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  1. Mortgage Rates Could Be Affected By Data Released This Week

    2 By on July 26, 2010

    In the upcoming week a lot of data is coming out that could affect the housing market and the mortgage industry. Later today, information about new home sales is set to be released. It will be interesting to see how the expiration of the first-time homebuyer tax credit affected new home sales in June.Economic Data Could Affect Mortgage Rates

    On Tuesday, the S&P Case-Shiller Home Price Index is going to be released. This is probably the most important indicator of home prices nationwide. Later on in the day, data on consumer confidence will be released. Both the Home Price Index and information on consumer confidence could play a big role in the direction mortgage rates move. Continue Reading…

    Category: General

  2. Initial Jobless Claims Climb to 464,000

    By on July 22, 2010

    More Americans filed initial claims for state unemployment benefit for the week ending July 17. The amount of first-time jobless claims rose by 37,000, to a seasonally adjusted 464,000. This is the largest increase in initial jobless claims since early this year in February. Initial Jobless Claims are up this week

    The jump in jobless claims is greater then the amount projected by economists who thought that claims would rise to 445,000. The increase in claims wipes out last weeks decline in claims for state unemployment benefits, which was partly attributed to companies like General Motors reporting less temporary layoffs than they normally would during this time of year.

    Most analysts agree that the 4-week moving average is a better indicator of initial jobless claims. The average increased by 1,250 to 456,000. The number of people still receiving jobless benefits fell by 223,000 in the week ending July 10th, moving that figure to 4.49 million Americans. This does not include those who receive extended benefits as part of a federal program.

    Chairman of the Federal Reserve, Ben Bernanke, spoke yesterday saying that it will take a “significant amount of time” to recover the amount of jobs lost between 2008 and 2009.

    The report on jobless claims is just one of many indicators that have been released recently that indicate that economic recovery is beginning to slow down. So long as unemployment remains down consumer spending will be limited. It will be interesting to watch what affect this economic news has on mortgage rates and the housing industry as a whole.

    Category: General

  3. Amount of Foreclosures Could Surpass 2009 Numbers

    1 By on July 15, 2010

    A record number of borrower’s seem to be falling behind on their home loans. In the first half of 2010 528,000 homes were taken over by lenders according to RealtyTrac Inc. If foreclosures continue at this rate it is likely that the amount of homes taken by lenders will surpasses the 900,000 homes foreclosed upon in 2009.Foreclosures Level High in 2010

    Rick Sharga, a senior VP at RealtyTrac, mentioned that historically lenders normally take over about 100,000 homes a year. It looks as though this year we may surpass that number ten fold. It was reported that the number of foreclosures in the first half of 2010 was up 8 percent compared to this time last year. On a brighter note the amount of foreclosures was down 5 percent from the second half 2009.

    With unemployment rates high, mortgage-assistance programs not working as they were supposed to and the economy not boosting the housing market it looks like a new wave of foreclosures could be on the way in the final months of 2010. This may cause real estate prices to fall even further.

    Mortgage rates are already near historic levels. How do you think a rise in foreclosures could affect the mortgage industry in the future?

    Category: General

  4. Initial Jobless Claims Fall Close to Two-Year Lows

    By on July 15, 2010

    In a ray of hope for the economy, claims for state unemployment benefits decreased by 29,000, to 429,000 for the week ending July 10th. The Labor Department is saying that this is the lowest level claims have been at since August 2008. Experts had projects that claims would fall to somewhere around 450,000. Clearly, those numbers were surpassed.

    A better measure of market trends is the four-week moving average. This fell by 11,750 to 455,520. Often during the summer jobless claims rise due to annual summer shutdowns at manufacturers and auto makers. This year though General Motors has kept the majority of its operations running during the annual shutdown.

    The high level of unemployment in this country seems to be holding back economic recovery. Consumers are less willing to spend money because their incomes are not as concrete as they once were. This has caused economists to ease their predictions for economic recovery.

    Hopefully this is the start of a string of good news in regard to the economy. A rise in employment could trigger consumer spending which hopefully could give a little boost to home buying activity and lift mortgage application numbers.

    To find out if you qualify for the lowest mortgage rates possible call 877-868-2503 to speak with a mortgage expert.

    Category: General

  5. What is the Solution to the Next Financial Crisis?

    By on May 27, 2010

    bailoutThere was a very interesting article yesterday on CNNMoney.com by Kenneth A. Posner that discusses a possible solution to future banking crises.

    Currently the Obama administration and the G-20 are trying to develop new regulatory systems that would ensure that major banks would have adequate capital reserves in the event of an economic catastrophe.  During recession, many banks found themselves under-capitalized and over-leveraged, and many of them that were considered “too-big-too-fail” were bailed out at great expense by U.S. taxpayers.

    Posner posits that regulations are definitely part of the solution to the next economic crisis, but he suggests that there is a simpler plan that could save  taxpayers billions.

    The central contention of the article is that speed is of the utmost importance when some sort of shock hits the market.  Posner says that financial institutions will eventually restructure on their own, but that management acts slowly for a variety of reasons, delaying important decisions until the damage has been done.

    Posner’s idea is to “require systemically important financial institutions to issue so-called “contingent capital”, a kind of shock-absorber that would immediately kick in during a crisis to stabilize the institution and bolster its solvency”.

    The idea behind contingent capital is that the company in question pays a commitment fee to another company which agrees to either loan assets or purchase debt from the first company when some sort of pre-determined condition is met.  Unlike insurance, this type of transaction doesn’t negatively effect the balance sheet, but provides a source of capital in the event of emergency, and the company doesn’t have to negotiate for funds after the emergency has occurred, when their leverage is greatly lessened.

    Posner suggest that the contingent capital “could be a special kind of debt that automatically converts to common stock when the firm’s regulatory capital gets depleted”.  This sort of system would allow us to more quickly get past crashes and move to the recovery stage.  An additional benefit would be that the plan would not cost the taxpayers anything, it would essentially allow the banks to conduct a self-bailout.

    What do you think of Posner’s plans?  Let us know in the comments section below.

    Category: Mortgage Rates

  6. Consumer Confidence Rises For Third-Straight Month

    By on May 25, 2010

    Amid the myriad of ongoing economic woes and concerns, there was at least one glimmer of good news today on the economic front: consumer confidence rose in May for the third straight month.

    The New York-based Conference Board announced Tuesday that its Consumer Confidence Index rose to 63.3, up from the 57.7 read recorded in April – its highest level since March 2008. The Consumer Confidence Survey is based on a representative sample of 5,000 American households.

    Lynn Franco, Director of The Conference Board Consumer Research Center says “Consumer confidence posted its third consecutive monthly gain, and although still weak by historical levels, appears to be gaining some traction. Consumers’ apprehension about current business conditions and the job market continues to slowly dissipate. Consumers’ expectations, on the other hand, have increased sharply over the past three months, propelling the Expectations Index to pre-recession levels.”

    The increase in confidence was boosted by consumers’ outlook for the next six months, which jumped from 77.4 to 85.3 – its highest point since August of 2007. The other component of the index, which gauges how shoppers feel about the economy, went up from 28.2 to 30.2.

    A reading above 90 would indicate the economy is on solid footing, so clearly there is still significant room to for the Consumer Confidence Index to grow. But with real estate prices sagging, unemployment rates still rising and stocks in the midst of a tailspin, there is still much be done to increase confidence in the economy as a whole.

    Category: Mortgage Rates

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