Sunday, February 24, 2013

Mortgage Market Guide Weekly Issue 8

Last Week in Review: More Fed chatter hit the wires about Quantitative Easing. Find out what happened.










"You don't know what you got until it's gone." Those lyrics from the band Chicago's 1980's hit could apply to the chatter from the Fed last week, as the debate about whether to continue their latest round of Bond buying, known as Quantitative Easing, continues.

What is Quantitative Easing? Quantitative Easing is the concept of the Fed becoming a buyer of Treasuries and Bonds to try and stimulate the economy.

Why does the Fed do Quantitative Easing? Oftentimes, the Fed does Quantitative Easing when they are hoping to (1) create inflation and avoid a deflationary economy, (2) lower the unemployment rate, and (3) boost Stock prices. For this latest round of Quantitative Easing, the Fed especially wanted to help stimulate the housing market and our economy overall.

And the housing market has shown signs of improvement lately. While Housing Starts in January declined overall, single family Housing Starts rose to its highest rate since July 2008. Building Permits, a sign of future construction, also came in above expectations. These reports were the latest in a series of reports showing that the housing market is recovering.

What is all the Fed chatter about? Last week, the minutes from the Fed's January meeting of the Federal Open Market Committee were released. The minutes noted that several Fed members would like to halt the Quantitative Easing program sooner than planned, because they are concerned about inflation. However, it's important to note that last week's Producer and Consumer Price Index Reports showed that inflation at both the wholesale and consumer levels remained tame in January.

On the flip side, other Fed members are concerned that halting the program too soon could end the recovery in the housing market, and hinder our economic recovery overall. And given that the increase in the payroll tax in January left consumers with less money in their paychecks, and that Walmart has reported that February sales were the weakest in seven years, this is an important factor to consider as well.

The biggest take away is that now remains a great time to consider a home purchase or refinance, as home loan rates remain near historic lows. Let me know if I can answer any questions at all for you or your clients.

Forecast for the Week: The last week of February brings a full slate of economic news.

A busy week of reports is ahead, with news on housing, manufacturing, consumer sentiment, U.S. growth and inflation.
  • The week starts and ends with a measure of how the consumer is feeling with Tuesday's Consumer Confidence Report and Friday's Consumer Sentiment Index.
  • There's a double dose of housing news on Tuesday, with the Case Shiller Index and New Home Sales. Plus, look for Pending Home Sales on Wednesday.
  • We'll get a sense of how the economy is doing with Wednesday's Durable Goods Orders, which measures orders for products used for an extended period of time, and Thursday's Gross Domestic Product, the biggest picture of economic activity.
  • Also on Thursday, Weekly Initial Jobless Claims will be reported.
  • Ending the week, Friday brings Personal Consumption Expenditures, the Fed's favorite measure of inflation, along with Personal Income and Spending and the ISM Index.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond that home loan rates are based on.

When you see these Bond prices moving higher, it means home loan rates are improving -- and when they are moving lower, home loan rates are getting worse.

To go one step further -- a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, Bonds and home loan rates remain steady near record best levels. I'll continue to monitor them closely.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Feb 22, 2013)















View: Want your social media posts to be as effective as possible? Don't miss important information below.

Best Days and Times for Posting to Social Media

More than nine out of ten businesses spend six or more hours online each week maintaining a presence on social media. And while you probably already know the benefits of social media--better engagement with your market, better website traffic, improved sales--you might not realize that some days (and times!) are better than others for posting to social media.

Social media analytics firm Socialbakers showed Facebook posts achieve 50% of their total reach within 30 minutes of being posted. In other words, half of all the people who will see your post have seen it within the first half-hour after you post it. Not only that, by the time 90 minutes have elapsed, your average post reaches less than 2% of total audience for the next seven hours before it drops off completely.

That's why timing your posts properly is the best strategy. Here are the best days and times to post according to current research from Social Caffeine:

Twitter
BEST: 1 p.m. to 3 p.m., Monday through Thursday
WORST: 8 p.m. to 9 a.m. Avoid after 3 p.m. Friday and weekends

Facebook
BEST: 1 p.m. to 4 p.m., peaking on Wednesdays at 3 p.m.
WORST: 8 p.m. to 8 a.m., avoiding weekends

LinkedIn
BEST: 7 a.m. to 9 a.m. OR 5 p.m. to 6 p.m., Tuesday through Thursday
WORST: 10 p.m. to 6 a.m., avoid Monday and Friday

Pinterest
BEST: 2 p.m. to 4 p.m. or 8 p.m. to 1 a.m., peaking on Saturday morning
WORST: 5 p.m. to 7 p.m. and late afternoons
Economic Calendar for the Week of February 25 - March 01
The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors.

As your mortgage professional, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.


Saturday, February 16, 2013

Mortgage Market Guide Weekly Issue 7

Last Week in Review: There was another sign that the housing market continues to recover. Plus, chatter about the Fed.

"Ease on down the road." The song from the musical The Wiz could also apply to recent chatter in the markets, regarding whether the Fed will continue to "ease on" with their Bond buying program, known as Quantitative Easing. Read on for details and what they mean for home loan rates.

Quantitative Easing is the concept of the Fed becoming a buyer of Treasuries and Bonds to try and stimulate the economy. Oftentimes, the Fed does Quantitative Easing when they are hoping to (1) create inflation and avoid a deflationary economy, (2) lower the unemployment rate, and (3) boost Stock prices.

Over the last few months, the Fed has bought large amounts of Mortgage Bonds through their Quantitative Easing program to keep home loan rates (which are tied to Mortgage Bonds) near record lows, and to help strengthen our housing market and economy overall. And the housing market has definitely seen some improvement. Last week, the National Association of Realtors reported that the national median existing single-family home price surged 10% since this time last year to $178,900. The year-over-year increase of 10% was the largest gain since the fourth quarter of 2005.

This is one of the big reasons the Fed will likely continue their Quantitative Easing program: The housing market is on the mend and stopping the program could threaten the housing recovery.

So what is the bottom line? Stocks continue to do well--at the expense of Bonds and home loan rates. However, the debt crisis continues in Europe: Spain, Italy and Greece remain in contracting economies and now France and Germany have shown negative GDP growth that was even worse than expected. This means that investors will likely continue to see our Bond market as a safe haven for their money, which could ultimately benefit Bonds--and home loan rates, which are tied to Mortgage Bonds--in the process.

The biggest take away is that home loan rates remain near historic lows, making now a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients.

Forecast for the Week: The markets are closed Monday for Presidents' Day, but important housing and inflation news will be released later in the week.

The markets are closed Monday in observance of the Presidents' Day holiday, but look for several important reports later in the week.
  • Housing news hits the wires, with Housing Starts and Building Permits on Wednesday and Existing Home Sales on Thursday.
  • We'll get a double dose of inflation news with Wednesday's wholesale-measuring Producer Price Index, followed by the Consumer Price Index on Thursday.
  • Also on Thursday, Initial Jobless Claims and the Philadelphia Fed Index will be reported.
In addition, the minutes from the January meeting of the Federal Open Market Committee will be released on Wednesday at 2:00pm ET. With all the differing opinions of the Fed governors and the chatter about Quantitative Easing, this has the potential to move the markets.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond that home loan rates are based on.

When you see these Bond prices moving higher, it means home loan rates are improving -- and when they are moving lower, home loan rates are getting worse.

To go one step further -- a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, Bonds and home loan rates have been impacted by the rally in Stocks. However, home loan rates remain near record lows and I'll continue to monitor them closely.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Feb 15, 2013)

View: Thinking less may actually help you get more done. Check out why below.

Rituals of Success
How to Get More Done By Thinking Less


If you've ever felt like you can't find time to get to your list of important things, you're not alone. New York Times best selling author Tony Schwarz says almost 75 percent of workers around the world feel disengaged at work and that the "more, bigger, faster" mantra is to blame. We are busier than ever, trying to get more done with fewer resources.

Schwarz suggests everything we do--whether checking email, exercising, or resisting the temptation to eat an extra cookie--often requires thinking, and thinking takes energy. So, if you want to get more done you must actually think less.

In 1911, philosopher A.N. Whitehead wrote: "It is a profoundly erroneous truism that we should cultivate the habit of thinking of what we are doing. The precise opposite is the case. Civilization advances by extending the number of operations we can perform without thinking about them."

The answer, according to Schwarz, is to make important things automatic, what he calls a ritual. Rituals are highly specific behaviors performed at a specific time. He reports the five rituals that have made the most difference in his life are:
  1. Sticking to a bedtime that ensures he gets at least 8 hours of rest.
  2. Working out first thing in the morning, whether he feels like it or not.
  3. Starting his workday by doing the most important task first--decided the night before--and working only in 90-minute time blocks with a definite break in between.
  4. Writing down his good ideas immediately, so they aren't bouncing around in his mind all day, or worse, forgotten entirely.
  5. When upset by someone or something, he ritually asks how he can see the same set of facts in a more hopeful or empowering way.
Remember, the less you have to think about your goals as you perform the steps to achieve them, the more likely you are to check them off your list.

Economic Calendar for the Week of February 18 - February 22

The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors.

As your mortgage professional, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.

Saturday, February 9, 2013

Mortgage Market Guide Weekly Issue 6

Last Week in Review: There was a mix of good, bad, and ugly news.

"Bad news goes about in clogs, good news in stockinged feet." Welsh Proverb. And we certainly saw both good and bad news last week. Here are the details and what they mean for home loan rates.

There was good news for the housing sector, as CoreLogic reported that home prices rose by 0.4% in December, from November, and was the tenth monthly gain. In the year ended in December, prices rose by 8.3%, the largest increase since May of 2006.

But news from the Congressional Budget Office (CBO) wasn't as pretty of a picture. The CBO said that growth in the U.S. will slow due to large government spending cuts coupled with new tax increases in 2013. The Gross Domestic Product (GDP) is expected to rise by a meager 1.4% this year. This is clearly not enough to lower the Unemployment Rate, which is estimated to remain near 7.9% in 2013. The CBO went on to say that growth will likely rise in 2014, which would then lower the Unemployment Rate. However, this could result in inflation and rising interest rates.

And the news out of Europe was just plain ugly. Greece is in a depression-like state with no prospect of meeting its third bailout terms. Spain has historically high unemployment and the second highest debt load in the region. Other countries continue to struggle as well.

What does all of this mean for home loan rates? As the drama in Europe continues to unfold, the U.S. Dollar and our Bonds should benefit from safe haven buying. And since home loan rates are tied to Mortgage Bonds, as Bonds benefit, home loan rates should as well. In addition, the Fed's Bond purchase program (known as Quantitative Easing) continues, so it is tough to see Bonds (and therefore home loan rates) worsen significantly without the immediate threat of inflation.

However, one thing to continue to monitor is the seesaw battle that has developed between the Stock and Bond markets. If Stocks continue to do well, this could temper any significant improvement in Bonds and home loan rates.

The biggest take away is that now is a great time to consider a home purchase or refinance, as home loan rates remain near historic lows. Let me know if I can answer any questions at all for you or your clients.

Forecast for the Week: The second half of the week features several important reports, including retail sales, consumer sentiment and more.

The beginning of the week is quiet, but look for several important reports in the second half of the week.
  • On Wednesday, Retail Sales will be released and will gauge how consumer spending habits held up in January.
  • Initial Jobless Claims will be reported on Thursday. Last week, claims fell by 5,000 in the latest week to 366,000, just above expectations. The four-week moving average, which evens out any seasonal abnormalities, fell to a five-year low of 350,500.
  • New York State Empire Manufacturing and Consumer Sentiment will be released on Friday.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond that home loan rates are based on.

When you see these Bond prices moving higher, it means home loan rates are improving -- and when they are moving lower, home loan rates are getting worse.

To go one step further -- a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, Bonds attempted to rally last week. I'll continue to monitor their movement closely.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Feb 08, 2013)

View: Claim a home-office deduction on your taxes? The rules just got easier. See important details below.

IRS Makes Claiming the Home-Office Deduction Easier

A simplified option available for 2013 tax returns requires fewer calculations and will save taxpayers time.
By Cameron Huddleston, Kiplinger.com

If you work from home, deducting costs associated with your home office on your tax return can be a money saver. But claiming this write-off has been somewhat complicated -- until now, that is.

The IRS recently announced a simplified option to make it easier for taxpayers to calculate and claim the home-office deduction. Although those who work at home won't be able to take advantage of the simplified option on their 2012 returns, it will be available for 2013 tax returns, which taxpayers will file in early 2014. The IRS estimates it will reduce the paperwork and record-keeping burden on small businesses by an estimated 1.6 million hours annually.

Currently, to claim the home-office deduction you have to fill out the 43-line Form 8829, which involves substantiating actual expenses. With the new method, you don't deduct actual expenses. Instead, you determine the amount of deductible expenses by multiplying a prescribed rate ($5) by the square footage of the area of your residence that is used for business purposes, not to exceed 300 square feet. So that means the deduction is capped at $1,500.

With the new option, you don't depreciate the portion of your home used for business, and you don't have to allocate deductions for mortgage interest, real estate taxes and casualty losses between personal and business use. You'll simply claim these expenses as itemized deductions on Schedule A. However, to claim the home-office deduction under the new option, you still must use the space regularly and exclusively for your business.

For more information, see IRS Revenue Procedure 2013-13.

Reprinted with permission. All Contents ©2013 The Kiplinger Washington Editors. Kiplinger.com.

Economic Calendar for the Week of February 11 - February 15

The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors.

As your mortgage professional, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.



Monday, February 4, 2013

Mortgage Market Guide Weekly Issue 5

Last Week in Review: There was important news on the labor market and the state of the economy. Find out how home loan rates were impacted.

Take two steps forward and one step back. That popular catchphrase is a good description of our economy of late, as good economic news continues to be tempered by some negative reports.

There was mixed news in the Jobs Report for January: 157,000 jobs were created, which was below expectations, while the unemployment rate ticked up to 7.9% from 7.8%. On the flip side, the November and December job numbers were revised higher by 127,000. In addition, the benchmark revisions showed that employers added 335,000 jobs in 2012, more than was originally reported. That brought the average rate of job gains per month in 2012 to 181,000, up from the 175,000 per month average seen in 2011.

Overall, the labor market continues to improve, but at a very slow pace. And seeing the unemployment rate tick higher is yet another reason why the Fed said last week that their Bond purchase program (known as Quantitative Easing) will continue.

In other important news, Fourth Quarter Gross Domestic Product (GDP) showed negative growth for the first time since the second quarter of 2009. While external factors like Superstorm Sandy did have an impact on this reading, overall growth has been limited to just 2% or so annually. This is part of the reason why the unemployment rate remains as elevated as it is.

What does this mean for home loan rates? First, it's important to remember three things. First, home loan rates are tied to Mortgage Bonds, and as Bonds improve, home loan rates improve. Second, inflation is the arch enemy of Bonds (and therefore home loan rates) as inflation reduces the value of fixed investments like Bonds. Third, Bonds (and therefore home loan rates) typically benefit when there is weak economic news, as investors tend to move their money into safer investments like Bonds.

The question is: With the Fed still buying $85 billion in Mortgage Bonds per month, no inflation, and weak economic readings, why aren't Bonds and home loan rates improving? The answer: Stocks had their best January in over two decades. As long as the Fed continues to pump money into the economy, the bias in the markets will likely be towards riskier assets like Stocks.

However, home loan rates remain near historic lows, which means now is still a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients.

Forecast for the Week: In the absence of any major economic data points and with earnings season coming to an end, investors will be looking for the next catalyst to impact the markets.

After last week's packed economic calendar culminating with Friday's mixed Jobs Report, this week's calendar is light.
  • Look for the ISM Services Index on Tuesday.
  • Weekly Initial Jobless Claims will be reported as usual on Thursday. Last week's reading showed that initial claims jumped 38,000 to 368,000 in the latest week.
  • Also on Thursday, Q4 2012 Productivity will be released
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond that home loan rates are based on.

When you see these Bond prices moving higher, it means home loan rates are improving -- and when they are moving lower, home loan rates are getting worse.

To go one step further -- a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, Bonds attempted to stabilize last week. I'll continue to watch the markets closely.
Chart: Fannie Mae 3.0% Mortgage Bond (Friday Feb 01, 2013)















View: The cost of getting the flu is nothing to sneeze at. Be sure to share the important information below with clients and colleagues.

 Monitor the Flu Online

Flu season is here...and the cost of the season is nothing to sneeze at! In fact, Americans spend approximately $4 billion on over-the-counter cold and flu remedies. That doesn't even factor in how much time and productivity is lost on sick-time in the workplace or co-pays for doctor visits and prescriptions.

But with the two websites below, you can stay up to date on the latest flu information in your area and even add your data to help others.

View Flu Activity:

You don't have to wonder if the flu is prevalent in your state or search for long complicated reports. Each week, the Centers for Disease Control and Prevention (CDC) produces a Flu Activity Map. The map displays the level of flu activity across the United States and is based on data reported from state epidemiologists. The map also allows you to view previous weeks, so you can compare the spread of flu activity over time.

Contribute Your Data:

On the "Flu Near You" website, you can complete a brief weekly survey that may help all of us learn more about the flu. When a case is reported, the map registers a "pin" in the map - and you can even click on that pin to learn more about the symptoms or severity of the case! The site is completely free to use. And the information on the site will be available to public health officials, researchers, disaster planning organizations and anyone else who may find this information useful.

So if you're concerned about being sidelined by the flu, take a few minutes to check out the websites above. You may even want to consider passing the information on to your friends, family members, or even your clients.
Economic Calendar for the Week of February 04 - February 08
The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors.

As your mortgage professional, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.


Monday, January 28, 2013

Mortgage Market Guide Weekly Issue 4

Last Week in Review: Good news moved the markets. How were home loan rates impacted?

"Happy days are here again." Milton Ager and Jack Yellen. There was more evidence last week that the housing market is improving. But not everything that happened last week was cause for song. Read on to learn more.  
Last week, the Federal Housing Finance Agency (FHFA) reported that home prices rose by 0.6% in November from October, and that they are up 5.6% from the year ended in November. These numbers are based on data received from Fannie Mae or Freddie Mac mortgages. In addition, both Existing Home Sales and New Home Sales for December, though below estimates, were strong numbers for 2012.

But the housing market wasn't the only area where we saw positive economic data last week. There was good economic news out of Germany, plus several companies here reported strong earnings, including Procter & Gamble and Honeywell. In addition, weekly Initial Jobless Claims dropped by 5,000 to 330,000 in the latest survey: this is the lowest level since January of 2008. It is important to note that estimates were used for three states, including Virginia and California, so the numbers could be distorted.
How were home loan rates impacted? The mix of good economic news last week caused investors to move their money out of Bonds, which are considered safer investments, and into Stocks in the hopes of taking advantage of gains. And since home loan rates are tied to Mortgage Bonds, as Bonds worsened last week, so did home loan rates. But rates remain close to historic lows, and now is still a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients. 

Forecast for the Week: A busy week is ahead, with news on inflation, consumer confidence and spending, manufacturing, the labor market and more.

 A full slate of economic reports is ahead, with several key data points that could move the markets.
  • Monday's Durable Goods Orders and Wednesday's Gross Domestic Product Report will give us signs as to how our economy is doing.
  • Monday also brings more news on the housing market with Pending Home Sales, which will be followed by Tuesday's Case Shiller 20-city Home Price Index.
  • We'll get a sense of how the consumer is feeling with Consumer Confidence on Tuesday and the Consumer Sentiment Index on Friday.
  • Thursday brings several key economic reports, including Initial Jobless Claims, Chicago PMI, Personal Income and Spending, and the inflation-reading Core Personal Consumption Expenditure, the Fed's favorite measure of inflation.
  • Rounding out the week, the all-important Non-Farm Payrolls will be reported along with the Unemployment Rate. Also on Friday, the ISM Index will be delivered.
In addition, the Federal Reserve will meet for its two-day meeting of the Federal Open Market Committee, with the monetary policy statement released at 2:15pm ET on Wednesday. The statement will be dissected for any hints on the current purchase programs of Mortgage Backed and Treasury Securities. If there is any talk of halting the programs this year, it could lead to lower Bond prices and a push higher in home loan rates.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond that home loan rates are based on.

When you see these Bond prices moving higher, it means home loan rates are improving -- and when they are moving lower, home loan rates are getting worse.

To go one step further -- a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, Bonds and home loan rates worsened after positive economic data was released last week. I'll continue to watch all the news and market action closely. 
Chart: Fannie Mae 3.0% Mortgage Bond (Friday Jan 25, 2013)















View: There's a new scam targeting small businesses. See important details below.

FTC Warns of New E-mail Scam
Small-business owners are the target of this phishing scheme.
By Cameron Huddleston, Kiplinger.com


The Federal Trade Commission is warning small-business owners not to open e-mails with the subject line "Notification of Consumer Complaint." The e-mail falsely claims to be from the FTC and states that a complaint has been filed with the government agency against their company.

E-mails of this sort often prompt recipients to click on a link or open an attachment. However, these links and attachments usually install malware or a virus on your computer if you click on them. Then you're at risk of having personal information stored on your computer stolen.

The FTC says that you should delete such e-mails. It also offers tips on how to reduce your risk of downloading malicious software onto your computer.
  • Keep your security software updated by setting it to update automatically.
  • Don't buy software in response to pop-up messages on your computer or e-mails. Scammers use ads that claim to have scanned your computer and detected malware to get people to install malicious software.
  • Make sure your Internet browser security setting is high enough to detect unauthorized downloads. For example, Internet Explorer users should have their security setting at medium, at a minimum.
  • Use a pop-up blocker on your browser (look for the security tab in your browser's options). Links in pop-ups can contain malware.
If you notice that your computer is running slower, crashes often or repeatedly displays error messages, it may have a virus. Other warnings signs include new toolbars or icons on your desktop, a barrage of pop-ups, Web sites that you didn't intend to visit displaying on your screen and a laptop battery that drains quickly.

See Protect Yourself From New Phishing Schemes for more advice on avoiding fraudulent e-mails.

Reprinted with permission. All Contents ©2013 The Kiplinger Washington Editors. Kiplinger.com 

Economic Calendar for the Week of January 28 - February 01
The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors.

As your mortgage professional, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.

Monday, January 21, 2013

Mortgage Market Guide Weekly Issue 3

Last Week in Review: There was good news on the housing front, plus inflation remains tame.



"There is magic in that little word, home." Robert Sotheby. And last week, there were more signs that the housing sector continues to improve. Read on for details.

Housing Starts surged by 12.1% in December to 954,000 units on an annualized basis. This was above expectations and the highest level since June 2008. Building Permits, a sign of future construction, also increased, coming in slightly higher than the November reading.

In addition, research firm CoreLogic reported that home prices rose by 7.4% in the year ended in November. This figure, which includes the sales of distressed properties, was the largest year-over-year increase since 2006 and it has been positive for nine straight months. Also, the Obama Administration's December Housing Report showed that home prices had solid annual gains for the year ended in October, with the Federal Housing Finance Agency (FHFA) and Case-Shiller housing price indices up 5.6% percent and 4.3%, respectively, from one year ago.

It's also important to note that RealtyTrac's year-end 2012 foreclosure report showed that foreclosure activity increased in 25 states. However, median home prices also increased in 25 states, which pulled 1.6 million homeowners out of negative equity in 2012.

So what's the takeaway? Goldman Sachs has reported that the fundamentals are pointing towards larger gains for housing prices in the next couple of years. And with home loan rates remaining near record lows, great opportunities are available.

As always, one thing that's important to monitor is inflation. Since inflation reduces the value of fixed investments, inflation is considered the arch enemy of Bonds–and, therefore, of home loan rates, which are tied to Mortgage Bonds. However, last week's wholesale-measuring Producer Price Index and the Consumer Price Index showed that inflation remains tame, meaning inflation is not a factor at this time.

The bottom line is that now remains a great time to consider a home purchase or refinance, as home loan rates remain near historic lows. Let me know if I can answer any questions at all for you or your clients.

Forecast for the Week: It's a holiday-shortened week and while the economic calendar may be quiet, earnings season heats up.

The markets are closed on Monday in observance of Martin Luther King, Jr. Day and the economic calendar is pretty quiet the rest of the week.
  • More housing news is ahead, with Existing Home Sales on Tuesday and New Home Sales on Friday.
  • The only other economic report will be Weekly Initial Jobless Claims on Thursday. Last week, claims fell to a five-year low and this may have been due to seasonal factors. Investors will be looking for any uptick in the numbers.
In addition, many companies will be reporting their earnings numbers and the markets will be closely watching the results. Positive earnings data could help push Stocks higher and shift investing dollars out of the Bond markets, which could have a negative impact on home loan rates.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond that home loan rates are based on.

When you see these Bond prices moving higher, it means home loan rates are improving – and when they are moving lower, home loan rates are getting worse.

To go one step further – a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, Bonds worsened last week due in part to the better-than-expected housing news and an influx of investing dollars into Stock mutual funds. I'll continue to watch this situation closely.

Chart: Fannie Mae 3.0% Mortgage Bond (Friday Jan 18, 2013)















View: Writing articles for local papers or newsletters is a great way to show your expertise. Check out the tips below, and be sure to share them with clients and colleagues.

Writing Business Articles That Get Read

"The easiest thing for a reader to do is to quit reading."
Michael Gartner, Pulitzer Prize winner and former President, NBC News


To some people, writing a business article can seem almost as daunting as public speaking. And yet, just like public speaking, business writing presents a variety of opportunities to share your expertise. Be it through local news outlets, community newsletters or shared access to a strategic partner's database, you can grab some fresh exposure for yourself or your business by writing a timely, helpful article.

Here are a few tips on how to write one that people will read and remember:

The Inverted Pyramid. Your goal should always be to create an easy reading experience for your audience. And there's no easier way to write an article than to follow in the footsteps of the experts. The inverted pyramid is a tool many journalists use to explain the structure of most news articles. For a classic example, read this news story (scroll down to the heading that says "History") that originally appeared in the New York Herald in April of 1865.

Start At The Bottom. You want to make sure all the newsworthy information is in the beginning, but not go into too much detail. It's critical you answer the Who, What, When, Where, Why, and How as early and as briefly as possible. If you skip this in favor of a long narrative, you're more likely to lose readers you wouldn't have lost otherwise.

Details, Details, Details. The benefit to keeping your introduction short and to the point is your readers are more likely to follow you into the nitty-gritty. This is the stuff you really want to talk about and here's where you'll expand on your message and deliver the value promised by your introduction. Make sure, however, you deliver the goods–or "pay off"–to your readers by giving them the information you've promised in your headline and introduction.

The Kitchen Sink. The ending is reserved for other information needed to back up your case, lend credibility to your point, or include relevant but non-essential information on the subject.

Call To Action. This step doesn't appear on the inverted pyramid model, but if you're writing for business, and your publication allows it, put a very clear call to action that lets readers know you take questions and are happy to receive a call from them if they want to talk more about it with you!
Economic Calendar for the Week of January 21 - January 25






The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors.

As your mortgage professional, I am sharing with you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.

Sunday, January 13, 2013

Mortgage Market Guide Weekly Issue 2

Last Week in Review: The economic report calendar was quiet, but there was still plenty of news to move the markets

All's quiet on the economic report front. And while there was little economic report news during the first full week of January, the markets still had plenty of other news to digest. Read on for details.

The only economic report to note last week was Thursday's Weekly Initial Jobless Claims Report. Initial Jobless Claims rose by 4,000 in the latest week to 371,000. This was above expectations and the highest number in a month. While the recently released Jobs Report for December showed that the labor market is continuing to improve, though at an anemic pace, it's also important that we see these weekly initial jobless claims numbers continue to decline.

Also in the news last week, Fannie Mae reported that its national housing survey showed that 43% of those consumers polled feel that home prices will rise in 2013. However, 20% said that their financial situations will deteriorate this year due to the debt ceiling worries and the rise in taxes. And in news overseas, European Central Bank President Mario Draghi said that he sees further risks to the region's economic outlook.

So what does this mean for home loan rates? Stocks did reach five-year highs last week--at the expense of Bonds and home loan rates--after the Fiscal Cliff deal was reached and investors felt that the pace of economic growth would increase due to the deal passing. However, uncertainty both here at home (due to the debt ceiling worries) and overseas (due to the continuing debt crisis in Europe) means that investors will likely continue to see our Bond market as a safe haven for their money. This could ultimately benefit Bonds--and home loan rates, which are tied to Mortgage Bonds--in the process.

The bottom line is that home loan rates remain near historic lows, meaning now is a great time to consider a home purchase or refinance. Let me know if I can answer any questions at all for you or your clients.

Forecast for the Week: A full slate of economic reports is ahead, with news on consumer sentiment and spending, inflation, manufacturing and housing

After last week's quiet economic report calendar, this week's calendar heats up.
  • Retail Sales will be released on Tuesday and investors will look to see if consumers opened their wallets during the holiday shopping season.
  • We'll get a double dose of inflation news this week, with the wholesale-measuring Producer Price Index on Tuesday and the Consumer Price Index on Wednesday.
  • Housing Starts and Building Permits will be reported on Thursday along with Weekly Initial Jobless Claims.
  • We'll also see a double dose of manufacturing news, with the Empire State Index on Tuesday and the Philly Fed Index released on Thursday.
  • To close out the week, the Consumer Sentiment Report will be released on Friday.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond that home loan rates are based on.

When you see these Bond prices moving higher, it means home loan rates are improving -- and when they are moving lower, home loan rates are getting worse.

To go one step further -- a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, Bonds and home loan rates worsened last week as Stocks hit five-year highs. But home loan rates remain near historic lows and I'll be watching closely to see what happens this week.
Chart: Fannie Mae 3.0% Mortgage Bond (Friday Jan 11, 2013)

View: Interruptions at work can hinder productivity, maybe even more than you think. Check out these tips below and be sure to share them with colleagues, clients, friends and family.

Pardon the Intrusion: The High Cost of Office Interruptions

Getting into that peak state of performance some people call "flow"--where ideas come easy and productivity seemingly doubles, or triples if you're lucky--is an elusive state for many office workers. Basex, a research and advisory firm, estimated the cost of workplace interruptions such as unscheduled calls, emails, and instant messaging at around $588 billion per year in lost productivity for the U.S. economy.

And that's not all. New York Times bestseller Brain Rules, written by developmental molecular biologist Dr. John Medina, points out...
  • A task that's interrupted takes 50% longer and has 50% more mistakes than an uninterrupted one
  • On average, an interrupted worker takes 23 minutes to get back to the original task, and an additional 30 minutes to return to the "flow" state
  • 80% of the time workers will return to an interrupted task later in the day; in 1 out of 5 occurrences, however, they will not be able to return to it the same day
  • Frequent task changes without completion significantly increases stress levels as opposed to handling things to completion one at a time
The bottom line is interruptions not only hurt your productivity but may also harm your health. Try to limit interruptions during your day as much as possible by:
  • Checking email or taking calls only during certain times of the day
  • Keeping your door closed
  • Wearing headphones (even if nothing is playing)
  • Making sure every staff member knows the true cost of their interruptions
And the next time you want to interrupt someone else, remember that your 30 second request may easily become an hour of extra work--not to mention additional mistakes that take even more time to correct later on.

Economic Calendar for the Week of January 14 - January 18
The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors.

As your mortgage professional, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.




Saturday, January 5, 2013

Mortgage Market Guide Weekly Issue 1

Last Week in Review: The Fiscal Cliff was avoided, plus the Jobs Report for December was released.

Time will tell. And as 2013 marches along, time will tell us what impact avoiding the Fiscal Cliff had on our economy...and if our labor market will continue to improve. Read on for details, and what they mean for home loan rates.

On Friday, the Labor Department reported that 155,000 jobs were created in December, with 168,000 private job gains offset by modest government losses. The Unemployment Rate was unchanged at 7.8% (November's 7.7% reading was subsequently revised higher).

The Labor Force Participation Rate (LFPR) was also unchanged at 63.6%, which is still the lowest reading in over 31 years. The LFPR calculation is quite simple. If you are 16 years old and not in the military, then you either have a job or you don't. The ratio of people "participating" or working is then compared to the total population. All in all, the Jobs Report was in-line with expectations and shows that the labor market is continuing to improve, but at an anemic pace.

The other big news from last week: The Fiscal Cliff was avoided after a last-minute deal was passed in Washington. The deal will shield millions of Americans from higher taxes and will extend Unemployment Benefits for the long-term unemployed. However, spending cuts were not addressed, which is something Congress will have to do over the next 60 days.

So what does this mean for home loan rates? Looking ahead, there is more uncertainty on the horizon as to how Congress will handle the debt ceiling, which is currently at $16.4 trillion and which must be raised in the coming weeks. There is also uncertainty after the Fed released the statement from their Federal Open Market Committee (FOMC) meeting in December, which revealed that some Fed members think the Fed should stop their latest rounds of Bond buying (known as Quantitative Easing) sooner than initially planned. While Bonds and home loan rates did worsen after hearing this news, the continued uncertainty here in the markets means that investors will likely continue to see our Bond market as a safe haven for their money. This could ultimately benefit Bonds--and home loan rates, which are tied to Mortgage Bonds--in the process.

The bottom line is that now is a great time to consider a home purchase or refinance, as home loan rates remain near historic lows. Let me know if I can answer any questions at all for you or your clients.


Forecast for the Week: A quiet economic report week is ahead, but volatility could be as well.

A light economic report calendar is ahead for the first full week of January. But with the markets watching to see how Congress continues to handle key items like the debt ceiling and spending cuts, we could see some volatility.
  • Weekly Initial Jobless Claims will be released as usual on Thursday. Now that the seasonal abnormalities are behind us, investors will be looking for the real numbers.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond that home loan rates are based on.

When you see these Bond prices moving higher, it means home loan rates are improving -- and when they are moving lower, home loan rates are getting worse.

To go one step further -- a red "candle" means that MBS worsened during the day, while a green "candle" means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

As you can see in the chart below, Bonds and home loan rates worsened after the Fed minutes were released last week. I'll be watching all the news closely to see what happens this week.








View: Check out these tips to help you quiet your mind and improve your productivity in the process.

Brain Power Boosters for Busy People

Researchers at UCLA have long known about the benefits of meditation. But a further report by Eileen Luders, assistant professor at the UCLA Laboratory of Neuro Imaging, has revealed people who meditate frequently have larger amounts of gyrification--or folding of the cortex--which may allow them to process information faster than those who do not meditate.

Whether you've mediated before or not, taking a short mental break during the day is a great way to improve your productivity. Here are a few tips to try and to pass along to your clients, colleagues, friends and family members:

Commune While You Commute. Simply letting your mind relax twice each day, on the way to and from work is a great first step. While easier to do if you commute by public transit or carpool, it's still possible if you drive your own car by leaving for work a bit earlier. Focus on something very calming and specific. Perhaps a waterfall, waves on a beach, flowers, or a tree swaying in the wind--it's up to you--the point is letting your mind stay clear. If any other thoughts interrupt you, gently sweep them aside and continue to focus on your scene.

Pulse Power. K. Anders Ericsson, psychologist and researcher at the University of Florida, discovered that people were much more efficient working in clearly divided blocks or "pulses." The optimal time limit being about 90 minutes, after which the mind needs a break. The simplest way to remind yourself to take a time out is to download a free break-timer application such as Scirocco (PC) or Time Out (Mac)--or just use the alarm feature on your smartphone.

Daydream Believer. It's a fact that daydreamers score higher on creativity tests and come up with better ideas than those focused exclusively on work. Daydreaming is different than meditation in that you're filling your mind rather than trying to empty it, but the trick is to focus on things other than work or problems. Taking a 20-minute lunchtime walk as you let your mind wander freely is a great way to refresh both mind and body with a bit of fresh air and exercise.

Economic Calendar for the Week of January 07 - January 11

The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors.

As your mortgage professional, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.