Mtg Rate Update 11-6, Get Money for the Holidays

Below is a helpful hint on how to get more money for holiday shopping - I heard a good credit tip:  Most of the big banks are going to increase rates on credit cards this season - if you get a letter from your bank to advise you that the rate will be increased it might be advised for you to reply to the bank and "opt out" of their card and maybe find another institution with a lower rate - good luck!  Below the rates are today's economic commentaries - As always please contact me when I can be of assistance - BTW Happy Veterans Day next Wednesday.  A lot of Federal, State and Banks will be closed for the day
 

Mary Taylor Sales Manager/Sr. Loan Officer Golf Savings Bank Phone: (503) 701-2269 Fax: 1-888-287-1675 metaylor@golfsavingsbank.com

Don't Wait for a Tax Return - Get That Money Now for Holiday Shopping This time of year, millions of Americans find themselves wondering how they're going to pay for everything on their holiday shopping lists. Wouldn't it be nice if you had your tax return money now so you can use it for holiday spending? In a way, you can. The IRS allows you to increase the number of dependants on your W-4 withholding form, meaning that less will be withheld for taxes from each paycheck. In the past, if you claimed greater than nine dependants, an explanation and approval may have been required. But the IRS has lifted this restriction. This lets you have more money in each paycheck instead of "loaning" the money to the IRS and having to wait for a refund. But don't go overboard. You should only lessen the periodic tax withholding to match the expected refund. This way you are taking your refund as you go; instead of letting the IRS hold on to it. Before you make the changes, consider visiting the IRS Withholdings Calculator to see how a change will impact your paycheck. Just visit www.irs.gov and type "Withholding Calculator" into the search bar at the top.

Mortgage Interest Rates for Fixed Rate Mortgages*

Rates as of  Friday, November 6th, 2009

Term Conforming APR     Conv 30 Yr 360  4.875 %  5.017 %         Conv 15 Yr 360  4.25 %  4.491 %         Conv 5/1 Arm 360  3.5 %  3.631 %         FHA/VA 30 Yr 360  5.125 %  5.556 %         FHA 3/1 Arm 360  3.875 %  4.253 %

*Rates are subject to change due to market fluctuations and borrower's eligibility.

All loans subject to credit approval and property appraisal. Programs, rates, and terms subject to change without notice. For ARM loans, rate may increase after settlement. Prequalification is not a commitment to lend, a condition of loan approval, or an application for credit. Pre-approvals will result in a loan decision subject to conditions. Consult a tax advisor regarding the deductibility of interest.--

From "Think Big, Work Small"

 The employment report stunk; treasuries and mortgages rallied nicely on the report but by 9:50 it all flipped; stocks opened weaker then rallied, the bond market opened strong and now weak at 10:00. 

 Blah, blah, blah; after the employment report this morning confirmed the employment sector is still a serious problem for the economic recovery we were treated to guests on CNBC spinning it as not so bad. Too early to be smoking that stuff this morning. As usual the headlines need some in depth clarification; Oct non-farm jobs fell more than expected to -190K against consensus of -175K, the unemployment rate also blew up, to +10.2%, much higher than 9.9% expected and up 0.4% from Sept. The average hourly earnings were up 0.3% about what BLS plugs in each month and is meaningless from a trading perspective; yr/yr earnings up 2.4%. The unemployment rate at 10.2% is the highest unemployment in 26 years going back to April 1983 and is going to increase; this isn't the end unfortunately. Now, on the more constructive side; Sept non-farm job losses originally reported at -263K was revised top -219K and August non-farm job losses were revised better to -154K from -201K. Huge revisions even for the BLS dart toss and drives the point that accuracy in the employment report isn't completely reliable; nevertheless a slight ray of sunshine in the employment eclipse.   

Pres Obama is scheduled to sign the bill that extends first time homebuyers $8K tax credit to the end of April, and adds $6.5K tax credit for non-first timers. Also in the bill extension by 14 weeks and 20 weeks in weakest states of unemployment benefits. Still details on the tax credits that we don't have on when closings or contract dates are triggered. The increase in unemployment will dash those who have focused on declining continuing unemployment claims (us included); look for continuing claims to begin to increase again after falling for the past six weeks.

At 3:00 this afternoon Sept consumer credit; a key data series we pay a lot of attention to, but markets don't give it much because it rains on the parade in the equity markets. Consumer credit is declining rapidly as consumers cut back on borrowing and banks are helping out by cutting credit cards up and raising interest rates to as high as 30%. Barney is giving banks another free pass before the consumer protection agency is actually operational. Where is Barney when banks are jumping out ahead of consumer protection that will keep banks from hosing consumers? Once again Congress and Barney their main man will close the door after the house caves in.

Health care reform is up for votes tomorrow (Sat); the AMA and AARP have come out in favor of it. It is now a done deal but the voting and procedural issues in the Senate may drag off until Jan. 

 Break up the big banks; a plan we have advocated since the bank blow up. No one in Congress led by Barney are willing to consider it; way too much lobbying money floating around and Barney wants his cut. No less than John Reed former CEO of Citi Group and one of the leaders in banking that led to banks getting into businesses they should not be in apologized for his role in building a company that has taken $45B in direct U.S. aid and said banks that big should be divided into separate parts. "I would compartmentalize the industry for the same reason you compartmentalize ships," ..... "If you have a leak, the leak doesn't spread and sink the whole vessel. So generally speaking you'd have consumer banking separate from trading bonds and equity."

Trade today has been extremely volatile so far; treasuries and mortgage markets opened strong on the jump in unemployment, the stock market indexes were hammered. By 9:50 however it all flipped over. The DJIA rallying, treasuries and mortgage selling off. Most lenders that priced prior to 9:30 are thinking re-price. Always a wild day when employment hits. Markets focusing on upward revisions on non-farm jobs in Sept and August. 

 30-Year Fixed Rate Falls Below 5 Percent

Long- and Short-Term Rates Are Down This Week

McLean, VA - Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 4.98 percent for the week ending November 5, 2009, down from last week when it averaged 5.03 percent. Last year at this time, the 30-year FRM averaged 6.20 percent.

The 15-year FRM this week averaged 4.40 percent down from last week when it averaged 4.46 percent. A year ago at this time, the 15-year FRM averaged 5.88 percent.

The five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 4.35 percent this week down from last week when it averaged 4.42 percent. A year ago, the 5-year ARM averaged 6.19 percent.

"Mortgage rates fell back this week pulling interest rates on 30-year fixed mortgages under 5 percent," said Frank Nothaft, Freddie Mac vice president and chief economist. "Lower mortgage rates should help homeowners lower their monthly payments and feed the ongoing recovery in the housing market." For instance, the Federal Housing Finance Agency reported that Freddie Mac and Fannie Mae have financed more than 3.5 million refinance loans during the first nine months of 2009. Freddie Mac estimates that borrowers who refinanced their conventional loan during the third quarter reduced their interest rate by a median of 1.1 percentage points, which will save these borrowers an aggregate of $3 billion in mortgage payments over the next 12 months.

"Further, pending sales for existing homes rose for the eighth straight month in September to the strongest pace since December 2006, while spending on private residential construction jumped 3.9 percent and represented the largest gain since July 2003. In the third quarter of this year, residential fixed investment added almost a full percentage point to economic growth."