What a day what a day......

There was more blood on the table today for sure as the latest casualty from the credit crunch hit like thunder this morning. Lehman Brothers filed for Chapter 11, the largest in US history. But the other news wasn't anything to sneeze at either. Bank Of America, obviously not scared of spending money this year, picked up a little company called Merrill Lynch so Merrill would avoid going the way of Lehman Bros. AIG needed to raise a mere $40 BILLION in capital by borrowing from the Fed. Add all that up and you basically have a financial meltdown of epic proportions. Well, that's exactly what we had. The Dow closed today down 504 points, that's the biggest single day drop since September of 2001. Mortgage bonds picked up 88bp today and our 5.5% FNMA Benchmark closed at $101.47. This saw a further drop in rates today and I fully expect the same tomorrow morning. In an effort to avoid an international crisis and restore confidence, a global banking consortium comprised of Bank of America, Barclays, Citibank, Credit Suiesse, Deutsche Bank, Goldman Sachs, JP Morgan, Merrill Lynch, Morgan Stanley, and UBS agreed to provide $7billion each to create a $70billion dollar pool of emergency funds to lend to distressed financial companies. The situation is so dire that Fed Funds futures are now showing an 80% chance of the Fed stepping in with a 25bp rate cut tomorrow. As we've seen this year, that could spike mortgage rates so we're going to be paying VERY close attention to the markets from the time they open through the days first rate sheets. We'll be locking with that rate sheet unless something unexpected prompts another strategy because if we see inflation rearing it's head with the Fed announcement tomorrow afternoon, long term rates lose their luster, our prices drop on the MBS and the rates go the other way. Today's economic news was ignored in light of the Wall Street massacre. Dow closed below 11,000 to 10,917 after it's nose dive. The NASDAQ shed 81 points and closed at 2179 and the broader S&P rid itself of 59 points to close at 1192.

This is an opportunity for you so don't miss it. This means that a buyer can get into a house at a wonderful rate and you need to encourage a very long talk with between your client a true mortgage professional. Guidance by someone that knows what they are doing right now is crucial to making the right moves at the right time. Now is the time because we're making houses "cheaper" without decreasing the price right now when rates drop.

If you have a listing you can't move, let me know the sales price and what the next "price reduction mark" is and I'll get you the info to sell it at the price you've got it at now. That will benfit your client for sure and it will benefit those homes around it much more than a price drop. Let's get this market headed back the other direction and we'll use these lower rates that are now available to do so. Call me and we'll get it going.