I have truly been searching for something to hang our hat on moving forward but today did not do us any justice....at least from a recovery standpoint. You see with the economy in a recession and companies sales really falling by the way side we get the following; Sprint laying off 8k, Phillips laying off 6k, Caterpillar cutting 20k, McDonald's (this is McDonald's we are talking about here) is down 24% and Home Depot is eliminating 5k in jobs.

Many are predicting more of the same through the spring. The key to an economic recovery is J.O.B.S. and individuals, couples and families making money, saving money and having money to SPEND. The sticking points in a recession is that it's primary purpose imposes just the opposite thus making it very hard to reverse the trend. To top it off there is such a disconnect between primary rates (the rates offered or trading on Wall Street) and secondary rates (the rates at which consumers can get) that the Fed Purchase Program IS NOT WORKING! I promise to find something "pretty" to read about in the coming weeks but I also must do my part in truly talking about what is fact and not what we "wish" it to be.

Brought to you by Flat Branch Mortgage, Inc.
Your Mid-Missouri Mortgage Lender
Posted by: Shawn Von Talge

Well, what once was thought to be a good thing is now gone by the way side and actually sputtered some more. What am I talking about? Mortgage interest rates have gone from one extreme to the other. The morning of December 17th saw ALL TIME low mortgage rates for a period of about 60 minutes from that point till today it has been nothing but bad news for mortgage rates and all the time the U.S. government has been doing most of the buying. For instance on 12/17/08 the 4.5% MBS coupon (the bond that affects mortgage rates high price=low rates) was at 103-06 and today we closed (keep in mind this is the same 4.5% MBS coupon) at 101-04!

Simply put the "media frenzie" surrounding mortgage rates is a complete mirage right now. Be advised that we are no longer in a refinance rally and the one that was underway was the shortest I have seen in 11 years! Let's hope we see some rebounding and quickly otherwise there will be a lot of disappointed consumers out there. Although it seems disappointment has been the norm lately.

Brought to you by Flat Branch Mortgage, Inc.
Your Mid-Missouri Mortgage Lender
Posted by: Shawn Von Talge

The above questions is something that seems to be on everyone's mind lately. I recently (last week) received 4 phone calls from past clients facing some very serious decisions. Two of them had lost their job due to the current economic woes and the other two had seen their salaries cut by 40%! ALL had serious concerns on how they were going to keep their homes. These people weren't victims of financial mismanagement or irresponsible they have simply felt the wrath of today's economic reality.....things are bad and could get worse.

Most economists are predicting 2009 to be a replica of 2008. I know this does not come as "things we like to hear" however, this is the reality of where we are at. Why sugar coat times like these? False hope can only lead to disappointment and perhaps even further stress about the "if's". I for one am fairly optimistic about the gentlemen we have taking office tomorrow and the staff he has put together to hopefully change things for the better. This is not a political forum however Mr. Obama has plans for a $775 billion stimulus package, 2.5 million jobs, financial services reform (yes this includes the "asleep at the wheel" SEC) and a wholesale list of other items that need to be addressed asap! Hold your head up high and stay focused and things will work out. We all will be better people from facing these challenges.....perhaps we cannot see it now but "the mark" this economy has left us will hopefully be erased over time.

Brought to you by Flat Branch Mortgage, Inc.
Your Mid-Missouri Mortgage Lender
Posted by: Shawn Von Talge

I thought I had seen it all but every time I feel things have ran there course another whirlwind hits us. I'm sure it's no surprise but December holiday sales were down 2.7% and excluding auto's were down 3.1% more than double the expectations by most economists of 1.3% and marked the first calendar year decline ever! The DOW is down over 200 points, treasuries are skyrocketing with yields in the low 2's and guess what our friendly and ever rate influencer (known as MBS) have traded "sideways" for 4 consecutive days which means stagnant mortgage rates.

The primary problem we are seeing right now is the banks not translating today's current economic rate environment onto rate sheets and thus customers. For instance, we have two BIG lenders that are so overwhelmed with business that the only way to keep it from coming in is to raise rates! That way bankers and brokers are forced to use other avenues but hey guess what? Almost all banks are doing this to some extent. Simply put the banks are now too busy to handle the volume of business and do not want to "staff up" to cover it because of fear that this refinance rally will be short lived. The general public cannot win for losing and it's getting extremely frustrating to sit on the sidelines and watch this happen. Ben Bernanke stated yesterday (paraphrasing) "If $600 billion of GSE/MBS buying doesn't do the trick, then we'll buy another $600 billion. And if treasury traders even think about donning the vigilante hat of taking market matters into their own hands in a sign of policy protest then we will set up a bear trap of buying term treasuries in size." Bluntly put stopping messing with our market presence or you will pay!

It's nice to see the government take such an active role in trying to influence consumer rates and in particular mortgage rates however, to date the moves have not been doing what was planned as it seems sellers and treasury traders are making their presence felt!

Brought to you by Flat Branch Mortgage, Inc.
Your Mid-Missouri Mortgage Lender
Posted by: Shawn Von Talge

We all know that a small refinance boom is taking place and I cannot say enough how thankful I am to be swamped with business. However, I continue to get phone call after phone call with regards to the "media driven" 4.5% mortgage rates. First, let me say that mortgage rates are NOT at 4.5%! Second, today's environment is much different than the past. We now have "risk based pricing"; meaning depending on the borrowers risk (i.e. loan-to-value, credit score, type of home, and loan amount) will very much influence the rate at which the borrower can get.

For instance; a person with a 700 score, putting 10% down on a single family residence will more than likely get a higher rate than someone with a 740 score putting 20% down on a single family residence. Both are great scores however with "risk based pricing" anyone who has a credit score below 740 will take a "hit" to the rate. Let me reiterate so when you hear your friend, co-worker, or family member talk about the 4.875% rate they got; EVERY SINGLE INDIVIDUAL AND MORTGAGE APPLICATION IS DIFFERENT and NOT EVERYONE WILL GET THE SAME RATE.

It simply seems the media has got the general public fooled to think that if they can't get a mortgage rate in the 4's then something is wrong! Nothing could be further from the truth and ever since we started this "refinance rally" rates have not hit 4.5% not ONCE! So keep things in perspective when you are speaking with mortgage professionals. We want to get you the best rate possible but cannot work magic tricks in order to do it. If you qualify for 5.25% on a 30 year fixed that is a darn good rate! Don't be fooled by gimmicks and rates quoted below what the banks and mortgage companies are telling you over the phone. Are there points, broker fees, bank fees, origination fees, are they "portfolioing" the loan, what are closing costs? These are questions that you need to ask and you also need to know your credit score and loan-to-value.

Brought to you by Flat Branch Mortgage, Inc.
Your Mid-Missouri Mortgage Professional!
posted by: Shawn Von Talge

What happened late Thursday evening and into Friday was instigated by one thing.....politics. I wish I could say that politicians looked out for their constituents and the general public but the reality is they simply look out for themselves. I'm not one to get into political discussions on a mortgage site but the issues that affect the U.S. economy and for that matter the global economy affect the mortgage industry and what transpires moving forward. Headline news is always on it's toes in affecting mortgage rates and many other aspects of our industry.

Case in point.....look at Illinois and Governor Blageovich. I could go on and on about things that politicians have done out of sure greed, devine right or because of some power trip. The difference between them and the others is they (the former) got caught. Just like everything else in life there are good seeds and bad seeds. Unfortunately what gets advertised the most are the bad seeds and how they sprouted!

Ok....back to my point. The lower states (i.e. Alabama, Tennessee, Georgia and others) are "right to work states" meaning they are non-union. They voted against the bill (all republicans) in essence to hurt the union workers and in particular get back at UAW (United Auto Workers) and protect the foreign auto makers like Toyota, Hyundai and Honda who have several plants in the lower states. Let's see where this takes us moving forward.

Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker

We have seen history unfold right before our eyes over the past 12 months. We have witnessed companies that have been operating for over 150 years either get bailed out or file for bankruptcy protection. We have seen absolutely huge companies get billions of dollars from the U.S. government only to be back at the front door knocking just a few weeks later. We have seen massive layoff, closures, and cut backs from just about every company in every industry.

Financial institutions are now converting themselves to bank holding company's just to get access to Federal Aid in order to stay afloat. States are having real issues making payroll moving forward because they cannot sell state debt to fund their projects. Guess what.....this morning there was another huge announcement that is going relatively unnoticed. GMAC the auto and consumer lending company failed to meet the capital requirements to become a bank holding company. Per regulations they need $30 billion in capital to complete the transition however, less than 25% of the GMAC existing debt has been tendered to raise the capital required. It is projected that in order to meet this requirement they must have a commitment of about 75% participation in order to meet this requirement. Could we see another failed financial institution?

I recently spoke to a close friend of mine who exited the industry about a year ago and the news that he told me is shocking. Just yesterday his company (industrial) let go over 180 employees one of which had a tenure of over 35 years. He was very nervous about his own job and for the first time in his life was scared. No industry or profession is safe! Hospitals are laying people off because the economic crisis has people putting off health issues to save cash. Professional sports are reeling because they are scared fan support will be significantly decreased because of the economic times. Let's get this mess behind us and move forward being better people, parents, friends and professionals!

Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker

It looks like "The Big 3" are very close to working something out in hopes the government will give them a hand out of $25 billion or more. On another note it looks like a BIG company will look at bankruptcy to resolve it's financial woes....Tribune Company is short cash to pay it's creditors interest payments coming due on $12 billion in debt and has now hired a company to look into a possible Chapter 11 bankruptcy filing. This news has simply been shoveled "under the rug" on Wall Street as the DOW has opened up triple figures on the auto bail out plan and President Elect Barrack Obama's infrastructure plan.

The hits keep coming for other major employers in the U.S. as both 3M and Dow Chemical cut their earnings outlook and in turn slashed jobs and possible plant closings. I only hope as we near 2009 we have a wholesale list of good news to talk about. I am optimistic that 2009 will be better but by how much and how quickly are the key questions. Let's hope our soon to be President has the answers!

Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker

We all know what is happening with the economy and just how far the fox hole goes. Or do we? I am in utter amazement as to the volatility we still face even in light of the government guaranteeing everything that contains a pulse! For instance, just Monday we saw 30 year mortgage rates hit 5.375% and yet today we will see rates at 5.75%. Though the former is still a fabulous rate what is intriguing to me is the fact that nothing has changed in the MBS environment to warranty this type of swing. In all my research, studying, and speaking with people the only thing I can gather is that "flows" (meaning the flow of money from the selling and buying side) have recently switched to being one-sided. Keep in mind the $500 billion directed by the government for the sole purpose of buying Agency MBS has not even hit the market yet.

On another note advertising by companies linked to the real estate industry is done over 62%......wow what a shock! Companies are doing everything imaginable to cut costs just to stay afloat during these very tough times. How about a hand out for the little guy? This just in.....Countrywide / Bank of America is being sued.......AGAIN! It's no secret that they have been actively trying to modify as many as 400,000 loans to help borrowers stay in their homes. However, some of the "investors" in these pool of mortgages are now suing Countrywide Financial for the losses they will take on their mortgage holdings. With reduced rates, write-downs and cheaper terms investors are set to lose billions and want Countrywide Financial and in turn Bank of America to fit the bill for their lost investment.

Brought to you by Professional Mortgage Group
Your Columbia Missouri Mortgage Broker

It's always a pleasure to see the snow trickling through the sky and hitting the green lawns this time of year. If your like me then you truly love December and what comes with it! We all know about the economy, mortgage market, housing crisis and what is going on at Capital Hill. Step away for a minute and appreciate what you have, the family that surrounds you, and the friends that always seem to remind you of what is important in life!

Enjoy the holidays, enjoy your family, and enjoy your life. We only get to live it once so we better stand up straight, dust off our boots and get back up! The individuals, families and companies that can get back up after repeatedly getting knocked down will be the ones that truly succeed in life.

Brought to you by Professional Mortgage Group and Wishing You A Happy Holiday Season!
Your Columbia Missouri Mortgage Broker