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Weekend Market Update

Dec. 5-6, 2009

While FHA loans have driven the purchase markets this year due to their relatively low downpayment requirements and the disappearance of low-doc and low-investment conventional loan programs, the party may slow down next year as buyers will be required to have more money and better credit, HUD’s top man told Congress this week.

In financial markets, concerns about future interest rate increases hit bond prices and kept a lid on stocks on Friday.

Employers cut 11,000 jobs from their payrolls last month, the Labor Department reported Friday. It was the smallest number of job losses since the start of the recession in December 2007. The unemployment rate, generated by a separate survey, fell to 10% from a 26-year high of 10.2% in October.

The 10-year U.S. Treasury note rose in yield to 3.48%.

Job losses from the previous two months were revised lower, too, indicating that a slow but steady pattern of lessening job cuts is emerging. Stocks initially jumped on the news and hit 14-month highs---touching levels last seen after the collapse of Lehman Brothers last year--- before pulling back and taking modest gains into the weekend. Some market players began tilting toward the prospect of future interest rate increases, if the economy has indeed bottomed.

As we noted last week, short-term unemployment numbers mask the depth of U.S. unemployment as those persons who have been unemployed for more than six months is at all-time highs. The drop in the unemployment rate also points to the millions of people who have been out of work so long that they've given up looking for a job.

Reminding us that all markets are inter-related, the dollar showed strength against the yen and euro, which made dollar-denominated oil prices rise and led to a drop in gold prices. Much trading action was an unwinding of the carry trade, which involves investors borrowing in low-yielding currencies and then lending money in higher-yielding currencies.

HUD Secretary Shaun Donovan testified before the House Committee on Financial Services on Wednesday that FHA will be raising requirements for credit score and will raise its mortgage insurance fees next year. Donovan also said that in a risk-hedging measure it will lower the amount of buyer’s closing costs that a seller may pay on an FHA loan from the current 6% to 3% of the sales price.

Donovan also noted that this year first-time buyers have consumed 75% of all FHA purchase loans, and that half of all first-time buyers have used FHA loans. With the Recovery Act credit of up to $8,000 for first-time buyers and up to $6,500 for move-up buyers good through April 30, prospective buyers need to take action.

Call or email me to get pre-approved and get my free, customized buying strategy consultation.

30-Year Conventional Fixed

4.75% $100,000-$417,000


FHA-100% VA

5% $100,000-$393,300


100% Guaranteed Rural Housing w/no MI

5.5% $100,000-$417,000

30-Year Jumbo 5/1 ARM (15% down, No MI)

5% $417,001-$900,000

(Interest-only available-Call me)

Call for free pre-approval and to discover

the best financing for you!

...by Gary Moore

Cell: 615-579-8658 Toll-free fax: 866-321-6513

"Confidence grows at the rate a coconut tree grows. It falls at the rate a coconut falls." - Montek Ahluwalia

Visit my real estate website:

http://www.RealCarte.com

Visit my mortgage website:

http://www.BrentwoodHomeLoan.com

(0% points, 1% origination, subject to program and lock period. Market Update informs on market trends and is not a quote for a unique borrower.)

Weekend Market Update

Dec. 26-27, 2009

The U.S. Treasury Department picked Christmas Eve to announce that it is increasing the slush fund it has been providing to Fannie Mae and Freddie Mac to soak up bad loans. Treasury will remove the caps on aid to Fannie Mae and Freddie Mac for the next three years, to allay investor concerns that the companies will exhaust the previously allocated government assistance.

The two companies have caps of $200 billion per year each on backstop capital from the Treasury. Under the new agreement announced on Thursday, these limits can rise as needed to cover net worth losses through 2012.

Treasury says the two aren't likely to need the full $400 billion they'd been offered for 2009, but its authority to expand the guarantee unilaterally expires Dec. 31. The two GSE's (Government-Sponsored Entities) combined have drawn $111 billion of that so far this year.

Reading the tea leaves of this, one thought is that Treasury foresees an extended run of foreclosures. Treasuries and mortgage-backed securities were selling off this week, which pushed up interest rates, perhaps as a foretelling of a new cycle of higher rates. The 10-year Treasury rose in yield to 3.81% at the close of this week's trading and seems to be targeting 4% yield, which presents a signal point for mortgage rates, according to my analysis. The 10-year, which generally correlates with mortgage rates, has not crossed 4% all year. The 3.81% is its highest yield since Aug. 7.

Another view is that rates were pressed upward this week as investors pondered the Federal Reserve's recent announcement that their program of buying mortgage loans would expire in March. This support under the market, which the Fed announced in November 2008, triggered the trough in mortgage rates of 4.5% to 5%-something that we have experienced generally ever since.

While money was flowing out of bonds, it was moving into stocks with a so-called Santa Claus rally that pushed all major stock averages to highs for 2009.

Now is the time to be firming plans for real estate and financing for 2010. All is not gloom and doom. We have a window of opportunity at this time. Call me to show you some opportunities you can find in real estate now and to do some "mortgage planning" on your overall financial plan.

30-Year Conventional Fixed

4.875% $100,000-$417,000


FHA-100% VA

5.5% $100,000-$393,300


100% Guaranteed Rural Housing w/no MI

5.5% $100,000-$417,000

30-Year Jumbo 5/1 ARM (15% down, No MI)

5% $417,001-$900,000

(Interest-only available-Call me)

Call for free pre-approval and to discover

the best financing for you!

...by Gary Moore

Cell: 615-579-8658  Toll-free fax: 866-321-6513

"We are what we believe we are." --C.S. Lewis

Visit my mortgage website:

http://www.BrentwoodHomeLoan.com

(0% points, 1% origination, subject to program and lock period. Market Update informs on market trends and is not a quote for a unique borrower.)

Tips from the Trenches

Realtors’ 12 Days of Christmas

By Gary Moore

Mortgage Planner

On the first day of Christmas, my broker gave to me:

A piece of his com-pa-ny.

On the second day of Christmas, my broker gave to me:

Two trips to Tunica,

And a piece of his com-pa-ny.

On the third day of Christmas, my broker gave to me:

Three yard signs,

Two trips to Tunica,

And a piece of his com-pa-ny.

On the fourth day of Christmas, my broker gave to me:

Four Escalades,

Three yard signs,

Two trips to Tunica,

And a piece of his com-pa-ny.

On the fifth day of Christmas, my broker gave to me:

Five per cent more split……!

Four Escalades,

Three yard signs,

Two trips to Tunica,

And a piece of his com-pa-ny.

(OK, you’ve got the idea…let’s skip to the 12^th day.)

On the 12^th day of Christmas, my broker gave to me:

Twelve all-cash buyers…

Eleven plumbers plumbing…

Ten toilets leaking…

Nine needy relos…

Eight 3G iphones…

Seven Supra boxes…

Six new BlackBerries…

Five per cent more split……!

Four Escalades,

Three yard signs,

Two trips to Tunica,

And what’s left of his com-pa-ny.

Merry Christmas! Feliz Navidad!

(Check out http://brentwoodhomeloan.com Mortgage Planner Gary Moore produces Weekend Market Update and Tips from the Trenches, copyright 2002-2009, designed for up-and-coming Realtors and those who seek continual improvement, from the perspective of business partner and teammate. Bringing a background of experience as a Realtor, Homebuilder and PR advisor, I seek to help you build your business and enhance your value to customers by providing specialized resources, training and insights. Contact me at 615-579-8658 for group or personal training and to pre-approve your prospects into the program which best serves their unique picture.)