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.

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/

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