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Mortgage Market Update - Gas turn this into an opportunity to improve!

By Joe Farro

Mortgage and Lending with Premier Capital Mortgage

October 01, 2008 06:55 AM

Joe Farro

Certified Mortgage Planner
Phone: (678)289-6600
(800)613-0650
Fax: (678)289-6601
jfarro@joefarro.com

www.premiercapitalmortgage.com

I bet you thought I would write about the economy and politics - Wrong! I did this for you as much as for myself and my sanity - more to come on that later this week.

I made a decision a long time ago not to live more than a few miles from work. I can say this has been a great decision. After the hurricane we still feel the impact, especially in the Atlanta area. We should hopefully have relief this week.

please click above to find cheap gas!

I had to laugh the other day as a friend on mine from Chicago made the comment to me "What's wrong with you people(edited) down there(GA)? Last year it was water and this year it's gas, what's next?." I can surely tell you it feels like the money in my pocket is going to be gone next as this business is very challenging right now. These economic times are forcing the way we transact business. This can be a good thing as we can perfect how we work on our efficiencies. Every time you get in your car to go somewhere -Think "Do I really need to do this?" - this is not the time to waste time & money. Some tips are provided below on how to save time and money:

        1.   Confirm your appointment by phone before the meeting
        2.   Master tools using online property searches while building your relationship with clients
        3.   Untilize tools like GoToMeeting.com to conduct meetings with clients or your teams
        4.   Share resources in the office for putting up directionals, yard signs and lock boxes.
        5.   Co op with other Open houses to concentrate in a common geographic area
        6.   Temporarily offer remote office meetings with conference calls.
        7.   "remote office" - Scan documents rather than overnight or deliver
        8.   "remote office" - Able to access and distribute information from anywhere
                       example: don't have to say "I need to got to the office for that."
        9.   Prequalify clients before you take then out. - amazing to still see issues to this day
                        -Home Express Mortgage Plan
        10. Spin these ideas around for your clients to save them money too!

My thought here is that some of the adjustments you make in your business today can be permanent improvements for now and the future. Any ideas are more than welcome

Market Comment

Mortgage bond prices fell last week pushing mortgage interest rates higher. The $700 billion bailout plan dominated the financial markets as uncertainty loomed and the liquidity crisis continued. Fed Chairman Bernanke warned the economy is under extraordinary stress and pleaded with Congress to act swiftly. Despite the pleadings, as of late Friday the uncertainty remained. Trading in the financial markets was extremely volatile and oil prices were erratic. For the week, interest rates on government and conventional loans rose by about 1/4 of a discount point.

The employment report Friday will be the most important data release this week. The other data releases may be overshadowed a bit as bailout developments emerge. Be alert as extreme market volatility is possible.

LOOKING AHEAD

Economic Indicator	Release Date & Time	Consensus Estimate	Analysis
Personal Income and Outlays	Monday, Sept. 29, 8:30 am, et	Income up 0.2%, Outlays up 0.2%	Important. A measure of consumers' ability to spend. Weakness may lead to lower mortgage rates.
Consumer Confidence	Tuesday, Sept. 30, 10:00 am, et	55.0	Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates.
ADP Employment	Wednesday, Oct. 1, 8:30 am, et	None	Important. A decrease in payrolls may bring lower rates.
Construction Spending	Wednesday, Oct. 1, 10:00 am, et	Down 0.5%	Low importance. An indication of economic strength. A significant decrease may lead to lower rates.
ISM Index	Wednesday, Oct. 1, 10:00 am, et	50.0	Important. A measure of manufacturer sentiment. A large decline may lead to lower mortgage rates.
Factory Orders	Thursday, Oct. 2, 10:00 am, et	Down 1.8%	Important. A measure of manufacturing sector strength. A larger decrease may lead to lower rates.
Employment	Friday, Oct. 3, 8:30 am, et	Unemp. @ 6.1%, Payrolls -90k	Very important. An increase in unemployment or a larger decrease in payrolls may bring lower rates.

State of the Industry

With all the financial turmoil hitting the stock and bond markets much is still unknown concerning the future of the US economy.

What we do know is the Federal Government has recently taken unprecedented steps to shore the economy and back many historically private institutions. The Securities and Exchange Commission implemented strict trading rules prohibiting short selling of financial stocks. Money market accounts, historically considered safe investments, got caught in the financial turmoil of the Lehman Brothers bankruptcy. As a result, the Treasury created a temporary insurance system for the funds. Regulators indicated this was done to prevent a banking system collapse.

Fannie Mae and Freddie Mac were taken over by the US Treasury. This effectively guaranteed the performance of the Fannie and Freddie instruments with the backing of the US Federal Government. Federal Housing Finance Agency Director James B. Lockhart indicated that not acting, "would have been disastrous for the mortgage markets, as mortgage rates would have continued to move higher and, in turn, disastrous for the enterprises as the prices of their securities would have fallen and credit losses increased." He noted the goal of the takeover was "to help restore confidence in Fannie Mae and Freddie Mac, enhance their capacity to fulfill their mission, reduce the systemic risk and make more mortgages available at a lower cost to the American people." While lending guidelines have tightened and mortgage rates remain volatile, the good news is rates remain historically favorable and loans are readily available.

MORTGAGE RATES

Loan Programs	Interest Rates*
30 Year Conventional	Upper 5's
30 Year FHA/VA	Low 6's
30 Year Jumbo	Low 7's
5/1 Arm Conventional	No Way!
5/1 Arm Jumbo	Upper 6's