The FOMC statement is available.  Click here to read the whole thing.

Here is the bit that effects our mortgage interest rates.

In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability. The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and anticipates that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period. As previously announced, to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year. In addition, the Federal Reserve will buy up to $300 billion of Treasury securities by autumn. The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is facilitating the extension of credit to households and businesses and supporting the functioning of financial markets through a range of liquidity programs. The Committee will continue to carefully monitor the size and composition of the Federal Reserve's balance sheet in light of financial and economic developments.



Big selling happened just after this was released.  Rates went up quite a bit and very, very quickly.  I'm looking for some relaxing and improvment as the week continues.

Trend for rates through the year should be good as the Feds have recommited their buying.

I now have the Making Home Affordable loan up and running.  Although the government passed the plan a few months ago, it took this long for the banks to get things straight with Fannie Mae and Freddie Mac and roll the program out to you.

The program will help many people.  It will not help everyone.  The main thing is that the loan you have today is with either Fannie Mae or Freddie Mac loan.  If you have a  jumbo loan, or if you have an alternative documentation type loan (for example stated income), or other loan, you will be out of luck on this program. 

If you are lucky enough to have an FHA or a VA loan, what is available to you would be the best.  If you do not have an FHA or VA loan, here is how to find out if you have a Fannie Mae or Freddie Mac loan and if you can move forward with a Making Home Affordable refinance.

Go to Fannie Mae and put in your address.  It will tell you by the address if you are eligible.  Then give me a call ASAP and we'll run with it!  Rates are great!

Go to Freddie Mac and put in your address and social security number.  It will tell you by the address if you are eligible.  Then give me a call ASAP and we'll run with it!  Rates are great!

I received this update from HUD in my email today.  I want to paste it here, including the links, so that you have the most current information on the Obama Stimulous Plan.

Foreclosure scams are destructive, deceptive, and devastating to families who are fighting to survive.  We have families on the edge of foreclosure that are being offered relief too good to be true, and we at HUD will take every possible measure to educate and protect consumers and homeowners, bring these scams to light, and prevent con artists from exploiting the housing crisis.  There are legitimate people, places, and agencies that American families can turn to when they are facing foreclosure, and many of you are working on these efforts.

I would like to make the attached flyer available to you for distribution to your clients.  It is a printable, easy-to-copy one pager detailing how consumers can access president Obama's housing plan for FREE.  We are distributing the flyer nationwide today to all of our housing partners - our HUD field offices and staff, housing authorities, state and local agencies, and non-profit organizations.  This and other targeted outreach efforts will help us reach out directly to communities hard-hit by foreclosre about the legitimate foreclosure assistance available to them.

For the homeowners fighting hard to make their mortgage payments and stay in their homes, our housing plan - the Making Home Affordable Plan - will help up to 9 million Americans. Making Home Affordable will work in concert with the President's Recovery Act and support a recovery in the housing market.  Our plan is helping families in three ways.  First, we are protecting housing opportunities for all Americas by taking action Administraction-wide to reduce interest rates, which are now at historic lows.  Second, we will assist 4 to 5 million homeowners who can't otherwise take advantage of today's historically low mortgage interest rates.  Lastly, we have committed up to $75 billion to help an additional 3 to 4 million homeowners who are at risk of foreclosure modify their unaffordable mortgages into affordable ones.  These three planks of our housing plan will keep american families in their homes and prevent the falling home prices that result from nearby foreclosures. 

Homeowners NEVER have to pay to participate in the President's Making Home Affordable program.  I encourage anyone trying to modify or refinance their loans to a monthly mortgage payment that is affordable to visit the Making Home Affordable website at makinghomeaffordable.gov.  Homeowners can also call the Homeowner's HOPE Hotline at 1-888-995-HOPE for free foreclosure counseling assistance.

April is National Fair Housing Month.  It's important, in that context, to recognize that the economic and housing crises, including foreclosure scams, have disproportionately impacted minority populations across the country.  Unscrupulous financial institutions, brokers, and others have broken their trust as lenders, cheating and lying to families fighting to make their way through this crisis.  I will renew our commitment at HUD to fair housing enforcement, particularly for lending violations that target minority communities.  As part of our broader effort to combat abuse and fraud, HUD is using new toos, including the SAFE Act and RESPA, to protect American families.  We at HUD will ensure that all Americans, particularly those in areas previously victimized by unscrupulous practices, are protected and will enforce our laws against those who prey upon them.

I hope that you will find the attached flyer useful in your outreach to consumers about the President's Making Home Affordable plan.

To contact HUD click here

Download | Duration: 00:01:25

Months ago I did a piece on what Mark to Market accounting is and how it was effecting bank capital.  Click Here to re read that piece.

Right from the beginning of this "depression" (clearly not a normal recession) a lot of experts said that changing Mark to Market would ease a lot of the troubles.

Today, the FASB (Financial Accountings Standards Board)  made changes.  Better late than never??? We'll see.  Many experts say that making these changes now will work against the Treasury's plan to have public /private buyers of toxic assets.  Since now the banks do not have to mark to market, but mark to a model, those assets might not be as much a problem for the banks.  They might not want to sell them.  Or, the buyers might not be as excited to purchase on the model's price vs the mark to market price.

Regardles,  the equity market is pretty happy.  At the moment, up 267 on the big board.  Having broken through 8000 on the DOW.  Officially, 20% up from the bottom.  By definition, a new bull market!

Read these articles for more info:

http://online.wsj.com/article/SB123867739560682309.html

http://www.usnews.com/blogs/capital-commerce/2009/04/02/mark-to-market-and-ppip.html

Shopping Around?

HERE’S THE INSIDE SCOOP ON HOW TO DO IT RIGHT!

First: make sure you are working with an experienced, professional loan officer. The largest financial transaction of your life is far too important to place into the hands of someone who is not capable of advising you properly and troubleshooting the issues that may arise along the way. But how can you tell?

Here are FOUR SIMPLE QUESTIONS YOUR LENDER ABSOLUTELY MUST BE ABLE TO ANSWER CORRECTLY. IF THEY DO NOT KNOW THE ANSWERS…RUN…DON’T WALK… RUN…TO A LENDER THAT DOES!

 

1) What are mortgage interest rates based on? (The only correct answer is Mortgage Backed Securities or Mortgage Bonds, NOT the 10-year Treasury Note. While the 10-year Treasury Note sometimes trends in the same direction as Mortgage Bonds, it is not unusual to see them move in completely opposite directions. DO NOT work with a lender who has their eyes on the wrong indicators.)

 

2) What is the next Economic Report or event that could cause interest rate movement? (A professional lender will have this information at their fingertips.) 

 

3) When Bernanke and the Fed "change rates", what does this mean… and what impact does this have on mortgage interest rates?  (The answer may surprise you. When the Fed makes a move, they can change a rate called the "Fed Funds Rate" or "Discount Rate". These are both very short- term rates that impact credit cards, Home Equity credit lines, auto loans and the like. On the day of the Fed move, Mortgage rates most often will actually move in the opposite direction as the Fed change. This is due to the dynamics within the financial markets in response to inflation. For more information and explanation, just give us a call).

 

4) Do you have access to live, real time, mortgage bond quotes? (If a lender cannot explain how Mortgage Bonds and interest rates are moving in real time and warn you in advance of a costly intra-day price change, you are talking with someone who is still reading yesterday’s newspaper, and probably not a professional with whom to entrust your home mortgage financing. Would you work with a stockbroker who is only able to grab yesterday’s paper to tell you how a stock traded yesterday but had no idea what the movement looks like at the present time and what market conditions could cause changes in the near future? No way!)

 

 

Be smart...  Ask questions…  Get answers!

 

More than likely, this is one of the largest and most important financial transactions you will ever make. You might do this only four or five times in your entire life… but we do this every single day. It’s your home and your future. It’s our profession and our passion. We're ready to work for your best interest.

Download | Duration: 00:01:14

 Reno Loan Lady - KOH 780 - Radio Commentary for March 23, 2009 - Good news for the market....

After a year and a half of horrible news - day after day after day after day after day.  We'll take good news!  Call the bottom!  I'll jump in.  Do we really care at this point how long it holds?  Personally, I'll live in the moment and jump for joy for a change.

Here's a quick run down on some of the great news.

1) Housing numbers are up.  Sales up 5.1% to 4.72 million units.  Supply down to 9.7 months (target about 6%).  Median price dropped 15.5% to $165,400.  Sales figures by region: Northeast up 15.6%, Midwest up 1%, South up 6.1%, West up 2.6%

For more info, click here
 
2) As of 1113a PST, today, Monday, the DOW is up about 300 points.  (Updated 1:23 p PST, today, Monday, the DOW is up almost 500 points.) This is due to Geithner giving more detail on this private-public plan to buy bad assets.

To read the full story, click here

3) Somehow, Geithner smoothed things over with the Chinese and they have committed to buying our treasuries.  If you read the previous blog on the Chinese, you know this is absolutely important to our survival.

To read the full story, click here

4) Bernanke to buy $750 Billion in MBS.  Read the previous blog on this subject for more info.  Just to note that rates have continued to look great since this announcement.

The Feds have pumped half a trillion dollars into the mortgage backed securities (MBS) market.  In January rates improved about .50% for a short while.  The reduced mortgage rates were a "honeymoon" effect that did not last.  Rates quickly began to creep back up.

Yesterday the Feds announced that they will pump another $750 billion into MBS and will also begin buying Treasuries.  This caused a quick drop in rates yesterday afternoon.

Will rates finally get to 4%?  Or, will this be another "honeymoon" for a short while?

The Feds have already set their Fed Funds Target Rate at 0%.  The only way to have a negative effect on that rate is to increase the Fed Balance Sheet further.  That means monitary policy is looser than a 0% target.  This is a desperate attempt that many worry will have severe inflationary consequences upon an economic recovery.

We know that the bubble that popped, that we are now suffering from, is a result of the very loose monitary policy of our recent past.  So how is an ever looser monitary policy going to fix us without having another horrible result?  But then, what choice does the Fed have?  It is an interesting debate.

I personally think a bird in the hand .....  If you can refinance or purchase a home and have 5% or below for 30 yrs, WOW.  Let's not be stupid and greedy.  These rates are life changing for some people.  It allows people to buy a very nice home which will ultimately build wealth long term. 

Calling a bottom, or worse, being greedy, will certainly mean that many people will miss out altogether.  Refinancing to improve your cash flow or buying a home in a distressed market with low rates - a NO BRAINER. 

To quote Nike, "Just Do It"

Below are a couple of really good articles on this subject.  Check them out.

http://www.cnbc.com/id/29760360

http://www.bankrate.com/brm/news/fed/main-mar182009-a1.asp

 

 

The results of the last two day's Federal Open Market Committee  (FOMC) meeting are available.  To read in full, click here.

To summarize, the committee believes the economy is still contracting.  The cited job losses, declining equity and household wealth, and tight credit amoung the largest concerns.  There has also been a slump in our exports due to our trading partners also experiencing the recession.  

The interest rate target will remain at the 0-1/4 level.  

Here is a quote that relates specifically to mortgage interest rates.

"To provide greater support to mortgage lending and housing markets, the Committee decided today to increase the size of the Federal Reserve’s balance sheet further by purchasing up to an additional $750 billion of agency mortgage-backed securities, bringing its total purchases of these securities to up to $1.25 trillion this year, and to increase its purchases of agency debt this year by up to $100 billion to a total of up to $200 billion."

The Wall Street Journal online does this cool parsing thing.  Check this out.

http://online.wsj.com/public/resources/documents/info-fedparse0903.html

The Fed will also begin buying treasuries.