Subject: Responding to your message

Dear Aaron:

Thank you for taking the time to contact me to voice your concerns with the financial crisis we're facing. I hear you loud and clear and want to assure you that I took your thoughts to heart prior to casting my vote. I appreciate having the chance to respond to your well-founded frustration.

I am deeply concerned about the financial crisis and its impact on our already troubled economy. While this crisis may seem to be only about Wall Street, in reality it touches each and every Minnesotan. Jobs, personal and retirement savings, loans for businesses, college and car loans, and mortgages are all at stake. Prior to the vote, I received a multitude of real-life stories from Minnesotans who were facing issues such as the inability to make payroll or get a student loan.

I am frustrated that the case-by-case approach up to this point in dealing with the financial crisis had failed to solve the problem. Unfortunately, we entered a new and dangerous phase in which our entire financial system hangs in the balance. Dramatic action was required to respond to economic disaster. I did not take lightly for one minute allocating $700 billion in taxpayer money. In fact, I am infuriated that we are at this point, but I did come to the ultimate conclusion that it was necessary.

In response to the crisis, which was brought on by outright greed, mismanagement and a failed financial regulatory system, the Administration proposed on September 19, 2008, a $700 billion plan to systematically stabilize the financial system and protect the economy by buying toxic mortgage-related assets that have been paralyzing the financial system. As originally proposed, I could not support the Administration's plan. In fact, on September 29, I sent a letter to Senate Banking Committee Chairman Dodd, Ranking Member Shelby, House Financial Services Chairman Frank, and Ranking Member Bachus making it known that in order to gain my support, any financial rescue plan needed to uphold the principles of Wall Street accountability, taxpayer protections, and no blank checks or golden parachute payouts to Wall Street executives.

As you may know, on October 1, 2008, I joined 73 of my colleagues in passing revised financial stabilization legislation that included my required principles. More specifically, the financial stabilization legislation doesn't give a blank check for Wall Street, provides for strong oversight and judicial review, limits executive compensation, and prohibits golden parachutes for participating institutions. Signed by President Bush on October 3, this legislation provides $700 billion, in installments, for programs to buy and insure these toxic assets. $250 billion will be given upfront; another $100 billion if the President certifies need, and the last $350 billion will be subject to Congressional disapproval.

It is important to point out that these assets have underlying value. In fact, the Congressional Budget Office has determined that the net cost to the taxpayer would be "substantially less than $700 billion." Moreover, a number of well-respected market observers have suggested that the government could actually earn a profit on these assets. In the event that a profit is not made, the President must report to Congress with a plan on how to make up any shortfall from the financial industry. And if there are profits, they must be used for debt reduction.

In addition, this legislation directs the Securities and Exchange Commission (SEC) to suspend mark-to-market accounting if it is found to be in the public interest, raises the Federal Deposit Insurance Corporation (FDIC) insurance limit from $100,000 to $250,000, provides responsible homeowner relief such as a three-year extension of mortgage debt forgiveness, and protects middle-class Minnesotans from higher taxes.

Going forward, we cannot go back to business as usual. The need to aggressively undertake financial regulatory reform is a top priority of mine and will remain so until we pass much-needed legislation. Our current system is broken - we must have a forward looking regulatory system for our 21st century economy. We need greater transparency and accountability across our entire financial system so that regulators and consumers fully understand financial products and their possible risks. We also need to put more "cops on the beat" to better police Wall Street.

You may also be interested to know that I have called on Wall Street executives to repay any and all ill-gotten bonuses they may have received, and I have also asked Attorney General Mukasey to investigate whether Wall Street executives engaged in criminal conspiracy and fraudulent activities. Executives who clearly helped to create this crisis must be held accountable, and those who have broken our laws should be punished through fines and jail time.

This was not an easy vote. In fact, this was one of the most politically unpopular votes I have had to take. But the thing is, I don't think Minnesotans sent me to Washington to cast easy votes. You sent me here to weigh pros and cons and do what is best for our state. At the end of the day, and after laying everything out on the table, the dangers of not acting far outweighed any political fallout that may come because of my vote.

These are extremely challenging times. Please know I will continue to do everything in my power to support the economy and protect the taxpayer.

While we may not view this issue the same way, I do appreciate the chance to respond. I respect and appreciate your advice and hope you will continue to share your thoughts and ideas with me.

Sincerely,
Norm Coleman
United States Senate

Freddie Mac: Fixed-rate mortgages fall in latest survey

By Michelle Donley Last update: 10:07 a.m. EDT Oct. 23, 2008 Comments: 4 NEW YORK (MarketWatch) -

- U.S. fixed-rate mortgages declined in the latest week, according to Freddie Mac's survey released Thursday. The national average interest rate on the benchmark 30-year, fixed-rate loan averaged 6.04% in the week ending Thursday, down from last week's 6.46% and the year-ago 6.33%. The 15-year fixed-rate loan averaged 5.72%, down from the week-ago 6.14% and the year-ago 5.99%. The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 6.06%, compared with 6.14% a week ago and 6.03% a year ago. One-year Treasury-indexed ARMs averaged 5.23% this week, up from last week's 5.16% and down from the year-ago 5.66%. "Long-term mortgage rates fell this week amid news of tame inflation and a weaker housing market," said Frank Nothaft, Freddie Mac vice president and chief economist.

First-Time Homebuyer Credit

•Establishes a first-time homebuyer refundable tax credit equal to 10% of the purchase price of a principal residence, not to exceed $7,500.

•This is a tax credit claimed on the Federal income tax returns.

•This is not a down payment assistance that can be used at closing.

•Requires taxpayers receiving the credit to repay it over 15 years in equal installments by imposing a surcharge on the taxpayers' annual income.

•Allows the credit for purchases on or after April 9^th, 2008 and before July 1^st, 2009.Phases out the credit for taxpayers with incomes over $75,000 ($150,000 for joint returns).

Aaron Abed
Sr. Mortgage Banker
Email: AAbed@LakelandMortgage.com
Web: www.AaronAbed.com
Direct: 952.908.9425
Cell: 612.386.6575
Fax: 952.224.1862

Wednesday's bond market has opened in positive territory as investors continue to dump stocks this morning. The stock markets showing significant losses with the Dow currently down 324 points and the Nasdaq down 36 points. The bond market is currently up 10/32, which should improve this morning's mortgage rates by another .125 to .250 of a discount point.

There is no relevant economic data scheduled for release today, therefore the bond market is relying on stocks for direction. With stocks still falling, investors are eyeing bonds as a parking space for funds, at least temporarily. This has benefited mortgage rates this week, however, I don't see that as a situation that will likely last long. Accordingly, I am shifting to a lock recommendation for immediate and short-term closings.

The only data scheduled for release tomorrow is weekly unemployment claims from the Labor Department. Analysts are expecting to see that 465,000 new claims were filed last week. This would be a slight increase from the previous week and would basically be good news for the bond market and mortgage rates. But, since this data tracks only a week's worth of claims, its influence on the markets is usually limited unless it varies greatly from forecasts.

The only other data scheduled for release this week is September's Existing Home Sales Friday morning. 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.

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 pla ce 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.

Tuesday's bond market has opened up sharply following early stock losses. The stock markets showing sizable losses, erasing a good portion of yesterday's late rally. The Dow is currently down 2 02 points while the Nasdaq has lost 47 points. The bond market is currently up 22/32, which will likely improve this morning's mortgage rates by approximately .500 of a discount point or .125 in rate.

There is no relevant economic data scheduled for today or tomorrow. As expected, we are seeing the bond market fluctuate with stocks. Since stocks are in selling mode, the recent jump in bond yields has made bonds more attractive to investors. This is especially true with stocks unable to keep solid footing. The result is a significant improvement to this morning's mortgage rates.

With no data scheduled for release tomorrow and only weekly unemployment claims due Thursday, look for similar action in bonds the next two days. I feel there is still more roo m for bonds to improve and mortgage rates to move lower, so I am holding the float recommendation for the time being. However, that may change at any time.

The only other data scheduled for release this week is September's Existing Home Sales Friday morning. 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.

If I were considering financing/refinancing a home, I would.... Float 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.