News You Can Use from Gary Moore

Weekend Market Update

May 1-2, 2010

U.S. stocks closed their worst week since January, and Treasuries rallied on Friday, extending weekly and monthly gains and sending yields lower, as a report showing the U.S. economy expanded in the first quarter failed to curb the market’s appetite for U.S. debt as a safe-haven play.

Stocks were under siege while Goldman Sachs traders and top brass squirmed and double-talked their way through televised testimony before a Congressional committee investigating Goldman’s role in the mortgage meltdown. Goldman allegedly was pooling subprime mortgages and wrapping them up in a AAA-rating bow to individual investors, while scoffing at the “widows and orphans” in company emails and boasting about profits from shorting---betting those investments would drop---subprime pools. Goldman is being prosecuted criminally and sued civilly for its actions.

The 10-year Treasury note yielded 3.65% at market close. For the week, yields dropped 15 basis points as Treasuries gained in price. Bonds yields move inversely to prices. A basis point equals 0.01%. The Dow Jones average of large-cap stocks fell 158 points on Friday yet closed above the 11,000 mark.

Mortgage interest rates, which usually correlate with the 10-year Treasury and often move opposite of stocks, continued to defy consensus opinion and remained in the very low end of this year’s range. It was a good week to lock a mortgage rate. Conventional wisdom has it that interest rates will rise this year; some market watchers had expected that increase to come after the U.S. Treasury quit its buying of mortgages about a month ago.

The Federal Open Market Committee met this week and left its short-term Fed funds rate unchanged, but the FOMC did note some signs of an improving economy, which indicates higher rates, and some Fed governors ---not the majority, obviously---wanted to raise the Fed rate immediately.

One of my sources inside the Tennessee Housing Development Agency said that the U.S. Treasury will buy THDA pooled mortgages in the near future. The source also said that the last THDA tax-free bond issue was bought up entirely by individual investors. THDA’s Great Start program gives a 4% of sales price gift to qualified first-time home buyers. Look for the gift amount to increase later this year.

30-Year Conventional Fixed

4.875% $100,000-$417,000


FHA-100% VA

5% $100,000-$393,300


30-Year Jumbo Fixed

5.875% $417,001-$900,000

(Interest-only available-Call me)

THDA Great Start

5.35% $100,000-$393,300

4% of sales price Gift

Call for free pre-approval and to discover

the best financing for you!

...by Gary Moore

Mortgage Planner, First Community Mortgage

...a subsidiary of First Community Bank

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

"We are not retreating - we are advancing in another direction."

- General Douglas MacArthur

Visit my real estate website:

http://www.RealCarte.com


Visit my mortgage website:

http://www.BrentwoodHomeLoan.com

(0% points, 1% origination. Market Update informs consumers and Realtors on market trends, offers subjective opinions and is not a quote for a unique borrower.)