Rick's Blog

FEDS JUMP IN WAIST DEEP TO SAVE OUR ECONOMY!

Mortgage Bankers Of Wisconsin — Fri, 19 Sep 2008 13:46:53 -0500

Hello to all my Real Estate partners

What a week it has been! On Wall Street, every day has resulted in a triple digit change with 4 of the 5 days ending in changes over 400 points!

Monday we saw one of the worst slides in history as the DOW finished down 504 points. On Tuesday, the Feds met to decide short term interest rate direction. The futures market called for a 100% chance of a ¼ point cut in the Federal Funds rate. While the decision to hold rates were they were was unexpected, so was investor reaction. When at the end of the day a rumor spread that the government might step in to save embattled AIG, the market actually ignored the Fed inaction with the DOW finishing up 141 points.

Unfortunately, the disaster was delayed just one day as the DOW finished back down over 450 point! (The same investors that were encouraged by the potential Federal solution to the world's biggest insurers collapse reacted very negatively to the details of the plan. In exchange for a 80% share of AIG going to Uncle Sam, they received a loan of $85 billion at over 11% interest. The truth is, no matter what this moves cost tax payers, the US could do very well should the company rebound with 80% of profits headed to the US treasury.)

On Thursday, unbelievably, the DOW, which had been down well over 120 points earlier, had a record rally in the last couple of hours which resulted in a 410 point GAIN. The rumor spread like wildfire that the government had a plan to step in to take over and manage all of the bad mortgage debt from banks! This morning we got the details as the following things were announced:

1) The Fed will buy bad assets (mortgages that are not performing and other mortgage securities that are keeping lenders from lending)

This will open up the arteries of lenders that have declined to lend because their books are clogged up with bad mortgages.

2) The US Treasury will purchase $10 BILLION of Mortgage Backed Securities! (Doubling what they had committed to.)

The purchase of Mortgage Backed Securities brings long term fixed rates down!

3) Fannie Mae and Freddie Mac will buy MBS!

4) Insurance fund for Money Market Funds

This will keep investors from panicking and having a run on their money markets as many moved down to record low reserve levels.

5) Short selling on Wall Street BANNED for the next two weeks

For the next two weeks, investors will not be able to manipulate stock prices by shorting them. This will bring some stability to Wall Street. The government may extend if they feel it to be neccesary.

6) More steps to be announced!

Folks...the Feds are in an all assault mode! This is VERY good for Real Estate! They are for the first time truly on our side. It has taken them the better part of two years to realize and admit that this economy can NOT recover with out the recovery of the Real Estate sector...something that all of us knew a long time ago. Today, Treasury Secretary Hank Paulson told the nation that Real Estate needs to be fixed for our economy to fully recover

Mortgage rates go down as investors invest in Mortgage Backed Securities. Until the Feds took control of Fannie Mae and Freddie Mac, it was considered to be an unsafe investment to buy Mortgage Backed Securities...this is no longer the case. Rates already lower than they've been for quite some time should now continue to drop. This will happened as soon as this record volatility calms a bit. That is the government's intent...to calm the fears and to create a market that will encourage once again banks to lend at lower costs.

Hang in there...these almost daily government moves are designed to turn things around quickly because there is no more time to waste. We have survived the most challenging years of our business and survive so that we will thrive as the cycle turns in our favor.

Until next time, I wish you good times and good business. Rick

FHA and VA ARE ONCE AGAIN IMPORTANT OPTIONS

Mortgage Bankers Of Wisconsin — Mon, 02 Jun 2008 12:38:52 -0500

When HUD came out with the FHA and VA programs, they were designed to fit the needs of the credit challenged borrower and the borrower with little to put down. When sub-prime programs hit the market, for a certain percentage of borrowers, it was easier to take the path of least resistance and use the program that would NOT require them to even prove that they qualified for the program. Many home sellers avoided offers that included FHA financing, because they did not want to deal with the picky improvements that FHA appraisers would call for. Those that obtained FHA and VA financing were often borrowers with imperfect credit history who did not have money for a down-payment.

Then came what is commonly referred to as "The Sub-Prime Mortgage Meltdown". Fannie Mae and Freddie Mac 30 year fixed lenders over-reacted to what they saw as poor lending decisions by originators. Existing banks with bad loans on their books turned VERY conservative in underwriting guidelines effectively permanently moving an entire segment of buyers away from housing if not permanently, for a very long time. Fannie Mae and Freddie Mac decided that if they were going to continue buying mortgages, they needed to make more from the good borrowers to make up for the losses from the ones that couldn't pay. They came out with a tier of risk based pricing that effectively penalizes safe borrowers! Those that do not have 40% (yes, I said 40%) down now MUST have a credit score above 719 to be eligible for the lowest rate on the market,

That's where FHA and Va come in. Here are some bullet points for the two programs.

•1) Although, you must still have a 580 credit score in order to be eligible, all credit scores above that level will get the low same rate.

•2) The monthly Private Mortgage for FHA is reduced in order to make it easier to make a payment.

•3) With VA, you may borrow 100% of the purchase price and have NO monthly Private Mortgage Insurance

Both programs require the borrower to borrow an additional amount to pay HUD as a service fee for offering the program. With FHA, the fee is 1.5% of the loan amount (this is pre-paid Mortgage Insurance designed to reduce the monthly mortgage insurance) and is non-refundable unless the borrower refinances into another FHA loan. At this point, the unused portion of the pre-paid MI is transferred to the new loan. With the Fed VA loan, the fee is called a "funding fee". The fee itself varies as it is as low as 2.15% for the first time use to 3.3% for subsequent uses. The fee is higher but there is no other program that will allow no money down with NO Private Mortgage Insurance with an interest rate that is as low as a conventional loan.

Borrowers previously considered as A1, now must accept higher rates if their credit scores drop below 720. These are the new breed of borrowers that fit into the FHA and VA loan option. Both can be no money down programs and HUD is allowing programs like Nehemiah to fund the down the minimum 3% down payment that FHA requires. Simply put, the seller agrees to pay 3% of the purchase price PLUS $495 to Nehemiah Corporation (a charitable foundation). When they receive these funds, the 3% is provided for the buyer at closing with the charity keeping the $495. There is no requirement that the money ever be paid back.

Both programs will continue to be a more important way to get good borrowers into good homes with little or nothing down. The loan limits have recently been increased by HUD. The single family FHA limit is $315,000 with the VA limit being the conforming limit of $417,000. Multi-unit homes have larger limits. The mortgage rates are very close to the lowest conforming rates available. At this writing, it was 6.5% but changes daily.

The FED Develops a BACKBONE! Why Rate Cuts are NOT the answer

Mortgage Bankers Of Wisconsin — Fri, 02 May 2008 20:36:53 -0500

Hello again to all my Real Estate Partners

I wanted to wait until the market reacted to the government job reports before I wrote this update. Wednesday marked a very different strategy for Ben Bernanke and the Federal Open Market Committee. After lowering the Federal Funds Rate (the rate banks lend to each other and the index that the Prime Rate adjusts to) by 3% since August of last year, the committee decided to ease by just ¼ % and furthermore, inferred that they saw no urgency in easing again. They feel that the previous rate cuts will start showing their effect soon as there is always a lag between the cut and its effect on the economy. Clearly, investors agreed as both stocks and bonds moved up in price since Wednesday. That is good for all investors as the world looked at the action as a sign of strength. The Euro, which had been as high as 1.59 against the US dollar, fell to 1.5424 today.

Then came the wild card...the government job report. Mortgage rates (30 year Fixed) had ticked down below 6% again for the first time in weeks. If the employment numbers were close to the consensus of 5.2% unemployment (from 5.1% last month) and 75000 jobs (from 80,000 last month) lost, rates would have fallen quickly as negative financial news means inflation will probably stay under control. Well...unemployment "plunged" to just 5% and only 20,000 jobs were lost. The news was devastating to mortgage bonds as the price quickly fell a whopping 134bp in a matter of minutes. (That's equivalent to ¼ % increase in rate!) Remember, the higher the bond price, the lower mortgage rates go.

But once the details of the report were unpacked, including downward revisions to the last two Jobs Reports, as well as some realization that the economy still lost 20,000 jobs, Mortgage Bonds staged an enormous recovery. The truth is that investors were confused...they reacted emotionally when the numbers came in "much less horrible" than was expected. Stocks got a jolt as these days it seems that it takes only news that isn't devastating to make a positive equity market. But as the employment figures were analyzed, things looked...well, more realistic. While it was true that we lost "only" 20,000 jobs, the sectors that were hit the hardest were construction, manufacturing, and retail. Jobs added at the government level and education softened the blow. Guess who pays for that? Are you looking in the mirror?

The bottom line is that today could have been a killer day for mortgage rates and yet by market close, bonds had gained back most of their losses. Theses Fed meetings have been nothing more than distraction to investors. After every single meeting the Feds have eased, mortgage rates have headed up soon after. The next Fed meeting is scheduled for June 24^th-25^th, 7 weeks away. Now we can let the market play itself out without concern of what the Feds will do. The next few days will be key...if bonds can maintain their price level, we may see rates drop to the January levels.

We have gotten close to the "perfect storm" that it takes for mortgage rates to drop before. What is the perfect storm? Rates are low after the Fed eases and then bad news on Wall Street flows investors to the safety of bonds. Let's hope we are close to that. (Somehow that doesn't sound right!)

In other news released before the employment numbers came out, the Fed boosted its biweekly Term Auction Facility sales of cash to banks by 50 percent to $75 billion and expanded the collateral it takes from bond dealers through loans of Treasury securities. It also raised the amount of dollars it makes available to the European Central Bank and Swiss National Bank through swap lines to a combined $62 billion from $36 billion.

Today's actions follow a jump in banks' borrowing costs of as much as 0.38 percentage point since the Fed's March meeting that had blunted the impact of the cash injections that began in December. Fed officials expanded the collateral they accept under the Term Securities Lending Facility to include AAA rated asset- backed investments. This collateral includes student loan debt as well as credit card debt. Why do this? The Feds are encouraging lenders to lend. Clearly the collateral they are now accepting has higher risk but it is we, the tax payers, are paying the bill if there are defaults.

We have come to the point that further rates cuts make no sense. The Fed Funds Rate is now just 2% (in 2004, Greenspan's Fed lowered to 1%) and yet the long end of the curve has not benefited. (One might wonder where mortgage rates might be had the Feds not eased at all). Further cuts may hasten the decline of the dollar which is very inflationary. The show of backbone by the Fed by intimating that the rate cuts have ended has rallied the dollar this week. As long as the Feds hold tight, the dollar should continue to gain strength. This is very key to keep inflation in check. Look for more news from the Fed to improve liquidity to bring down lending costs. It's not hard to see that there has been an overreaction by lenders that have resulted in underwriting standards tightening and lending costs increasing. (A borrower MUST have at least a 720 credit score now to get the lowest rate available if they have less than 40% equity.) By lowering costs to lenders and by allowing a variety of debt assets as collateral, the Feds are helping this to happen.

Rest assured that the Fed is actively moving to help the Real Estate sector. There are some that say we will not see the market recover until 2010. I certainly have no crystal ball, but I look for a recovery that begins later this year. All of the Fed moves will result in a recovering economy that will be led back by Real Estate. But the key to it all is to promote liquidity so that both consumers and businesses will begin to do the spending this economy thrives on.

As always, I encourage your comments and questions. Remember, those that survive the down cycles live to thrive in the up cycles. Until next time, I wish you good business and good times. Rick

THE FED FINALLY GETS IT! THEY ARE ON OUR SIDE!

Mortgage Bankers Of Wisconsin — Mon, 24 Mar 2008 01:17:38 -0500

Hello to all of my colleagues in Real Estate

WOW! Hold on for dear life! The actions of the last two weeks brings to mind the phrase that we are all familiar with..."Survive to Thrive!". We have to live through the tough times to get to the good ones. It could be that the good times are closer than you think.

We have been through two of the most challenging years in recent history. Many Real Estate and Mortgage professionals have exited the business...many that have been veterans of many years. There was a time that there literally seemed to be no buyers looking. As the credit crisis deepens, lending gets tighter and tighter. Inventory of homes is at an all time high. In January of 2007, when I began to write this column, I told you all that the Fed was in denial when they kept saying that the sub-prime crisis was an isolated problem and that there was no indication it would spread to the rest of the economy. In March of '07, I predicted that the Feds would start lowering the Fed Funds rate by the third quarter. In the beginning of August, Ben Bernanke stated that the economy was solid and the weakness in the economy was limited to housing. Two weeks later, in an emergency meeting, the Fed admitted that the problem may be more serious than they thought by lowering the Discount Rate by 50 basis points. Since that day, the Federal Funds rate has dropped to 2.25% from 5.25% with the Discount Rate dropping to 2.5% from 6.25%. The Prime rate is now just 5.25%. Furthermore, it's clear that there will be more cuts ahead.

It is equally clear that the Feds have done a 180 in their thinking and now are convinced that the key to the economy's recovery is in the recovery of Real Estate! As of March 5^th, mortgage rates were at a high for one year, topping off at 6.625%. So, with all of the Fed action, mortgage rates were no lower than they were before they stepped in. WHY? The answer can be found in the perception that investors have about the safety of Mortgage Backed Securities. As more and more losses were announced by banks and other institutions, Wall Street investors chose commodities over Mortgage Securities. This is one reason oil peaked out at $112 per barrel and gold hit $1,032 per ounce at the same time mortgage rates were at their highest point.

What has changed to make me so excited by what is ahead for Real Estate? Bernanke and company are finally using the right bullets and hitting the right targets. Last week, they announced that $200 billion of treasuries would be made available to banks at the end of March and they were encouraging them to use mortgage backed securities as collateral. Last Friday, Bear Stearns made an emergency call to their bank, JP Morgan, in a bid to secure financing that would keep them going. JP Morgan went to the New York Fed and worked out a deal that would hold them harmless should Bear Stearns not survive. (Later it was announced that JP Morgan would buy Bear Stearns for just $2/share!) The Fed also announced they were dropping the Discount Rate by ¼ point, an unusual move for a Sunday.

By Monday morning, the Fed announced that all financial firms, not just banks, could now go to the discount window for financing, effective immediately. Once again, Mortgage Backed Securities will be acceptable collateral. This was done to prevent any other financial companies from suffering Bear Stearn's fate.

Finally, on Tuesday, it was widely expected that the Federal Reserve would lower both Discount and Fed Funds Rates by a record 1%. They chose instead to limit the easing to ¾%. As a result of all of these moves, investors are now once again buying mortgage backed securities when Wall Street has a bad day. Oil has "plummeted" to $100 with gold down to $908! The dollar had its best week against the Euro, largely because the Fed did not cave in by easing 1%.. Mortgage rates are now under 6% and should continue to fall and hopefully stay low. This MUST happen for Real Estate to recover.

Look for the Fed's next move to be the direct purchase of Mortgage Backed Securities. This will increase liquidity for banks and encourage them to lend more. The Fed is on OUR side and we all will be the beneficiaries!

Things have changed for sure. It is in this economy's best interest that Real Estate recovers and everything is being done to make that happen. Let your buyers and sellers know what is happening. It's a great reason to be in contact with those you've worked with during the last few years. Be ready for the best year of business in many.

I will update you as there is more news! Until then, I wish you good times and good business!

WHY TODAYS BAD PPI NUMBERS MAY NOT BE SO BAD FOR HOUSING

Mortgage Bankers Of Wisconsin — Tue, 26 Feb 2008 15:26:59 -0600

Hello to all my colleagues

I know that I am beginning to sound like a broken record when I use the word volatility. Unfortunately, there just is no better way to describe it. Let's get all the bad news out of the way. Last month I told you that my sources indicated there would be a nationwide increase in the conforming loan limit from $417,000 to at least $625,000. This certainly would have had a huge impact on Real Estate that required a "Jumbo" loan to purchase their new home. After battling between the House and Senate, they compromised (doesn't sound like much of a compromise to me) by raising the conforming limit to 125% of the median area home price.

The Median Home Price in Milwaukee County last year was $241,501. Multiply that by 1.25 and you get $301,876. The conforming limit remains $417,000. The good news is that the same formula appears to apply to FHA loan limits. The exact Median home prices will be determined by HUD and the amount above is NOT the amount that will be used but it should be close. The new limits are good through December 31st, 2008. With FHA loan limits rising, that buyer with challenged credit or little to put down will be back in the market.

In my opinion, Congress made a big mistake in not making the increase effective throughout the country. The only areas that will truly benefit from the new limits will be high cost areas, which represent a small percentage of counties in the United States.

On January 22^nd, after the Feds jumped in with a ¾ point rate cut, the Fannie Mae 30 year 5.5% bond price topped out at 102.28. At that point, mortgage rates were at historical lows. After the scheduled January 30^th Fed meeting, where another ½ point was cut, bond prices were steady until February 4^th, when Philadelphia Federal Reserve President Charles Plosser made no secret about his concern that core inflation will elevate. Bonds sold off more as concerns about Bond Insurers ability to remain solvent swept the market. Recently, investors have not looked to mortgage bonds as the safe option. Yesterday, the price fell to 98.53 as mortgage rates hit the highest level in over 6 months. WHY?

Right after the first emergency cut in August, there was little confidence in the quality of bonds and yet they became a safe haven whenever stocks had a bad day soon after. Yesterday, Standard And Poor reaffirmed the AAA rating for bond insurers MBIA Inc. and Ambac Financial Group Inc. The result was a rally on Wall Street with the Dow Jones Industrial Average closing up 189 points on the news. This caused bonds to sell off, moving mortgage rates up further.

Why may the news today be very good for rates? With the reaffirmation announced today, bonds once again have become a safe option. There is more bad news to come on Wall Street and when that next shoe drops, money should flow back to bonds, moving rates down. In January, we had bad news after bad news announced creating the "perfect storm" that caused investors to move money from stocks to bonds consistently. There is no reason to believe that won't happen again.

On March 18th, Bernanke and Company meet to decide on policy. Most expect them to ease again, most probably by ½ point. This becomes a much more difficult decision as inflation becomes more of a concern. Many feel that we are already in a technical recession and the Feds have decided that it is more important to keep the economy growing than to combat inflation that may likely accelerate as a result of the aggressive rate cuts. Today, Federal Reserve Vice Chairman Donald Kohn said turmoil in credit markets and the possibility of even slower economic growth pose a ``greater threat'' than inflation. (He made this statement after the Producer Price Index was announced at 1% which was over double the number expected.) As a result, both stocks and bonds rallied which illustrates not only how volatile the market is but how important for Mortgage rates it is that investors are convinced that growth remain the priority for the Fed.

Folks, the Fed is doing everything within its power to stimulate growth. Those of you that have followed this column remember that it has been my view that valuable time was wasted in denial of the fact that Real Estate crisis would bring this economy to a halt.

I believe that as the Feds cut short term rates which will put more money in all of our pockets, Real Estate will begin the comeback that will result in an economy that will grow once again. Clearly, one can not happen without the other. If the Fed Funds Rate drops to 2.5% next month, the Prime Rate will fall to 5.5%. (The Prime Rate is the index that determines interest charged for credit cards, adjustable home equity loans and other variable rate loans, and many business loans.)

When will this happen? Statistics show that when the Feds cut rates, the full effect is not felt for 6-8 months. The first Fed Funds cut was made on September 18^th of last year. (The August 16^th emergency cut was to the Discount Rate only) The January 21^st /January 30^th cuts that totaled 1.25 points won't have full effect until sometime between July and September of this year, using that formula. The Feds will continue to ease until there is a sign that there is improvement to the Gross National Product, assuming inflation is not out of control. Mortgage rates should fall again as problems surface on Wall Street. Prices are continuing to fall on Real Estate as buyers remain on the sideline. Low rates and low prices will once again make Real Estate a solid investment at some point.

HANG IN THERE! The time to really worry was when the Fed was doing nothing and believing that the Real Estate crisis was NOT related to the strength of our economy. Now, they know what you and I have known all along. Yeah...they were late...real late...but as they say..."better late than never"!

Until next time, I wish you good times and good business. Rick

Bernanke Cuts 1.25% in 8 days with more to come. Now what?

Mortgage Bankers Of Wisconsin — Wed, 06 Feb 2008 08:17:15 -0600

Hello to all my valued colleagues

So much has happened in the last two weeks and yet in some ways not much has changed. Late on Monday evening two weeks ago, I sent this note to 400 Real Estate agents in my area.

"It looks like the perfect storm! Dow futures are down almost 500 points after Asian and European stocks plunged over night. Over night treasury yields have plunged in a flight to safety as the 10 year yield reaches 3.53%! What does this mean? If Ben Bernanke and company do not announce an emergency rate cut before the opening bell on Tuesday morning, mortgage rates could fall to historical lows!"

Well, Bernanke did step in and lowered the Federal Funds rate by 3/4 point before the opening bell. Investors seemed confused by the action as the Dow Jones Industrial average plunged 500 points in the 1st hour after the announcement. Money from stocks wound up in the safety of mortgage bonds moving mortgage rates to their lowest point in 5 years. Confused investors then decided that the cut was a good thing with a furious reversal by day's end with mortgage rates moving up 1/2 point by the closing bell.

On Wednesday, January 30th, the Feds eased again, this time by 1/2 point after announcing that the preliminary 4th quarter Gross Domestic Product moved up by a paltry .6%. Remember, the definition of recession is two consecutive quarters with negative GDP growth.

The big shock came Tuesday morning when the ISM Non-Manufacturing Index (a measure of the expansion or contraction of service related businesses) was released before the opening bell, coming in at 41.9 vs estimates of 53.0. (Above 50 is expansion...below 50 indicates contraction). Service companies represent 60% of our economy! There is a strong possibility that the Bernanke and company will once again cut before the scheduled March 18th meeting and it may be by as much as another 3/4 point. The Dow Jones Industrial Average plunged 370 points by the closing bell today.

So, how is it that after slashing the Federal Funds Rate by 1.25% in 8 days with another 3/4% cut ahead, are we in the same position we were that night 2 weeks ago?

The Dow is trading at the same level today as it was the day after the emergency cut. The 10 year treasury is trading at 3.54%. The Asian Nikkai exchange is down 640 points as of this moment. In my opinion, no matter how aggressive the Feds continue to be, they can not prevent recession.

But as investors lose confidence in stocks, mortgage rates should continue to fall and that will eventually bring buyers back into the Real Estate market. In fact, some are concerned that low interest rates could lead to the "bubble" in Real Estate that was a big part of what led us to this dark place we've been in. There is a big difference now that will keep history from repeating itself. Lending guidelines have tightened and those with questionable credit will no long be able to be in a position to put little or nothing down to buy a home. Buyers will from now on have good credit with money for a down payment and they will be required to document the income required.

As both short term and long term rates decline, it will lead to more disposable income for potential buyers. Homeowners that previously refinanced into historically low rates will now be able to invest in new real estate with amazing value with even lower rates. As investors lose confidence in stocks, they will eventually turn to Real Estate as they did when we suffered our last recession after 9/11. This recovery will be gradual but inevitable.

The stimulus package announced by President Bush and being negotiated by the House and Senate will include a temporary bump-up of the conforming loan limit from $417,000 to $625,000. (Over the last 8 months, Wall Street has had no buyers of mortgages not insured by Fannie Mae and Freddie Mac causing jumbo rates to be as much as 1.75% higher than conforming loans. That has no doubt had a significant effect on the sale of more expensive homes that require larger mortgages.) This could be announced and put into effect quickly.

The Feds will continue to be aggressive because they have to. And because they are FINALLY convinced that the way to a healthy economy involves a recovery of the Real Estate market, we can be reasonably sure we have seen the worst.

Until next time, I wish you good times and good business. Rick

Bernanke and Company Are Far from Finished! Federal Funds and Discount Rates fall another 1/2 point!

Mortgage Bankers Of Wisconsin — Wed, 30 Jan 2008 19:47:27 -0600

Hello to my colleagues and clients

WOW! After the Feds jumped in and lowered the Federal Funds Rate and Discount rate 3/4 point last Tuesday, I told you that this was the most volatile market I have seen in a very long time. That day we saw the DOW drop 500 points right after the announcement (it seems to take investors time to digest events they don't expect), moving mortgage bond prices way up, which moved mortgage rates down to close to historical lows. That was short lived as money flowed back into stocks and by the end of the day, mortgage rates were 3/8% higher than morning.

We spent the next week with investors speculating as to the probablility of the Feds easing more today. By this morning, there was a 80% probability that they would ease another 1/2 point today and they didn't disappoint. This decision came after the advance Quarter 4 Gross Domestic Product came in at PLUS 0.6%, weaker than the expected 1.2% increase. This number should have resulted in mortgage bonds moving higher (rates moving in the opposite direction), but not ahead of the Fed decision. When the Feds announced their decision, stocks initially moved higher with bonds lower.

Stocks then reversed it's rally and fell for the first time this week on concern that bond insurers guaranteeing $2.4 trillion in securities will lose AAA credit ratings. By the end of the day, the Dow Jones was down 38 points with mortgage bonds also slightly negative.

Consider that after a cut of 1.25%, the Dow Jones gained just 170 points this week when investors should have been thrilled about what the resulting lower Prime Rate would mean to corporate debt and consumer debt (credit card interest and home equity loan interest, etc). Imagine where stocks would have been today had the Fed not chosen this aggressive path!

Tomorrow Personal Income and Outlays will be announced. This will be an indication both of inflation and consumers ability and williness to spend. On Friday, the government employment number are announced. Weak numbers should result in lower mortgage rates. Obviously, the opposite will be true. Today, ADP, a private firm that measure, sometimes inaccurately, estimated that 130,000 new jobs were created in Jaunary. That number is a surprise to the upside...but we'll see what the official numbers show.

Where are we headed? In my opinion, there is only one reason that Bernanke, congress, and Bush are so agressively pursuing every avenue possible to stimulate growth in our economy. There is a common concern from everyone that we could be headed toward the "perfect storm" of consumers losing both their assets and their income should the stock market go into a free fall and unemployment accelerate at the same time. Absent of the positive news of the inpending stimulus package and the fed aggressive moves, we would probably already be in the recession that we may not be able to avoid in any case. In the long term, I believe it will work as the values of under-priced stocks and real estate along with lower cost of debt will jump start our economy similar to the way it did after the 2001 recession. But we have a long road ahead before that happens with opportunities that we must recongnize before we can take advantage of them. Mortgage rates will likely drop over the next few weeks and months close to or below historical lows!

The intense volatilty that will continue through our road back makes it more important than ever that consumers have trusted professionals to advise them when making Real Estate and other investment decisions. Connect with your clients during this stressful time so that they feel confident that you have their back. As an example, I have been having 10 min phone conferences with my clients to help them plan for the right time to lock in to rates at a point that makes sense for them. Since it is clear that when mortgage rates reach the bottom (wherever that is), market volatility will probably not allow them to stay there, planning is essential.

Hang on for the ride, my friends. This will be a year to remember. Until next time, I wish you good times and good business!

Conforming Loan Limits To Temporarly go to $625,000? The Feds get Aggressive!

Mortgage Bankers Of Wisconsin — Thu, 24 Jan 2008 09:57:39 -0600

Hi, Real Estate Partners

Well...the name of the game is volatility! Very early Tuesday morning (well before the Wall Street bell), I told you that unless Ben Bernanke and the Federal Reserve would cut the discount and federal funds rates BEFORE the opening bell, there would be a flight to safety as funds moved out of stocks into bonds. This would have caused mortgage rates to plunge to levels NEVER seen before. While this would have been a good thing for prospective buyers, the resulting carnage on stock exchanges would most likely have been the last straw in our battle to avoid a very serious recession. CNBC analyst Jim Cramer stated that the Dow would have fallen between 1000 and 2000 points by the 30^th had the Feds not stepped in.

Well...as you know, the Fed DID act by slashing Discount and Federal Funds rates by ¾ point in what was the largest emergency cut ever. Furthermore, there is an additional ½ point built into the market for a cut on the scheduled meeting date of January 30^th. That would be a cut of 1.25 points in just 1 week! It's clear that Bernanke is more worried about the economy than he is saying as he virtually abandons voicing his concerns about inflation and focuses on stimulating growth.

What does a Federal Funds Rate of 3% and a Discount Rate of 3.5% mean to this economy? The Discount Rate is the rate that the Feds lend to other banks. As this rate drops, banks have more incentive to lend as their cost of money is lower and they make more! This speaks to liquidity as the secondary mortgage market has gotten tighter and more expensive over the past few months. The Federal Funds Rate is the rate that banks charge each other and is the index that the Prime Rate follows. The Prime Rate is the index that commercial debt, credit card debt, and home equity lines adjusts to. Once again, the cost of living for virtually everyone has just gone down.

Yesterday, I received 20 calls from clients that were locked in for purchase and refinance closing over the next 30 days. In each case, the question was "Now that the Feds lowered rates by 3/4 , can I get a better mortgage rate?" My answer to them was accented by market events of yesterday. The Feds are cutting the short term rates, which have the effect I just described. Mortgage rates go down when investors choose the safety of mortgage bonds over stocks. Yesterday's 600 point Dow Jones Industrial Average swing resulted in funds flowing AWAY from mortgage bonds into stocks. The result was that mortgage rates went up 3/8% in the afternoon alone. At this writing, mortgage bonds are trading lower again. The result of the Fed cut (at least for now) was to raise mortgage rates.

Jumbo Loan limits currently at $417,000 could be temporarily increased to $625,000, my sources tell me. This is great news for the higher priced home market as the Jumbo 30 year Fixed rate has been up to 1.75% higher than the conforming limit and would be eligible for the same low rates as conforming. I will let you know when I hear more.

The long term outlook for mortgage rates is still lower but the volatility that we are experiencing will continue. The saying is that Real Estate is often the first into a recession and the first out. With lower mortgage rates ahead, the Feds more aggressive than EVER before, and Congress actively plotting to shock this economy out of recession with stimulus packages, I look for Real Estate to begin it's recovery this year. I could be wrong, but the things I have written to you all about over the last months have and are happening.

Get ready for a wild ride this year! Rick

MORTGAGE RATES IN A FREE FALL! 2008 WILL BE A YEAR OF RECOVERY

Mortgage Bankers Of Wisconsin — Sun, 06 Jan 2008 11:01:41 -0600

Happy New Year to all of my Real Estate Partners!

2008 will be the best year in Real Estate in many years. I know...you wonder what I'm drinking! I am stone cold sober when I say that. Here is why.

Since Spring of last year, I have been saying to you all that for the economy to be healthy, we need to have a healthy Real Estate market. It was my very strong belief that Ben Bernanke and company would be jumping in before the fourth quarter to stimulate by lowering the Discount and Federal Funds Rates. Furthermore, I said that mortgage rates would need to fall to historical lows for buyers to start poking around.

The truth is that the Feds are in the game big time. They have lowered both rates at every meeting since the August 17^th surprise Discount rate cut of ½ %. They will meet again on January 30^th and most likely will cut again. Even though oil has briefly pierced the dreaded $100 per barrel level and evidence of inflation in other areas is apparent, the subject of inflation is nowhere to be seen in recent statements by the Fed. Why is that? Are they no longer concerned? The answer, in my opinion, is that their concern is primarily in watching signs that we are headed into recession. Up until recently, employment numbers pointed to a very resilient work force which seemed to make the probability of recession less and less. Then came the employment numbers of Friday!

The consensus was that there were 70,000 new jobs added in December, a month that traditionally includes holiday hiring numbers. Wall Street was shocked to hear that the number was just 13,000 (the smallest gain in 4 ½ years!). Furthermore, it was expected that unemployment would rise to 4.8%. Instead, the number was a staggering 5%. The Dow Jones Industrial Average closed today at 12800 which represents a loss of 750 points since the "Santa Claus Rally" of Christmas Eve. The result has been the biggest Mortgage bond rally in years! This means that mortgage rates have dropped close to historical lows as of today!

Wall Street is finally coming to grips that the Housing Market is bringing other sectors closer to recession. Think of the countless millions of dollars that will not flow into the economy as lending gets more expensive and cash out refinancing that a short time ago was easy is being discouraged with higher rates and costs. Equity in homes is dropping which, is also a factor keeping consumers from money they used to count on to pay debts.

Now comes some good news. Mortgage rates have been falling at a pace not seen since 2002. Many home owners could not afford to give up their low interest rates to move. That excuse is gone as rates have fallen well below 6% and could continue to fall. Watch the 10 year treasury bond yield. While rates are not directly affected by this instrument, mortgage bonds have been heading the same direction. If stocks continue their trend, money flows to safety of bonds. This pushes rates down!

Sub-prime lending and Real Estate has propelled this economy toward recession. During the last twelve months, Bernanke and the Feds have continuously stated that there a few signs that the "housing slump" is showing effect in other sectors of the economy. It was extremely naïve to believe that it was not inevitable that would not be the case. The irony is that if we do hit a true recession, safe money will not be in stocks. It will be in bonds and...REAL ESTATE! That which propelled us toward recession just could be the thing that helps bring us back.

Remember what happened in 2001? We experienced some of the best Real Estate years ever after that recession. Now, I'm not counting on that kind of demand this year but I do expect to see a noticeable increase in Real Estate demand by the end of 2008. Be ready for that opportunity by setting the groundwork now. Contact as many of your past clients as possible to tell them what you believe will happen in our economy. This is an issue that hits everyone personally. They will be glad to hear from you.

Until next time, I wish you a very healthy, happy, and successful new Year. Rick

Mortgage Rates Head Back Up As lending Standards Tighten

Mortgage Bankers Of Wisconsin — Wed, 26 Dec 2007 15:05:23 -0600

Hello and Happy Holidays to all of my friends in Real Estate

One week ago I wrote to alert you to a rally in the mortgage backed bond market that had mortgage rates headed down once again. This market is extremely volatile and very complicated. In the week since my last post, mortgage bonds lost all of those gains and even more. Interest rates have been as low as 5.625% and are now 6.25% (these rates are with NO points). I have advised my refinance clients to plan for the time to pull the trigger. Those of you that follow my blog know that I have predicted the volatility that we are seeing now. I still believe that we will see other bond rallies as Wall Street issues lead to the flight to safety from stocks to bonds that we saw earlier in the month.

I am seeing more purchase activity over the last 30 days than I have in a very long time. Buyers are beginning to fall off that proverbial fence, especially those that have no homes to sell. Yet, there are new obstacles, almost daily. Mortgage standards are tightening.

The old standard of 20% down is not necessarily the number making lenders feel safe. If the home buyer has a credit score less than 680, it will take 30% down for them to qualify for the lowest rate available. If you have a 679 score and are putting 20% down, your rate will be 1/4% worse as a result. If your score is below 660, it will cost an additional 1/8%. Below 640, it will be an additional 1/8%. FannieMae and FreddieMac are now charging 1/4% of the loan amount on all loans they insure in the new year. This risk based pricing is their way of limiting their losses. (With 30% or more down, there are no rate penalties)

Private Mortgage Insurance is making a comeback. Secondary lenders are pricing "piggy back" second mortgages so high it makes no sense to split loans between 80% first and the balance on the second. Furthermore, lenders are charging an additional 1/4% on the first mortgage when accompanied by a "piggy back" second. More financing is do

Lenders now offer "Lender Paid Mortgage Insurance". By accepting a higher interest rate, the borrower is not required to pay a monthly PMI payment. The resulting payment is often less than the lower rate with monthly PMI.

The moral of this story is that as Real Estate agents, it is more important than ever to network with a lender that keeps up with the many changes so there are no surprises in the financing process. I will blog further as the changes happen.

2008 will be an outstanding year for those of us that are students of our profession. The more you know, the more value you have to your prospective client. Those that don't keep up will be left in the dust. Those may be harsh words but look at all the changes as an opportunity to start the year off on the right foot.

INTEREST RATE ALERT! RATES HEADED DOWN AS BONDS RALLY!

Mortgage Bankers Of Wisconsin — Wed, 19 Dec 2007 08:17:07 -0600

Hi, again

Well...here we may be going again! We are in the middle of a three day Mortgage Bond rally with interest rates starting to head down. On Wall Street, the futures look negative with Morgan Stanley reporting their first quarterly loss ever in their 84 year history. Once again, elements of a financial "perfect storm" appear to be there as volatility is as high as I remember for many years.

What is ahead? This rally could end and reverse itself just as it did when I first blogged you that rates had dropped. (We saw the 30 year fixed rise ½% in just three days! ) Later today, Richmond Fed President Jeffrey Lacker speaks in Charlotte on the outlook for the U.S. economy later today. Additionally, the final revision of the third quarter Gross Domestic Product will be announced tomorrow morning along with an indicator of economic activity. Finally, Income and Outlays, an indicator of both earning and spending by consumers, will be announced on Friday. Should all of these indicators show that inflation is in check and activity is down, we may see interest rates drop to where they were two weeks ago. Should they show the opposite, this rally will end and reverse.

Make your buyers aware of these opportunities to create a bigger sense of urgency as that clearly has been lacking in many undecided potential buyers. I'll blog again after Friday's big numbers are in the rear view mirror.

Rick

One More Fed Meeting in 2007 What's ahead for the 2008 Real Estate market?

Mortgage Bankers Of Wisconsin — Sat, 24 Nov 2007 19:22:27 -0600

Hello, Friends!

I hope all is well with you and your family and that this holiday season brings you health, happiness, and success.

The Feds made their move on October 31^st by dropping the discount rate ¼ point. Watching the market since then, very interesting things have happened. On the day of the Fed decision, the Dow Jones Average gained 138 points as investors were relieved that Bernanke and company were still responding to their needs and being proactive in regard to stimulating this economy that has begun to stall. Ironically, that same day, the government released quarter three advanced gross domestic product (GDP) which stood at a very healthy 3.9%. This seemed to indicate the possibility that the economy was still growing at a moderate pace. Concern about inflation becoming the predominate Federal Reserve focus intensified as a growing economy can be inflationary.

On Friday, Federal Reserve Governor Randall Kroszner, in a prepared statement prepared for an Institute of International Finance conference in New York, "a sequence of data releases consistent with the rough patch for economic activity that I expect in coming months would not, by themselves, suggest to me that the current stance of monetary policy is inappropriate,"

He was saying that cutting the Fed Funds Rate is not only not likely, but would only be considered only as a last resort. It's clear that the Fed's are doing what they can do gain control so that investors can't count on a rate cut each time the equity markets perform poorly over an extended period of time. Recently, Ben Bernanke, the Federal Reserve chairman, made it clear that they believe the economy will slow in the forth quarter.

Since October 31st, the Dow Jones average has dropped from 13930 to 12980 where it finished today. During this time, Bernanke and company stated that "The Committee judges that the upside risks to inflation roughly balance the downside risks to growth."

What does this mean and at what point will the focus once again on inflation as the predominate danger to this economy? While it's certainly true that the economy and the American public have shown tremendous resiliency in the face of sky rocketing oil and the ever weakening US dollar, the worst is yet to come. On its rise toward the inevitable journey to $100 per barrel, gasoline prices remained at recent lows, averaging $2.75 per gallon through the summer and into Fall. Some analysts expect gas to be close to $4/gallon soon. That is a level that we have not had to experience in the past. At $4/gallon, it will cost $64 to fill a 16 gallon tank. In my opinion, you will see consumer spending fall as the cost of living rises. This leads to recession.

Looking at the GDP numbers, another important thing to remember is that exports have been on the rise as foreign currency is now worth a record amount of US dollars. Take away export numbers and the weakness of our economy becomes more transparent. Ironically, the weak dollar actually helps this economy stave off recession, at least for now.

In summary, the Fed is in a very tough position. On the one hand, the spike in oil prices could clearly be viewed as a sign of inflation. So that's a good argument for the Fed to keep its key federal funds rate unchanged when it has its next meeting on December 11, some economists say.

However, the spike in oil has the potential to lead to higher gas prices at the pump as well as steeper home heating costs this winter. With that in mind, $100 oil might be more of a tax on consumers and could weaken the economy.

"The economy is on the brink of a recession," said Mark Zandi, chief economist with Moody's Economy.com, an independent research firm. "Hand wringing about inflation is misplaced. The Fed should be focused on growth. Inflation is not an issue for 2008."

Yesterday, the Fed released their outlook for 2008. They are predicting that the economy will grow at between a 1.8 percent and 2.5 percent clip in 2008, down from an anticipated growth rate of 2.4 percent to 2.5 percent this year. There is clearly a very real concern that higher oil prices along with the still depressed Real Estate market will lead to a recession and consumers become very selective in how they spend their money.

Now here is the good news! Through all of the roller coaster of events since October 31^st, the mortgage backed securities (increased buying leads to lower yield which lead to lower Mortgage rates!) have been steady and not been subject to the wild swings of Wall Street. Why is this good? The 30 year fixed rate has been close to 6% during this entire time and that, my friends, puts them in position to fall below that level soon. Last December, we fell all of the way down to 5.75% and there's no reason not to believe that we will be there OR LOWER by year end.

December 11th, the Federal Open Market Committee will meet for the last time in 2007. (The first 2008 meeting will be January 30th) The commitee will do their best to hold rates steady, in part due to the failing dollar. Remember that mortgage rates follow the yields of mortgage backed bonds. As investors flow into those bonds, the yields will fall and mortgage rates will follow. The 10 year treasury yield closed at 4% on the day after Thanksgiving largely due to the flight to safety of bonds. (Each time negative news comes out of the financial sector, stocks react negatively with the money flowing to safety. This partially explains the more than 1100 point drop in the Dow since October 9th.)

In my view, 2008 will be a year of slow but gradual recovery in Real Estate. Long term mortgage rates should continue to tick down and more and more buyers will jump into the market as a result. Those of us that have worked hard and will continue to work hard will survive to experience good times again.

Rick Bernstein

The Feds Cut again but will it be the last time? UPDATE 11/2/07

Mortgage Bankers Of Wisconsin — Fri, 02 Nov 2007 11:00:13 -0500

Hello Friends

Well, October 31^st has come and gone with very interesting yet contradictory results. Bernanke and company once again cut both the Discount Rate (the rate that the Feds lend to banks) and the Federal Funds Rate (the rate that banks lend to each other and the index the Prime Rate adjusts to) by ¼ point. Wall Street cheered as money flowed from the safer bond market to the riskier but potentially more lucrative stock market. Since mortgage backed securities also suffered, mortgage rates ticked up. The DOW was up over 130 points by the end of the day as investors were relieved that the Feds pulled the trigger again.

Once again, yesterday was proof that it is rarely what the Feds decide that drives the market as much as it is what they say. After examining the Fed statement and after Citigroup Inc. and Bank of America Corp., the two biggest U.S. banks, were downgraded by CIBC World Markets on worries about the credit markets, the DOW dropped 362 points with money flowing back to safety of the bonds and mortgage rates fell back to where they were before the Fed announced their decision.

WHAT HAPPENED YESTERDAY? To get a clear understanding you must first compare the statements from this meeting to the one issued after the September 18^th meeting.

"Readings on core inflation have improved modestly this year. However, the Committee judges that some inflation risks remain, and it will continue to monitor inflation developments carefully.

Developments in financial markets since the Committee's last regular meeting have increased the uncertainty surrounding the economic outlook. The Committee will continue to assess the effects of these and other developments on economic prospects and will act as needed to foster price stability and sustainable economic growth."

That was the press release after the September 18^th meeting. Notice the benign way the subject of inflation was treated...almost as if they felt obligated to mention it. Compare it to the statement released yesterday!

"Readings on core inflation have improved modestly this year, but recent increases in energy and commodity prices, among other factors, may put renewed upward pressure on inflation. In this context, the Committee judges that some inflation risks remain, and it will continue to monitor inflation developments carefully.

The Committee judges that, after this action, the upside risks to inflation roughly balance the downside risks to growth. The Committee will continue to assess the effects of financial and other developments on economic prospects and will act as needed to foster price stability and sustainable economic growth. "

The contrast is clear. Yesterday, we saw the Feds tell Wall Street that there would be no more moves to appease investors. All future moves would be made after considering what is in the best interest of the economy in the long run and not what would make investors feel safe. It is a move, in my opinion, that had to be made. The Federal Reserve must be proactive and until yesterday (and in some respect including yesterday) they have reacted to investor's concerns. Clearly, although there were other factors, the news wasn't what Wall Street wanted to hear. In not so many words, the Fed was saying that not only might they not cut again but if it were indicated they would consider a rate hike. It seems that Bernanke felt it was time to stop allowing "the inmates to run the asylum".

Remember, when the world sees the economy as weak, the dollar loses value and the products they buy over seas become more expensive. Since most oil is exported into the US, the weaker dollar began to drive the cost up. On September 18^th, the price of oil hit $81.51 per barrel. By the end of the day on October 31^st, the price was over $96 per barrel! That is an 18% increase in just 6 weeks. No wonder there is concern about inflation. At what point will the cost of oil translate to higher prices or reduced spending...or both? It is interesting that after the Feds made their stand that the price of oil declined and the dollar rallied against the Euro yesterday.

This morning there were 166000 new jobs added which was almost double the expected 80,000. Unemployment remained at the expected 4.7% The average hourly wage was up only 0.2 percent, less than the 0.3 percent forecast. Looking at this news, you would expect Wall Street to react positively. Indeed, the futures were up over 50 points. But continued concern in the financials produced the opposite result. As of 10:30 am, the DOW is down over 100 points. Investors are transferring to bonds with the 10 Year Treasury current yielding 4.29%, the lowest this year. Weakness in our equity markets has helped move the dollar lower and oil higher today. This obviously is not good news and once again fuels the Fed's concerns about inflation AND concern that consumers may begin to spend less.

Consumer confidence has been sinking. Despite the surprisingly strong third quarter and the strong employment numbers, analysts expect the last three months to slow down as both retailers and manufacturers are expecting a more sluggish quarter.

The bottom line is that nothing has really changed. Despite the message the Feds are trying to send, they won't hesitate to cut again if we head closer to recession. This is all about setting expectations as investors react so much on speculation. There is still much weakness in this economy despite the areas of strength. I still believe, more now than ever, that the recovery of the Real Estate sector is pertinent to the health of our economy. Rates must fall to near record lows to bring buyers back into the market. The fact that mortgage rates remain near one year lows after this volatile information filled week is very good. We could be seeing the 30 year fixed rate actually fall below 6% soon.

Rick Bernstein

Two Weeks Away From the Fed decision-where are we headed?

Mortgage Bankers Of Wisconsin — Thu, 18 Oct 2007 18:27:27 -0500

Hello Friends

We are two weeks away from the next Federal Open Market Committee meeting, chaired by Ben Bernanke, to determine economic policy. At this meeting, they must decide whether it makes sense to lower the Discount Rate (the rate the Feds lend to banks over-night), the Federal Funds Rate (the rate that banks lend to each other and the rate that the Prime Rate adjusts to), or both. Remember that these key indexes are short term rates and while they may make your home equity loans and credit card interest fall, they are NOT directly connected to mortgage interest rates. In fact, when the Feds surprised most, including me, by dropping both indexes by ½ point on September 18^th, mortgage rates actually climbed in the week following.

Why is that? Immediately after the Feds made their decision, the dollar accelerated its decline against the Euro. This is inflationary as products imported into the US become more expensive as the dollar becomes worth less. A related concern is the cost of crude oil. If the dollar is worth less, crude oil will cost more. At this writing, crude oil closed at $89.47/barrel and the dollar closed at a value of $1.4294 per Euro...both records. When there are inflation concerns, investors sell mortgage backed securities moving mortgage rates up.

But market participants are looking for confirmation that the economy is cooling and inflation is contained presently. The dollar value and crude oil price could become more of an issue in the future if trends continue, but this week, both the Producer Price Index and the Consumer Price Index readings indicated that both costs and prices were within the comfort level of Ben Bernanke and the Federal Reserve Board. Inflation for now seems to be under control. Traders seem to be growing more convinced the US (and possibly Asia and Europe) economy is heading for a slowdown.

Both Secretary of Treasury Henry Paulson and Ben Bernanke stated this week that the housing slowdown has affected the economy more than they had thought and were concerned about growth in the months ahead. Initial claims for state unemployment insurance totaled 337,000 in the week ending October 13^th, much larger than the 314,000 predicted by economists. Bank Of America's quarterly profit fell a much larger-than-expected 32 percent, hurt by mounting credit losses and poor trading results in its investment banking unit. Washington Mutual said third-quarter profit fell by 72 percent due to mounting losses and write-downs related to mortgages.

There is enough data to see clearly that we are not out of the credit crisis. The decision on the 31^st is a very difficult decision indeed. There are arguments for the Fed to pause and as many to continue what they started on August 17^th and again on September 18th. Remember, I have said that the only way for this Real Estate market to get on track is for long term mortgage rates to come down thereby bringing buyers on the sideline into the market. The Feds must make the right move or long term mortgage rates could actually climb as the short term rates decline. If the Feds were meeting tomorrow, I believe they would cut the Federal Funds Rate ¼ point. Any more than that could lead to the mortgage backed security sell-off we saw after September 18^th causing Mortgage rates to climb.

But there are still two weeks before that decision is made. Watch the stock market...what we want is a flight to the safety of the bonds. The DOW has finished down four of the last five trading days during which interest rates have been ticking lower. Data released over the next two weeks could make a difference but it does seem that evidence of a slowing economy with inflation in check will leave the path open to another cut.

By the way, rates on loans over $417,000 (jumbo loans) have been much higher than those $417,000 and below. This is due to the over-reaction of investors that stopped buying mortgage assets that were not insured by Freddie Mac or Fannie Mae. The good news is that it is now possible to lock into jumbo 30 year fixed loans under 7% now. The dust seems to be settling so if you have a buyer frustrated by the high jumbo rates, call me to get details.

As always I hope you find value in these updates. Until next time, I wish you good times and good business.

Rick

Rick Bernstein

Senior Vice President

16655 West Bluemound Road Suite 330

Brookfield, WI 53005

Office 262-784-6600 Ex 232 Cell 414-350-5834

Fax 414-376-4760