Robert Rauf

In keeping with my Monday theme, below is the economic calendar for the week and the educated guesses for what we may see happen as the data is released. This year has been a difficult one to call, there are so many variables that can move interest rates and it is hard to predict what the market will move on. For example, I posted a blog on the global economy last week explaining on a few things that move the market that you just cant predict, you can click on the blue link to see what happened last week for today's blog we are moving forward and talking about THIS week!

Here is this weeks Calendar:

• Monday: No News Day. As of Monday afternoon we have a happy mortgage market continuing last weeks rally, slowly chipping away at the losses we saw in the past few weeks.
• Tuesday June 16: May Producer Prices expected +0.4% with a core of +0.1%. The core rate remains low once you take out food and energy, this is not a big mover for the week.
• Tuesday, Jun 16: May Housing Starts and Building Permits, expected up 6% and +0.4%. The Housing starts 'guess' is higher than I would have thought, but the teeny building permits number is showing the future of construction spending. I guess the Spring had a bounce up in starts after the winter months where building is slower. It is not likely to move mortgage rates.
• Tuesday: May Industrial production and Capacity Utilization expected -0.5% and 68.6. Manufacturing sector continues to shrink, and as it does the capacity number moves with it. This is priced in already and should not shock the markets.
• Wednesday, June 17: Consumer Price index expected +0.3% and a core of +0.2%. The core rate remains at multi month lows even with the modest gains on the headline number. While this number has the potential to move the markets (base on the past history of these reports) it may not be much of a mover this week.
• Thursday, June 18: Initial jobless claims expected down 10,000. No one seems to pay much attention to the weekly number, and it is anticipated that the employment picture will continue to get worse as we see more corporate bankruptcies especially in the auto industry.
• Thursday: May leading indicators expected +0.8%. This number shows the likely economic activity in the next 3-6 months, so as reported it could be a concern for interest rates as it is a "good news" item, and Good News is bad news for interest rates. BUT: a big piece of this index is the upward movement in the equities markets. Stock prices are thought to be "over done" and we may see a pull back, if there is a pull back this week we will probably see this number ignored.
• Friday: No News, and I leave to camp with Troop 30, Kayaking this weekend!

I am beginning to feel some redundancy in my reports as I am about to type: Watch for Stock Market activity to control interest rates this week. Falling prices in stocks will support steady to lower rates. A few analysts believe that the NASDAQ and the DOW are both about 100 points away from a top and it is likely that there will be profit taking that will lead to a flight to quality that will help us in the mortgage department. One of my Favorite prognosticators thinks it is likely we will see 5.25% by the end of the summer. (I don't want to think about the end of summer, it doesn't even seem like summer started yet!). Keep in mind that there are many things that can move interest rates that are not scheduled events as you have in this economic calendar. This BLOG has a few global items that throw wrenches into the works at times and helps explain some of the moments that catch us off guard.

That's this weeks humble opinion, 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

This weekend is the 23rd Belmar Seafood Festival, in past years as many as 100,000 people have attended. I know I have been there in the past, it is a great time and a LOT of great food!

• When: 11am to 7pm Saturday and Sunday June 13 & 14, 2009
• Where: Silver Lake Park on Ocean Ave in Belmar, NJ
• Cost: FREE, thats right, no fee to enter, but you do need to pay for food and drinks

In past years there have been wine tasting along with all of the great food prepared by local chefs. It is an opportunity to test out food from several restaurants with out having to visit all of them!

Lets hope the rain stops and we have a good weekend for it!

Have a great weekend.

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

Actions in other countries can move our rates? YOU BETCHA!

Back in 1987 I graduated with a degree in Economics and stumbled into this crazy career in the Mortgage Biz. I did not want to work in NY, so I figured I would go work for a bank and use my degree.. and my love affair with the Mortgage business began. Even with my degree I never fully understood the effects of a global economy... That is until I started paying attention to interest rates on a daily basis. Back in the 80's we had a big swing in interest rates with no apparent reason... The cause turned out to be a tax law change in JAPAN. That's right, a Japanese Tax law change caused our interest rates to go up. At the time there were a lot of Japanese investors buying in the US Credit markets and the new tax change for them made it less profitable to do so, so they pulled out. When there are more sellers than buyers in a market the price goes down and in the credit markets it is an inverse relationship between interest rate and Yield. (Price down = Yield UP) Since then there have been numerous issues, Mostly flights to quality that have helped our markets, but the occasional hic up that have hurt.

FLASH FORWARD 20+ years:

This week was an unusual one. We had 2 international happenings in our credit markets:

• Wednesday: Russia Announces it will not be buying our Treasuries. OH SH--! said our markets and rates went up
• Thursday: There was significant buying from Asian investors (mostly China) and they picked up big lumps of Mortgage Backed Securities. A GREAT day, wiping out much of Wednesday's losses.

Interest rates often move on supply and demand issues. There has been a lot of supply in the markets and not enough demand, along with fears of inflation. These international factors just add some more fun into the mix.

As we are all well aware, the past few weeks have not been good ones for interest rates. Rates are up quite a bit from the lows we saw earlier this year, Still historically WONDERFUL, just not as low as our clients were teased by.

Did you know the average rate for a 30 year fixed mortgage over the past 40 years is 9.47%? That certainly makes today's rates look very attractive!

Have a great weekend.

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

NJ Mortgage License Requirements

As you may be aware, Governor Corrine has signed into law a bill that amends the Licensed Lender Act ( which we are currently licensed under) with the new Residential Mortgage Lending Act. This is New Jersey's regulatory change to comply with the requirements mandated by the federal Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act).

The Major Changes-

• All licensing will be done thru the NMLS
• The combining of First and Secondary Mortgage Lenders Licenses into one Lenders License
• Stricter enforcement and more substantial fines for violations of licensing guidelines
• Loan Originator Licensing with far more requirements and restrictions than the current Mortgage Solicitor Registration.

All Licensed Lenders will need to transition their current license onto the NMLS at some point between January 4^th 2010 and July 31^st 2010. In this transition, we will essentially be surrendering our Lenders License and receiving of the "New Residential Mortgage Lenders License". At that point, and not until, will we be subject to the provisions of the new law.

The most substantial difference will be for Loan Originators. There will no longer be Registered Mortgage Solicitors. Once the company transitions, all LO's will have to apply for and become Licensed Mortgage Loan Originators. Loan Originators will have to complete education, testing, fingerprint, background checks and submit credit reports. However, the state has not released specifics and there are unfortunately no mechanisms, approved courses, or application available for anyone to get started with as of yet.

A NJ Mortgage Loan Originator under the new law:

• Will be disqualified from licensure if:
  • Convicted of a felony during the seven year period before filing application
  • Convicted of a felony involving fraud, dishonesty, a breach of trust or money laundering at any prior time.

The state will require prior to application:

• 20 hours of continuing education
• A passing grade on a pre-licensing test
• Fingerprint Cards
• Background Check
• Credit Report ( Not set by state yet, but we expect they will require a minimum score somewhere around 600-620)

The time line for each step of the transition process is a bit up in the air at this time. However, we do know that the entire process, including all LO licensing, must be completed by July 31^st 2010.

There have been many changes in the Real Estate world in NJ, coming in 2011 we will be the last State in the country to require Continuing Ed for Real Estate Agents.

This will come up quick, 20 Hours of CE could be "fun" to try and accomplish in a short time frame especially since there is no

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

Mortgage Rates, and what may happen this week

The past two weeks have been ugly ones for Mortgage rates, Easily a full percent higher in rate now than we were at our lows for the year. Last week continued the blood bath that started the last Wednesday in May. Of the 5 trading days last week we had 2 slightly positive days and 3 really bad days where mortgages sold off. By the end of the week the market lost 83/32nds. to put that number into perspective: you see noticeable changes on a rate sheet when the market moves 5-7/32nds, so this was a big loss for the week. So far this morning we have had choppy trading in the absence of any news. Monday started off positive and has since turned negative.

Here is what we have in store for this weeks Calendar:

• Monday, June 8, 2009: No news day: Most likely Mortgages will take their direction from stocks today.
• Tuesday, June 9: April Wholesale Inventories expected -1.1%. April data is OLD and the market is not likely to notice this at all.
• Tuesday: First Treasury Auction of the week, $36 BILLION of 3 year notes. The short term auctions are expected to be well bid, so it is not likely to move the Mortgage market.
• Wednesday, June 10: Fed Beige Book Released. It is expected that the Beige book will show moderating recessionary pressure in most of the country. The Beige book covers all 12 Federal Districts. It is not likely to be a mover in the markets.
• Wednesday: Treasury Auction of $19 BILLION 10 year notes. It is the 10 yr that bounced above a psychological level of 3.6% 2 weeks ago that sparked the sell off. The yield is now over 3.9% and it is anticipated that it will be well bid at the 3.9% rate. if this is the case this will probably be supportive of steady Mortgage Rates.
• ThursdayJune 11: Initial Jobless claims for last week, expected down 6,000. Not likely to have any impact on the mortgage market especially since we know there is likely to be a strong surge in jobless claims looming on the horizon in the Auto Industry.
• Thursday: May Retail sales expected +0.5% ex auto +0.2%. These numbers are higher than they have been, but it may not be great news as the activity is expected based on Tax Refund Checks and Fiscal stimulus monies. Once again not likely to be a market mover.
• Thursday: April Business inventories, expected -1.0%. More stale news that is not likely to be looked at.
• Thursday:Last of the Auction for the week, $11 BILLION of 30 Year Bonds. Yields on the 30yr are now above 4.5%. At these levels we should see happy investors buying which will support steady rates. If poorly bid, LOOK OUT, we will see rates move up by the end of the day.
• Friday: No News

This Week's 'Biggie' comes over 3 days, It is the $65 Billion in excess supply in the market being auctioned off by the Treasury. Extra "stuff" is always a threat to lower rates, and could actually cause rates to creep higher.

Fears of inflation are being sparked by the low dollar, Higher Oil prices and future Treasury auctions that will continue at huge levels until Uncle Sam's fiscal year ends September 30th. If stocks stay strong it is not likely that we will see a significant drop in mortgage rates. We need a melt down in the stock market to spark a flight to quality to help boost Mortgage prices up and Yields down.

PERSPECTIVE: While we have rates that are significantly HIGHER than the 4's that our clients have fresh in their minds we still need to look at how good we have it. Rates are still low if you look at things from a more historic perspective. Long term rates usually are good indicators for the future, if they are climbing it may be because they see the light at the end of the tunnel and that we are climbing out of the recession, and NONE of us can complain about that! If you ask me nicely I may send you a pretty color chart of interest rate history over the past 20 years, or you can see it here: http://activerain.com/blogsview/1052297/20-year-interest-rate-history-how-low-can-they-go-pretty-color-graphics-too-

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