Kathleen Davis

Wednesday: February 25th

6:30pm to 7:30pm

Location: 4301 Hacienda Drive ste 120: Pleasanton, CA 94588

Learn:

1st Time Home Buyer tax credit

How it might be better to BUY than RENT

Low Down Payment options

Loan programs available

Your credit score and your interest rate

Bank Owned properties and purchasing them

Free Credit Repair kit, Getting Ready to Buy Guide, and Pre-Application Kit will be given.

Schedule a free consultation. After the consultation appointment you will get a $100 off coupon to put towards your closing costs when you close.

Jeri Anderson - Realtor and Kathleen Davis - Mortgage Professional will be teaching the class

SEATING IS LIMITED: RSVP TO 925-474-1129 OR KDAVIS@CCMCLENDING.COM

The Fed's been at it again, offering words that sound encouraging at first blush, confirming that their buying program of Mortgage Backed Securities is in full swing and will continue as needed. Of course, the media will pick this up and offer their own interpretation, saying "Good news, the Fed's words on continuing their purchasing program mean that rates will continue to drop lower, and remain low into the summer..." But is this really what that means? Not so.

Here's the truth.

Yes, the Fed has been buying Mortgage Bonds, but if you look at what they are purchasing, they are buying a lot of FNMA 30-yr 5.5% and 5.0% Bonds...which won't have much of an impact on present interest rates. Why? First, see the Fed's purchases for yourself by hitting this link: Direct Link to View Fed Mortgage Bond Buying - http://www.newyorkfed.org/markets/mbs/index.html.

So why is the Fed buying these Bonds? Well if you think about it, it's very smart of the Fed...and maybe even a little sneaky...because 5.5% Bonds actually represent outstanding mortgages with rates of 6 - 6.50%, which are precisely the loans being refinanced at today's great interest rates.

Stay with me here...

With rates at present low levels, many of the mortgages in these FNMA 5.5% pools being bought up by the Fed will be refinanced and paid, thus giving the Fed a quick recoup on some of their investment. And this is likely a big reason why the Fed said they could continue this purchasing program beyond June, if necessary. Bottom line, the Fed buying these higher rate coupons will not necessarily help rates to move lower, as their actions do not impact the loans being originated at today's low rates.

Here's the most important part.

Sometimes I talk to clients who are in a situation where it makes sense to refinance or buy right now, but when they hear the media throwing around teases of lower rates ahead, they decide to hold off on making the decision. They are holding off on the hopes of saving more when they can maybe save on their refi now or purchase that perfect now. The hopes of gaining additional savings in the future if they wait is actually a loss. Now clearly, rates could turn higher, and this window of opportunity could pass them by entirely.

Here is the clincher:

Even if those clients ultimately are correct in timing the market, and eventually grab that lower rate and save another $30 per month - think of what they have lost by waiting. While they delayed, they lost the savings they could have gained by taking action sooner - in an example refi: $250 saving now but waited for the additional $30 - they still lost the $250 each month. For a purchase the loss of the the tax benefits for those months as well as the possible $7500 tax credit for 1st Time Home Buyers and potential higher purchase price because if rates are lower than others came off the fence to purchase. So even if they got lucky and obtained the rate they were looking for, it could take years to make up what they lost by waiting.

I don't want anyone to miss an opportunity by either waiting, or not understanding what is at stake. Call me or your trusted mortgage consultant. Talk about it, get the facts.

I unfortunately get questions from people who ask me about credit repair. Unfortunately because usually their credit is in a bad state. The biggest issue is the time and energy required to get through all the paperwork, sending the letters, getting the documentation togther, etc.

I know how tough it can be, when my husband got divorced there were things still on his report that were his ex-wife's. It was 4 months of being on top of it all before all it was removed or accounts closed. There are other solutions but finding one that is a money back guarantee and reputable is tough.

I did find one that I used all year last year. I wanted to really try it out and get some history with them before referring them. One clients went from 400 FICO to 680 FICO in 4 months. He had some serious issues on his account but this is great improvement. They are still working on a few other things but it is coming along.

You can go to: http://kd.fixcreditbix.com There is NO www in front of the link.

There is a great video that talks about how the program works. They also have a money back guarantee . WATCH THE VIDEO...

My hope is that people that get into this are truly interested in starting over and this is a one time thing. I like to give people the benefit of the doubt and realize we all sometimes get ourselves into a situation but just don't know how to fix it. Here is an option to fix it.

I know there are many other solutions and hope that we as professionals can provide REPUTABLE solutions for consumers. This is just one of my options for clients.

Here is what happened yesterday:

We had a large swing in interest rates today UP due to actually good news for the economy with the House passing Obama's $819B stimulus package. Granted it still has the Senate but this news pushed money out of the bond market. The package has $544B in federal spending and $275B in tax cuts for individuals and businesses. This caused a rally but not for bonds thus causing interest rates to INCREASE. My 5% yesterday is 5.5% today. In the long term I see rates coming back down but it will be a few weeks. The FED has left the over night lending rate unchanged. It was stated in yesterday's meeting that inflation will remain not a concern. They will continue to purchase MBS (mortgage backed securities) until June and possibly beyond. However if you look at the which bonds they are purchasing its the FNMA 5.5% to 5% which are the loans that are being secured with refinances now not past mortgages thus when clients say they are going to wait for 4% or 4.5% it will most likely not get there. Why... banks are not getting the higher ones off their books, this will keep rates up and as we have seen today with the rally in the stock market and people pulling out of bonds we are up .5% in rate price changes for the worse. Get your clients locked in, help them understand the volatility of the market place and how fast it can change and that sitting on the fence waiting... well they can lose their rate or the home they really wanted.

Here is what happend 30 minutes ago!

Well the Bond market took another drop causing the potential for another mid-day price increase from lenders like the last 2 days has happened. However the stock market also took a drop. Usually when bonds go down stocks go up and vice a versa. This just goes to show again how crazy this market is and how it's so important to tell your clients the volatility in the market place. Taking advantage of low prices and low interest rates instead of waiting to see what will happen can cost them in potential purchase price, the house they want, and in a higher rate.

I was talking with a Realtor today who mentioned that she has clients that have put in 3 offers on properties and lost them all due to multiply offer situations. I have a client currently who has lost on 2 of his offers for the same reason. The Buyers are out there and those that have some understanding and Realtors who are educating them are winning the bids. This is not a sit on the fence market houses are selling.

I suspect we'll see about a .25% to .375% increase in rates soon. If your clients have not locked and want too this would be the time to do it. If they can wait it out and want to take the risk than floating for the next few weeks could be to their advantage.