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.