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.

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 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.

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/