Aaron Abed

Rate Lock Advisory - Friday Sep. 12th

Friday's bond market has opened fairly flat despite sizable stock losses during early trading. The stock markets are showing losses as investors worry about the future of Lehman Brothers. There is growing concern that the 158-year old financial institution will fail if not sold or if other drastic measures are not taken very soon. The result is renewed fears about the stability of U.S. banks that has pushed the Dow down 124 points and the Nasdaq down 22 points. The bond market is currently down 2/32, but we will still .likely see a small improvement in this morning's rates as a result of strength late yesterday.

The Commerce Department gave us today's first piece of relevant economic news with the release of August's Retail Sales data. They reported that sales fell 0.3% last month when it was expected to rise by the same amount. This means that consumers were much less active than many had thought. However, this is good news for the bond market and mortgage rates.

The second of today's three releases was August's Producer Price Index (PPI). It showed a 0.9% drop in the overall reading, meaning that prices paid at the producer level of the economy fell by a wider margin than what was thought. This is good news for the bond market, but the more important core data reading matched forecasts with an increase of 0.2%. Overall, this report can be considered somewhat favorable to bonds and mortgage rates.

The last report of the week was the University of Michigan's Index of Consumer Sentiment late this morning. It indicated that consumers were much more optimistic about their own financial situations than many analysts had expected. The 73.1 reading was much higher than the 64.0 that was expected. This reading is considered bad news for bonds and mortgage rates because consumers tend to spend more when they have more faith in their own financial situation.

Next week is fairly active in terms of economic releases with several scheduled that can influence mortgage rates. The first comes Monday morning with the release of August's Industrial Production report. It will be posted mid-morning Monday and is considered to be of moderate importance to the markets. Look for more details on next week's events in Sunday's weekly preview.

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 - Thursday Sep. 11th

Thursday's bond market has bounced around in the wake of extremely volatile stock trading this morning. The stock markets are showing losses at the moment, but are currently significantly higher than earlier lows. The Dow is now standing down 19 points after falling as much as 170 points earlier. The Nasdaq is currently up 6 points but was as low as down 37 points before rebounding. The recovery in stocks is pressuring bonds and preventing much of an improvement in this morning's mortgage rates. The bond market is currently unchanged from yesterday's close, which should keep this morning's mortgage rates at yesterday's levels.

Today's only monthly economic data was July's Goods and Services Trade Balance report.

It showed that the U.S. trade deficit rose to $62.2 billion last month when it was expected to reveal a deficit of approximately $58.0 billion. Fortunately though, this data is not considered to be of high importance to the markets.

The Labor Department released weekly unemployment figures this morning, saying that 445,000 new claims were filed. This was a drop of 6,000, which was very close to forecasts and has not had an impact on the markets or mortgage rates.

Tomorrow morning brings us the release of three pieces of relevant data. The first is the release of August's Retail Sales report. It will give us a measurement of consumer spending, which is very important to the markets because consumer spending makes up two-thirds of the U.S. economy. Current forecasts are calling for a 0.3% increase in sales. If we see a higher level of spending than what is forecasted, the bond market will most likely fall and mortgage rates will rise. However, a weaker than expected reading could push bond prices higher and mortgage rates lower tomorrow morning.

The second important piece of data is the release of August's Producer Price Index (PPI). This report will give us a very important measurement of inflationary pressures at the producer level of the economy. There are two readings that analysts follow in this release. They are the overall index and the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. Analysts are currently calling for a 0.5% decline in the overall index, and a rise of 0.2% in the core data. Stronger than expected readings could fuel inflation concerns in the bond market and lead to an increase in mortgage rates Friday morning.

The last report of the week comes from the University of Michigan late tomorrow morning. Their consumer sentiment index will give us an indication of consumer confidence, which hints at consumers' willingness to spend. If confidence is rising, consumers are more apt to make large purchases. But, if they are growing more concerned of their personal financial situations, they probably will delay making that large purchase. This influences future consumer spending data and can impact the financial markets. It is expected to show a reading of 64.0.

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.

Friday's bond market has opened on positive territory following the release of weaker than expected employment numbers. The stock markets are showing another weak morning with the Dow down 105 points and the Nasdaq down 27 points. The bond market is currently up 10/32, which should improve this morning's mortgage rates by another .250 of a discount point.

The Labor Department posted August's Employment figures this morning, saying that the unemployment rate spiked to a five year high of 6.1% when it was expected to remain at 5.7%. They also reported that the economy lost 84,000 jobs last month, exceeding the forecasted decline of 75,000. Both of these numbers are favorable to bonds and mortgage rates because they indicate a weakening employment sector.

A bit of negative news for bonds was the average hourly earnings readings that rose 0.4%. This was 0.1% higher than was expected, but not enough of a concern to prevent stocks from falling and bo nd prices from rising.

Next week is fairly light in terms of the number of economic reports scheduled for release. However, two of the reports on the calendar are considered to be very important to the markets and mortgage rates. There is no relevant data scheduled for release Monday or Tuesday, but look for more details on next week's event sin Sunday's weekly preview.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float 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.

Lakeland, Northwest Mortgage merge in start of acquisition push Minneapolis / St. Paul Business Journal - by Erik Borg Staff Writer

Lakeland Mortgage Corp., the eighth-largest residential mortgage company in the Twin Cities, has acquired the assets of a smaller competitor.

Lakeland closed Tuesday on its acquisition of Edina-based Northwest Mortgage Co., said Mark Teteris, chairman and CEO of Lakeland.

Lakeland has 85 employees across five offices, including the 20 that it gained from Northwest. Lakeland closed about $365.8 million in loans in 2006. Northwest closed about $125 million in loans in 2007.

There are no layoffs planned, Teteris said.

The merged companies plan to acquire smaller mortgage brokers as part of their growth strategy, following the trend of consolidation in the industry. St. Louis Park-based Bell Mortgage also has said recently it plans to acquire smaller companies.

Northwest CEO and Chairman Wade Abed will become managing director for Lakeland and continue to oversee the Edina office as Lakeland's newest branch, he said.

Based in Bloomington, Lakeland also operates branches in Minnetonka, Oakdale and St. Paul.

The acquisition adds Northwest's sales volume to Lakeland's existing infrastructure in an effort to promote growth from within and future acquisition possibilities, Teteris said.

As part of the deal, he also said Abed will have a central role in the plans for any new acquisitions.

The two men previously worked together with the state's trade group, the Minnesota Mortgage Association, each having served for a time as the organization's president.

eborg@bizjournals.com | (612) 288-2112

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