Robert Rauf

Last week ended up on the positive side with a gain of 12/32nds on 30 year Fannies which is a noticeable change on a rate sheet. That makes 3 positive weeks in a row. Over all we have been in a tight range all year with hic ups along the way. I expect more of the same in the near term as Uncle Sam will continue to buy mortgages as necessary to calm the market down. So far Uncle Sam has purchased over $800 Billion in Mortgage backed securities and that number is expected to rise to $1 Trillion by time they step out of the mortgage market in early 2010. This buying has been the Fed's way of keeping rates low since they have no way of dropping Fed funds any lower. It is not likely we will see the Fed even consider an upward move in rates until the end of the 2nd quarter of 2010, at least that's what the financial wizards are saying this week.

This is a busy week of financial calendar, here is what to look out for:

• MondayNovember 16: October retail sales expected +0.9% ex auto +0.4%. This number pretty much came out in line with expectations and over all the market had a nice gain for the day
• TuesdayNovember 17: October PPI expected +0.5% with a core of +0.1%. The UP piece of this number is clear to any of us filling up our gas tank. Energy and food prices are up ... but the core rate is staying subdued which the market should like if things come in as forecast.
• Tuesday: October Industrial Production and Capacity Utilization expected +0.4% and 70.8. It appears that manufacturing is up a bit but the capacity is still low enough to keep prices from climbing. As capacity increases you can expect prices to climb which is the typical supply and demandequation. As this stands it is not likely to move the market.
• Wednesday November 18: October CPI expected +0.2% with a core of +0.1%. if the core stays at or below 0.2% it is a good news scenario for mortgage rates
• Wednesday: October Housing starts and Building permits Up 1.7% and up 0.9%. It continues to look like new construction has hit bottom.. it will take a few more positive months to prove this to the market before it exerts any pressure on the mortgage world.
• ThursdayNovember 19: Initial jobless claims expected up 3,000. I don't think that I have ever seen Thursday's number move the market. But it is always on the calendar! UE remains high and it is a lagging indicator, it will take some time before companies are secure enough to hire.
• Thursday: October LEI expected +0.4%. This is a step down from last month. LEI is a very forward looking number and the dip down is supportive of steady to lower rates.
• Friday: No news to worry about.

The biggie of the week is a coin toss, it could have been retail sales, that ended up being a good number for the credit markets. There are a lot of inflation pieces in CPI PPI and LEI which have the potential to push rates one way or another if there is a shocker. It would take a significant deviation in the real number vs the forecast number to have any significant effect on rates. I think we will need to look mostly to the stock market for direction. If stocks have a strong week it can be bad news for mortgage rates. So far I think it would be safe to say we may see a slight improvement by weeks end... Time will tell if my crystal ball is clear or not!

Have a great week!

Rob

Robert Rauf

Mortgage Banker

www.RobertRaufHomeLoans.com or my blog: http://activerain.com/blogs/rrauf

(732)223-1630 x102

Since 1987 I have been helping my clients fulfill their dream of home ownership!

Real Estate Mortgage Network

NJ Mortgages, New Jersey Mortgages, Mortgages in NJ, mortgage in New Jersey, Mortgages in New Jersey

Last week ended up being a pretty flat week with a few bounces along the way. The highlight of the week was Fridays Employment report that was quite a bit worse than expected. It did not cause a big improvement as one would have thought, it really only served to wipe out losses from earlier in the week and for the week we were only 3/32nds to the positive side on Fannies which is pretty much an unchanged week.

This week has its bumps and grinds to deal with as well, here is what we have in store:

• Monday November 9: First Treasury Auction of the week with $40 Billion in 3 year notes. This Auction went off as expected at about 1pm with strong bidding. It ended up being a market neutral event and Fannies are trading slightly to the positive side.
• TuesdayNovember 10: Auction #2 with $25 Billion in 10 year notes. Keep your fingers crossed and hope this one is well bid. It is expected to be well bid, and if so it will be more of a "non event" in the mortgage world. If it is not well bid we may see a ripple effect sell off in mortgages that will not be good news for mortgage rates.
• Wednesday, November 11: Happy Veterans Day. The market is closed for Veterans day.
• Thursday, November 12: Initial Jobless claims expected down 2,000. Not likely to be a market mover.
• Thursday: Auction number 3 with $16 Billion of 30 year bonds. The bidding here will be a sign of how the investment community sees the economy. If they see things as "the worst is behind us" they will demand a higher yield. If they see things staying weak, it should be well bid. This one is entirely up in the air. If well bid it will be a neutral event, if poorly bid it is likely that mortgage rates will climb.
• Friday: nothing exciting to report on.

Well this week is obviously being lead by the Treasury. I think the Mortgage market will also look toward the stock market for direction. Good days for stocks usually end up being bad ones for mortgages as the credit markets thrive on bad news. The concern with the auction is the Fed's $300billion check book is closed and it is not likely that the Fed will be buying Treasuries anymore. For most of the year the Fed has helped to keep rates low by being one of the "investors" buying up Treasuries and Mortgages... so lets hope for strong market participation, that would be the best news for the interest rate world. My gut feeling is we will see a bumpy but fairly flat week by time the dust settles.

Thats my 2 cents worth: Have a great week!

Rob

Robert Rauf

Mortgage Banker

www.RobertRaufHomeLoans.com or my blog: http://activerain.com/blogs/rrauf

(732)223-1630 x102

Since 1987 I have been helping my clients fulfill their dream of home ownership!

Real Estate Mortgage Network

NJ Mortgages, New Jersey Mortgages, Mortgages in NJ, mortgage in New Jersey, Mortgages in New Jersey

Last week had its share of fairly large up and downs, but ultimately we ended up with a pretty decent gain for the week with Fannies trading up 19/32nds by the close on Friday... That translates to a noticeable improvement in Mortgage rates last week (but some bumps and bruises along the way) Most of the improvement in Mortgages was due to the sell off in the stock market.

Well this week has its share of challenges. Here is this weeks calendar:

• MondayNovember 2: (can you believe it is November already??) October Institute of Supply Mgt was expected at 53.0. Well we lost about 7/32nds today. which is not a good way to start the week!
• Tuesday November 3: DON'T FORGET TO VOTE!
• Tuesday: September Factory Orders expected up 1%. Not likely to do much more than take up space on this page.
• Tuesday: First day of the Fed Meeting.
• WednesdayNovember 4: October Institute of Supply Mgt Supply index expected 51.8. If this comes in near expectations it is not likely to move rates. If it pops higher than 52, we most likely will see rates bump up a bit.
• Wednesday: Fed meeting over at 2:15. No one expects the Fed to change rates... The analysts will certainly read every word of the post meeting statement for hints at what is coming. This is most likely a non event unless we are surprised by an exceptionally weak or strong view of the economy. Facts are the economy is slowly improving. The question is: "how fast?" and will the Fed move sooner than anticipated.
• ThursdayNov 5: Initial Jobless claims expected down 6,000. Zzzzzz look at Friday. This is just a shadow in comparison to Friday's number.
• Thursday: Third Quarter Productivity expected +5.5% and Unit Labor costs -4.5%. Productivity up and costs down... No fear of inflation in this report! But unfortunately not enough to move interest rates down.
• Friday November 6. October Non farm Payroll expected -175,000 and Jobless rate 9.9% and an average 33.1 hour work week. The Jobless rate is up, but the non farm number has been improving based on the beginning of the year. It is not likely we will see a bump up in rates with out a 9.7% jobless rate and 150k job loss. As forecast this is not likely to do much more than be supportive of steady interest rates.
• Friday: September Wholesale Inventories expected -1%. Even with this being an old number it will be looked at to see if there is any demand in wholesalers rebuilding inventory. This is most likely going to swept under the rug since it comes out right after the employment report.

The biggie of the week is hands down Friday's employment report. Leading into Friday's report we are most likely going to see stock market fluctuations be the driving force in the credit markets this week. If we have improvement in stocks we will lose some ground in the credit markets.

That's this weeks movers and shakers, Have a great week!

Rob

Robert Rauf

Mortgage Banker

www.RobertRaufHomeLoans.com or my blog: http://activerain.com/blogs/rrauf

(732)223-1630 x102

Since 1987 I have been helping my clients fulfill their dream of home ownership!

Real Estate Mortgage Network

NJ Mortgages, New Jersey Mortgages, Mortgages in NJ, mortgage in New Jersey, Mortgages in New Jersey

The last 3 weeks have not been good ones for the Mortgage world. Last week was a crazy up and down week that ended up only slightly negative by the close on Friday, but bumpy enough along the way that it left many feeling queasy. almost every day last week had some VERRRRY negative moments but the market was able to come back to almost even each day.

The initial sell off a few weeks ago that has rates up now was mostly because of stocks jumping above the 10k mark. This piece of positive news was not taken well in the credit markets. and if you read any of my blogs on the subject, you will know that Good News is BAD news for interest rates.

This weeks calendar is a busy one:

• MondayOctober 26: Treasury auction of $7Billion 5 year IIS. This is an inflation indexed security so it is typically well accepted. Ahead of the auction the market was not doing well, but it regained some of its ground since it started.
• TuesdayOctober 27: October Consumer Confidence expected 53.5. It really doesn't matter what consumers think. What matters most is what they are actually doing. So this number is not expected to move things in the market. You can feel bad, but still spend money!
• Tuesday: Second auction of the week with $44Billion in 2 year notes. The shorter term notes have been fairly well received, and this one is likely to draw decent bidding from foreign and domestic investors. Not likely to move things today.
• WednesdayOctober 28: September Durable Goods Orders expected +1% ex auto +0.7%. There have been surveys that may point towards a surprise in factory activity. If we get surprised with a number stronger than the forecast here it will not be a good day for rates.
• Wednesday: Auction #3 for the week with $41Billion in 5 year notes. This one is a nail-biter. We need this to be well bid. There is enough supply here that a poorly bid auction will send ripple effects through the entire credit market... (which is NOT good for mortgage rates). If it is well bid we will see steady rates.
• ThursdayOctober 29: 1st estimate of third quarter GDP, expected +3.2%. As I have mentioned in previous blogs... Inventory has been bled dry over the first half of the year, that is why this number looks so strong, it is due to businesses replacing inventory. As forecast it is most likely supportive of steady to possibly a slightly higher rate, it would take a number weaker than 2.5% to help bring rates lower.
• Thursday: Initial Jobless claims expected down 6,000. likely to be supportive of steady rates.
• Thursday: Auction #4 with $31 Billion in 7 year notes. This one may be more important than the 5 year. We will see what the investment world thinks about prospects for the economy into the future based on how well bid this auction is. If poorly bid, that means they think the economy is improving and want a higher yield to commit to a rate for 7 years. So that "Good News" is a bad thing for interest rates. This one could fall on either side of the fence.
• FridayOctober 30: September personal income expected to be flat, Spending to be -0.5% and PCE index +0.2%. The PCE piece of this is the exact number that Trumps Tuesday's confidence number. if consumption is up more than forecast it will not be good. But a weaker PCE will definitely be supportive of lower rates.

The biggie of the week has to be the record $123 Billion in the auctions. Supply is always an issue in any market. So far this year we have been lucky with enough activity and enough investment in the auctions to keep rates from being hurt along the way. Keep your fingers crossed for these. The numbers themselves are most likely priced into the market and not likely to be big movers unless there is a surprise. The Auction is an unknown and unpredictable event that we will have to wait and see.

The trend over the last 3 weeks has bee towards higher rates, could be be due for a positive week? It is hard to tell. I would play it safe and Lock in.

Have a great week!

Rob

Robert Rauf

Mortgage Banker

www.RobertRaufHomeLoans.com or my blog: http://activerain.com/blogs/rrauf

(732)223-1630 x102

Since 1987 I have been helping my clients fulfill their dream of home ownership!

Real Estate Mortgage Network

NJ Mortgages, New Jersey Mortgages, Mortgages in NJ, mortgage in New Jersey, Mortgages in New Jersey

Finally, some good news in the form of relaxed guidelines.

This is some great news. PMI Companies have caused many of the guideline changes we have experienced over the past few years since they were not willing go offer PMI on anything that had risk at all.

Just a few weeks ago we got news that we can do 10% down second homes. Here are the requirements:

• 720 Minimum credit score
• $417,000 Max Mortgage

Even if you don't dabble much in the Vacation Home market, this is a great sign. This news came from one of the more conservative PMI Companies. The fact that they are willing to insure vacation homes shows that they have a renewed confidence in the Real Estate Market. This confidence must mean that they see a stable improving market or they would not add any risk to their portfolios

Have a great week!

Rob

Robert Rauf

Mortgage Banker

www.RobertRaufHomeLoans.com or my blog: http://activerain.com/blogs/rrauf

(732)223-1630 x102

Since 1987 I have been helping my clients fulfill their dream of home ownership!

Real Estate Mortgage Network

NJ Mortgages, New Jersey Mortgages, Mortgages in NJ, mortgage in New Jersey, Mortgages in New Jersey