Marc's Mortgage Matter's

The economy is so bad that Angelina Jolie adopted a child from America. The economy is so bad they renamed Wall Street " WalMart Street". The humorous list goes on, but one person who probably isn't smiling much is Rebecca J. Domecillo, of Lake Saint Louis, MO, who was sentenced to over two years in prison for her role in a mortgage fraud scheme. Domecillo was associated with both Network Ventures and Premier Mortgage Funding. She pled guilty to mail fraud, to preparing phony loan applications for 'straw buyers" to purchase nine properties in the St. Louis area, obtaining inflated appraisals of the properties, arranged for their sale at inflated prices, and then stripped the inflated amount out of the transaction through phony invoices payable to companies she controlled.

Today is a memorable day. If I had a day planner, I would make a note of it. Because today, I didn't find any house price indices in the news! Honestly, between RealtyTrac, Zillow, S&P/Case-Shiller, CoreLogic, Freddie Mac, NAHB, Fannie Mae, RE/MAX, NAR, DataQuick, not to mention all the local realty indices and my own collection of open house flyers, I have grown numb to whatever price direction housing is going. Prices are measured by part of the nation, state, county, by similar properties that sold last year, versus last quarter, within the same city - my head spins just thinking about it. And the press latches on to whatever report just came out. I need a roof over my head, I will need one until I die (except for when I'm camping), and does it really matter to me if prices are up 2% or down 2% versus a month ago or a year ago? Okay, I'm done with the ranting.... especially after I realized that later this month we have New Home Sales coming out, again.

After a Summer of almost steady decline, mortgage rates have mostly plateaued as the season comes to a close. During the period, rates moved down by a little better than one-third of percentage point, frequenting new lows regularly. That said, the vast majority of the decline in mortgage rates took place early in the season, and the last six weeks have found a very narrow range in which to wander.

Provided the economy gets no worse, and there is no return of financial panic, mortgage rates don't really have much place to go.

Discussions about outright widespread price declines -- deflation -- and what the administration and Federal Reserve responses might be to such a situation have been in the news at times over the past few months. The latest news on price pressures didn't suggest any imminent problem which needs addressing, but did suggest that inflation does remain quite muted.

It would seem that the economic setback of the Summer has passed, leaving it its wake a rather higher mountain to climb to get us back to full employment and a robust economy. Forthcoming elections and possibly looming tax increases shortly thereafter only adds to the steepness of the incline we will need to travel.

Next week, the Federal Reserve meets again to discuss monetary policy and consider what steps, if any, need to be taken to try to push the economy in the right direction more strongly. No policy action is expected, since the short-term interest rates the Fed directly controls are near zero percent already. Still, participants will have plenty to discuss. For our part, we'll be keenly eyeing the NAHB index and both new and existing home sales, which are likely to be poor yet again. Since the expiration of the last homebuying tax incentive, conditions have been very weak. Although reportedly not in the cards, we think that another homebuyer tax credit should be on the table, but rather different than the programs previously offered.

Rates seem likely to continue to wander aimlessly next week. Still a great time to lock, do a loan or buy a boat!

A loan agent and a priest both died and went to Heaven at the same time. They get to the pearly gates where Pope St. Peter greets them. He motions to the priest, and they both hop in a jeep and go out the back door. There are about 50 acres of rolling hills with a little cottage on the knoll.
St. Peter turns to the priest and says "This will be yours for eternity. A perfect little cottage, right next to lovely pond, a lush little garden, and a library full of books."
The priest says, "Thank you so much. This I shall enjoy!"

St. Peter drops off the priest, goes back to the pearly gates and motions to the loan agent.
They hop in a stretch limo and go out the front door. There are about 500 acres of land, with mountains and lakes and rivers. There is a huge 200-room castle on one of the mountains, and a wishing well that makes wishes come true. St. Peter says "This will be yours for eternity. You can live in that castle with servants to wait on you hand and foot, and you can have everything you want."
The broker looks at St. Peter and says "Well, now, don't think I'm not grateful, but why am I getting so much more than the priest?"
St. Peter just laughs and says, "You brought more souls to Heaven! When the priest preached, everyone fell asleep. But when you talking about locking in rates, people prayed!"