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

Techniques on Financing Foreclosures.

Charlottesville and Central Virginia Short Sales, Foreclosures, and Real Estate Explained

Techniques on Financing Foreclosures.

Financing foreclosures is the part of this business that people are worried about most. Most people automatically assume that you have to have money to invest in foreclosures, which is what keeps them from investing. You will be happy to learn that you don't have to have money to start investing. Obviously everyone is in a different financial situation, so not every technique we share with you will work. You just need to find one that works for you and go with it. Even those with bad credit, no money, or no job may capitalize on foreclosure opportunities. In fact, financing foreclosures is the easier part when it comes to buying foreclosures, finding them can be the biggest challenge, unless you know where to look. These are all great techniques which we discuss more in depth in our best selling foreclosure ebooks.
The following are 10 techniques used in financing foreclosures.

Technique No. 1 Assume Seller's Obligations

Technique No. 2 Borrow Against Life Insurance Policy

Technique No. 3 Use Small Amounts of Money From Different Banks

Technique No. 4 Home Improvement Loans

Technique No. 5 Home Equity Loans

Technique No. 6 VA Loans

Technique No. 7 Find a partner

Technique No. 8 Hard Money Lenders

Technique No. 9 Use Banks and other lending instutions

Technique No. 10 Take over "Subject To" existing financing

These are just a few options you have when financing foreclosures. There are many more ways to creatively finance these properties.

Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.theaverygroup.com

Techniques on Financing Foreclosures.

Charlottesville and Central Virginia Short Sales, Foreclosures, and Real Estate Explained

Techniques on Financing Foreclosures.

Financing foreclosures is the part of this business that people are worried about most. Most people automatically assume that you have to have money to invest in foreclosures, which is what keeps them from investing. You will be happy to learn that you don't have to have money to start investing. Obviously everyone is in a different financial situation, so not every technique we share with you will work. You just need to find one that works for you and go with it. Even those with bad credit, no money, or no job may capitalize on foreclosure opportunities. In fact, financing foreclosures is the easier part when it comes to buying foreclosures, finding them can be the biggest challenge, unless you know where to look. These are all great techniques which we discuss more in depth in our best selling foreclosure ebooks.
The following are 10 techniques used in financing foreclosures.

Technique No. 1 Assume Seller's Obligations

Technique No. 2 Borrow Against Life Insurance Policy

Technique No. 3 Use Small Amounts of Money From Different Banks

Technique No. 4 Home Improvement Loans

Technique No. 5 Home Equity Loans

Technique No. 6 VA Loans

Technique No. 7 Find a partner

Technique No. 8 Hard Money Lenders

Technique No. 9 Use Banks and other lending instutions

Technique No. 10 Take over "Subject To" existing financing

These are just a few options you have when financing foreclosures. There are many more ways to creatively finance these properties.

Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.theaverygroup.com

February 5th, 2009 Morning Market Update

"Bonds are having another volatile morning on the heels of more bad news on the labor front. Initial Jobless Claims reached the highest level in 26 years. In addition, while Productivity in the 4th Quarter was better than expected, Output in the 4th Quarter declined by the largest amount in 26 years.
In other news, the Senate voted to include a $15,000 tax credit in the new stimulus plan in hopes of revitalizing the slumping housing market. The stimulus bill is still working its way through Congress after being voted on in the House last week, and its impact still remains to be seen.
Overall, Bonds have drifted significantly lower since peaking on January 9th. If tomorrow's Jobs Report is as bad--or worse--than expected, Bonds could rally on the negative economic news. Therefore, I recommend floating ahead of the Jobs Report, but I will let you know if we need to shift gears."

Brought to you by:
Leonard Winslow
Gateway Bank Mortgage
690 Berkmar Circle
Chrlottesville, Va 22901
(O) 434-220-3409 (F) 434-220-3429
(M) 434-760-2580 email leonardwinslow@gwfh.com
www.emortgageware.com/leonardwinslow

February 5th, 2009 Morning Market Update

"Bonds are having another volatile morning on the heels of more bad news on the labor front. Initial Jobless Claims reached the highest level in 26 years. In addition, while Productivity in the 4th Quarter was better than expected, Output in the 4th Quarter declined by the largest amount in 26 years.
In other news, the Senate voted to include a $15,000 tax credit in the new stimulus plan in hopes of revitalizing the slumping housing market. The stimulus bill is still working its way through Congress after being voted on in the House last week, and its impact still remains to be seen.
Overall, Bonds have drifted significantly lower since peaking on January 9th. If tomorrow's Jobs Report is as bad--or worse--than expected, Bonds could rally on the negative economic news. Therefore, I recommend floating ahead of the Jobs Report, but I will let you know if we need to shift gears."

Brought to you by:
Leonard Winslow
Gateway Bank Mortgage
690 Berkmar Circle
Chrlottesville, Va 22901
(O) 434-220-3409 (F) 434-220-3429
(M) 434-760-2580 email leonardwinslow@gwfh.com
www.emortgageware.com/leonardwinslow

Thursday's bond market opened flat but has since slipped into negative ground following early gains in stocks. The stock markets are rebounding from yesterday's afternoon sell off that pushed the Dow down over 500 points and the Nasdaq down 80 points. I suspect that this morning's rally may be short-lived so we should be looking for afternoon volatility again.

The Dow is currently up 180 points while the Nasdaq has gain 13 points. The bond market is currently down 5/32, which will likely push this morning's mortgage rates higher by approximately .125 - .250 of a discount point. If the stock markets due give back their current gains, we may see improvements to mortgage rates later in the day.

The only economic news released this morning was last week's initial unemployment claims from the Labor Department. They reported that new claims rose to 478,000 last week, which was an increase of approximately 15,000. Analysts were expecting to see lit tle change form the previous week, meaning that the employment sector is still showing signs of weakness. This is good news for bonds, but this particular report is not considered to be of high importance because it tracks only a week's worth of claims.

Tomorrow morning brings us the release of September's Existing Home Sales data from the National Association of Realtors. This report gives us an indication of housing sector strength and mortgage credit demand. I don't see it having much of an influence on the bond market or mortgage rates, but a reading that varies greatly from analysts' forecasts could lead to a slight change in mortgage pricing. It is expected to show a slight increase in sales from August to September.

The recent rapid improvement in bonds has me concerned that we may see profit taking by traders that could push prices lower and mortgage rates higher. It appears that there is no consensus in the markets regarding whether or not th is is the bottom for the stock markets. It appears there is still room for the major indexes to fall further, but this may not necessarily mean that rates will improve as a result. That means that the risk versus reward factor of continuing to float an interest rate is leaning heavily to the risk side in my opinion. Accordingly, please maintain constant contact with your mortgage professional if you have not locked an interest rate yet.

Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.theaverygroup.com

Thursday's bond market opened flat but has since slipped into negative ground following early gains in stocks. The stock markets are rebounding from yesterday's afternoon sell off that pushed the Dow down over 500 points and the Nasdaq down 80 points. I suspect that this morning's rally may be short-lived so we should be looking for afternoon volatility again.

The Dow is currently up 180 points while the Nasdaq has gain 13 points. The bond market is currently down 5/32, which will likely push this morning's mortgage rates higher by approximately .125 - .250 of a discount point. If the stock markets due give back their current gains, we may see improvements to mortgage rates later in the day.

The only economic news released this morning was last week's initial unemployment claims from the Labor Department. They reported that new claims rose to 478,000 last week, which was an increase of approximately 15,000. Analysts were expecting to see lit tle change form the previous week, meaning that the employment sector is still showing signs of weakness. This is good news for bonds, but this particular report is not considered to be of high importance because it tracks only a week's worth of claims.

Tomorrow morning brings us the release of September's Existing Home Sales data from the National Association of Realtors. This report gives us an indication of housing sector strength and mortgage credit demand. I don't see it having much of an influence on the bond market or mortgage rates, but a reading that varies greatly from analysts' forecasts could lead to a slight change in mortgage pricing. It is expected to show a slight increase in sales from August to September.

The recent rapid improvement in bonds has me concerned that we may see profit taking by traders that could push prices lower and mortgage rates higher. It appears that there is no consensus in the markets regarding whether or not th is is the bottom for the stock markets. It appears there is still room for the major indexes to fall further, but this may not necessarily mean that rates will improve as a result. That means that the risk versus reward factor of continuing to float an interest rate is leaning heavily to the risk side in my opinion. Accordingly, please maintain constant contact with your mortgage professional if you have not locked an interest rate yet.

Rob Alley, Realtor
The Avery Group at Roy Wheeler
540-250-3275
roballey@roywheeler.com
http://www.robsellscharlottesville.com
http://www.forestlakesliving.com
http://www.theaverygroup.com

Bond Market Update October 16th

Technorati Profile

Thursday's bond market opened in negative territory but has since rebounded as the markets continue their see-saw activity. The stock markets are posting sizable losses after yesterday's sell-off dropped the Dow 733 points. With the Dow down 190 points this morning, it has given back all of Monday's record gain of 936 points. The Nasdaq is currently down 30 points and is also below its Friday closing level. The bond market is currently up 2/32, but due to a significant rally late yesterday, we should see mortgage rates improve this morning by approximately .500 of a discount point or .125 of a percent in rate.

This morning's economic data added more concern about the status of the economy and the likelihood of a quick recovery. The Labor Department said that the Consumer Price Index (CPI) for September went unchanged from August's level and that the core data that excludes more volatile food and energy prices rose only 0.1%. Both of those readings were bel ow forecasts, indicating that inflationary pressures are weaker than thought at the consumer level of the economy. That is good news for the bond market and mortgage rates.

The biggest surprise came from September's Industrial Production data that showed a whopping 2.8% monthly drop in output. This was the biggest monthly decline in 34 years and points towards a quickly slowing manufacturing sector. That is also good news for the bond market and mortgage rates.

The Labor Department said that 461,000 new claims for unemployment benefits were filed last week. This was a smaller number than was expected but since the data tracks only a week's worth of claims, it had little impact on trading this morning.

The remaining two reports are both scheduled for release tomorrow morning. September's Housing Starts is the first, but is the week's least important piece of monthly data. It gives us an indication of housing sector strength and mortgage cre dit demand, but usually is not a mover of mortgage rates. It is expected to show a decline in starts of new homes last month. If it varies greatly from forecasts, we could see the bond market have some reaction to the news, but probably not enough to cause much movement in rates.

The last report of the week is October's preliminary reading to the University of Michigan's Index of Consumer Sentiment late tomorrow morning. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. If it shows a sizable decline in consumer confidence, bond prices will probably rise. It is expected to show a reading of 65.0, down from September's final of 70.3.

Bond Market Update October 16th

Technorati Profile

Thursday's bond market opened in negative territory but has since rebounded as the markets continue their see-saw activity. The stock markets are posting sizable losses after yesterday's sell-off dropped the Dow 733 points. With the Dow down 190 points this morning, it has given back all of Monday's record gain of 936 points. The Nasdaq is currently down 30 points and is also below its Friday closing level. The bond market is currently up 2/32, but due to a significant rally late yesterday, we should see mortgage rates improve this morning by approximately .500 of a discount point or .125 of a percent in rate.

This morning's economic data added more concern about the status of the economy and the likelihood of a quick recovery. The Labor Department said that the Consumer Price Index (CPI) for September went unchanged from August's level and that the core data that excludes more volatile food and energy prices rose only 0.1%. Both of those readings were bel ow forecasts, indicating that inflationary pressures are weaker than thought at the consumer level of the economy. That is good news for the bond market and mortgage rates.

The biggest surprise came from September's Industrial Production data that showed a whopping 2.8% monthly drop in output. This was the biggest monthly decline in 34 years and points towards a quickly slowing manufacturing sector. That is also good news for the bond market and mortgage rates.

The Labor Department said that 461,000 new claims for unemployment benefits were filed last week. This was a smaller number than was expected but since the data tracks only a week's worth of claims, it had little impact on trading this morning.

The remaining two reports are both scheduled for release tomorrow morning. September's Housing Starts is the first, but is the week's least important piece of monthly data. It gives us an indication of housing sector strength and mortgage cre dit demand, but usually is not a mover of mortgage rates. It is expected to show a decline in starts of new homes last month. If it varies greatly from forecasts, we could see the bond market have some reaction to the news, but probably not enough to cause much movement in rates.

The last report of the week is October's preliminary reading to the University of Michigan's Index of Consumer Sentiment late tomorrow morning. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. If it shows a sizable decline in consumer confidence, bond prices will probably rise. It is expected to show a reading of 65.0, down from September's final of 70.3.

Rate Lock Advisory

This week brings us the release of seven economic reports that are of interest to the mortgage market. The week also gets heavy in quarterly earnings releases for companies, which could cause significant movement in the stock markets again. The earnings results could affect bond trading as investors move funds into stocks if the reports are good. The other possibility is that the earnings reports would generally disappoint, meaning investors may move funds out of stocks and into bonds as a safe-haven. The latter would be good news for the bond market and mortgage rates.

The bond market is closed tomorrow in observance of the Columbus Day holiday and will reopen Tuesday morning. The first pieces of data come Wednesday morning, which are two of the week's more important releases. The first is September's Retail Sales report. This data is very important to the markets because it measures consumer spending by tracking sales at retail establishments in the U.S. S ince consumer spending makes up two-thirds of the U.S. economy, any related data is considered to be highly important. If we see weaker than expected readings in this report, the bond market should respond favorably and mortgage rates should drop. However, stronger than expected sales could fuel a stock rally and push mortgage rates higher. Current forecasts are calling for a 0.4% decline in sales.

September's Producer Price Index (PPI) is the second report of the day. This index measures inflationary pressures at the producer level of the economy and is also considered to be of high importance to the markets. Analysts are expecting to see a decline of 0.3% in the overall index and a 0.2% rise in the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. A larger than expected increase could fuel inflation concerns in the bond market and push mortgage rates higher. But, weaker than expected readi ngs should lead to lower rates, especially if the sales report doesn't give us stronger than expected results.





Also scheduled for release Wednesday is the Fed Beige Book during afternoon trading. This data details economic conditions throughout the U.S. by region. It is relied upon heavily by the Federal Reserve during FOMC meetings when determining monetary policy. If it reveals stronger signs of inflation from the last release, we could see mortgage rates revise higher shortly after its 2:00 PM ET release.

Thursday morning also brings us two economic releases. The first is September's Consumer Price Index (CPI) that measures inflationary pressures at the consumer level of the economy and is one of the most important reports that the bond market gets each month. Analysts are expecting to see a rise of 0.1% in the overall index and an increase of 0.2% in the core data reading. A larger than expected increase in the core reading coul d raise inflation concerns in the bond market and push mortgage rates higher Thursday. However, a smaller than expected reading should ease inflation concerns and lead to lower mortgage rates.





September's Industrial Production data is the second release of the day and will be released mid-morning. It gives us an indication of manufacturing strength by tracking orders at U.S. factories, mines and utilities. It is expected to show a 0.8% drop in output from August's level, meaning that manufacturing activity fell sharply. A smaller than expected decline or an increase in output would be negative for bonds and mortgage rates while a larger drop should help push mortgage rates lower, assuming that the CPI shows favorable results.

The remaining two reports are both scheduled for release Friday morning. September's Housing Starts is the first, but is the week's least important piece of data. It gives us an indication of housing sector st rength and mortgage credit demand, but usually is not a mover of mortgage rates. It is expected to show a decline in starts of new homes last month. If it varies greatly from forecasts, we could see the bond market have some reaction to the news, but probably not enough to cause much movement in rates.





The last report of the week is October's preliminary reading to the University of Michigan's Index of Consumer Sentiment late Friday morning. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. If it shows a sizable decline in consumer confidence, bond prices will probably rise. It is expected to show a reading of 69.0, down from September's final of 70.3.

Overall, I am expecting to see a fair amount of movement in mortgage rates this week, but mostly the latter part of the week. The key reports are Wednesday's PPI and Retail Sales reports and Thursday's CPI data. But as we saw last week, we certainly don't need factual economic releases to see mortgage rates move. I am thinking we may still see plenty of volatility in the stock markets that may affect bond prices also. Accordingly, please proceed cautiously if you have not locked an interest rates yet.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Rate Lock Advisory

This week brings us the release of seven economic reports that are of interest to the mortgage market. The week also gets heavy in quarterly earnings releases for companies, which could cause significant movement in the stock markets again. The earnings results could affect bond trading as investors move funds into stocks if the reports are good. The other possibility is that the earnings reports would generally disappoint, meaning investors may move funds out of stocks and into bonds as a safe-haven. The latter would be good news for the bond market and mortgage rates.

The bond market is closed tomorrow in observance of the Columbus Day holiday and will reopen Tuesday morning. The first pieces of data come Wednesday morning, which are two of the week's more important releases. The first is September's Retail Sales report. This data is very important to the markets because it measures consumer spending by tracking sales at retail establishments in the U.S. S ince consumer spending makes up two-thirds of the U.S. economy, any related data is considered to be highly important. If we see weaker than expected readings in this report, the bond market should respond favorably and mortgage rates should drop. However, stronger than expected sales could fuel a stock rally and push mortgage rates higher. Current forecasts are calling for a 0.4% decline in sales.

September's Producer Price Index (PPI) is the second report of the day. This index measures inflationary pressures at the producer level of the economy and is also considered to be of high importance to the markets. Analysts are expecting to see a decline of 0.3% in the overall index and a 0.2% rise in the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. A larger than expected increase could fuel inflation concerns in the bond market and push mortgage rates higher. But, weaker than expected readi ngs should lead to lower rates, especially if the sales report doesn't give us stronger than expected results.





Also scheduled for release Wednesday is the Fed Beige Book during afternoon trading. This data details economic conditions throughout the U.S. by region. It is relied upon heavily by the Federal Reserve during FOMC meetings when determining monetary policy. If it reveals stronger signs of inflation from the last release, we could see mortgage rates revise higher shortly after its 2:00 PM ET release.

Thursday morning also brings us two economic releases. The first is September's Consumer Price Index (CPI) that measures inflationary pressures at the consumer level of the economy and is one of the most important reports that the bond market gets each month. Analysts are expecting to see a rise of 0.1% in the overall index and an increase of 0.2% in the core data reading. A larger than expected increase in the core reading coul d raise inflation concerns in the bond market and push mortgage rates higher Thursday. However, a smaller than expected reading should ease inflation concerns and lead to lower mortgage rates.





September's Industrial Production data is the second release of the day and will be released mid-morning. It gives us an indication of manufacturing strength by tracking orders at U.S. factories, mines and utilities. It is expected to show a 0.8% drop in output from August's level, meaning that manufacturing activity fell sharply. A smaller than expected decline or an increase in output would be negative for bonds and mortgage rates while a larger drop should help push mortgage rates lower, assuming that the CPI shows favorable results.

The remaining two reports are both scheduled for release Friday morning. September's Housing Starts is the first, but is the week's least important piece of data. It gives us an indication of housing sector st rength and mortgage credit demand, but usually is not a mover of mortgage rates. It is expected to show a decline in starts of new homes last month. If it varies greatly from forecasts, we could see the bond market have some reaction to the news, but probably not enough to cause much movement in rates.





The last report of the week is October's preliminary reading to the University of Michigan's Index of Consumer Sentiment late Friday morning. This index measures consumer willingness to spend and usually has a moderate impact on the financial markets. If it shows a sizable decline in consumer confidence, bond prices will probably rise. It is expected to show a reading of 69.0, down from September's final of 70.3.

Overall, I am expecting to see a fair amount of movement in mortgage rates this week, but mostly the latter part of the week. The key reports are Wednesday's PPI and Retail Sales reports and Thursday's CPI data. But as we saw last week, we certainly don't need factual economic releases to see mortgage rates move. I am thinking we may still see plenty of volatility in the stock markets that may affect bond prices also. Accordingly, please proceed cautiously if you have not locked an interest rates yet.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

Credit Scoring Part IV

Credit Scoring

Part IV: Credit Remediation

If you are in need of credit remediation, and especially if you live in an area where this is an overall problem within the population, you should seek to align yourself with a credible referral source for credit repair. While government web sites will suggest that self-help may be the best option, keep in mind that for the most part people lack discipline when it comes to spending and making payments. They are not likely to have the diligence to research and remedy their own credit problems.

The Federal Trade Commission regulates credit repair services, and they provide free information to help consumer’s spot, stop, and avoid businesses with fraudulent, deceptive, or unfair practices. Be familiar with the Credit Repair Organization Act http://www.ftc.gov/os/statutes/croa/croa.htm as you seek out a genuine ally in this area. Research their background and make sure this company will cast a good reflection on you when you refer your clients to them.

written by Leonard Winslow, a Mortgage Loan Officer, of Gateway Bank Mortgage, INC. for The Avery Group Real Estate Blog

Credit Scoring Part IV

Credit Scoring

Part IV: Credit Remediation

If you are in need of credit remediation, and especially if you live in an area where this is an overall problem within the population, you should seek to align yourself with a credible referral source for credit repair. While government web sites will suggest that self-help may be the best option, keep in mind that for the most part people lack discipline when it comes to spending and making payments. They are not likely to have the diligence to research and remedy their own credit problems.

The Federal Trade Commission regulates credit repair services, and they provide free information to help consumer’s spot, stop, and avoid businesses with fraudulent, deceptive, or unfair practices. Be familiar with the Credit Repair Organization Act http://www.ftc.gov/os/statutes/croa/croa.htm as you seek out a genuine ally in this area. Research their background and make sure this company will cast a good reflection on you when you refer your clients to them.

written by Leonard Winslow, a Mortgage Loan Officer, of Gateway Bank Mortgage, INC. for The Avery Group Real Estate Blog

A Lenders Response to the Bailout Rescue Plan

The Chinese have a proverb: "May you live in interesting times." And we are living through interesting times indeed.

Whatever the political posturing regarding the rescue plan, a plan needed to be passed. Credit markets are frozen and banks are going bust every day. This is not totally because of "toxic" mortgages. This has a lot to do with FASB 157, also known as "mark to market".

Each day, lenders must mark their assets to the marketplace. It's like you having to appraise your home everyday and, if your neighbor was under duress because she got very ill, divorced, lost her job and was forced to sell her home quickly, she may have sold it super cheap. Now, does that mean your house is worth that super cheap price, too? Clearly not. Why? Because you are not under duress. You have the time to sell your home and get a more normal price, which more accurately reflects true market conditions. But "mark to market" does not allow for this, which creates a vicious cycle.

Why is this so bad? Because, as lenders mark down their assets the amount that they have previously loaned becomes much riskier in relation to their assets. For example, say a bank has $1 million in assets and say they have $15 million in loans outstanding. Their ratio is an acceptable 15 to 1. But should they take a paper write down of $500 thousand due to "mark to market" requirements, their ratio suddenly changes to 30 to 1. This is because their assets are now only $500 thousand after taking the paper loss, while their loans outstanding are still $15 million. And at 30 to 1 this bank is viewed as a risky investment. So the stock price starts to get hit, it becomes harder to borrow, and most importantly harder to make money. The bank is then forced to sell some of its loans to reduce its ratio...at cheap prices.

And this makes the vicious cycle continue. And a quick look at the holdings of these loans show that 95% are problem free. Additionally, the Credit Default Swaps (CDS) that are used with the pools of mortgages are relatively safe. But this requires a bit of understanding. You see, when a pool of mortgage loans is put together it isn't just A paper or B paper etc. it's everything. It's got some A paper, B paper, C paper...and even what looks like toilet paper. An "A" investor buys the whole pool but because they are an "A" investor their safety is greater because they can avoid the first 20% (an example) of defaults. So they own the whole pool but are sheltered from the first batch of defaults, and for this they get the lowest rate of return. As you can figure from here the more risk investors want to take, the higher the return. So the investments are relatively safe, but the accounting rules currently place undue pressure on the banking institutions.

Now add to all this, the opportunistic "shorting" done on the financial stocks, much of it illegal because those shorts did not legitimately borrow shares (called naked shorting), and you exacerbate this whole problem. Thank goodness for the recent temporary ban on shorting in the financial sector. As for the plan, the government is the only one who can step in to do this. And they have to do this. And they will do this. The nauseating political posturing from both sides is just part of the process.

This is not easy to understand for the general public. In fact most politicians don't get this either. That's why it is a difficult yet critical bill for them to vote on.

Once this is done, it will take some time but the markets will stabilize. As for the real estate and mortgage industries, it will take a bit of time but we will make it through this. Rates will remain attractive and the influx of credit availability will help the housing market gradually improve. This ultimately will be the medicine needed to improve the situation overall.

As always – please keep in touch during these volatile times. I am here to help you and your clients in any way that I can.



Sincerely,
Leonard Winslow
Gateway Bank Mortgage
434-220-3409
leonardwinslow@gwfh.com

A Lenders Response to the Bailout Rescue Plan

The Chinese have a proverb: "May you live in interesting times." And we are living through interesting times indeed.

Whatever the political posturing regarding the rescue plan, a plan needed to be passed. Credit markets are frozen and banks are going bust every day. This is not totally because of "toxic" mortgages. This has a lot to do with FASB 157, also known as "mark to market".

Each day, lenders must mark their assets to the marketplace. It's like you having to appraise your home everyday and, if your neighbor was under duress because she got very ill, divorced, lost her job and was forced to sell her home quickly, she may have sold it super cheap. Now, does that mean your house is worth that super cheap price, too? Clearly not. Why? Because you are not under duress. You have the time to sell your home and get a more normal price, which more accurately reflects true market conditions. But "mark to market" does not allow for this, which creates a vicious cycle.

Why is this so bad? Because, as lenders mark down their assets the amount that they have previously loaned becomes much riskier in relation to their assets. For example, say a bank has $1 million in assets and say they have $15 million in loans outstanding. Their ratio is an acceptable 15 to 1. But should they take a paper write down of $500 thousand due to "mark to market" requirements, their ratio suddenly changes to 30 to 1. This is because their assets are now only $500 thousand after taking the paper loss, while their loans outstanding are still $15 million. And at 30 to 1 this bank is viewed as a risky investment. So the stock price starts to get hit, it becomes harder to borrow, and most importantly harder to make money. The bank is then forced to sell some of its loans to reduce its ratio...at cheap prices.

And this makes the vicious cycle continue. And a quick look at the holdings of these loans show that 95% are problem free. Additionally, the Credit Default Swaps (CDS) that are used with the pools of mortgages are relatively safe. But this requires a bit of understanding. You see, when a pool of mortgage loans is put together it isn't just A paper or B paper etc. it's everything. It's got some A paper, B paper, C paper...and even what looks like toilet paper. An "A" investor buys the whole pool but because they are an "A" investor their safety is greater because they can avoid the first 20% (an example) of defaults. So they own the whole pool but are sheltered from the first batch of defaults, and for this they get the lowest rate of return. As you can figure from here the more risk investors want to take, the higher the return. So the investments are relatively safe, but the accounting rules currently place undue pressure on the banking institutions.

Now add to all this, the opportunistic "shorting" done on the financial stocks, much of it illegal because those shorts did not legitimately borrow shares (called naked shorting), and you exacerbate this whole problem. Thank goodness for the recent temporary ban on shorting in the financial sector. As for the plan, the government is the only one who can step in to do this. And they have to do this. And they will do this. The nauseating political posturing from both sides is just part of the process.

This is not easy to understand for the general public. In fact most politicians don't get this either. That's why it is a difficult yet critical bill for them to vote on.

Once this is done, it will take some time but the markets will stabilize. As for the real estate and mortgage industries, it will take a bit of time but we will make it through this. Rates will remain attractive and the influx of credit availability will help the housing market gradually improve. This ultimately will be the medicine needed to improve the situation overall.

As always – please keep in touch during these volatile times. I am here to help you and your clients in any way that I can.



Sincerely,
Leonard Winslow
Gateway Bank Mortgage
434-220-3409
leonardwinslow@gwfh.com

700 Billion Dollar Bailout for who??

So Congress passes a seven hundred billion dollar bailout...but who is going to benefit from this "bailout"? It appears the bill is more designed to jumpstart a struggling world market and not individual homeowners. Foreclosures are rising, short sales are becoming more prominent, more homeowners are looking at ways to afford their payments and reduce their debt, and stocks continue to struggle. All in all, not good. What we are waiting for is a trickle down effect. We will probably see the government give money to banks to encourage lending between banks. This should increase confidence and make banks more willing to lend again. Hopefully, this extra capital will become available to people trying to make their payments, ease the burden, but only time will tell...

700 Billion Dollar Bailout for who??

So Congress passes a seven hundred billion dollar bailout...but who is going to benefit from this "bailout"? It appears the bill is more designed to jumpstart a struggling world market and not individual homeowners. Foreclosures are rising, short sales are becoming more prominent, more homeowners are looking at ways to afford their payments and reduce their debt, and stocks continue to struggle. All in all, not good. What we are waiting for is a trickle down effect. We will probably see the government give money to banks to encourage lending between banks. This should increase confidence and make banks more willing to lend again. Hopefully, this extra capital will become available to people trying to make their payments, ease the burden, but only time will tell...

To finance or not to finance....

Tuesday's bond market has well in negative territory following a stock rebound that has shifted funds back away from bonds. The stock markets are rebounding after yesterday's walloping with the Dow up 260 points and the Nasdaq up 30 points. This means that the major stock indexes have recovered approximately one-third of yesterday's losses. The bond market benefited form yesterday's stock sell-off but is suffering today as investors move funds back into stocks. The result is the bond market down 13/32 that will likely push this morning's mortgage rates higher by approximately .250 of a discount point.

Today's only economic news was September's Consumer Confidence Index (CCI). It showed a reading of 59.8 that was much higher than forecasts had called for. Analysts were expecting to see a reading of 55.0, meaning that consumers had more confidence in their own financial situation than was expected. This is considered bad news for bonds and mortgage rates because it indicates that consumers are more willing to make large purchases in the near future.

Tomorrow only relevant data is the Institute for Supply Management's (ISM) manufacturing index for September. This index gives us an indication of manufacturer sentiment. Analysts are expecting to see a 0.4 decline from last month's 49.9 reading. The 50.0 benchmark is extremely important because a reading below that level means more surveyed executives felt business worsened than those who said it had improved. This data is important not only because it measures manufacturer sentiment, but it is very recent data. Some economic releases track data that are 30-60 days old, but the ISM index is only a few weeks old. If we get a smaller than expected reading, I expect to see the bond market rally and mortgage rates fall tomorrow morning.

We need to keep an eye on the stock markets and Fed bailout attempt. I don't think we will see much come today as the markets take a breather, but we probably will see more volatility in stocks before the end of the week. This could affect bond prices and mortgage rates. Generally speaking, look for stock weakness to lead to bond gains and lower mortgage rates as investors move funds into the safety of bonds. If the stock markets continue to move higher, we should see bonds suffer and mortgage rates move higher.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

To finance or not to finance....

Tuesday's bond market has well in negative territory following a stock rebound that has shifted funds back away from bonds. The stock markets are rebounding after yesterday's walloping with the Dow up 260 points and the Nasdaq up 30 points. This means that the major stock indexes have recovered approximately one-third of yesterday's losses. The bond market benefited form yesterday's stock sell-off but is suffering today as investors move funds back into stocks. The result is the bond market down 13/32 that will likely push this morning's mortgage rates higher by approximately .250 of a discount point.

Today's only economic news was September's Consumer Confidence Index (CCI). It showed a reading of 59.8 that was much higher than forecasts had called for. Analysts were expecting to see a reading of 55.0, meaning that consumers had more confidence in their own financial situation than was expected. This is considered bad news for bonds and mortgage rates because it indicates that consumers are more willing to make large purchases in the near future.

Tomorrow only relevant data is the Institute for Supply Management's (ISM) manufacturing index for September. This index gives us an indication of manufacturer sentiment. Analysts are expecting to see a 0.4 decline from last month's 49.9 reading. The 50.0 benchmark is extremely important because a reading below that level means more surveyed executives felt business worsened than those who said it had improved. This data is important not only because it measures manufacturer sentiment, but it is very recent data. Some economic releases track data that are 30-60 days old, but the ISM index is only a few weeks old. If we get a smaller than expected reading, I expect to see the bond market rally and mortgage rates fall tomorrow morning.

We need to keep an eye on the stock markets and Fed bailout attempt. I don't think we will see much come today as the markets take a breather, but we probably will see more volatility in stocks before the end of the week. This could affect bond prices and mortgage rates. Generally speaking, look for stock weakness to lead to bond gains and lower mortgage rates as investors move funds into the safety of bonds. If the stock markets continue to move higher, we should see bonds suffer and mortgage rates move higher.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Lock if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.