Bias to lock

Mortgage Bonds traded within a few whiskers of resistance yesterday, but were then pushed back lower and have continue downward so far this morning. Adding pressure to Bonds was a better-than-expected S&P Case Shiller Home Index reading, which measures home prices in the 20 largest US cities. Overall, the report indicated that the decline of home prices is slowing, which may suggest the bottom in housing is coming closer.
In the news today, Consumer Confidence came in well below expectations, indicating that consumers became more pessimistic in June after a short-lived boost of confidence in May.Currently, prices look as though they may drop down to test support at the 200-Day Moving Average, which is another 30 basis points beneath current levels.

Leonard Winslow Dominion Trust Mortgage
434-760-2580(cell)
leonard.winslow@dominiontrustmortgage.com
www.dominiontrustmortgage.com/leonard.winslow

Bias to lock

Mortgage Bonds traded within a few whiskers of resistance yesterday, but were then pushed back lower and have continue downward so far this morning. Adding pressure to Bonds was a better-than-expected S&P Case Shiller Home Index reading, which measures home prices in the 20 largest US cities. Overall, the report indicated that the decline of home prices is slowing, which may suggest the bottom in housing is coming closer.
In the news today, Consumer Confidence came in well below expectations, indicating that consumers became more pessimistic in June after a short-lived boost of confidence in May.Currently, prices look as though they may drop down to test support at the 200-Day Moving Average, which is another 30 basis points beneath current levels.

Leonard Winslow Dominion Trust Mortgage
434-760-2580(cell)
leonard.winslow@dominiontrustmortgage.com
www.dominiontrustmortgage.com/leonard.winslow

Mortgage rates Charlottesville

Bonds are higher this morning in response to news that China, the largest holder of US debt, will continue to purchase our Bonds as part of their foreign-currency reserve policy. This good news for Bonds comes on the heels of last week's strong Treasury auction results, which showed a good foreign appetite for US Bonds.
Also this morning, Stocks are trading slightly higher and continue to do battle at their own technical ceilings of resistance.
There are no big auctions in this shortened holiday week, as all markets will be closed on Friday in observance of the 4th of July.
Leonard Winslow
Dominion Trust Mortgage
434-760-2580

Mortgage rates Charlottesville

Bonds are higher this morning in response to news that China, the largest holder of US debt, will continue to purchase our Bonds as part of their foreign-currency reserve policy. This good news for Bonds comes on the heels of last week's strong Treasury auction results, which showed a good foreign appetite for US Bonds.
Also this morning, Stocks are trading slightly higher and continue to do battle at their own technical ceilings of resistance.
There are no big auctions in this shortened holiday week, as all markets will be closed on Friday in observance of the 4th of July.
Leonard Winslow
Dominion Trust Mortgage
434-760-2580

How long would it take to evict former owner (but current occupant) of house acquired in short sale, in VA?

A bank has approved our offer for a short sale of a home in pre-foreclosure. The current owner of the property has told us he will only move forward with settlement if he can have two months free rent back while he finds someplace to go. If it came down to it, and I accepted this offer, to what lengths could the current owner extend his stay beyond those two months–through filing bankruptcies, or other legal means that could prevent me from moving forward with an eviction? Clearly, I am not going to move forward unless I KNOW that I can control when he vacates the property. How long could he potentially "squat", once I settle on the house, before I could have him evicted? Again–for you legal experts out there–this is in the state of Virginia.

If he stays beyond the two months you can take eviction action against him - the legal term is actually an "Unlawful Detainer" action. In normal cases, it can be completed in 2-3 weeks. However, if he fights it in court, he can drag it out another 2-3 months. In nightmare cases I have seen some cases where the evictee fought it for 18 months befroe finally beeing locked out by the Sheriff.

General Rule of thumb in foreclosure and short sale purchases: NEVER allow the old owner to stay in the property. NEVER!

A much better idea is to pay for their first 2-4 months rent at another property - ie he must move - but you will pay for the deposit and two months rent for another place if he is out of the house in time. Then, if there is a problem it is someone else's problem.

Good luck

Rob Alley, Realtor of The Avery Group at Roy Wheeler
540-250-3275 (cell)
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com

How long would it take to evict former owner (but current occupant) of house acquired in short sale, in VA?

A bank has approved our offer for a short sale of a home in pre-foreclosure. The current owner of the property has told us he will only move forward with settlement if he can have two months free rent back while he finds someplace to go. If it came down to it, and I accepted this offer, to what lengths could the current owner extend his stay beyond those two months–through filing bankruptcies, or other legal means that could prevent me from moving forward with an eviction? Clearly, I am not going to move forward unless I KNOW that I can control when he vacates the property. How long could he potentially "squat", once I settle on the house, before I could have him evicted? Again–for you legal experts out there–this is in the state of Virginia.

If he stays beyond the two months you can take eviction action against him - the legal term is actually an "Unlawful Detainer" action. In normal cases, it can be completed in 2-3 weeks. However, if he fights it in court, he can drag it out another 2-3 months. In nightmare cases I have seen some cases where the evictee fought it for 18 months befroe finally beeing locked out by the Sheriff.

General Rule of thumb in foreclosure and short sale purchases: NEVER allow the old owner to stay in the property. NEVER!

A much better idea is to pay for their first 2-4 months rent at another property - ie he must move - but you will pay for the deposit and two months rent for another place if he is out of the house in time. Then, if there is a problem it is someone else's problem.

Good luck

Rob Alley, Realtor of The Avery Group at Roy Wheeler
540-250-3275 (cell)
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com

Foreclose On My House, Please!!!!

While it sounds improbable, some American homeowners are pleading with their lenders to ‘hurry up and foreclose already!’ Homeowners who have fallen months behind on their mortgage payments sit idle, ready to move on with their lives but are unable, just waiting for their lender to make the next move.
While this “financial limbo” has brought great reprieve to some delinquent borrowers who have benefited from the “rent-free” living, for others, the limbo is a time of added stress, emotional pain, and financial liability. But the limbo not only financially hampers borrowers and investors, it poses a threat to future recovery:
The overhang of homes in limbo means that foreclosure rates are likely to increase dramatically during the second half of this year and into 2010 as lenders work through the backlog, said Bob Bellack, chairman of Zetabid, which auctions foreclosed properties.
More than ever, foreclosure has become an unattractive outcome for lenders.
This could in turn put renewed stress on financial firms that carry mortgages or mortgage-backed securities on their books. As a general policy, many firms have been marking down the value of those assets as the loans become delinquent. But once the homes go into foreclosure and are sold, their value could decline even more, prompting another round of losses at financial companies.
However, lenders have become so swamped with foreclosure filings that they’re having a truly difficult time keeping up. Moreover, our nation’s dedication to foreclosure-prevention programs has redirected a lot of lenders’ and servicers’ attention away from repossessing homes to refinancing rates and modifying loans:
“Lenders are having an immensely difficult time handling the capacity. They are torn between loan modification, short sales, foreclosures, and they are finding they can’t do all these things at once, and do them well, so we’re seeing a lot of things falling through the cracks,” said Howard Glaser, a housing industry consultant and a housing official during the Clinton administration.
Those cracks must be pretty big. According to NeighborWorks America, a large housing counseling group, 60% of homeowners who miss more than four payments before seeking help will end up in foreclosure.
Is a swift foreclosure process the most clear-cut way to speed up the housing recovery? Or has delayed foreclosures (including moratoriums) helped ease the devastating impact foreclosures have on the market?

Rob Alley, Realtor of The Avery Group at Roy Wheeler
540-250-3275 (cell)
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com

Foreclose On My House, Please!!!!

While it sounds improbable, some American homeowners are pleading with their lenders to ‘hurry up and foreclose already!’ Homeowners who have fallen months behind on their mortgage payments sit idle, ready to move on with their lives but are unable, just waiting for their lender to make the next move.
While this “financial limbo” has brought great reprieve to some delinquent borrowers who have benefited from the “rent-free” living, for others, the limbo is a time of added stress, emotional pain, and financial liability. But the limbo not only financially hampers borrowers and investors, it poses a threat to future recovery:
The overhang of homes in limbo means that foreclosure rates are likely to increase dramatically during the second half of this year and into 2010 as lenders work through the backlog, said Bob Bellack, chairman of Zetabid, which auctions foreclosed properties.
More than ever, foreclosure has become an unattractive outcome for lenders.
This could in turn put renewed stress on financial firms that carry mortgages or mortgage-backed securities on their books. As a general policy, many firms have been marking down the value of those assets as the loans become delinquent. But once the homes go into foreclosure and are sold, their value could decline even more, prompting another round of losses at financial companies.
However, lenders have become so swamped with foreclosure filings that they’re having a truly difficult time keeping up. Moreover, our nation’s dedication to foreclosure-prevention programs has redirected a lot of lenders’ and servicers’ attention away from repossessing homes to refinancing rates and modifying loans:
“Lenders are having an immensely difficult time handling the capacity. They are torn between loan modification, short sales, foreclosures, and they are finding they can’t do all these things at once, and do them well, so we’re seeing a lot of things falling through the cracks,” said Howard Glaser, a housing industry consultant and a housing official during the Clinton administration.
Those cracks must be pretty big. According to NeighborWorks America, a large housing counseling group, 60% of homeowners who miss more than four payments before seeking help will end up in foreclosure.
Is a swift foreclosure process the most clear-cut way to speed up the housing recovery? Or has delayed foreclosures (including moratoriums) helped ease the devastating impact foreclosures have on the market?

Rob Alley, Realtor of The Avery Group at Roy Wheeler
540-250-3275 (cell)
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com

Different Types of Loans

Understanding Different Loan Types
The market today has been reduced to more traditional loan programs. The standards of today are fixed, adjustable, hybrid and flexed fixed. With these financing packages one can be tailored to meet your financial goals.
While the different choices may seem overwhelming at first, the overall goal is really quite simple: you want to find a loan that fits both your current financial situation and your future plans. Though this article discusses some of the more common loan types, you should spend time talking with your lender before deciding on the right loan for your situation.
Categories of loans:
Typically loans fall into one of three major categories: fixed rate, adjustable and hybrid loans that combine features from both the fixed rate and adjustable.
Fixed Rate Mortgages:
As the name describes, the mortgage is based on a fixed rate at a fixed term. The term can range from 10 to 30 years and in some cases can go to 40 years. The fixed rate mortgage has been the reliable tradition for all time. You can plan a budget based on a known monthly payment, the principal and interest does not change, you can pre-pay the mortgage, allowing you to pay the loan off early.
Adjustable Rate Mortgage:
Adjustable Rate Mortgages as the name implies change based on a new rate and new principle balance at the time of adjustment. For some people the adjustable rate is the right program. Typically a life event is going to occur in future that will allow them to pay down the balance, have another income enter into the family or just want a potentially lower payment for the first few years of the mortgage. Adjustable rate mortgages over history have a lower initial interest rate which would mean a lower payment.
The interest rate at time of adjustment is based on an index typically the one year treasury index or more recently the LIBOR, (London Inter Bank Rate) and a margin. The margin typically is 2.75%. You add the two together and that would be the rate for the ensuing time frame. The rate on most adjustable can go up or down by no more than 2% per change and no higher or lower than 6% over the life of the loan.
Hybrid Loans:
Hybrid loans combine the features of both fixed rate and adjustable rates. A hybrid will start with a moderate fixed term (5, 7, 10 years) and then will go to a 1 year adjustable for the remaining time of the loan. The same principal for adjustment as above applies with the exception of the first adjustment. Some Hybrids at the first adjustment will change by up to 5% maximum after the initial fixed term. As with the adjustable a future life event may occur; an additional income source, additional monies to pay down the mortgage, or a time frame of staying in the home.
Another possible feature could be an interest only feature for the fixed time frame. This would mean a lower monthly payment in the first years of the mortgage but would also translate to a higher payment after the fixed term.
Balloon Payments:
A balloon payment refers to a loan that has a large, final payment due at the end of the loan. For example, there are currently fixed-rate loans which allow homeowners to make payments based on a 30-year loan, even though the entire balance of the loan may be due (the balloon payment) after 7 years. As with some hybrid loans, balloon loans may be attractive to homeowners who plan to have a future life event occur. In the case of a balloon, it could be another property selling, an inheritance, or a planed move.
Strategies of mortgage planning
The general theme when planning a mortgage strategy is to ask your self several questions. These questions are:
1) How long do I plan to stay in the home?
2) How much do I want my payments?
3) How much money do I want to commit to the transaction?
Given question 2 and 3 being equally important, which one is more important?
While time is important when designing a mortgage program it is question 2 and 3 which to most people are the important ones. Time is used more for deciding a permanent buy-down of the rate is rational. The rates on the fixed and adjustable are not different as they have been in the past.
FHA :
Federal Housing Administration loans, aka FHA, are backed by the federal government by insuring the loan in cases of default. The loan requires 3.5% down and has higher qualifying ratio’s. Used predominately with borrows with limited cash resources
VA:
Veterans Administration loans, AKA VA, are loans made to qualified veterans. They do not require a down payment and are used for Veterans of the armed forces and some other government entities. VA is entitling the loan only in cases of default.
VHDA:
Virginia Housing and Development Authority, AKA VHDA, Issues bonds that are tax free in some cases and lends monies to first time homebuyers. There loans can be combined with FHA, VA, RD and conventional loan mortgage insurance. There loans have income and sales price limitations. http://www.vhda.com/ .
Conventional Loans:
A conventional loan is simply a loan offered by a traditional lender. They may be fixed-rate, adjustable, hybrid or other types. While conventional loans may be harder to qualify for than government-backed loans, they typically have higher credit scores and tighter qualifying ratios.
By:Leonard Winslow
Dominion Trust Mortgage
www.dominiontrustmortgage.com/leonard.winslow
434-760-2580

Rob Alley, Realtor of The Avery Group at Roy Wheeler
540-250-3275 (cell) roballey@roywheeler.com http://www.robsellscharlottesville.com/ http://www.forestlakesliving.com/ http://www.charlottesvillevarealestate.blogspot.com/ http://www.charlottesvilleshortsale.com/

Different Types of Loans

Understanding Different Loan Types
The market today has been reduced to more traditional loan programs. The standards of today are fixed, adjustable, hybrid and flexed fixed. With these financing packages one can be tailored to meet your financial goals.
While the different choices may seem overwhelming at first, the overall goal is really quite simple: you want to find a loan that fits both your current financial situation and your future plans. Though this article discusses some of the more common loan types, you should spend time talking with your lender before deciding on the right loan for your situation.
Categories of loans:
Typically loans fall into one of three major categories: fixed rate, adjustable and hybrid loans that combine features from both the fixed rate and adjustable.
Fixed Rate Mortgages:
As the name describes, the mortgage is based on a fixed rate at a fixed term. The term can range from 10 to 30 years and in some cases can go to 40 years. The fixed rate mortgage has been the reliable tradition for all time. You can plan a budget based on a known monthly payment, the principal and interest does not change, you can pre-pay the mortgage, allowing you to pay the loan off early.
Adjustable Rate Mortgage:
Adjustable Rate Mortgages as the name implies change based on a new rate and new principle balance at the time of adjustment. For some people the adjustable rate is the right program. Typically a life event is going to occur in future that will allow them to pay down the balance, have another income enter into the family or just want a potentially lower payment for the first few years of the mortgage. Adjustable rate mortgages over history have a lower initial interest rate which would mean a lower payment.
The interest rate at time of adjustment is based on an index typically the one year treasury index or more recently the LIBOR, (London Inter Bank Rate) and a margin. The margin typically is 2.75%. You add the two together and that would be the rate for the ensuing time frame. The rate on most adjustable can go up or down by no more than 2% per change and no higher or lower than 6% over the life of the loan.
Hybrid Loans:
Hybrid loans combine the features of both fixed rate and adjustable rates. A hybrid will start with a moderate fixed term (5, 7, 10 years) and then will go to a 1 year adjustable for the remaining time of the loan. The same principal for adjustment as above applies with the exception of the first adjustment. Some Hybrids at the first adjustment will change by up to 5% maximum after the initial fixed term. As with the adjustable a future life event may occur; an additional income source, additional monies to pay down the mortgage, or a time frame of staying in the home.
Another possible feature could be an interest only feature for the fixed time frame. This would mean a lower monthly payment in the first years of the mortgage but would also translate to a higher payment after the fixed term.
Balloon Payments:
A balloon payment refers to a loan that has a large, final payment due at the end of the loan. For example, there are currently fixed-rate loans which allow homeowners to make payments based on a 30-year loan, even though the entire balance of the loan may be due (the balloon payment) after 7 years. As with some hybrid loans, balloon loans may be attractive to homeowners who plan to have a future life event occur. In the case of a balloon, it could be another property selling, an inheritance, or a planed move.
Strategies of mortgage planning
The general theme when planning a mortgage strategy is to ask your self several questions. These questions are:
1) How long do I plan to stay in the home?
2) How much do I want my payments?
3) How much money do I want to commit to the transaction?
Given question 2 and 3 being equally important, which one is more important?
While time is important when designing a mortgage program it is question 2 and 3 which to most people are the important ones. Time is used more for deciding a permanent buy-down of the rate is rational. The rates on the fixed and adjustable are not different as they have been in the past.
FHA :
Federal Housing Administration loans, aka FHA, are backed by the federal government by insuring the loan in cases of default. The loan requires 3.5% down and has higher qualifying ratio’s. Used predominately with borrows with limited cash resources
VA:
Veterans Administration loans, AKA VA, are loans made to qualified veterans. They do not require a down payment and are used for Veterans of the armed forces and some other government entities. VA is entitling the loan only in cases of default.
VHDA:
Virginia Housing and Development Authority, AKA VHDA, Issues bonds that are tax free in some cases and lends monies to first time homebuyers. There loans can be combined with FHA, VA, RD and conventional loan mortgage insurance. There loans have income and sales price limitations. http://www.vhda.com/ .
Conventional Loans:
A conventional loan is simply a loan offered by a traditional lender. They may be fixed-rate, adjustable, hybrid or other types. While conventional loans may be harder to qualify for than government-backed loans, they typically have higher credit scores and tighter qualifying ratios.
By:Leonard Winslow
Dominion Trust Mortgage
www.dominiontrustmortgage.com/leonard.winslow
434-760-2580

Rob Alley, Realtor of The Avery Group at Roy Wheeler
540-250-3275 (cell) roballey@roywheeler.com http://www.robsellscharlottesville.com/ http://www.forestlakesliving.com/ http://www.charlottesvillevarealestate.blogspot.com/ http://www.charlottesvilleshortsale.com/

Evander Holyfield continues to face financial woes

Former heavyweight champion Evander Holyfield continues to face financial woes.

His $10 million mansion in suburban Atlanta is under foreclosure for the second time in a year.

A legal notice published last week in the Fayette Daily News revealed the former heavyweight boxing champion is in danger of losing his 109-room Fairburn mansion. The lien holder is demanding full repayment of the original $10 million loan, with an auction scheduled for July 7 on the Fayette County Courthouse steps, reports the AJC.

The 5,000-square-meter home — located on Evander Holyfield Highway — has 109 rooms, including 17 bathrooms, three kitchens and a bowling alley. It's worth an estimated $20 million and costs more than $1 million to maintain each year.

Last June a similar legal notice was published which then lead to a foreclosure notice being issued for the 5,000-square-meter home — located on Evander Holyfield Highway — has 109 rooms, including 17 bathrooms, three kitchens and a bowling alley. However, before the home was auctioned off, he was able to reach a deal to keep the home.

He also has defaulted on a loan for a second home and that's in foreclosure, too.

That home, located at 592 and 596 West Bridge Road, had an original loan amount of $216,000.

Rob Alley, Realtor of The Avery Group at Roy Wheeler
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com

Evander Holyfield continues to face financial woes

Former heavyweight champion Evander Holyfield continues to face financial woes.

His $10 million mansion in suburban Atlanta is under foreclosure for the second time in a year.

A legal notice published last week in the Fayette Daily News revealed the former heavyweight boxing champion is in danger of losing his 109-room Fairburn mansion. The lien holder is demanding full repayment of the original $10 million loan, with an auction scheduled for July 7 on the Fayette County Courthouse steps, reports the AJC.

The 5,000-square-meter home — located on Evander Holyfield Highway — has 109 rooms, including 17 bathrooms, three kitchens and a bowling alley. It's worth an estimated $20 million and costs more than $1 million to maintain each year.

Last June a similar legal notice was published which then lead to a foreclosure notice being issued for the 5,000-square-meter home — located on Evander Holyfield Highway — has 109 rooms, including 17 bathrooms, three kitchens and a bowling alley. However, before the home was auctioned off, he was able to reach a deal to keep the home.

He also has defaulted on a loan for a second home and that's in foreclosure, too.

That home, located at 592 and 596 West Bridge Road, had an original loan amount of $216,000.

Rob Alley, Realtor of The Avery Group at Roy Wheeler
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com

Freddie Mac REO Homes in Charlottesville 6/25/2009

--------------------------------------------------------------------------------
Property Status: LISTED (available for sale now)
Zip Code: 22902Loan: 328861340 Address: 194 BROOKWOOD DR, CHARLOTTESVILLE, VA Rooms: 11 Bed: 3 Bath: 2.5 Price: 334,900.00 Offered By: LONG & FOSTER RE (703) 877-7836

Zip Code: 22911Loan: 285164546 Address: 1075 WEYBRIDGE COURT 206, CHARLOTTESVILLE, VA Rooms: 3 Bed: 1 Bath: 1.0 Price: 159,900.00 Offered By: REAL ESTATE III INC (434) 817-9700
--------------------------------------------------------------------------------
Property Status: NOT LISTED (coming soon to the market; please contact listing broker for more information)
Zip Code: 22903Loan: 362483078 Address: 308 6TH ST SW APT A, CHARLOTTESVILLE, VA Rooms: 8 Bed: 4 Bath: 3.0 Price: 0.00 Offered By: LONG & FOSTER RE (703) 877-7836

Rob Alley, Realtor of The Avery Group at Roy Wheeler
540-250-3275 (cell)
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com

Freddie Mac REO Homes in Charlottesville 6/25/2009

--------------------------------------------------------------------------------
Property Status: LISTED (available for sale now)
Zip Code: 22902Loan: 328861340 Address: 194 BROOKWOOD DR, CHARLOTTESVILLE, VA Rooms: 11 Bed: 3 Bath: 2.5 Price: 334,900.00 Offered By: LONG & FOSTER RE (703) 877-7836

Zip Code: 22911Loan: 285164546 Address: 1075 WEYBRIDGE COURT 206, CHARLOTTESVILLE, VA Rooms: 3 Bed: 1 Bath: 1.0 Price: 159,900.00 Offered By: REAL ESTATE III INC (434) 817-9700
--------------------------------------------------------------------------------
Property Status: NOT LISTED (coming soon to the market; please contact listing broker for more information)
Zip Code: 22903Loan: 362483078 Address: 308 6TH ST SW APT A, CHARLOTTESVILLE, VA Rooms: 8 Bed: 4 Bath: 3.0 Price: 0.00 Offered By: LONG & FOSTER RE (703) 877-7836

Rob Alley, Realtor of The Avery Group at Roy Wheeler
540-250-3275 (cell)
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com

Bond Comment

Mortgage Bonds dropped lower yesterday after the Fed's Monetary Policy and by the end of yesterday bonds climbed back to finish the day at near unchanged levels.
Todays news, Initial Jobless Claims came in a bit weaker than expected, indicating that the job market continues to be weak and slow in stabilizing.
Prices are still testing a tough ceiling of resistance at the 200-Day Moving Average. I recommend floating for now to see how Bond prices react to the government's auction of 7-Year Notes this afternoon, as well as any movement in Stocks. But be prepared to lock, since the situation can change quickly in today's volatile times.

Leonard Winslow
Dominion Trust Mortgage
434-760-2580

Bond Comment

Mortgage Bonds dropped lower yesterday after the Fed's Monetary Policy and by the end of yesterday bonds climbed back to finish the day at near unchanged levels.
Todays news, Initial Jobless Claims came in a bit weaker than expected, indicating that the job market continues to be weak and slow in stabilizing.
Prices are still testing a tough ceiling of resistance at the 200-Day Moving Average. I recommend floating for now to see how Bond prices react to the government's auction of 7-Year Notes this afternoon, as well as any movement in Stocks. But be prepared to lock, since the situation can change quickly in today's volatile times.

Leonard Winslow
Dominion Trust Mortgage
434-760-2580

Fed Day

Fed did not change rates orMBS & Treasury purchase program

It's Fed Day... and that means the Fed will release its Monetary Policy Decision and Statement later today. While there will be no change to the Fed Funds Rate, I will be listening for any potential news that may move the financial markets. For example, if the Fed indicates it will expand its purchase of long-term Treasuries, Mortgage Bonds may see a boost. If not, however, they may decline.
In other news today, Durable Orders came in better than expected for May, led by orders for airplanes and machinery. Although one report doesn't make a trend, the reading is encouraging and may signal that the economic slump is starting to ease.For now, I recommend floating, as we watch to see how the markets react to the Fed's statement later, as well as another government auction of 5-Year Notes today. Remember, the market can be very volatile right now, so be prepared to lock if the situation changes. I will continue to monitor the financial indicators and keep you posted.

Fed Day

Fed did not change rates orMBS & Treasury purchase program

It's Fed Day... and that means the Fed will release its Monetary Policy Decision and Statement later today. While there will be no change to the Fed Funds Rate, I will be listening for any potential news that may move the financial markets. For example, if the Fed indicates it will expand its purchase of long-term Treasuries, Mortgage Bonds may see a boost. If not, however, they may decline.
In other news today, Durable Orders came in better than expected for May, led by orders for airplanes and machinery. Although one report doesn't make a trend, the reading is encouraging and may signal that the economic slump is starting to ease.For now, I recommend floating, as we watch to see how the markets react to the Fed's statement later, as well as another government auction of 5-Year Notes today. Remember, the market can be very volatile right now, so be prepared to lock if the situation changes. I will continue to monitor the financial indicators and keep you posted.

HUD releases guidance on Protecting Tenants at Foreclosure Act

HUD releases guidance on Protecting Tenants at Foreclosure Act. Follow the link below for the information:
http://www.hud.gov/offices/adm/hudclips/notices/pih/files/09-17pihn.pdf

Rob Alley, Realtor of The Avery Group at Roy Wheeler
540-250-3275 (cell)
roballey@roywheeler.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.charlottesvillevarealestate.blogspot.com/
http://www.charlottesvilleshortsale.com/

HUD releases guidance on Protecting Tenants at Foreclosure Act

HUD releases guidance on Protecting Tenants at Foreclosure Act. Follow the link below for the information:
http://www.hud.gov/offices/adm/hudclips/notices/pih/files/09-17pihn.pdf

Rob Alley, Realtor of The Avery Group at Roy Wheeler
540-250-3275 (cell)
roballey@roywheeler.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.charlottesvillevarealestate.blogspot.com/
http://www.charlottesvilleshortsale.com/

Dumping Your Debt

Dumping your debt
Millions of Americans set a goal for and succeed in paying off their credit card debt each year – is this one of your goals? With a little determination and a plan, you can take control of your credit, and improve your credit score in the process. Here’s how:

Cut the Cards
The first step toward reducing your credit card debt is to stop adding to it. While you don’t have to literally shred your cards, you do need to stop using them routinely. Try one (or all) of the tips below to break this habit:
a) Carry Cash – give yourself a weekly cash allowance for expenditures. You’ll be more aware of how much you actually spend; plus, once you run out of money, you’re more apt to stop spending
b) Use debit, not credit – for times when only plastic will do, use your debit card instead of a credit card.
c) Out of sight, out of mind – keep your credit cards at home and you’ll be less likely to use them.
d) Think strategically – decide on two to four credit cards with which you have a lengthy, positive history, and close any other accounts. Having a few good accounts will boost your credit score, but having too many will hurt it (and may also keep you tempted to spend money you don’t have).

Lower Rates/Cut a Deal
Once you’ve got your spending under control, focus on reducing your interest rates:
a) Negotiate rates – call up your credit card issuers and ask for a better rate. Explain that your plan to transfer the balances to another card unless your rates are lowered. Usually, borrowers with good credit scores can cut their rates by a few points – sometimes as much as 10%.
b) Transfer balances – consider transferring balances from cards with high interest rates to a different card. Look for offers with low introductory rates that are good for at least a full year, with relatively low rates thereafter. Read the fine print and pass up offers from cards with hidden fees or costs.
c) Shop around – do a little investigative work to find the best card offers. Check out www.cardweb.com for current offers.
Reduce Your Debt
Now it’s time to start chipping away those balances. Develop a strategy and make it happen, using the following tips:
a) Sort it out – make a list of each credit card you have, its existing balance, minimum payment and interest rate. Use any of the online calculators listed here to help you determine which card to pay off first: CNN Money Magazine at http://cgi.money.cnn.com/tools/debtplanner/debtplanner.jsp or Quicken at http://www.quicken .com/planning/debt/
b) Develop a plan – pay as much money as you can on your card with the highest interest rate, while paying the minimum on the other cares. This additional payment on the high-rate card will help to pay off the principal faster.
c) Build a debt snowball – once your highest interest rate card is paid off, take the same amount you’ve been paying on that card and add it to the minimum on the card with the next highest interest rate (this is commonly referred to as “snowballing” or a debt-reduction rollover of your payments). Continue to pay the minimum on the remaining accounts, repeating the process until you are debt-free.
d) Have a back-up – keep one low-interest card put away for emergencies, but maintain a zero monthly balance at all times by paying it off when due.
Think Ahead
Now that you’re debt-free, start thinking even further ahead:
a) Invest – begin to invest the same amount of money you’ve been applying to debt every month. You’ve trained yourself to live on less by paying as much as possible toward your debt each month, now take that philosophy and use it to your advantage, reinforcing that thrift must continue in order to develop a mindset of abundance.
b) Visualize – spend a few moments each day imagining what it will feel like to be debt-free, paying cash for every purchase and looking forward to a comfortable retirement!

TIP: Call 1-888-5-OPTOUT to stop the flood of credit card offers from reaching your mailbox.
Rob Alley, Realtor of The Avery Group at Roy Wheeler
540-250-3275 (cell)
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com

Dumping Your Debt

Dumping your debt
Millions of Americans set a goal for and succeed in paying off their credit card debt each year – is this one of your goals? With a little determination and a plan, you can take control of your credit, and improve your credit score in the process. Here’s how:

Cut the Cards
The first step toward reducing your credit card debt is to stop adding to it. While you don’t have to literally shred your cards, you do need to stop using them routinely. Try one (or all) of the tips below to break this habit:
a) Carry Cash – give yourself a weekly cash allowance for expenditures. You’ll be more aware of how much you actually spend; plus, once you run out of money, you’re more apt to stop spending
b) Use debit, not credit – for times when only plastic will do, use your debit card instead of a credit card.
c) Out of sight, out of mind – keep your credit cards at home and you’ll be less likely to use them.
d) Think strategically – decide on two to four credit cards with which you have a lengthy, positive history, and close any other accounts. Having a few good accounts will boost your credit score, but having too many will hurt it (and may also keep you tempted to spend money you don’t have).

Lower Rates/Cut a Deal
Once you’ve got your spending under control, focus on reducing your interest rates:
a) Negotiate rates – call up your credit card issuers and ask for a better rate. Explain that your plan to transfer the balances to another card unless your rates are lowered. Usually, borrowers with good credit scores can cut their rates by a few points – sometimes as much as 10%.
b) Transfer balances – consider transferring balances from cards with high interest rates to a different card. Look for offers with low introductory rates that are good for at least a full year, with relatively low rates thereafter. Read the fine print and pass up offers from cards with hidden fees or costs.
c) Shop around – do a little investigative work to find the best card offers. Check out www.cardweb.com for current offers.
Reduce Your Debt
Now it’s time to start chipping away those balances. Develop a strategy and make it happen, using the following tips:
a) Sort it out – make a list of each credit card you have, its existing balance, minimum payment and interest rate. Use any of the online calculators listed here to help you determine which card to pay off first: CNN Money Magazine at http://cgi.money.cnn.com/tools/debtplanner/debtplanner.jsp or Quicken at http://www.quicken .com/planning/debt/
b) Develop a plan – pay as much money as you can on your card with the highest interest rate, while paying the minimum on the other cares. This additional payment on the high-rate card will help to pay off the principal faster.
c) Build a debt snowball – once your highest interest rate card is paid off, take the same amount you’ve been paying on that card and add it to the minimum on the card with the next highest interest rate (this is commonly referred to as “snowballing” or a debt-reduction rollover of your payments). Continue to pay the minimum on the remaining accounts, repeating the process until you are debt-free.
d) Have a back-up – keep one low-interest card put away for emergencies, but maintain a zero monthly balance at all times by paying it off when due.
Think Ahead
Now that you’re debt-free, start thinking even further ahead:
a) Invest – begin to invest the same amount of money you’ve been applying to debt every month. You’ve trained yourself to live on less by paying as much as possible toward your debt each month, now take that philosophy and use it to your advantage, reinforcing that thrift must continue in order to develop a mindset of abundance.
b) Visualize – spend a few moments each day imagining what it will feel like to be debt-free, paying cash for every purchase and looking forward to a comfortable retirement!

TIP: Call 1-888-5-OPTOUT to stop the flood of credit card offers from reaching your mailbox.
Rob Alley, Realtor of The Avery Group at Roy Wheeler
540-250-3275 (cell)
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com

10 Mistakes Buyers Make When Purchasing a Home

1. Making an offer on a home without being prequalified: Prequalification will make your life easier - so take the time to speak with a lender. Their specific questions in the regard to income, debt. etc., will help you determine the price range you an afford. It is an important setup on the path to home ownership.

2. Not having a home inspection: Trying to save money today can end up costing you tomorrow. A qualified home inspector will detect issues that many buyers can overlook.

3. Limiting your search to open houses, ads or the internet: Many homes listed in magazines or on the Internet have already been sold. Your best course of action is to contact a Realtor. They have up-to-date information that is unavailable to the general public and are the best resource to help you find the home you want.

4. Choosing a real estate agent who is not committed to forming a strong business relationship with you: Making a connection with the right Realtor is crucial. Chose a professional who is dedicated to serving your needs-before, during and after the sale.

5. Thinking there is only one perfect house out there: Buying a new home is a process of elimination, not selection. New properties arrive on the market daily, so be open to all possibilities. Ask your Realtor for a comparative market analysis. This compares similar homes that have recently sold, or are still for sale.

6. Not considering long-term needs: It is important to think ahead. Will the home suit your needs 3-5 years from now?

7. Not examining insurance issues: Purchase adequate insurance. Advice from an insurance agent can provide you with answers to any concerns you may have.

8. Not buying a home protection plan: This is essentially a mini insurance policy that usually lasts one year from the close of escrow. It usually covers basic repairs you may encounter and can be purchased for a nominal fee. Talk to your agent to help you find the protection plan you need.

9. Not knowing total costs involved: Early in the buying process, ask your Realtor or lender for an estimate of closing costs. Title company and attorney fees should be considered. Pr-pay responsibilities such as Homeowner Association fees and insurance must also be taken into account. Remember to examine your settlement statement prior to closing.

10. Not following through on due diligence: Buyers should make a list of any concerns they have relating to issues such as; crime rates, schools, power lines, neighbors, environmental conditions, etc. Ask the important questions before you make an offer on a home. Be diligent so that you can have confidence in your purchase.

Oh, by the way...whenever you come across people who are thinking about buying or selling a home and who would appreciate the kind of service I offer, I'd love to help them. So, as these people come to mind, just give me a call with their name and business phone number. I'll be happy to follow up and take care of them.

Rob Alley, Realtor of The Avery Group at Roy Wheeler
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com

10 Mistakes Buyers Make When Purchasing a Home

1. Making an offer on a home without being prequalified: Prequalification will make your life easier - so take the time to speak with a lender. Their specific questions in the regard to income, debt. etc., will help you determine the price range you an afford. It is an important setup on the path to home ownership.

2. Not having a home inspection: Trying to save money today can end up costing you tomorrow. A qualified home inspector will detect issues that many buyers can overlook.

3. Limiting your search to open houses, ads or the internet: Many homes listed in magazines or on the Internet have already been sold. Your best course of action is to contact a Realtor. They have up-to-date information that is unavailable to the general public and are the best resource to help you find the home you want.

4. Choosing a real estate agent who is not committed to forming a strong business relationship with you: Making a connection with the right Realtor is crucial. Chose a professional who is dedicated to serving your needs-before, during and after the sale.

5. Thinking there is only one perfect house out there: Buying a new home is a process of elimination, not selection. New properties arrive on the market daily, so be open to all possibilities. Ask your Realtor for a comparative market analysis. This compares similar homes that have recently sold, or are still for sale.

6. Not considering long-term needs: It is important to think ahead. Will the home suit your needs 3-5 years from now?

7. Not examining insurance issues: Purchase adequate insurance. Advice from an insurance agent can provide you with answers to any concerns you may have.

8. Not buying a home protection plan: This is essentially a mini insurance policy that usually lasts one year from the close of escrow. It usually covers basic repairs you may encounter and can be purchased for a nominal fee. Talk to your agent to help you find the protection plan you need.

9. Not knowing total costs involved: Early in the buying process, ask your Realtor or lender for an estimate of closing costs. Title company and attorney fees should be considered. Pr-pay responsibilities such as Homeowner Association fees and insurance must also be taken into account. Remember to examine your settlement statement prior to closing.

10. Not following through on due diligence: Buyers should make a list of any concerns they have relating to issues such as; crime rates, schools, power lines, neighbors, environmental conditions, etc. Ask the important questions before you make an offer on a home. Be diligent so that you can have confidence in your purchase.

Oh, by the way...whenever you come across people who are thinking about buying or selling a home and who would appreciate the kind of service I offer, I'd love to help them. So, as these people come to mind, just give me a call with their name and business phone number. I'll be happy to follow up and take care of them.

Rob Alley, Realtor of The Avery Group at Roy Wheeler
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com

Alert to lock

Mortgage Bonds -19bp on the day, and worse from some later Lender pricing windows. Bonds unable to push through Reistance provided by the 200-DMA. Despite a strong Auction, MBS slipped after a knee-jerk reaction higher. Alert to lock.

Alert to lock

Mortgage Bonds -19bp on the day, and worse from some later Lender pricing windows. Bonds unable to push through Reistance provided by the 200-DMA. Despite a strong Auction, MBS slipped after a knee-jerk reaction higher. Alert to lock.

Bond Market Comment

Mortgage Bonds started out the morning down, but have since climbed into positive territory. Overall, however, prices still remain just below a stiff ceiling of resistance at the 200-Day Moving Average.

In other news, Existing Home Sales came in below expectations. Also in the news, the Fed Meeting begins today. Although the Fed Funds Rate won't change as a result of the meeting, there is speculation that the Fed will buy more longer-term Treasuries, which may jumpstart the cycle needed to eventually bring Mortgage rates down.For now, I recommend floating as we watch to see if a continued slide in Stocks can help Bonds improve or if the Treasury Department's auction of 2-Year Notes today will pressure Bonds lower. I will keep you posted.
Leonard Winslow
Dominion Trust Mortgage

Bond Market Comment

Mortgage Bonds started out the morning down, but have since climbed into positive territory. Overall, however, prices still remain just below a stiff ceiling of resistance at the 200-Day Moving Average.

In other news, Existing Home Sales came in below expectations. Also in the news, the Fed Meeting begins today. Although the Fed Funds Rate won't change as a result of the meeting, there is speculation that the Fed will buy more longer-term Treasuries, which may jumpstart the cycle needed to eventually bring Mortgage rates down.For now, I recommend floating as we watch to see if a continued slide in Stocks can help Bonds improve or if the Treasury Department's auction of 2-Year Notes today will pressure Bonds lower. I will keep you posted.
Leonard Winslow
Dominion Trust Mortgage

Daily comment

The incredible volatility continues as Bonds have managed a triple digit rally since late last week. However, Bonds are near a key ceiling of resistance and there is still heavy supply coming to the market from Treasuries as well as Mortgage Bonds from recent refinance closings. These obstacles could lead to a reversal.
In other news, Stocks are also attempting to stay above an important level, and if they are able to improve, this will add even more pressure to Bonds. And tomorrow begins the 2-day Fed Meeting with a statement being issued at 2:15pm ET on Wednesday, and this is always a potential market mover.

Daily comment

The incredible volatility continues as Bonds have managed a triple digit rally since late last week. However, Bonds are near a key ceiling of resistance and there is still heavy supply coming to the market from Treasuries as well as Mortgage Bonds from recent refinance closings. These obstacles could lead to a reversal.
In other news, Stocks are also attempting to stay above an important level, and if they are able to improve, this will add even more pressure to Bonds. And tomorrow begins the 2-day Fed Meeting with a statement being issued at 2:15pm ET on Wednesday, and this is always a potential market mover.

Week In Review

Last Week in Review


"THE WORLD IS BUT A PERPETUAL SEE-SAW." Michel de Montaigne. And that sentiment was especially true in the world of Stocks and Bonds last week, as money see-sawed back and forth between the two markets, halting the improvement that Bonds and home loan rates mustered up in the first part of the week.
Bonds and home loan rates began the week looking good - and remembering that inflation is bad news for both Bonds and rates, they were helped along by good news on the inflation front. Inflation at the wholesale or producer level remained tame in May, and at a consumer level, inflation readings came in lower than expected, with a year-over-year reading at its lowest level since 1950. These are good signs that inflation hasn't become an issue yet. However, inflation will be a concern down the road, due to the massive stimulus being injected into the economy. It is said that rates are like a boat floating atop the sea of inflation...as inflation rises, so will home loan rates. If you or someone you know should be acting on today's still low home loan rates, please get in touch soon.
Also helping Bonds rally in the early part of last week was the fact that the New York State manufacturing index came in weaker than estimates, indicating that the US economy is still very weak. And since bad economic news often causes money to flow from Stocks into Bonds, this piece of news helped Bonds start the week on an improving trend.
However, Bonds and home loan rates reversed course midweek and worsened, as money see-sawed back over to Stocks. They were also pressured to worsen by the enormous amount of Bond supply hitting the markets - as too much supply of anything will naturally cause the price to move lower...and in this case, has caused home loan rates to move higher. As you can see in the chart below, Bonds have worsened when additional supply has been announced, causing home loan rates to climb.

While the Fed is continuing to purchase Mortgage Backed Securities, their efforts are just not enough to absorb the flood of new closed and securitized mortgages that are hitting the market after the heavy refinance activity recently - not to mention all the Treasury Securities being auctioned in order to pay for all the stimulus plans.
And speaking of activity in the housing market, Housing Starts rose a whopping 17% in May to come in better than expectations. In addition, Building Permits, which are a sign of future construction, also came in better than expected. These are good signs that the affordable home prices, tax incentives and low home loan rates are attracting buyers to the market.
After all the see-sawing action back and forth last week, including a late week rally in Bonds and fizzle in Stocks, home loan rates ended the week slightly higher than where they began.
THERE CAN BE PLENTY OF UPS AND DOWNS WHEN IT COMES TO BUYING A HOME. CHECK OUT THIS WEEK'S SPECIAL MORTGAGE MARKET VIDEO VIEW FOR IMPORTANT INFORMATION THAT WILL HELP EASE THE PROCESS.

Forecast for the Week


The see-sawing motion between Stocks and Bonds will likely be seen during the coming week, as there is plenty of action ahead. After last week's look at the new construction piece of the housing market, we'll get more information on housing this week with Tuesday's Existing Home Sales Report and Wednesday's New Home Sales Report.
Also on Wednesday we will get an update on consumer and business consumption and buying behavior via the Durable Goods Report, which shows data on items that are non-disposable, such as cars, furniture, appliances, games, cameras, business equipment, etc. Thursday brings a read on the economy with the Gross Domestic Product (GDP) Report, which is the broadest measure of economic activity. Also on Thursday is the weekly Initial Jobless Claims report. Last week's report showed that continuing claims fell by 148,000 to 6.69 million, which is the largest one-week drop since November of 2001. Jobs are vital to the economy strengthening, so it will be important to see what this week's report indicates.
This week we also have the Fed's next regularly scheduled Federal Open Market Committee meeting, followed by their Policy Statement and Interest Rate Decision coming on Wednesday afternoon. It will be important to hear the Fed's comments on the economy and inflation. And speaking of the Fed and inflation, the Fed's favorite gauge of inflation, the Core Personal Consumption Expenditure (PCE) index found within the Personal Income Report, will be released on Friday.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds were unable to maintain the gains they made earlier in the week. I'll be watching closely to see what impact this week's news, including additional supply of Bonds hitting the market, will have on Bonds and home loan rates.

Week In Review

Last Week in Review


"THE WORLD IS BUT A PERPETUAL SEE-SAW." Michel de Montaigne. And that sentiment was especially true in the world of Stocks and Bonds last week, as money see-sawed back and forth between the two markets, halting the improvement that Bonds and home loan rates mustered up in the first part of the week.
Bonds and home loan rates began the week looking good - and remembering that inflation is bad news for both Bonds and rates, they were helped along by good news on the inflation front. Inflation at the wholesale or producer level remained tame in May, and at a consumer level, inflation readings came in lower than expected, with a year-over-year reading at its lowest level since 1950. These are good signs that inflation hasn't become an issue yet. However, inflation will be a concern down the road, due to the massive stimulus being injected into the economy. It is said that rates are like a boat floating atop the sea of inflation...as inflation rises, so will home loan rates. If you or someone you know should be acting on today's still low home loan rates, please get in touch soon.
Also helping Bonds rally in the early part of last week was the fact that the New York State manufacturing index came in weaker than estimates, indicating that the US economy is still very weak. And since bad economic news often causes money to flow from Stocks into Bonds, this piece of news helped Bonds start the week on an improving trend.
However, Bonds and home loan rates reversed course midweek and worsened, as money see-sawed back over to Stocks. They were also pressured to worsen by the enormous amount of Bond supply hitting the markets - as too much supply of anything will naturally cause the price to move lower...and in this case, has caused home loan rates to move higher. As you can see in the chart below, Bonds have worsened when additional supply has been announced, causing home loan rates to climb.

While the Fed is continuing to purchase Mortgage Backed Securities, their efforts are just not enough to absorb the flood of new closed and securitized mortgages that are hitting the market after the heavy refinance activity recently - not to mention all the Treasury Securities being auctioned in order to pay for all the stimulus plans.
And speaking of activity in the housing market, Housing Starts rose a whopping 17% in May to come in better than expectations. In addition, Building Permits, which are a sign of future construction, also came in better than expected. These are good signs that the affordable home prices, tax incentives and low home loan rates are attracting buyers to the market.
After all the see-sawing action back and forth last week, including a late week rally in Bonds and fizzle in Stocks, home loan rates ended the week slightly higher than where they began.
THERE CAN BE PLENTY OF UPS AND DOWNS WHEN IT COMES TO BUYING A HOME. CHECK OUT THIS WEEK'S SPECIAL MORTGAGE MARKET VIDEO VIEW FOR IMPORTANT INFORMATION THAT WILL HELP EASE THE PROCESS.

Forecast for the Week


The see-sawing motion between Stocks and Bonds will likely be seen during the coming week, as there is plenty of action ahead. After last week's look at the new construction piece of the housing market, we'll get more information on housing this week with Tuesday's Existing Home Sales Report and Wednesday's New Home Sales Report.
Also on Wednesday we will get an update on consumer and business consumption and buying behavior via the Durable Goods Report, which shows data on items that are non-disposable, such as cars, furniture, appliances, games, cameras, business equipment, etc. Thursday brings a read on the economy with the Gross Domestic Product (GDP) Report, which is the broadest measure of economic activity. Also on Thursday is the weekly Initial Jobless Claims report. Last week's report showed that continuing claims fell by 148,000 to 6.69 million, which is the largest one-week drop since November of 2001. Jobs are vital to the economy strengthening, so it will be important to see what this week's report indicates.
This week we also have the Fed's next regularly scheduled Federal Open Market Committee meeting, followed by their Policy Statement and Interest Rate Decision coming on Wednesday afternoon. It will be important to hear the Fed's comments on the economy and inflation. And speaking of the Fed and inflation, the Fed's favorite gauge of inflation, the Core Personal Consumption Expenditure (PCE) index found within the Personal Income Report, will be released on Friday.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, Bonds were unable to maintain the gains they made earlier in the week. I'll be watching closely to see what impact this week's news, including additional supply of Bonds hitting the market, will have on Bonds and home loan rates.

A Recent History of the Housing Market

http://charlottesvillevarealestate.blogspot.com/2009/06/recent-history-of-housing-market.html

Any history of the inflation and collapse of the housing market will necessarily leave out many important aspects. The housing bubble had been set up in the regulatory agencies in the 1980's and 1990's, but capital had not yet gone into these sectors at such high levels during these decades. In the late 1990's, the dotcom bubble was all the rage, as well as "emerging markets," like Southeast Asia, and Russia and former Soviet Union nations.

Also, partly as a result of the collapse of the Savings & Loan industry, and the resulting wave of foreclosures from the fallout, real estate was a steadily-appreciating, but not inflated, market. Investments were going elsewhere and returns were better in other market sectors than could be had on real estate or mortgages, two seemingly somewhat boring markets.

But then, around 1997, the markets in Southeast Asia and other developing nations became super-inflated, with many of them pegging their currencies to the US dollar. Speculators could then inflate the markets, driving capital into them and inflating stock values, and then create a flight out of the currency, taking their profits. Many of these countries saw their currencies collapse relative to the dollar as capital fled. As a result, they were forced to impoverish themselves and take loans from the International Monetary Fund.

The same currency destruction happened most notably in Russia in 1998, where the government actually defaulted on its debt, which was quite unexpected. The most powerful nation in the USSR that competed with the United States for decades during the Cold War defaulting on its bond payments was a surprise for many investors. A large hedge fund at the time, Long-Term Capital Management, had bet heavily in favor of the Russian bond market, and was in danger of collapse. The Fed and other large banks stepped in to make sure this did not
happen, thereby setting the precedent of bailing out hedge funds.

In 2000-2001, the dotcom bubble burst, as investors realized internet companies could not make money without business plans. Many of them folded, and the market began to sink. It sank even further as a result of the 9/11 attacks on the Pentagon and New York City. As a result, the large energy-trading company Enron faced collapse as a result of its aggressive accounting fraud. But Enron had engaged in the somewhat novel idea of selling off its debt to other investors, a plot the largest banks in the country had helped the company put together.

After the collapse of the dotcoms and the disclosure of Enron's accounting shenanigans, two things happened to work together to create the housing bubble. Without both, the bubble would not have inflated so much, most likely.

First of all, the banks and mortgage companies realized what a great idea Enron had in selling off its debt. The banks could originate mortgages and package them up and sell off the rights to collect the payments. The profits they got from selling mortgages would help them originate new mortgages, and the scam would continue forever, or at least as long as the real estate market was increasing in value. Because they did not have to worry about collecting the payments themselves, these origination companies did not have to worry about borrowers being financially able to pay their debts.

Second, because the Federal Reserve lowered interest rates to below 1%, huge amounts of capital flowed into the US market, and anyone who could successful operate a pen could sign for a mortgage. Interest rates were so low that lending guidelines became nonexistent. If the homeowners defaulted, it did not matter in the least, since the bank could just re-sell the house on the open market and make a profit.

This was the environment until early 2007 or so, when investors started to sober up and realize that maybe giving loans to deadbeats was not such a great idea, because if the market declined, there would be a lot of foreclosures. Banks started tightening up lending guidelines and the Fed was busy raising interest rates to "cool off" the artificially "heated up" housing market.

Then, the inevitable happened: with money becoming more expensive, the real estate bubble burst, taking a few Bear Stearns hedge funds with it. But it was alright for them, since they were bailed out anyway. Homeowners who were actually facing foreclosure, though, were still dealing with higher interest rates and were unable to sell their homes for as much as they paid for them. They either failed to stop foreclosure and lost their properties or the banks had to help them take a loss on the houses through a short sale.

Either way, when the loans went into foreclosure or were paid off for less, the money lost just disappeared. Even worse, no bank wanted to own these bad mortgages anymore, but no bank was quite sure who owned them at all. They were not even absolutely sure they did not own a lot of bad debt themselves, because these loans had been sliced up, packaged, and sold off to dozens of different investors.

So because banks did not want to do business with each other, credit dried up. The Fed started providing loans to banks and dropped interest rates in efforts to stimulate the economy. When that failed to work, the Fed decided to trade bad mortgage debt for US Treasury Securities, which means that the US dollar is now backed by foreclosed loans that no one is quite sure who owns.

Since the rest of the world uses the dollar as its reserve currency, it was none too happy to see that their money was paying less interest and was backed by defaulting mortgage loans. Currencies not backed by foreclosures were assumed to be safer, and nations moved to invest in European Union Euros or Japanese Yen.

Nations still accepted dollars, but wanted more of them for what they were selling. Stuff like gas (refined from oil), food (fertilizer made from natural gas), precious metals, and consumer goods (made in China) went up in price as the value of the dollar went down.

And here we are today, with the US economy facing a recession and politicians providing foreclosure relief which rewards the banks and homebuilding companies with tax breaks. No one is yet sure who owns all of the foreclosed loans, but with the Federal Reserve taking them in return for Treasury Securities, it is becoming clear that all Americans will own these bad debts. The banks will be able to lend money to each other again, while they foreclose on houses, raise interest rate fees, and collapse the economy.

Rob Alley, Realtor of The Avery Group at Roy Wheeler
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com/

A Recent History of the Housing Market

http://charlottesvillevarealestate.blogspot.com/2009/06/recent-history-of-housing-market.html

Any history of the inflation and collapse of the housing market will necessarily leave out many important aspects. The housing bubble had been set up in the regulatory agencies in the 1980's and 1990's, but capital had not yet gone into these sectors at such high levels during these decades. In the late 1990's, the dotcom bubble was all the rage, as well as "emerging markets," like Southeast Asia, and Russia and former Soviet Union nations.

Also, partly as a result of the collapse of the Savings & Loan industry, and the resulting wave of foreclosures from the fallout, real estate was a steadily-appreciating, but not inflated, market. Investments were going elsewhere and returns were better in other market sectors than could be had on real estate or mortgages, two seemingly somewhat boring markets.

But then, around 1997, the markets in Southeast Asia and other developing nations became super-inflated, with many of them pegging their currencies to the US dollar. Speculators could then inflate the markets, driving capital into them and inflating stock values, and then create a flight out of the currency, taking their profits. Many of these countries saw their currencies collapse relative to the dollar as capital fled. As a result, they were forced to impoverish themselves and take loans from the International Monetary Fund.

The same currency destruction happened most notably in Russia in 1998, where the government actually defaulted on its debt, which was quite unexpected. The most powerful nation in the USSR that competed with the United States for decades during the Cold War defaulting on its bond payments was a surprise for many investors. A large hedge fund at the time, Long-Term Capital Management, had bet heavily in favor of the Russian bond market, and was in danger of collapse. The Fed and other large banks stepped in to make sure this did not
happen, thereby setting the precedent of bailing out hedge funds.

In 2000-2001, the dotcom bubble burst, as investors realized internet companies could not make money without business plans. Many of them folded, and the market began to sink. It sank even further as a result of the 9/11 attacks on the Pentagon and New York City. As a result, the large energy-trading company Enron faced collapse as a result of its aggressive accounting fraud. But Enron had engaged in the somewhat novel idea of selling off its debt to other investors, a plot the largest banks in the country had helped the company put together.

After the collapse of the dotcoms and the disclosure of Enron's accounting shenanigans, two things happened to work together to create the housing bubble. Without both, the bubble would not have inflated so much, most likely.

First of all, the banks and mortgage companies realized what a great idea Enron had in selling off its debt. The banks could originate mortgages and package them up and sell off the rights to collect the payments. The profits they got from selling mortgages would help them originate new mortgages, and the scam would continue forever, or at least as long as the real estate market was increasing in value. Because they did not have to worry about collecting the payments themselves, these origination companies did not have to worry about borrowers being financially able to pay their debts.

Second, because the Federal Reserve lowered interest rates to below 1%, huge amounts of capital flowed into the US market, and anyone who could successful operate a pen could sign for a mortgage. Interest rates were so low that lending guidelines became nonexistent. If the homeowners defaulted, it did not matter in the least, since the bank could just re-sell the house on the open market and make a profit.

This was the environment until early 2007 or so, when investors started to sober up and realize that maybe giving loans to deadbeats was not such a great idea, because if the market declined, there would be a lot of foreclosures. Banks started tightening up lending guidelines and the Fed was busy raising interest rates to "cool off" the artificially "heated up" housing market.

Then, the inevitable happened: with money becoming more expensive, the real estate bubble burst, taking a few Bear Stearns hedge funds with it. But it was alright for them, since they were bailed out anyway. Homeowners who were actually facing foreclosure, though, were still dealing with higher interest rates and were unable to sell their homes for as much as they paid for them. They either failed to stop foreclosure and lost their properties or the banks had to help them take a loss on the houses through a short sale.

Either way, when the loans went into foreclosure or were paid off for less, the money lost just disappeared. Even worse, no bank wanted to own these bad mortgages anymore, but no bank was quite sure who owned them at all. They were not even absolutely sure they did not own a lot of bad debt themselves, because these loans had been sliced up, packaged, and sold off to dozens of different investors.

So because banks did not want to do business with each other, credit dried up. The Fed started providing loans to banks and dropped interest rates in efforts to stimulate the economy. When that failed to work, the Fed decided to trade bad mortgage debt for US Treasury Securities, which means that the US dollar is now backed by foreclosed loans that no one is quite sure who owns.

Since the rest of the world uses the dollar as its reserve currency, it was none too happy to see that their money was paying less interest and was backed by defaulting mortgage loans. Currencies not backed by foreclosures were assumed to be safer, and nations moved to invest in European Union Euros or Japanese Yen.

Nations still accepted dollars, but wanted more of them for what they were selling. Stuff like gas (refined from oil), food (fertilizer made from natural gas), precious metals, and consumer goods (made in China) went up in price as the value of the dollar went down.

And here we are today, with the US economy facing a recession and politicians providing foreclosure relief which rewards the banks and homebuilding companies with tax breaks. No one is yet sure who owns all of the foreclosed loans, but with the Federal Reserve taking them in return for Treasury Securities, it is becoming clear that all Americans will own these bad debts. The banks will be able to lend money to each other again, while they foreclose on houses, raise interest rate fees, and collapse the economy.

Rob Alley, Realtor of The Avery Group at Roy Wheeler
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.charlottesvillevarealestate.blogspot.com
http://www.charlottesvilleshortsale.com/

A Recent History of the Housing Market

Any history of the inflation and collapse of the housing market will necessarily leave out many important aspects. The housing bubble had been set up in the regulatory agencies in the 1980's and 1990's, but capital had not yet gone into these sectors at such high levels during these decades. In the late 1990's, the dotcom bubble was all the rage, as well as "emerging markets," like Southeast Asia, and Russia and former Soviet Union nations.

Also, partly as a result of the collapse of the Savings & Loan industry, and the resulting wave of foreclosures from the fallout, real estate was a steadily-appreciating, but not inflated, market. Investments were going elsewhere and returns were better in other market sectors than could be had on real estate or mortgages, two seemingly somewhat boring markets.

But then, around 1997, the markets in Southeast Asia and other developing nations became super-inflated, with many of them pegging their currencies to the US dollar. Speculators could then inflate the markets, driving capital into them and inflating stock values, and then create a flight out of the currency, taking their profits. Many of these countries saw their currencies collapse relative to the dollar as capital fled. As a result, they were forced to impoverish themselves and take loans from the International Monetary Fund.

The same currency destruction happened most notably in Russia in 1998, where the government actually defaulted on its debt, which was quite unexpected. The most powerful nation in the USSR that competed with the United States for decades during the Cold War defaulting on its bond payments was a surprise for many investors. A large hedge fund at the time, Long-Term Capital Management, had bet heavily in favor of the Russian bond market, and was in danger of collapse. The Fed and other large banks stepped in to make sure this did not
happen, thereby setting the precedent of bailing out hedge funds.

In 2000-2001, the dotcom bubble burst, as investors realized internet companies could not make money without business plans. Many of them folded, and the market began to sink. It sank even further as a result of the 9/11 attacks on the Pentagon and New York City. As a result, the large energy-trading company Enron faced collapse as a result of its aggressive accounting fraud. But Enron had engaged in the somewhat novel idea of selling off its debt to other investors, a plot the largest banks in the country had helped the company put together.

After the collapse of the dotcoms and the disclosure of Enron's accounting shenanigans, two things happened to work together to create the housing bubble. Without both, the bubble would not have inflated so much, most likely.

First of all, the banks and mortgage companies realized what a great idea Enron had in selling off its debt. The banks could originate mortgages and package them up and sell off the rights to collect the payments. The profits they got from selling mortgages would help them originate new mortgages, and the scam would continue forever, or at least as long as the real estate market was increasing in value. Because they did not have to worry about collecting the payments themselves, these origination companies did not have to worry about borrowers being financially able to pay their debts.

Second, because the Federal Reserve lowered interest rates to below 1%, huge amounts of capital flowed into the US market, and anyone who could successful operate a pen could sign for a mortgage. Interest rates were so low that lending guidelines became nonexistent. If the homeowners defaulted, it did not matter in the least, since the bank could just re-sell the house on the open market and make a profit.

This was the environment until early 2007 or so, when investors started to sober up and realize that maybe giving loans to deadbeats was not such a great idea, because if the market declined, there would be a lot of foreclosures. Banks started tightening up lending guidelines and the Fed was busy raising interest rates to "cool off" the artificially "heated up" housing market.

Then, the inevitable happened: with money becoming more expensive, the real estate bubble burst, taking a few Bear Stearns hedge funds with it. But it was alright for them, since they were bailed out anyway. Homeowners who were actually facing foreclosure, though, were still dealing with higher interest rates and were unable to sell their homes for as much as they paid for them. They either failed to stop foreclosure and lost their properties or the banks had to help them take a loss on the houses through a short sale.

Either way, when the loans went into foreclosure or were paid off for less, the money lost just disappeared. Even worse, no bank wanted to own these bad mortgages anymore, but no bank was quite sure who owned them at all. They were not even absolutely sure they did not own a lot of bad debt themselves, because these loans had been sliced up, packaged, and sold off to dozens of different investors.

So because banks did not want to do business with each other, credit dried up. The Fed started providing loans to banks and dropped interest rates in efforts to stimulate the economy. When that failed to work, the Fed decided to trade bad mortgage debt for US Treasury Securities, which means that the US dollar is now backed by foreclosed loans that no one is quite sure who owns.

Since the rest of the world uses the dollar as its reserve currency, it was none too happy to see that their money was paying less interest and was backed by defaulting mortgage loans. Currencies not backed by foreclosures were assumed to be safer, and nations moved to invest in European Union Euros or Japanese Yen.

Nations still accepted dollars, but wanted more of them for what they were selling. Stuff like gas (refined from oil), food (fertilizer made from natural gas), precious metals, and consumer goods (made in China) went up in price as the value of the dollar went down.

And here we are today, with the US economy facing a recession and politicians providing foreclosure relief which rewards the banks and homebuilding companies with tax breaks. No one is yet sure who owns all of the foreclosed loans, but with the Federal Reserve taking them in return for Treasury Securities, it is becoming clear that all Americans will own these bad debts. The banks will be able to lend money to each other again, while they foreclose on houses, raise interest rate fees, and collapse the economy.

Rob Alley, Realtor of The Avery Group at Roy Wheeler
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.charlottesvillevarealestate.blogspot.com/
http://www.charlottesvilleshortsale.com/

A Recent History of the Housing Market

Any history of the inflation and collapse of the housing market will necessarily leave out many important aspects. The housing bubble had been set up in the regulatory agencies in the 1980's and 1990's, but capital had not yet gone into these sectors at such high levels during these decades. In the late 1990's, the dotcom bubble was all the rage, as well as "emerging markets," like Southeast Asia, and Russia and former Soviet Union nations.

Also, partly as a result of the collapse of the Savings & Loan industry, and the resulting wave of foreclosures from the fallout, real estate was a steadily-appreciating, but not inflated, market. Investments were going elsewhere and returns were better in other market sectors than could be had on real estate or mortgages, two seemingly somewhat boring markets.

But then, around 1997, the markets in Southeast Asia and other developing nations became super-inflated, with many of them pegging their currencies to the US dollar. Speculators could then inflate the markets, driving capital into them and inflating stock values, and then create a flight out of the currency, taking their profits. Many of these countries saw their currencies collapse relative to the dollar as capital fled. As a result, they were forced to impoverish themselves and take loans from the International Monetary Fund.

The same currency destruction happened most notably in Russia in 1998, where the government actually defaulted on its debt, which was quite unexpected. The most powerful nation in the USSR that competed with the United States for decades during the Cold War defaulting on its bond payments was a surprise for many investors. A large hedge fund at the time, Long-Term Capital Management, had bet heavily in favor of the Russian bond market, and was in danger of collapse. The Fed and other large banks stepped in to make sure this did not
happen, thereby setting the precedent of bailing out hedge funds.

In 2000-2001, the dotcom bubble burst, as investors realized internet companies could not make money without business plans. Many of them folded, and the market began to sink. It sank even further as a result of the 9/11 attacks on the Pentagon and New York City. As a result, the large energy-trading company Enron faced collapse as a result of its aggressive accounting fraud. But Enron had engaged in the somewhat novel idea of selling off its debt to other investors, a plot the largest banks in the country had helped the company put together.

After the collapse of the dotcoms and the disclosure of Enron's accounting shenanigans, two things happened to work together to create the housing bubble. Without both, the bubble would not have inflated so much, most likely.

First of all, the banks and mortgage companies realized what a great idea Enron had in selling off its debt. The banks could originate mortgages and package them up and sell off the rights to collect the payments. The profits they got from selling mortgages would help them originate new mortgages, and the scam would continue forever, or at least as long as the real estate market was increasing in value. Because they did not have to worry about collecting the payments themselves, these origination companies did not have to worry about borrowers being financially able to pay their debts.

Second, because the Federal Reserve lowered interest rates to below 1%, huge amounts of capital flowed into the US market, and anyone who could successful operate a pen could sign for a mortgage. Interest rates were so low that lending guidelines became nonexistent. If the homeowners defaulted, it did not matter in the least, since the bank could just re-sell the house on the open market and make a profit.

This was the environment until early 2007 or so, when investors started to sober up and realize that maybe giving loans to deadbeats was not such a great idea, because if the market declined, there would be a lot of foreclosures. Banks started tightening up lending guidelines and the Fed was busy raising interest rates to "cool off" the artificially "heated up" housing market.

Then, the inevitable happened: with money becoming more expensive, the real estate bubble burst, taking a few Bear Stearns hedge funds with it. But it was alright for them, since they were bailed out anyway. Homeowners who were actually facing foreclosure, though, were still dealing with higher interest rates and were unable to sell their homes for as much as they paid for them. They either failed to stop foreclosure and lost their properties or the banks had to help them take a loss on the houses through a short sale.

Either way, when the loans went into foreclosure or were paid off for less, the money lost just disappeared. Even worse, no bank wanted to own these bad mortgages anymore, but no bank was quite sure who owned them at all. They were not even absolutely sure they did not own a lot of bad debt themselves, because these loans had been sliced up, packaged, and sold off to dozens of different investors.

So because banks did not want to do business with each other, credit dried up. The Fed started providing loans to banks and dropped interest rates in efforts to stimulate the economy. When that failed to work, the Fed decided to trade bad mortgage debt for US Treasury Securities, which means that the US dollar is now backed by foreclosed loans that no one is quite sure who owns.

Since the rest of the world uses the dollar as its reserve currency, it was none too happy to see that their money was paying less interest and was backed by defaulting mortgage loans. Currencies not backed by foreclosures were assumed to be safer, and nations moved to invest in European Union Euros or Japanese Yen.

Nations still accepted dollars, but wanted more of them for what they were selling. Stuff like gas (refined from oil), food (fertilizer made from natural gas), precious metals, and consumer goods (made in China) went up in price as the value of the dollar went down.

And here we are today, with the US economy facing a recession and politicians providing foreclosure relief which rewards the banks and homebuilding companies with tax breaks. No one is yet sure who owns all of the foreclosed loans, but with the Federal Reserve taking them in return for Treasury Securities, it is becoming clear that all Americans will own these bad debts. The banks will be able to lend money to each other again, while they foreclose on houses, raise interest rate fees, and collapse the economy.

Rob Alley, Realtor of The Avery Group at Roy Wheeler
540-250-3275 (cell)
roballeyrealtor@gmail.com
http://www.robsellscharlottesville.com/
http://www.forestlakesliving.com/
http://www.charlottesvillevarealestate.blogspot.com/
http://www.charlottesvilleshortsale.com/

Alert to lock

Bonds woke up this morning angry following yesterday's sell-off, and are struggling to regain their footing and move back above an important level of support.

On the news front, Initial Jobless Claims were slightly higher than expectations and continue to be a drag on the economy. However, continuing claims fell by 148,000 to 6.69 million, which is the largest one-week drop since November of 2001.

Next week brings another round of Bond supply from the Treasury, which could weigh on the Bond market. Therefore, I recommend locking but I will let you know if Bonds are able to reverse course and muster another rally.

Alert to lock

Bonds woke up this morning angry following yesterday's sell-off, and are struggling to regain their footing and move back above an important level of support.

On the news front, Initial Jobless Claims were slightly higher than expectations and continue to be a drag on the economy. However, continuing claims fell by 148,000 to 6.69 million, which is the largest one-week drop since November of 2001.

Next week brings another round of Bond supply from the Treasury, which could weigh on the Bond market. Therefore, I recommend locking but I will let you know if Bonds are able to reverse course and muster another rally.