Recommendation: Float, but float with caution!
Contact me for a rate quote!
With no reports on the Economic Calendar today, the bond market is holding stead
y which means interest rates are holding. The Big News is scheduled for Wednesday (October 31st) as we all await the Feds next move; whether to cut rates or not. Also up on the Economic Calendar we have: the quarterly Employment Cost Index, Core Personal Consumption Expenditure (PCE).
Did you know...
Today is "Black Tuesday!" 78 years ago today, October 29, 1929, the Stock Market crashed have lost approximately 60% of its value. Soon thereafter came the Great Depression. Unemployment rates sored to historic highs of 25%. So if you think the Real Estate Market isn't doing so well, just think how bad things were back then.
Pasadena Mortgage Rates Report - October 29, 2007
2 comments • Ricardo Bueno • October 29 2007 04:59PMPasadena Mortgage Rates Report - October 25, 2007
Stocks traded higher today on strength in from players like Countrywide and Microsoft.
Countrywide did report negative earnings however not as low as "the Street" wa expecting. What's more, they did show signs of an optimistic future.
This is significant because when Stocks move higher, it comes at the expense of Bonds being sold (and vice versa). What we want to see, is Stocks selling off and moving lower because this means Bonds prices are improving and so are our rate sheets!
At closing bell this week, we're still holding to our gains from the increase in Bond prices earlier this week.
Contact me for a rate quote!
Less important is news in the Stock Market and probably more important is the big news item coming out next week on Wednesday. Do you know what it is? That's right...the next Federal Open Market Committee meeting which comes once every six weeks. We're expecting another Fed Funds Rate cut at this point; estimated at 25 basis points (.25%).
Recommendation: last months Fed Funds Rate cut helped bonds initially but Bond prices were eventually pushed lower. What we're going to do now is float, but float cautiously! If prices move any lower we'll quickly recommend you lock. So check back and check back often.
4 comments • Ricardo Bueno • October 26 2007 08:25PMMerrill Lynch Suffers After $7.9 Billion Write Down
In a recent article from Market Watch:
"Merrill shares fell almost 8% to a near two-year low of $62.
'It turned out our assessment of the potential risk and mitigation strategies were inadequate,' O'Neal said. 'I am accountable for the mistakes as I am accountable for the performance of the firm overall and my job, our job, the leadership team's job is to address where we went wrong, what changes were necessary to make sure we respond to changes early, correctly and in every asset class at every stage of market's evolution,' O'Neal said.
Ratings agencies Fitch, Moody's and Standard & Poor's all downgraded the firm's credit ratings following the report.
The company reported a loss of $2.24 billion, or $2.82 a share, compared with a year-earlier profit of $3.05 billion, or $3.17 a share.
Merrill Lynch had previously calculated their write down at approximately $4.5 billion of subprime and collateralized debt obligations (CDOs) on October 5th. Collateralized debt obligations are pools of loans, often times mortgages. Merrill Lynch's write down of $7.9 billion today clearly exceeded expectations. Given that the trading market for derivatives such as CDOs has come to a screeching halt since August of 2007, this quickly downgraded the company's credit ratings.'These losses are relatively larger than those reported previously by other broker dealers and universal banks that have already reported,' DBRS analysts said in a report Wednesday. 'Merrill appears to have been much more exposed in its securitization businesses.' Merrill holds the leading position in CDO securitization."
Since we don't expect to return to the easy financing market of prior years and our credit problems are far from over, it kind of makes you wonder how firms are calculating/estimating their mortgage write downs.
7 comments • Ricardo Bueno • October 24 2007 11:46PMPasadena Mortgage Rates Report - October 24, 2007
To all of my Southern California friends, family and colleagues affected by the fires, please know that my thoughts & prayers go out to you! You have friends and family here and everywhere to support you! With an Active Rain Network 54,000+ members strong, you have a tremendous amount of support!
Here's an Active Rain blogroll tracking some of the activity...
Safe in SoCal...for now. by Brian Brady
California Fire Active Rain Roll Call by Marlene Bridges
CALIFORNIA FIRES - MEMBERS IN JEOPARDY by Laurie Manny
Southern California Fires - Day Four by Tom Plant
Sunday Morning - My Old Home Burned Up (Fire Updates) by Kathy McGraw
On to the Industry Report...
Existing Home Sales: are looking ugly for the month of September.
Unsold inventory spiked to a 10.5 month supply
Median home price dropped by 4.2% year over year to $211,000
California and Florida are designated as the biggest problem areas as they have also enjoyed some of the more larger gains in the most recent years.
It's anticipated that much like the housing decline in the early 90's, a full recovery will most likely be achieved in years rather than just months.
Stocks have been under selling pressure this morning...
4 comments • Ricardo Bueno • October 24 2007 03:58PMCountrywide Financial Corp. & Neighborhood Assistance Corp. Team Up!
Well, it's official... In a Dow Jones Newswire:
"Countrywide Financial Corp. (CFC) confirmed late Tuesday that it entered into an agreement with the Neighborhood Assistance Corp. of America to help borrowers preserve homeownership and avoid foreclosure...
Under the program, homeowners have a 'waterfall' of options, from a payment plan, to modification, to refinancing and finally to restructuring. Homeowners will be able to achieve a mortgage program that provides a payment they can afford over the long-term."
Countrywide is scheduled to speak further on the matter at a news conference this Wednesday (October 24th) at 2:00p.m. so check back in later for more.
With much pressure raining on the industry for improved efforts to help borrowers, the move appears to be a step in the right direction IF executed properly!
Let's look at this article from Yahoo Finance: Lenders Slow to Rescue Failing Mortgages
"As defaults and foreclosures snowball, the mortgage industry is under increasing pressure to do even more to help financially strapped borrowers hang on to their homes.
'People are talking about it, saying it might be necessary, but there's not a lot of it going on,' said Guy Cecala, publisher of Inside Mortgage Finance, an independent trade publication...
Moody's Investors Service recently surveyed 16 mortgage servicers that accounted for 80 percent of the market for subprime loans made to borrowers with shaky credit histories.
It found that most of those companies had modified only about 1 percent of loans with interest rates that reset in the first half of this year."
One would surmise that this move by Countrywide is a step in the right direction. BUT...is it simply all media fluff? Can we REALLY help home owners refinance out of their existing home mortgage into a new one? What about pre-payment penalties? Will they be waived? What about homes with no equity? How willing are you to modify a loan?
We'll find out more in due time.
8 comments • Ricardo Bueno • October 24 2007 01:40AMIt was "an accident waiting to happen:" scolds Alan Greenspan
Amidst the the ever so popular credit crisis "blame game" our former Fed Chairman, Alan Greenspan shares his insights with new Chairman Ben Bernanke...
From Reuters: Crisis Was "Accident Waiting to Happen:" Greenspan
"The financial crisis that erupted on August 9 was an accident waiting to happen," Greenspan said in a speech on the sidelines of the International Monetary Fund and World Bank meetings. "Credit spreads across all global asset classes had become suppressed to clearly unsustainable levels."
"Something had to give." (Reuters)
I remember the date like it was yesterday! One week you had proud Fed Chairman Ben Bernanke proclaiming to the world that the credit crisis is confined to the Subprime market...and the following Monday you have American Home Mortgage filing for Chapter 11 bankruptcy! Whoops!!!
Like the shot heard around the world, investors fled the bond market not wanting anything to do with less than perfect credit.
(Photo by REUTERS/James Reed)
Since then...
The Lender death toll is currently at 173 per the Mortgage Implode-O-Meter.
In order to help ease the credit markets, the Fed has...
The question raining on everyone's mind now is whether or not the Fed will once again cut the Fed Funds Rate on Halloween!
While advocates like Jim Cramer are screaming "cut rates...Cut Rates....CUT RATES!!!"
The Fed might be a bit more conservative with only a 25 basis point cut, if at all.
And others have proposed...
$80 Billion Dollar Fund to Revive Asset-Backed Commercial Market - Proposed by Citigroup, Bank of America, JPMorgan and Wachovia
Only to have Greenspan Issue A Sharp WARNING On the Superfund!
At the end of the day, one thing is for sure about the outlook ahead...
The turmoils in the credit market have created price elasticities for certain markets... Homes sit stale on the market because borrowers don't qualify and are therefore resigned to a reduction in price. The higher-end markets are a bit more inelastic to the turmoil because here you often have a down-payment buyer with excellent credit.
Either way, if you're a buyer and are wondering about the market, here are some facts:
Pin the Tail On the Bottom of the Market by Tracey Thomas
The HOME POSSIBLE Financing Program
Weekly Mortgage Update - October 22nd - Long-term mortgage rates held steady in light of mixed economic reports. As you can see however, short-term rates have rallied downward as the bond market has improved through increased demand. We can expect yet lower interest rates today but we'll be monitoring the market closely as earnings and credit reports will continue to influence the market.
10 comments • Ricardo Bueno • October 23 2007 07:46PMSouthern CA Wild Fires & the Importance of Property Coverage
I'm sure most of you followed the news coverage on Sunday with respect to the Malibu and Canyon Country wild fires. Here are some of the headlines...
In a recent article from the Los Angeles Times: Winds Drive Southland Wildfires
"Thousands of Southern California homes could be at risk in coming days as powerful Santa Ana winds continue to stoke wildfires, fire officials said."
In another article from ABC News:
"A huge fire being driven by strong desert winds has forced the evacuation of hundreds of homes in Malibu, California.
So far it has scorched 400 hectares in the upscale Malibu neighbourhood, home to stars like Olivia Newton-John, Mel Gibson and Barbra Streisand."
I point these headlines out because they emphasize the importance of having adequate property coverage as well as coverage for your personal belongings! At this point I'd like to welcome Terri Habecker from Farmers Insurance Group and Exchanges. An active contributor of the Active Rain Real Estate Network, Terri is well versed in all things insurance and Real Estate!
To find out more about Terri you can visit her website at www.farmersagent.com/thabecker/
Or you can contact Terri directly at (949) 254-9511
Interview:
Q. Terri, what message can we take away from these fires?
A. The most important message regarding fire is to make sure you have adequet coverage on your home and personal belongings. You want to consider the following...
Do you have adequate coverage in your policy to live while your home is being re-built or repaired?
A good rule of thumb is to look at your coverage and multiply your square footage by 150.00 a square foot.
What do you need to do to rebuild in your City?
Farmers replaces up to 125% of your residence plus Building code requirements if you have at least 80% of coverage on your residence. As far as Landlord polcy- make sure you add building code replacement, have your tenants purchase their own Fire policy for their contents. Make sure your policy has coverage if your tenant starts a fire and you are covered for loss of rent.
Does your HOA have proper coverage? Check it out. If you own a townhome or Condo, coverage is available for loss of use, contents.
Q. What can home owners do to be better prepared?
A. Always be prepared for a fire. Living in Southern California, you never know when you may not even get home to retrieve your belongings with road closures. Get a Fire Safe for your documents. I used to have about 40 large family photos on the wall. When we were close to evacuation, the photos were the most important belonging I could think of. We were lucky and after the close call, I took all the photos off the wall and placed them in albums. Now, we can put and keep our photos on CD's!
Take a home Inventory, pictures and if you have a Farmers Agent, ask them to give you a copy of home inventory software. Keep the software with you or in your fire safe. Keep a fire break around your home of a minimum of 100 feet. No uncleared brush or fuel that can burn.
Have the Fire Department come and access your home. Plan and practice a safe evacuation in case of emergency with your family. Don't forget your pets. Many pets are lost in emergency situations. Keep plenty of water available and have a micro chip placed in your dogs and cats. These microchips are checked at the Shelters. Don't just rely on a collar.
A solid plan and proper coverage on your home and property can make the difference betwen having the money to rebuild and having to move in with relatives or friends.
This is just some information to help home owners assess their current situation. For further questions, you can always reach Terri Habecker at her office: (949) 254-9511
Mortgage Advisor
323.810.2175
www.ricardobueno.com | Blog: www.industry-report.com
2 comments • Ricardo Bueno • October 22 2007 12:34PMWeekly Mortgage Update ~ Oct. 22nd: Lock or Float & the Week Ahead
Let's Recap:The 30-Year Fixed Rate Mortgage averaged 6.40%, having remained the same since last week.
The 15-Year Fixed Rate Mortgage averaged 6.08%, up from 6.06% just last week.
The 1-Year Adjustable Rate Mortgage averaged 5.76%, up from 5.73% just last week.
Fannie Mae 30-Year Fixed (60) Sixty Day Average is at 6.19%.
Fannie Mae 30-Year Fixed (30) Thirty Day Average is at 6.16%.
Long-term mortgage rates held steady in light of mixed economic reports. As you can see however, short-term rates have rallied downward as the bond market has improved through increased demand. We can expect yet lower interest rates today but we'll be monitoring the market closely as earnings and credit reports will continue to influence the market.
Mortgage Rates Report:
Be sure to visit our new section titled Daily Mortgage Rates Report for a view of current interest rates trends. Don't play the guessing game and don't let yourself be seduced by low-ball offers. Instead, make a financial decision based on guided, real-time market research!
Mortgage Rates Report - October 19, 2007
Mortgage Rates Report - October 18, 2007
Mortgage Rates Report - October 17, 2007
The Fed Funds Rate:
The next scheduled meeting is October 31st at which point we expect the Fed to hold the Fed Funds Rate steady at 4.75%.
The Fed Funds Rate was cut the first time around in an effort to loosen the credit markets and help economic expansion. Amidst a somewhat improved credit market, it does not appear the Fed will...
0 comments • Ricardo Bueno • October 22 2007 08:48AMActualización Semanal De la Hipoteca ~ El 22 De Octubre Del 2007
Recapitulemos:La hipoteca de tarifa fija de 30 años hizo un promedio de 6.40%, siguiendo siendo igual desde la semana pasada.
La hipoteca de tarifa fija de 15 años hizo un promedio de 6.08%, encima a partir de la semana pasada justa 6.06%.
La hipoteca de tarifa ajustable de 1 año hizo un promedio de 5.76%, encima a partir de la semana pasada justa 5.73%.
La hipoteca de tarifa fija de 30 años de Fannie Mae de (60) sesenta días está en 6.19%.
La hipoteca de tarifa fija de 30 años de Fannie Mae de Fannie Mae de (30) treinta dias está en 6.16%.
Las tarifas de hipoteca a largo plazo sostuvieron constantemente por medio de informes económicos mezclados.
Informe De las Tarifas De Hipoteca:
Sea seguro visitar nuestra nueva sección titulada informe diario de las tarifas de hipoteca para una vista de las tendencias actuales de los tipos de interés. No juegue el juego que conjetura y no se deje ser seducido por ofertas de la bajo-bola. ¡En lugar, tome una decisión financiera basada en estudio de mercados dirigido, en tiempo real!
Informe De Las Tarifas De Hipoteca - De Octubre El 19 De 2007
Informe De Las Tarifas De Hipoteca - De Octubre El 18 De 2007
Informe De Las Tarifas De Hipoteca - De Octubre El 17 De 2007
La Tarifa De Fondos Del Fed:
La reunión programar siguiente es de octubre el 31 en qué punto esperamos que el fed lleve a cabo la tarifa de fondos del fed constante en 4.75%.
0 comments • Ricardo Bueno • October 22 2007 08:46AMAlan Greenspan Warns Against Superfund!!!
In a recent Emerging Markets article: Greenspan Delivers Sharp Warning On SuperFund
Former Federal Reserve chairman Alan Greenspan has warned that plans announced this week to launch a so-called “super fund” – a dramatic attempt by major investment banks to ease the crisis facing credit markets – could have dire repercussions...
“It’s not clear to me that the benefits exceed the risks,” Greenspan said. “The experiences I’ve had...
10 comments • Ricardo Bueno • October 20 2007 02:03PMContent © 2009 'Frequent Contributors'. Design © 2009 ActiveRain Corp.
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