TEAM EMPOWERMENT MORTGAGE CHATTER; April 29; News & Headlines; Should YOu Get A Second Opinion?; Renting: Truly or Better Option?; NAR: Resale Real Estate Prices to Fall 2% in 2011; Today’s Rates


“There are no accidents… there is only some purpose that we haven’t yet understood.” — Deepak Chopra: Speaker and writer on spirituality and mind-body topics



Ask the person standing next to you, “In the first quarter of 2011, how many housing units are there in the US?” The answer is 131 million. Of those, about 86% are occupied, 57% by owners, 29% by renters, and 14% (nearly 19 million units) are vacant. In this country the home ownership rate is about 66%, down slightly from the previous quarter and year. The Census Bureau reports that the homeownership rates were highest for those householders ages 65 years and over (81%) and lowest for those under 35 years of age (38%) – no surprise there. Lastly, the homeownership rate for non-Hispanic Whites was highest at 74%, while “Black Alone householders” was lowest at 45%. CensusHouseholds

Borrowers can obtain their IRS Transcripts within minutes, many times before they are available to lender. They can just call 800-908-9946, press (1) for English, give their social security number when prompted, and give the street numbers of their address on their tax returns. The borrower should then listen to the automated message and when it prompts to submit an order by pressing (1) don’t – the borrower should hit zero (0) until it brings them to the operator. At that time the borrower can verbally request a faxed copy of the years’ transcripts needed, but remember that the borrower will be asked personal questions for all people on returns will be asked such as: what form they filed, address, SSN’s, names, number of people on returns, whether it is a business or personal fax, etc.

Who has been buying securities backed by mortgages? Over the three week period ending on April 13, domestic bank holdings of agency MBS have increased by $26 billion (from $1,093bn to $1,119bn). This sharp rise occurred after bank holdings of agency MBS remained nearly flat for about 3-4 months. In addition, a major portion of the recent spike in bank holdings of agency MBS can be attributed to the purchases of large banks instead of small banks (large bank holdings are up $21.5bn over the three week period ending on 4/13). This is unlike with the prior 3-4 months when agency MBS holdings of small banks continued to increase while those of large banks remained flat or even declined. It is also apparent that domestic banks that were aggressively growing their Treasury holdings (and agency debt) instead of agency MBS holdings in 2009 and 1H’10 are preferring agency MBS over Treasuries over the past several months.

Things seem pretty slow out there, with a light day in Asia, Europe wrapped up with the wedding holiday today and Bank Day coming up on Monday, and the devastation in the South from the tornadoes. 170 tornadoes through 6 states! (Japan’s markets were closed today, and next Tuesday through Thursday as the Golden Week holidays begin.)

Yesterday rates improved as Initial Jobless Claims jumped 25K last week with continuing claims posting a decrease. Pending Home Sales for March came in much stronger than expected, possibly due to buying ahead of the FHA MIP change. The 1st quarter GDP printed worse than expectations at +1.8% (is the economy slowing back down, or did it pick up in the first place?), and a weak 7-yr auction. The 10-year note closed higher by 14+/32s (3.314%) and rate-sheet MBS prices were better by about .250-.375.

Today we have/had had the Employment Cost Index, Personal Income & Spending, the Chicago PMI, and a Michigan Sentiment number. Personal income and spending both posted larger-than-expected gains in March. After Exxon produced a 1Q profit of $10.7B earlier this week, Chevron announced net income of $6.21B (last year’s first quarter: $4.55B) due to higher oil prices. Remember that we have more news ahead of us, MBS prices are better by about .125.


Buying and/or financing a home are major decisions for anyone. We all look for referrals from friends, family and co-workers who have gone through the process successfully. But we wonder….

“Are there geographical differences?”

“Has the market changed since they did their transaction?”

“How has the ever-changing technology impacted real estate since their closing?”

“Are my personal circumstances (income, assets, and credit) the same as the person who is giving the referral?”

So, how do you know if the agent and/or loan officer you are working with (regardless of how you found them) is a “keeper”? It got to be more than a personality match in the current environment. It’s about effectiveness and leadership. I believe that you need to judge them by three criteria:

1. Are they an EXPERT?

Do they know everything about the home, the neighborhood, the other available homes, the pricing trends, the loan product and qualification thresholds, etc.? Are they able to target a likely buyer, if you are selling? Are they certified or have specific designations? What formal training have they had (say, in the art of negotiating, as an example). Do they know anything about quality of construction or when you are likely to need to replace a roof or boiler?

2. Are they looking to serve?

Unfortunately, many sales people operate in their personal best interests. Today, more than ever, you need someone who puts your needs ahead of their own. Whether you are looking to sell quickly or for the most money, you need an agent who acts in the best ways to help you achieve those objectives. Likewise, when looking to buy, is your agent asking you the right questions and listening, so that they can streamline your search?

3. Do they have creative solutions to your challenges?

Are their presentations to you basically the same as every other agent? Do their print ads, postcards, open house plans, and promises of fifty websites sing as monotonous? You need an agent with unique approaches though marketing plans that are comprehensive with online and offline components that speaks to a targeted buyer pool (Gen X, Gen Y, Baby Boomers, certain employment groups, particular cultural components, and so on).

If you believe you are working with a great agent and/or loan officer, thank your lucky stars and be loyal to them because they are worth their weight in gold. On the other hand, if you’re concerned that you have a run-of-the-mill person, don’t settle! Go on a search for excellence. It’s too important not to.


After the last five years, more and more people are hesitant about purchasing a home. We definitely understand their concern. However, is the alternative option actually a better choice? Renting in the current housing market might not make good financial sense. Just this week the Harvard University Joint Center for Housing Studies released a report analyzing conditions in the rental market. The study found:

Rental markets are now tightening, with vacancy rates falling and rents climbing. With little new supply of multifamily units in the pipeline, rents could rise sharply as demand increases.

This increase in rental costs is already taking place. In their

Spring 2011 Housing Report released earlier this week, stated:

…that rental listing prices across the US climbed 7.4 percent while for sale listing prices retreated 8.8 percent since this time last year (April 2010 – April 2011).

Just yesterday, Trulia released its second quarter

2011 Rent vs. Buy Index. In the report, they stated that buying a home has become more affordable than renting in nearly four out of five (78%) major cities.

“With home prices nearing a double dip and more foreclosures expected to flood the housing market over the next two years, the decision between renting and buying a home across most of the country has clearly moved in favor of buying,” says Ken Shuman, Head of Communications at Trulia. “As we head into the summer buying season, those looking to buy a home should be encouraged by improvements in the market and feel optimistic about their chances of finding an affordable home, much more so than in previous years.”

“Aspiring homeowners should focus their energies on locking down a low mortgage rate sooner than later. While home prices are unlikely to return to pre-crash levels, today’s low interest rates will likely rise thanks to inflation and spikes in the Fed rates,” notes Shuman. “As the government wind downs its role in the mortgage markets higher mortgage interest rates will be inevitable.”

Bottom Line

Though purchasing a home is not an easy decision after what has taken place in the market over the last five years, realize rental prices are about to soar. You should probably take this into consideration when determining your best housing choice.


A National Association of Realtors index that tracks pending sales of existing homes rose 5.1 percent in March but dropped 11.4 percent compared to the same month last year.

Also today, NAR released its latest annual forecast, which anticipates a 1.8 percent drop in the median price of U.S. existing homes — the previous forecast, released in March, had anticipated a 1 percent drop in the median U.S. existing-home price.

Regionally, the Pending Home Sales Index — which is based on sales for which the contract has been signed but the transaction has not yet closed — rose 10.3 percent in the South, 3.1 percent in the West and 3 percent in the Midwest while dipping 3.2 percent in the Northeast from February to March.

And the index dropped 18.4 percent in the Northeast, 16.6 percent in the Midwest, 10.5 percent in the South and 4.1 percent in the West on a year-over-year basis in March.

An index score of 100 is equal to the average level of contract activity during 2001, according to NAR, which was the first year of data to be examined for the index. The index stood at 94.1 in March 2011, compared to 89.5 in February and 106.2 in March 2010. Regionally, the index score was 63.4 in the Northeast, 83.5 in the Midwest, 103.7 in the West and 110.2 in the South in March 2011.

In its economic forecast, NAR anticipates the median existing-home price will be $169,800 this year, down from $172,900 in 2010, and is expected to rise 3.9 percent, to $176,500, in 2012. Sales of existing homes are expected to climb 7.7 percent this year, to 5.28 million, and to climb another 5.9 percent in 2012, to 5.6 million.

NAR expects the median new-home price will climb 1.4 percent this year, to $224,100, and to rise another 3.1 percent in 2012, to $231,000. In its previous outlook, released last month, NAR had forecast a new-home price of $222,300 in 2011.

New single-family home sales are expected to dip 0.5 percent this year, to 320,000, according to the latest economic outlook, and to rise a whopping 52 percent in 2012, to 487,000.

NAR also expects the national unemployment rate to average 8.8 percent in 2011, an improvement from the 9.6 percent rate in 2010, and to improve to 8.6 percent in 2012. The interest rate for a 30-year fixed-rate mortgage is expected to average 5.2 percent this year, and to climb to 6 percent in 2011.

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