Insure an On-Time Closing

Mortgage Loan Time Line

We are seeing a surge in mortgage applications with interest rates at rock-bottom lows and housing at incredible values (see sidebar below for today's rates).  The lending industry is working within tight constraints to ensure on-time closings. Having your "docs" in a row will insure your application is at the top of the pile and gets processed and closed quickly and painlessly!

 Key pieces to keep in consideration

In order to begin processing and underwriting the following items need to be in your file:

1) Complete loan application and signed loan docs -- Yes docs must be signed and returned (Hedges Mortgage Group uses Docusign to make this step quick and easy!)

2) All required support documentation, including:

• Income verification—pay stub, tax returns, W2s 

• Verified funds to close—Most recent bank statement(s); all numbered pages with balance to cover funds to close for downpayment and closing costs and required reserves. If you are using a gift or 401K for this be sure you have it lined up and ready to validate.

• Copy of Driver’s license

• Ratified contract

• Authorization to order appraisal

Each loan will also have special documentation that is unique to a borrower, pre-approval helps you know which other documents you will also need, such as:

• Landlord contact (for renters),
• Purchase agreement and/or final HUD 1 (for current homeowners)
• Separation agreement, divorce decree, or free trader agreement
• Proof of VA eligibility
• POA
• Proof of student loan deferment
• For rehab or NC Housing loans we will also need additional specialized documents  

PROCESSING STARTS HERE—PLAN YOUR CLOSING 30 DAYS AFTER ALL DOCUMENTS HAVE BEEN SUBMITTED AND YOU WON’T MISS A CLOSING DATE*

*If the loan is a rehab, is going to NC Housing or USDA, it will need complete underwriter approval before submission and may be subject to additional conditions. Allow an extra two weeks.
Expect a 45 day closing  for REHAB,  USDA or NCHFA.

We can pre-underwrite for credit and assets prior to going under contract, in which case we need all of the above with the exception of the ratified contract and appraisal. This is the best way to make everything move quickly once going under contract.

If it takes two weeks to get the last support documentation or authorization for the appraisal, please know this can delay our closing by this amount of time if we are working on a 30 day timeline.

Give us a call, we are here to make your loan close smoothly and ON TIME!
919 961-6915

Market Update --For the week of June 4, 2012 – Vol. 10, Issue 23

QUOTE OF THE WEEK..."What we see depends mainly on what we look for." --John Lubbock, British banker, politician, naturalist and archaeologist

INFO THAT HITS US WHERE WE LIVE... Those looking for healing in the housing market needed to see past April's 5.5% dip in Pending Home Sales and focus on the 14.4% gain in the index compared to a year ago. The small drop ended a three month run of monthly gains, but we've now had annual gains for 12 months straight! The National Association of Realtors' chief economist stated, "Housing market activity has clearly broken out at notably higher levels and is on track to see the best performance since 2007."

The S&P/Case-Shiller home price index for the 20 biggest metros, was up 0.1% (seasonally adjusted) in March, offering more evidence of a real-estate market on the mend. The annual rate of change declined in only three of 20 metros. The chairman of the Index Committee at S&P said, "This is what we need for a sustained recovery: monthly increases coupled with improving annual rates of change."

BUSINESS TIP OF THE WEEK... You want to be there when folks are ready to buy. Build trustful relationships by sharing valuable information with prospects. People buy from people they know, like and trust.

>> Review of Last Week

BAD JOBS... Friday's jobs report showed a meager growth in payrolls during May. This sent investors on a selling spree that resulted in the stock market's worst day in 6 months and wiped out the Dow's entire gain for the year. One of the worst US employment reports of the past year revealed a gain of just 69,000 nonfarm payrolls and the unemployment rate back up to 8.2%. Even worse, downward revisions to the March/April jobs reports meant overall payrolls were up by only 20,000 jobs.

Other economic disappointments included a drop in Consumer Confidence and a downward revision of Q1 GDP to an anemic 1.9% growth rate. Weekly initial jobless claims went up to 383,000, while the ISM Manufacturing index dropped, though it stayed in expansion territory, a good thing. Other positive signs included a 0.2% gain in personal income for April and inflation still under control, with Core PCE up just 0.1%.

For the week, the Dow ended down 2.7%, at 12119; the S&P 500 closed down 3.0%, to 1278; and the Nasdaq ended down 3.2%, to 2747.

Weak data from China, Europe and the U.S. rekindled fears of a global slowdown. The consequent flight to safety pushed bond prices up and sent yields tumbling to record lows. The FNMA 3.5% bond we watch finished the week UP 1.00, at $105.11. With mortgage bond prices gaining, mortgage rates sank to new lows in Freddie Mac's weekly survey. The national average 30-year fixed mortgage rate hit an all-time trough for the fifth straight week.

DID YOU KNOW?... A consumer reporting agency, or credit bureau, collects information about the creditworthiness of individuals to create a credit score and report. Lenders buy these reports to help them decide how much credit to extend to a borrower.

>> This Week’s Forecast

READS ON THE SERVICES SECTOR, TRADE BALANCE, PLUS SOME FED VIEWS... It's a quiet week for economic data, but there will be a read on the services sector of the economy, accounting for well over 80% of our jobs. Tuesday's ISM Services is forecast down slightly for May, but still over 50, showing continued, if slow, growth. Friday, the Trade Balance for April is expected to shrink a bit from the blowout level it achieved in March.

The Fed's Beige Book will share anecdotal views of the economy from Fed regions around the country. Could offer some useful views, you never can tell.

>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of Jun 4 – Jun 8

Date Time (ET) Release For Consensus Prior Impact

Tu Jun 5 10:00 ISM Services May 53.0 53.5 Moderate

W Jun 6 08:30 Productivity-Rev. Q1 0.7% –0.5% Moderate

W Jun 6 10:30 Crude Inventories 06/02 NA 2.213M Moderate

W Jun 6 14:00 Fed's Beige Book May NA NA Moderate

Th Jun 7 08:30 Initial Unemployment Claims 06/02 375K 383K Moderate

Th Jun 7 08:30 Continuing Unemployment Claims 05/26 3.250M 3.242M Moderate

F Jun 8 08:30 Trade Balance Apr –$49.9B –$51.8B Moderate

>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months... With the economy still in the doldrums and inflation under control, economists expect the Fed to keep rates super low well into next year. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on: Consensus

Jun 20 0%–0.25%

Jul 31 0%–0.25%

Sep 12 0%–0.25%
Probability of change from current policy:

After FOMC meeting on: Consensus

Jun 20 <1%

Jul 31 <1%

Sep 12 <1%

UIE

Market Update For the week of May 21, 2012 – Vol. 10, Issue 21

QUOTE OF THE WEEK..."Do what you can, with what you have, where you are." --Theodore Roosevelt, 26th U.S. President

INFO THAT HITS US WHERE WE LIVE... Home builders are doing plenty with what they have, as Housing Starts rose 2.6% in April to a 717,000 annual rate. Single-family units were up 2.3% for the month and are up 18.8% from a year ago. Multi-family starts were up 3.2% for the month and are up a whopping 63.0% from a year ago. This reflects interest in the condo market, attractive to first time buyers and downsizers, as well as to investors in rental units. Building Permits were down 7.0% in April to a 715,000 annual rate, although permits for single-unit homes are up 18.5% versus a year ago.

Experts say housing starts have to hit a 1.5 million annual rate just to meet the need created by population growth and "scrappage" of older units. That probably won't happen until 2016, so the home building recovery is still very young. But the National Association of Home Builders reported builders' sentiment rose in May to its highest level in five years. At 29, it still has a long way to go before it's in positive territory above 50, last seen in April 2006.

BUSINESS TIP OF THE WEEK... A French proverb says, "People count up the faults of those who keep them waiting." So when a colleague needs your input or a client needs an answer, hustle!

>> Review of Last Week

BEARING DOWN... Wall Street's bears remained in control as the Dow and S&P 500 headed lower for the third week in a row, the S&P 500 posting its worst weekly performance since November. Investors worried about Greece leaving the euro zone. The country's politicians couldn't form a coalition government, so a fresh vote needs to be taken. Over here, the continuing saga of JP Morgan's big trading loss kept investors on edge, along with a big drop in the Philly Fed index that showed a manufacturing slowdown in that region.

Continuing the disappointments, April Retail Sales were up only half what was forecast and the Leading Economic Indicators (LEI) index surprised with a drop. But on the positive side, the CPI inflation reading came in without any shocks. Also, Industrial Production surged a better than expected 1.1% in April and the Empire State Manufacturing Index handily beat expectations for May, which dispelled factory sector concerns. Friday saw the frenzy around the IPO of social website Facebook, whose shares closed up a mere 0.6%.

For the week, the Dow ended down 3.5%, at 12369; the S&P 500 closed down 4.3%, to 1295; and the Nasdaq sank 5.3%, to 2779.

As investors worried about Greece and swallowed hard on some disappointing economic data, they flocked to the safe haven of bonds. Mortgage-backed securities did well, with the FNMA 3.5% bond we watch finishing the week UP .15, to $104.16. Rising bond prices drove national average mortgage rates down deeper into record territory in Freddie Mac's weekly survey, although purchase loan demand dipped.

DID YOU KNOW?... The census reported the median size of a new home in 2010 was 2,169 square feet, down from the 2007 peak of 2,277 square feet.

>> This Week’s Forecast

APRIL HOME SALES, EXISTING AND NEW... The big economic news this week covers the full read on April home sales, starting with Existing Home Sales on Tuesday, expected UP to a 4.65 million annual rate. Wednesday we'll see New Home Sales for the month, also forecast up, but just by a small amount, to 340,000 units.

We will continue to monitor Initial Jobless Claims, looking for any improvements in the employment picture, so vital to the housing market's recovery. Unfortunately, no major changes for the better are predicted. Durable Goods Orders should inch into positive territory from the prior month's big drop, a good sign.

>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of May 21 – May 25

Date Time (ET) Release For Consensus Prior Impact

Tu May 22 10:00 Existing Home Sales Apr 4.65M 4.48M Moderate

W May 23 10:00 New Home Sales Apr 340K 328K Moderate

W May 23 10:30 Crude Inventories 05/19 NA 2.128M Moderate

Th May 24 08:30 Initial Unemployment Claims 05/19 365K 370K Moderate

Th May 24 08:30 Continuing Unemployment Claims 05/12 3.250M 3.265M Moderate

Th May 24 08:30 Durable Goods Orders Apr 0.3% -3.9% Moderate

F May 25 09:55 Univ. of Michigan Consumer Sentiment May 77.5 77.8 Moderate

>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months... Virtually all economists believe the Fed will keep rates super low well into next year. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on: Consensus

Jun 20 0%–0.25%

Jul 31 0%–0.25%

Sep 12 0%–0.25%

Probability of change from current policy:

After FOMC meeting on: Consensus

Jun 20 <1%

Jul 31 <1%

Sep 12 <1%

UIE

Market Update For the week of May 14, 2012

QUOTE OF THE WEEK..."I've been lucky. Opportunities don't often come along. So, when they do, you have to grab them." --Audrey Hepburn

INFO THAT HITS US WHERE WE LIVE... There are more and more opportunities to grab in the housing market. After almost six years of price declines, we're finally seeing signs of stability, as home prices rose in the first quarter in more than half the U.S. metro areas tracked by the National Association of Realtors (NAR). The median price for existing homes sold was higher than a year ago in 51% of the areas -- 74 of 146 metros.

That's a nice turnaround from the fourth quarter of last year when median prices increased in just 29 of 149 metros. The small supply of lower-priced homes in many places should provide a price boost, according to the NAR's chief economist, who added, "this is good news for many sellers who wish to list now, or for those waiting for prices to improve." Home sales were UP 4.7% over the prior quarter and UP 5.3% from the first quarter a year ago.

BUSINESS TIP OF THE WEEK... Satisfied customers are your strongest source of leads. When clients have an experience worth talking about, the value of the referrals can be enormous.

>> Review of Last Week

HONEY FOR THE BEARS... The only investors who got a sweet treat last week were the bears who expect to see stocks go down. European worries and a big loss at a big bank sent the Dow on its biggest weekly dive in five months. JPMorgan revealed a pretax trading loss of $2 billion, partially offset by $1 billion in gains. The loss comes at a bad time, when banks are fighting increased regulations, which they and many economists say are unnecessary. Across the pond, a new French Socialist President and Greece's failure to form a coalition government put austerity plans in doubt.

Weekly initial jobless claims remain elevated but not growing, staying just below 370,000. On the upside, there was a surprise gain in the University of Michigan Consumer Sentiment Survey. This was joined by an unexpected 0.2% dip in overall wholesale prices (PPI), with Core PPI, excluding food and energy, up just 0.2%, as expected.

For the week, the Dow ended down 1.7%, at 12821; the S&P 500 closed down 1.1%, to 1353; and the Nasdaq went down 0.8%, to 2934.

Global economic worries, including a slowing of China's economic growth, inspired this week's flight to safety into bonds. The FNMA 3.5% bond we watch finished the week unchanged, at $104.01. In Freddie Mac's weekly survey, national average mortgage rates hit record lows for certain types of mortgages for the second week in a row. This was due to the strength in mortgage bond prices due to the continued economic uncertainty.

DID YOU KNOW?... Investors see Building Permits as an indicator of consumer confidence. They watch monthly and yearly trends for signs of weakness that might suggest a contraction in consumer spending.

>> This Week’s Forecast

CONSUMER PRICES AND SPENDING, HOME BUILDING AND A PEEK INTO THE FED... Tuesday we see how strongly consumers are spending, with April Retail Sales expected up, but not by as much as last month. Prices should hold, as the overall Consumer Price Index (CPI) is forecast flat, with "core" prices (excluding food and energy) up just 0.2%.

We'll also look into home building, with April Housing Starts predicted up a little, but Building Permits (see above) down a bit. Wednesday's FOMC Minutes will give us a closer look into what happened at the last Fed meeting.

>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of May 14 – May 18

Date Time (ET) Release For Consensus Prior Impact

Tu May 15 08:30 Retail Sales Apr 0.2% 0.8% HIGH

Tu May 15 08:30 Retail Sales ex-auto Apr 0.2% 0.8% HIGH

Tu May 15 08:30 Consumer Price Index (CPI) Apr 0.0% 0.3% HIGH

Tu May 15 08:30 Core CPI Apr 0.2% 0.2% HIGH

Tu May 15 08:30 Empire State Mfg May 8.4 6.6 Moderate

Tu May 15 10:00 Business Inventories Mar 0.3% 0.6% Moderate

W May 16 08:30 Housing Starts Apr 680K 654K Moderate

W May 16 08:30 Building Permits Apr 730K 747K Moderate

W May 16 09:15 Industrial Production Apr 0.5% 0.0% Moderate

W May 16 09:15 Capacity Utilization Apr 79.0% 78.6% Moderate

W May 16 10:30 Crude Inventories 05/12 NA 3.652M Moderate

W May 16 14:00 FOMC Minutes 04/25 NA NA HIGH

Th May 17 08:30 Initial Unemployment Claims 05/12 365K 367K Moderate

Th May 17 08:30 Continuing Unemployment Claims 05/05 3.250M 3.229M Moderate

Th May 17 10:00 Philadelphia Fed Mfg May 8.8 8.5 HIGH

Th May 17 10:00 Leading Economic Indicators (LEI) Apr 0.2% 0.3% Moderate

>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months... The Fed has stated its goal is to keep rates super low well into next year. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on: Consensus

Jun 20 0%–0.25%

Jul 31 0%–0.25%

Sep 12 0%–0.25%



Probability of change from current policy:

After FOMC meeting on: Consensus

Jun 20 <1%

Jul 31 <1%

Sep 12 <1%



UIE

Six ways to Make Your Garden Spring-ready– PLUS 5 things to consider before renting your home

RATE ALERT: Economic conditions have caused interest rates to improve significantly. Please reply to this email ASAP to see if you can benefit.

6 ways to make your garden Spring-ready–

PLUS 5 things to consider before renting your home

Now is the time of year to let your garden "Spring" to life!

1. Lawn Care. Rake up all the "thatch"–that's the dried dead grass and weeds mingling with the live grass. Thatch prevents water and nutrients from getting into your lawn and stops new seeds from taking root. Next, set your mower blades high for the first mow, to trim off just the tops. Lastly, if the lawn needs feeding, spread fertilizer, using one with a weed killer if it's necessary.

2. Prune Trees and Bushes. Trim all limbs and branches that were broken or damaged during the Winter.

3. Weed. Take out weeds before they go to seed. Some weeds produce up to 10,000 seeds, so getting rid of them now saves you from dealing with lots more later on. Tip: weeding is much easier when the soil is wet.

4. Spread Compost or Manure. When the soil has dried sufficiently, work in some manure or compost.

5. Check for Aphids. As new spring growth comes in, look for aphids on the underside of leaves. If you see them, find out what to do from the National Sustainable Agriculture Information Service by clicking here.

6. Brighten Up. Look for places to add some bright new flowers. Perennials that have had at least a full growing season can be worth the extra cost. They're heartier and more likely to survive.

THINKING THROUGH RENTING ISSUES

If you're considering renting your home, here are five things to think about:

1. Current Condition. If you've just spent money renovating, you might not want to risk having a tenant trash those new upgrades. If you go ahead anyway, collect a healthy deposit and a rent that protects your investment. On the other hand, if your home needs fixing, rent it the way it is, then upgrade to sell it.

2. Homework. Talk to rental agents and property managers to see what your rental rate would be. Then calculate how that income would cover your monthly obligations–mortgage, property taxes, insurance, maintenance, management costs. Ask the experts if there are any rent- or eviction-control ordinances. These laws can sometimes make it very expensive to evict even non-paying tenants.

3. Screen Tenants. If you decide to rent, consider hiring a rental agent or property manager with a strict tenant screening process. Network with everyone you know. Renting to a friend or a friend-of-a-friend can boost your chances of a good experience.

4. Tenant-Proof. Minimize the cost of tenant damage by replacing carpet with tile, nice lighting fixtures and window treatments with more ordinary options and high-end appliances with bargains from Craigslist. Of course, if you're renting a luxury home at a premium, you'll have to keep those high-end features tenants expect.

5. Think About a Lease-Option. Today, a lease with an option to buy can be great for everyone. You might get more money, and the tenant gets time to decide. And lease-option tenants tend to take better care of your home.

If you want to know more about home financing, the housing market in your area or have any other related questions, please call or email us. We're always here to help.... Have a great day!

PS Experts say the housing market appears to be turning around in many places. Mortgage rates are at historic lows and home prices are very affordable. So this could be a great time to upsize, downsize or refinance. Please call or email us now to discuss your situation.

Market Update -- For the week of April 23, 2012

QUOTE OF THE WEEK..."A great pleasure in life is doing what people say you cannot do." --Walter Bagehot, English businessman, essayist and journalist


INFO THAT HITS US WHERE WE LIVE... People say home building can't recover any time soon. Yet the signs continue to mount that a recovery is underway. Off 5.8% for March, Housing Starts are up 10.3% from a year ago, to a 654,000 unit annual rate. The monthly drop came from volatile multi-family starts, while single-family units were down only 0.2%. And the number of homes under construction was up for the seventh month in a row! Even Building Permits are up 30.1% versus a year ago. It's early in the home building recovery, but some are saying we could get to 1.5 million units by 2016.

More signs the housing market is recovering slowly but surely came with March Existing Home Sales. Although off 2.6% for the month, at 4.48 million units, they're up 5.2% over a year ago. In addition, the median price rose in March to $163,800 and is up 2.5% over a year ago, while the months' supply of inventory stayed at 6.3. Frankly, no one expects a big bump in home sales soon, but the market is definitely beginning to heal, as it's obviously a great time to buy.

BUSINESS TIP OF THE WEEK... Take time to think. Get away from the day's chaos and ponder a while. Don't worry if a great idea doesn't come right away. Back on the job, your subconscious will continue to work.

Review of Last Week

UP AND DOWN... Markets went in both directions last week as the S&P 500, a broad market measure, clung to a fractional 0.6% gain, its first move upward in three weeks. Traders' moods were also up and down, as the economic data rolled in. The up mood was fueled by the strong earnings reports of a wide range of players, from McDonald's to GE to Microsoft. Also up were March Retail Sales, gaining a better than expected 0.8% and up 6.5% over a year ago!

But other things economic were downers. Both the Empire State and Philadelphia Fed manufacturing indexes dropped for the month, reflecting a slowdown in growth. Industrial production was flat and manufacturing capacity edged down, both worse than expected. Worse than that, weekly unemployment claims headed up to 386,000, while continuing claims hit 3.30 million.

For the week, the Dow ended UP 1.4%, at 13029; the S&P 500 closed UP 0.6%, to 1379; and the Nasdaq edged down 0.4%, to 3000.

There was enough political and economic turbulence coming out of Europe to keep investors in the safe haven of bonds. This held prices up, with the FNMA 3.5% bond finishing the week UP .04, at $103.19. Inflation fears were kept in check as doubts about the economic recovery continue. So national average mortgage rates held steady, still at historically low levels, as reported in Freddie Mac's weekly Primary Mortgage Market Survey.

DID YOU KNOW?... CPI inflation is more widely reported, but the GDP Price Deflator is often the inflation measure of choice for economists. It takes a more comprehensive look at price levels for a more precise read on inflation.

This Week’s Forecast

NEW HOME SALES, PENDING HOME SALES AND THE FED... We'll have more reads on the housing market, with Tuesday's New Home Sales forecast to be up slightly for March. Thursday's Pending Home Sales, measuring signed contracts in March for existing homes, are expected up a bit, indicating sales a few months out.

The Fed meets Wednesday and although no one expects the FOMC Rate Decision to change anything, we'll have a policy statement giving their opinion on the economy. For hard numbers, we'll have to wait until Friday for Q1 GDP-Advanced, projected to show economic growth slowing.

The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

 Economic Calendar for the Week of Apr 23 – Apr 27

Date Time (ET) Release For Consensus Prior Impact

Tu Apr 24 10:00 Consumer Confidence Apr 69.5 70.2 Moderate

Tu Apr 24 10:00 New Home Sales Mar 320K 313K Moderate

W Apr 25 08:30 Durable Goods Orders Mar -1.9% 2.4% Moderate

W Apr 25 10:30 Crude Inventories 04/21 NA 3.856M Moderate

W Apr 25 12:30 FOMC Rate Decision 04/25 0%-0.25% 0%-0.25% HIGH

Th Apr 26 08:30 Initial Unemployment Claims 04/21 373K 386K Moderate

Th Apr 26 08:30 Continuing Unemployment Claims 04/14 3.300M 3.297M Moderate

Th Apr 26 10:00 Pending Home Sales Mar 0.5% -0.5% Moderate

F Apr 27 08:30 GDP-Advance Q1 2.6% 3.0% Moderate

F Apr 27 08:30 GDP Price Deflator-Advance Q1 2.2% 0.9% Moderate

FApr 27 08:30 Employment Cost Index Q1 0.5% 0.4% HIGH

F Apr 27 09:55 Univ. of Michigan Consumer Sentiment-Final Apr 75.7 75.7 Moderate

Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months... We'll see if this week's Fed meeting gives any indication of when they'll change their super low Funds Rate policy. No one sees a hike any time soon. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on: Consensus

Jun 20 0%–0.25%

Jul 31 0%–0.25%

Sep 12 0%–0.25%



Probability of change from current policy:

After FOMC meeting on: Consensus

Jun 20 <1%

Jul 31 <1%

Sep 12 <1%

What’s in Your Wallet?

I had an interesting conversation this morning with an instructor at my gym. A while back, she  left her purse sitting on the console of her car while she worked out. Sadly, the worst happened, and when she returned to her car, the window was smashed and her purse was gone. Turned out the day her purse was stolen, a number of gyms had the same bandits go through their parking lots. First point: Never ever leave an item of value visible in your car.

Bad right? Well sadly that wasn’t the worst. After cancelling credit cards and closing out accounts, she thought she was safe and put the incident out of her mind. Fast forward to her vacation in Costa Rica. She goes to withdraw money from her new checking account via the ATM. The account was cleaned out and running on overdraft!

She had just made a huge deposit prior to leaving for the trip, and found out she was $10,000 poorer than when she left.

Turns out she had her social security card in her wallet the day her purse was stolen. This is the worst that can happen—well it’s the best if you happen to be a thief… But the worst for the rest of us. The thief, had her social security number and her driver’s license, so he was able to go to her bank and access her new accounts!

She put a lock down on her credit, or else the thief could have opened credit cards in her name. I actually had a client who had his wallet with social security card stolen and the thief bought a car within hours!!!! By the time he locked down his credit, he was the owner of a new car. A car that he never saw and never had a single payment made, and ended up ruining by borrower’s chances of buying a new home.

Identity theft is rampant and very lucrative for thieves. Second Point: Never keep your social security card in your wallet. This would also apply to paystubs or other documentation that might contain your social security number. The combination of social security number, address, and birth date opens you up to every type of credit abuse and identity theft. With tax time upon us, many people have files in their car with this information—get it out of the car immediately, and put it in a locked filing cabinet.

Sadly up until a few years ago, social security numbers were widely used for identification purposes, and many of these old records are ending up in landfills. It makes sense to have an alert on your credit, so you know every time your credit is accessed.

Car thieves aren’t the only ones to watch out for. If you are in the habit of leaving items in your home out for future filing, think about people coming into your home. Do you have teenagers with friends who visit? How about cleaning people, carpet cleaners, handymen? Guard your social security number like you guard your other valuables. This may be your most valuable possession of all! Untangling true identity theft can take hundreds of hours and be an ongoing battle, once your social security number is out. They literally sell it and re-sell it, so after you clean it up, the nightmare is not necessarily over. And as my instructor at the gym found out, your social security number is with you for life; it’s not an option to change it due to identity theft.

As a mortgage lender we deal with credit for better or worse on a daily basis. Third Point: Your good credit truly is your most valuable possession. Without good credit, you can’t finance, a car, a home, or even get a credit card. Good credit isn’t good enough. It used to a fico of 700 was the gold standard for superior credit. We are now seeing investors who won’t lend under 780 in specific circumstances. If you have any questions on identity theft or on how to maximize your credit score, please call The Hedges Mortgage Group at Prime Lending at 919 961-6915.

Market Update - For the week of April 16, 2012 – Vol. 10, Issue 16

QUOTE OF THE WEEK..."Faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof." --John Kenneth Galbraith, Canadian-American economist.


INFO THAT HITS US WHERE WE LIVE... When people tell you the housing market isn't showing many positive signs, here are some facts that may change their minds. As of January, the National Association of Realtors (NAR) reported the housing inventory of for-sale homes has fallen to its lowest level since March 2005 -- 2.3 million homes, about a six-month supply. Meanwhile, total home sales rose 13% in the last six months, according to another industry survey.

The NAR also reports that sales of second homes in 2011 shot up to their highest market share since the height of the housing boom. This includes both vacation and investment homes. A survey of real estate economists and analysts reported home prices should stabilize this year, rebound in 2013 and accelerate in 2014. Finally, Freddie Mac's weekly survey revealed that national average mortgage rates hit new all-time lows for 15-year fixed-rate loans and were just above the record low for 30-year mortgages.


BUSINESS TIP OF THE WEEK... When you have more problems than you can handle, start with the ones that are most important. Ask yourself, "what's the most valuable thing I could be doing right now?"

>> Review of Last Week

SECOND DOWN... The S&P 500 and the Nasdaq lodged their first back-to-back weekly losses, while the Dow had its worst week of the year. Some observers felt stock prices were simply due for a correction after zooming UP 30% since October. But others pointed to genuine economic concerns after China reported its economic growth slowing more than anticipated, dropping from 8.9% in Q4 to 8.1% for Q1. Of course, that's still over 2.5 times our growth rate! Spain's rising borrowing costs also worried Wall Street.

Over here, corporate earnings season got off to a great start with Alcoa, Google, JPMorgan Chase and Wells Fargo all coming in better than expected. The February Trade Deficit was lower than expected, as U.S. exports gained, a good thing. BUT weekly unemployment claims shot up to 380,000, Michigan Consumer Sentiment dropped for April and the CPI inflation reading showed consumer prices shot UP 0.3% in March after being UP 0.4% in February.

For the week, the Dow ended down 1.6%, at 12850; the S&P 500 closed down 2.0%, to 1370; and the Nasdaq sank 2.2%, to 3011.

Good corporate earnings and increasing inflation would have hurt bond prices, but worries over European sovereign debt and China's economic growth kept investors committed to the safe haven of bonds. The FNMA 3.5% bond we watch finished the week off just .01, at $103.15. National average mortgage rates slipped again last week, as economic concerns kept investors in mortgage bonds, holding prices up and rates down.

DID YOU KNOW?... Crude Inventories is the DOE's estimate of the weekly change in barrels of crude oil held by commercial facilities. Growing inventories may lower oil prices, diminishing inventories can raise them.

>> This Week’s Forecast

BUILDERS AND EXISTING HOME SALES HANGING IN THERE... A lot of this week's economic indicators are expected to slip but stay in positive territory, as the economy continues to grow so slowly it's barely perceptible. But our key points of interest -- Tuesday's Housing Starts and Thursday's Existing Home Sales -- are actually forecast UP, though just by a tick.

Keep an eye on today's Retail Sales numbers, as they indicate consumers' willingness to spend at the store on everything up through autos, which are included in the overall number. Cars, of course, are the second biggest consumer purchase after homes.

>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of Apr 16 – Apr 20

Date Time (ET) Release For Consensus Prior Impact

M Apr 16 08:30 Retail Sales Mar 0.3% 1.1% HIGH

M Apr 16 08:30 Retail Sales ex-auto Mar 0.6% 0.9% HIGH

M Apr 16 08:30 Empire State Manufacturing Apr 17.5 20.2 Moderate

M Apr 16 10:00 Business Inventories Feb 0.5% 0.7% Moderate

Tu Apr 17 08:30 Housing Starts Mar 700K 698K Moderate

Tu Apr 17 08:30 Building Permits Mar 710K 717K Moderate

Tu Apr 17 09:15 Industrial Production Mar 0.2% 0.0% Moderate

Tu Apr 17 09:15 Capacity Utilization Mar 78.5% 78.4% Moderate

W Apr 18 10:30 Crude Inventories 04/14 NA 2.791M Moderate

Th Apr 19 08:30 Initial Unemployment Claims 04/07 375K 380K Moderate

Th Apr 19 08:30 Continuing Unemployment Claims 03/31 3.275M 3.251M Moderate

Th Apr 19 10:00 Existing Home Sales Mar 4.62M 4.59M Moderate

Th Apr 19 10:00 Philadelphia Fed Mfg Apr 10.3 12.5 Moderate

Th Apr 19 10:00 Leading Economic Indicators (LEI) Mar 0.2% 0.7% Moderate

>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months... Last week, Fed Vice Chairman Janet Yellen suggested the central bank could keep the Funds Rate super low through 2015 if necessary. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on: Consensus

Apr 25 0%–0.25%

Jun 20 0%–0.25%

Jul 31 0%–0.25%



Probability of change from current policy:

After FOMC meeting on: Consensus

Apr 25 <1%

Jun 20 <1%

Jul 31 <1%

New Light Bulb Rules: What They Are and 3 Cost-saving Choices PLUS 3 Ways the Job Market Moves Housing

NEW LIGHT BULB RULES

Thomas Edison's incandescent light bulb was a brilliant invention, but not very energy efficient. Just 10% of the electricity it uses gets converted into light; the rest is radiated as heat. This January, the old-style bulb got a big push toward extinction, as additional provisions of the Energy Independence and Security Act of 2007 kicked in.

The new rules do not ban incandescent bulbs outright, nor do they say we have to use compact fluorescent (CFL) bulbs. But they do require manufacturers and wholesalers to meet new standards that force them to improve the efficiency of incandescent bulbs or replace them with bulbs using newer technologies.

The new standards phase in over the next two years, starting with the 100-watt incandescent bulbs. The Department of Energy assures us that the average household replacing 15 traditional 60-watt bulbs with the new alternatives can save over $50 a year on electricity – and have longer lasting bulbs. Here are three choices:

Halogen Incandescents. These offer a brightness and light quality closest to traditional bulbs and should last up to three times longer than old-style incandescents. But they only cut energy use by 25%. Estimated annual cost savings: $19.50.
Compact fluorescents (CFLs). These use 75% less energy and last up to ten times longer than traditional bulbs. Estimated annual cost savings: $54.

Light-emitting diodes (LEDs). These are the state of the art in low-energy lighting. They use 75%-80% less energy and last up to 25 times longer than old-style bulbs. They're costly, but prices should drop as more come to market. Estimated annual cost savings: $57.

THE SKINNY ON JOBS AND HOUSING

Over the years, in good times and bad, the most accurate indicator for the health of the housing market has been the health of the job market. When people are working full-time in good jobs they believe they'll keep, it's good for housing too. Here are three ways labor impacts homes:

1) Home Prices. A secure and healthy employment market helps stabilize home prices, since people aren't at risk of losing their homes because they can no longer afford them. A gain in jobs also brings in more first-time home buyers, which can help home prices rebound.

2) Home Size. In a good, healthy job market, businesses often compete for the best workers, driving up salaries. When people get paid more, guess where they think about putting the extra money? In a larger home!

3) Home Location. Thriving labor markets require employers to attract people from outside the local area. This is why housing markets are localized. Towns, counties and states with better job markets than their neighbors also enjoy better housing markets. Compare job growth figures and the unemployment rate in your locale to other areas and the nation as a whole. That will tell you the real health of your local housing market.

In any case, please note that in almost all markets, it now makes more financial sense to buy than rent.

If you're wondering about the housing market in your area or have any other related questions, please call or email us. We're always here to help.... Have a great day!

P.S. With the housing market looking poised for an upturn in more areas of the country, this could be a great time to upsize, downsize or refinance. Mortgage rates are still at historic lows and home prices are very affordable. Please call or email us now to discuss your situation.

Market Update - For the week of April 9, 2012

QUOTE OF THE WEEK..."You miss 100% of the shots you don't take." --Wayne Gretzky, hockey's all-time leading goal scorer

INFROMATION THAT HITS US WHERE WE LIVE... Hopefully, more people will be taking a shot at buying a home, with home ownership regaining its appeal as rents head higher. A real estate research firm reported average apartment rents UP 2.7% last year, while the national vacancy rate went below 5% for the first time since 2001. Increasing rents, plus very affordable home prices and near record low mortgage rates, have made home buying cheaper than renting in most areas, spurring on first-time buyers.

A major bank housing analyst said apartment rental costs have historically been about 10% lower than after-tax home ownership costs. That difference began shrinking in 2010 and now apartment rents are about 15% higher than home ownership costs. A new survey found that twice as many real estate professionals, compared to three months ago, expect home values to rise. The housing market appears to be stabilizing as home sales trend upward and homebuilders are more optimistic than they've been in years.
BUSINESS TIP OF THE WEEK... Focus your networking on the people who have referred business to you or made advantageous introductions. Stay in contact every three months to stay top-of-mind with these important contacts.

>> Review of Last Week

SLIPPING INTO Q2... In a not-so-wonderful start to the second quarter, the Dow suffered its worst weekly loss since last December, while the S&P500 and the Nasdaq also went lower. FOMC Minutes from the last Fed meeting left investors uncertain about monetary policy, while there were renewed concerns about Spain's sovereign debt. The ISM Services index, measuring the largest sector of our economy, dipped more than expected, but stayed in positive growth territory, as did the better-than-expected ISM Manufacturing index.

Friday, equity markets were closed, but the government's disappointing jobs report ended the week on a downer for us all. Just 120,000 new jobs were created in March, hugely below expectations. The unemployment rate crept down from 8.3% to 8.2%, but economists explained that was because more people are becoming discouraged and dropping out of the work force.
For the week, the Dow ended down 1.2%, at 13060; the S&P 500 closed down 0.7%, to 1398; and the Nasdaq edged down 0.4%, to 3081.

Following the weak jobs report, investors sought the safe haven of bonds in Friday's holiday-shortened session. Bond prices surged, with the FNMA 3.5% bond we watch finishing the week UP .92, to $103.16. National average mortgage rates eased again last week, according to Freddie Mac's weekly survey. Purchase loan demand rose to its highest level in months.

DID YOU KNOW?... The typical home purchased in 2011 was built in 1993, with three bedrooms and two bathrooms in 1900 square feet of space, as reported in the latest NAR survey.

>> This Week’s Forecast

BUDGET, FED VIEWS, INFLATION... Wednesday's March Federal Budget should show the government running a big deficit, no surprise there. This will be followed by the Federal Reserve's Beige Book of economic observations from Fed districts around the country. Could be some good stuff.

But the big reports will be PPI wholesale inflation on Thursday and CPI consumer inflation come Friday. The monthly numbers are expected to reflect annual inflation rates slightly above the Fed's 2% target. This is not good, as inflation cuts consumer buying power, sends mortgage bond prices lower -- and mortgage rates up!

>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of Apr 9 – Apr 13

Date Time (ET) Release For Consensus Prior Impact

W Apr 11 10:30 Crude Inventories 04/07 NA 9.009M Moderate

W Apr 11 14:00 Federal Budget Mar NA –$188.2B Moderate

W Apr 11 14:00 Fed's Beige Book Apr NA NA Moderate

Th Apr 12 08:30 Initial Unemployment Claims 04/07 355K 357K Moderate

Th Apr 12 08:30 Continuing Unemployment Claims 03/31 3.350M 3.338M Moderate

Th Apr 12 08:30 Producer Price Index (PPI) Mar 0.3% 0.4% Moderate

Th Apr 12 08:30 Core PPI Mar 0.2% 0.2% Moderate

Th Apr 12 08:30 Trade Balance Feb –$52.0B –$52.6B Moderate

F Apr 13 08:30 Consumer Price Index (CPI) Mar 0.3% 0.4% HIGH

F Apr 13 08:30 Core CPI Mar 0.2% 0.1% HIGH

F Apr 13 09:55 Univ. of Michigan Consumer Sentiment Apr 76.1 76.2 Moderate



>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months... The Fed said it intends to keep the Funds Rate low for quite some time, which is what economists expect. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on: Consensus

Apr 25 0%–0.25%

Jun 20 0%–0.25%

Jul 31 0%–0.25%



Probability of change from current policy:

After FOMC meeting on: Consensus

Apr 25 <1%

Jun 20 <1%

Jul 31 <1%

Market Update -- For the Week of April 2, 2012

QUOTE OF THE WEEK..."To succeed, jump as quickly at opportunities as you do at conclusions." --Benjamin Franklin

INFO THAT HITS US WHERE WE LIVE... Last week's housing reports supported the fact there are great opportunities in today's real estate market, as long as you don't look at just part of the data and jump to conclusions. For example, February Pending Home Sales, measuring contracts on existing homes, were off 0.5% for the month. But wait a second, Pending Home Sales are now UP 13.9% over a year ago!
In the same vein, the S&P/Case-Shiller Home Price Indices slipped a non-seasonally adjusted 0.8% for January and 3.8% from a year ago. But the seasonally-adjusted index of home prices in the 20 largest metro areas was unchanged for the month. And nine of the twenty metros showed price increases! The National Association of Realtors (NAR) expects home prices to rebound in 2012 with existing home sales up 7%-10%, to their highest level in five years.

BUSINESS TIP OF THE WEEK... It's important to listen to your customers to see things from their point of view. But then firmly set their expectations to what you can deliver, so they'll be satisfied at the end.

>> Review of Last Week

HIGH-SCORING FIRST QUARTER... We're not talking basketball, just S&P 500 stocks, which ended the week posting their biggest first quarter gain in over a decade, up a very strong 12%. The Dow registered the best first quarter advance in its history, an 8.1% hike. Not to be outdone, the Nasdaq went up almost 19% the first quarter. Experts said that big institutional investors are feeling a little better about the economy and looking to make money in riskier stocks, pushing prices up.

The economic data continues mixed. Personal income and personal spending were up in February, both good things, but inflation was worrisome. Overall prices are up 2.3% the last 12 months, above the Fed's 2% target. University of Michigan Consumer Sentiment was up more than expected, but the Consumer Confidence Index was down. Fed Chairman Bernanke voiced his concerns that job market conditions remain far from normal.

For the week, the Dow ended UP 1.0%, at 13212; the S&P 500 closed UP 0.8%, to 1408; and the Nasdaq went UP 0.8%, to 3092.

Bond prices held steady, as there are still enough economic concerns to keep safe haven buyers participating in the market. The first quarter ended with the FNMA 3.5% bond we watch finishing the week UP .12, at $102.24. After edging up the last two weeks, national average mortgage rates switched direction in Freddie Mac's weekly survey. Mortgage rates remain firmly at historically low levels.

DID YOU KNOW?... According to the NAR, the top 3 approaches first-time home buyers use are: 1) online search for homes; 2) online search for info on the home buying process; and 3) contacting a mortgage lender.

>> This Week’s Forecast

FED MUSINGS, MARCH JOBS... As the Spring home selling season begins, it could certainly use the support of a healthier jobs market. Tomorrow, the FOMC Minutes from the Fed's March 13 meeting could put some overall economic perspective on the situation. We'll see.

Then Friday, we get the March Employment Report. Unfortunately, no major improvement is foreseen. The modest rate of job creation we've had the last few months should drop a bit, with unemployment still at 8.3%.

>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.
Economic Calendar for the Week of Apr 2 – Apr 6

Date Time (ET) Release For Consensus Prior Impact

M Apr 2 10:00 ISM Index Mar 53.0 52.4 HIGH

Tu Apr 3 14:00 FOMC Minutes 3/13 NA NA HIGH

Tu Apr 3 10:00 ISM Services Mar 56.9 57.3 Moderate

W Apr 4 10:30 Crude Inventories 03/31 NA 7.102M Moderate

Th Apr 5 08:30 Initial Unemployment Claims 03/31 355K 359K Moderate

Th Apr 5 08:30 Continuing Unemployment Claims 03/24 3.355M 3.340M Moderate

F Apr 6 08:30 Average Workweek Mar 34.5 34.5 HIGH

F Apr 6 08:30 Hourly Earnings Mar 0.1% 0.1% HIGH

F Apr 6 08:30 Nonfarm Payrolls Mar 200K 227K HIGH

F Apr 6 08:30 Unemployment Rate Mar 8.3% 8.3% HIGH



>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months... Economists expect the Fed to keep the Funds Rate low for quite some time. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on: Consensus

Apr 25 0%–0.25%

Jun 20 0%–0.25%

Jul 31 0%–0.25%



Probability of change from current policy:

After FOMC meeting on: Consensus

Apr 25 <1%

Jun 20 <1%

Jul 31 <1%







.

>> Market Update --For the week of March 26, 2012

QUOTE OF THE WEEK..."I invented my life by taking for granted that everything I did not like would have an opposite, which I would like." --Coco Chanel

INFO THAT HITS US WHERE WE LIVE... The renowned French fashion designer certainly would have appreciated that while February's Housing Starts were down 1.1% for the month, Building Permits bumped UP 5.1%, to their highest level since 2008. The housing recovery is full of opposites. In spite of that monthly dip, starts are UP almost 35% from a year ago. And before their February slip, single-family starts went up four months in a row to an 18-month high.

Continuing the theme of opposites, February Existing Home Sales fell 0.9% but are UP 8.8% over a year ago. And while the median price rose, a good thing, the supply also rose, not a good thing, but is still only 6.4 months. Friday, New Home Sales were off 1.6% for February, at a 313,000 annual rate, but the months' supply is only 5.8, inventories are at record lows and the median price of new homes sold is UP 6.2% from a year ago, all good things.

BUSINESS TIP OF THE WEEK... Watch out for stress. When you feel it, just stop, relax and enjoy the world around you. Then focus that positive energy on new business and profits.


>> Review of Last Week

HOT, THEN NOT... Investors pushed stocks to the S&P 500's highest level since mid-2008, then took their profits, concerned that global economic conditions are still worrisome. As a result, the Dow and the S&P 500 suffered their worst weeks of the year, although the techie Nasdaq edged upward. The global negative vibe came from manufacturing indexes in China and Europe showing activity contracting in those regions. Not a great sign for our economically interconnected world.

Over here, the slight dips in housing numbers were a bit disappointing, although, as noted above, there was positive data as well, indicating real estate appears to be starting a recovery. Supporting that recovery is an improving jobs situation, as weekly initial jobless claims edged down to a multi-year low of 348,000. That number still needs to get way lower, but at least it's no longer growing.
For the week, the Dow ended down 1.2%, at 13081; the S&P 500 closed down 0.5%, to 1397; and the Nasdaq went UP 2.2%, to 3068.

Bond prices were hammered early in the week, then benefited from the stock sell-off and the less inspiring economic data. The FNMA 3.5% bond we watch wound up the week off just .01, at $102.12. National average mortgage rates headed up for the second week in a row in Freddie Mac's weekly survey. But mortgage rates still remain well below their levels of a year ago.

DID YOU KNOW?... According to the National Association of Realtors (NAR), there's been a reversal of the trend toward more single buyers: 64% of buyers are now married couples, the highest proportion since 2001.

>> This Week’s Forecast

PENDING HOME SALES, Q4 GDP AND, OH YES, INFLATION... The only thing left after last week's avalanche of data on February housing was Pending Home Sales. This measure of signed contracts indicates actual sales a few months out and a mild trend upward is expected today. Thursday, the Q4 GDP 3rd Estimate is forecast to remain in moderate growth range.

Core PCE Prices, excluding volatile food and energy, should remain within the Fed's guidelines, although prices overall keep edging up. This, unfortunately, can also push up mortgage rates.

>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of Mar 26 – Mar 30

Date Time (ET) Release For Consensus Prior Impact

M Mar 26 10:00 Pending Home Sales Feb 0.5% 2.0% Moderate

Tu Mar 27 10:00 Consumer Confidence Mar 70.0 70.8 Moderate

W Mar 28 08:30 Durable Goods Feb 2.5% -3.7% Moderate

W Mar 28 10:30 Crude Inventories 03/24 NA -1.160M Moderate

Th Mar 29 08:30 Initial Unemployment Claims 03/24 350K 348K Moderate

Th Mar 29 08:30 Continuing Unemployment Claims 03/17 3.385M 3.352M Moderate

Th Mar 29 08:30 GDP-3rd Estimate Q4 3.0% 3.0% Moderate

Th Mar 29 08:30 GDP Deflator-3rd Estimate Q4 0.9% 0.9% Moderate

F Mar 30 08:30 Personal Income Feb 0.4% 0.3% Moderate

F Mar 30 08:30 Personal Spending Feb 0.6% 0.2% HIGH

F Mar 30 08:30 PCE Prices - Core Feb 0.1% 0.2% HIGH

F Mar 30 09:45 Chicago PMI Mar 62.0 64.0 HIGH

F Mar 30 09:55 Univ. of Michigan Consumer Sentiment-Final Mar 74.3 74.3 Moderate

>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months... The Fed has stated it wants to keep the Funds Rate low for quite some time, which is what economists expect. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on: Consensus

Apr 25 0%–0.25%

Jun 20 0%–0.25%

Jul 31 0%–0.25%



Probability of change from current policy:

After FOMC meeting on: Consensus

Apr 25 <1%

Jun 20 <1%

Jul 31 <1%

Warren Buffett's best investment? Now it's the single-family home!

Warren Buffett, chairman and CEO of Berkshire Hathaway, is widely regarded as one of the world's most successful investors. He recently appeared live on CNBC's Squawk Box program, Monday, February 27, 2012, for his annual "Ask Warren" three-hour marathon. Among the many topics covered was the housing market. Here is Warren's latest advice on investing in that area.
Buffett began by pointing out, "...equities are still cheap relative to any other asset class," but added, "I would say the single-family homes are cheap now, too." He then made this startling statement:

"If I had a way of buying a couple hundred thousand single-family homes... I would load up on them."

He admitted that he would need a way to manage so many residences: "... the management is... really the problem because they're one by one. They're not like apartment houses." But if it were practical, he would "load up on them and I would take mortgages out at very, very low rates."

He then offered an insightful summary of the current situation in the housing market: "If anybody is thinking about buying a home -- five years ago they couldn't buy them fast enough, because they thought they were going to go up, and now they don't buy them because they think they're going to go down. And interest rates are far lower."

Keying off the low mortgage interest rate situation, he pointed out:

"It's a way, in effect, to short the dollar, because you can take a 30-year mortgage and if it turns out your interest rate's too high, next week you refinance lower. And if it turns out it's too low, the other guy's stuck with it for 30 years. So it's a very attractive asset class now."

Buffett was then asked, point blank, if he were a young individual investor who had to choose between buying a first home or investing in stocks, which one would be the better bet? His characteristically direct answer:

"...if I knew where I was going to want to live the next five or 10 years, I would buy a home and I'd finance it with a 30-year mortgage and it's a terrific deal."

He followed that with this business idea:

"... if I was an investor that was a handy type, which I'm not, and I could buy a couple of them at distressed prices and find renters -- and again take a 30-year mortgage -- it's a leveraged way of owning a very cheap asset now and I think that's probably as attractive an investment as you can make now."

Check out the video: http://www.youtube.com/watch?v=vkx57Ifein8&feature=share

And a final note: Buffett wrote in his latest letter to Berkshire Hathaway shareholders: "Housing will come back -- you can be sure of that."


Remember, we're always here to answer any questions.... Have a great day!

P.S. So with today's mortgage rates at historic new lows and with very affordable home prices, this is a great time to upsize, downsize or refinance. Please call or email us now to discuss your situation.

Market Update, For the week of March 12, 2012

QUOTE OF THE WEEK..."Opportunities? They're all around us...there is power lying latent everywhere waiting for the observant eye to discover it." --Orison Swett Marden

INFO THAT HITS US WHERE WE LIVE... It shouldn't take a particularly observant eye to see the historic affordability available to home buyers, thanks to current home prices and mortgage rates. The National Association of Realtors (NAR) Housing Affordability Index reached a 42-year high in January. An index of 100 represents a median-income family's ability to afford a median-priced, existing single-family home, with a 20% down payment and mortgage payments at 25% of gross income. January's record reading was 206.1!

Freddie Mac's chief economist commented, "the typical family had more than double the income needed to purchase a median-priced home in January." There's also talk about prices finally bottoming out. Data aggregator CoreLogic's National Home Price Index in January was at its lowest level since January 2003, and their chief economist noted prices are "not far from the bottom." Finally, the NAR forecasts existing home sales UP 6.8% for the year.

BUSINESS TIP OF THE WEEK... Pay attention to the little stresses in your work. They're usually easy to fix, but if you ignore them, you can wind up with a whole bunch that add up to one big stress.

>> Review of Last Week

DOW, OW! OTHER TWO, UP... Investors responded to the now usual combination of better and worse than expected economic news by sending the Dow down, but keeping the other two market indexes up for the week. Monday's ISM Non-Manufacturing showed slightly stronger than expected growth among service businesses. But our economy is now globally connected, so it wasn't good that China dropped its 2012 growth forecast to 7.5%, the lowest in eight years, and Eurozone Q4 GDP shrunk 0.3%. Meanwhile, our trade deficit ballooned in January to $52.6 billion.

There were enough negative vibes to dampen investor optimism over the February Employment Report's gain of 227,000 nonfarm jobs. The unemployment rate remains 8.3%, with almost 13 million out of work. There are 8.1 million "involuntary part-time workers" who want a full-time job but can't find one. And over half the increase in professional and business services jobs were in temporary help services. So the housing market still isn't seeing the jobs recovery it needs.

For the week, the Dow ended down 0.4%, at 12922; the S&P 500 closed UP 0.1%, to 1371; and the Nasdaq went UP 0.4%, to 2988.

Better than expected economic data, plus a Greek debt agreement, sent bond prices lower. But details of the Greek deal kept worries alive, sending investors back to the safety of bonds. The FNMA 3.5% bond we watch ended the week down .06, to $103.08. The national average rate for 15-year fixed mortgages hit a record low in Freddie Mac's weekly survey, while national average rates for all other mortgage types continued near record lows.

DID YOU KNOW?... A company's Market Capitalization is the value of all outstanding shares, calculated by multiplying the total number of shares by the current market price of one share.

>> This Week’s Forecast

RETAIL SALES, THE FED AND INFLATION... Tuesday gives us Retail Sales for February, predicted to be flat, excluding auto sales, but up a bit when you include them. A few hours later that day, we'll have the FOMC Rate Decision from the Fed. No one expects them to touch the Funds Rate, but their Policy Statement will be scrutinized for its take on the economy.

The Fed keeps an eye on inflation, but we won't get those readings until Thursday's February wholesale PPI inflation and Friday's CPI consumer inflation. They're both forecast to be up overall, but the Core numbers, which exclude volatile food and energy prices, are what the Fed pays attention to. They should be up just a bit, but within Fed guidelines.

>> The Week’s Economic Indicator Calendar

Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.

Economic Calendar for the Week of Mar 12 – Mar 16

Date Time (ET) Release For Consensus Prior Impact

Tu Mar 13 08:30 Retail Sales Feb 1.0% 0.4% HIGH

Tu Mar 13 08:30 Retail Sales ex-auto Feb 0.7% 0.7% HIGH

Tu Mar 13 10:00 Business Inventories Jan 0.6% 0.4% Moderate

Tu Mar 13 14:15 FOMC Rate Decision 03/13 0%-0.25% 0%-0.25% HIGH

W Mar 14 10:30 Crude Inventories 03/10 NA 0.832M Moderate

Th Mar 15 08:30 Initial Unemployment Claims 03/10 358K 362K Moderate

Th Mar 15 08:30 Continuing Unemployment Claims 03/03 3.415M 3.416M Moderate

Th Mar 15 08:30 Empire State Manufacturing Mar 15.0 19.5 Moderate

Th Mar 15 08:30 Producer Price Index (PPI) Feb 0.5% 0.1% Moderate

Th Mar 15 08:30 Core PPI Feb 0.2% 0.4% Moderate

Th Mar 15 10:00 Philadelphia Fed Manufacturing Mar 12.5 10.2 HIGH

F Mar 16 08:30 Consumer Price Index (CPI) Feb 0.4% 0.2% HIGH

F Mar 16 08:30 Core CPI Feb 0.2% 0.2% HIGH

F Mar 16 09:15 Industrial Production Feb 0.5% 0.0% Moderate

F Mar 16 09:15 Capacity Utilization Feb 78.8% 78.5% Moderate

F Mar 16 09:55 Univ. of Michigan Consumer Sentiment Mar 76.0 75.3 Moderate



>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months... No one living in the real world expects the Fed to raise the Funds Rate at this week's FOMC meeting. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.

Current Fed Funds Rate: 0%–0.25%

After FOMC meeting on: Consensus

Mar 13 0%–0.25%

Apr 25 0%–0.25%

Jun 20 0%–0.25%



Probability of change from current policy:

After FOMC meeting on: Consensus

Mar 13 <1%

Apr 25 <1%

Jun 20 <1%
























>> Federal Reserve Watch

Forecasting Federal Reserve policy changes in coming months... No one living in the real world expects the Fed to raise the Funds Rate at this week's FOMC meeting. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same.



Current Fed Funds Rate: 0%–0.25%



After FOMC meeting on:

Consensus



Mar 13

0%–0.25%



Apr 25

0%–0.25%



Jun 20

0%–0.25%







Probability of change from current policy:



After FOMC meeting on:

Consensus



Mar 13

<1%



Apr 25

<1%



Jun 20

<1%











This e-mail is an advertisement for Jean Hedges. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice, or a commitment to lend. Although the material is deemed to be accurate and reliable, there is no guarantee of its accuracy. The material contained in the newsletter is the property of PrimeLending, A PlainsCapital Company and cannot be reproduced for any use without prior written consent. It is designed for real estate and other financial professionals only. It is not intended for consumer distribution. The material does not represent the opinion of PrimeLending, A PlainsCapital Company. © 2012 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; Illinois Residential Mortgage Licensee, IL Dept of Financial and Professional Regulation, - lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender. NMLS #108440





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FHA Bomb About to Drop

Big changes for FHA. FHA is tightening the noose on our first-time borrowers. As of April 1, not only is HUD increasing MI (mortgage insurance), they are capping collections at $1000. This will be a deal breaker for many of our buyers. Right now, the policy at Prime has been to allow collections if DU (automated underwriting) will accept them. We have gotten loans approved with $10,000 and even $20,000 in open collections. So this is a radical departure. If you have a borrower with an FHA approval, we would be happy to review it. If there are large collections, and we can get an FHA case number before April 1, your buyer can follow the current guidelines. The cutoff for a ratified contract would be approximately April 20th to guarantee a case number and fall under the old guidelines. As always we are here to be of service you and your buyers. Don’t hesitate to call us if you have any questions.

Jean and James 919 334-9030

jhedges@primelending.com

Market Update for the Week of March 5, 2012

BULLETIN... HUD is set to increase FHA up-front mortgage insurance premiums April 1. This is a significant change -- please relay this to your buyers immediately: waiting will be costly. Call or email us for further information. >> Market Update  QUOTE OF THE WEEK..."If I had a way of buying a couple hundred thousand single-family homes... I would load up on them." --Warren Buffett INFO THAT HITS US WHERE WE LIVE... Buffett, one of the world's most successful investors, appeared live on CNBC last Monday and told viewers: "... if I knew where I was going to want to live the next five or 10 years, I would buy a home and finance it with a 30-year mortgage, and it's a terrific deal." He added, "... if I was an investor that was a handy type... I could buy a couple of them... and find renters... and again take a 30-year mortgage.... I think that's probably as an attractive an investment as you can make now." Check out the video:http://www.youtube.com/watch?v=vkx57Ifein8&feature=share Later that morning, as if on cue, January Pending Home Sales came in UP 2% from December and UP 8% over a year ago. This measure of homes under contract from the National Association of Realtors (NAR) hit its highest level since April 2010. The NAR's chief economist commented, "the trend in contract activity implies we are on track for a more meaningful sales gain this year."  BUSINESS TIP OF THE WEEK...  Apple means innovation. Disney says magic. What's the one special thing you stand for? Decide on that, then make it the focus of all your marketing efforts. >> Review of Last Week GOOD NEWS, BAD NEWS... Bad news: the Dow suffered its third weekly loss since the start of the year. Good news: during the week, the Dow closed above 13,000 for the first time since 2008; the Nasdaq sailed over 3,000 (but didn't stay there) for the first time since 2000; and the S&P 500 had its best two-month annual start since 1987. Good news, bad news also describes the economic data we continue to get. The bad news began with Durable Goods sliding 4% in January. This was followed by the good news that Consumer Confidence spiked to 70.8 in February. More good news came with manufacturing doing well in the Chicago region, followed by the bad news that manufacturing overall is growing, but slower than expected. It was good news that the Q4 GDP 2nd Estimate rose to 3%, February auto sales reached their highest level since before the recession and same-store sales shot up 6.4% at 18 retail chains. But bad news that Personal Spending, up 0.2%, and Personal Income, up 0.3%, were both weaker than expected.  For the week, the Dow ended down 0.04%, at 12978; the S&P 500 closed UP 0.3%, to1370; and the Nasdaq went UP 0.4%, to 2976. Better economic data hurt bond prices in the first half of the week, but European worries ultimately drove investors back to the safe haven of bonds. The FNMA 3.5% bond we watch ended the week up .01, to $103.14. In Freddie Mac's weekly survey,national average fixed mortgage rates eased this week, staying at or near record lows for the coming spring home buying season.  DID YOU KNOW?... In 2012, the NAR expects a 1.1% rise in the median price for existing homes, a 2.1% median price rise for new homes and a 3.3% rise in rents.  >> This Week’s Forecast ALL EYES ON FRIDAY...  That's when we get the February Employment Report which will tell us if the jobs situation, vital to the housing recovery, will continue its upward crawl. The consensus among economists is that there will be fewer new jobs for the month, although the Unemployment Rate should remain the same.  Those with jobs are accomplishing more, as Q4 Productivity is expected to be up again. The ISM Services index is predicted to show growth, but the Trade Balanceshould still have imports exceeding exports by over $48 billion. >> The Week’s Economic Indicator Calendar Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates.  Economic Calendar for the Week of Mar 5 – Mar 9  Date Time (ET) Release For Consensus Prior Impact M Mar 5 10:00 ISM Services Feb 56.0 56.8 Moderate W Mar 7 08:30 Productivity - Rev. Q4 0.9% 0.7% Moderate W Mar 7 10:30 Crude Inventories 3/3 NA 4.160M Moderate Th Mar 8 08:30 Initial Unemployment Claims 3/3 355K 351K Moderate Th Mar 8 08:30 Continuing Unemployment Claims 2/25 3.405M 3.402M Moderate F Mar 9 08:30 Average Workweek Feb 34.5 34.5 HIGH F Mar 9 08:30 Hourly Earnings Feb 0.2% 0.2% HIGH F Mar 9 08:30 Nonfarm Payrolls Feb 207K 243K HIGH F Mar 9 08:30 Unemployment Rate Feb 8.3% 8.3% HIGH F Mar 9 08:30 Trade Balance Jan -$48.1B -$48.8B Moderate >> Federal Reserve Watch    Forecasting Federal Reserve policy changes in coming months... Everyone still expects the Fed to keep the Funds Rate down for now, since they said they'll try to keep it there til the end of 2014. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same. Current Fed Funds Rate: 0%–0.25% After FOMC meeting on: Consensus Mar 13 0%–0.25% Apr 25 0%–0.25% Jun 20 0%–0.25% Probability of change from current policy: After FOMC meeting on: Consensus Mar 13      <1% Apr 25      <1% Jun 20      <1%