My New Blog

Hello,

Just a quick change of pace here to check in with all of my clients and website visitors.

According to my stats there have been over 5,200 recent visitors to my site and blog.

I would like to take this moment to ask what you think about the content, information, articles, etc.

We are firm believers that the customer IS ALWAYS right and we love to hear from those who are using our services.

One of our new services is Financial Advisor analysis. I have a network of great Financial advisors to help answer questions in these troubled times.

Please take a moment to drop us a email or comment on the blog.

I am always available to ask questions too.

No obligation or pressure ever!!!

PS- a news tidbit- The Bond market has been doing well and the mortgage bond experts are expecting rates to get a bit better.

By Daniel Taub

Oct. 20 (Bloomberg) -- Southern California home sales rose 65 percent in September, the biggest year-over-year increase in at least two decades, as buyers took advantage of foreclosures to purchase properties at discounted prices, MDA DataQuick said.

A total of 20,497 new and existing houses and condominiums sold last month in Los Angeles, Riverside, San Diego, Ventura, San Bernardino and Orange counties. The rise from a year earlier was the biggest in MDA DataQuick's records, which go back to 1988, and September's sales count was the highest since December 2006, the San Diego-based company said today in a statement.

Sales increased the most in areas where rising foreclosures drove down prices, MDA DataQuick said. Half of all the homes sold in Southern California last month had been foreclosed upon in the previous 12 months, up from 13 percent a year earlier.

``The prices are low enough that people who would normally not be able to purchase are buying,'' said Stephanie Martin, owner of Champion Realtors, a San Bernardino-based residential brokerage.

A foreclosed home with three bedrooms and 2 1/2 bathrooms in Fontana, California, that Martin sold for Ocwen Financial Corp. this month attracted more than a dozen offers and sold for $25,000 more than its asking price, she said. ``The buyers are out there. They're looking.''

Sales of foreclosed homes were highest in Riverside County, where they accounted for 69 percent of the homes sold, MDA DataQuick said. Riverside also had the biggest increase in the number of homes sold, more than doubling from a year earlier to 4,551. San Bernardino had the second-highest percentage of foreclosure sales, at 63 percent, and had the second-largest rise in sales, at 88 percent.

`Steep Price Declines'

Last month's sales increase was driven ``largely by bargain shopping -- price reductions,'' said Andrew LePage, an analyst with MDA DataQuick, a unit of Richmond, British Columbia-based MacDonald, Dettwiler and Associates Ltd. ``In some inland markets, you have double, triple, or more of a year ago, thanks to large declines in the home prices. There's this unfailing correlation between big price declines and big sales increases.''

The surge in foreclosure sales, which tend to be discounted, pushed the median price down 33 percent from a year earlier to $308,500. The September median was 39 percent below the record $505,000 median reached in Southern California last year, said MDA DataQuick, which compiles its surveys using county records and supplies real estate information to public agencies, lenders, title companies and other customers.

Prices fell in all six Southern California counties the company tracks, dropping the most in San Bernardino and Riverside, down 37 percent in each, followed by San Diego County, which was down 30 percent to a median $328,000.

It isn't yet clear whether September's sales increase will be repeated this month, LePage said.

Those sales came ``before the financial meltdown of the last few weeks,'' he said. ``It was a strong month, period, right before we had some of the worst news on the economy and financial markets since the Great Depression.''

The stock and bond market are still falling. Mortgage rates are rising. If you want to refi or buy lock in now.

Red on Wall Street

NEW YORK (CNNMoney.com) -- Stocks tumbled Wednesday afternoon as recession fears resurfaced following a weaker-than-expected retail sales report and dour comments on the economy from Ben Bernanke and another Federal Reserve official.

The credit market showed some signs of easing, as a key overnight bank lending rate fell. But the improvement was slowgoing and failed to reassure investors. Global markets were mostly lower.

The Dow Jones industrial average (INDU) fell as much as 515 points before pulling back a bit. The decline was equal to around 6.4%. The Standard & Poor's 500 (SPX) index lost 5.8% and the Nasdaq composite (COMP) lost 5.5%.

"The path of least resistance seems to be down again," said Joseph Saluzzi, co-head of equity trading at Themis Trading.

Saluzzi said investors were reacting to the weak economic reports from the morning and the still-sluggish credit market.

Better-than-expected quarterly results from Intel, Coca-Cola, Wells Fargo, JPMorgan Chase and a host of regional banks had little impact amid worries about a recession.

San Francisco Federal Reserve Bank President Janet Yellen said the U.S. economy "appears to be in a recession," something many economists, but few Fed officials, have said. Yellen isn't a voting member of the Fed's policy-setting committee this year but is nonetheless seen as influential. (Full story)

Federal Reserve Chairman Ben Bernanke, speaking in the afternoon, said that while policymakers now have the tools they need to fix the financial and credit markets, the economic rebound will take time. (Full story)

The Fed's 'beige book' reading on economic activity was due later in the day.

Although Wall Street has welcomed many of the steps the government and world banks have taken to get money flowing again, investors remain skittish. That's partly because a lot of the programs won't kick in until several months from now.

"After all the damage that's been done, it's going to take a while for people to feel confident again," Saluzzi said.

Stocks rallied sharply Monday, with the Dow up 936 points or 11.1%, its best one-day point gain ever and best one-day percentage gain since 1933. The advance was fueled by bets that the United States would follow Europe in pouring money directly into banks in exchange for shares, as part of the $750 billion bailout plan.

But investors took a "sell the news" approach Tuesday after the government detailed plans to invest at least $250 billion in the nation's banks. The Treasury said it will start by investing $125 billion in nine leading banks. (Will it work?)

Last week was Wall Street's worst ever, as the Dow capped a stunning eight-session selloff that cut 2,400 points and 22% off the blue-chip indicator. That erased $2.4 trillion in market value from the Dow Jones Wilshire 5000, the broadest measure of the stock market.

Many market pros are cautiously optimistic that Friday's lows represent the lows of the bear market, or a bottom.

Treasury prices inched higher Wednesday, lowering the corresponding yields. The dollar gained versus the yen and fell against the euro. Oil and gas prices slipped, while gold prices rose.

Economy: Consumer spending has remained strained, despite the drop in gas prices over the last 4 weeks.

Retail sales fell 1.2% in September, the biggest drop in three years, after falling a revised 0.4% in August. Economists surveyed by Briefing.com thought sales would fall 0.7%. Sales excluding volatile auto sales fell 0.6%, versus forecasts for a drop of 0.2%. Sales excluding autos fell a revised 0.9% in August. (Full story)

The September Producer Price Index (PPI), a measure of inflation at the wholesale level, fell 0.4%, in line with forecasts and reflecting the decline in energy prices. PPI fell 0.9% in August. So-called core PPI, which strips out volatile food and energy prices, rose 0.4% in September, versus forecasts for a rise of 0.2%. Core PPI rose 0.2% in August.

The NY Empire State index, a regional manufacturing report, slumped to negative 24.6 from negative 7.4 in the previous month. Economists thought it would fall to negative 10. Any negative reading shows weakness, while a positive reading shows growth.

Late Tuesday, the government said the U.S. budget deficit swelled to $454.8 billion, the highest level in history.

Earnings: A number of companies reported better-than-expected quarterly results late Tuesday and early Wednesday, including a slew of banks.

JPMorgan Chase (JPM, Fortune 500) surprised investors Wednesday morning by reporting a profit versus expectations for a loss. But the company's net income plunged 84% due to charges connected to its purchase of Washington Mutual. It also took $3.6 billion in writedowns related to bad mortgage bets. Shares fell 2%. (Full story)

Wells Fargo (WFC, Fortune 500) posted weaker profit on writedowns and credit losses, but results were better than expected. The bank said it expects to complete its $11.7 billion purchase of Wachovia by the end of the fourth quarter. Shares were little changed. (Full story)

JPMorgan and Wells Fargo have fared better than many of their peers in the credit crisis. Still, the two banks are among the nine that will participate in the Treasury plan.

In other earnings news, Coca-Cola (KO, Fortune 500) reported higher quarterly earnings that beat estimates on higher sales that missed estimates. Coke's report followed Pepsi's weaker results Tuesday. Coke shares gained 5% Wednesday.

And late Tuesday, Intel (INTC, Fortune 500) reported higher quarterly earnings that edged estimates on higher revenue that was short of forecasts. The chipmaker also reported a bigger-than-expected rise in gross margins, a key measure of profitability. Shares gained 1.5% Wednesday morning.

JPMorgan, Coke and Intel are all Dow stocks. Coke and Intel were the only gainers, as 28 of the 30 components fell.

Third-quarter earnings are currently on track to have fallen 9.8% from a year ago, according to the latest estimates from Thomson Reuters.

Credit market: Some bank lending indicators improved, in a sign that the recent global initiatives to get money flowing again may be starting to work. (Full story)

Libor, the overnight bank-to-bank lending rate, fell to 2.14% from 2.18% Tuesday, according to Bloomberg.com.

The three-month Libor, what banks charge each other to borrow for three months, fell to 4.55% from 4.64% Tuesday.

The Libor-OIS spread, a measure of cash scarcity, decreased to 3.35% from 3.39% Tuesday and a record high of 3.67% Friday.

The TED spread, which is the difference between what banks pay to borrow from each other for three months and what the Treasury pays, widened to 4.40% from 4.30% late Tuesday. The spread hit a record 4.65% Friday. The wider the spread, the more reluctant banks are to lend to each other.

Treasury prices gained, lowering the yield on the 10-year note to 4.02% from 4.07% late Tuesday. Treasury prices and yields move in opposite directions.

But the yield on the 3-month Treasury bill, seen by many as the safest place to put money in the short term, fell to 0.15% from 0.25% late Tuesday, showing investors were still willing to take a meager return on their money rather than risk it on stocks. Last month, the yield on the 3-month bill skidded to a 68-year low around 0%.

Other markets: U.S. light crude oil for November delivery fell $3.76 to $74.87 a barrel on the New York Mercantile Exchange. Oil prices have tumbled on bets of slowing demand since the price of crude hit an all-time high of $147.27 a barrel on July 11.

Gasoline prices fell another 3.8 cents overnight, to a national average of $3.125 a gallon, according to a survey of credit card activity by motorist group AAA. It was the 28th consecutive day that prices have decreased - in the past month alone, they're down more than 73 cents a gallon.

Finally someone is getting it right. If the major lenders in our country do this instead of letting everyone short sale or foreclose we will get out of this economic crisis MUCH faster. See below.

NEW YORK (CNNMoney.com) -- A plan announced today by Bank of America will be the most aggressive foreclosure prevention effort ever undertaken by a U.S. bank.

The program, scheduled to start in December, will be open to distressed borrowers who signed up with Countrywide Financial before December 31, 2007. Countrywide was acquired by Bank of America (BAC, Fortune 500), in July.

It came in a legal settlement that the company entered into with the attorney general offices of 11 states, who had sued Countrywide over predatory lending practices, but the initiative applies to borrowers in all 50 states.

"The Countrywide settlement is a watershed moment for loan modification programs," said Mark Pearce, North Carolina's Deputy Commissioner of Banks and a member of the State Foreclosure Prevention Working Group. "This is, by far, the best [program ever], even better than the FDIC program with IndyMac Bank."

As part of the initiative, Bank of America will cut monthly housing payments, including mortgage, property taxes and insurance, to no more than 34% of gross income. The move is expected to help keep as many as 400,000 troubled borrowers in their homes.

The program targets holders of subprime adjustable rate mortgage (ARMs), subprime fixed rate loans and option ARMs, but prime and Alt-A borrowers, who did not document their income, will be eligible as well.

No other foreclosure prevention effort has aimed to keep borrowers' house payments so low.

"[The program's] affordability is far better than any other program out there," said Rick Simone, spokesman for Bank of America.

By contrast, the much heralded foreclosure-prevention initiative announced in August by the FDIC for customers of IndyMac Bank, the subprime lender that the agency took over in July, said it will keep borrower payments to no more than 38% of gross income.

"This is the biggest mandatory modification of loans in U.S. history," said Jerry Brown, attorney general of California, the state with the largest number of borrowers who may benefit from the settlement. "Of course, we never saw such a big rip-off by any other company either."

According to Simone, the Countrywide program will proactively screen all of its borrowers for eligibility, and then contact them directly to offer loan workouts. No prepayment penalties or modification fees will apply. He added that Bank of America is training personnel and putting systems into place that it hopes will enable staff to deal with a large number of mortgages all at once.

The new program comes with a price tag of $8.4 billion, but Simone says that it will cost much less than foreclosing on homes en masse.

As the credit crisis continues, more and more lenders and mortgage servicers are coming to grips with the fact that preventing a foreclosure is usually cheaper than going through the repossession process and then reselling the property in a declining market.

Depending on each borrower's circumstances, Bank of America might freeze or lower a loan's interest rate or even cut the principal loan balance. The bank said it will also participate in the government's Hope for Homeowners program, a provision of the housing rescue bill which went into effect Oct. 1 and makes FHA-insured loans available for delinquent borrowers.

The announcement of the program came on the heels of Friday's approval of the $700 billion Wall Street bailout, a measure which has been criticized for failing to address the foreclosure crisis head on.

The hope is that other lenders and servicers will follow Countrywide's lead.

"Now that we've gotten this with Countrywide, I would expect that we'll be talking with other major servicers to implement similar programs in the near future," said North Carolina Deputy Commissioner of Banks Mark Pearce, who worked on this settlement.

But he and other members of the the State Foreclosure Prevention Working Group have been pushing other lenders to do something this drastic for months, without much luck.

"So far, they have failed to show the leadership required to get it done," said Pearce. "I hope, having the market leader do this will spur the other servicers to greater action." 

Question: When is the best time to refinance?

Answer: Many people flock to refinance while mortgage interest rates are low, particularly when rates are about two percentage points below their existing home loans. Other factors, like when to finance, will depend on how long you plan to hold on to your home and whether you have to pay considerable fees to refinance. It also will depend on how far along you are in paying off your current mortgage. If you expect to sell your home relatively soon, you are not likely to recoup the costs you incurred to refinance. And if you are more than halfway through paying your current mortgage, you probably will gain little by refinancing. However, if you are going to own your home for at least another five years, that is probably long enough to recoup any refinancing costs and realize real savings as a result of lowering your monthly payment. In fact, if it costs you nothing to refinance, you can gain even more. Many lenders will let you roll the costs of the refinancing into the new note and still reduce the amount of the monthly payment. Plus, there are no-cost refinancing deals available.

Don't forget the mortgage rules are now changing daily and what is available today might be gone tomorrow.

That includes unknown rates in the future.

If you have an adjustable that still has a few years left on it, it may be wise to refi now into a fixed rate while you still can.

Contact your lender when ready to refinance.

See this article from 05 about the mess we are in....Could you be part of it? Cash-out refis soar

Americans are using refinancing to take cash out of their homes -- but that can be a risky strategy. August 5, 2005

NEW YORK (CNN/Money) - The pace of mortgage refinancing has not slowed, according to a new report from Freddie Mac. But the primary reason for refinancing may have changed. In a growing proportion of refinancings, homeowners are taking major amounts of cash out of the transactions. In the quarter ended June 30, 74 percent of Freddie Mac-owned loans that were refinanced resulted in principal amounts larger by at least 5 percent. Only 9 percent of refinancings resulted in lower loan amounts. In other words, nearly three-quarters of homeowners refinancing a $100,000 loan wound up with a loan principal of at least $105,000, usually more...the difference between the size of the old loan and the new loan is being taken out in cash. In 2003, that was the case only 33 percent of the time. Back then refinancing was rate driven, according to Bob Moulton of Americana Mortgage Group. Homeowners reworked mortgages to take advantage of lower interest rates so they could reduce their monthly bills. Now they refinance to put cash in their pockets or to pay for big purchases. Where's the money going? The homeowners spend much of the money on their homes. The latest figures from Harvard's Joint Center for Housing Studies report that Americans paid out $133 billion for home improvements in the 12 months ended June 30. Others take out cash to buy motor vehicles, pay for the kid's college, or to pay down other debt, all of which can be legitimate uses for the money, especially if it enables homeowners to avoid or eliminate high-interest debt such as from credit cards. Borrowers shouldn't drain their home equity for frivolous purposes, however, and then hope for increasing house prices to replenish it. That could be risky. "For the typical family, home equity accounts for the bulk of their wealth," said Frank Nothaft, chief economist for Freddie Mac. Fortunately, most families are practicing responsible refinancing. "The average loan-to-value ratio after refinancing is still 70 percent," Nothaft said, which means homeowners are being pretty conservative. He also points out that the number one use the money is being put to is home improvement, "which enhances the home's value." Other good uses include retiring more expensive debt. Mortgage loans are far better for the borrower than high-interest credit card or auto loans and can even have advantages over student loans, said Moulton, "The government is a partner in paying off mortgages." Not only are interest rates lower than other loans, the interest is also tax deductible. Moulton reports that some of his customers are using their cash-outs to buy more real estate. "I have a client who is looking to tap $400,000 to buy a second home in the Berkshires." That's only risky if real estate prices drop. Freddie Mac expects rising mortgage rates to dampen enthusiasm in the housing market later this year. If that occurs, homeowners would have to grow home equity the old fashioned way, by paying off mortgage loans. Alan Greenspan says Freddie Mac's operation may pose a risk to the U.S. economy.

If anyone did a cah out refi in the last 7 years or flipped a house for profit we may be a part of the problem.

All the blame is not just for Wall Steet. Everyone involved form the top to the bottom has a minor rol to play.

Lets just hope and pray we can resolve it...

I would value your opinions on this topic...Please respond with yout opinions.

On October 1st, 2008 FHA will be raising their mortgage insurance fees.

In this changing market even FHA needs to protect themselves a little more.

Currently FHA requires mortgage insurance on all loans with a LTV of over 80%.

The current fee for this is 1.5% of the loan amount paid upfront and .5% monthly fee.

The new fees will be 1.75% upfront fee and .55% for LTV's over 95%.

Example: A 300,000 loan at 97% LTV would have a $4,500 upfront cost and $125 month for mortgage insurance.

Under the new rules the same $300,000 loan would have a upfront cost of $5,250 and a monthly of $138.

Protect your clients and get your FHA loans approved before the deadline.

You can contact me with any questions you may have.

Take care,

Chuck Davis

714-625-8954

Speaking in a Bloomberg Television interview, noted hawk Philadelphia Federal Reserve President Chuck Plosser said the Fed may have to hike rates even as housing prices continue to fall.

Plosser commented that the economy has not changed much in the last few months and that rising prices pose the biggest challenge to the economy. Plosser noted that price pressures are moving through the economy and that the Fed may have no choice but to raise rates.

Plosser acknowledged that financial stability is an important consideration for the economy and that the Fed must take action before price expectations become "unhinged". Plosser added that the Fed's credibility must be reinforced by action.
Plosser warned that high inflation expectations will result in firms passing on higher costs to consumers. He warned that a slackening economy does not necessarily contain inflation pressures.

"The U.S. economy is on a road to recovery, but the road will be bumpy," said Plosser.

Plosser admitted that no one knows if the worst of the credit crisis has passed. He pointed to the recent GSE turmoil stating that the turmoil posed a risk to markets and this made the Fed's job difficult.

By Steve Stecyk and edited by Cristina Markham
©CEP News Ltd. 2008