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Andrea Sommermeyer

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Clarksville Kennel Club Dog Show

04-24-08
Andrea Sommermeyer

The Clarksville Kennel Club will be hosting it's 23rd Annual AKC All Breed Dog Show, Obedience and Rally, this Saturday and Sunday, April 26th and 27th in Clarksville at the Fairgrounds. If you have the time bring the family out and enjoy.

If you need more information please feel free to visit the Clarksville Kennel Club's Website at http://clarksvillekennelclub.homestead.com/index.html.

Willie - MiRo Boxers, Clarksville TN - www.miroboxers.com

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What buyers SHOULD know

04-24-08
Andrea Sommermeyer

Shopping Around

I think I can get you the best deal, provide you with the best service and like so many others turn you into a very satisfied customer. However, if you want to look around, I want to help you do that wisely as well!

First, make sure you are working with an experienced, professional loan officer affliated with a credible institution. 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.

FTC Alert

According to the Federal Trade Commission (FTC), you may be signing on for trouble if a lender:

  • Encourages you to falsify your application information to get the loan.
  • Urges you to borrow more than you need.
  • Pushes you to accept payment terms that you can't realistically meet.
  • Fails to give you the required disclosures (e.g., APR, rescission rights, etc.).
  • Shows up at closing with a totally different loan product than you agreed to.
  • Asks you to sign blank forms. ("It'll speed things up. We'll fill in the blanks later, trust me.")
  • Denies you copies of documents you signed.

Four Critical Questions

Here are four simple questions your lender must answer for you. If the lender can not answer these questions to your satisfaction, then move on to the next lender and keep at it until you find a lender that can.

What are mortgage interest rates based on?

The correct answer is Mortgage Backed Securities or Mortgage Bonds sold in the open market and NOT the 10-year Treasury Note. The reason for the confusion is because the 10-year Treasury Note sometimes trends in the same direction as Mortgage Bonds. However, it is not unusual to see them move in opposite directions. I suggest you NOT work with a lender who has their eyes on the wrong indicators.

What is the next Economic Report or event that could cause interest rate movement?

A professional lender should always have an up-to-date calendar of weekly economic reports and events that may cause rates to fluctuate.

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 are changing a rate called the "Fed Funds Rate". This is a very short-term rate that impacts credit cards, credit lines, auto loans and the like. Mortgage rates most often will actually move in the opposite direction as the Fed change, due to the dynamics within the financial markets.

What is happening in the market today and what do you see in the near future?

If a lender cannot explain how Mortgage Bonds and interest rates are moving at the present time, as well as what is coming up in the near future, you are talking with someone who is still reading last week's newspaper, and probably not a professional with whom to entrust your home mortgage financing.

Be smart... Ask questions... Get answers!

'Four Critical Questions" Source: adapted from www.suewoodard.com

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Market Update 04/21/08

04-21-08
Andrea Sommermeyer

Market Commentary

At Legacy Mortgage we are constantly seeking ways to enhance our dedication to our clients and real estate partners. Our postition as an innovator in the field of real estate finance allows us to help you make informed decisions regarding your customers mortgage financing. We have scoured through the financial reports for the week and we wanted to share the information with you. Please let us know if we can be of further assistance to you and your valued clients.

This week is fairly light in terms of economic news scheduled for release. There are four reports scheduled, but only one of them is likely to cause much movement in mortgage rates. Accordingly, there is a fairly decent possibility of seeing a fairly calm week in the mortgage market.

The week's first piece of data is one of the least important of all four. The National Association of Realtors will post March's Existing Homes Sales numbers Tuesday morning, which are expected to show a drop from February. A similar report to this one and actually the week's least important data- March's New Home Sales will be released Thursday morning. Both of these releases give us an indication of housing sector strength and mortgage credit demand, but unless they vary greatly from analysts forecasts, we don't think they will cause much movement in mortgage rates.

March's Durable Goods Orders will be posted early Thursday morning. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. Current forecasts call for a small increase in orders. A smaller than expected increase could help boost bond prices and cause mortgage rates to drop Thursday morning. However, a stronger than expected reading would indicate that the manufacturing sector is gaining strength quicker than many had thought. This would be negative news and would probably help drive mortgage rates higher.

Also Thursday is a 5-year Treasury Note auction. These sales sometimes bring volatility to the bond market ahead of the actual sales as investors prepare for them. However, that weakness is usually only temporary and will correct itself after the sale is complete as long as it was met with a decent demand from investors. Results of the sale will be posted at 1:00 PM ET. If there was a strong demand, bond prices should rise during afternoon trading. But, lackluster interest could lead to weakness and upward revisions to mortgage rates.

The last important data of the week is the University of Michigan's update to their Index of Consumer Sentiment for April. This report gives us an indication of consumer sentiment. We don't expect it to have a significant impact on bonds and mortgage pricing unless it varies greatly from forecasts Current forecasts are calling for an upward revision to 64.2.

Overall, look for Thursday to be the most important day of the week with the Durable Goods report being posted and the Treasury auction. The rest of the week will likely be heavily influenced by the stock markets. If the major stock indexes continue to rally, bonds will likely suffer and mortgage will move higher. If stocks pull back, we could see mortgage rates move lower this week. Keep in touch with your mortgage professional through out the week for updated rates.
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Market Update 04/16/2008

04-16-08
Andrea Sommermeyer

Market Commentary

At Legacy Mortgage we are constantly seeking ways to enhance our dedication to our clients and real estate partners. Our postition as an innovator in the field of real estate finance allows us to help you make informed decisions regarding your customers mortgage financing. We have scoured through the financial reports for the week and we wanted to share the information with you. Please let us know if we can be of further assistance to you and your valued clients.

This week brings us the release of seven relevant economic reports for the bond market to digest. We are also heading into corporate earnings season which could lead to fluctuations in the stock markets. If earnings come in lighter than estimates, the stock markets may fall, leading to an influx of funds into bonds. But, if earnings and forecasts are strong, the major stock indexes may rally, pulling funds from bonds and leading to higher mortgage rates. Some of the most influential companies don't report quarterly earnings for a few more weeks, but the early releases could affect optimism about what those big named companies' earnings will show.

The first important report comes early this morning when the Commerce Department will release March's Retail Sales data. This piece of data gives us a measurement of consumer spending, which is very important because consumer spending makes up two-thirds of the U.S. economy. Current forecasts call for a 0.1% increase in sales last month. If we see a larger increase in spending, the bond market will probably fall and mortgage rates will rise. However, a weaker than expected reading could push bond prices higher and mortgage rates lower tomorrow.

The Labor Department will post March's Producer Price Index (PPI) early Tuesday morning, giving us an important measurement of inflationary pressures at the producer level of the economy. There are two portions of the report that analysts watch- the overall reading and the core data reading. The core data is more important to market participants because it excludes more volatile food and energy prices. If it shows rapidly rising prices, inflation fears may hurt bond prices, leading to higher mortgage rates Tuesday morning. However, a small increase, or better yet a decline in prices, would be good news for the bond market and mortgage rates. Current forecasts are calling for a 0.4% increase in the overall reading and a 0.2% rise in the core data.

There are four pieces of news scheduled for release Wednesday. The first is the sister report of the PPI. March's Consumer Price Index (CPI) will be released early Wednesday morning. This index is very similar to Tuesday's PPI, but tracks prices at the more important consumer level of the economy. This is one of the most important pieces of data we see each month, so stronger than expected readings will undoubtedly lead to higher mortgage rates. Current forecasts are calling for an increase of 0.3% in the overall index and 0.2% in the core data.

March's Housing Starts report is the second report to be posted Wednesday morning, but it will most likely be a non-factor in the market. It gives us a measurement of housing sector strength and mortgage credit demand, however, usually doesn't cause much movement in mortgage pricing unless it varies greatly from forecasts. It is this week's least important report.

The third is March's Industrial Production report at 9:15 AM ET. It gives us a measurement of output at U.S. factories, mines and utilities, translating into an indication of manufacturing sector strength. Current forecasts are calling for a decline in production of 0.1%. Since signs of a weakening economy are considered favorable to bonds and therefore mortgage rates, a larger decline would be good news for mortgage pricing. However, the CPI is by far the most important data of the day.

The Federal Reserve will post its Fed Beige Book report at 2:00 PM ET Wednesday. This report, which is named simply after the color of its cover, details economic conditions throughout the U.S. by region. Since the Fed relies heavily on it during their FOMC meetings, its results can have a fairly big impact on the financial markets and mortgage rates if it reveals any surprises.

Thursday's sole monthly report is the Conference Board's Leading Economic Indicators (LEI). This data attempts to measure economic activity over the next three to six months. If it estimates an increase in activity, the bond market may fall and mortgage rates could rise. If it shows weaker than expected readings, the bond market may rally and mortgage rates should move lower. This is considered to be a moderately important report, so we may see some movement in rates as a result of this report. It is expected to show an increase of 0.1%.

Overall, look for the most movement in rates early in the week. The Retail Sales, PPI and CPI reports are the biggest names on the agenda. Any of the three can cause significant movement in the markets and mortgage rates, so please keep in touch with your mortgage professional throughout the week.
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Market Commentary 02/24/2008

02-25-08
Andrea Sommermeyer

Market Commentary

At Legacy Mortgage we are constantly seeking ways to enhance our dedication to our clients and real estate partners. Our postition as an innovator in the field of real estate finance allows us to help you make informed decisions regarding your customers mortgage financing. We have scoured through the financial reports for the week and we wanted to share the information with you. Please let us know if we can be of further assistance to you and your valued clients.

Monday's bond market has opened in negative territory following early stock gains and stronger than expected housing news. The Dow is currently up 94 points while the Nasdaq has gained 15 points. The bond market is currently down 18/32, which will likely push this morning's mortgage rates higher by approximately .250 of a discount point.

The only economic data released this morning was January's Existing Home Sales report. The National Association of Realtors releases this data that tracks home resale in the U.S. It showed a slight drop in sales, but not nearly as much of a drop that analysts had expected. With this being today's only news, it has had a moderate impact on today's bond trading and mortgage rates.

The first big report of the week will be released early tomorrow morning when we will see the Labor Department's Producer Price Index (PPI) for January. It measures inflationary pressures at the producer level of the economy. There are two portions of the report that analyst's watch- the overall reading and the core data reading. The core data is more important to market participants because it excludes more volatile food and energy prices. If it shows rapidly rising prices, fears of inflation may rise, hurting bond prices and leading to higher mortgage rates tomorrow morning. However, a smaller than expected increase or better yet a decline in core prices would be good news for the bond market and mortgage rates. It is expected to show an increase of 0.4% in the overall reading and a 0.2% rise in the core data.

Also tomorrow morning is the release of February's Consumer Confidence Index (CCI). This Conference Board index measures consumer confidence in their personal financial situations, giving us a measurement of consumer willingness to spend. Since consumer spending makes up two-thirds of the economy, related data is considered important in terms of gauging economic activity. It is expected to show a decline in confidence from 87.9 in January to 82.5 this month.

Overall, look for plenty of movement in bond prices and mortgage rates this week. We think we will see the most movement either tomorrow or Wednesday, but several of the week's reports can cause movement in rates. This would be a good week to maintain contact with your mortgage professional.
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