Don Polletta - CT FHA loans

Mortgage bond prices rose last week pushing Connecticut mortgage rates lower. The Fed spent another $45 billion buying mortgage bonds between November 5th and the 11th. For all the criticism the Fed receives for the handling of the economy, they do deserve credit for keeping mortgage interest rates low throughout this year. How it all plays out in the long term is uncertain. The record Treasury auctions continued to be absorbed in trading without any major problems. For the week, Connecticut mortgage rates improved by about 7/8ths of a discount point.

The consumer price index data Wednesday will be the most important release this week. Producer price index data along with retail sales data will set the tone for the start of the week. Inflation indications would likely hurt Connecticut mortgage rates but signs of tame inflation could help rates improve.

LOOKING AHEAD

Economic Indicator	Release Date & Time	Consensus Estimate	Analysis
Retail Sales	Monday, Nov. 16, 8:30 am, et	Up 0.9%	Important. A measure of consumer demand. A smaller than expected increase may lead to lower rates.
Business Inventories	Monday, Nov. 16, 10:00 am, et	Down 0.6%	Low importance. An indication of stored-up capacity. A significantly large increase may lead to lower rates.
Producer Price Index	Tuesday, Nov. 17, 8:30 am, et	Up 0.5%, Core up 0.1%	Important. An indication of inflationary pressures at the producer level. Weaker figures may lead to lower rates.
Industrial Production	Tuesday, Nov. 17, 9:15 am, et	Up 0.3%	Important. A measure of manufacturing sector strength. A lower than expected increase may lead to lower rates.
Capacity Utilization	Tuesday, Nov. 17, 9:15 am, et	70.8%	Important. A figure above 85% is viewed as inflationary. Weakness may lead to lower rates.
Housing Starts	Wednesday, Nov. 18, 8:30 am, et	Up 1.5%	Important. A measure of housing sector strength. Weakness may lead to lower rates.
Consumer Price Index	Wednesday, Nov. 18, 8:30 am, et	Up 0.2%, Core up 0.1%	Important. A measure of inflation at the consumer level. Weaker figures may lead to lower rates.
Leading Economic Indicators	Thursday, Nov. 19, 10:00 am, et	Up 0.4%	Important. An indication of future economic activity. A smaller increase may lead to lower rates.
Philadelphia Fed Survey	Thursday, Nov. 19, 10:00 am, et	None	Moderately important. A survey of business conditions in the Northeast. Weakness may lead to lower rates.

Tax Credit Extension

The housing market received some good news when Congress recently acted on the pleas of housing sector professionals and extended the $8000 first time homebuyer tax credit. In addition, the program was expanded to include move-up buyers with a $6500 tax credit. The program now runs through April of next year. Prior to the extension the program was set to eclipse at the end of November.

Even with the positive measure there is still some criticism the program does nothing to address the foreclosure problems that continue to plague the housing market. Unfortunately the cost to extend the credit is around $1 billion per month. This has politicians from both sides of the isle concerned.

The new and move-up buyer incentives coupled with historically low Connecticut mortgage rates make now a great time to purchase a home. Low rates also make it favorable for many current homeowners to refinance.

CHFA Mortgage rates are at their lowest point in years, and with the extension of the homebuyer tax credit now is the perftect time to buy. The following chfa rates are in effect until Thursday, November 19, 2009, and subject to change

CHFA Homebuyer Mortgage Program
Interest rate: 4.625 % (APR range 4.725 - 5.125 %)
Term - 30 years, fixed rate

CHFA Downpayment Assistance Program (DAP)
Interest rate: 4.625 % (APR range 4.725 - 5.125 %)
Term - 30 years, fixed rate

Urban Rehabilitation Homeownership (UR Home) Program
Interest rate: 4.375 % (APR range 4.475 - 4.875 %)
Term - 30 years, fixed rate

Pilot Homeownership and Downpayment Assistance Program for Manchester
Interest rate: 4.375 % (APR range 4.475 - 4.875)
Term - 30 years, fixed rate

Homeownership Program,
Home of Your Own Program,
Police Homeownership Program,
Teachers Mortgage Assistance Program, and
Military Homeownership Program

Interest rate: 4.500 % % (APR range 4.600 - 5.000 %)
Term - 30 years, fixed rate

For more news and information about the CHFA Loan program vist http://www.CHFAMortgageLoan.com, or call us directly at (800) 922-3210

Connecticut Mortgage Rates were near unchanged for the week amid very choppy trading conditions. Stronger than expected factory orders and ISM Index data were generally not bond friendly and attributed to higher rates in the middle of the week. Fortunately the Fed indicated the continued desire to keep mortgage rates low for an extended period. In addition, higher than expected unemployment and more payroll losses than expected helped mortgage bonds rally Friday. For the week, Connecticut mortgage rates finished near unchanged.

The record debt auctions Monday, Tuesday, and Thursday will once again take center stage as the Veterans holiday Wednesday splits the trading week in half. Strong foreign demand remains necessary for interest rates to stay relatively low. The trade data Friday will also be important.

LOOKING AHEAD

Economic Indicator	Release Date & Time	Consensus Estimate	Analysis
3-year Treasury Note Auction	Monday, Nov. 9, 12:00 pm, et	None	Important. $40 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
10-year Treasury Note Auction	Tuesday, Nov. 10, 12:00 pm, et	None	Important. $25 billion of notes will be auctioned. Strong demand may lead to lower mortgage rates.
Veterans Day	Wednesday, Nov. 11		Important. Shortened trading week may lead to mortgage interest rate volatility.
30-year Treasury Bond Auction	Thursday, Nov. 12, 12:00 pm, et	None	Important. $16 billion of bonds will be auctioned. Strong demand may lead to lower mortgage rates.
Trade Data	Friday, Nov. 13, 8:30 am, et	$31.9 billion	Important. Affects the value of the dollar. A falling deficit may strengthen the dollar and lead to lower rates.
U of Michigan Consumer Sentiment	Friday, Nov. 13, 10:00 am, et	71.8	Important. An indication of consumers' willingness to spend. Weakness may lead to lower mortgage rates.

Trading This Week

Market conditions that often lead to Connecticut mortgage rate volatility are thin trading and shortened trading weeks. If very few market participants are buying and selling bonds, the potential for short-term volatility is escalated. A large buyer or seller can execute trading orders that, without additional traders to buffer out the extreme buying or selling, can lead to swift market movements. In addition, shortened trading weeks have the potential to compress a week's worth of trading into fewer days. Bond traders often take defensive positions ahead of weekends and holidays to guard against unforeseen events that could possibly jeopardize their investments. This positioning can be beneficial or detrimental to mortgage interest rates. If investors sell stocks and buy mortgage-backed securities, mortgage interest rates will improve. However, if investors sell mortgage-backed securities and hold cash positions, mortgage interest rates will rise.

Holidays can often result in volatility as trading resumes following the extended close. The Fed continues to state the goal of low interest rates for some time. It is hard to argue they have not been effective with that goal so far this year. That doesn't mean we haven't and won't see any mortgage rate volatility. Recent history attests to spikes and drops in rates throughout the year even with the Fed pumping $1.25 trillion in mortgage bonds. The big unknown remains when and how the Fed will exit the market without severe disruptions. Fed officials admit the future remains uncertain, and results from government stimulus programs remains to be seen.

This week could result in market swings that are favorable or negative in nature. Considering the heightened possibility for mortgage interest rate volatility, a cautious approach to interest rate exposure is prudent.

For more news and information on Connecticut Mortgage Rates visit www.ToMortgageServices.com, or call us directly at (800) 922-3210

Congress gave final approval to legislation expanding an $8,000 tax credit for first-time home buyers. The House passed the extension on Thursday and President Obama is expected to sign it today. The new bill extends until April 30, 2010 for the tax credit for first-time homebuyers that would otherwise expire at the end of this month.

Changes:

The new legislation will allow the credit for couples earning up to $225,000 a year and individuals earning up to $125,000. That's up from the current $75,000 limit for individuals and $150,000 for couples.

Current Homeowners

The new bill will allow homebuyers who have owned their prior residence for at least five years to receive a $6,500 credit. Those who sell their new home or no longer use it as their main residence within three years would have to repay the credit. Homes worth more than $800,000 wouldn't be eligible.

Moving Forward

The homebuyers' credit will hopefully pave the way for stabilization in the housing market. The government has also made recent attempts to get the economy moving in other areas such as the now expired "cash for clunkers" program, and the recently initiated government appliance rebate program, but these programs wont be able to deliver a boost to the economy that a strong housing market can deliver.

For more news and information about purchasing a home or refinancing you can visit http://www.CHFAMortgageLoan.com or call (800) 922-3210.

Connecticut First time homebuyers may never see a better time to buy than right now. The CHFA loan program is now offering 30 year fixed rate mortgages at 4.75%. Here are the chfa mortgage rates as of November 5, 2009:

Homebuyer Mortgage Program

Interest rate: 4.750 % (APR range 4.850 - 5.250 %)
Term - 30 years, fixed rate

Down Payment Assistance Program (DAP)
(Rate listed is for DAP loans with Homebuyer Mortgage Program financing.)__________________________________________________

Interest rate: 4.750 % (APR range 4.850 - 5.250 %)
Term - 30 years, fixed rate

Urban Rehabilitation Homeownership (UR Home) Program

Interest rate: 4.500 % (APR range 4.600 - 5.000 %)
Term - 30 years, fixed rate

Pilot Homeownership and Downpayment Assistance Program for Manchester

Interest rate: 4.500 % (APR range 4.600 - 5.000)
Term - 30 years, fixed rate

Homeownership Program,
Home of Your Own Program,
Police Homeownership Program,
Teachers Mortgage Assistance Program, and
Military Homeownership Program

Interest rate: 4.625 % % (APR range 4.725 - 5.125 %)
Term - 30 years, fixed rate

You can find more news and information about the CHFA Loan program, and Down Payment Assistance programs in Connecticut at www.CHFAMortgageLoan.com or call us directly at (800) 922-3210