started on Monday.

But the economic calendar stacked up such that two significant economic reports would come just after the Fed decision - the inflation measuring Personal Consumption Expenditure (PCE) Index, and the heavy hitting monthly Jobs Report. While inflation numbers were relatively in-line and as expected...the Jobs number was one of the worst in years, showing no job creations at all, but instead a net loss of 17,000 jobs. Although future revisions may erase this negative number, this weak indicator made the Fed move look pretty smart, whether the conspiracy theory is true or not.

DID YOU KNOW THAT THE MEDICAL INDUSTRY IS CONSPIRING TO DEVELOP A MEDICAL "CREDIT SCORE", TO HELP THEM BETTER DETERMINE IF YOU'LL PAY YOUR MEDICAL BILLS OR NOT? THE POTENTIAL IMPLICATIONS ARE ALARMING...SO LEARN MORE IN THIS WEEK'S MORTGAGE MARKET VIEW.

Forecast for the Week

After the last few weeks frenzied and jam packed economic calendars - this weeks schedule takes a much needed rest, with only a few mid-level reports of interest due for release. But with all the explosive market action that has been seen in the last several weeks - don't get too relaxed just yet.

The chart below shows how Bonds and home loan rates have overall been moving "sideways" since the surprise cut the Fed made about two weeks ago, which means the open and closing price of Bonds have been within a pretty tight range. And if you didn't know better - you'd think this would mean home loan rates have been pretty stable. However - here's a quick primer on Japanese Candlesticks, which tell a very different story of volatility.

The red and green markers on the chart below are called Japanese Candlesticks, and have been used by savvy traders over the years to gain more information on a Stock or Bond than a simple open and closing price will provide. A red candle means the closing price was lower than the open, and a green candle means the closing price was higher than the open...but it's the "wicks" on the candles that often tell the real tale. A wick on the top of the candle shows the highest trading point reached throughout the day, and a wick on the bottom of a candle shows the lowest trading point reached during the day.

Now look at the chart again...you can see that last week was actually very volatile for Bonds and home loan rates throughout the trading days, although the open and closing prices alone wouldn't indicate so. And even with a light economic calendar ahead - more volatility likely lies ahead as well.

Chart: Fannie Mae 5.5% Mortgage Bond (Friday Feb 01, 2008)

The Mortgage Market View...

BETTER KNOW THE SCORE

It looks like lenders, landlords, insurance companies and employers aren't the only ones interested in credit scores these days - now the health industry is getting in on the act.

Credit industry giant Fair Isaac is working with Healthcare Analytics and Tenet Healthcare to create a new "MedFICO" score. This new credit score is intended to judge a person's likelihood of paying their medical bills and could debut as early as this summer. Understandably, the new score is already raising concerns from consumer advocacy groups that fear it will be checked before patients are treated. They are afraid that people with low medical credit scores could receive lower-quality care than those with a higher MedFICO.

According to Stephen Farber, chairman and chief executive of Healthcare Analytics, that will not happen. Hospitals will check the score, which will be based on the patient's medical bill payment history, only after the patient is discharged.

And under the Fair Credit Reporting Act, hospitals and doctors may report health care debts to credit reporting agencies but cannot indicate what they were for. Hospitals generally do not report delinquent accounts, but they do turn them over to collection agencies. In such cases, only the medical provider's name and the amount owed should be listed. And even then great care must be taken so as not to reveal the type of care given, as would be the case with the Betty Ford Clinic, which is widely known for treating drug and alcohol addiction.

But can they be trusted?

Given the problems with the credit system in general - such as identity theft and inaccurate scoring data - consumer advocates question whether or not this information should be used as the basis for a new medical version. In an analysis of more than 500,000 individuals' credit scores, the Consumer Federation of America says 29 percent were 50 points lower than they should have been.

They ask, "What's going to happen if there's a mis-scoring due to clerical error or when there are two people with names like Bob Jones who have similar numbers?" Insurance companies are already using a person's credit score to determine their premiums now. What's going to stop health insurance providers from doing the same thing once the new MedFICO score is available?

If you ever doubted the importance or legitimacy of your credit score being as high as possible, this should be your wake up call!

Learn More About Credit Scoring and Credit Repair

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 04 - February 08

Date	ET	Economic Report	For	Estimate	Actual	Prior	Impact
Tue. February 05	10:00	ISM Services Index	Jan	53.0		53.9	Moderate
Thu. February 07	08:30	Jobless Claims (Initial)	2/02	350K		375K	Moderate
Thu. February 07	10:30	Crude Inventories	2/02	NA		NA	Moderate

As your trusted advisor, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.

In the unlikely event that you no longer wish to receive these valuable market updates, please USE THIS LINK or email: greg@thefinancinggroup.com. If you'd like to automatically receive this every week, email: greg@thefinancinggroup.com.

If you prefer to send your removal request by mail the address is:

Greg Vogel
3615 Mitchell Dr.
Fort Collins, CO 80525