Mtg rate update Fri 9-4, reminder of $8000 tax credit

Hey there - I hope you have a good Labor Day Weekend. I know that I'll be scrubbing my database and making a huge push for the first time buyers to consider the tax credit and to get ready to buy asap - we don't have much time left if we're going to get folks into their new home by end of November! I'll be getting information arranged and organized on the FHA 203K Renovation Loan - this program will be great to help move the housing inventory that is in need of repair. I used to do a lot of these in years gone by and I see that it's making a comeback. As I provide every week, below the rate sheets are various economic commentaries - rates are still very low so there is no excuse to put off buying. Thanks again for allowing me to provide this info - let me know how I can be of assistance to you over the long weekend.

Mary Taylor Sales Manager/Sr. Loan Officer Golf Savings Bank Phone: (503) 701-2269 Fax: 1-888-287-1675 metaylor@golfsavingsbank.com

New $8,000 Tax Credit for First Time Home Buyers Great news for first time home buyers in 2009! Qualified first time home buyers are eligible for an $8,000 tax credit when buying a primary residence. If you haven't owned a home in the three years prior to closing, congratulations! You are also eligible. Remember, a tax credit is much more valuable than a tax deduction. A tax credit reduces dollar for dollar the amount of tax you owe. A deduction merely reduces the amount of your income that is taxable. Here are two examples of how the tax credit works. You paid $4,000 in taxes. Qualify for the full credit and you get that $4,000 back, plus another $4,000. If you paid no taxes, you get the full $8,000 back in cash - and you don't have to pay it back! Eligible buyers may qualify for a tax credit of up to 10% of the purchase price or $8,000, whichever is less. To qualify for the full credit, the buyer's modified adjusted gross income must be less than $75,000 for single taxpayers and $150,000 for married taxpayers filing a joint return. A partial credit is available for incomes under $95,000 (single) or $170,000 (married). In order to qualify, the $8,000 tax credit is available for qualifying home purchases made before Dec. 1, 2009. This is not a typo. If your closing occurs December 2nd or later, you lose. Want one more reason to act now? Qualified home buyers can apply the credit to either their 2008 or 2009 tax return. To get the credit for 2008, see your tax professional about filing an amended return. For other program requirements, give us a call. We'll run the numbers and see how much you can save.

Mortgage Interest Rates*

Rates as of Friday, 4th September, 2009:

Conforming APR Payment per $1,000 Jumbo APR Payment per $1,000 30-Yr. Fixed 5% 5.131% $5.37 % 0.000% $0.00 15-Yr. Fixed 4.375% 4.598% $7.59 % 0.000% $0.00 3-Yr. ARM - FHA 3.875% 3.998% $4.70 % 0.000% $0.00 30-Yr FHA 5% 5.131% $5.37 % 0.000% $0.00 30-Yr VA 5% 5.131% $5.37 % 0.000% $0.00 5-Yr. ARM - Conv 3.75% 3.872% $4.63 % 0.000% $0.00

*Rates are subject to change due to market fluctuations and borrower's eligibility.

All loans subject to credit approval and property appraisal. Programs, rates, and terms subject to change without notice. For ARM loans, rate may increase after settlement. Prequalification is not a commitment to lend, a condition of loan approval, or an application for credit. Pre-approvals will result in a loan decision subject to conditions. Consult a tax advisor regarding the deductibility of interest.--

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Mary Taylor
Golf Savings Bank
9755 SW Barnes Road Suite 460
Portland, OR 97225

© Copyright 2009. All About News, Inc.

Think Big, Work Small

The initial reaction was as you would expect, a lot of volatility. The stock indexes were trading better ahead of the employment rate and rate markets were being pressured; on the knee jerk the 10 yr note rallied back to unchanged, the stock indexes fell to unchanged. But in 15 minutes the stock indexes were improving while the 10 yr note and mortgages also improved from the initial reaction but were still weaker on the day. The employment report had something for everyone; bears and bulls. The jump in unemployment, a stat done by telephone interviews is troublesome, implying jobs are scarce while the 216K job losses is a lot better than ADP estimates and actually better than what traders were whispering yesterday. Bottom line, the report didn't change a thing; markets continue to believe we can have an economic recovery without the consumer, while the bearish view remains that without the consumer there will be no noticeable recovery. In the meantime stock markets want to shrug off any negativity and keep on kneepan on.

No matter how you slice it, the employment report isn't good news; 9.7% unemployment is seen this morning by some as probably the high in unemployment in this recession. Not a chance in our view, unemployment is very likely to top 10.0% and maybe 10.5% before we see the high. Businesses are not hiring in any significant way and those that are are entry level low income jobs. Recall the geniuses in Washington lead by the President increased the minimum wage two months ago, a drag on hiring. The other side of the debate goes like this; since the number of people losing jobs is slowing to just 200K+ a month businesses will soon begin hiring. After jobs were being cut by 700K a month early this year, chopping 1.6 mil jobs, cutting 200K a month is seen as good news and signs of recovery. Can't keep up cutting jobs by 700K a month or we would be in very deep water. Job cuts obviously had to slow, but new jobs of sizeable numbers is not on the radar for many months. One dude on CNBC this morning, "consumers are back", an ostrich in street clothes. And, we don't have to bring up the recession in housing or consumers up to their bellies in debt and have no desire or ability to borrow more.

This is a very short day; the bond and mortgage markets close at 2:00. The three day weekend will likely keep markets in check. Looking to next week, Treasury will auction $70B of 3 yr, 10 yr and 30 yr debt, always a factor in the rate markets. The stock market, for all the positive spin this morning on the less job losses than were expected, isn't doing much so far.

Dick Lepre, San Francisco

Friday September 4, 2009

BLS Employment Situation Report headlines at -216,000 jobs but revises previous down 49,000 showing -265,000 from the initial previous report. The Unemployment Rate is 9.7%.

Treasuries are selling (higher yields and mortgage rates) but the extent to which they are selling is driven by the fact that the daily tech is substantially overbought. That creates volatility.

BOND YIELDS PUSH MORTGAGE RATES DOWN SLIGHTLY THIS WEEK

McLean, VA - Freddie Mac (NYSE:FRE) today released the results of its Primary Mortgage Market Survey® (PMMS®) in which the 30-year fixed-rate mortgage (FRM) averaged 5.08 percent for the week ending September 3, 2009, down from last week when it averaged 5.14 percent. Last year at this time, the 30-year FRM averaged 6.35 percent.

The 15-year FRM this week averaged 4.54 percent down from last week when it averaged 4.58 percent. A year ago at this time, the 15-year FRM averaged 5.90 percent.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 4.59 percent this week down from last week when it averaged 4.67 percent. A year ago, the 5-year ARM averaged 5.97

"Bond yields pushed mortgage rates slightly lower this week," said Frank Nothaft, Freddie Mac vice president and chief economist. "Low mortgage rates are helping to keep housing very affordable. Seven of the top eight most affordable months occurred during this year, according to the National Association of Realtors'® (NAR) Housing Affordability Index, which dates back to 1971. As a result, pending sales of existing homes rose for the sixth straight month in July, a trend not seen since the NAR began reporting data in 2001. Moreover, July's sales were the strongest since June 2007.

"Overall, inflation remains in check while certain sectors of the economy are experiencing some improvement. The core price index on consumer expenditures, a key indicator tracked by the Federal Reserve, rose 1.4 percent in July from the same time a year earlier and represented the smallest 12-month increase since October 2003. Meanwhile, the manufacturing industry expanded for the first time in 19 months, according to the Institute of Supply Management."