Jon's Blog

a WARNING shot across the nose!

Jon Kutsmeda (National Lending Agency) — Wed, 28 Oct 2009 16:30:41 -0500

(original posting 10-28-2009)

Aloha!

I've already made my point clear via numerous other blogs, but in summary the next big market decline is right around the corner and may very well be more severe then the recession we just experienced and apparently survived.

Recession over? Not so fast! Take for example the screenshot I've included below from Bloomberg this morning. Every top breaking news story was negative, not to mention another 100 point drop in the DJIA. If for some reason you can't view the screenshot, it doesn't matter, crippling economic news breaks are more then abundant so just visit Bloomberg.com or any news feed of your choice and you'll find the same stuff.

However, the recent turn back downward (which I warned about) directly and indirectly has been good for interest rates so get on your horse already and talk to a professional (like myself of course) about your refinance options today before these "easy" loan guidelines and historic rates are gone! That's not just sales talk either! Changes to Fannie Mae Underwriting Guidelines will be implemented on December 12^th and include some of the following loan killing changes:

An update to credit risk assessment; basically meaning we're going to be more conservative
A decrease to maximum allowable expense ratio (debt-to-income) to 45%; Yikes!! Take your total debts including the mortgage and divide it by your income. If it isn't LESS than 45% you DON"T qualify! Plain and simple!
Retirement of Expanded Approval; Credit, income, and equity, the magic 3. Currently if one of these items isn't great you could still get a loan under Expanded Approval Guidelines, no longer, so this means if the loan isn't vanilla flavored it probably won't go!
Increase of minimum credit score to 620; No ifs, ands, or buts about it; 620 FICO or no loan for you! This includes FHA!!

Hope this update has been informative! ALOHA!

Jon Kutsmeda
National Lending Agency
808-389-2174
jon@nationallendingagency.com
www.nationallendingagency.com

QUICK READ(I mean it this time) - Be careful it's not over!

Jon Kutsmeda (National Lending Agency) — Thu, 10 Sep 2009 23:43:41 -0500

(original posting 08-19-2009)

Here are two short articles that feed you the medicine with a spoonful of sugar optimism:

Yahoo! News

http://news.yahoo.com/s/ap/20090817/ap_on_bi_ge/transunion_mortgage_deliquencies_1

Wall Street Journal

http://online.wsj.com/article/SB125038307081334617.html?mod=dist_smartbrief

If You Own:

•1. REFINANCE NOW while you can! Rates are low and flexible programs are available that make refinancing, even with high Loan-To-Value's, worthwhile for both short term and long term goals.

•2. Consider selling while optimism runs high and the market continues to push investors and emotional first time home buyers into over-valued properties

If You Are A Prospective Buyer:

•1. Be Patient, Selective, and Cautious; No matter what one's opinion is of our economies outlook there should be little argument that there is "No Hurry"!

•2. Don't always assume renting will be a feasible way to leverage an investment. Due diligence is crucial to determining a sound investment.

•3. Wait! Build reserves and cash liquidity and buy when a true bottom has the rest of the market running for the hills.

Jon Kutsmeda
National Lending Agency
808-389-2174
jon@nationallendingagency.com
www.nationallendingagency.com

QUICK Summer Market Update

Jon Kutsmeda (National Lending Agency) — Thu, 10 Sep 2009 23:39:29 -0500

(original posting 06-21-2009)

ALOHA!!

Summer is here, long overdue, just like this Market Update. There will be some very important information shared, fact and perspective, both very much worth your time which I'll attempt to share with you in the shortest manner possible. I've been intending to share most of this information for well over a month, but it's a busy time for all these days. If you couldn't refinance before because of lack of value things may be looking up for you, keep reading. Now, since it is summer and I hope that you have better things to be doing this time of year then reading a long Market Update I'm going to TRY to be brief by using a different, number organized, format. If any of the bullet points are topics of interest for you and you'd like to discuss them in more detail feel free to call or e-mail me. Here we go:

Unemployment is up and so is Government spending. The U.S. government announced Thursday it will auction a record $104 billion in debt this week, despite obvious warning signs that the world has had its fill of American paper. Hey how else are they going to pay for the cash injections to, well, just about everyone these days?
Among those getting big cash injections are the now Government controlled and tax payer owned Fannie Mae and Freddie Mac. These two GSE's own more then 70% of all mortgage back securities in the market. To help resurrect the housing market the government, in conjunction with Fannie Mae and Freddie Mac, has created NEW High Loan-to-value refinancing options. It's important to realize that you don't necessarily have to be making your payment to Fannie or Freddie for them to actually be holding your mortgage in fact they have servicing agreements with most lenders such as Bank of America/Countrywide, Bank of Hawaii, etc. So if you couldn't refinance before due to low home values and your mortgage is owned by Fannie Mae or Freddie Mac you may be eligible for these NEW High Loan-to-Value programs which in most cases do NOT require Mortgage Insurance (MI). So how do you know if Fannie Mae or Freddie Mac owns your mortgage, easy, call me! =) 808-389-2174
Mortgage Interest Rates haven't been in the 4%'s since May 27^th aptly titled Black Wednesday, when rates skyrocketed from 4.625% to 5.25% on 30 year mortgages in just one day. This is actually good for those who haven't begun the refinance process yet as it's still taking 20+ days for loan approval with many of the best priced lenders and almost just as long for appraisals. It's less stressful for everyone working on a loan approval when rates are less attractive. Why is that you might ask? Well, it takes a lot more market confidence and liquidity to keep rates low, so if rates were low today and you hadn't yet submitted a loan application for underwriting it's most likely that by the time you got an appraisal and your was approved rates would be pushing back up. I'm not Monday morning quarterbacking this either because I was giving the same message of urgency back in January and February before rates reached historical lows, lows due mostly to cash injections from the FED to control volatility in the MBS market. Rates got good, everyone decided to finally get off the fence and then BAM like a Emeril cooking special from Hell, rates shot back up before all the late bloomers knew what hit them. Good News! The Government has only spent about half of the 1.2 trillion originally allocated to artificially drive down mortgage interest rates in the 4%'s, so expect another round of interest rate heaven before it's all said and done. Therefore if you have a loan submitted or approved and you're now stuck waiting for lower rates hang in there and be patient, your second chance is coming. For everyone else take the next two sentences very seriously! The next month or two may very well be the last chance to capitalize on 2009's roller coaster ride of historic interest rates, so don't miss out waiting for historic low rates to return before taking action. Take the time to get your application submitted today while rates are higher so that when the final rate rally occurs you're already in position to take advantage of the positive swing.
Of course I was speaking of refinancing in #3. I do NOT recommend buying! We are still at historically high prices for real estate and I expect further depreciation Nationwide even in Hawaii. How much you might ask? Well, shake your head in disbelief or disagreement if you want, but don't be surprised to see additional 30% - 50% depreciation in many areas across the country including parts of Hawaii. Low interest rates are NOT a reason to buy but an incentive or these days, a hook. Would you rather have a loan at 5% for 30 years and buy at peak pricing, price levels which we will most likely never see again in our lifetime, or have a loan with a higher interest rate but save hundreds of thousands of dollars on purchase price and ultimately interest payments over the life of the loan? I leave it up to you to decide! If you are still determined to buy well I won't fight you on it and will be happy to assist you by giving you the best mortgage the market can offer you. The market is obviously favoring buyers these days. If you currently own real estate and most of the commitment to owning the home is based on speculation of future appreciation then I recommend selling during this summer's market rally while you still can find buyers willing to pay top dollar and bail you out of an over-valued and over speculated investment. If your home is your home and you have no interest in selling regardless of what the market tells you its worth then more power to you! Hang in there and try to position yourself as best you can by refinancing into the most cost effective loan for your given situation and financial goals. The time for bottom of the barrel buying will come and not far around corner but I can assure it isn't going to be in 2009. That's my piece and I'm leaving it at that, if you want to know more as to why I'm adamantly taking this position, keeping in mind that it must be with good reason given that it obviously has a negative impact on my current income, then I recommend you call or e-mail me. However, after things rapidly begin to depreciate at the end of this year and throughout 2010, especially when the collapse of commercial real estate further cripples the banking and financial sectors, don't be surprised when I say, "I TOLD YOU SO!"
Speaking of rallies; the stock market has stomped back from the trenches in the second quarter of 2009 with the Dow Jones closing Friday above 8,500. Take my advice at your own risk, but if you own stock, consider dumping it once the DJIA reaches the range of 9,000 - 10,000, if we even get that lucky. Don't be surprised at a 3,000 DJIA or lower at some point in the next 2 years.
Liquidity will be King and deflation will be at the forefront of the power of cash. Despite what will be a commodity boom this summer/fall, deflation will have an uncontrollable inertia bringing down the price of everything. If you have cash you will be king, but king for how long? The destructive actions of the fed may eventually prove fatal for the dollar and its current position as the Worlds reserve currency.
Gold?? $2,000 an ounce, $5,000 an ounce? Sounds like the forecasts of a 30,000 DJIA all but a few years ago. A position in actual gold bullion and certain gold stocks or ETF may be a valuable play but I would proceed cautiously. A lot of those who are pushing gold may very well be the ones shorting it in the end and leaving you with nothing, AGAIN, with no one but yourself to blame, AGAIN, but with no government to bail you out. Do your research and invest cautiously. Like I've said before, "NO ONE WILL LOOK OUT FOR YOU AND YOUR MONEY BETTER THEN YOU!"

Just a final word to the wise; I find it funny how clear and obvious things tend to be when emotions don't cloud our realities and although I know it can be especially difficult to make sense of everything in our current market environment I have two simple pointers to assist you in making these types of decisions.

First, ask yourself how the person providing a service or information to you might benefit from you actually following their recommendations and give thorough consideration to how much of there perspective or consultation is biased due to these potential benefits. Similar to the "Don't ask the barber if you need a haircut" analogy I used in a previous update. Additionally, ignorance can be even more dangerous then selfishness, so constantly challenge the opinions and advice from others. Don't assume for second they have any idea what they are talking about which goes for me too!!

Second, use your common sense. If you are receiving this message directly from me then I've already made the bold assumption that you are capable of this! =) Seriously though, just use your head. Hawaii is at about 8% unemployment SO FAR, foreclosures are up 397% this month from last year which moved Hawaii into the no. 15 spot SO FAR, Hawaii state employees are expected to see loss in pay and furloughs, the economy is shrinking, money is tight, and...I could go on. So how does any of this point to any sign of market correction or even remotely indicate a bottom to anything, it‘s pretty clear we've only just begun our free fall. Now I'm not negative or pessimistic, I'm just realistic and in fact I'm very excited for the immense opportunities which will be available when the market truly hits bottom in the coming years, hence why I'm so adamant about urging you to NOT get back into the market, YET. Good Luck!

I'm sure I'm missing something, so forgive me if there is a part 2. Enjoy your summer. ALOHA!

Jon Kutsmeda
National Lending Agency
808-389-2174
jon@nationallendingagency.com
www.nationallendingagency.com

The Blame Game

Jon Kutsmeda (National Lending Agency) — Thu, 10 Sep 2009 23:27:11 -0500

(original posting 04-23-2009)

ALOHA!!!

I've included a recent blog below, NOT from myself, which I believe to be very well written about the finger pointing going on recently regarding our current economic crisis and the deflating housing bubble. I think it is important for people to take responsibility for their actions and I believe this article does a good job of emphasizing that in its own way. I recommend reading it in its entirety, it isn't that long, and pondering it's points.

I'll be writing my own Market Update shortly, hopefully before the weekend, and in it I'll discuss today's market place and the NEW refinancing programs being provided by the Obama Home Affordability and Stability Plan. If you've had trouble refinancing before due to lack of value it'll be an important e-mail update for you to read.

Also, I'll be discussing my predictions for the rest of 2009, our current economic condition, and what is most likely in store for us over the next decade. If you are some one who has been thinking about buying or if you are a Real Estate Professional who is hyping up our current market as the Golden Opportunity for Home Buying I recommend you keep an eye out for my next e-mail and seriously consider its message otherwise the finger will most likely be pointed at you!!

Until then, here you go...

While the markets themselves appear to have calmed down a bit, the noises emanating from politicians and pundits about the financial crisis have reached new decibel levels. Over the past month, we've been treated to the AIG fiasco, Jon Stewart's public flogging of Jim Cramer, and Time Magazine's "25 People Responsible for the Financial Crisis." This gem includes naming Lew Ranieri, the creator of the mortgage-backed security, as a culprit (which is like blaming Henry Ford for all car accidents), while studiously ignoring the role of Congress in impeding the more active regulation of the GSEs.

The most telling piece was a New York Times column by David Brooks entitled "Greed and Stupidity." In attempting to evaluate the causes of the global economic downturn, the piece outlined the two "general narratives" that are gaining currency among observers, which he labeled the Greed Narrative and the Stupidity Narrative. To me, this column illustrated the type of simplistic and arrogant thinking associated with the recent reporting on the financial crisis. I strongly believe that it's a necessary exercise to attempt to understand what has happened over the past few years to both financial markets and the global economy, and Brooks certainly makes a number of good points. However, there are critical flaws in his analysis. It is extremely simplistic to divide it into these two elements. What he categorizes as "stupidity" on the part of bank management was actually the result of overconfidence in the ability of financial modelers to replicate the behavior of human beings, as opposed to physical phenomena such as particle motion or heat diffusion, on which a lot of models are based. (I hope to explore this subject at a future time.)

However, the column's most troubling and dangerous assumption is that it's other people's greed and stupidity that is responsible for the crisis, with the general population being innocent victims overwhelmed by events beyond their control. A fair analysis would lead to the conclusion that responsibility for the crisis is shared by 1) Wall Street banks, 2) mortgage lenders, and 3) borrowers. (In fact, the only people that bear no responsibility were renters that didn't work for banks, brokerages, or realtors.)

While bad lending practices have been the focus of much attention, the amount of equity taken out of the housing market by homeowners had an equally profound affect on the financial system. The sad case of Ed McMahon serves as an example. The former Tonight Show sidekick bought a house many years ago which had, over time, appreciated in value to more than four times his purchase price. Unfortunately, he had "monetized" the growing equity through cash-out refinancings. When he was unable to work due to health problems, he could no longer pay his mortgage(s); moreover, he could only sell his house at a loss, since the downturn in the real estate markets left him underwater on his loans.

The accompanying chart illustrates this phenomenon at the macro level. According to Federal Reserve statistics, the total value of real estate in the US at the end of 1999 was $12.3 trillion while total mortgage debt was $4.7 trillion, resulting in a combined LTV of 38%. By the second quarter of 2007, the value of real estate peaked at $21.6 billion, while mortgage debt had grown to $10.2 trillion, pushing the market's LTV up to 47%. This suggests that almost $2 trillion in equity was pulled out of the housing market through second-lien financing and cash-out refis during that period. Moreover, homeowners continued to pull money out of their homes even after real estate prices began to drop. In the third quarter of 2007, total mortgage debt increased by $118 billion even as real estate values declined by almost $500 billion.

The massive removal of equity from the housing market had a number of disastrous effects. The combined effects of high leverage and declining home prices clearly contributed to the spike in defaults and foreclosures. Homeowners who couldn't continue to service their loans could no longer be bailed out by selling the property, leaving homeowners with the choice of either selling at a loss or defaulting on their loans. The decline of home prices in an over-leveraged market has also impacted consumer behavior. Over the last few years, economists recognized that "equity takeout" (i.e., the ability of homeowners to finance a variety of purchases by treating their homes as piggy banks) was a key ingredient in the rapid economic growth experienced between 2002 and 2006. The sharp declines in consumer spending experienced during the current recession, in that case, are at least partly attributable to the decline in equity takeout.

The loss of this funding source resulted from both the decline in home prices and the reduced availability of mortgage financing, especially for credit-impaired and self-employed borrowers. This is in addition to the obvious fact that large numbers of people bought homes that they clearly couldn't afford, and were (either unconsciously or explicitly) banking on the dual hopes of rising incomes and real estate prices.

Therefore, it's disingenuous to point fingers at "banks," "lenders," "Wall Street," etc. without taking into account the important role played by huge numbers of borrowers in the disastrous events of the last two years. I don't dispute the fact that Wall Street executives were egregiously overpaid, and the Street's compensation practices created incentives for a host of bad decisions and behaviors at all levels.
However, the collective activities of homeowners had equally pernicious effects on the financial system. Although it is satisfying for politicians and the media to rail about the "unbridled greed" on Wall Street, it is both foolish and disingenuous to ignore the role of homeowners and borrowers in crippling the financial system.

While it's necessary to examine the events of the past few years and assign responsibility, it's important to do it in a fair, complete, and dispassionate basis. The blame games being played by politicians and the press, exemplified by the witch hunt surrounding AIG's bonus payments, flirt dangerously with a descent into McCarthy-ite bullying. (This includes the Administration, Congress, and the state Attorneys General that tried to intimidate AIG employees by threatening to release their names.)

Finally, "blame" itself is a dangerous concept without the requisite thought and discipline. An apropos thought on the subject can be found in the 1973 movie "Papillon." The character Louis Dega was asked whether he would blame the title character, suffering from starvation and inhuman conditions in solitary confinement, for turning him in. His response: "Blame is for God and small children."

Jon Kutsmeda
National Lending Agency
808-389-2174
jon@nationallendingagency.com
www.nationallendingagency.com

Lower Rates - Must Know Info!

Jon Kutsmeda (National Lending Agency) — Thu, 10 Sep 2009 23:21:17 -0500

(original posting 03-19-2009)

ALOHA!

For quite some time I've been encouraging prospective borrowers to get off the fence and prepare the necessary documentation needed to apply for a mortgage refinance. It's important to realize that applying for a mortgage does NOT obligate you to anything nor should it cost you anything. Not until an appraisal is completed or a loan officially funds and records should you be concerned with paying any loan fees. This is something I've explained and emphasized numerous times in an attempt to get borrowers to take action. My biggest motivation for this encouragement was so that if lower rates did occur, which has been speculated and discussed now for over 3 months, then a borrower would already be approved and in position to lock in the lowest rate possible with a short 15 day lock. On average right now the most aggressively priced wholesale lenders are taking anywhere between 10-15 days to underwrite a NEW loan submission while local lenders are on 30 day underwriting turn times. What this means is even if rates dip lower, LIKE RATES DID TODAY, you won't be able to take advantage of these rates because there is no way for the file to be underwritten, signed, funded, and recorded in 15 days or even 30 days in many cases. Now with the NEW RATE HYPE refinance applications will probably increase exponentially making turn times for approvals even longer. Some lenders are now only accepting 60 day locks on NEW submissions or if the file is not yet approved. A 60 lock is NOT going to get you top tier pricing so get your application submitted TODAY!!

I applaud those who found the motivation and took the initiative to provide the basic yet necessary information to have their loan underwritten and approved ahead of the NEW LOWER INTEREST RATE RALLY without costing them a penny. These borrowers are now in the driver seat and can wait for the most impressive pricing before locking.

I encourage those still on the fence for any reason to re-consider and to make a quick call to find out what is required to submit your loan application. If you think you have any idea what the market is going to do next, think again. Also if you have some magical interest rate number burned into your brain please re-consider and re-focus your energy. It doesn't make sense to hold out and risk losing big savings on a potential great refinance because you "THINK" rates will get even better or because you are obsessed over an additional 0.125% or 0.250% without any market understanding or justification for your expectations. For example many lenders re-priced for the worse and we lost all of the morning's gains on Thursday well before the Market close as there was a big sell off in MBS late in the day. Also, there is no rule or standard range of rate improvement in which to judge if a refinance is worth it, such as the infamous, "I need a 1% drop in rate for it to be worth it". If a refinance saves you money and the savings are beneficial to you over the life of the loan then it doesn't necessarily matter what the difference is between your new rate and your old rate.

These are just some basic things to consider when you are sitting around talking yourself out of getting started with the refinance process.

Don't let the media feed your INTEREST RATE EGO either. For example even though today's rally is being touted as just the beginning of what is expected to be an extended period of low interest rates there is NO GUARANTEE. Even despite the recent announcement that the Federal Reserve will use hundreds of billions of tax payer dollars to buy MBS (mortgage backed securities) in an effort to drive interest rates lower and keep them there, exactly how the market will react is a daily task. Even if lower rates become an option there is no guarantee that the savings will be passed on to you. Watch this short video from CNBC to get an idea of what I'm talking about and why the most important time to act is NOW before the volume is too overwhelming and market liquidity too non-existent!

http://www.cnbc.com/id/15840232?video=1065793884&play=1

The Morals of my story are this:

A bird in hand is worth two in the bush

Don't think because you watch the news or breeze over a business article that discusses the housing crisis and Obama's strategy on how to fix it that you have enough knowledge or experience to predict how the market is going to react. Because if you did have any real insight into how it works you'd be trading directly in MBS' secondary markets and not worried about an extra 0.250 on your own mortgage.

I'm all for being patient and trying to get the best mortgage possible, heck it's your money and I want nothing more then to see you save as much of it as possible that's what this is all about, but try to know when a enough is enough. If the loan is saving you money and in the long run those savings justify the cost then there isn't too much more to debate.
WHAT ARE YOU WAITING FOR!!? There is zero risk to you for submitting a loan application for underwriting. If the loan is denied for any reason, well at least you tried. If rates never go low enough to provide you with enough savings to justify a refinance then don't do the loan, but at least you positioned yourself to take advantage of potential lower rates. Waiting for rates to be in any particular area before taking action will almost guarantee you lots of stress, frustration, and missed opportunity!

NOW YOU KNOW!!!!!!

Good luck & ALOHA!

Jon Kutsmeda
National Lending Agency
808-389-2174
jon@nationallendingagency.com
www.nationallendingagency.com

Cramer Vs Stewart

Jon Kutsmeda (National Lending Agency) — Thu, 10 Sep 2009 23:03:45 -0500

(original posting 03-12-2009)

ALOHA!!

Tonight (Thursday) Jim Cramer of CNBC's Show "Mad Money" will be a guest on Comedy Central's "Daily Show" with Jon Stewart.

If you are unfamiliar with Jim Cramer or Jon Stewart and their shows don't worry it'll still be worth watching. Also, if you are unfamiliar with some of the events that have been transpiring recently between these two then these clips will bring you up to speed! They are short and pretty entertaining so check them out and if you get a chance try to tune in for tonight's "Daily Show" on Comedy Central.

I've placed the VIDEO clip links in order of which to view.

There is slight profanity is some which is only used for effect and is "bleeped" out so no big deal but just thought I'd let you know in advance.

http://www.huffingtonpost.com/2009/03/05/jon-stewart-eviscerates-c_n_172057.html

http://www.huffingtonpost.com/2009/03/10/jon-stewart-slams-jim-cra_n_173738.html

http://www.huffingtonpost.com/2009/03/10/jon-stewart-rips-into-jim_n_173454.html

Like I've always said, double check your info and always challenge the advice you receive with opinions from multiple sources of different mindsets. ALL Markets are unpredictable and no one is GOD! Don't always assume the intentions of others are good or that any one particular resource knows how to best advise you regardless of how long they've been doing it! This goes for Cramer, Stewart, Buffet, MADOFF, or anyone else. No one will look after you and your family better then YOU!!! Hope all is well. ENJOY!!

Jon Kutsmeda
National Lending Agency
808-389-2174
jon@nationallendingagency.com
www.nationallendingagency.com

2009 - NOW is the time!

Jon Kutsmeda (National Lending Agency) — Thu, 10 Sep 2009 22:59:17 -0500

(original posting 01-05-2009)

ALOHA & HAPPY NEW YEAR!!!

Regardless of your view on today' s real estate market, the government bail-outs, or the future of our economy, there shouldn't be any doubt as to where the market is headed in the short term. With home values experiencing a historical landslide, down an average of 23% in 2008, you may be running out of time to take advantage of our current historically low interest rates! Without equity in the home it doesn't matter how good rates get you won't be able to refinance at a lower rate. So act now while values are such that lenders are still willing to refinance your loan!

I'm NEVER one to push and I'm the first to tell you if I think you are making a poor decision or considering a bad investment. Well, if you aren't looking into whether or not you can improve your current mortgage NOW then you are making a "poor decision" and you are most likely allowing a good investment to become a bad investment.

What do you have to lose? I'll help you examine the market, your current mortgage, and your goals to determine whether or not a refinance is in your best interest. However, if you don't take the time to take control of your mortgage situation now you might NOT have an opportunity to do so for DECADES.

It's EASY, it's FREE, and there is absolutely ZERO obligation so please get out there and DO IT NOW! Take a second, make a call and let me explore your options with you! Also, don't ignore even the smallest savings, if the big picture makes sense, every penny saved may be worth it in the long run especially since the market will most likely only get worse before it gets better!

ONE more thing! Please do NOT wait or hesitate because you are waiting for rates to get better! First of all, unless you are an experienced bond trader and a personal friend of those running the treasury department YOU most likely have absolutely ZERO idea what is going to happen and your newscaster and television buddies aren't going to show you the way to the promise land either. Look into your current situation and determine what it would take "exactly" for a refinance to be profitable for you and then prepare yourself for those potential market environments. Don't try to predict the market, REACT when the market is in your favor. However, in most cases the types of market swings that create positive situations for borrowers usually only happen once and sometime in just a few hours and that point it's already to late if you hadn't taken the time to position yourself appropriately. Let's also not forget the biggest factor that will affect all potential refinances which is HOME VALUE! As more time passes more homes sell at lower price points thus bringing down the average comparable home value and then of course decreasing the appraised value of your home making a refinance that much more difficult.

Also, It doesn't matter if you already have a low fixed rate mortgage if something historical is going to happen with mortgage rates it's most likely going to happen in the first quarter of 2009 so position yourself to have the "Option" of doing a refinance if you want, if it helps, if it saves you money, but don't delay and don't speculate about something you probably know very little about! That assumption could cost you a lot of money; it may even COST YOU YOUR HOME!

SO WHAT ARE YOU WAITING FOR?

ALOHA!

Jon Kutsmeda
National Lending Agency
808-389-2174
jon@nationallendingagency.com
www.nationallendingagency.com

The Sky is Falling!

Jon Kutsmeda (National Lending Agency) — Thu, 23 Oct 2008 04:26:24 -0500

(original posting 7-9-2008)

Aloha,

No the sky is not falling, stocks are, so today feels like a great time to write a market update as the Dow Jones Industrial Average (DJIA) fell over 200 pts today, down over 2% (will it fall under 11,000 tomorrow?), and the S & P is at it's lowest since July '06. This comes with a mix of other economic data that as a whole has proved to be slightly beneficial for Bonds as Mortgage Interest Rates today were the best we've seen in just over a month. The progress hasn't been dramatic by any means but we'll take anything we can get. Today rates were averaging close to 6% for 30 year Fixed and 5 year ARM's were smokin' in the 5.375% range. With Jobless claims set to be released tomorrow and the Dow on track to sink below 11,000 will we push back under 6% again? Looks possible, the consensus says float and I agree. Whether things move up or down lately the changes have always been subtle hence why it's taken us over 3 days of regular improvement to inch back to 6%. So go with the flow into tomorrow and see if you can squeeze another 0.125 out of a struggling stock market and a turtle paced bond market. Chances are market deterioration will move just as slow as the recent improvements so why not risk it? Yet, as I'm writing this I'm struggling to not say "I told you so", but I guess I just did. The last time I sent an e-mail update was over a month ago and my recommendation was to lock and close, hinting that rates would slowly raise above 6% and dance up and down in that range for quite awhile and so far it has been like dancing with two left feet and it hurts me just as much as it does you to say "I told you so".

Queue up some Queen because...another one bites the dust,...and another one gone, another gone, another one bites the dust. Two down in two days! Two more major mortgage lenders bow out of the business of Mortgage Backed Securities, IndyMac Bank and Colorado Federal Savings Bank. The writing was on the wall for IndyMac as their stock continued to fall while they struggled to raise new capital from investors. Both Retail and Wholesale operations ceased immediately Monday morning. On the other hand CoFed's new owner chose to eliminate the wholesale division of the bank but still plans to keep its' retail operations open. There are still plenty of excellent lending options available and this news, although a topic of discussion in the lending industry, has NOT even put a ripple in how I conduct my business or where I send my loans. My preferred lenders price great and have the financial legs to stay strong even in today's bumpy market, so think of the news as more of "cleaning of the house" then anything else. This "cleaning" will probably continue with Lenders, Loan officers, and Realtors, leaving the business, as the market struggles to find some stability which many don't expect to happen until sometime next year, and that outlook could even be considered optimistic. I say if you aren't in it for life, then you shouldn't be in it at all! Too much is at stake for those that take this business seriously so with that being said,...Let The Cleaning Begin!

Jon Kutsmeda
National Lending Agency
808-389-2174
jon@nationallendingagency.com
www.nationallendingagency.com

JUMBO is Back! rates less then...?!

Jon Kutsmeda (National Lending Agency) — Thu, 23 Oct 2008 03:59:24 -0500

(original posting 5-27-2008)

Aloha!

I know what you are thinking, "what better way to end a long weekend and start a short week then with a market update from Jon Kutsmeda", well I couldn't agree more!! Big news, Jumbo loans are back with new improved Agency Jumbo rates! Before I tell you the rates I figure I'd build some anticipation and first educate you about Agency Jumbo loans and its brief history. The conforming loan limit in Hawaii as most of us know is $625,500. Many of us heard that there was an increase in conforming loan limits, this isn't completely accurate. For the most part what happen was that a completely separate category of loan was created that ranges between $625,501 and $793,750 (for single unit dwellings and higher for multiple units), which is often referred to as "Conforming Jumbo" or "Agency Jumbo" and maximum loan amounts are based on zip code. When this was first introduced to the market in the beginning of March rates were averaging about 1 point higher then conforming interest rates and approximately 1 point less then Jumbo Loans that exceeded the Agency Jumbo limits. So we had a nice in between option for borrowers who needed a little more leveraging power then conforming loan limits but weren't really pushing the loan limit through the roof. Pricing wasn't great, but it was a major improvement from regular Jumbo rates. Before if a borrower needed a loan just $1 over the conforming limit of $625,500, the rate would go from something in the range of 5.5% all the way to 7.25%! Ouch! Initially the Agency Jumbo was pricing around 6.5% which was nothing spectacular but certainly much more reasonable then 7.5%. So where are rates now? Not so fast my friends, let's first take a look at the current market then we'll get to the new Agency Jumbo pricing. I promise I'll tell you the rates right after this and if you're good maybe I'll even give you an ice cream! But if you get sneaky and peak well then shame on you!

Well lately it doesn't look like anything is going to move this market and what has seemed to catalyst the market into sudden and brief changes keeps coming out of left field. Perhaps it's a painful economic tug of war that can't seem to find a momentum either way or maybe it's a well-balanced yin and yang which we can't seem to appreciate because optimism has no place in the media and after all that's who tells us what to think, well isn't it?

I'm hoping for continued stability with the occasional non-dramatic upward and downward swing, just enough to keep us interested. So there will be good days and bad days but I think the median rates for any given week over the next month or two may perhaps be very close to the highs and the lows, much like it was the past 30 days. What does that mean you might ask? It means if you are thinking about buying a home or refinancing your current mortgage just do it! Don't wait for a magical improvement in rates to come along again! In fact when things finally do start to go in a particular direction it will most likely head towards higher rates. Just look at the price of gas (if you dare) the next time you are at the pump and you'll see there is no denying inflation! A great way to curb inflation is to raise rates and you better believe the second this economy looks like it's starting to stand on its feet again the fed will start attacking concerns of inflation and begin raising rates. Perhaps later then sooner though as there is speculation that at the next FOMC meeting in June the fed will make one more 0.25% rate cut just for kicks, but like the last cut in April this will probably do very little to stimulate bond trading or improve mortgage interest rates. So if you are thinking 30 year fixed and currently your rate is somewhere in the 5.625% - 5.875% range and you are in a holding pattern waiting for better rates, "forget about it!" LOCK and close, and be content with the fact that you have a great loan and can move on with your life spending your time more effectively then pondering over 0.125% of a point you may or may not get. Holding out at this point is most likely not worth waking up to rates that are back over 6% when you had 7 months to decide on a mortgage loan in the 5's. If you are an ARM shopper same idea applies but there is more strategy to why I say LOCK the low ARM rates NOW, but if you want a piece of what that strategy might be, well, you'll just have to call me. Hey, wait a minute weren't we talking JUMBO!!!!

Yes, JUMBO loan pricing improvements! Seems the market has a new taste for these Agency Jumbo Loans or something like that as Agency Jumbo rates came tumbling down to almost the same as conforming rates! No joke, last week Agency Jumbo 30 year fixed loans were at 5.875%, ARMS are pricing low too!!! That's a really BIG deal if you ask me! Think about the areas that are still retaining value and selling homes, then think about how many more homes in those areas have properties listed in the $630,000 - $790,000 price range. These properties now have great financing options and price points aren't the only thing worth noting, loan-to-value is aggressive on Agency Jumbo Loans as well, up to 90% LTV!!! So what are you waiting for, get out there and tell the people about Agency Jumbo Loans and sell those homes or buy those homes, whatever you are in the market for, just remember who to call for the LOAN ;-)!!! Good Luck! Aloha!

Jon Kutsmeda
National Lending Agency
808-389-2174
jon@nationallendingagency.com
www.nationallendingagency.com

100%, still can! ARM yourself!

Jon Kutsmeda (National Lending Agency) — Thu, 23 Oct 2008 03:48:18 -0500

(original posting 5-6-2008)

Aloha!

Well last week was certainly a bumpy one, but we definitely had some shining moments with Thursday being the best day for 30 year fixed rate mortgages as they snuck back down into the 5.5% range for what seemed like a blink of an eye then scampered back up and hung around 5.75% for the rest of the week. Yet, even though the 30 year note was pricing slightly higher on Friday those still shopping in the ARM market saw the best priced 5 year ARM's in well over a month. I know some of you might be thinking, "ARM's, no way, too risky", but if you understand the loans strengths and how to use them to your advantage an Adjustable Rate Mortgage can be the most cost effective loan option. Truth of the matter is most people don't keep a mortgage longer then 5 years these days and with good reason. Real Estate has become more then the White Picket Fence American Dream, it's a powerful means of investment and capital gains. Like any good investor you should audit yourself and your investments on a regular basis in order to make the most of your invested cash flow. If you are taking full advantage of your Real Estate Investments by regularly evaluating the best methods for profit you can almost guarantee that a refinance will be justified sometime in a 5 year period. It may not be essential but certainly worth considering, so with this being said the ARM becomes a very powerful weapon to your arsenal for Real Estate Success. I know what you are thinking, "Point taken Jon, but I'm really not an investor". Well, then you didn't get my point at all, in fact it went right over your head. In many cases the biggest difference between an investor and a person who is not, or at least thinks that they are not, is simply their state of mind. Change your state of mind and how you think about certain things like ARM loans and you are already turning the corner towards becoming a better real estate investor.

Since this isn't intended to be a "how to" e-mail on Real Estate Investing I'll make my point about ARM loans and move on. With lower ARM loan rates and monthly payment options like Interest Only you can generate more cash flow from your investments and even if you don't put a single penny towards principal it doesn't matter as long as you are netting a profit and have a comfortable watch on home values.

There is plenty of valuable info I can offer when it comes to using smart financing to leverage your investments and generate more cash flow, but it is better left for personal consultation, so if you are considering an investment, an ARM loan, or still scratching your head confused, give me a call and we'll talk, but don't close the door to any loan option until you understand the facts and know how to make the most of your mortgage options.

Wow, feels like the e-mail should be over, but really I just dragged you on a tangent. I guess in order to keep your attention I better stick to the point from here on out! So, back to the Market. Not much forecasted this week so the Markets are on their own and with oil prices spiking today, plus with Microsoft pulling out of a potential Yahoo! deal things could be looking up for bonds especially with the Treasury holding a 10 year note sale on Wednesday and a 30 year Bond sale on Thursday. It's important to note that the reason things didn't get real tasty last week for mortgage interest rates is because the economic reports showed that our current economy is doing much better then expected and we may already be pulling out of this recession. So I wouldn't expect anymore rate cuts and would keep an ear on the tracks for the ugly bond monster called "inflation"! But, if your still hoping that rates will improve this week or at one point rolling into the summer, well I got your back. Stay sharp, there should still be a moment here or there when you can get a lock worthy of a high five.

Moving on to the big topic, 100% financing! YES, you can! If you have clients who need 100% financing and are NOT eligible for VA you need to act fast! The 100% loan options that are currently still out there will most likely NOT be available past July, so the 100% buyers should probably be in escrow by mid June just to be safe. As always, I'll keep you posted if things change, but for now if you need 100% financing consider making a decision about buying soon otherwise purchasing a home might not be an option at all this year! Good luck! Aloha!

Jon Kutsmeda
National Lending Agency
808-389-2174
jon@nationallendingagency.com
www.nationallendingagency.com

BIG week, Here it comes!

Jon Kutsmeda (National Lending Agency) — Thu, 23 Oct 2008 02:29:47 -0500

(original posting 4-28-2008)

Aloha!

I know it hasn't been that long since my last e-mail, but with so much action on the horizon I felt it was crucial to give you a beginning of the week update and potential outlook. Without even reading on, know that this week could bring drastic improvements to the Mortgage Market and optimism is running high for rate improvements, so if you have been sitting back waiting for better rates before locking and closing this could be the week that many of us have been patiently expecting since the last time we saw rates around 5.5%.

Monday morning started out flat as investors await this week's economic news and events. However, even as I'm writing this I'm seeing mid-day price improvements with rates sliding back to the 5.75% range. As I mentioned this should be the week of opportunity and drastic improvement for mortgage interest rates. There is something of importance scheduled for each day of the week with the most significant pieces of data being released Wednesday and Friday.

The first report comes late Tuesday with the Consumer Confidence Index (CCI) which is a key indicator of future spending by consumers. Hopefully consumer sentiment is weak due to concerns about issues like job security and will show a decline from this months expected reading. Although, a sizable increase could hurt the bond market, pushing mortgage rates higher Tuesday, it is unlikely. A favorable CCI reading combined with investors preparing for a potential Fed Funds rate cut Wednesday by stimulating a day early bond rally as they have done previously this year could also bring further rate improvements late Tuesday.

Wednesday, will be crazy to say the least. The FOMC meeting will commence Wednesday afternoon with what everyone is expecting to be further rate cuts to key short term interest rates. However, there has been speculation that it won't be as sizeable a reduction as hoped, perhaps (0.25), slightly down from the previous predictions of (0.50). It's hard to say at this point how the markets will react either way so for now it's a real wait and see situation, which always makes for a bit of a rollercoaster ride.

Wednesday also brings us the release of two important reports along with the FOMC meeting. The first is the preliminary version of the 1st Quarter Gross Domestic Product (GDP). This is arguably the single most important report that we see on a regular basis. The GDP is the sum of all products and services produced in the U.S. and is considered to be the best indicator of economic growth or contraction. This report is expected to cause major movement in the financial markets Wednesday and therefore the mortgage market also. A smaller increase then analysts' current expectations would be ideal for mortgage rates as it would fuel recession concerns. But, a larger increase would almost certainly cause inflation concerns in the bond market and that would push mortgage rates higher Wednesday morning.

The next report of the day is the 1st Quarter Employment Cost Index (ECI), which tracks employer costs for wages and benefits. This gives us a measurement of wage-inflation. Current forecasts are showing that a modest rise is expected. If it shows a large increase, we may see inflation concerns cause the bond market to fall and mortgage rates to rise. A smaller than expected increase would be good news for the bond market and mortgage pricing.

Thursday has its' own data reports to be released so it will be just as important to stay on top of things Thursday as well as the rest of the week but for the sake of keeping these updates some what digestible we'll jump to Friday for the week's most important. The almighty Employment report will be released Friday morning giving us April's employment statistics. This is where we may see a huge rally or major sell-off in the bond market and large changes in mortgage rates. The ideal situation for the bond and mortgage markets would be an increase in the unemployment rate and fewer than expected new payrolls. Just how much of an improvement or worsening depends on how much variance there is between forecasts and actual readings. This could turn out to be a wonderful day in the mortgage market, but it also carries risks of seeing mortgage rates move higher if the Labor Department posts stronger than expected readings.

Overall, look for plenty of movement in the financial markets and mortgage rates this week. Wednesday or Friday will likely be the most important day of the week with the GDP and Employment numbers being posted along with the FOMC adjournment, but we may also see noticeable changes to rates Tuesday. If this week's reports reveal weaker than expected economic conditions, the bond market should rally and mortgage rates should fall significantly for the week. Buckle up, here we go!

Jon Kutsmeda
National Lending Agency
808-389-2174
jon@nationallendingagency.com
www.nationallendingagency.com

Keepin' up, on the up & up! 100% Financing, A Hui Ho

Jon Kutsmeda (National Lending Agency) — Thu, 24 Apr 2008 06:23:08 -0500

(original posting 4-10-2008)

Important news about 100% financing, please read

Aloha!

Mortgage interest rates haven't changed much over the past two weeks hovering around 5.625% despite that the big picture has been relatively gloomy. Even though bad news for the economy usually means good news for bonds and mortgage rates we haven't seen the expected market reactions. Either we are blindly charging forward or more needs to be said for the resilience of the American economy. Stocks remain strong, but many stand firm that this is just a delay of the inevitable and the reality of recession will eventually sink in, eventually leading to a bond rally and lower mortgage interest rates. Yesterday's Fed minutes release from last months FOMC meeting indicated that the economic slowdown could continue well into next year while Former Federal Reserve Chairman Alan Greenspan shared similar thoughts at a conference in Tokyo on Tuesday. Mr. Greenspan feels that home prices are starting to stabilize and that we may see a very large rate of liquidation in the second half of this year. Once most of the home inventory has been eliminated then the markets can start to stabilize, but as Greenspan put it, "it will be slow, it will be hesitant." Greenspan also said that inflation will be contained during the current slow down before picking up as the world economy recovers. Which is great news for bonds, remember as far as mortgage rates are concerned, recession good :-), inflation bad :-(.

So, let's take all this and blend it up into an analysis. First add bonds, then add stocks, a dash of the Fed, a splash of Greenspan, hit blend, then serve:

I think the early bird gets the worm in this case. The rollercoaster is probably far from over, but the markets seem to be getting use to the ride. So I wouldn't expect magical rates to just suddenly appear. Even if we slip into a worse economic situation and recession is no longer a debate but a reality, that doesn't guarantee rates are going to go sliding with it. The Fed can lower rates all they want, but as we've seen so far this year that usually works against bonds as it tends to stimulate a stock rally. But really, why is anyone waiting? Even if rates dip under 5.5% again how much of difference will it actually make and is it worth losing out on a great price on a great investment. I'd hate to see people miss out on the bottom floor because they were waiting for someone to announce it's here. Hi, I'm someone, Hi, it's here! You don't officially know it's the bottom until it starts to stabilize and recover and guess what it's starting to stabilize so here comes the bottom, don't wait for the memo! Once we start to eliminate the inventory this great window of opportunity will have past.

But, besides the price points there is another factor that is squeezing the opportunity out of the market. In case you haven't heard 100% financing is all but a thing of the past. The mortgage insurance companies are no longer willing to ensure up to 100%. I still have a lender or two that can still do 100% financing, but it's not going to last. So come on early bird, get the worm! Also, lenders continue to tighten guidelines, while others continue to seek buy outs and financial support. We're all familiar with what happened at Countrywide, Bear Stearns almost went under last month, and now Washington Mutual is discussing a deal for a $5 billion dollar cash infusion from a private equity group, this days before announcing they(WaMu) would be exiting the wholesale lending industry.

The way I see it, the time is now, so let's get excited! Rates are incredibly low, home prices are bottom floor, the market can still offer good financing options, and with economic recovery right around the corner, the window of opportunity is NOW!!

Aloha!

Jon Kutsmeda
National Lending Agency
808-389-2174
jon@nationallendingagency.com
www.nationallendingagency.com

What's a LOCK?? - Bye Bye SISA

Jon Kutsmeda (National Lending Agency) — Fri, 11 Apr 2008 22:28:39 -0500

(original posting 3-27-2008)

Aloha!

Let's talk LOCKs for a quick second. I feel that for the most part the idea of a loan rate lock is misinterpreted. Locking an interest rate with a particular lender is NOT a loan commitment. It is simply securing that lenders current interest rate(s) for a particular length of time, typically 30 days. There can be quite a bit of strategy that goes into the LOCK process, but in many cases it's not to be over analyzed considering there is still plenty of flexibility with a rate lock, such as lock extensions, buying down the locked rate, or completely changing the loan program for which the rate lock applies. One should at least be a little cautious when considering a lock because you don't want to be unaware of expected improvements in the market and hastily lock only to see rates improve the following day, but with a good overall understanding of the daily market changes as well as the general predicted direction of economic factors that effect rates, a smart and comfortable lock decision can be easily determined.

Of course a back up plan never hurts either. As I mentioned locks should not be made hastily, but in the event that an unexpected improvement in rates occurs, it's good to know that you have other options. The goal and intent is always to move forward and close a loan that is locked, but intent doesn't mean you are obligated and if rates improve and a second lender can then offer the same loan at a better price, it only makes sense to move forward with the different lender for the same loan at better pricing. Add this concept to the plethora of advantages to working with me as I am associated with an extensive list of over 25 local and national wholesale lenders, who for the most part are all very competitively priced with each other. Didn't quite catch my point on that last sentence? Well here it is another way, since I work with multiple lenders each with competitive rates, it allows me the advantage to stay flexible in a constantly changing market while at the same time offer the security of a rate lock when rates are good, thus it makes the loan process a lot more like a game of checkers then a game of chess.

With this said, the end of this week will also most likely bring the end of the SISA loan. SISA(stated income/stated assets) is currently pricing the same as a FULL document loan. However, if a SISA loan isn't locked by the end of this week, the option to get what is virtually a NO doc loan at FULL doc pricing will no longer exist! This information, along with what I discussed above about rate locks begs the question, "What are you waiting for?"

(Quick Market Update)

There is so much going on I'm not sure how to effectively share it all, but here is the short and sweet of it all. Rates have increased slightly after March's best last week of 5.375%. The past few days we've seen rates hover around 5.625% with the occasional midday price change for the worse. There is a lot happening these days and lots of important data to be released the rest of this week. Most of the data is expected to be negative and further pointing in the direction of recession, which should be good for mortgage interest rates. However, when predictions are clearly pointing in a particular direction, any kind of surprise seems to tip the whole boat. So, we should hopefully see a slight improvement on rates in the next few days, but if just a little bit of odd ball data hits the markets, interest rates could suddenly change for the worse despite the still strong indicators of a slowing economy which otherwise would be good for rates.

I don't mind sharing my insight on the above matter, but in certain cases I feel it's a moot point considering that for the most part SISA need to be locked by the end of the week regardless of the rates, but even with a negative change to rates, this is still a GREAT time to consider a NEW mortgage loan. If you choose to gamble a little, hey this is Hawaii, but if you want to take your chances as to whether or not there will still be lenders offering SISA loans next week feel free, but if that's the case why not lock with a lender which has clearly stated the SISA loan won't be available after Friday. Like I mentioned, a LOCK is NOT an obligation and if things improve and there are still other lenders offering SISA, then do the loan at the better pricing. Makes sense to me!! There is nothing to lose, except the ability to get approved for a loan because SISA is no longer available!

SISA, LOCK IT!!

Aloha!

Jon Kutsmeda
National Lending Agency
808-389-2174
jon@nationallendingagency.com
www.nationallendingagency.com

Are You Ready?

Jon Kutsmeda (National Lending Agency) — Fri, 11 Apr 2008 22:15:52 -0500

(original posting 3-18-2008)

ALOHA!!

(Realtors and Real Estate Professionals be ready tomorrow for a special announcement from "National Lending Agency")

This afternoon, the Federal Reserve announced that it had lowered the fed funds rate today by 0.75% to 2.25% and the discount rate by 0.75% to 2.50%.

But, guess what!!

Rates were better yesterday with conforming 30 year fixed rate loans pricing around 5.375%!

Déjà vu

Seems like every time the Fed makes a cut, the market is in such anticipation that the bond markets rally the day before and when the official announcement is made the following afternoon stocks rally as investors shift funds from bonds into stocks. So although the rate cuts stimulate investor spending it tends to be in sectors other then bonds, which isn't good for mortgage interest rates, hence the deterioration in mortgage rates from the previous day.

I apologize that I didn't update everyone yesterday once there were price improvements but when the market improves so drastically and so quickly there is little time for midday market updates, it becomes an all day dash for file submissions and LOCKS! In most cases these aren't new loans but clients that I have previously consulted, and we were patiently and expectedly waiting for yesterday's improvements, and reacted accordingly.

So the question becomes "Are You Ready?"

In today's real-time market, a day late leaves you much more than a dollar short! The loan process is more involved than most realizes and can involve just as much strategy as a stock portfolio. So if you want to take advantage of positive swings in the market you need to be READY, the overall picture should already be discussed, documentation reviewed and assessed, and a strategic plan of attack implemented. So when the next rate drop occurs everything is already in-line and a low rate lock is just another executed step in a well established plan. "Are you Ready?"

Call me TODAY so we can discuss "Your Plan", because in today's ever changing market it's never too late to be prepared! Aloha!

(Market Update)

As previously mentioned today's Federal Open Market Committee meeting adjourned with an announcement of a three-quarter of a percent cut to key short-term interest rates. This led to a significant stock rally with the Dow up 420 points and the Nasdaq up 91 points. The stock rally hurt bonds by investors shifting funds from bonds into stocks. Also contributing to this afternoon's selling was the post-meeting statement that indicated the Fed was concerned about inflationary pressures within the economy. However, a nod to possible further rate cuts was provided by the comment that "downside risks to growth remain."

February's Housing Starts was today's second release which showed stronger than excepted starts of new homes. That could mean that the housing sector may be stabilizing, at least in terms of new construction.

There are no major releases on Wednesday so the markets will continue to react to the results of the Fed meeting, however The Conference Board will post its Leading Economic Indicators (LEI) for February late Thursday morning. That index attempts to measure economic activity over the next three to six months. Current forecasts are calling for a 0.3% decline, indicating that economic activity will likely slow in the coming weeks. This would be good news for the bond market and mortgage rates.

***So this should mean that we have most of the day tomorrow to prepare for what could be a great day for bonds and mortgage interest rates come Thursday as the markets will finally start to react to the Fed cut, that, combined with what may be more bad economic data should hopefully create a bond rally Thursday and another GOLDEN opportunity to lock in low rates. Once again, "Are You Ready?"

Jon Kutsmeda
National Lending Agency
808-389-2174
jon@nationallendingagency.com
www.nationallendingagency.com

BIG NEWS and BIG WAVES

Jon Kutsmeda (National Lending Agency) — Fri, 11 Apr 2008 22:06:17 -0500

(original posting 3-12-2008)

Aloha!

BIG NEWS!! The surf is up today in Hawaii and so are the CONFORMING LOAN LIMITS!!!!!

NEW conforming loan limits are officialy HERE! Loan amounts up to $793,750!!! instead of $625,500. That's NOT Jumbo, that's CONFORMING!! So loans up to $793,750 are now eligible for conforming pricing!!!

Loan Limits are based on zip code, so e-mail me today to find out the loan limits in your area!!

(Market Update)

Over the past few weeks we've seen rates rise and hover around the 6% range due to concerns of inflation. Yesterday news was released that the FED will set up another one of their popular term auction facilities which will lend up to $200 billion in Treasury Securities, basically a cash injection to the capital markets. This puts money into the bond market but what usually tends to happen in the immediate wake of announcements like these is a stock rally which is the case so far with the Dow currently up 80 pts today continuing yesterday's strong rally.

So optimistically we should see an improvement in the bond market which would lower interest rates, however tomorrows 10-year treasury note auction and the release of February's retail sales data could lead to additional volatility in bonds and a further tug-of-war between concerns of recession and inflation which has kept rates slightly above 6%.

Today has seen a Midday price improvement and rates are down around 5.875%. I recall a similar reaction in the market about two weeks ago which was followed by a late day price increase and further market deterioration the rest of the week, so I'd recommend taking advantage of today's window of opportunity and lock in a rate.

I only need a name and an address to lock and rate locks aren't a loan obligation it is simply securing the days rates for your potential loan. Also any loans locked this week will receive a 20% discount on origination fees!! Don't hesitate call today!!! Aloha!

Jon Kutsmeda
National Lending Agency
808-389-2174
jon@nationallendingagency.com
www.nationallendingagency.com