This Week’s Market Commentary

December 26, 2011

This week brings us the release of only one piece of monthly economic data that is considered important to mortgage rates. It is a true holiday-shortened week with the financial markets closed today for observance of Christmas and the bond market closing early Friday in recognition of the New Year’s Day holiday next weekend.

However, some traders will be working a short week, especially as it progresses, so we can expect to see some very light trading. That could mean little if nothing surprises the markets, but a significant piece of news or unexpected results from the little data being posted can cause a larger reaction than normal due to fewer traders working.

The week’s only and the year’s final important release comes late tomorrow morning when the Conference Board will post their Consumer Confidence Index (CCI) for December. This is a fairly important release because it measures consumer willingness to spend. If consumers are more confident about their personal financial situations, they are more apt to make large purchases. Since consumer spending makes up two-thirds of the U.S. economy, any related data is watched closely by market participants and can have a significant influence on mortgage rate direction. Current forecasts are calling for an increase in confidence from November’s reading of 56.0. Analysts are expecting tomorrow’s release to show a reading of 58.0, meaning consumers felt better about their own financial situation than they did in November. The lower the reading, the better the news for bonds and mortgage pricing.

With little economic data being posted this week, the Labor Department’s weekly unemployment numbers may help influence the markets and mortgage rates more than usual. They are expected to show Thursday that 368,000 new claims for unemployment benefits were filed last week, which would be an increase from the previous week. We usually don’t worry too much about this data because it tracks only a single week’s worth of new claims, but we should probably pay a little more attention to this particular release as it could impact mortgage rates slightly.

The bond market will close at 2:00 PM ET Friday, but the stock markets are scheduled to be open for a full day of trading. All banks and major U.S. financial markets will be closed Monday in observance of the New Year’s Day holiday. Everything will reopen next Tuesday morning for regular hours.

Overall, tomorrow will be the most important day of the week, but we may see some volatility any day. The thinnest trading will probably take place the latter part of the week as traders head home for the holiday. Despite last week’s shortened schedule, we saw plenty of movement in mortgage rates. This week likely will be the same as investors look to make year-end adjustments to their portfolios. Accordingly, I recommend keeping in contact with your mortgage professional if still floating an interest rate and closing in the immediate future.

This Week’s Market Commentary

December 19,2011

This holiday-shortened trading week brings us the release of eight monthly or quarterly economic reports in addition to two semi-relevant Treasury auctions.

None of the releases are considered to be highly important to the markets and mortgage rates, but several of them do have the potential to cause some movement in rates. The more important news comes later in the week. Therefore, we may see more movement in mortgage pricing as the week progresses.

There is nothing of relevance scheduled for release tomorrow. This means we can look towards the stock markets for guidance on bond and mortgage rate direction. The Europe debt crisis will likely be in the headlines this week as leaders move to avoid downgrades by credit rating agencies that would be equivalent to adding gasoline to the fire. If the actions taken overseas are strong enough to calm investor fears here, stocks may bode well for the week, making it difficult for bonds to rally and push mortgage rates lower. On the other hand, if it becomes evident that the downgrades to their debt are unavoidable, fears about the impact they would have on the global economy will probably fuel stock selling and bond buying here. The latter would be good news for mortgage rates.

Tuesday’s only data is November’s Housing Starts, but it is the week’s least important data. I don’t see it causing much movement in mortgage rates unless it shows a huge variance from expectations. It is expected to show little change in construction starts of new homes, hinting at a flat housing sector last month. Generally speaking, an increase in new starts would be bad news for bonds and mortgage pricing, but unless there is a significant surprise it will likely have little impact on Tuesday’s mortgage rates.

November’s Existing Home Sales figures will be posted late Wednesday morning. This release will come from the National Association of Realtors while its sister release, Friday’s New Home Sales data, is a Commerce Department report. Both give us a measurement of housing sector strength and mortgage credit demand, however, neither is considered to be of high importance. And both of the reports are expected to show increases in sales, indicating housing sector growth. Weaker than expected readings would be considered positive for bonds and mortgage rates because they hint at a still weakening housing market. But unless the actual readings vary greatly from forecasts, the results will probably have little or no impact on mortgage rates.

Thursday brings us the release of three reports, with the first being the final revision to the 3rd Quarter Gross Domestic Product (GDP). I don’t think this data will have an impact on mortgage rates unless it varies greatly from its expected reading. Last month’s first revision showed that the economy expanded at a 2.0% annual pace during the quarter and this month’s revision is expected to show no change. A revision higher than the 2.0% rate that is expected would be considered bad news for bonds. But since this data is quite aged at this point, I don’t think it will have much of an impact on mortgage rates Thursday.

The second report of the day comes just before 10:00 AM ET when the revised University of Michigan Index of Consumer Sentiment for December is posted. Current forecasts are calling for a small upward revision from the preliminary reading of 67.7. This is fairly important because rising consumer confidence indicates that consumers may be more apt to make large purchases in the near future. A reading above the 68.0 that is forecasted would be negative for bonds and mortgage rates.

The Conference Board will release their Leading Economic Indicators (LEI) for the month of November. This 10:00 AM release attempts to measure or predict economic activity over the next three to six months. It is expected to show a small increase in activity, meaning that it predicts a slowly expanding economy over the next several months. This probably will not have much of an impact on bond prices or affect mortgage rates unless it exceeds current forecasts of a 0.3% increase from October’s reading. The lower the reading, the better the news for bonds and mortgage pricing. If it shows a smaller increase, the bond market may move slightly higher, leading to a minor improvement in rates.

The final two economic reports of the week come Friday morning along with November’s New Home sales. The first is November’s Personal Income and Outlays data. It will give us an important measurement of consumer ability to spend and current spending habits. Since consumer spending makes up two-thirds of the U.S. economy, any related data usually has a noticeable impact on the financial markets and mortgage rates. Current forecasts are calling for a 0.2% increase in income and a 0.3% increase in spending. If this report reveals weaker than expected readings, we should see the bond market improve and mortgage rates drop slightly Friday morning.

November’s Durable Goods Orders is the last report, also being posted early Friday morning. This data gives us an important measurement of manufacturing sector strength by tracking orders for big-ticket items or products that are expected to last at least three years. Analysts are expecting the report to show a 2.0% rise in new orders. A smaller increase in orders would indicate that the manufacturing sector was weaker than many had thought. This would be good news for the bond market and should drive mortgage rates lower. However, a larger jump in orders could lead to mortgage rates moving higher early Friday morning. This data is known to be quite volatile from month-to-month, so it is not unusual to see large headline numbers on this report.

This week also has Treasury auctions scheduled the first three days. The two that are most likely to influence mortgage rates are Tuesday’s 5-year and Wednesday’s 7-year Note sales. If those sales are met with a strong demand, particularly Wednesday’s auction, bond prices may rise during afternoon trading. This could lead to improvements to mortgage rates shortly after the results of the sales are posted at 1:00 PM ET each day. But a lackluster investor demand may create bond selling and upward revisions to mortgage rates.

Overall, I am expecting to see some movement in the markets and mortgage rates, especially if we get some surprising results from the week’s data or news about Europe’s financial crisis. Despite the holiday season, we need to keep a cautious approach toward rates because we are likely to see very thin trading (light volume) as a result of many traders keeping short hours or home for the holiday altogether. This means that firms that trade bonds will likely be keeping only a skeleton staff the latter part of the week and raises the possibility of a stronger reaction to surprises in the economic data than we normally would see.

The least important day for mortgage rates will likely be tomorrow unless something drastic happens overnight. We will probably see the most movement in rates Friday, but Thursday’s economic data can also move mortgage pricing noticeably. With the Christmas holiday next weekend, it is being observed next Monday. The bond market will close early this Friday afternoon ahead of the holiday and will reopen next Tuesday morning. Accordingly, proceed cautiously this week if still floating an interest rate and closing by the end of the year

FHA Loans Difficult for Condos Due to New Policy

A change in FHA policy has caused major problems for condo sellers, buyers, and home owner association boards across the country by making many condos ineligible for FHA loans.

This little-publicized change in policy has led to decreased prices and the blockage of refinancing, according to an article in The Real Deal. Condo industry leaders, Realtors, and owners are upset by the series of rule revisions that have caused thousands of condo projects to be ineligible for FHA mortgages.

Many who hoped to refinance or buy a condo are being forced to obtain conventional bank loans with much higher interest rates.

According to the FHA, of the 25,000 condo projects whose certification for FHA eligibility expired between last December and the end of September, only 8.4% have been approved or re-certified.

Some condo boards have faced rejection on simple technicalities in their applications for re-certification. Board members are also facing legal problems due to these new FHA rules. They must sign certification documents that recognize compliance with all local statutes and that they have no knowledge of anything that could lead to a condo owner becoming delinquent. If they are incorrect in this mandatory certification, they can face up to $1 million in fines and 30 years in jail.

The major takeaway from this for unit owners, buyers, and sellers is that if an FHA loan is a part of your plan, check with a mortgage professional and the condo board to make sure the condo project is certified.

The Housing Problem Isn’t Getting Better —Maybe it’s Time for Scary Thinking

December 6, 2011

Mortgage banking executive Jerry Selitto, CEO and President of PHH Corporation, questions the approaches currently being taken towards the problems in the housing market.

He published an opinion piece, “The Housing Problem Isn’t Getting Better —Maybe it’s Time for Scary Thinking,” in which he suggests thinking outside the box for solutions.

“Sometimes, when nothing else is working, you have to try something that had previously been simply unthinkable,” wrote Selitto in his editorial.He presents bold ideas for starting over with a new beginning, including government new programs to help distressed homeowners.

Read his thoughts here. Do you agree or disagree?

This Week’s Market Commentary

November 28, 2011

There are six pieces of economic news that may affect mortgage rates this week. Some of the data is considered highly important to the financial and mortgage markets, so it will likely be an active week for mortgage rates. As the week progresses, the data gets more important.

Unlike most Mondays, there is data being posted this morning with the release of October’s New Home Sales report. It will give us an indication of housing sector strength, but is the week’s least important release. Analysts are expecting to see little change between September’s and October’s sales of newly constructed homes. It will take a large change in sales for this data to influence mortgage rates.

November’s Consumer Confidence Index (CCI) will be released late Tuesday morning by the Conference Board. It gives us a measurement of consumer willingness to spend. If consumer confidence is rising, analysts believe that consumers are more apt to make larger purchases, essentially fueling economic growth. This makes long-term securities such as mortgage-related bonds less attractive to investors and usually leads to higher mortgage rates. Analysts are expecting to see a sizable increase in confidence from last month’s level, meaning consumers were more optimistic about their own financial situations this month than they were last month. A weaker reading than the 44.0 that is expected would be good news for mortgage rates, while a stronger reading could push mortgage rates higher Tuesday.

The next piece of data that we need to be concerned with comes early Wednesday morning when revised 3rd Quarter Productivity numbers are posted. This index is expected to show an upward revision from the preliminary reading of worker productivity. Higher levels of productivity are thought to allow the economy to expand without inflationary pressures rising. This is good news for the bond market because economic growth itself isn’t necessarily bad for the bond market. It’s the conditions around an expanding economy, such as inflation, that hurt bond prices and mortgage rates. Current forecasts are calling for an annual rate of 2.6%, down from the previous estimate of 3.1%.

Also Wednesday, the Federal Reserve will release their Beige Book at 2:00 PM ET. This report, which is named simply after the color of its cover, details economic conditions by region. That information is relied on heavily during the FOMC meetings when determining monetary policy, so its results can influence bond trading and mortgage rates if it shows any significant surprises. More times than not, this report will not influence the markets enough to cause intra-day changes to mortgage rates, but the potential to do so does exist.

November’s manufacturing index from the Institute for Supply Management (ISM) will be posted at 10:00 AM ET Thursday. This index measures manufacturer sentiment and can have a considerable impact on the financial markets and mortgage rates. Current forecasts call for a small decline in sentiment from October to November. October’s reading was previously announced as 50.8. A weaker reading than the expected 51.0 would be good news for the bond market and mortgage rates. A reading above 50 means that more surveyed trade executives felt business improved during the month than those who felt it had worsened. The lower the reading the better the news for bonds because waning sentiment indicates a slowing manufacturing sector and makes a broader economic recovery less likely.

The biggest news of the week comes Friday morning when the Labor Department posts November’s Employment figures. This is arguably the most important monthly report we see. It is comprised of many statistics and readings, but the most watched ones are the unemployment rate, the number of news jobs added or lost during the month and average hourly earnings. Current forecasts call for no change in the unemployment rate of 9.0% while 117,000 new jobs were added to the economy. The income reading is forecasted to show an increase of 0.2%. An ideal scenario for mortgage shoppers would be a higher unemployment rate than 9.0%, a smaller increase in payrolls and no change in the earnings reading. If we are fortunate enough to hit the trifecta with all three, we should see the stock markets fall, bond prices rise and mortgage rates move lower Friday. However, stronger than expected readings would likely fuel a stock rally and bond sell-off that would lead to higher mortgage rates.

Overall, the most important day of the week is Friday with the employment figures being released, but we may also see sizable movement in rates Thursday. Friday’s employment data could cause a significant change in rates, but Thursday’s ISM index is also one of the more important reports we see each month. If Friday’s data reveals stronger than expected results we may see rates spike higher after its release, possibly erasing any gains from the week. It will probably be the key to rates moving lower or higher for the week. I suspect it will be a fairly active week for the markets and mortgage pricing, especially the latter part, so it would be prudent to maintain contact with your mortgage professional if still floating an interest rate.

This Week’s Market Commentary

This holiday-shortened week brings us the release of five relevant economic reports for the markets to digest along with the last FOMC meeting’s minutes and two potentially important Treasury auctions.

All of the week’s data is being posted over three days due to the Thanksgiving holiday, so the first part of the week should be interesting for mortgage shoppers.

October’s Existing Home Sales data will be posted by the National Association of Realtors late Monday morning. It gives us a measurement of housing sector strength and mortgage credit demand by tracking home resales. This report is expected to show a decline in sales, meaning the housing sector weakened last month. That would be good news for the bond market and mortgage pricing, but unless it shows a significant surprise, it will likely not have a major impact on tomorrow’s mortgage rates.

Tuesday has the first revision to the 3rd Quarter Gross Domestic Product (GDP). It is expected to show little change from last month’s preliminary reading of a 2.5% annual rate of expansion. The GDP measures the total of all goods and services produced in the U.S. and is considered to be the best measurement of economic activity. Current forecasts call for a reading of approximately 2.4%, meaning that there was slightly less economic growth during the third quarter than previously thought. This would be good news for the bond market and mortgage rates, but it will likely take a larger decline to improve mortgage rates Tuesday morning.

Also worth noting is the release of the minutes from the last FOMC meeting Tuesday afternoon. Traders will be looking for any indication of the Fed’s next move regarding monetary policy. They will be released at 2:00 PM ET, therefore, any reaction will come during afternoon trading. This release is one of those that may cause some volatility in the markets after they are posted, or could be a non-factor. If they show anything surprising, we may see some movement in rates Tuesday afternoon, but it is more likely there will be little reaction since Fed Chairman Bernanke held a press conference following the most recent meeting.

There are three monthly reports scheduled for Wednesday morning. October’s Durable Goods Orders is the first and will be posted at 8:30 AM ET. This data helps us measure manufacturing strength by tracking orders for big-ticket items, but is known to be quite volatile from month-to-month. It is expected to show a 1.0% decline in new orders. A larger than expected drop would be considered good news for the bond market and mortgage rates as it would indicate manufacturing sector weakness.

The second is October’s Personal Income and Outlays data. This data measures consumers’ ability to spend and their current spending habits. This is important because consumer spending makes up two-thirds of the U.S. economy. It is expected to show that income rose 0.3% and that spending increased 0.3%. Smaller than expected readings would mean consumers had less money to spend and were spending less than thought. That would be good news for bonds and could lead to improvements in mortgage rates.

The revised November reading to the University of Michigan Index of Consumer Sentiment will be posted late Wednesday morning. It will give us a measurement of consumer willingness to spend. If confidence is rising, consumers are more apt to make a large purchase in the near future, fueling economic activity. Analysts are expecting to see little change to the preliminary reading of 64.2. Unless we see a significant variance from the forecasted reading, I don’t think this data will cause much movement in mortgage rates Wednesday.

In addition to this week’s economic reports, there are two relatively important Treasury auctions that may also influence bond trading enough to affect mortgage rates. There will be an auction of 5-year Treasury Notes Tuesday and 7-year Notes on Wednesday. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions in mortgage rates. However, strong sales usually make bonds more attractive to investors and bring more funds into the bond market. The buying of bonds that follows often translates into lower mortgage rates. Results of the sales will be posted at 1:00 PM ET auction day, so look for any reaction to come during afternoon hours.

The financial markets will be closed Thursday in observance of the Thanksgiving Day holiday. There will not be an early close Wednesday ahead of the holiday, but they will close early Friday and will reopen next Monday morning. I suspect that Friday will be a very light day in bond trading as many market participants will be home. Banks have to be open Friday, but we will likely see little change to mortgage rates that day.

Good Schools Mean Fewer Foreclosures?

November 18, 2011

Good school scores may have other benefits than education, according to a recent Wall Street Journal article. Areas with highly ranked schools were shown to have less homes foreclosed upon, a new analysis shows.

The study, done by Location Inc., reviewed six months of 2011 sales data. Foreclosure sales decreased as the school ranking went up in five metro areas, including  Stockton, California and Seattle.

Areas with well-ranked schools also saw less price erosion.  “Higher-rated school districts also maintained higher home-sale prices, and higher home prices per square foot.”

Have you seen similar trends in your area?

Four Fireplace Safety Tips for the Winter

November 10, 2011

With fireplaces and chimneys involved in 42% of home-heating fires, it is important to maintain your fireplace and use it properly during the cold winter months.

Follow these four tips to make sure your fireplace is safe and won’t turn into a fire-starter:

1. Get your chimney professionally cleaned

Hire a chimney sweep to clean out the soot and debris in your chimney. The National Fire Protection Association recommends you do this once a year.

2. Burn the right kind of wood

Burn seasoned hardwoods that are dense, such as oak, that have been split and stored in a dry, high-up place. According to an MSN article, “green wood and resinous softwoods such as pine produce more creosote, a flammable byproduct of combustion that can build up in the chimney.”

3. Don’t overdo it with too many logs
A fire that is too big or too hot can cause a chimney to crack. Small fires create less smoke, and less creosote buildup as a result.

4. Use a spark-guard
Set up a spark guard to prevent embers and sparks from igniting something outside the fireplace. This is especially important when the room the fireplace is in is unoccupied. Glass fireplace doors or a mesh metal screen will do the trick.

Princeton Capital Donates to Habitat for Humanity

Coldwell Banker held its 13th annual Homes and Hope raffle fundraiser for Habitat for Humanity, and Princeton Capital was proud to sponsor it. Raffle tickets were purchased at Coldwell Banker offices and from real estate agents for $2 each, and the grand prize, provided by us, was $5,000.

The prize list was extensive, with multiple hotel stays, gift certificates, and an iPad. This year’s fundraising goal is  just over $365,000.

In the past twelve years, Coldwell Banker has raised more than $2.1 million for Habitat for Humanity, helped to build 159 Habitat homes, and contributed more than 44,000 hours of volunteer labor.

We were proud to be a part of this winning tradition by donating prize money for this wonderful event.

This Week’s Market Commentary

by admin on October 17, 2011

Ben Bernanke

This week brings us the release of seven economic reports for the markets to digest, in addition to a speaking engagement by Fed Chairman Bernanke. Also worth noting is the fact that this will be an extremely busy week for corporate earnings, which usually translates into stock volatility.

The most important economic reports are scheduled for the middle part of the week, but we may see movement in mortgage rates each day. Intra-day revisions to mortgage rates on more than one day are also possible. Therefore, proceed with caution if closing in the near future.

Today has September’s Industrial Production data scheduled to be posted. It will be released mid-morning, giving us an indication of manufacturing strength by tracking output at U.S. factories, mines and utilities. It is expected to show a 0.2% increase in output from August’s level, meaning that manufacturing activity rose slightly.

A larger than expected increase in production would be negative for bonds and mortgage rates as it would indicate economic strength. A decline in output would likely push mortgage rates lower tomorrow morning.

September’s Producer Price Index (PPI) will be released early Tuesday morning. This is one of the two very important inflation readings we get each month. This index measures inflationary pressures at the producer level of the economy. Analysts are expecting to see a 0.2% increase in the overall index and a 0.1% rise in the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. A larger than expected increase could raise concerns in the bond market about future inflation and lead to higher mortgage rates Tuesday. However, weaker than expected readings should result in lower rates.

Wednesday has three reports scheduled that may influence mortgage rates. The first is the sister report of Tuesday’s PPI. This would be September’s Consumer Price Index (CPI). It measures inflationary pressures at the more important consumer level of the economy and is one of the most important reports that the bond market gets each month. Analysts are expecting to see a rise of 0.3% in the overall index and an increase of 0.2% in the core data reading.

A larger than expected increase in the core reading could raise inflation concerns, pushing bond prices lower and mortgage rates higher. Inflation is the number one nemesis of the bond market because it erodes the value of a bond’s future fixed interest payments. When inflation is a threat, even down the road, bonds sell for discounted prices that push their yields higher. And since mortgage rates tend to follow bond yields, this leads to higher rates for mortgage borrowers.

September’s Housing Starts is Wednesday’s second release, also coming at 8:30 AM ET. This report will probably not have much of an impact on the bond market or mortgage rates. It gives us a measurement of housing sector strength and mortgage credit demand by tracking construction starts of new homes, but is usually considered to be of low importance to the financial and mortgage markets. It is expected to show an increase in new home starts between August and September. I believe we need to see a significant surprise in this data for it to influence mortgage rates.

The final report scheduled for release Wednesday will come during afternoon trading when the Federal Reserve posts its’ Beige Book at 2:00 PM ET. This data details economic conditions throughout the U.S. by region and is relied upon heavily by the Federal Reserve when determining monetary policy at their FOMC meetings. If it reveals stronger signs of economic growth from the last release, we could see mortgage rates revise higher Wednesday afternoon.

Thursday has the last two reports of the week with the release of September’s Existing Home Sales data and Leading Economic Indicators (LEI), both at 10:00 AM ET. This index attempts to measure future economic activity, particularly during the next three to six months. Current forecasts are calling for an increase of 0.3% from August’s reading. This would indicate that economic activity is likely to increase moderately over the next couple of months. That would be relatively bad news for the bond market and mortgage rates, but this report is considered to be only moderately important. Therefore, a small increase would not be of much concern to the bond and mortgage markets. Ideally, we would like to see a decline in the index.

The National Association of Realtors will release September’s Existing Home Sales data. This report gives us an indication of housing sector strength and mortgage credit demand by tracking home resales. I don’t see it having much of an influence on the bond market or mortgage rates, but a reading that varies greatly from analysts’ forecasts could lead to a slight change in mortgage pricing. It is expected to show a decline in sales from August to September, meaning the housing sector remained soft. That would be favorable news for the bond market since a weak housing sector makes a broader economic recovery less likely.

Overall, it appears that Tuesday or Wednesday are the likely candidates for the most important day of the week. In addition to the economic data Tuesday, Fed Chairman Bernanke will speak at a Boston Fed conference during early afternoon hours. This adds to the days’ value as his words always have the potential to cause volatility in the markets. Besides the economic reports, there are many companies posting earning reports during the week, including some big names that include Apple, Citigroup, IBM and Intel.

If the corporate earnings releases are generally weaker than forecasts, stocks may suffer, making bonds more appealing to investors. The end result would likely be an improvement in rates. The flip side though is stronger than expected earnings that drive stocks higher, pushing bond prices lower and mortgage rates upward. Accordingly, please maintain contact with your mortgage professional if still floating an interest rate.

The Challenges of For Sale by Owner Transactions

by admin on October 5, 2011

Some choose to sell their home without the aid of a real estate agent. However, this has risks to both the buyer and the seller in such a transaction.

In  a for-sale-by-owner purchase, risks to the buyer include a lack of disclosures from the seller. The seller should disclose any problems with the house, but this doesn’t always happen. Buyers also have no representation to negotiate the price of the home, and no one to help them deal with the problems that come up along the way.

The seller risks not getting the money they could have for the property because it will not receive exposure on the MLS without a Realtor. Another major financial risk is getting sued by the buyer for inadequate disclosure in the Transfer Disclosure Statement and seller supplemental papers.

Before selling a home yourself or buying one for-sale-by-owner, weigh the risks of that decision and consider interviewing real estate agents – there is no commitment in an interview.

This Week’s Market Commentary

by admin on September 27, 2011

This week brings us the release of six relevant economic reports for the bond market to digest in addition to two relevant Treasury auctions. Most of the reports are considered to be of moderate to fairly high importance to the markets, so they do have the potential to affect mortgage rates. We also have to consider stock market swings as they also can have a direct impact on bond trading and mortgage pricing, as we have seen over the past few weeks.

Generally speaking, stock market strength makes bonds less appealing to investors and leads to higher mortgage pricing. On the other hand, stock weakness often leads to safe-haven investing where investors move funds away from stocks and into bonds to escape the volatility. That translates into higher bond prices and lower mortgage rates.

The first release of the week is August’s New Home Sales late this morning. The Commerce Department is expected to say that sales of newly constructed homes slipped last month, indicating further housing sector weakness. This report will likely not have a significant impact on mortgage rates unless its readings differ greatly from forecasts. This is the week’s least important report in terms of potential impact on mortgage rates, partly because it covers only approximately 15% of all homes sales.

September’s Consumer Confidence Index (CCI) is next, coming late Tuesday morning. This Conference Board index will be posted at 10:00 AM ET and gives us a measurement of consumer willingness to spend. It is expected to show an increase in confidence from last month’s reading, indicating that consumers were more optimistic about their own financial situations than last month, therefore, more likely to make a large purchase in the near future. This is bad news for the bond market and mortgage rates because consumer spending fuels economic growth. Analysts are calling for a reading of approximately 46.7, up from August’s 44.5 reading. The smaller the reading, the better the news for the bond market and mortgage rates.

August’s Durable Goods Orders is the week’s most important data and will be posted early Wednesday morning. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. Analysts are expecting to see little change July’s orders. A large drop in new orders could help boost bond prices and cause mortgage rates to drop Wednesday because it would point towards manufacturing sector weakness. However, a sizable increase would indicate a stronger than expected manufacturing sector and would likely help push mortgage rates higher.

The Treasury will sell 5-year Notes Wednesday and 7-year Notes Thursday, which will tell us if there is still an appetite for medium-term securities. If investor demand in these sales is strong, particularly from international buyers, the broader bond market should move higher, pushing mortgage rates lower. But a lackluster interest from investors could lead to bond selling and higher mortgage pricing. The results of the sales will be announced at 1:00 PM ET each day, so any reaction to the results will come during afternoon trading Wednesday and Thursday.

Thursday’s sole monthly or quarterly data is the final revision to the 2nd Quarter Gross Domestic Product (GDP). Since this data is aged now and the preliminary reading of the 3rd Quarter GDP will be released next month, I don’t see this revision having much of an impact on the financial markets or mortgage pricing. The GDP is important because it is the total sum of all goods and services produced within the U.S. and is considered the best measurement of economic activity. It is expected to show a 0.2% upward revision to the previous estimate of a 1.0% increase in the GDP. It will take a fairly large revision for this data to move mortgage rates Thursday.

Friday has two reports scheduled that may influence mortgage rates. The first is August’s Personal Income and Outlays early Friday morning. It gives us an indication of consumer ability to spend and current spending habits. This is relevant to the markets because consumer spending makes up two-thirds of the U.S. economy. Rising income generally indicates that consumers have more money to spend, making economic growth more of a possibility. This is negative news for the bond market and mortgage rates because it raises inflation and economic growth concerns, making long-term securities such as mortgage-related bonds less attractive to investors. It is expected to show no change in income and a 0.2% increase in spending. If we see weaker than expected readings, the bond market should react positively, leading to lower rates Friday.

The second report is the University of Michigan’s revised Index of Consumer Sentiment for September. The preliminary reading that was released earlier this month showed a 57.8 reading. Analysts are expecting to see a small downward revision, meaning consumer confidence was slightly weaker than previously thought. As with Tuesday’s CCI release, a lower than expected reading would be good news for bonds and should help improve mortgage rates.

Overall, it is likely going to be a fairly active week in the markets and mortgage rates again, but probably not by last week’s standards. The most important day will likely be Wednesday or Friday, but Tuesday’s data can also influence mortgage rates. This is one of those weeks that I recommend maintaining contact with your mortgage professional if still floating an interest rate.

Real Estate Agent Safety Tips: New Clients

by admin on September 13, 2011

While new clients are a great thing, it is important to trust your instincts and stay on the safe side when meeting someone for the first time. Real estate agents have been tricked and hurt because they walked into dangerous situations, thinking it was a simple showing of a property to a new client.

THE RISK: Meeting with people you don’t know can put your safety at risk. You don’t know whether this person could potentially be a criminal, stalker, thief, or worse.

SAFETY TIPS

• Meet at the office first. Get them on your territory before you visit any property with them so you can learn more about them and collect personal information about them for your files.

• Ask for identification. The public is used to having their identification checked, so don’t be reluctant to ask because you’re scared you’ll offend someone, Siciliano says. Tell clients it’s company policy that all clients’ driver’s licenses are photocopied. “This will significantly reduce your risk because the bad guys don’t want to give you their I.D. or get their picture taken,” Siciliano says.

• Have all clients fill out a customer identification form. You can find an example of this at REALTOR.org. Click on “Prospect Identification Form” under the Office Safety Forms heading. The form asks for car make and license number, contact information, and employer information, and also requests a photocopy of the driver’s license.

• Introduce them to a coworker. When you meet them at the office, introduce them to at least one other person in your office. Criminals won’t like that others have seen them for identification purposes, according to tip sheets provided by the Washington Real Estate Safety Council.

This Week’s Market Commentary

by admin on September 5, 2011

This week brings us the release of only two pieces of economic data, but neither of them is considered to be highly important. In addition to the economic releases, we also have two speaking engagements that may influence the markets and possibly mortgage pricing.

The first release of the week comes Wednesday afternoon. The Federal Reserve will release its Beige Book report at 2:00 PM ET Wednesday. This report details current economic conditions in the U.S. by Federal Reserve regions. It is believed to be a key source of data when the Fed meets for their FOMC meetings and is usually released approximately two weeks prior to each meeting. If it reveals any significant surprises, we may see movement in the markets and mortgage pricing as analysts adjust their theories on the Fed’s next move.

July’s Goods and Services Trade Balance data will be posted early Thursday morning, giving us the size of the U.S. trade deficit. It is expected to show a deficit of approximately $51.5 billion, which would be a decline from June’s $53.1 billion. However, I would consider this the least important of this week’s events, meaning it will likely have little impact on bond trading or mortgage rates unless it varies greatly from forecasts.

Thursday also has the two speeches that we need to watch. The first is at 1:00 PM ET when Fed Chairman Bernanke speaks to the Minnesota Economic Club in Minneapolis. Anytime Mr. Bernanke speaks, there is a potential for his words to cause havoc in the markets. However, I don’t believe he will say anything that we did not see or hear in last week’s FOMC minutes or his speech in Jackson Hole the previous week. Still, he is speaking, so we are listening.

The one that is more likely to have a noticeable impact on the markets and mortgage pricing comes from President Obama Thursday evening. He will speak to the nation via a joint session of Congress at 7:00 PM ET about the economy and the current employment situation. He is looking for support in his ideas to boost economic activity and payroll numbers. It will be interesting to see what ideas he has, but there is little doubt that if anything substantive is proposed, we will see an active morning in the markets Friday. Since he will be speaking after market hours Thursday, his words will influence the international markets before the U.S. markets. That should give us an idea of what to expect Friday morning.

I think many believe that the current situation in Washington makes it very difficult for all parties to quickly pass any type of bill that will really lower unemployment and help the economy gain momentum. Therefore, it is unlikely that Thursday’s speech will unveil a plan that will make everyone happy, but hopefully it will at least get the ball rolling. After the debt ceiling debacle, maybe Washington learned to play a little nicer with each other. We will see.

Overall, this week looks like it may be a little less active for mortgage rates than last week was. With the financial markets closed tomorrow, we only have four days of trading. There is no particular data that is important enough to label its day of release as the most important of the week, but Thursday’s speeches make that day the best candidate. The lack of important economic news may allow the stock markets to heavily influence bond trading and mortgage rates this week. As long as the stock markets do not stage a sizable rally or sell-off, the likelihood of seeing significant changes to mortgage rates before Thursday or Friday morning is fairly minimal.

Prepare for an Earthquake: Making a Disaster Kit

by admin on August 26, 2011

In California, earthquakes can and will happen here quite often. If a big one strikes on this earthquake-prone area, it is important to be prepared and keep you and your family safe.

Creating a disaster kit for your home is not difficult and could make all the difference one day, as well as providing peace of mind. The California Emergency Management Agency (CalEMA) emphasizes that the first 72 hours after a major disaster are critical.

“Electricity, gas, water, and telephones may not be working. In addition, public safety services such as police and fire departments will be busy handling serious crises. You should be prepared to be self-sufficient – able to live without running water, electricity and/or gas, and telephones – for at least three days following a major emergency.”

In order to prepare for three days, create a Disaster Kit with supplies for three days and place it in a central location. Most importantly, make sure you have one gallon of water per person, per day. This is the amount of water needed for survival.

Other supplies, including food, essential medications, and a freshly stocked first aid kit are essential in a proper disaster kit

Shopping Around for a Mortgage

by admin on August 24, 2011

It is important that while shopping for a mortgage to not solely focus on rates, but to shop for a great loan consultant. Anyone can quote a rate, but knowing you’re with a true professional that can deliver makes all the difference.

Also, many lenders will quote rates without taking into account where the property is, what your credit rating is, or other very important factors that may affect the actual rate you and your property qualify for.

Here’s the inside scoop on how to do it right.

Always make sure you are working with an experienced, professional lender. The largest financial transaction of your life is far too important to place into the hands of someone who is not capable of advising you properly and troubleshooting the issues that may arise along the way. But how can you tell?

Here are four simple questions your lender absolutely must be able to answer correctly. If they do not know the answers immediately leave and go to a lender that does.

1. What are mortgage interest rates based on?

The only correct answer is Mortgage Backed Securities or Mortgage Bonds, not the Fed or the 10-year Treasury Note. While the 10-year Treasury Note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions. Do not work with a lender who has their eyes on the wrong indicators.

2. What is the next Economic Report or event that could cause interest rate movement?
A professional lender will have this at their fingertips. To receive an up-to-date weekly calendar of weekly economic reports and events that may cause rates to fluctuate, contact us today.

3. When Bernanke and the Fed “change rates,” what does this mean… and what impact does this have on mortgage interest rates?
The answer may surprise you. When the Fed makes a move, they are changing a rate called the “Fed Funds Rate”. This is a very short-term rate that impacts credit cards, credit lines, auto loans and the like. Mortgage rates most often will actually move in the opposite direction as the Fed change, due to the dynamics within the financial markets.

4. What is happening in the market today and what do you see in the near future?
If a lender cannot explain how Mortgage Bonds and interest rates are moving at the present time, as well as what is coming up in the near future, you are talking with someone who is still reading last week’s newspaper, and probably not a professional with whom to entrust your home mortgage financing.

Be smart… Ask questions… Get answers!

More than likely, this is one of the largest and most important financial transactions you will ever make. You might do this only four or five times in your entire life but we do this every single day. It’s your home and your future. It’s our profession and our passion. We’re ready to work for your best interest.

This Week’s Market Commentary

by admin on August 16, 2011

This week brings us the release of six reports that may influence mortgage rates, but only two of them are considered to be highly important. With no relevant auctions or speeches on tap, I suspect we will see much less movement in mortgage rates this week compared to the past couple of weeks.

With the wild swings in the markets last week, a calmer week won’t be too difficult to accomplish. We will still likely see more movement in the major indexes and mortgage rates, but probably to a lesser degree.

There is no relevant data scheduled for release today,so look for the stock markets to drive bond trading and mortgage rates. Tuesday has two of the week’s six reports scheduled to be posted. The first is July’s Housing Starts data. This report gives us an indication of housing sector strength and future mortgage credit demand. However, it isn’t considered to be of high importance to the bond market or mortgage pricing and usually doesn’t cause much movement in mortgage rates unless it varies greatly from forecasts.

July’s Industrial Production is Tuesday’s second report with a release time of 9:15 AM ET. It gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is considered to be moderately important to the markets and can influence mortgage rates slightly if it is a dead day for other news or events. Current forecasts are calling for a 0.4% increase in production, indicating some strength in the manufacturing sector. Good news for the bond market and mortgage rates would be a decline in output, signaling sector weakness.

One of the week’s key inflation indexes is July’s Producer Price Index (PPI) that will be posted early Wednesday morning. It will give us an indication of inflation at the producer level of the economy. There are two readings in the report- the overall index and the core data reading. The core data is more important because it excludes more volatile food and energy prices that can change significantly from month to month. Current forecasts call for no change in the overall reading and a 0.2% increase in the core data. A larger increase in the core data could push mortgage rates higher Wednesday morning. If it reveals weaker than expected readings, we may see mortgage rates improve as a result.

The PPI will be followed by the even more important Consumer Price Index (CPI) early Thursday morning. The Consumer Price Index is one of the most important reports we see each month as it measures inflation at the consumer level of the economy. As with the PPI, there are also two readings in the report. Current forecasts call for a 0.2% increase in the overall index and a 0.2% rise in the core data reading. Declines in the readings, especially in the core data, should lead to lower mortgage rates. However, stronger than expected readings will likely cause an increase to mortgage pricing Thursday July’s Existing Home Sales report will be posted late Thursday morning. The National Association of Realtors will release this report, giving us a measurement of housing sector strength. It covers approximately 85% of home sales in the U.S., but usually does not have a major influence on bond trading and mortgage rates unless it varies greatly from analysts’ forecasts. It is expected to show an increase from June’s sales, meaning the housing sector strengthened last month. This would generally be bad news for the bond market and mortgage rates because a strengthening housing sector makes a broader economic recovery a little easier.

The third report of the day Thursday will come from the Conference Board, who will give us its Leading Economic Indicators (LEI) for July. This index attempts to measure economic activity over the next three to six months and is considered to be moderately important. A higher than expected reading is bad news for the bond market because it indicates that the economy may be strengthening more than thought. However, a weaker than expected reading means that the economy may not grow as much as predicted, making stocks less appealing to investors. This also eases inflation concerns in the bond market and could lead to slightly lower mortgage rates Thursday if the stock markets remain calm and the day’s other data does not show any surprises. It is expected to show an increase of 0.2 % in the index, indicating minor economic growth over the next couple of months. The CPI will be the focus of the morning, so it will take a sizable difference between forecasts and its actual reading for this report to influence mortgage rates.

Overall, look for Thursday to be the busiest day of the week with the CPI being released, but Wednesday’s PPI can also cause plenty of movement in the markets and mortgage rates. Friday looks to be the lightest day. The rest of the week will likely be influenced by stock prices in addition to the moderately important economic data, which can be quite volatile as we have seen over the past couple weeks. Therefore, keep an eye on the markets and maintain contact with your mortgage professional if you have not locked an interest rate yet.

This Week’s Market Commentary

by admin on August 1, 2011

There are four relevant reports scheduled for release this week that are likely to affect mortgage pricing, but it may end up being news out of Washington that may have the biggest impact on the markets and mortgage rates. As of this evening, there appears to be much more progress being made on the debt ceiling issue than we have seen yet. There actually have been rumors of an agreement in general between the House and Senate, which could mean a finished deal by Tuesday’s default deadline is possible.

The stock markets took a beating last week, even before the surprisingly weak GDP reading Friday morning. The potential for a default on our debt and the credit downgrade that would have followed was expected to have a huge negative impact on our economy. That led to stock selling most of the week, and support in the bond market, although we did see softness in bonds at times also. The big day for bonds came Friday after the 2nd Quarter GDP reading fell well short of forecasts and a significant downward revision to the 1st Quarter reading fueled a sizable rally in bonds that gained momentum during afternoon trading. The yield on the benchmark 10-year Treasury Note fell below 3.80%, causing many lenders to revise rates even lower late Friday.

Friday’s rally caught us off guard a bit. That is one way of describing it. Another is to use the word unjustified. We certainly got bond-friendly news out of the GDP report, but I think we saw more flight-to-safety buying than long-term buying due to weak economic conditions. That is evident by the afternoon surge in bonds Friday that pushed yields below recent levels. The flight-to-safety is a bonus for mortgage shoppers closing in the very near future, but extremely problematic for borrowers that need a couple weeks or months before they go to closing. Time and time again (duplicate that many more times), we see gains from several trading sessions of flight-to-safety buying unwind in a single day of trading. In other words, rates can give back last week’s gains, and some, much quicker than they were able to capture them as soon as stocks appear ready to head higher. A resolution to the debt ceiling issue is definitely a strong enough event to do this. If the threat of a credit downgrade and default dissolves, I would not be surprised to see a couple hundred point gain in the Dow over a single, maybe two, trading sessions. That would likely cause most of the flight-to-safety funds to shift away from bonds and back into stocks. And a noticeable upward move in mortgage rates.

In addition to the debt ceiling topic, we do have a couple of extremely important economic reports for the markets to digest. The first important release is the Institute for Supply Management’s (ISM) manufacturing index for July late tomorrow morning. This index measures manufacturer sentiment by surveying trade executives about business conditions during the month and is considered to be of fairly high importance to the markets. A reading above 50.0 means that more surveyed executives felt that business improved last month than those who said it had worsened.

Wednesday morning brings us the release of June’s Factory Orders data at 10:00 AM ET. It helps us measure manufacturing sector strength by tracking orders for both durable and non-durable goods during the month of June. It is similar to last week’s Durable Goods Orders report that tracks orders for big-ticket items only. Since a significant portion of the data was released last week, this report likely will not have as big of an impact on the markets as last week’s did. Analysts are expecting to see a decline in new orders of approximately 1.0%. A larger than expected drop would be considered good news for bonds and mortgage pricing.

There is no relevant monthly or quarterly economic news scheduled for release Thursday, but Friday is a different story. The most important piece of data this week and arguably each month is the monthly Employment report. This report gives us the U.S. unemployment rate, number of jobs added or lost during the month and the average hourly earnings reading for July. The ideal situation for the bond market is rising unemployment, a sizable loss of jobs and little change in earnings.

While the preliminary reading to the GDP is arguably the single most important report in general, it is posted quarterly rather than monthly like the Employment report. Friday’s report is expected to show that the unemployment rate slipped 0.1% to 9.1% last month while approximately 78,000 jobs were added to the economy. The unemployment rate probably will not be much of a factor unless it moved much more than the 0.1% that is expected. However, due to the importance of these readings, we will most likely see quite a bit of volatility in the markets and mortgage pricing Friday morning if they vary from forecasts.

Overall, I am expecting to see another extremely active week for mortgage rates. I think that the most important day is tomorrow due to the debt ceiling crisis coming to a head and the ISM index being posted. Friday is also a key day with the monthly Employment report being released. We may see some pressure in bonds mid to late week ahead of Friday’s employment numbers (assuming Washington puts the debt ceiling issue to bed), but we also need to watch the stock markets for significant moves that can influence bond trading. We are getting key economic data during a period of great uncertainty about our economy with a major national crisis climaxing at the same time. If still floating an interest rate, I would definitely maintain constant contact with my mortgage professional. And hold on tight, it’s going to be quite an interesting week!

Inexpensive Home Maintenance Tasks Can Prevent Big Expenses in the Future

by admin on July 28, 2011

For a few hours’ time and a small investment, you can do a lot to protect your property. Even renters can ensure comfortable surroundings with some of these tips.

Get energy efficient. If you have not yet installed a programmable thermostat, now is the time to do it. You can reduce your cooling costs by 10 percent, according to the U.S. Department of Energy. Thermostats cost $40 to $70.

Seal around the tub and shower. Cracked or poorly sealed caulking around tubs, showers, and sinks can lead to water damage to floors, walls, and the ceilings below, say experts writing in Money magazine. When you see cracks or gaps, buy a $5 tube of caulking and reapply.

Prevent fires. Check your fire extinguisher to see if it’s still charged. If you need a new one, buy an extinguisher that works on both kitchen and electrical fires. The National Fire Protection Agency recommends one that is labeled ABC. Cost is about $40.

Test the sump pump. Before a heavy rain floods your basement, test your sump pump to see if it works. Pour water into the well around it. Raising the water level should make it go on.

Prevent shocks. Electrical outlets near water in the kitchen and bathroom should have ground fault circuit interrupters that protect from a shock They have “test” and “reset” buttons. If you need one, the GFCI costs about $10, but you should hire an electrician to install it.

Service the garage door. Spray penetrating oil such as WD-40 into the hinges and rollers so the door will open and close more easily. Test the safety reverse mechanism by placing an object in the door’s path to see if it stops. WD-40 costs about $7.

Register for Your Down Payment

by admin on July 19, 2011

Many newlywed couples face a daunting down payment soon after marriage. This has gotten only more difficult as larger down payments are required since the reemergence of conservative underwriting standards.

A recent article in the Scotsman Guide discussed a new trend at weddings that can ease the financial burden: down payment registries.

“Homebuyers hoping to avoid the typical barrage of plates, glasses and cutlery now have a choice,” explained the article. Couples can learn about down payment registries from their loan officers and using that money as a gift fund for their new home.

Websites allowing secure payments for wedding guests to contribute is the common method, as down payment registries online can allow guests to see the homes a couple likes and feel more involved in the process, as opposed to just sending cash.

For more information about these registries, read the full Scotsman Guide article here and talk to your mortgage professional about it.

Biggest First-Time Homebuyer Mistakes to Avoid

by admin on July 10, 2011

Looking for your first home can be an exciting experience, but it can easily get overwhelming. There are some mistakes that are pretty easy to make if you aren’t familiar with real estate.

Looking Without Knowing Your Price Range

This is a waste of time for you and your real estate agent. It can give you the wrong idea of a realistic fit for your financial situation. The first thing you should do is sit down and figure out what you can afford. Once you’ve done that, your Realtor can show you houses that fit your price range.

Discounting a Great Home Because of Decor
Just because you can’t afford to replace the hideous wallpaper right now doesn’t mean you won’t be able to soon. Getting too picky over small details that can be changed could keep you from ending up in your dream home. Use your imagination and visualize what the house could be like after you’ve put your touch on it.

Shopping Without A Mortgage Pre-Approval
What you have determined you can afford and what banks are willing to lend might not be the same thing. If you go into contract on a home and can’t get the loan you need, you will have wasted a lot of people’s time and gotten your hopes up. Contact a mortgage professional in order to get qualified for a loan before you do any serious house-hunting.

Focusing on Color: Painting Your Home

by admin on June 17, 2011

Wherever we go, we respond to color, though its effect is often underestimated.

Color use is important to us in our homes and workplaces.

If you are selling a house, you will want to choose different colors than those you might use for your own home.

If you just purchased a house, you can add some of your own personality with paint.

HGTV’s Shari Hiller says color accounts for 60 percent of our response to a room.  Here is some advice.

Living room: Start with colors you love from something in the room. Consider colors from artwork, a rug, dishes, an accessory or furniture for a main color or accent. Buy two or three quarts of paint. Paint sample boards to hold up to the furniture, fabrics and surfaces you choose.

If you aren’t sure where to begin with a color, experiment in a bathroom, a small hall or area between rooms. The dining room: Do you want the area to feel social and stimulating or be formal and quiet? Warmer, contrasting and somewhat brighter colors add to a sociable atmosphere. Deeper blue-greens and neutral colors make the dining area more formal.

The monochromatic color scheme: In any room, one color need not be boring. You can create bold or subtle variations within one color group with contrasting paint finishes. It helps to use matte finish paint for walls and slightly shiny eggshell paint for wood trim. The paint will appear to be a slightly different color. It can be attractive to paint an entire wall in a lighter or darker hue of the same color.

White or off-white tint can be a striking accent when used as trim with a monochromatic color group.
For bedrooms: Softer, cool colors and neutrals create a quiet feeling.

Children’s bedrooms: Stay away from bright and intense wall colors, which are said to lead to unrest and irritability.

For an accent color in any room, select a warmer color, more toward reds, or a cooler color more toward blues, to compliment your main color group.

Tagged as: decor, home care, staging

Buying Short Sales or Foreclosures

by admin on June 14, 2011

There’s no question that negotiating the short sales or a foreclosure can be time-consuming and frustrating. It can take months. But if you’re patient and willing to do the work, your reward will be a great house at a bargain price.

Short sales

For a distressed property, you could be dealing with third parties, each with their own agenda and process rules.
On short sales, banks will price a home close to the market value, but they are often willing to take less to avoid a costly foreclosure. The average short sale in the past year has sold at14 percent off the list price, compared with a 7 percent discount for foreclosure and regular sales.

Dealing for a foreclosure
Because banks are eager to unload properties they own, they list the home at a price at which they think it will sell quickly. These properties are often bought for cash by investors. In California, 31 percent of recent deals were by cash, according to Money magazine.

In some cases, the bank that handles the foreclosure may not own the loan. During the real estate boom years, many loans were sold off to other investors. In that case, the bank who owns the property has to consider the amount investors who own the loan are willing to accept.
Wells Fargo short sale and foreclosure servicing department says, on loans insured by the Federal Housing Administration, lenders can accept no less than 88 percent of appraised fair market value in the first 30 days. That declines to 84 percent after 60 days.

How to make an offer
In deciding what to bid on a foreclosure or short sale, remember that banks aren’t interest in making several counteroffers, though they may come back to you once or twice. In weeks to come, you could resubmit the offer and it might be accepted.

Your initial bid should be 10 percent to 20 percent below the list price.

Tagged as: foreclosure, real estate, short sales

June is Fly-A-Kite Month: Fly kites just for fun or as a sport

by admin on June 8, 2011

Blue skies and gentle breezes beckon as June ushers in the kite flying season. This is a time for adults, kids, funsters and sportsters to play.

It has been so for thousands of years since kites were first flown in China. But today’s kites are far different.

You can buy a basic diamond-style kite for a few dollars and have fun with it. Or you could opt for a Delta or Dragon kite for winds below 15 mph. For more challenging winds, box kites and Para foil kits are recommended.

New materials like ripstop nylon, fiberglass, and carbon graphite have made kites stronger, lighter, more colorful and durable. Modern Delta kites, like the one pictured here,

can be used for tricks and aerobatics.

Advice for novice fliers

* Choose a colorful kite so you can see it against the sky and clouds.

* Find a large, windy and open area that is free of power lines. A beach or a football field is fine.

* Hold the kite in both hands and throw it into the wind until the wind catches it. Or let out some string and run with the kite behind you until the wind catches it.

* Gradually let out more string until it reaches the desired height.

* If the kite dips or begins to crash down, run with it or pull in some of the string to give it more lift.

* When you are finished, bring the kite down slowly by winding in the string.

* Grab the kite before it reaches the ground.

Tagged as: activities, California, california weather, stress reduction