Obama Spoke but Will Action Follow?

In This Issue Last Week in Review: President Obama spoke...but what actions will follow? Forecast for the Week: With reports on inflation, manufacturing, and consumer news, there’s sure to be tons of action in the markets. View: Got stress? Who doesn’t these days…but take a moment and learn a few specific actions you can take to reduce your stress levels. Last Week in Review “Actions speak louder than words.” There were certainly important words spoken last week by President Obama. Read on to learn what he said, and what the impact could be on home loan rates. Last Thursday, President Obama proposed a $447 Billion Job Stimulus Plan, which was larger and broader than most had expected. The program calls for tax cuts, state aid, infrastructure spending, on the job training, plus some surprises like tax cuts for small business to encourage hiring and a "Helping More Americans Refinance Mortgages" or HARP plan. There are no details to the HARP plan as of yet, as the President has just instructed his team to work with Fannie Mae and Freddie Mac, the Federal Housing Finance Agency (FHFA) and lenders to develop the plan. I’ll be sure to keep you posted as more details emerge on this plan. Only time will tell how much of the President's plan will only be talked about… and how much will be put into action that will make a difference. But one thing is for sure: With 400,000 plus brand new people still filing for first time unemployment benefits every week, action is definitely needed to create jobs. Plus, when you factor in the 3.7 Million people still collecting some sort of benefits, it’s no wonder why consumer confidence and demand is starting to revisit levels seen in the midst of the financial crisis back in 2008. So what could all of this mean for home loan rates? Some of President Obama’s plan does indeed appear to be stimulative in the short run, and anything that helps growth would be bad for Bonds and home loan rates longer-term. However, in the short term, Bonds—including mortgage Bonds, which home loan rates are tied to—are benefitting from the continued credit crisis in Europe, as investors see our Bonds as a safe haven for their money. The bottom line is that home loan rates remain near historic lows, which makes this a great time to purchase or refinance a home. Again, if I can answer any questions at all for you or your clients, call or email me anytime. As we pass the 10th anniversary of the terrible events of September 11, our hearts continue to go out to the families who were impacted on that day. It is a time to stop and remember, and also to consider the people in your life and what is most important about our great country. I stand with you in remembrance. Forecast for the Week This week's economic data is chock full of important reports that could give us hints on whether the economy is slipping into a recession or starting to turn the corner...and the action really heats up in the second half of the week: There will be a double dose of inflation news, beginning Wednesday with the Producer Price Index (which measures inflation at the wholesale level) and then Thursday with the Consumer Price Index. CPI measures changes in the price level of consumer goods and services purchased by households, and this report will tell us if there has been a pick up in prices. If any inflationary signs appear, it could put a dent in Bond prices and home loan rates. Retail Sales for August will also be reported on Wednesday. This gives the investor a gauge on how consumer spending is holding up in these tough times. Thursday brings a double dose of news about the manufacturing sector, with Industrial Production and Capacity Utilization and the Philadelphia Fed Index. Also on Thursday, we'll see another Weekly Initial Jobless Claims Report. Last week's claims equaled 414,000, above that important 400,000 level which indicates real improvement in the labor market. Ending the week, Consumer Sentiment will be delivered on Friday-and after the previous reading, any gain will be met with open arms. 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. As you can see in the chart below, Bonds and Home loan rates were able to end the week above an important technical level due to continued problems in Europe. If you're wondering if you can take advantage of this situation, now is a great time to call or email me and learn more. Chart: Fannie Mae 3.5% Mortgage Bond (Friday Sep 09, 2011) The Mortgage Market Guide View... Stop Kidding Yourself… And Start Managing Your Stress Just about everyone experiences stress and anxiety on some level. High-pressure jobs, relationship issues, and financial worries are just some of the causes of chronic stress. But the real issue is whether you're managing it correctly. The following information can help you do just that! What Is Stress? First, let’s define what we’re talking about. Stress is the body's way of coping with immediate danger. When confronted by immediate danger, nearly every system in our body modifies itself for the sake of survival. The brain releases hormones that have control over organs, including the heart and lungs, as well as functions such as circulation and digestion. Why Does it Matter? The reality is, when you’re facing a short-term crisis, acute stress can actually benefit you. By having a heart that's capable of beating faster and lungs that can take in more oxygen, the human body is able to react in a fight or flight manner during an emergency. Problems occur, however, when stress is experienced over a long duration—which can wreak havoc on your mind and body. 5 Tips for Reducing Stress If you find yourself experiencing chronic stress, it is important that you make a commitment to changing certain aspects of your life. Here are five tips to help you get started: 1. Identify the Source – Identify your daily sources of stress along with your sources of comfort. If they don't readily come to mind, keeping a journal may help. Take special note of any events that consistently put a strain on your energy and time, especially those that elicit a negative physical response like a headache. After several weeks, you should have a pretty good idea of what's causing your stress. 2. Watch What You Eat – It may sound silly, but a diet that consists of lean proteins, whole grains, fresh fruits, and vegetables has been shown to help reduce stress. It's a good idea to limit foods containing high amounts of caffeine, sugar, and fat, as well as your consumption of alcohol. You should also reduce your intake of overly processed meals and fast foods. 3. Increase Daily Exercise – Exercise strengthens the heart and circulatory system as well as muscles and joints, all of which are negatively affected by chronic stress. 4. Learn to Relax – Relaxation techniques can be as simple as deep breathing and as complex as transcendental meditation. Seek out whatever interests you and learn how to relax. Maybe Yoga or Tai Chi works for you. Maybe it’s just a brisk walk, a short nap, or reading a book during a short break in the day. Or maybe, if your budget permits, you’ll want to try an occasional therapeutic massage. 5. Find Support – If the tips above don’t seem to help, it may be time to seek some help and support. Consult your health plan to see if it covers therapy of this nature. If not, use the Internet to find a support group in your area. Sometimes, just knowing you're not the only one with stress is enough to create a positive change. As we work through challenges in the markets and the financial sector, make sure you’re taking time to take care of yourself. Use the tips above to find a healthy balance of work and play in your life! Economic Calendar for the Week of September 12 - September 16 Date ET Economic Report For Estimate Actual Prior Impact Wed. September 14 08:30 Producer Price Index (PPI) Aug 0.0%   0.2% Moderate Wed. September 14 08:30 Core Producer Price Index (PPI) Aug

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Labor Day Holiday

Labor Day Holiday I hope you and your family enjoy the Labor Day holiday. And, I sincerely hope you have been enjoying your complimentary subscription to the MORTGAGE MARKET GUIDE WEEKLY. Due to the holiday weekend, the next full issue will arrive on Monday, September 12. In the meantime, check out the special article below from Kiplinger.com featuring tips to help you file an insurance claim. These are great ideas to keep in mind and to share with any family, friends, and associates who may have been impacted by Hurricane Irene or other recent events. I am pleased to provide this timely article to you as well as weekly insights into the mortgage and housing industries through the MORTGAGE MARKET GUIDE WEEKLY. If you feel that any of your clients, friends, family members, or associates would benefit from keeping up to date on market and economic trends in this easy-to-read format, please let me know, and I will be more than happy to add them free of charge. Best wishes to you this holiday weekend. And remember, if you need any assistance at this time, just give me a call. The Mortgage Market Guide View... Tips to Help You File an Insurance Claim Getting organized will help the process go smoothly. By Cameron Huddleston, Kiplinger.com Getting your financial life in order may seem like a daunting task. But in the May 2010 issue of Kiplinger's Personal Finance we've broken it down into quick and easy fixes you can accomplish in 15 minutes or fewer. With storm and flood season upon us, one of our "recipes" for financial success should be tackled sooner rather than later: Snap digital photos of your household belongings. The images will help back up an insurance claim if your possessions are destroyed or stolen. Taking pictures is just a starting point for a complete household inventory, in which you itemize all your belongings and record details such as purchase price. You can use the Insurance Information Institute's free Know Your Stuff online home inventory software . The Insurance Information Institute also offers these four tips for when you have to file an insurance claim: 1. Call your insurance company as soon as possible if your home has been damaged and let your agent know where you can be reached. 2. Make a list of your damaged property and take photographs to substantiate your losses. Having digital photos of your belongings before they were damaged and a home inventory will help with this step. 3. Keep receipts for hotel rooms and restaurant meals if you are unable to live in your home. Most companies will reimburse you for these expenses (up to 20% of the total insurance you have on the structure of your house). 4. Make temporary repairs to prevent further damage -- and keep the receipts. Economic Calendar for the Week of September 05 - September 09 Date ET Economic Report For Estimate Actual Prior Impact Tue. September 06 10:00 ISM Services Index Aug NA   52.7 Moderate Wed. September 07 02:00 Beige Book         Moderate Thu. September 08 08:30 Jobless Claims (Initial) 9/03 NA   NA Moderate Thu. September 08 08:30 Balance of Trade Jul NA   -$53.1B Moderate [mmgwDisclosure] The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial services and other professionals only and is not intended for consumer distribution. 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, 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. Mortgage Market Guide, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated.   Mortgage Market Guide, LLC does not grant to you a license to any content, features or materials in this email.   You may not distribute, download, or save a copy of any of the content or screens except as otherwise provided in our Terms and Conditions of Membership, for any purpose.

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ECONOMIC FOCUS

Volume 15, Issue 33 For the week of August 22, 2011 Update: Key Factors Impacting Housing The housing market is having trouble escaping from its prolonged slump. Total home sales have been declining. Single family homebuilding construction is off. Soft job growth and tight mortgage lending are constraining home sales. KEY FACTORS IMPACTING HOUSING Falling Conforming Limits: The federal government will allow the conforming loan limit for government-sponsored enterprise and Federal Housing Administration loans to drop on schedule in October. Allowing the limits to decline on schedule will help allow private lenders back into the mortgage market, but the move is likely premature given the still-weak state of the housing market. The higher loan limits affected approximately $120 billion in loans originated in 2010, or about 8% of the $1.5 trillion in mortgages made that year. Big Foreclosure Pipeline: Foreclosure processing delays are slowing distress sales. Distressed homes remain a large share of home sales, with the National Association of Realtors reporting a 31% share. Processing delays are hitting both ends of the pipeline. Servicers are filing fewer new foreclosures and they are disposing of fewer existing foreclosures. On balance though, servicers are disposing of distressed homes more quickly than they are filing new foreclosures. However, it may take longer than expected to work through all the foreclosures. Weak Employment & Job Creation: Weak employment and job creation poses a downside risk that the faltering job recovery weighs on the demand for housing. Many uncertainties remain around the timing of foreclosures that could easily delay the end of the price correction. Legal issues surrounding the foreclosure process could take longer to resolve than expected. Limited Access to Credit: Difficulties that the homebuilding industry may have in accessing credit pose a downside risk for the construction and new-home sales outlook. Excess US Housing Inventory: The number of unwanted vacant homes is contracting, a positive sign for a struggling U.S. housing market. Excess inventory weighs on house price appreciation and homebuilding. Unwanted vacant homes are defined as those empty year-round and listed for sale or rent or held off the market for unspecified reasons. Such houses are always present on the market in some number, but the current supply is well above the norm. The share of unwanted vacant homes was 7.4% in Q2, according to the latest Housing Vacancy Survey. A share consistent with long-term trends is 6.4%. The difference translates into 1.28 million excess vacant units, a large number, but the lowest reading since mid-2008. The Move to Rentals: Rental activity is chipping away at the excess inventory. Households who lost homes to foreclosure and newly formed households are driving demand for rentals. Job growth remains weak, but the economy has still expanded for more than two years, producing more young families who are more likely to rent than to buy. BOTTOM LINE Many observers predict that the lingering housing correction will play out by early next year. House prices will be one of the last metrics to hit bottom. With prices balanced with respect to fundamentals, distress sales will drive the remaining modest 3% decline. Key Economic Reports Released This Week RELEASE DATE ECONOMIC INDICATORS RELEASED BY CONSENSUS Wt. INFLUENCE ON INTEREST RATES Mon 08/22 1:00 pm et Weekly Bill Auction Dept. of the Treasury N/A **  If strong demand  If weak demand Tue 08/23 10:00 am et New Home Sales for July '11 Bureau of the Census Dept. of Commerce 315k **  If above consensus  If below consensus Tue 08/23 1:00 pm et 2-Year Note Auction Dept. of the Treasury $35.0B offering ** If strong demand If weak demand Wed 08/24 7:00 am et MBA Mort Apps Survey for week ending 08/19 Mortgage Bankers Association of America N/A * Undetermined Wed 08/24 8:30 am et Durable Goods Orders for July '11 Bureau of the Census Dept. of Commerce 2.0% **  If above consensus  If below consensus Wed 08/24 1:00 pm et 5-Year Note Auction Dept. of the Treasury $35.0B offering ** If strong demand If weak demand Thu 08/25 8:30 am et Jobless Claims for week ending 08/20 Bur. of Labor Statistics Department of Labor 410k *  If above consensus  If below consensus Thu 08/25 1:00 pm et 7-Year Note Auction Dept. of the Treasury $29.0B offering ** If strong demand If weak demand Fri 08/26 8:30 am et Gross Domestic Prod (GDP) Q2 '11 preliminary Bur. of Econ. Analysis Dept. of Commerce 2.3% ****  I! f above consensus  If below consensus Fri 08/26 10:00 am et Consumer Sentiment for August ' 11 University of Michigan 55.0% *  If above consensus  If below consensus * Low Importance ** Moderate Importance *** Important **** Very Important

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Week in Review

Last Week in Review : What does the wild market mean to home loan rates? Forecast for the Week : The markets will be waiting with bated breath. Read why! View : How do you maintain focus on your work? Two tips to achieve success! Last Week in Review "It's a small world after all." The wild ride over the last few weeks continued again last week, as the US markets danced to the tune of the European debt and economic crisis. Here's what it means to home loan rates here in the US. Even inflation hasn't stopped Bonds. Last week, consumer inflation and producer inflation came in above expectations. Remember inflation is the archenemy of Bonds and home loan rates, so hotter inflation would normally negatively impact Bonds and home loan rates. But even last week's inflation news didn't impact Bonds. Seeing Bonds dismiss that inflation news indicates that the Bond market senses that the economy (which is already hardly growing) is in a very vulnerable position with things in Europe uncertain and gloomy at best. And when the situation deteriorates further, it may push many world economies into a recession. It's all about Europe. US Bonds - including Mortgage Bonds - have been seen by the markets as a safe haven bid on existing and growing fears that Europe's debt crisis is coming to a head…and global growth, which is already anemic, is being threatened further. Not helping the situation was the news last week that there is no concrete solution to the European debt problems. Last week, French President Nicolas Sarkozy and German Chancellor Angela Merkel met. However, following the meeting, Sarkozy stated that "EuroBonds can be imagined one day, but at the END of the European integration process, not at the BEGINNING." That was a pretty clear message to the financial markets that the creation of a EuroBond is not within the remote daydreams of Germany, which is the strongest nation in Europe and who will determine whether it gets created or not. So let's be clear, the German taxpayers want no part of a EuroBond, since it would use the surplus that Germany has worked hard to create to fund the poor habits and debt of weaker and less responsible member States. The bottom line is that the fear and uncertainty right now is pretty overwhelming, which is supporting Bonds and home loan rates. But Bonds are at "nose bleed levels" and sentiment can change very quickly. If you or someone you know has been considering refinancing or purchasing a home this is an ideal time to look at their unique situation. It only takes a few minutes to look at the options that are available right now. Forecast for the Week This week's economic calendar is light but the impact could be big: New Home Sales will be released on Tuesday. This report comes after a drop in Existing Home Sales, Housing Starts and Building Permits. It would be nice to see some improvement - but the market expectation isn't high. Gross Domestic Product for the 2nd quarter will be released on Friday, and investors will be waiting with bated breath for signs of weakening in the US economy. The initial read for Q2 came in low. If the second read is weak, Stock markets could move a leg lower and give Bonds a boost. But the report isn't released until Friday, so Stocks and Bonds will fight for investing dollars throughout the week. 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. As you can see in the chart below, Bonds and Home loan rates improved last week but tapered off a bit on Friday. Stock markets fell once again last week on fears of a double-dip recession. That coupled with a plunge in the Philly Fed Index along with weak housing numbers fueled a rally in the Bond markets that saw Mortgage Bonds hit fresh 2011 highs before giving up some of those gains on Friday. Overall, however, home loan rates are still at some of the most attractive levels ever seen - making now a great time to consider a refinance or home purchase. ----------------------- Chart: Fannie Mae 3.5% Mortgage Bond (Friday Aug 19, 2011) The Mortgage Market Guide View... Focus to Finish: A Mindset By Jason W. Womack, MEd, MA When it's time to sit down and work on your work, how do you hold your focus? Over the past 5 months I've been working on the book. In that time, I've tried it ALL! I've planned extra days in hotel rooms, blocked time on the calendar, hired editors, I've even kept the calendar completely clear for one 3-day stretch, all to buy a little extra time to write. Here's what I've learned (or deepened my understanding of) over the past several months: 1. I've got to have a solid "start point." When I sit down to write, it helps a TON if I've already decided WHAT I'm going to draft in that session. Now, EVERY time I do this, the topic is expanded on, but...I don't waste any time getting started. I sit down. I write. 2. I (and this is me, what about you?) need to have some finish line in mind. And, it can't be time. I don't know why, but saying to myself, "I'm going to write until 3:45pm" just doesn't get me going as much as, "I'll take my next break after I've written 3,000 words." A starting line. A finish line. Maybe that's why I like triathlons so much! Jason W. Womack is an author and advisor, and founder of The Womack Company, a productivity-training firm based in Ojai, California. Jason's next book will be published in January 2012. Pre-order copies today at http://www.amazon.com/Your-Best-Just-Got-Better/dp/1118121988/ref=sr_1_1?ie=U... . -------------------------- Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise. Economic Calendar for the Week of August 22 - August 26 Date ET Economic Report For Estimate Actual Prior Impact Tue. August 23 10:00 New Home Sales Jul 310K   312K Moderate Wed. August 24 08:30 Durable Goods Orders Jul 2.0%   -1.9% Moderate Thu. August 25 08:30 Jobless Claims (Initial) 8/20 400K   408K Moderate Fri. August 26 08:30 Gross Domestic Product (GDP) Q2

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