I decided to sponsor this new Localism community because I need a place for my buyer clients to go to when they need info on home loans and mortgages in Lawrence Kansas and the surrounding area. Consumers wanting to buy a home need to know when a good time is to lock their rate or when to float (wait for the rates to drop a little more).  Consumers need to know which of all the Lawrence Kansas lenders to choose.

First Assured Mortgage

Lawrence, KS  66049

P. 785-856-LOAN (5626)

C. 785-766-3788

F. 785-856-RATE (7283)

E. bobb@firstassuredmortgage.com

W. www.firstassuredmortgage.com

A lot has happened in the past week in the financial world. Bob Buchanan has been on top of what is going on each day. The following several paragraphs have been written by him. They tell when to lock a loan rate with a lender to get the best rate. I'm sure Bob would be happy to talk with you at any time regarding home loans and mortgages and will add you to his email list so you get his market alerts instantly. If you would like to read what Bob has to say, return to this Lawrence Kansas Home Loans and Mortgages Localism Community for specialty blogs and mortgage marketplace updates.

written Tue, Sep 16 - 5:00 PM ET  Market Wrap: It was 'Fed Day' and to use a baseball analogy, the Fed threw the markets a 'curve ball' when they were looking for a 'fast ball.' Our benchmark FNMA 5.5% mortgage bond was hit with a wave of selling on the Fed's unanimous decision to keep the Fed Funds rate target on hold at 2% and ended with a 88bp loss to close at $100.59. The markets were instead looking for a 25bp rate cut based upon the financial system meltdown witnessed yesterday and with AIG's crisis. In fact, the Fed funds futures had already priced in a 25bp cut. Early in the session bonds were up and stocks down as all eyes were focused on the dilemma faced by AIG and its fight for survival. AIG is struggling to raise cash after credit ratings downgrades. The downgrades require AIG to increase its cash reserves by billions it doesn't have. Although AIG's traditional insurance business remains healthy, its huge market position in credit default swaps is killing it. These complex and illiquid contracts protect an estimated $62 trillion worth of debt against default so a bankruptcy by AIG could trigger a worse panic in the global financial system than what just happened with Lehman Brothers. So far the Fed has refused to bailout AIG but private sources such as Goldman Sachs and Morgan Stanley are working hard to put together an emergency $75 billion loan package for the company's survival. Instead, the Fed injected another $70 billion into the capital markets by expanding the types of collateral it will accept in exchange for Fed loans. And by not cutting rates, the Fed created an increase in confidence among large stock market investors rather than signaling the financial crisis was out of control with a rate cut. The stock market responded with a sharp bounce higher, pulling money back out of bonds. The Dow reversed course for a 141 point bounce to close at 11,059. The NASDAQ Composite Index finished close to 28 points higher to close at 2,207 and the broader S&P 500 Index gained 20 points to end at 1,213.

written 09-16-08 11:41am  "The big story this morning is insurance giant AIG, which desperately needs $75 Billion to avoid bankruptcy. This news has far-reaching implications because, if AIG goes bankrupt, insurance claims around the world would not get paid.

In other news, the Fed will release its interest rate decision and policy statement later this afternoon. Until recently, there wasn't much chance the Fed would cut rates. But as of this morning, there is a good chance they'll cut rates by .25% or even .50%. If they do, Mortgage Bonds would likely drop and rates would worsen in the short term. However, if the Fed doesn't cut, we may see slight movement in our favor.

For now, I recommend we float to see what the Fed decides. I will keep you posted on any changes that impact you."

written 09-12-08 at 12:10pm  "Mortgage Bonds are trading lower so far today, despite this morning's news on inflation and retail sales.

Wholesale Prices--which help measure inflation--fell in August for the first time this year. Today's Consumer Sentiment report also indicated that consumers are feeling better about the economy and inflation. In other news, retail sales in August were reported much lower than Wall Street was expecting, signaling that consumer spending continues to slow.

Overall, the good inflation news and the Fed's recent move with Fannie and Freddie should lead to higher Mortgage Bonds prices in the long-term. But there may be some bumps and pullbacks along the way. For now, I recommend locking as Bonds prices face one of those pullbacks."

written 09-12-08 at 9:33am The price high of $101.19 on bonds on May 9^th is serving as a very tough ceiling of resistance. Prices have either pierced or hit this level three of the past five days, but have been unable to close above it.  History has shown that the more the bonds tests but is unable to break above this ceiling, the more formidable this resistance becomes.  So we can continue to try and float, but be mindful that in order for prices to improve further, the Bond will need to break convincingly above the 101.19 level.  I see Mortgage Bonds moving higher in the longer-term thanks to the Fed's recent move with Fannie and Freddie and also because inflation appears to be moderation just a little-but there will be some bumps and temporary pullbacks along the way.  Remember as bonds go up, rates go down.

written 09-11-08 at 9:46am  "Mortgage Bonds are slightly higher this morning after continuing unemployment claims were reported at their worst level since October 2003.

In addition, overall Import Prices declined for the first time since December, thanks in part to the recent plunge in oil and gas prices. This is good news for both the economy and the Bond market because it signals that inflation fears may be lessening.

For now, I recommend carefully floating, but I will be watching closely to see if overhead resistance or volatility in the markets requires a change of course."

written 09-10-08 at 2:06pm  LOCK NOW

written 09-10-08 at 10:56am  "Mortgage Bonds traded much lower in early trading this morning, but have since improved and are now trading near unchanged levels from yesterday.

Overall, inflation fears have been calmed by the huge drop in oil prices lately. In addition, the Treasuries' guarantee of Fannie and Freddie should make Bonds appear very attractive. This tells us that there is a very good chance for better rates ahead.

Therefore, I recommend floating for now. But, I will monitor the situation and keep you informed of changes that impact you."

written 09-09-08 at 11:15am  "Mortgage Bonds are trading higher this morning, but are down a bit from their best levels.

Also this morning, oil is trading just above $103 a barrel. A continued drop in the price of oil is good for both Stocks and Bonds, as it brings down the threat of inflation.

Overall, the Fannie and Freddie news is an enormous and much needed boost to our world. But these are wild times, and Mortgage Bonds will not move in a straight line higher. For now, I recommend floating. But there may be short-term volatility and fluctuation in prices. I will keep a close eye and keep you informed of any changes."

Again, these Lawrence Kansas mortgage marketplace updates and blog notes have been supplied by Bob Buchanan who is available at

Thanks and "Don't keep me a secret--I'm never too busy for your referrals!"
Rob (FREE Home Warranty with every home you buy or sell through me!!)
Rob Lang, CRS, ABR, ePro, GRI, CFPS Realtor®
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