Housing prices are rising! Did we miss the bottom?

Are you still waiting for a housing bottom? You may have already missed it. According to statistics recently released by Altos Research, housing prices have been on the rise in 21 of the 26 largest metropolitan areas for the last 3 months, while 22 of those areas showed increases last month. Yes, the Portland metro area did show an increase in median income prices for each of the last 3 months ending in June 2009. Our prices rose 0.5% last month, and 0.6% for the last 3 months.


Here are some highlights of the article:

1. The largest price increases were in California, most notably in Los Angeles and San Diego.

2. Housing prices continue to fall in Las Vegas

3. Listed property inventory increased in 16 of the 26 markets, while it dropped in 10 of those markets. However, the rate of increase is slowing.

4. In all areas, except Boston and San Francisco, the median period of time on the market was 100 days or more. In Portland, that number has increased to 110 days. Thank goodness we’re not in Miami where the median time it took for a house to sell was 262 days during the month of May 2009!

5. The median price of homes listed in the Portland metro area as of the end of June was $342,133!

6. The number of homes on the market in Portland, increased 1.8% for the month of June (these are houses listed by realtors, and does not account for homes for sale by owner). Total inventory as of the end of June was 14,336.

7. Housing sales continue to increase, though most of the activity is in the lower end of the market (houses priced $250,000 and below.)

The article does mention that it is possible that median housing price increases peaked in June, and could even potentially drop again in the coming months.

All eyes remain on recovery from this economic crisis and the halt to increasing unemployment numbers. While most potential home buyers said they were waiting for the bottom before they buy, the truth is that many home buyers are still very nervous about losing their jobs, AND, many buyers either cannot qualify for financing, or think they cannot qualify. Because the media talks so much about how hard it is to obtain financing, many potential home buyers are not aware of the options that exist that might help them.

Please let me know if you have thought about getting into the housing market, but found you could not qualify for financing. I can't promise to find a loan, but I will try.

Best regards,

Shelby
http://www.shelbytncmortgage.com

Home buyers beware!

I'm sure you all remember the "house flipping" phenomenom that contributed to the housing boom just a couple years ago. Guess what - it's back, but with a different twist. Investors are out there taking advantage of the glut of foreclosed properties on the market, and flipping these properties quickly, often without spending a cent on home repairs or upgrades. Of course, the investor is making a profit on this sale, so, would you, as a home buyer, be getting a bargain? Possibly - that's really outside the scope of this "buyer beware." I do expect that most of you will do your own research to determine if these properties is a good value.

Here's the risk to you as a consumer. While there is probably no fraud involved in these transactions, as was the case during the housing boom, and while you may be getting a very good price for a very nice house, you may not be able to find good financing for your purchase. Before you realize that financing options are scarce, you could jeopardize your earnest money deposit. FHA has had a 90 day "prior owner" rule for years, to discourage property flipping. They recently lifted that rule, but only for bank owned properties (foreclosures), and not even all bank owned properties will qualify for FHA financing. Fannie and Freddie do not have a 90 day flip rule, but they do look at "chain of title" to determine if the property you want to finance appears to be a flip. Most lenders will not finance properties that have not been owned 90 days by the seller.

So, how do you protect yourself? There are a few things you can and should do before you make an offer.
• Chain of title - a record of who has owned the property and for what length of time, is a matter of public record, and is available to you through the county records.
• If you are working with a realtor, your realtor can research the MLS for records of prior sales (assuming the house has been listed for sale).
• Ask the seller. If the seller lies, he/she is commiting fraud and can be fined heavily, as well as be sentenced to jail time, so it is unlikely this information will be withheld.
• Make the 90 day rule a condition of your purchase offer, AND detail the type of financing you want, or require, as an additional condition of your purchase. (I strongly suggest you have a realtor or attorney write up your purchase offer, to protect yourself, if you suspect house flipping is part of the transaction you are entertaining.)
• Talk to your lender, to determine IF financing is available, and what the terms of the financing will be.

When you limit your financing options, you may be forced to settle for higher rates, higher closing costs, and perhaps less attractive loan terms, in order to close your loan.

If any of you has experienced a problem with financing due to a 90 day rule, please comment on this post, to share your experience and to help others.

Make it a great day today. And, try to stay cool. We are in for a very hot week.

Best regards,

Shelby Bateson

www.shelbytncmortgage.com

Mortgage rates stay low as Ben Bernanke is on the hot seat today

There's a whole lot of moving and shaking going on today on Capitol Hill. Fed Chairman Ben Bernanke continues his testimony before Congress, and is under a lot of pressure, as many of the Senators are questioning some of his past action, and future plans. Many of the Senators, Democrats and Republicans alike are questioning his prior handling of this financial crisis, his failure to act in a timely manner to avert this crisis, his balking at independent audits of his actions, and his apparent belief that the Feds should have even more power than they have now. Wow!

The upshot of all this turmoil, along with some less than stellar earnings reports, is that Wall Street is more than a little anxious today. For the first day in the last eight days, the DOW is taking a break, down 45 points from the high reached yesterday. The NASDAQ is still up though, on the back of some great earnings from companies like Apple. Technology companies, in general seem to be weathering this economic downturn better than financial institutions. They are not subject to foreclosures, charge offs on credit cards, etc. However, their sales are also down due to less consumer spending.

When Wall Street gets nervous, mortgage rates tend to benefit, and that is the case today. As investors sell off stocks and buy bonds, mortgage rates do well. There is very little change from the close of business, as regards mortgage rates today, but no news is good news. We saw rates drop substantially yesterday, close to the lows we saw earlier this year.

For a snapshot of where the Portland market is now, please take a look at Trulia.com. This is a great website to watch market trends in the Portland metro area, or any other major city in the country. I think you'll be surprised to see that the average listing price in the Portland metro area is $429,051 (which is UP 0.1%), while the median sales price is $264,000 (down 9.6% from this time last year). The most popular areas are those closest in to downtown Portland. There is lots more great information, so check out the link above. The information on this site is updated daily.



Best regards
Shelby Bateson

www.shelbytncmortgage.com
http://www.examiner.com/x-17460-Portland-Real-Estate-Examiner

Mortgage rates are falling. What's going on?

Mortgage rates are falling today! Almost all lenders now have "best" rates on the 30year fixed rate mortgage a bit below 5% this afternoon. Rates on other types of loans are falling in tandem. Jumbo loans are making a comeback. Please call for more information on rates and terms available. Jumbo loans (since they are not regulated by Fannie and Freddie) tend to differ a lot from lender to lender, so we need quite a bit of information to determine which lender fits you best.

While the stock market closed up for the 7th straight day, based on better than expected earnings reports, there was also news that has put "fear" back into the hearts of some of the larger institutional investors, driving those funds back into bonds. The 10 year Treasury bond closed below 3.5% today for the first time in over a week.

News that is driving fear into investors surrounds CIT group, one of the major lenders for small and mid sized businesses. The government has decided that CIT is "not too big to fail" and has left this financial giant to flounder, seeking private capital, and perhaps heading for a Chapter 11 bankruptcy. CIT did receive TARP funds in the original round of bailouts, so if they file for bankruptcy, those TARP funds will not be repaid to taxpayers. The reason for the investor fear though is if CIT collapses, it could deal a "crippling blow to an economy still bleeding hundreds of thousands of jobs a month..." Apparently CIT is a very big player in the clothing and merchandise industries.

In the meantime, we are hearing more and more that the recession is winding down and we should start looking for recovery mode in the next 1 to 2 quarters (by the end of 2009!). Your mantra today is "please let this be true." It would be so great to see our economy stabilizing, people back to work, housing prices stable and even rising? Is that too much to ask?

Fed Chairman Ben Bernanke was testifying before Congress today, giving his state of the economy speech, and trying to assure Congress that the Feds do have a handle on this runaway government spending, and can take on a "supercop role" if need be, in policing and monitoring the big financial institutions.

It's amazing and disconcerting to me that one body (the Feds) should have the power to control monetary policy, police the financial institutions, and is now getting involved in the policing of the mortgage industry as well. Fed Chief, Bernanke, is urging Congress to keep proposals to audit the Fed away from monetary policy duties. Excuse me, but does this man think he should have absolute power over the monetary policy of this country, without being subject to audit? OK - stepping off my soapbox, because I've wandered away from the subject of mortgages...

Say YAY today. With all this turmoil up on Capitol Hill, the investment community is nervous enough to be moving funds back into Treasury bonds and driving mortgage rates down. That's the crux of the news today, in a nutshell.

Make it a great afternoon.

Warm regards,

Shelby Bateson
503-819-6545 phone
http://www.shelbytncmortgage.com

**Best rates apply to borrowers with Loan to Value at or below 90% and credit scores of 740+. ** Best FHA rates apply to credit scores of 660 and up. There are upward rate adjustments for lower credit scores on all loan programs. All rates are subject to change without notice. These rates are NOT APRs - do not include closing costs.

Stock Market is UP - Mortgage rates are Falling!

The stock market is up again, for the 6th straight session. So far, the DOW is up approximately 7% since last Monday. Usually when we see the stock market up, we see investors running from bonds, so mortgage rates rise too. But, here's what we're hearing today. So far, 69 of the companies on the S & P 500 have reported earnings. 59 of those companies have beat estimates on earnings, so the investors on Wall Street are happy folks and buying. BUT, this is a huge earnings week with many of the major S & P players yet to report. Oil is up to almost $65/barrel, and most metal commodities, like gold, silver, etc, are way up as well.

Companies like Apple and Caterpillar are "biggies" that sometimes put a damper on earnings week, and have yet to report. While they may report good earnings, they tend to also add comments that earnings going forward are iffy. So, some investors are still buying bonds. Also, we have to keep in perspective that some of these great earnings are from banks and investment companies, that are cashing in on higher fees and stock issuance to cover their TARP loans. Others are retailers that are reporting better than expected earnings, but have slashed their workforces and inventories to bare minimums to survive. So, yes, investors are still nervous, especially as Fed Chairman Ben Bernanke will be testifying before Congress this week again about the state of the economy and an exit strategy from all this stimulus and federal spending, to keep future inflation at bay.

In addition to a proposed exit strategy, it is anticipated that Bernanke wants to keep interest rates low as long as possible to help our employment numbers. But, in order to be allowed that leeway, he will have to convince Congress that he also has a plan to keep inflation in check. (I wouldn't want to be Ben Bernanke right now, would you?)

So far, most economists are saying that "leading indicators signal the U.S. economy is nearing the end of this recession." However, the caveat is that unemployment is still way too high and housing prices, over much of the nation, have yet to stabilize. However, more and more economists are predicting that this recession could end by the end of this year! Of special significance are three factors:
1. The fantastic earnings reports by lenders indicates that credit is loosening up a bit - which is good news for both businesses and consumers.
2. Building permits for new home construction were up 8.9% in June. This will put many people back to work.
3. The Federal Reserve is sitting on $877.1 billion dollars in bank excess reserves. This is money that is "available for lending," but is being held by the Federal Reserve instead to keep banks from pumping those funds into the economy too quickly (which would result in inflation.) The Feds are paying interest on those reserves (with taxpayer dollars, of course), to incent the banks to not lend too much too quickly.

The end result is that mortgage rates are fantastic. Best rates on 30 year fixed rate loans are hovering around the 5% range again. 5/1 ARMs are way down in mid 4% range. However, we probably should not expect rates to stay this low for the long term. One of the leading indicators of a healthy economy is higher yields on long term treasury bonds, so savvy investors are watching for yields to rise as soon as possible. With economic recovery potentially around the corner, bond yields, and mortgage rates will begin to rise.

Have a fabulous week.

Best regards,

Shelby Bateson
http://www.shelbytncmortgage.com

* Best rates apply to borrowers with Loan to Value at or below 90% and credit scores of 740+. ** Best FHA rates apply to credit scores of 660 and up. There are upward rate adjustments for lower credit scores on all loan programs. All rates are subject to change without notice. These rates are NOT APRs - do not include closing costs.

The Recession is OVER! Really?

Merrill Lynch analysts announced yesterday afternoon that the recession is OVER!! While that is certainly a feel good sentiment, perhaps Merrill is overlooking all those people still out of work, or still in fear of losing their jobs? What about the forecast, just this week, that unemployment could rise as high as 13%? A survey done by Realty.com just released this week, shows that more than 50% of potential first time homebuyers are reluctant to make that purchase for fear of losing their jobs.

Nevertheless, mortgage rates are on the rise today as business earnings continue to come in at or above estimates. Retailers, in general are reporting better numbers than expected (which is what prompted Merrill's remarks). The yield on the 10 year Treasury bond rose to 3.45% yesterday, a huge jump over the close Monday at 3.34%. Today the yield jumped to 3.61%, so yes, mortgage rates are definitely on the rise again! We have had several rate increases already today.

Last night, Intel reported much better than expected earnings, which has led to a huge stock market rally today. Intel earnings are considered very significant because they portend the trend in technology buying, which, of course, is very good news for the economy. In addition, there was some positive news about on orders and shipments in the manufacturing index, the first positive news we've seen in this sector is quite some time. The DOW closed up 256 points, while the NASDAQ closed up 63 points. The S & P crossed a critical point of resistance at 925 to close at 933.

At the same time, global confidence continues to drop to new lows as unemployment is surging worldwide. (Are you listening Merrill?) Government stimulus efforts are doing little to reduce unemployment as most of the stimulus dollars have yet to move into those "shovel ready" jobs out there. But, here's a green shoot for you...combined sales of both existing and new construction homes increased in May for the 4th straight month. Perhaps the housing market really is bottoming out finally at least nationally, even if we're not feeling it as much here in Portland.

So, are we in for another round of gains on the stock market, leading to ever higher mortgage rates? Mortgage applications were up the last two weeks, but then rates had dropped again. Currently, 30 year fixed rate mortgages are above 5%** again, though some lenders do still have ARM loans below 5%**. That still remains to be seen, as many of the "bellwethers" of the market have yet to report earnings. Any really bad earnings reports in the next week or so, could send the stock market tumbling again, with bond yields and mortgage rates dropping in tandem. As always, I'll keep you posted as news unwinds. In the meantime, mortgage rates in the 5% range are still very good rates, historically speaking. We all want to see those rates in the 4% range, but is that realistic long term? I'd love to hear your comments.

Warm regards,

Shelby Bateson

Town & Country Mortgage

503-819-6545 phone

Lic # ML-3604

http://www.shelbytncmortgage.com


* Best rates apply to borrowers with Loan to Value at or below 90% and credit scores of 740+. ** Best FHA rates apply to credit scores of 660 and up. There are upward rate adjustments for lower credit scores on all loan programs. All rates are subject to change without notice. These rates are NOT APRs - do not include closing costs.

Rates are up Slightly, House Valuations, and More News

Good afternoon. I hope you all had a fabulous weekend. I know I did. My son was here visiting from England, but alas, all good things must come to an end. He is returning to his home across the pond today. So, I'm back, and ready to go to work for all of you again.

The stock markets opened higher today, based on positive comments about bank stocks. The banks are actually doing pretty well financially, all things considered, because of increased fees and hugely increased margins on real estate transactions. The DOW is currently up 175 points, the NASDAQ up 35 points.

The 10 year T bond traded as low as 3.25% yield overnight, but is now up around 3.34%. This has caused most mortgage rates to rise a bit from the close on Friday. I am still seeing best rates on 30 year fixed rate loans below 5% for those of you in owner occupied homes with at least 20% equity. Here's my seque into HVCC (Home Valuation Code of Conduct appraisals) again!

I just received an appraisal today - what a disaster! This appraisal was on a home in the Wilshire Beaumont area, an area that has largely held its values. This appraisal almost completely discounted a beautifully finished basement (670 square feet), and overly emphasized comparable sales of homes 500 square feet smaller, with unfinished basements. Other comps that were slightly larger homes (approximately 100 square feet), with unfinished basements, that sold at higher prices were given little weight in in the valuation.

For those of you who think HVCC doesn't affect you, because you're not buying or selling right now, please think again. If home sales are failing, or prices are falling based on these very low appraised values, this definitely affects the value of your home when and if you decide to sell, or if you want or need to refinance your current mortgage. It has been estimated that HVCC, since inception on May 1, 2009, has been responsible for over $1 trillion dollars loss in home values nationwide. I don't have any statistics on how many home sales have fallen through because of this law, but will continue to research this topic and will report when I have more data.

More news headlines:

1. Oil prices closed below $60/barrel again today.

2. The ECB has instructed European banks to start lending and stop hoarding cash. Many European banks simply paid back the federal funding they had received to encourage lending, rather than lend, due to "playing it safe mentality."

3. Commercial construction lending is down 16+% here in the U.S. because of the same "play it safe mentality" in our banks.

4. We have a 2 week hiatus on sales of T-bonds beginning this week. While this may help bond prices and yields stabilize, the opposite could also occur because we are now well into earnings reports from all businesses publicly traded.

5. It is estimated that unemployment nationwide will hit 13% or higher before this recession comes to an end. Unemployment numbers for Oregon are due out later this week, and are estimated to be over 12% already!

FYI - we just received Wells Fargo's most current rating on property valuation risk ratings. All 3 counties in the Tri County area of Oregon (Multnomah, Clackamas, and Washington County are all considered high risk counties.) Clark County, in Washington, is also in the highest risk category.

For those of you contemplating a purchase, whether for investment or for your own home, check out the Investor Loft. This site will give you information on homes that are priced below value, with an estimate of the equity you will be buying at the current sales price.

Another great site which will give you insight on neighborhoods is Cyberhomes. For a nominal fee of $9.95 per month, this site will give you data on recent home sales, and will show you trends for the neighborhoods, so you will know if you are buying into an increasing or decreasing valuation neighborhood.

Both of the above sites cover all the major cities in the country.

Have a fabulous day today.

Please remember to either email or call with questions, comments, concerns.

Best regards,

Shelby Bateson

Town & Country Mortgage

Portland, OR 97219

503-819-6545 phone

http://www.shelbytncmortgage.com

* Best rates apply to borrowers with Loan to Value at or below 90% and credit scores of 740+. ** Best FHA rates apply to credit scores of 660 and up. There are upward rate adjustments for lower credit scores on all loan programs. All rates are subject to change without notice. These rates are NOT APRs - do not include closing costs.

Mortgage Rates are in FREEFALL!

Just time for a quick update - because this is news I think many of you are waiting to hear.

Mortgage rates are in freefall mode today. The stock market closed pretty flat today, very slightly in positive territory, but the bond market is being very kind to mortgages.

The yield on the 10 year bond is currently at 3.3% - down approximately 20 basis points from the close yesterday. Apparently our 10 year bond auction was very well received today.

The 30 year fixed rate mortgage has finally dropped below 5% again, for the first time in over 6 weeks. Adjustable rate mortgages are down in the mid 4% range, especially if your loan has already been approved and is ready to get docs out for signing. FHA loans are again in the low 5% range.

There is no way to know how long rates will remain this low. But, we'll take the good news anytime.

If you are one of those people who has been thinking this is a great time to buy, but you can't sell your current home, There has been one big change fairly recently that might help some of you.

Many lenders are now allowing you to offset the amount of the mortgage payment on your current house if:

1. You have 6 months reserves (PITI = principal, interest, taxes and insurance) in the bank that you can document for 60 days or more

2. You have at least a 1 year lease signed for your current house

3. You are allowed 75% of the lease payment amount to offset your current mortgage payment.

If all this is confusing, please call me. I'll be able to work if you qualify and for how much you can qualify. I know there are some of you out there looking to buy to take advantage of the low prices, but unable to sell your current homes.

Make it a great afternoon today.

Warm regards,


Shelby Bateson

Town & Country Mortgage

Portland, OR 97219

503-819-6545 phone

Lic # ML-3604

http://www.shelbytncmortgage.com


* Best rates apply to borrowers with Loan to Value at or below 90% and credit scores of 740+. ** Best FHA rates apply to credit scores of 660 and up. There are upward rate adjustments for lower credit scores on all loan programs. All rates are subject to change without notice. These rates are NOT APRs - do not include closing costs.

Mortgage Rates are dropping AND Wine is Cheaper than Water?

Good Afternoon! I hope you all had a fabulous 4th of July holiday weekend. We are now into the part of the year where we won't see another holiday until Labor Day, so the short work weeks have ended for the summer again.

On a happier note, it has cooled off today, for those of us who dread those 90+ degree days.

The stock markets took a major hammering on Friday with the higher than expected unemployment numbers. In addition, China was again talking about a "universal reserve currency, rather than the U.S. dollar, so the markets jumped into sell mode for fear that China would start dumping the $1.9 trillion dollars they are currently holding. Today, Russia indicated that a universal reserve currency should be something to be discussed, but for now the US dollar is still that currency and trading up today. So far, the 2nd quarter has not been kind to the rest of the markets.

The stock market opened down all the way around this morning, but is now trading up around 40 points for the DOW, and down approximately 10 points for the NASDAQ. Remember that 2nd quarter business earnings reports begin soon, so the market is skittish ahead of those earnings, though most analysts don't expect much. Also, potential market and rate movers are the big treasury auctions again this week.

Gas and oil prices are way down to levels we haven't seen in almost 6 weeks. Oil is down to around $64/barrel. Hopefully we'll see gas prices at the pumps follow shortly. In fact almost all commodities are trading way down today. Metals of all types, both precious, like gold and silver, and unprecious, like aluminum and steel, are way off recent high prices. Even fertilizers and seed are way down. Does this mean food prices might drop?

Australian wine makers are complaining that wine is getting cheaper than bottled water. Wine in Australia is currently selling for less than half the price it was 10years ago. And in Cape Cod, the price of lobster is about equal to the price of lunch meat? Really? So, this recession means that we can all eat and drink like kings, as long as we eat at home? Works for me. Personally I've been enjoying some of the more costly types of fish, as fishermen are also being hit hard by this recession.

The U.S. service industries (home builders, retailers) contracted at a slower pace last quarter than prior quarters which most commentators are jumping on as an indication that we are starting to see the economy turning slightly. Most businesses however, are saying that when they see housing stabilize, then they will start increasing their output. Again, it's that Catch 22 (Housing won't stabilize until employment stabilizes. Employment won't stabilize until businesses increase output, and round and round we go.) Which came first, the chicken or the egg? Hmmm.

In the meantime, monetary policy makers are again urging and criticizing banks for sitting on all the funding they have been receiving from central banks, rather than lending out those funds to stimulate businesses and world economies.

Lastly, another bright note is that mortgage rates are down a bit today. We are definitely nearing that **5% mark for the 30 year fixed rate loan. The 5/1 ARM is dropping more dramatically and more quickly than the 30 year fixed and is solidly below that 5% mark today with almost all the lenders that are offering the product.**

From what we're hearing, there is no cause to rush to top off your gas tanks today. Oil prices have broken through a resistance level, and are expected to continue to drop to closer to $60/barrel for the rest of this month.

Low rates!! Low gas prices!! It's sounding better to me!

Enjoy the rest of your day today.

Best regards,


Shelby Bateson

Town & Country Mortgage

10228 SW Capitol Highway

Portland, OR97219

503-819-6545 phone

Lic # ML-3604

http://www.shelbytncmortgage.com


** Best rates apply to borrowers with Loan to Value at or below 90% and credit scores of 740+. ** Best FHA rates apply to credit scores of 660 and up. There are upward rate adjustments for lower credit scores on all loan programs. All rates are subject to change without notice. These rates are NOT APRs - do not include closing costs.

125% HARP Financing - Clarification

Good morning and Happy Holiday.

I received a lot of response to my post yesterday about the new HARP loan limits as high as 125%. It is always gratifying to me to see that a lot of you read my emails. However, it was apparent that many of you are confused about the email, so I'd like to clarify.

As a reminder, the HARP program was initiated to make it possible for those of you who currently have mortgages owned by either Fannie or Freddie, to refinance your loans at the lower rates, in spite of the fact that you owe more than your house is currently worth. With HARP refinances, you are not permitted to get cash back. You are permitted to refi for the purpose of lowering your rate, and therefore lowering your monthly payments to help you through this economic crisis.

When HARP was rolled out in February, housing values had not fallen as much as they have now. The lending limit was set at a loan amount of up to 105% of the appraised value of your home. Since home values have continued to drop, the lending limit has been raised to 125% of the appraised value. This has been done to allow more of you to take advantage of this program. If you have not checked in the past, or if you checked in the past and got a NO response, please click on the links below to find out if your current mortgage is owned by either Fannie or Freddie now. Some mortgages were reporting incorrectly, and Fannie and Freddie have purchased more existing mortgages.

https://ww3.freddiemac.com/corporate/

http://loanlookup.fanniemae.com/loanlookup/

For those of you whose mortgages included mortgage insurance payments, technically you do qualify for a HARP refinance transaction. BUT, Fannie and Freddie are requiring that in order to get this refinance, you must still carry mortgage insurance on your loan. The problem is that there are no insurers willing to insure this loan, so the reality is that you still cannot refinance your loan. In my less than humble opinion, this is not fair. Many borrowers who DO qualify for HARP funding, have a 1st and 2nd mortgage, rather than mortgage insurance, and never had more equity than you.

We in the lending industry, are campaigning on your behalf, with Congress and with Fannie and Freddie, to have this mortgage insurance requirement deleted. In our opinion, you are being unfairly discriminated against because you perhaps bought your house later in the game, or you didn't have the 20% down payment when you purchased or refinanced, or you didn't get a 1st/2nd mortgage combo loan when you purchased. If you have good credit, a good payment history, and a steady source of income, why should some people have an opportunity you are being denied?

You need to take steps to try to help yourselves, because this affects a LOT of you. When we in the mortgage industry talk to our Congressional representatives, or lobby Fannie and Freddie, we are often perceived as looking after our own interests - more business. Of course we want more business, doesn't everybody? But, at the same time, we are the ones in the position of seeing, first hand, how many of you are being affected by this ruling. YOU have to speak out on your own behalf. Congress tends to "grease the squeakiest wheel," so if you make yourselves heard in huge numbers, perhaps someone will actually take notice. There is no reason why your loan, at 125% of appraised value, poses a higher risk to the lender than someone else, with the same, and potentially even less equity. Following are some speaking points I suggest you use, if you should decide to contact your Congressional representative:

1. My credit score is __________

2. I have owned my home for _______ years

3. I have NEVER been late on my mortgage payment

4. I have steady employment income and have been at my current job for _____ years.

5. So, why can't I refinance my ___% mortgage at today's lower rates, when someone else with all the same statistics can?

Be sure to start your correspondence or call with the fact that you want to qualify for a HARP loan, but have been denied because your current mortgage includes mortgage insurance.

To contact your Congressman, Senator, or Fannie Mae, click on the links below to be taken to their websites.

https://writerep.house.gov/writerep/welcome.shtml

http://www.senate.gov/general/contact_information/senators_cfm.cfm

http://www.fanniemae.com/contact/crc.jhtml;jsessionid=OKGECFH3RIXC5J2FECHSFGQ?p=Contact+Us

Please have a safe and happy holiday weekend.

Warm regards,

Shelby Bateson
Sr. Loan Officer

503-819-6545

http://www.shelbytncmortgage.com

125% Financing? HARP Lending Guidelines Just Got Better!

We have just heard that with a new cash infusion to Fannie and Freddie of $6.1 billion, AND home values continuing to fall, HARP financing rules have just been changed to allow more home owners the ability to refinance their homes.

If you'll recall, HARP financing applies to those borrowers whose current mortgages are owned by either Fannie or Freddie. The rule, prior to today, was the capability of refinancing your current mortgage up to 105% of the home value. As of today, that has been increased to 125% of the homes value.

If you have a 1st and 2nd mortgage, this refinance will apply to the 1st mortgage only, but your first mortgage can be up to 125% of the appraised value of your home. Many of you were not able to qualify for the HARP program prior to this change due to extreme loss of your home value.

If you think this applies to you, please do not hesitate to call or email me.

Lenders are working frantically to update their guidelines to handle this rule change.

Again, have a great day today.

Shelby

503-819-6545

www.shelbytncmortgage.com

Market and Mortgage News today - An Idea to Help Buy REO Property

Good afternoon and welcome to the second half of 2009.

The news is mixed today, and rates are again somewhat volatile ahead of the holiday weekend, and the beginning of second quarter earnings reports.

Treasury bond yields are rising again today as investors again become nervous about the bond auction coming up next week. While the auction is not record setting in size, it is still a big auction. Also trading on Wall Street is very light today, because of the short week, and because investors are awaiting the June employment numbers that will be reported tomorrow.

The ADP numbers were released this morning for June. (ADP reports only on the private sector employment data and are not deemed to be truly accurate). Employers announced the fewest job cuts for June that we have seen in over a year. Some analysts are taking this as a sign that perhaps more employers have finally reached a "stabilization" point where they feel they are now staffed at the numbers required to make it through the rest of the recession. Planned firings dropped 9% for the month of June. This brings the total number of people who have lost employment, since this recession began in late 2007, to more than six million people! The ADP report is considered a somewhat unreliable report because it excludes government employees, and we know that many states are also laying off employees.

California just announced that state workers will be required to take an additional 1/3 day off without pay, and some people will be paid with State of California IOUs!! Wow - that will pay the bills. Can they use those IOUs to make their mortgage payments? Other states around the country are also scrambling to pass their state budgets to see how they will manage their economies, since June 30 marks the end of the fiscal year for many states.

Mortgage applications dropped the most last week, since February, due to higher rates. Refinance applications, which had been sustaining the mortgage industry declined 30% and accounted for less than 50% of all mortgage transactions for the month. It is feared that if rates continue to rise, and foreclosures continue to rise, this housing crisis could extend well into the latter part of 2010. But, those buyers who can still qualify for credit are out buying up the bargains. The NRA (National Realtors Assocation) is reporting that, for the most part, most sales are "distress sales (properties priced below fair market value).

The good news this morning is:

1. the Obama administration plan to jump start the economy with public sector jobs, is scheduled to begin hiring and breaking ground in the coming months this year.

2. pending sales of existing homes increased in May by 0.1%. May marks the 4th consecutive month that an increase in sales has occured. Pending sales is a statistic that is considered a "leading indicator."

3. Oil prices are again below $70/barrel today.

Are you shopping for a home now? Are you thinking of utilizing FHA financing, AND buying a bank owned (foreclosed) property? Here's a strategy that some realtors across the country are utilizing to get those offers accepted more quickly. Offer the bank as much or more than they are asking, with the knowledge that the property will NOT appraise for as much as the offer. The bank is pretty certain to accept your offer, but will HAVE to renegotiate with you for the appraised value. I'm not going to go into all the intricacies of why this works, but the bank is "stuck" with the appraised value for 6 months from the date of the appraisal, so they will either have to renegotiate with you, or sell that property to someone else at the appraised value. The one caveat here is that this will only work if you can qualify for the higher loan amount (based on your offer price) AND you are really certain that the offer price is higher than where the property will appraise.
Interesting strategy. Please contact me if you or anyone you know has utilized this strategy successfully.

Enjoy the rest of your day today.

Best regards,

Shelby Bateson

Town & Country Mortgage

503-819-6545 phone

Lic # ML-3604

www.shelbytncmortgage.com

* Best rates apply to borrowers with Loan to Value at or below 90% and credit scores of 740+. ** Best FHA rates apply to credit scores of 660 and up. There are upward rate adjustments for lower credit scores on all loan programs. All rates are subject to change without notice. These rates are NOT APRs - do not include closing costs.

Breaking News, Mortgage Markets and More

Good morning, and happy end of the first half of 2009. Tomorrow we officially begin the "second half" of 2009, which many analysts and economists have predicted will mark the beginning of the end of the worst recession to hit this country, and the world in 5 decades. Let's hope all these brilliant people are correct in their predictions.

The Case Shiller index released home valuation numbers for April (note this is 2 months behind). The news was a bit encouraging as we are seeing a decrease in the drop in home values across the country. In fact, 8 cities reported values increasing slightly. We are now well into the traditionally busiest season for home sales. While home values appear to be steadying, we do know that with the high unemployment rate, more foreclosures are upcoming. But, we also know that banks are becoming more reluctant to sell homes at below value prices, and are actually holding off on releasing their REO inventory, to help sustain home values, and of course, to save on more losses to their bottom lines.

Hang onto your pocketbooks folks. In the ongoing saga between Swiss Bank UBS and the IRS, it appears that the IRS has won the battle. If you, or anyone you know has a "hidden" bank account at UBS (for the purpose of avoiding IRS taxes), you will NOT be able to access those funds unless you close the account or move the funds to an onshore account, beginning tomorrow, July 1, 2009! In response to this announcement, many lenders have already announced this morning that prior to closing a mortgage transaction, you will be required to sign a form authorizing the lender to do an OFAC (Office of Foreign Assets Control) search prior to drawing docs or funding your loan. Some of the credit bureaus we utilize have the capacity to make this search prior to issuing the credit report. Of course, there is a nominal extra charge for this search, but the few dollars up front (my best guess is not more than $5) could save hundreds of dollars in closing delays. So, of course, we will be utilizing this service beginning immediately.

Daniel Baldwin, brother of actor Steven Baldwin, has announced that he will be moving to Portland with plans of opening a film production company here in our city. The plan is to make films in and about Oregon. His initial plans include the start of at least 3 productions within the first year. Are we ready for a Portland based reality show? Other plans include a horror flick, and a documentary on the struggling economy in Oregon. In fact, a large part of the reason for Baldwin's move to Portland is to help our economy. Did you realize that Oregon's economy is just below the poverty level? Then why are our housing prices averaging approximately $125,000 higher than the median price of homes across the nation?

The stock market is down across the board this morning, as we close out this quarter. In the meantime, the yield on the 10 year bond seems to be moving up again. It dropped slightly below 3.5% yesterday, but has reversed course today, and currently sits at 3.51%. Hang on - we're hearing the Feds are again infusing cash into the mortgage bond markets, so we just might see mortgage rates moving down again.

Best rates this morning:

30 year fixed - still above 5% - but trying to hit that mark again

5/1 ARM - this loan rate really depends on the lender. We are seeing the best rate between 4.5% - 5% for those lenders offering this product. This product is very sensitive to ALL the possible adjustments that can affect the rate you will pay.

FHA - 5.5% and up - again depending on the lender.

Speaking of lenders, please be sure to do some shopping around for rates and fees BEFORE you apply at one of the bigger banks. We are hearing that more and more big banks are requiring non-refundable application fees, and once you pay that $500-$750 fee, you will feel stuck with that bank. But, rates are so variable between lenders these days, that getting yourself stuck may not be the best option for you. There are still hundreds of lenders out there doing mortgage loans, so there is significant competition for your business.

Make it a great day everyone.

Best regards,

Shelby Bateson
Sr. Loan Officer

Town & Country Mortgage

http://www.shelbytncmortgage.com/

* Best rates apply to borrowers with Loan to Value at or below 90% and credit scores of 740+. ** Best FHA rates apply to credit scores of 660 and up. There are upward rate adjustments for lower credit scores on all loan programs. All rates are subject to change without notice. These rates are NOT APRs - do not include closing costs.

Mortgage Rates are Dropping AGAIN!

Happy Friday to everyone. We have some encouraging news almost all the way around.

> The stock market staged a bit of a rally yesterday, though the DOW is still down slightly for the week.

> The yield on the 10 year Treasury bond is down to 3.5% - this is a big drop from the almost 4% yield just a couple weeks ago, and mortgage rates have responded along with this yield drop. We're still off the lows of a few months ago, but this is encouraging news.

> Consumer spending increased in May, for the first time in 3 months, as average incomes also rose approximately 1.4%

> Individual savings have increased to a 15 year high, which ironically is what is holding the stock market down. Investors want and need to see us spending, in order to stimulate business. For those of you who are managing to save right now, congratulations!

> Disposable income increased an average of 1.6% due to wage increases

> The Michigan consumer sentiment index increased to 70.8% (do you remember when it was below 50% during the height of this economic downturn?)

> Some areas of the economy, including housing and manufacturing are finally seeing a slowdown in the pace of decline.

> While oil rose to above $71/barrel yesterday, based on news about the Nigerian turmoil around the oil fields and pipelines, much of that turmoil is abating through Nigerian government intervention. Oil is back under $70/barrel today.

We expect the national employment numbers next week. Most analysts expect that number to be 9.6% unemployment nationally, the highest level since the 1970s. Keep in mind that employment and unemployment are considered "lagging indicators." This means that businesses do not start hiring again until they see their numbers improving. So, we will see business improvement before we see the unemployment numbers begin to shrink. This is like a Catch 22. If all those unemployed went back to work, we would have more people spending, and businesses would be more profitable - but somehow this will work itself out; it always seems to anyway.

Enjoy your weekends. It is supposed to be warm and sunny.

This weekend, the Obama and other Healthcare reform supporters are holding limited health screenings around the state. In Oregon, almost all Farmers Markets will be hosting, at the very least, free blood pressure checks. Check out your local activity calendar to see what types of events are available in your area.

Best regards,

Shelby Bateson

503-819-6545

http://www.shelbytncmortgage.com/

Why don't I qualify for the "best" mortgage rates I see advertised?

Conforming loans (loans of $417,000 and below) are loans that very likely will ultimately be sold to Freddie Mac or Fannie Mae, so all of these loans are subject to the rate adjustments dictated by Fannie and Freddie. In addition, lenders have a lot of discretion in other adjustments to rates, based on the investor that will be buying those loans. The investor could be Bank of America, or Wells Fargo, but could also be a bank in Germany, for instance. The investors dictate rate adjustments, based on their risk tolerance. Since we've seen such a huge meltdown of lenders in the last few years, risk tolerance is very low.

Following are some of the ways that rates can be adjusted, either up or down, based on your unique financial situation:

1. Credit score - which we've already discussed many times, is huge!! Some lenders will not even look at a loan with a credit score below 680, even though Fannie and Freddie will buy loans with scores as low as 620. Other lenders will give you a better rate if your score is above 740, or 760, or 800!

2. Location, location, location - yes, this matters even in terms of rates. There are "risk" tables for different areas, and then lenders can add on to these risk tables even more. So, some lenders look at "declining value" tables, where other lenders will break this out further into categories such as "declining values, distressed values, etc." Obviously the more categories, the more the rate can move depending on where you property is located. Please be aware that these tables are not based on neighborhood demographics, but rather are based on statistical data on what has been happening to the values since the housing market went into this slump. "Redlining" of neighborhoods is still illegal and is not a part of this process.

3. Equity - Technically Fannie and Freddie will lend to you if you have at least 10% equity in your home, but the amount of equity you have is also coupled with your credit score, the location, and the type of loan transaction. So, if you have 30% equity AND a 740 credit score, AND you are buying a house, AND your home is located in a good area, you will qualify for "best rates." But, adjustments can and will be applied based on any of the above factors. If you want to refinance your house mortgage with less than 25% equity, and you want cash back, you WILL pay a higher rate.

4. Type of property - is this a Single Family home, a condo, townhouse, condhotel? Is this a property you intend to, or are currently occupying? Is this a vacation home (2nd home), an investment property? Is the condo in a high rise building (4 stories or more)? If a condo, is it a new building or one that has been deemed Fannie/Freddie "warrantable"? Is it FHA approved? Believe it or not, all these factors can and will affect, not only your rate, but if in fact this property qualifies for financing at any price.

5. Lock period - This has become huge since HVCC went into effect on May 1st. The standard used to be 30 days, which was the average time it took to go from loan application to closing that loan. With HVCC, the time is still an unknown. AND, when rates are very low, as they were just a month ago, lenders got so backed up with applications that it was not unusual for a file to sit at a lenders office for 30 days before anyone even looked at it. Most lenders are now encouraging us to lock for at least 45 days in order to ensure that the appraisal will be ordered, received, and reviewed, if necessary, and still get that loan closed in time. BUT, a 45 day lock costs more than a 30 day lock, so the rate could increase. For myself, I'm not locking any loans until an appraisal has been received and reviewed. This can save on the rate, but can also cost on the rate during these times of volatile rates. It's a juggling game, and is making lending much more difficult. (Just one more reason to repeal HVCC!!) If we are still in the iffy appraisal process and rates take a huge drop, I will notify you and allow you to make the final call on when to lock your loan. However, there are lenders out there that will not even look at your loan file until it is locked! If we can wait to lock your loan until it is completely approved, including the appraisal, and get a short term lock (7-15 days), you often will get a better rate.

6. Loan amount - A conforming loan is $417,000. This year we are seeing that ceiling raised in some areas where housing prices run higher, such as San Francisco, or New York City. However, these are called "high limit conforming loans" and are still subject to slightly higher rates. Once your loan amount exceeds the conforming, or high limit conforming amounts, you move into "jumbo loan" territory. The upward rates adjustments for jumbo loans are big. All the other potential adjustments mentioned above are added to this one.

Wow - I hope this cleared up some questions many of you have asked, and didn't confuse you more. And, I also hope that you now understand that when you call and ask "what's the rate today?" I will need to ask a lot of questions before I can answer you. Even then, until we get all the information confirmed through credit pulls, appraisals, etc, the best I can do is make a "best guess" based on what you tell me, and what rates are being quoted at that moment. Thankfully, I have a lot of experience in this industry, and know what questions to ask. But guidelines are still changing all the time.

We're all looking forward to a stabilization of the housing market, so some of these "ifs" will disappear, and lending guidelines will hopefully loosen a bit. None of us expect lending guidelines to ease to the point they were 2 years ago. If you do not have good credit, you need to fix it, or expect to pay higher rates. If you need help fixing your credit, please feel free to call or email me. But, please don't spend money at a credit repair company. They rarely do all they say they can, and your association with this company is one more factor that can cause your rate to increase. I can guide you through the process, but you will have to do most of the work on your own.

As regards credit repairs: remember that if your credit report shows you were 30 days late on a credit card payment, and you truly were 30 days late, it is very unlikely that the creditor will remove that report. Repairs apply to errors on your report. Errors can cost you hugely in terms of points lost on your score, but once removed, your score should revert to where it was prior to the error reporting.

I urge you all to sign up with some type of ID theft protection, or some credit monitoring agency. Most banks now offer this service. This service will typically report to you whenever there is any activity on your credit report, such as new debt being posted, inquiries from creditors, and late payments being reported. In addition, most of these agencies will also send you a copy of your credit report from at least one bureau either monthly or quarterly. Be sure, if you sign up with some agency that you are able to see all three bureaus AND your scores. This is important information for you to have.

As always, I am available to assist most of the time, so please feel free to call or email me, or visit my website for more information.

Best regards,

Shelby Bateson

503-819-6545

http://www.shelbytncmortgage.com/

Fed Speak today - Can we expect Mortgage rates to drop again soon?

After meeting for the last two days, Ben Bernanke spoke to the media with a summary of the key points covered. Here's a recap of today's Fed speak:

1. The Feds will leave overnight lending rates unchanged at between 0%-.25%, probably for at least the rest of 2009. For those of you with any debt tied to the prime rate (currently at 3.25%), this means no change in that rate or in those payments. NOTE: Mortgages are almost never tied to the prime rate. They are more likely to be tied to the LIBOR (London Interbank Offer Rate) index, and most specifically the 6 month LIBOR rate for most mortgages. The 6 month LIBOR is currently at 1.16%. ARM loans tied to the LIBOR will feel the effects of a rising LIBOR index only at the time of each payment adjustment.

However, if you have a variable rate HELOC (Home Equity Line of Credit), this type of loan is almost always tied to the prime rate. The good news for you is that your low monthly rate and payments will remain unchanged for now.

2. Bernanke also mentioned that the Feds are watching to see how quickly the economy will recover on its own. He said:

"The pace of the economic contraction is slowing."
"Conditions in the financial markets are improving."

Bernanke disappointed Wall Street, and all of us in the housing industry by failing to say that the Feds will resume purchases of Mortgage backed securities. This failure caused the yield on the 10 year bond to rise, and mortgage rates to rise with the yield. Currently the 30 year mortgage is averaging a rate of 5.38% nationally. That's substantially higher than just a month ago, when we saw rates below 5%, but slightly below the high we saw last week at closer to 5.6%.

A government report released today showed an unexpected increase in durable goods orders (refrigerators, televisions, computers, etc.) , but at the same time, an increase in unemployment nationally.

Ben Bernanke is walking a tightrope of a sort. Trying to move our economy into recovery mode after the worst recession in 5 decades is almost unprecedented with the powers the Feds have been assigned. And, his appointment to Chairman of the FOMC will expire shortly. There is considerable debate on whether or not he will be re-appointed. President Obama pretty much deflected the question at a recent news conference. While Bernanke was appointed by his predecessor, this is a pretty tough spot to insert a new key player.

I said my mantra last night for lower rates, but apparently the powers that be weren't listening. Can we hope for a delayed reaction? Again, I think that a key factor in whether or not the Feds will resume purchases of Mortgage backed securities will rest on the effect of the higher interest rates on the housing market recovery. Those numbers won't be released until mid-late July.

Speaking of the housing market recovery - other news released today was that sales of new homes decreased in May, but prices for those homes increased. Are we surprised then that those sales decreased?

Here's more news:
The average price of homes that are selling is at $173,000 - $200,000 nationwide.
The current inventory of homes that qualify for conforming loans (at or below $417,000) is at 9+ months nationwide.
The current inventory of homes priced at $1,000,000+ is at 8+ YEARS!!

Builders take note - the buyers out there are snapping up the lower end of the price range. If you are building, you have to keep this in mind! Home buyers are following the trends seen in the retail stores. Walmart and Kohls are thriving during this economic downturn, while Nordstom, Saks, Tiffanys, etc., are all feeling the pinch. Those who have money are holding onto it.

OK - that's it for today.
Tomorrow I will focus on what you can do to qualify for the best mortgage rates out there, and why some of you, even with good credit, are still looking at higher rates.
Enjoy the rest of your afternoons and evenings.

Best regards,
Shelby Bateson
Town & Country Mortgage
10228 SW Capitol Highway
Portland, OR 97219
503-819-6545 phone
Lic # ML-3604
http://www.shelbytncmortgage.com/

* Best rates apply to borrowers with Loan to Value at or below 90% and credit scores of 740+. ** Best FHA rates apply to credit scores of 660 and up. There are upward rate adjustments for lower credit scores on all loan programs. All rates are subject to change without notice. These rates are NOT APRs - do not include closing costs.

An Increased Tax credit for a Home Purchase? For Everyone?

Have you heard that the Senate is discussing increasing the tax credit for a home purchase from $8,000 to $15,000?

Did you know that this new program could be available to everyone? That is, everyone looking to purchase a home to actually live in, not an investment property, or a vacation home.

Still, for those of you waiting for more incentive to buy now!!! would an extra $7,000 make a difference?

Rates have been on roller coaster ride lately, and look to be unlikely to hit the lows in the mid 4% range. Higher rates means your dollar doesn't go as far as it would at lower rates - but $15,000 to help you out? That would cover all your closing costs and then some cash in your pocket - just for buying a house?


Stay tuned. I'll keep you posted as more news rolls out

Best regards
Shelby Bateson
503-819-6545

HVCC is raising havoc with a fragile housing industry

HVCC = The Home Valuation Code of Conduct
The focus of today's news centers around HVCC. I think it's important that you know about HVCC and how it can and WILL affect you and anyone you know buying, selling or refinancing a house. HVCC went into effect on May 1st this year, and is raising havoc with the already fragile housing industry.

HVCC has removed our ability to communicate with appraisers about your loan transaction. We are forced to use a "lender assigned" AMC (Appraisal Management Company) to order your appraisal. These management companies are located all over the country. They charge appraisers a huge percentage of the cost of the appraisal, which has driven up the cost of the appraisal to you, the consumer.

AMCs are not licensed, and are therefore not regulated, and the lenders can even own up to a 20% interest in the AMC we are required to use.

The best appraisers are often unwilling to work with AMCs, so we are often left with inexperienced appraisers doing what our local appraisers used to do best - evaluate a home's value based on their experience and knowledge of real estate in your local area. Can you believe your appraisal for a home in San Francisco, for instance, might be valued by an appraiser in Kansas? Does this make sense?

The increased cost of the appraisal is not the only way you can lose money. Since we are now relying on unknown people to do the appraisal, we have no control over the time frame to get a completed appraisal back to the lender. This can cost you in time to close the loan, which can result in either losing your rate lock, or having to pay for lock extensions. (Typical lender charges for lock extensions = 1/4% of the loan amount for a 15 day lock extension). Are we now talking potentially thousands of dollars?

And, what if the seller needs the loan to close faster? Can this result in a lost sale?

If you are unhappy with the valuation these appraisers arrive at, for your home, or the home you want to purchase, there are additional charges for an appraisal review. And, of course, you guessed it - the person doing the appraisal review is unlikely to know anything about your neighborhood or even home value trends in your state!

AND - if rates drop during your transaction, loan officers cannot transfer your appraisal to another lender to take advantage of better rates for you. You are forced to pay for another appraisal to move your loan!

If you are as outraged as those of us in the real estate, mortgage, and appraisal industries are, please write your Congressional representatives and let them know what you think. Help us kill this travesty called reform. We are doing all we can to fight this bill, but we need your help too.

Best regards,

Shelby Bateson

http://www.shelbytncmortgage.com/

USDA rural housing loans - and Market news

Are you aware of the USDA rural housing program? Perhaps you should be, because almost all of Oregon falls into the USDA rural housing boundaries. These loans are fantastic, offering 100% financing - even up to 102% financing (to help with those closing costs.) There is no Mortgage insurance requirement, even with 100% financing. Virtually all three of the tri-counties have areas that are eligible, and the further west or east you travel, the more property becomes available. For instance, did you know that if you want to move to the mountains, or the beach, almost all that property qualifies for USDA rural loans. In fact, think closer in, like Estacada, Damascus, Sandy, even parts of Oregon City - all in the USDA rural zone.

Here are some of the loan guidelines, because not everyone will qualify for this loan:

1. There are income restrictions - these loans are for low to mid-level income families
2. There are, of course location restrictions - this IS a rural housing loan program
3. There are caps on the loan amounts
4. The property being purchased must be your primary home
5. These loans are for purchase transactions, and rate and term refinances from an existing USDA rural loan only. Even if you live in a rural designated area, if your current loan is not USDA rural, you cannot refinance into this loan.
6. The minimum credit score required is 660 (no exceptions)

USDA rural loans are also available for business property purchases. Please call if you'd like more information. This is a much more difficult loan to get, but it is available.

Best regards,

Shelby Bateson

http://www.shelbytncmortgage.com/

503-819-6545

Mortgage rates are falling!! and other news

Good morning. Can you believe 2009 is almost half over, and summer is just around the corner?

As quickly as mortgage rates rose to their highest levels in a year, we are seeing Treasury and Mortgage bond rates drop late last week and this morning. There is resumed confidence in the US dollar after comments from Russian Finance Minister Alexei Kudrin that Russia has no immediate plans to switch from US currencies for their reserves. (If you'll recall, it was speculation that Russia would start selling off their US Treasuries that led to the huge rise in bond yields last week.) In addition, Japan has indicated that "investors have nowhere else to put their money that is more secure, nor paying higher yields than US Treasuries."

Bond yields have dropped from just over 4% last week to around 3.7 right now. Mortgage rates are following the drop. However, before we get overly excited, a survey of Bloomberg analysts forecast that the bond yield might not drop lower than 3.65%.

However, there are other economic concerns now, which has the stock market diving as investors take profits and sit back and wait for other news that validates the recent rally. The DOW is currently down over 200 points, NASDAQ down more than 50 points, and the S & P has broken through a key resistance point of 925, now at 920. To make matters more precarious, this is a "triple witching week" which is always volatile. (Triple witching occurs the 3rd Friday of the last month of each quarter. It is the expiration of stock index futures, stock option futures, and stock options.) Traders and investors are required to close out these option trades by this Friday, or allow them to expire worthless, or at a potential loss. This is what causes the extreme volatility in weeks like this one.

On the good news front, oil prices are down from last week's highs, and most commodities are down substantially as well.

For those of us looking for more reform and regulation of our financial systems, stay tuned as President Obama will be announcing on Wednesday more reforms which will give the Federal Reserve broader powers to prevent the kind of "economic meltdown" we have just experienced over the last 2 years. It is reported that a comprehensive plan will be announced which will provide for a stronger framework for consumer and investor protection.

The G-8 (Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, and the United States) is currently meeting,..... and is working on worldwide regulations, as well as an "exit strategy" to pouring money into worldwide economies. Treasury Secretary Tim Geithner is at the meeting representing the United States. In addition, there is a separate meeting being held by India, Russia, China and Brazil, currently the 4 strongest economies in the world. Now that it appears that economies world wide are reaching some level of stabilization, a plan (exit strategy) is required to return us all to some level of normalcy.

President Obama is also meeting with the AMA today, discussing his plans for health care reform The Congress is under a mandate to deliver a health care reform package to the President by October 2009. One option being discussed is a U.S. government owned insurance company to provide health care insurance. This would be in competition to other privately owned health care insurance providers, and forgive me speculation, but it appears that this would definitely help reduce the high costs of health care insurance in this country. Obama is urging the AMA to back his plan, while the plan is still meeting a lot of resistance from the Republican party.

This is likely to be a very volatile week on wall street, and is also potentially a volatile week in terms of mortgage bonds. Please stay tuned. I'll keep you updated as news breaks. For now, we're on rate watch.

*Best rates, as I write this: (remember these rates apply to those with the best scores, highest equity positions for purchase and rate and term refinances.)

30 year fixed 5.375% APR 5.41%
5/1 ARMs 4.5% APR 4.622%
FHA 5.5% APR 5.71%

Stay tuned as "our economy turns" this week. I'll do my best to keep you posted.

Best regards,

Shelby Bateson
Town & Country Mortgage
10228 SW Capitol Highway
Portland, OR 97219
503-819-6545 phone
1-866-626-2828 fax
Lic # ML-3604
http://www.shelbytncmortgage.com/

* Best rates apply to borrowers with Loan to Value at or below 90% and credit scores of 740+. ** Best FHA rates apply to credit scores of 660 and up. There are upward rate adjustments for lower credit scores on all loan programs. All rates are subject to change without notice. These rates are NOT APRs - do not include closing costs.

It's Friday and Mortgage Rates are dropping!!

After a month of rising mortgage rates and rising yields on the 10 year T bond, we are finally seeing the pull back that we'd been hoping would occur. There are multiple reasons for the drop, but the most significant is a believed to be that a Wall Street index fund showed confidence in the US dollar by making large purchases of shorter term bonds, and other funds followed. Also, a Japanese finance minister announced that they will continue to buy US debt because they have "unshakable" confidence in the US dollar. (The rise in rates had begun as countries, such as Russia, India and Brazil had previously announced that they would sell US debt in favor of more stable multinational currencies.) It is now anticipated that Treasury yields should continue to drop, according to a spokesperson at Citigroup.

Yesterday, the yield on the 10 year bond hit 4% before it turned back down. Is that a new point of resistance? Let's hope it is, because mortgage rates hit almost 6% on the 30 year fixed before we saw the reversal begin. This morning we are seeing the yield back around 3.8% - a huge drop. It is currently at 3.77%. The best rates on 30 year fixed have also pulled back to as low as 5.375%* for the very strongest of borrowers.

The Feds still are reluctant to comment on whether or not they will resume purchasing bonds to keep yields low. They are still watching to see how the market handles the fluctuations, and how the fluctuations and higher borrowing rates are affecting consumers. We expect to hear more about this after the next FOMC meeting in 2 weeks.

Yesterday we saw the price of oil top $72/barrel - up more than $5 in just a week. We've watched gas prices rise just as quickly. There is now discussion among traders that oil prices could hit $80/barrel by year end. Let's hope not. We're at almost $3 per gallon now. Oil is currently trading at just under $72/barrel.

The eyes of the world, and Wall Street, are on Iran today. Iran is holding presidential elections and are reporting what could be record breaking turn out at the polls. This election could somewhat alter the course of politics in that region. The primary rivals in this election are the current conservative, hard-line, President Ahmadinejad, and reformist Mousavi, who favors more freedom for the people and closer ties with the United States. Election result are expected to be released on Sunday.

The Michigan consumer confidence index released this morning, showed an increase in confidence for the sixth straight month. This index shows us that consumers are beginning to spend again, and is a good signal that perhaps the worst truly is behind us.

The very popular 5/1 ARM loan is doing its coming and going thing. Currently, I see just a few lenders offering this product, with rates, for the most part, significantly lower than the 30 year fixed rate loan. The best rates on this loan, this morning, are at 4.5%*. Again, I feel that I must caution that this loan is not necessarily the best way to finance your property. We should discuss the pros and cons of this type of loan, before you make this decision. It is always important to remember that while 4.5% is a very attractive rate, it is almost certain to rise in 5 years, when this loan becomes adjustable. The Adjustable rate mortgage is a special offer by some lenders when they find investors with an interest in offering this type of financing. When these funds run out, this loan can become unavailable and/or rates for the product being offer can change significantly.

Have a fabulous weekend.

Best regards,


Shelby Bateson
Town & Country Mortgage
10228 SW Capitol Highway
Portland, OR 97219
503-819-6545 phone
1-866-626-2828 fax
Lic # ML-3604
http://www.shelbytncmortgage.com/

* Best rates apply to borrowers with Loan to Value at or below 90% and credit scores of 740+. ** Best FHA rates apply to credit scores of 660 and up. There are upward rate adjustments for lower credit scores on all loan programs. All rates are subject to change without notice. These rates are NOT APRs - do not include closing costs.

Do you want real time Real Estate Trends in your area?

Big news today
Oil topped $70/barrel today, the first time since September 2008. $70 has been a point of resistance, so all eyes are watching to see if that point of resistance will hold, or if oil prices are about to move higher. It is reported that hedge funds are investing heavily in oil futures, as the hedge fund managers, in general, expect the upward movement in prices to become a trend.

10 of the 19 largest banks have gotten the green light to pay back TARP money. The Treasury should start receiving those repayments, with interest beginning this week. The total repayments totals $68 billion! That's a start on paying us back.

Mortgage rates went on another raving upswing yesterday as bond holders continued to dump inventory in anticipation of better prices and rates with the auctions this week. Rates are slightly improved today, but not even back to where they opened yesterday morning. 3 year bonds are being auctioned today, 10 year bonds tomorrow. Let's hope they are well received, so mortgage prices will drop more. We have seen mortgage rates rise a full 100 basis points (1%) in the last 3.5 weeks!

Check out the chart below for a real time look at what's going on in the Real Estate Market in Portland Oregon. If you are interested in a specific city in your part of the world, please let me know and I'll be happy to send you that data. After review, it appears that the city of Portland is pretty average for the entire Portland metro area. Some areas have higher median prices, and of course, some lower, but in general, all areas are looking at 100+ days of inventory (do the math, that's only 3-4 months-which is much improved from the 9+ months we have been seeing and hearing about.)

The trend is definitely turning positive, for now, in the Portland metro area.

Real-time Market Profile for PORTLAND


REPORT DATE: June 07 2009 REPORT LOCATION: PORTLAND,
Real Estate Price Trends
The median single family home price as of June 07 2009 for PORTLAND is $317,138.

Housing Market Conditions
With a Market Action Index as of June 07 2009 at 16.87, PORTLAND is currently a buyer's market.

Home Sales and Demand Trends
The average property in PORTLAND as of June 07 2009 has been on the market for about 101 days.

Price Per Square Foot
The median price per square foot for homes in PORTLAND as of June 07 2009 is about $164.

Homes for Sale
There are about 4,313 properties on the market in PORTLAND as of June 07 2009.

Copyright © 2009 Altos Research LLC. All Rights Reserved.

Enjoy the rest of today.

Shelby Bateson
Town & Country Mortgage
10228 SW Capitol Highway
Portland, OR 97219
503-819-6545 phone
1-866-626-2828 fax
Lic # ML-3604

The stock market is DOWN but mortgage rates are UP?

The stock market is down this morning, approximately 100+ points on the DOW. So, shouldn't mortgage rates be down too? That's the way it used to work, but nothing seems to work the way it used to work anymore.

Currently, the word on the street is that the economy seems to be stabilizing. This is causing many economists and analysts to start talking about inflation again, sparking fears that the Feds will start raising rates again by the end of 2009. The result is that investors are dumping bonds so they are liquid, in case bond prices (which move in the opposite direction of bond yields) start to rise.

Ben Bernanke is experiencing a conundrum - what to do now? If the Feds keep buying bonds, and most specifically mortgage backed bonds, will this create some level of inflation, causing him to have to raise rates to curb inflation? But, if he doesn't resume purchases of mortgage backed bonds, will mortgage rates continue to rise? Right now, the Fed is being very quiet as they watch, and mortgage rates have been on a tear.
Low mortgage rates were helping with stabilizing house values. Buyers were tipping their toes into the market, encouraged by record low rates, lower prices, and for those first time home buyers, the $8000 tax credit. As of today, the buyer has less buying power (due to higher mortgage rates) than he/she had in December 2008 (when housing prices were higher)! This is a conundrum of huge proportions.

Over the last two weeks, we have watched the average rate on the 30 year fixed rate mortgage move from a national average of 4.84% 5.45% this morning. Does this mean that housing prices will have to drop more to keep housing affordable? It is predicted that the Fed probably will not make any adjustments to their Treasury purchase program until after their next meeting June 23-24. This is because they do not want to be perceived as "reacting" to swings in yields, or acting in an arbitrary fashion. But we do know the following:

1. The yield on the 10 year bond rose to as high as 3.90% this morning, before dropping back to 3.8+

2. Government bond yields, consumer rates and price swings are increasing as the Fed fails to say if it will extend the $1.75 trillion policy of buying Treasuries and mortgage bonds through so-called quantitative easing.

3. Higher rates may deepen the two-year housing slump that helped trigger the recession and sideline consumers planning to refinance or buy their first home.

4. The median sale price for a U.S. home dropped in April to $170,000, down 26 percent from a record $230,000 in July 2006, according to the National Association of Realtors.

4. The Mortgage Bankers Association’s index of applications to purchase a home or refinance a loan fell 16 percent to 658.7 in the week ended May 29 as borrowing rates climbed.

5. The Largest holders of Mortgage backed securities, PIMCO and Pacific Investment Management have cut back their holdings of these securities drastically as they watch what the Fed will do in the near future.

6. Mortgage bonds have gained 1.9 percent this year, according to Merrill Lynch & Co.’s Mortgage Master Index. Treasuries have lost 6.2 percent this year, according to another Merrill index, after gaining 14 percent in 2008.


There are economists out there who believe that the rates on mortgage backed securities could drop back down to as low as 2.15% by the end of this year. This would equate to mortgage rates below 5% again.

If you think it would be beneficial to you to refinance at this time, or some time in the near future, again, my best advice to you is to get a mortgage loan application in process and pre-approved, so IF rates drop again, you are in a position to lock in those lower rates. Virtually no one is talking about future rates at 4% anymore. But who knows? It could happen?

I do appreciate your feedback about these newsletters, and of course, your continued business and referrals.
The greatest compliment you can pay me is feedback and referrals.

Best regards,


Shelby Bateson
Town & Country Mortgage
10228 SW Capitol Highway
Portland, OR 97219
503-819-6545 phone
Lic # ML-3604
http://www.shelbytncmortgage.com/


* Best rates apply to borrowers with Loan to Value at or below 90% and credit scores of 740+. ** Best FHA rates apply to credit scores of 660 and up. There are upward rate adjustments for lower credit scores on all loan programs. All rates are subject to change without notice. These rates are NOT APRs - do not include closing costs.