Marc's Mortgage Matter's

January 28th, 2012 9:35 PM

I'm passing this on because it worked for me today...

A doctor on TV said in order to have inner peace we should always finish things we start & we all could use more calm in our lives.

So, I looked around my house to find things I'd started & hadn't finished, so I finished off a bottle of Merlot, a bottle of Chardonnay, a bodle of Jin, a butle of wum, tha mainder of Valiuminun peescriptins, an a boks a chocletz.

Yu haf no idr how fablus I feel rite now. Sned this to all who need inner piss. An telum u luvum!..

In last weeks speech President Obama asked for creation of special unit of federal prosecutors to further investigate mortgage lending practices that led to the housing crisis. "This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans." Soon afterward I received this note: "I guess former Senator Dodd, Barney Frank, Bill Clinton, and Andrew Cuomo had better assemble good teams of attorneys. I don't remember who ran the FDIC for the last 8 years but Shelia Bair and Alan Greenspan might need one too!" Obviously the government's housing ownership push to artificial levels a decade ago is well remembered.

Seriously, there were two quotes that caught the interest of those in our business. The first was, ".....responsible homeowners shouldn't have to sit and wait for the housing market to hit bottom to get some relief. That's why I'm sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low interest rates. No more red tape. No more runaround from the banks. A small fee on the largest financial institutions will ensure that it won't add to the deficit, and will give banks that were rescued by taxpayers a chance to repay a deficit of trust. Let's never forget: millions of Americans who work hard and play by the rules every day deserve a government and a financial system that do the same. Hmm I've heard that one before - or something like it - have we not? ;/   

 

"The FOMC (FEDS) spoke. "The Committee decided today to keep the target range for the federal funds rate at 0 to 1/4 percent and currently anticipates that economic conditions--including low rates of resource utilization and a subdued outlook for inflation over the medium run--are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014. The Committee also decided to continue its program to extend the average maturity of its holdings of securities as announced in September. The Committee is maintaining its existing policies of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. The Committee will regularly review the size and composition of its securities holdings and is prepared to adjust those holdings as appropriate to promote a stronger economic recovery in a context of price stability."

This FOMC announcement turned some heads, especially if overnight rates stay low for 2-3 more years. (Remember - overnight rates are set by the Fed, longer terms rates like mortgages are set by supply, demand and a slew of other daily matters.) Banks must continue to survive in a low rate, low margin environment for an even longer haul - healthy banks will have to learn to subsist off lower earnings and a sub-optimal return on capital. Watch for them to continue to cut expenses and move business units around, especially with the specter of Basel III hanging over the industry. And the consumer can certainly expect to earn near 0% on, or even pay for, their checking accounts.

 

The Federal Reserve kicked off its new strategy of clearer communications at the close of January's Open Market Committee Meeting on Wednesday afternoon. With just a few words, plus some charts, the Fed now expects to keep interest rates "extraordinarily low" for a period up to 18 months longer than the mid-2013 previously in place. Also for the first time, the Fed more officially revealed more explicitly that it will use an inflation target to help control monetary policy.

Armed with this news, and with Fed Chair Bernanke commenting at his news conference afterward that a QE3 is certainly possible sometime this year, markets turned. Mortgage rates were rising somewhat in the early part of the week, goosed by warmer economic news, but reversed course to some degree. Why? If nothing else, it reinforces the idea that the Fed expects the economy to continue to experience sub-par growth which will require additional assistance, and that price pressures are low and will likely remain that way for some time.

The Fed's assessment of the economy over the next few quarters are no doubt darker than the conditions we are experiencing. The effects of a slowdown in Europe have yet to be fully felt here, which may trim exports to a measurable degree, and the economy here is by no means firing on all cylinders and is less able to endure any kind of shock. That being the case, of course the Fed would say that they stand ready to do more, but all the while, its a safe bet that they would rather not. The value of the Fed's previous actions is not nil, but it is limited, as is the Fed's ability to manage issues better done from the fiscal side rather then the monetary. That is to say, low interest rates are great for some things, but they only go so far.

It should be noted that there are those for whom low rates are a problem, like savers, pension funds and others. The longer-term commitment for low rates may force some rates even lower than they already are, which is very close to zero for many short-term accounts. If banks can get 0.25% for parking excess reserves with the Fed, perhaps they might consider time deposits which return something. It's not going to happen, but is a thought.

Arguably, the broad economy is better served by re-igniting and re-inflating housing, and this is the path we are set upon, for at least the foreseeable future. Refinance if you can, purchase a new (or used, or additional) home if you are inclined, but there doesn't seem to be much of a sense of urgency... for the moment. We are perhaps more optimistic than others that the housing market will strengthen in 2012.

In a one-sentence quip in his State of the Union speech, President Obama alluded to a new administration refinance plan. We've read plenty of speculation, but it may be a hybrid plan based upon a streamlined refinance concept detailed in an economic paper revealed last fall, coupled with elements of the FHA Short-Refi concept. It is claimed to be aimed at non-GSE mortgages (jumbos, etc) but there has been no official plan revealed. If it comes, we'll review it and critique as necessary. That's a big "if".

In the meanwhile, we have a full plate of economic data due out next week. We'll be looking for the Fed's Senior Loan Office survey detailing lending standards, ISM reports, worker productivity, the employment report and more. Rates have settled after initially being upset by the Obama announcement, soothed no doubt by the Fed's comforting hand. We would expect that this week's minor blip will be erased and we'll settle back to just about record lows, again.

 

An economics professor at a local college made a statement that he had never failed a single student before, but had recently failed an entire class. That class had insisted that Obama's socialism worked and that no one would be poor and no one would be rich, a great equalizer.
The professor then said, "OK, we will have an experiment in this class on Obama's plan". All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an A.... (substituting grades for dollars - something closer to home and more readily understood by all).
After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy. As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little..
The second test average was a D! No one was happy. When the 3rd test rolled around, the average was an F. As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else. To their great surprise, ALL FAILED and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed. It could not be any simpler than that.
Remember, there IS a test coming up. The 2012 elections.

These are possibly the 5 best sentences you'll ever read and all applicable to this experiment:
1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.
2. What one person receives without working for, another person must work for without receiving.
3. The government cannot give to anybody anything that the government does not first take from somebody else.
4. You cannot multiply wealth by dividing it!
5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.  (Thanks SD!)

A good old Alabama boy won a bass boat in a raffle drawing.
He brought it home and his wife looks at him and says, "What you gonna do with that. There ain't no water deep enough to float a boat within 100 miles of here."
He says, "I won it and I'm a-gonna keep it."
His brother came over to visit several days later. He sees the wife and asks where his brother is.
She says, "He's out there in his bass boat", pointing to the field behind the house.
The brother heads out behind the house and sees his brother in the middle of a big field sitting in a bass boat with a fishing rod in his hand.
He yells out to him, "What are you doin'?"
His brother replies, "I'm fishin'. What does it look like I'm a doin'?"
His brother yells, "It's people like you that give people from Alabama a bad name, makin' everybody think we're stupid. If I could swim, I'd come out there and whip your +++!"

 

 

Posted by Marc (Moshe) Preger on January 28th, 2012 9:35 PMPost a Comment (0)

I just got off the phone with a friend living in North Dakota near the Canadian border.

She said that since early this morning the snow has been nearly waist high and is still falling. The temperature is dropping way below zero and the north wind is increasing to near gale force. Her husband has done nothing but look through the kitchen window and just stare.

She says that if it gets much worse, she may have to let him in.

Wednesday’s Wall Street Journal looked at how one private-equity firm is making a bet on renting out single-family homes acquired through foreclosure. In the coming weeks, federal policy makers could roll out pilot programs to further test the concept. Here’s a look at what’s involved:

What is the government considering?

Government officials solicited more than 4,000 comments from the public last year on potential initiatives that would take foreclosed properties off the market and rent them out. The initiatives are likely to focus only on loans backed by federal entities Fannie Mae, Freddie Mac, and the Federal Housing Administration.

There are two different types of programs that officials are likely to consider. Under the first, the FHA could sell properties in bulk to investors who agree to rent them out. Bulk sales have been rare largely because investors tend to demand deep discounts that sellers haven’t been willing to accept.

A more likely option for Fannie and Freddie, if they move forward with any pilot programs, would be to set up pools of properties in which third-party investors would take a stake. Investors could be responsible for handling maintenance and day-to-day operation of the rental pool, with the mortgage-finance giants sharing in some of the returns.

How many homes are we talking about?

Fannie and Freddie held around 180,000 homes at the end of September, down from around 235,000 one year earlier. The FHA held around 35,000 homes at the end of November, down from 55,000 one year earlier.

The drop figures to be temporary because many loans backed by the FHA have fallen into foreclosure, but banks have been slow in taking back homes after they were caught fabricating documents in order to quickly repossess homes.

Why does the idea of renting out homes have appeal?

Officials like the idea for three reasons. The first is that a backlog of foreclosures estimated in the millions could roll onto housing markets in the coming years. The New York Fed estimates that banks and mortgage companies could take back 1.8 million properties in each of the next two years, up from 1.1 million in 2011 and 600,000 in 2010.

Second, there are signs that home prices of traditional homes are stabilizing in some parts of the country, even as distressed sales drag down property values. The gap between prices of traditional home sales and distressed home sales has widened in recent months. For the year ending in November, home prices were down by 4.3% as measured by real-estate firm CoreLogic. But prices were down by 0.6% when distressed sales are excluded.

Third, this is attractive because rents in many parts of the country are beginning to rise.

What parts of the country could see these types of programs?

In a white paper released by the Federal Reserve last week, officials identified 60 metro areas where federal entities have at least 250 foreclosed properties for sale — a scale that could be large enough to justify a rental program. The largest concentrations of foreclosures held by these entities were in Atlanta, with 5,000 units, followed by Chicago, Detroit, Phoenix, Los Angeles, and Riverside, Calif., which each have between 2,000 and 3,000 units.

While not all of these properties are good candidates for conversion to rental, preliminary estimates from the Fed suggest that around two-fifths of Fannie’s foreclosed properties could generate yields of 8%, which could be enough to warrant renting rather than selling the property.

Why can’t the private sector do this on its own?

Certainly, private investors have been building up operations in the rent-and-hold arena, and it’s possible that these types of rental transactions could happen anyway without any government involvement.

But there are two main obstacles facing investors: financing and scale. Most foreclosure investing has been done by local investors. But these outfits have faced challenges getting financing to buy enough homes to scale up a viable rental model. Institutional investors, meanwhile, have deeper pockets but banks have largely resisted big bulk sales of homes, making it harder for them to assemble big pools of homes.

Will this program have any impact on home prices?

To do so, the program would need to be quite large, and that isn’t likely to happen for some time. Michelle Meyer, an economist at Bank of America, says the proposed programs run the risk of being too small to have much impact.

Economists at Goldman Sachs estimate that moving all foreclosed properties from the for-sale market to the rental market would increase home prices nationally by around 0.5% in the first year and 1% in the second year. Of course, no one is talking here about moving all properties from the for-sale market to the rental market, so this shows the maximum effect of such initiatives. The real effect figures to be far more modest.

 

Report from the trenches: It really is tough to get a loan these days
 

A reader recently emailed me his story on getting a loan on a property. I know first-hand how tough the banks are making it to get a loan, but mine are investment property loans, and they should have more scrutiny. I am always suspect when I hear complaints about the tougher underwriting standards because most people compare today’s standards with the non-existent standards of the bubble. However, hearing stories from very well qualified borrowers having troubles does make me pause and wonder if perhaps we have gone a bit too far tightening standards.

I am writing to provide you with a data point and possibly an idea for a blog entry. We are about to close on a 2/2 condo in Woodbridge, a short sale held by B of A. After several offers back and forth we eventually settled on $296,000 as an all cash deal to B of A. For the size I think the price is still high in historical terms, but it’s a 33% percent haircut off the last sale in 2006, and this is to keep the mother in law from moving in, so worth it to me…… J We are a 2-physician family, enough cash on the sidelines to do a cash deal, zero debt other than the mortgage on our primary residence, 810+ credit scores, etc.

The story gets amusing in late September when our financial advisor suggests applying for a loan since we don’t really want to 100% own this depreciating-asset condominium with Woodbridge carrying costs…. So we submit a modification and a loan app with the bank my wife’s practice banks with. (We figured that we have a good rapport with them- at least we thought we did). We provided them with the litany of documentation requests, and so on. The deal on buying the condo was inked on November 1st or so, so we had until 12/15 to close. I figured 45 days ought to be enough to get a loan together since we’re willing to put down 30+% to ease things along, and they’d had the initial application for a month already by that time . We sent many additional documents to a temp employee at the bank, who midway through the process announced she was leaving. Her replacement waited 9 days before requesting many of the same docs that we’d already sent.

Long story short, on December 14th the bank came back with a loan offer- a 5 year balloon mortgage for $175,000 with over $8300 in origination fees, and a request for at least 40% down. And they hadn’t even submitted the loan application to their underwriters yet. At which point the selling agent advised that B of A was going to start a $100/day penalty for missing the closing deadline. The earliest the bank indicated they’d have a decision is mid-January. So after some quick calculations about long term costs of various options, we just elected to pay cash and tell ‘our’ bank to pound sand. We’re waiting today to hear whether B of A will accept what we’d agreed on in the first place…

All of this is to say either A) ‘our’ bank REALLY doesn’t want to be in the residential mortgage business, B) no one wants to write fixed interest 30 year loans at ~4% interest, C) they’re just incompetent and can’t follow through on a loan application, and/or D) we’re naïve knife-catcher idiots who have been played into doing a cash deal. Or some mix of all of these J

In any case, to me this all begs the question: If a highly qualified buyer can’t get a reasonable loan from a bank they do $10M+ a year of business with, on a condo with 10+ weeks’ advance notice, then who IS getting loans right now? And how much is this contributing to slowing the recovery, as it were? Some food for thought for you. My apologies if you’ve already written about this subject and I’ve missed it.

This buyer did finally close on the deal — all cash. He emailed me a follow up which said the bank charged him $900 for the back HOA fees at closing despite clear language in the contract that he would not be responsible. You have to love the banks. They can’t even follow their own written agreements.

Whether the U.S. or Israel bombs Iran’s nuclear facilities, one way to overthrow Ahmadinejad is to destroy the Iranian economy, and nothing is nearly as destructive as runaway inflation. Inflation in Iran is running at 20% a month (a month!), and since December 1, the Iranian Rial currency has declined 40% against the dollar on the black market. Let’s hope the CIA is flooding Iran with counterfeit currency to further worsen the problem. Economic sanctions seem to be working, and when you get right down to it, the average Iranian probably cares a lot more about taming inflation than whether or not they have a nuclear bomb!

Acquitted murderer, convicted felon, former actor, former sportscaster and former All-Star football player O.J. Simpson is losing his south Florida home to foreclosure.

According to Miami-Dade court records, a JP Morgan Chase process server recently attempted to serve foreclosure papers upon Simpson at his Miami home located at 9450 SW 112 Street, Miami, Fla. 33176.

Having been convicted in 2008 of kidnapping and armed robbery, Simpson is currently serving a 33-year prison sentence at the Lovelock Correctional Center in Nevada. He is not eligible for parole until 2017.

According to Jose Lambiet at GossipExtra.com, JP Morgan Chase initiated the foreclosure process after Simpson accumulated hundreds of thousands of dollars in mortgage debt on his former suburban Miami home.

The now imprisoned felon purchased the one-story house in September, 2000 taking out a $575,000 mortgage for the $522,000 home.

The 4,233 square foot home south of Miami has four bedrooms, four baths, a pool, and a guest house set on a two acre plot.  In 2010, it was assessed by the Miami-Dade County property appraiser at $478,953.

According to GossipExtra.com, Simpson now owes $724,354.15, including principal, interest, attorneys fees and penalties.  Originated through Washington Mutual Bank, the imprisoned Simpson stopped making mortgage payments in 2010.

Though Simpson was found not guilty in 1995 of murdering his ex-wife Nicole Brown and her friend Ron Goldman in a Los Angeles courtroom, he was found liable in a civil action brought by the deceased’s families in 2007.

"Service of process at the property location is standard in a foreclosure action," stated Carlos Reyes, a Fort Lauderdale foreclosure defense attorney.  "Unlike Casey Anthony, most of the world knows that O.J. Simpson is securely locked away in a Nevada prison."

Simpson’s lawyer, Leonardo Starke, is contesting JP Morgan Chase's foreclosure action calling their filing "ambiguous and vague."  Also party to the foreclosure lawsuit is the estate of Ronald Goldman and satellite television provider DirecTv.

According to court records, Simpson recently failed to participate in a Florida Supreme Court mandated Residential Mortgage Foreclosure Mediation Program aimed at saving homes to foreclosure.

Low and stable mortgage rates and a modestly improving economy are starting to produce positive effects on the nation's housing market. While starting from extraordinarily low levels, and though improvement are still of course tenuous, there have been accumulating signs of improvement for months. If the economy can continue to nudge forward for a while longer without some new or already-known catastrophe to derail it, we just might have ourselves a housing market worth talking about when Spring rolls around.

Are we really on a path to housing recovery, finally? Arguably. By no means yet at a breakeven level, let alone healthy, the indicator of builder sentiment from the National Association of Homebuilders continues to rise. The reading of 25 for January was about half the neutral level of 50, but almost double the 13 seen as recently as June. In fact, the overall reading was the highest in four years. Sales of single-family homes, traffic in showrooms and sales offices and expectations for sales over the next six months are all on the rise. Even if there is a long way to go, that we are moving in the right direction is a welcome sign of recovery.

But, with an 8.5% unemployment rate, we have a long way to go to say that labor markets are healed. However, some progress has been made in retreating from the high-water marks of both layoffs and unemployment, and improvements in hiring have been noted in recent months. There is a beneficial loop which occurs when a job is created; it creates spending, which in turn helps a job to be created, and so on. Rising asset prices can also contribute to this, too, as the wealth effect promotes purchases (the reverse is also true, as seen over the past couple of years).

At least a few headlines were made by the 23% increase in mortgage applications reported by the Mortgage Bankers Association of America for the week ending January 13. While of course welcome, our experience is that such a flare is typical for the first full week of January, as some pent-up demand occurs during the busy holiday season. Typically, if interest rates have remained favorable from about Thanksgiving to New Year's Day (and they are certainly all of that at the moment) borrowers finally get a cleared spot on their calendar to execute a transaction. Such application increases probably won't persist, but instead may be replaced with more modest but steady gains in the coming weeks.

Yields on 10-year Treasuries finished last week on a downward note, and rates were at record lows again through into Wednesday morning. However, the reverse is true this week, with Treasuries ending on a high note, and nudging rates off record lows. While some of this increase in underlying costs will probably be absorbed into still-wide spreads, a bit of it may make its way into rates next week, which would mean a further slight move away from record low levels. No real movement, but probably a couple of basis points upward is to be expected, based on where we are at the moment.

The Fed meets next week to discuss policy and communication strategies. It's a two-day affair, finishing on Wednesday. Expect no change to policy, perhaps some more frank discussion about where rates are expected to be going, a more upbeat assessment of the economic situation and a cautiously hopeful tone overall.

Jumbo Loans, specifically to $3 Million can now be done on a case by case - definently worth contacting me if you have something in mind. Yes, you need major income and assets to support it. Only 1 Family properties or condos, owner-occupied or 2nd home/Vacation home in various select states.

 

 

A woman and her 10 year old son were riding in a taxi in downtown USA. It was raining and all the prostitutes were standing under the awnings.
"Mom," said the boy, "what are all these women doing? "
"They're waiting for their husbands to get off work," she replies.
The taxi driver turns around and says, "Geez lady, why don't you tell him the truth? They're hookers, boy! They have sex with men for money."
The little boy's eyes get wide and he says, "Is that true mom?"
His mother, glaring hard at the driver, answers in the affirmative.
After a few minutes, the kid asks, "Mom, what happens to the babies those women have?"
"Most of them become taxi drivers," she said.

Posted by Marc (Moshe) Preger on January 21st, 2012 8:21 PMPost a Comment (0)

The IRS said that taxpayers will have until April 17 to file their 2011 returns, thanks to two quirks of the calendar this year: April 15 falls on a Sunday, and the following day is Emancipation Day, which is observed in the District of Columbia. By federal law, District of Columbia holidays affect tax deadlines the same way federal holidays do, giving taxpayers an extra day - thank you District of Columbia.

 

On January 13, 1955, Chase National Bank merged with The Manhattan Company to form Chase Manhattan Bank. “The” Manhattan Company is correct, as it was originally The Manhattan Water Company.

 

Ron Paul gets attacked for being too isolationist, but do we really need the 865 foreign military bases we currently have? That number does not include the ones we have in Afghanistan. We currently have U.S. military stationed in 150 countries, with a few listed below.

U.S. military

Where they’re stationed

Who we’re protecting them against?

40,178

Japan

North Korea

10,771

Italy

Switzerland?

54,198

Germany

France?

9,436

England

Germany?

1,234

Belgium

France?

433

Netherlands

Denmark?

157

Singapore

Malaysia?

No one has ever heard of it, but Djibouti is home to 334 U.S. soldiers. Maybe we’re there to protect them against neighboring Somalia, which doesn’t really have an army but does have some pirates.

 

This Presentation Has Every Chart You Need To Understand The Global Financial Markets And Economy – Money Game at Business Insider 

WASHINGTON (MarketWatch) — The Treasury Department on Monday said that nearly 910,000 troubled borrowers on the verge of foreclosure have had their mortgages permanently modified to lower payments as part of a White House program -- far short of the original goal.

The program, known as the Home Affordable Modification Program (HAMP) helps struggling homeowners by allowing them to reduce monthly loan payments. Under this plan, the lender voluntarily lowers the interest rate, and the government provides subsidies to the lender.

That number is up from roughly 880,000 permanent modifications as of October, according to the Treasury’s November report.

The Treasury also noted that banks have reduced the principal amount owed by about 36,000 borrowers, as of November 30. These are borrowers with mortgages that are not owned or guaranteed by Fannie Mae and Freddie Mac -- the two government-seized mortgage giants are not participating in a government principal reduction program.

According to the Treasury, The median amount of principal reduced is about $66,000 - or 31% of a homeowner’s previous unpaid principal balance. The three largest servicers, Bank of America Corp. (NYSE:BAC) , J.P. Morgan Chase & Co. (NYSE:JPM)  , and Wells Fargo & Co. (NYSE:WFC)   account for 71% of the principal modifications so far.

The number of permanent modifications is still far short of the 3 to 4 million foreclosures that the White House aimed to stop when it unveiled the program in February, 2009.

Philadelphia Unemployment Project Director John Dodds said that not enough resources are being spent to make borrowers aware that the HAMP program exists and that they could be eligible for it.

“People are being sucked up by the scammers and for-profit housing folks and we think they [Treasury] ought to be putting resources into promoting HAMP so that people know about the program,” Dodds said.

Dodds also argued that the principal reduction program is really just a drop in the bucket and that a more substantial program -- which includes Fannie and Freddie -- is critical to restore the housing market recovery. He noted that an expanded principal reduction program should be focused on borrowers who are employed yet struggling to make payments.

“With principal reduction, fewer houses would go into foreclosure, you would be keeping people in their homes and you don’t have a big surplus of foreclosed houses to be sold, which really dampens the enthusiasm for new construction,” Dodds said. “We need to stabilize those forces so the housing market can recover.”

More principal reduction is likely on the way. Lenders and states attorneys general are also in settlement talks that include billions of dollars in reductions in mortgage principal for distressed homeowners.

Some scary news for Twinkies lovers: After Twinkies owner Interstate Bakeries came out of bankruptcy in 2008, they sold Twinkies to Hostess, and it looked like this wonderful snack would be in good corporate hands. But, sacre blue, Hostess looks like it will now file its own bankruptcy any day now. Maybe Twinkies should be put on some sort of endangered species list so we can be assured of its existence. By the way, try this on your next meat loaf. After getting all the meat and spices blended, fill the tin only half way. Insert one Twinkie and then cover it up with the rest of the meat so that the Twinkie is right in the center. It sort of disintegrates during cooking, but it infuses the entire meal with a novel and delicious taste.

This is something you probably want to do when mom is out of town. Your kids will think you’re the greatest, but you might need to swear them to secrecy.

The death of a family member may bring a barrage of sadness, a bequest of property — and a mortgage to repay.

“It’s like getting a gift with a string,” said Judith D. Grimaldi, a principal of Grimaldi & Yeung, an estate planning law firm in Brooklyn. Thirty-one percent of people 65 and older, in fact, have home mortgages, according to the Census Bureau. “Most of my clients just end up selling the house,” Ms. Grimaldi said, “taking the proceeds and saying, ‘Thank you, Mom.’ ”

But if the beneficiary wants to keep the home, just who is responsible for paying the mortgage until the estate is settled can fall into something of a “gray area,” said Deirdre R. Wheatley-Liss, a tax lawyer at Fein, Such, Kahn & Shepard in Parsippany, N.J.

Under federal law, the mortgage must be allowed to remain in effect without changes when it passes from one person to another because of a death. This negates any due-on-sale clause in the mortgage. Who pays generally depends on the deceased relative’s will, and also who among the survivors has the ability to maintain the mortgage, the experts say.

The will might stipulate, for example, that the heir receive the home, free and clear, Ms. Wheatley-Liss said, which may mean that the executor will be directed to sell stocks, bonds or other assets in the estate to pay off the mortgage. (If there is no will, state law will come into play.)

The survivors, meanwhile, should look at the inheritance of property from a practical, economic perspective. “You need to look very strongly at whether you can afford to maintain the mortgage and maintain the property,” Ms. Wheatley-Liss said.

Although there may be some emotional attachment to the home, having it appraised can help determine whether it’s worth keeping. “The question would always be: ‘Are you protecting equity?’ ” 

An estate lawyer or financial adviser can provide advice on estate taxes and other expenses associated with the property. The survivors should contact the lender early on to let it know that the borrower has died and that they are the heirs, or the executor of the estate, and to determine the loan’s status. Mr. McHugh suggests sending the lender a copy of the death certificate and a letter from the estate’s lawyer.

It is also important to determine whether the deceased relative has stayed current on the property taxes, if they are not paid through the lender.

But what if the mortgage is delinquent — overlooked in a final illness? If the payments are behind by 60 days or so, it is possible to catch up. If it’s 90 or more days late, the property may already be in foreclosure proceedings. Depending on state laws and lender practices, the lender could either demand full payment of all the back payments, or continue with the foreclosure.

Some family members ask about whether they can “walk away” from the property if it is underwater, or worth less than the mortgage balance, Ms. Grimaldi said, noting that such requests are more common in this shaky economy. They can do this and allow the foreclosure to show up as the estate’s responsibility and record, she said. But care is needed if the estate has other assets, like a second home or an investment portfolio, which the lender could come after to satisfy the debt.

In some cases, negotiating with the lender for a short sale on the property may be the best solution. In a short sale, the lender agrees to accept less than what is owed on the mortgage.

If the deceased relative had a reverse mortgage on the property — one that paid him or her a stipend and accrued a balance — the heirs could pay off the mortgage balance in full; sell the property and pay off any balance with the proceeds; or refinance.

Mortgage rates eased a little bit this week, sufficient to produce continued record lows for fixed rate mortgages. The statistical wobble is one we've seen many times over the past 11 weeks, as mortgage interest rates have held fast to a narrow range. In reality, they are little different today than they were a month ago, but the lengthening period of stable and low rates is having a beneficial effect on home sales. 

 

The Federal Reserve's review of regional economic conditions, called the Beige Book for the color of its cover, said that "economic activity expanded at a modest to moderate pace" during the period of late November through December. It was perhaps the most upbeat assessment of the economy in some time, with gains in consumer spending, little or no price pressures, expanding factory activity and more. Real estate markets of course remain "sluggish" with sales of homes still low, but pockets of improvement in multifamily construction and some short-term stabilization of home prices were noted.

 

Where do we go from here? Mortgage rates are mostly wandering around, directionless. With underlying 10yr Treasuries also pretty firm and rangebound at present levels, the small increases and declines in rates are probably due to some investor (or Fed) appetite for MBS in the market. We have noted some mild narrowing of spreads in recent weeks, but even they remain well above the narrowest seen in the past year; mortgage rates moved only slightly downward while Treasuries benefited from strong flight-to-safety purchases during times of economic duress late last year. Even if the blaring headlines have stopped for the most part, those troubles remain with us, with Treasuries retaining strong interest from investors.

As noted in the chart above, mortgage rates started to support home sales to a greater degree once they slipped below the 4.5% threshold or thereabouts. Low and stable mortgage rates are essential to allow for the planning and execution of a home purchase, and the last 10 weeks of near-stasis in rates is an important component of strengthening the housing market in 2012. Next week, we'll get a couple of indicators to help see if we are progressing in that regard, including data from the home builders, on housing starts and existing home sales, plus a few other key indicators. We thought rates might move up a couple of basis points this week, but they decided to move down by a few instead. Should the economic news be largely positive next week, we will probably move off record lows by a couple of basis points.

 

That said, over the next few weeks we will start to see the impact of Congress' decision to raise the cost of the mortgage guarantee fees imposed by Fannie Mae and Freddie Mac. These increase will tend to keep rates firmer than they would otherwise be, increasing interest rates and/or fees consumers will pay by anywhere from an eighth percentage point or more (or increasing the fees to consumers, instead). With rates at or near record lows, it will probably be difficult to find anyone who notices or cares about the increase in cost.

 

 

 

Most of the time a joke is posted here. But sometimes there are some short (about a minute and a half) clever ads out there worth passing along: IfYouAreReadingThis.

 

Posted by Marc (Moshe) Preger on January 14th, 2012 8:45 PMPost a Comment (0)

A woman gets on a bus with her baby.  The bus driver says: "That's the ugliest baby that I've ever seen. Ugh!"
The woman goes to the rear of the bus and sits down, fuming. 
She says to a man next to her: "The driver just insulted me!"
The man says: "You go right up there and tell him off - go ahead, I'll hold your monkey for you."

 

The U.S. Census Bureau projected the Jan. 1, 2012, total United States population at 312,780,968. This would represent an increase of 2,250,129, or 0.7 percent, from New Year's Day 2011. In January 2012, one birth is expected to occur every eight seconds in the United States and one death every 12 seconds. Meanwhile, net international migration is expected to add one person to the U.S. population every 46 seconds in January 2012. The combination of births, deaths, and net international migration result in an increase in the total U.S. population of one person every 17 seconds - something that most "any-business" related people - like to hear.

 

 

There sure was a lot going on this past holiday-shortened week. First off, the Fed sent Congress a little missive on how to fix the housing and mortgage market. Among the ideas is forming a national strategy to facilitate the conversion of foreclosed properties into rentals, allowing banks to rent their repossessed homes rather than forcing lenders to sell them, changing the compensation structure for mortgage servicers, companies that collect payments from borrowers and pursue foreclosures in the event of a default, creating a national online registry of liens to track ownership interests, and altering existing Obama administration policies to allow for more refinancings and mortgage restructurings. These are a few of the twelve ideas - although many of the Fed's proposals either have been considered by policymakers or are under consideration now, the report is the Fed's most comprehensive effort to date to identify the ailments plaguing the US property market and potential solutions for policymakers to consider. Here is a summary. But don't believe everything you read - here is the actual paper. 

 

 

CitiBank told its correspondent clients that, "Under the umbrella of Income Calculation, the calculation of non-reimbursed business expenses has been identified as a top post-purchase defect. The policy that should be followed is, "When a borrower has non-reimbursed business expenses, such as classroom supplies, uniforms, meals, gasoline, auto insurance and/or taxes, a recurring monthly debt obligation should be developed based on a 24-month average of the expenses (from Schedule A and IRS Form 2106 from the tax returns). Automobile depreciation may be netted out. The 24-month average should be deducted from the borrower's stable monthly income. If there is not a full 24-month history, the underwriter should develop an annualized monthly average. Automobile loan payments and automobile lease payments that are included as non-reimbursed expenses on the tax returns may not be deducted from income. They must be included as recurring debts in the total debt ratio."

An interesting twist to have in mind, that most major banks and lenders now automatically do while underwriting ALL mortgage loans.

 

 

Question.docx 

NEW YORK (CNNMoney) -- Delinquent borrowers facing foreclosure are learning that they can stay in their homes for years, as long as they're willing to put up a fight.

Among the tactics: Challenging the bank's actions, waiting to file paperwork right up until the deadline, requesting the lender dig up original paperwork or, in some extreme cases, declaring bankruptcy.

Nationwide, the average time it takes to process a foreclosure -- from the first missed payment to the final foreclosure auction -- has climbed to 674 days from 253 days just four years ago, according to LPS Applied Analytics.

It takes much longer than that in Florida, where the process averages 1,027 days, nearly 3 years. In D.C., foreclosure averages 1,053 days and delinquent borrowers in New York often stay in their homes for an average of 906 days.

And while some borrowers are looking for ways to make good with lenders and get their homes back, many aren't paying a dime. Nearly 40% of homeowners in default have not made a payment in at least two years, according to LPS.

Many of these homeowners are staying in their homes based on a technicality. There is rarely any dispute over whether or not they have stopped paying their mortgage, said David Dunn, a partner at law firm Hogan Lovells in New York, who represents banks and other financial institutions in foreclosure cases.

"In my experience, they never say, 'I'm not delinquent' or 'I want to pay my bill but I'm confused over who to send it to,' or 'Oh my God, you mean I didn't pay my mortgage?' They're not in technical default. They're in default because they're not paying," he said.

Ironically enough, the banks have given delinquent borrowers some of the ammunition they need to delay the foreclosure process. During the "robo-signing" scandal in 2010, it was revealed that bank employees signed paperwork attesting to facts they had no personal knowledge of. Now, borrowers are routinely challenging that paperwork.

A Staten Island, N.Y. man who owed $300,000 on his mortgage and hadn't made a payment in two years, said his attorney used the robo-signing issue to fight his foreclosure.

In his case, the lender's paperwork included many different papers signed by the same employee. The problem was that the signatures didn't match. The judge dismissed the lender's case against the borrower, although it can be re-filed.

"It looks like I'll be in my home for some time to come," said the homeowner, who asked to remain anonymous. He said he is currently not making any payments on his home.

Sometimes just asking the bank to produce the paperwork that shows it is the legal holder of the mortgage note can stall a repossession, said attorney Robert Brown. Since mortgages are often transferred electronically, the official paperwork often gets misplaced.

"My lawyer asked my bank to produce an affidavit that entitled them to foreclose," said a client of Brown's, who lives in Harlem and also asked to remain anonymous. "They couldn't do it."

The case was dismissed, without prejudice, though the lender can try again -- if it finds the paperwork.

In some of the more extreme cases, borrowers will file for bankruptcy in order to block a foreclosure. In these instances, courts order creditors to cease their collection activities immediately. Home auctions can be postponed as the bankruptcy plays out, which can take months.

The ensuing delays are further harming the housing market. People who stay in homes undergoing foreclosure for years often don't maintain the properties, causing blight and lowering property values in the surrounding neighborhoods, said Dunn.

Then there are the court costs that lenders bear, which will eventually be borne by home buyers as lenders increase their borrowing fees to cover the increased risk, Dunn said.

David Berenbaum of the National Community Reinvestment Coalition (NCRC), a community activism group, disputes the contention that owners are gaming the system for free rent and hurting the housing market.

"Most people do everything in their power to maintain these homes," he said. "They take in relatives, get second jobs and even rent out rooms."

What really needs to be done, he said, is for lenders to work harder to find solutions that allow delinquent borrowers who can afford to make reasonable mortgage payments to keep their homes.  

New Bubble May Be Building in 30-Year Mortgages – 

… three separate factors that cause the 30-year fixed-rate mortgages to be a great deal less safe than it is advertised to be, says Edward J. Pinto of the American Enterprise Institute.

1. Its dominance requires permanent government subsidies.
2. It amortizes slowly, exposing homebuyers to years of unnecessary default risk.
3. It was responsible for two taxpayer bailouts in the last 20 years.
… Were government policies to change suddenly and affect interest rates, volatility within the mortgage securities market would be substantial.

1. If mortgage-loan rates went up only from 4 percent to 5.5 percent, the value of these securities would go down by about 6 percent.

2. Given current investment levels, this would result in a $100 billion loss.

3. A larger sudden interest rate hike would necessarily cause larger losses.

Out with the old year, in with the new. After several months of improving economic reports, optimism appears to be growing for the moment that the new year will bring steadily improving economic growth. There will no doubt be challenges both expected and unexpected as 2012 progresses, and probably, some beneficial surprises as well.

Will the housing market be one of them? Could be. Sales of existing homes are nudging higher, builders are building again (at least multifamily stock) and mortgage rates, well, mortgage rates really don't get any lower than they are at the moment and are starting 2012 at approximately 60-year lows. That said, better economic news, should it persist, will tend to bump rates higher as we go.

Aside from fantastic mortgage rates and lots of available low-priced housing stock, the key to a housing market improvement is fewer folks losing jobs and more getting them. In that regard, the end of 2011 points to a hopeful warming trend. Seasonal adjustments aside, over the past five weeks new claims for unemployment assistance have been in their most favorable pattern since March 2011. During the week ending December 31, that trend continued, with 372,000 new applications for benefits filed at state windows. Fewer people losing jobs is a key to re-building shattered consumer confidence as we roll forward.

Announced layoffs tracked by the outplacement firm of Challenger, Gray and Christmas were virtually unchanged in December from November, with 41,785 folks slated to lose jobs at some point. Not all announcements signal immediate firings, and not all will occur here in the US. Nonetheless, the present level is low and has been very steady for the past three months, which is good news overall.

Fewer layoffs are welcome, but perhaps more important is that more unemployed people find new jobs. After a 2011 nadir of just 20,000 new hires in June, job growth has turned more solidly positive, with no month since then sporting fewer than 100,000 new hires. December's figure was expected to improve on November's 100,000 increase by perhaps 50%, but the employment report on Friday was actually 100% higher, closing out 2011 with a sound 200,000 new jobs created. The nation's rate of unemployment eased back to 8.5%, partially driven there by a 50,000 contraction in the nation's workforce.

The Federal Reserve released the minutes of its policy-setting meeting on December 13. The Fed continues to expect that the pace of economic activity would pick up gradually in 2012 and into 2013. While no change in the Fed's present stance came at the meeting, it was decided that the Fed would start to provide additional clarity into FOMC member expectations for interest rates as a part of Fed's regular quarterly Summary of Economic Projections. Each member of the committee will provide their forecasts for the expected level of the Federal Funds rate in the fourth quarter of each year, over the next few calendar years and over a much longer run. This will include participants' current projection of when the first increase of the Federal Funds target rate will occur.

The change is expected to be "...helpful in enhancing the transparency and accountability of monetary policy and in facilitating well-informed decisionmaking by households and businesses..." but there is no way to know exactly how markets will react when presented with such information. If an increase in the Funds rate is on the Fed's horizon, how long will markets wait before demanding higher rates of their own, or will they react on a more immediate basis? Will the Fed still feel able to maneuver to react to emergent items if they have prepared the markets to expect stability? It seems to us that at least this construct of the Fed will take a gradualist approach to policy for some time if they feel such a level of comfort about revealing their intentions far in advance. Of course, we'll need to see how all this plays out, for better or worse.

 

Mortgage rates are at favorable levels, and it would take monumental economic change for better or worse to move them in either direction very much. At the moment, the warmer economic climate here is providing some much-needed distraction from the troubles in Europe, but those issues continue to influence the markets.

Will the good news continue? More clarity should come next week with the release of Retail Sales data for December, consumer borrowing, initial January consumer sentiment readings and a few other indicators. Look for little change in mortgage rates next week, perhaps a couple of basis point upward movement at most. 
 

A couple of New Jersey hunters are out in the woods when one of them falls to the ground. He doesn't seem to be breathing and his eyes are rolled back in his head.
The other guy whips out his cell phone and calls the emergency services. He gasps to the operator: "My friend is dead! What can I do?"
The operator, in a calm soothing voice says: "Just take it easy. I can help. First, let's make sure he's dead." There is a silence, and then a shot is heard.
The guy's voice comes back on the line.
He says: "OK, now what?" 

Posted by Marc (Moshe) Preger on January 7th, 2012 6:31 PMPost a Comment (0)

Dear God -
My prayer for 2012 is for a fat bank account & a thin body.

Please don't mix these up like you did last year.
AMEN! 

Over at Wells Fargo, according to the National Association of Homebuilders/Wells Fargo Housing Market Index (HMI), builder confidence continued to show gains in December, the third consecutive monthly increase and the highest level since May 2010. Starts and permits have also perked up, with single-family starts up 4.6 percent on a year-ago basis in November and permits up 3.6 percent over the same period. "The increases mirror improvement in construction outlays and sales, which have also seen gains in the past few months. While the increases are promising, we do not believe a 'genuine' recovery in housing activity has begun. Indeed, the major obstacles that have troubled the housing market over the past few years still remain intact, including the oversupply of single-family homes and mounting distressed transactions. We expect home prices to come under additional pressure this winter, as more foreclosures come on the market during the seasonally slow sales period. Appraisals are likely to remain conservative for at least the next year, or until the mountain of foreclosures hanging over the market finally clears."

We compiled this list of the world’s worst dictators just before North Korea’s Kim Jong-Il died, but we left him in anyway.

Enslaved nation

Length of dictatorship

Fidel & Raul Castro

Cuba

42 years

Omar al-Bashir

Sudan

22 years

Islam Karimov

Uzbekistan

21 years

Isaias Afewerli

Eritria

20 years

Kim Jong-Il

North Korea

17 years

Bashar al-Assad

Syria

11 years

 
The pictures of North Koreans weeping and wailing at Kim’s death show how propaganda machines can totally distort the truth. Kim starved to death 300,000 of his own people, but he convinced them that they’d be worse off without him. We hope he burns in hell for an eternity, along with Hitler, Stalin, and Mao.

If you're away from your home, and you come back and find that a pipe has burst, and the place is flooding, do you a) fix the leak, or b) raise the roof? I realize that the situation is more complex than that, but the White House plans to ask Congress for an increase in the government's debt ceiling to allow the United States to pay its bills on time. Didn't we just go through this? The approval is expected to go through without a challenge, given that Congress is in recess until later in January and the request is in line with an agreement to keep the U.S. government funded into 2013. The debt is projected to fall within $100 billion of the current cap by December 30, when the United States has $82 billion in interest on its debt and payments such as Social Security coming due. President Barack Obama is expected to ask for authority to increase the borrowing limit by $1.2 trillion, part of the spending authority that was negotiated between Congress and the White House this summer. Under the agreement struck in August during the showdown over the government's debt limit, the cap is automatically raised unless Congress votes to block the debt-ceiling extension.

This was mentioned before, but wanted to mention it again: it seems that PMI will stop being deductible in 2012 unless Congress acts - and they're on recess into January. I received this note from a reader on the west coast: "From my understanding, the PMI deduction will be completely eliminated and will not be available to any taxpayer. This is definitely something I have an issue with, as it next to impossible for a first-time buyer to get a home anywhere without paying PMI, but unfortunately, I don't make the rules. Since there doesn't appear to be any last minute tax battles in Congress like there was last year, I don't foresee this changing at least for the 2012 tax year."

Fannie Mae's chief economist, however, is warning that the United States has a 40% chance of slipping into a double-dip recession in 2012. Recently Doug Duncan predicted a 50% chance of a double-dip recession next year, due to persistently high unemployment and the ongoing housing slump. But an uptick in job growth and stronger automotive and retail sales forced Duncan to revise his dour forecast slightly upward. He does not anticipate the housing market to fully rebound before 2015. And he expects to see plenty of contagion from Europe. One of the major problems is the housing market, he says. In past downturns, home sales have led a recovery, but this time around low interest rates have not pulled mortgage lending or consumer sentiment out of the doldrums. Chronically high unemployment over the next decade and weak income growth will continue to expert pressure on housing prices, he says: "Until employment picks up, you won't see any improvement in housing."

 

Rarely do forecasts come true 100% of the time, however, and there were some from last year that did not. There was no double-dip recession in 2011, and the year is ending on a positive note with the U.S. economy is growing at an estimated 3.5-4% annualized pace in the fourth quarter. The European currency union did not come apart in 2011, although it had a few near-death experiences requiring multiple summits. The 11 countries that hitched their wagon to the common currency in 1999 and the 6 that joined subsequently are still together. About a year ago banking analyst Meredith Whitney's forecast of a large number of municipal defaults failed to materialize, fortunately, with less than $2 billion going into default according to a report from Merrill Lynch. In fact, the U.S. Census Bureau just reported that state and local government tax collections rose 4.1 percent in the third quarter from a year earlier, the eighth consecutive increase.

 

Anyone completing a course in microeconomics would find great difficulty applying what they learned about competition to the home mortgage market. The market meets the major requirement of a competitive market in having many buyers and many sellers, but the benefits associated with competitive markets are conspicuously lacking. Instead of the expected single price that barely covers the sellers’ costs and is available to all buyers, mortgage prices are all over the lot. Some borrowers pay competitive prices, but many pay more.

The inability of borrowers to shop effectively and the complex arena of mortgage loans is exploited by many lenders and originators using a variety of unsavory practices. One popular method that typically screws the borrowe(S) is Low-Ball Scamming. That is the practice of quoting a price to a borrower below the price the lender is actually willing to accept. The purpose is to be selected by borrowers who believe they can shop price. Low-balling is endemic on internet-based referral sites which display price quotes by dozens or hundreds of lenders. Rate shoppers beware!

IF your New Year’s resolutions include buying a house or refinancing, the Federal Reserve has you covered. It has committed to keep long-term interest rates low through next year, so a 30-year mortgage will be pegged about where it is now — 4.32 percent in New York — at least through spring, said Frank E. Nothaft, the chief economist at Freddie Mac.

Rates are very much at the bottom, and they may start inching up in the second half of the year. If you’re planning to refinance, do it sooner rather than later.

In order to cash in fully on some of the lowest interest rates ever recorded, buyers and owners need to start taking steps now, experts say. Rather than look for a house you really want, they suggest first finding out how much money you can afford to borrow, and what you can do in the next three to six months to improve your creditworthiness.

Sometimes it takes a few extra months to get your ducks in a row, particularly if there are mistakes or blemishes on your credit report. If your score is below 700, your mortgage interest rate could be a quarter to a half percentage point higher than for those with stronger scores, experts say.

Start by ordering copies of your credit reports and reviewing them for inaccuracies or disputes. Experts suggest doing this a few months in advance, if possible, to give yourself ample time to fix any issues, like an inadvertently missed payment or an address error.

Do not close any credit accounts now; doing so can reduce your score by as much as 60 points, banks like to see two to four accounts in the applicant’s name.

Once your credit score is established, identify a mortgage banker or broker whom you may want to work with. Ask friends, people in your religious or social circles, for recommendations. Someone that is highly recommended by such circles typically result in the most favorable outcome from beginnning to end.

Determine what your down payment and other out-of-pocket costs will be as you figure out what you can afford to buy. Use a mortgage calculator, or ask the mortgage officer to give you a range that would be comfortable.

Closing costs may be more difficult to estimate because they usually include prepaid real estate taxes and various fees for title insurance, mortgage taxes and more. Total closing costs in 2010 on a $200,000 mortgage were $3,843 in Connecticut and $6,183 in New York state, according to research by Bankrate.com in June.

Those figures exclude association fees, prepaid items and state taxes, which in New York City and five Boros can run 1.9 percent of the loan value for the mortgage recording tax.

It is a good idea to discuss your plan to buy a home with a financial planner or accountant. Your tax adviser may be able to guide you on tax deductions and decisions for your 2011 return. Some mortgages, including those offered by the Federal Housing Administration and those made to self-employed individuals, require two years of tax returns.

In those cases, taxpayers may want to be “a little less aggressive” with deductions so the income figure looks stronger.

Finally, keep an eye on those interest rates. We expect the 30-year fixed mortgage rate to end the year “well below 5 percent” — which could still mean a 0.75-point increase a year from now. 

Note: I tend to agree with all this relevant information here, and will simply add that you can contact me direct, and I will likely be able to assist you in advising what measures are needed to finance a new home or what needs to be done and addressed to down the road purchase a new home or/and refinance your existing mortgage.

Amidst other notable items -- crashing markets and tremendous natural disasters among them -- 2011 might also become known as "the year of record low mortgage rates". Not since the early 1950s -- perhaps beyond -- have mortgage rates plumbed these depths.

We begin 2012 with fixed interest rates almost a full percentage point below where we began 2011, at levels which not only promote affordability and refinance opportunities, but also at ones which are starting to warm up the housing market. Housing has been a drag on the economy for several years now; forecasts call for continued pressure on home prices in 2012, but that's to the benefit of potential homebuyers, if a detriment to sellers.

Mortgage rates should continue to be a strong support for housing, even if they don't set new records repeatedly in the coming year.

Next week is again a holiday-shortened affair, but unlike this week, is crammed full of fresh economic data. Auto sales, the aforementioned ISM and employment report, construction spending and more are due. Rates seem likely to start the week low but firm a little toward the end, perhaps, especially if the ISM and employment report are a little warmer than forecast. We will likely see a few basis point upward bias at best.

Here's wishing all associates, customers and friends a happy, healthy and prosperous 2012. 

A man had just settled into his seat next to the window on the plane when another man sat down in the aisle seat and put his black Labrador Retriever in the middle seat next to the man.
The first man looked very quizzically at the dog and asked why the dog was allowed on the plane.
The second man explained that he was from the Police Drugs Enforcement Agency and that the dog was a 'sniffing dog'.
"His name is Sniffer and he's the best there is. I'll show you once we get airborne, when I put him to work."
The plane took off, and once it has leveled out, the Policeman said, "Watch this."
He told Sniffer to 'search'.
Sniffer jumped down, walked along the aisle, and finally sat very purposefully next to a woman for several seconds.
Sniffer then returned to his seat and put one paw on the policeman's arm.
The Policeman said, 'Good boy', and he turned to the man and said, "That woman is in possession of marijuana, I'm making a note of her seat number and the authorities will apprehend her when we land."
"Gee, that's pretty good," replied the first man.
Once again, the Policeman sent Sniffer to search the aisles.
The Lab sniffed about, sat down beside a man for a few seconds, returned to its seat, and this time he placed two paws on the agent's arm.
The Policeman said, "That man is carrying cocaine, so again, I'm making a note of his seat number for the police."
"I like it!" said his seat mate.
The Policeman then told Sniffer to 'search' again.
Sniffer walked up and down the aisles for a little while, sat down for a moment, and then came racing back to the agent, jumped into the middle seat and proceeded to defecate all over the place.
The first man was really disgusted by this behavior and couldn't figure out how or why a well-trained dog would behave like that. So he asked the Policeman, "What's going on?"
The Policeman nervously replied, "He's just found a bomb."

Posted by Marc (Moshe) Preger on December 31st, 2011 7:12 PMPost a Comment (0)
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