Loren Johnson, CMPS

Today's mortgage market reaction to the weaker than expected Employment report appeared to be counterintuitive, as mortgage rates rose a little after the news, offsetting some of the rate improvement seen earlier in the week. The explanation is that the jobs data was so bad that investors now expect that another economic stimulus package will be implemented soon. The government will need to issue even more debt to pay for a stimulus package, and mortgage investors pushed rates higher on Friday on concerns about the added supply of debt.

As expected, the Employment report reflected weakness in the labor market. The economy lost -240K jobs in October, and the figures for August and September were revised lower as well. This marked ten straight months of job losses in 2008, bringing the total decline in jobs to 1.18 million so far this year. The manufacturing and construction sectors continued to show weakness.

The Economic Calendar will be much lighter next week. Next Friday's Retail Sales report will be the only major economic data for the week. Consumers account for about 70% of economic activity, and the Retail Sales report is a major indicator of spending levels by consumers. Import Prices and Consumer Sentiment will also be released on Friday. Other than that, the only report will be the Trade Balance on Thursday. There will be Treasury auctions on Wednesday and Thursday. Mortgage markets will close early on Monday and will be closed on Tuesday in observance of Veterans Day.

After publishing an article last week titled, "Understanding FHA," I received quite a few comments regarding FHA - Rehab loans. Here is a summary of more detailed information on the Rehab loan.

Section 203k loans are a key part of the FHA's efforts to rehab and repair owner occupied, one to four unit properties. I make this distinction because the program includes condos, "mixed use" residential and other qualified properties. It can also accommodate purchases of existing properties as well as refinances.

A key difference between a 203k loan and most mortgage programs is the method of financing. Traditional mortgages require that a home equity line of credit or similar financing be arranged to pay for the rehab after the initial home purchase and mortgage were completed. With a 203k loan, one loan covers both the purchase and the rehab of the property by basing the mortgage on the projected value of the property. FHA allows for fixed 15 or 30 year loans as well as 1 year arms.

The 203k has two primary programs, one for "minor" repairs, a second for "major" repairs. The principle difference between the two, "major" repairs require architectural plans or structural repairs, while "minor" repairs can be completed without plans requiring review or approval. Minor repairs can total up to $35,000 in rehab costs and must be completed within six moths of purchase.

As with any loan program, there are a number of stipulations that need to be met. First, the property has to qualify as well as the end value of the property, including the rehab. That is why it is important to choose the right FHA approved lender. Not all FHA approved lenders service 203k loans.

There are those who make things happen, those who watch what is about to happen and the rest who wonder what happened. Some people instinctively know what to do next in order to progress and succeed, and yet the high majority has to be shown the way. The former are the leaders and the latter are the followers. Which one are you?

If timing is everything and being prepared is paramount, is now the right time for you to be readying yourself for an upward turn in the market? Let's explore the patterns of the real estate market right back to the 1980's.

Starting in 1985: we experienced the highest-rising, longest-lasting positive market in real estate, which lasted about six and a half years. This was then followed by a severe recession in the 90's, lasting about the same period of time.

From 1999: the market climbed positively again for seven solid years, rising to even greater heights, which then took a nose-dive, triggered by the sub-prime mortgage debacle in the spring of 2006.

Presidential Election: On November 4th, 2008, we will witness a Presidential Election in which will result in the new leader taking official office on January 21, 2009. Then the first 100 days in office will be assessed seriously at all levels of media.

Market flow: From now until then there will still be a tendency for the final stages of a downward trend. Once this is all complete however, "the bottom of the market" will be declared at all media outlets. At that point everyone will begin to look up. Then, slowly but surely, recovery will begin to transpire. Real estate markets usually fall fast and rise relatively slowly, certainly in the beginning. Then given about a three-year stretch, things would have returned to where they had been.

Result: What you would have witnessed is seven years up and seven years down.

It is imperative that those who have come through this challenging market be fully prepared to take advantage of the upward shift. Sharpen your skills, position yourself with the right organization and align your systems and services. You will be the leaders. Timing is everything.

Since AR was down today...and I am a BIG Hockey fan, I decided to use my time to go get a NEW flat-panel TV at Best Buy. Now that it's plugged in, I'm loving it...and since it's on my mind, I'm passing along tips I used to shop with...

1. I'd recommend measuring the space you have available in your home for your new television and bringing those measurements, and a measuring tape, with you to the store. Flat screen TVs will require less depth but perhaps more width and height on your table, wall or shelf space. When determining what size DTV is best for your family, "bigger is not always better." You should determine the appropriate size for your new DTV set based on your viewing distance. The ideal viewing distance is approximately two to three times the diagonal of your TV set. So, before you head to the store, measure the viewing distance available in your room and purchase a set that is either half or a third of that distance.

2. Determine which type of Digital TV meets your preferred picture quality, screen type and budget. HDTVs offer the highest quality picture, but there are also EDTVs and SDTVs available at lower prices. Also, screen types vary between LCD, plasma and cathode ray tubes (CRTs), which are like traditional TVs but digitally updated.

3. You need more than just a great set to maximize your home theater experience (if that's the way you're going). Make sure you have all of the right cords and accessory parts before you leave the store. Bring a list of the other devices you will need to connect, such as a DVD player, speakers and more, so the retailer can help you determine if you need special connector cables. Some cables may not be included in the basic purchase price and others may be extra. Check out the HDTV Accessories Guide to help get everything you need-go to http://www.digitaltips.org/docs/07HDTVguide.pdf.

4. Don't forget the extended service plan. In fact, many consumer advocate groups have recommended purchasing service plans for large and flat screen televisions. By protecting your investment, you will benefit from the peace of mind and convenience service plans offer. Here's why: Most consumers who purchase a new television for their home plan to own it for at least five years.

Most television manufacturer warranties are good only for one year for parts and labor, with some limiting labor coverage for just the first three months. Also, these limited warranties generally only cover defects in materials and workmanship-hence the term "limited."

An extended service plan extends the length of the warranty and provides additional protection beyond the manufacturer, including protection for failures caused by normal wear and tear; heat, dust and humidity; and damage due to power surge. Service plans can also provide coverage for remote controls, and provide a no lemon guarantee. Without coverage, typical repair costs for the most common problems with LCD TVs may range from $280 to $1,200.

For larger televisions, in-home service is a great convenience offered by many extended service plans.

Beyond repair and replacement services, many retailers today are providing additional services and benefits as part of their service plans to meet the growing interconnectivity needs of home electronics systems.

No matter what kind you get....enjoy it! My Minnesota Wild never looked better....and the kids like the 'new look' of their DVD's. Enjoy...and have a great week!

Welcome to November! As we start the first business week, there are a number of economic reports out this week that will affect mortgage rates.

The biggest report this week will be Friday's important Employment data. As usual, this data on the number of jobs, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month, since the health of the labor market is perhaps the single biggest factor in the performance of the economy. Also this week, the ISM manufacturing index and the Construction Spending report will be released on Monday. ISM Services is scheduled for Wednesday, and Productivity will come out on Thursday. Finally, Pending Home Sales, very important to all of us, will be released on Friday.

It should be a wild week. I'll do my best to keep you informed. Hope yours is a good one!!