The Holiday's

All year I have been writing about mortgages, and real estate, and the economy. Well I thought I would change my ways just for this month, it is a special month isn't it? This is the month where we treat each other nicer, where we think about the homeless, where we think about what we did or didnt do this year, its the month where we are more patient with people.

My thoughts are as follow, yes that is all fine and dandy and we should continue to do these thing, actually we should try to do these things all year round instead of waiting for December.

Ok to my thoughts, this year I have read articles and seen actions pass in which people at work places, schools, airports etc. are not being allowed to celebrate Christmas as they want to.

Just becuase it insults some one else or it has to do with religion. Let me ask your opinion, why is this happening, are we now going to change the word Christmas to december 25th is gift day. Lets get something clear here!! this holiday came about for one reason and one reason ONLY, to celebrate the birth of our savior Jesus Christ, hence the word "CHRISTmas". I can continue to ramble on but I think I have made my point, and to end my point of view here is my suggestion

anyone that is against Christmas, calling it christmas, or anyother silly idealogy, lets CANCELL THE HOLIDAY AND MAKE IT only for Christians and people that believe in christ and christmas everyone else get your asses to work, dont ask for time off, and december 25th for you will be just another day!!!

The 'Mark to Market' Accounting Rule:What it is and why it is important to you now!
The financial crisis we are in today was not caused by mortgages or housing, although they were both catalysts. The real reason was an accounting rule called "Mark to Market" (also known as FASB 157).

Few people have a strong grasp of this rule, and even those who do have a tough time explaining it on air due to time restrictions. So let's take a few minutes to break it down, so you can have the inside track on this very important concept and understand why it represents some great opportunities.

Why does 'Mark to Market' exist?

Let's go back to the stock market crash, which occurred between 2000 and 2002. With the S&P down 49% and the NASDAQ down 71%, many people lost much of their life savings and they were very angry.

Companies like Enron and Arthur Andersen were able to find ways to make their books look more attractive, which was reflected in an artificially inflated stock price

Both the public and Congress had a call for more transparency in business and hastened the passage of "Mark to Market" accounting.

This is the notion that all assets should be valued as if they were sold on a daily basis. Under the letter of the law, failure to do this conservatively can now result in jail time.

So what's the problem?

Before we get into what this means for banks, let me make a quick analogy using a scenario that should make perfect sense to you my clients.

Let's imagine that you own a house in a neighborhood where all of the houses are priced at around $300,000. Unfortunately, your neighbor, who owns his home free and clear, falls ill and needs emergency cash quickly. Because he is under duress, he must sell the home for $200,000 in order to get the cash he needs right away, even though the home is worth considerably more.

Now would this mean that your home is now worth the same $200,000 that your neighbor sold his for? Of course not, because you are not forced to sell under duress. It just means that your new neighbor got a great deal.

However, if you were a publicly traded company and had to abide by Mark to Market account rules, you and the rest of your neighbors would now have to say, by law, that your home was worth only $200,000 - not the $300,000 you would get for it if you actually sold. So what's the big deal? Read on.

Let's say we decide to start a bank . . . call it XYZ Bank. We raise $2 Million to open our doors. Remember that our capital account is $2 Million. Banksmake money by taking in deposits and paying low rates of interest to those depositors (maybe throw in a toaster too). We then take that money and make loans with it at higher rates. We keep the difference.

So, we turn the $2 Million worth of deposits into $30 Million worth of loans. This puts our ratio of loans to capital (our Capital Ratio) at 15:1 ($15 Million in Loans to $1 Million in Capital). This level is acceptable, as long as we can shoulder some losses and recover.

Because we are very conservative here at XYZ Bank, the loans we make require a minimum down payment of 30%, a credit score of 800 or better (that's nearly an 850 which is perfect), proof of income and assets, a reserve of at least two years of mortgage payments (normal is two months) and income requirements that only allow 10% of monthly income to cover all expenses (normal is 40%).

We do this and our loans perform perfectly. We make lots of money. Nobody is paying late and our clients are sending us holiday cards. They love us . . . it's a party. You and I are celebrating as we see our stock price soar.

But real estate values decline and, even though all of our loans are paying perfectly, we must re-assess the loan portfolio to account for the decline in real estate values, which leaves us with less of an equity cushion. We had a minimum 30% down payment, which means the loans were 70% of the value of our assets - until we account for the decline in the market. Now, our position goes from 70% to 90%. That's riskier and, therefore, worth less than when our loans had a 70% safety position.

Our accountants tell us that we must "Mark to Market" or risk jail. They say our value is now reduced by $1 Million. Whoa!

We must take or write down this loss against our capital account. It is a paper loss - we don't write a check, we have no late payers, no defaults, no bad business decisions. Still, we must reflect this $1 Million paper loss in our Capital Account, which drops from a $2 Million to $1

does this make sense? more to come , stay tuned

Think the spike in regulation is just a fluke?
Think again. Moves to increase oversight
of financial and housing markets are just the start.
The era of big government is back...big-time.
Look at the bill that Congress just passed
to beef up the Consumer Product Safety Commission.
It gives the agency power to set tough new standards
for everything from toys to fax machines to pajamas.
Next year will see a much broader reg push,
one that gives Washington a far more active role.
Many states are also pressing ahead with new rules.
The shift is a backlash to the Bush years,
when regulators were reined in by the White House.
Democrats will lead the regulatory drive.
They are almost certain to have bigger majorities
in Congress after the Nov. elections (see page 3).
But McCain as well as Obama wants it.
Both see a need to set new standards on energy,
the environment and safety...and to curb excesses.
Obama, however, sees a bigger role for government.

Limits on emissions of carbon dioxide and other gases are a safe bet.
Expect a bill imposing a cap and trade system with pollution limits that are costly
for producers and users of coal, electricity, metals, chemicals, autos and airplanes.
Additional green rules are also likely. The Environmental Protection Agency
will get more staff for both research and enforcement. Democrats say Bush’s aides
squelched or watered down many rules, and they’ll want to take a fresh look at some.
Senate Democrats will demand promises from EPA nominees before confirming them.
Other probable areas: Labor. Democrats will push laws making it easier
for unions to organize. And they’ll insist on more enforcement of wage regulations.
Food and drugs. Recent controversies over unsafe drugs and foods
will lead to a beefed-up Food and Drug Administration. Congress will pass legislation
giving the agency more power to regulate advertising, order recalls and levy fines.
Workplace safety. Some Labor Department agencies will get the go-ahead
to give greater scrutiny to standards in use in several industries, especially mining,
building, chemical plants, oil refineries, food processing, logging and freight yards.
Companies that run afoul of rules can expect fines and even criminal penalties.
Human resources. Democrats, through either legislation or regulations,
will expand the Family and Medical Leave Act to cover adoptions and other events.

And more financial industry regulations are coming. Limits on speculation
in oil markets are possible if prices spike again. Plus increased regulation of banks,
insurance companies and stock markets is likely as a reaction to the credit crunch.
With the economy expected to grow 1.5% this year and next, businesses
and consumers stung by gas prices, real estate and credit woes must wonder:
Where is the growth coming from? Weakness seems to be nearly everywhere.
Exports, federal spending and rebate check shopping are feeding GDP gains.
The weak dollar helped boost exports by a bit more than 9% in the second quarter.
Federal spending...up nearly 7%. Consumer spending...a better than expected 1.5%.
What’s not rising is business spending on new equipment...down 3.4%.
One sweet note for everyone: Inflation is in check. Although energy
and food prices have soared, underlying inflation...measured using GDP figures
and the best available gauge of price pressures in the economy...rose just 2.1%
in the last quarter. That’s close to the Federal Reserve’s long-term goal of 2%.
When the Fed meets next, on Aug. 5, it will keep interest rates steady.
Monthly job losses should taper off into the fall, maybe even reverse,
with tiny monthly gains in employment. For the year...a net loss of 500,000.
Seeds of a recovery lie in easing oil prices, a trend we expect to continue.
By year-end, look for oil prices at about $110 a barrel. Come 2009...
averaging at or near the $100 mark, though there’ll be plenty of ups and downs.
That’ll take close to 40¢ a gallon off gasoline pump prices by late Dec.,
putting the national average at about $3.50. In 2009, we see a further decline
and an average for the year of roughly $3.40, 20¢ less than the average this year.
Figure on paying about 50¢ less for a gallon of diesel by New Year’s.
The 2009 yearly average should run near $4.15 a gallon, 15¢ below this year.
It’ll take longer for users of heating oil to enjoy any downward movement.
Retail customers will have to pony up about $4.50 a gallon by Dec. Next year,
however, the average for the year will be 15¢ a gallon or so lower than in 2008.
Consumers will put the savings into dining out, shopping and home repairs,
while firms will ponder adding workers and investing in new plants and equipment.

There’s no magic in the oil price decline: There are no shortages. And demand is softening.Oil producers are watching anxiously as individualsand firms permanently adopt energy saving measures.Drivers who converted to hybrid cars, for example,won’t return to gas-guzzling SUVs and pickup trucks.The drop in gasoline prices may spur a bit more driving,but not enough to return pump prices to previous peaks.

"OPINION HAS CAUSED MORE TROUBLE ON THIS LITTLE EARTH THAN PLAGUES OR EARTHQUAKES." ~ Voltaire.

Opinions certainly caused some trouble in the markets last week as several Fed members talked about inflation, the arch enemy of Bonds and home loan rates, and their comments shook the markets like a high-magnitude quake.

Last week began with Fed Chairman Ben Bernanke suggesting that the Fed is in no hurry to hike rates because of "slack" in the economy. Bonds traded lower on this news, and this may be because many economists disagree with Bernanke and believe a rate hike would actually help strengthen the US Dollar, drop oil prices closer to $100 per barrel, ease inflation pressure and...as a result, help Bonds and home loan rates improve.

Also chiming in last week was Philadelphia Fed President Charlie Plosser, who said the Fed has to take "appropriate steps to do something about" inflation. His remarks helped fan the flames of volatility for Bonds and home loan rates, adding to the sell off in Bonds and worsening of home loan rates.

There was some good economic news last week, but remember good economic news often causes money to flow from Bonds into Stocks, and when Bonds trade lower, home loan rates rise. And that's exactly what happened when April's Pending Home Sales report (which measures signed real estate contracts for existing single-family homes, condos and co-ops) and May's Retail Sales Report both came in much better than expected.

On Friday, the important read on consumer inflation via the Consumer Price Index (CPI) report delivered a mixed bag. Overall inflation is up 4.2% on a year-over-year basis, which is the highest it's been in awhile. This comes as no surprise, when taking into consideration how much the prices of fuel and food have both risen. But the Core Rate of inflation, which strips out both food and energy, increased at a much more reasonable rate of 2.3%. Since Core CPI is seen by most economists as the best measure of the underlying inflation rate, this was really good news. However, Stocks rallied after former Fed Chairman Alan Greenspan chimed in with his opinion that the worst of the credit crisis is over, and this halted any improvement for Bonds and home loan rates.

After all the reports and opinions, home loan rates ended the week at their worst levels in 4 months. I'll be watching closely this week for any more opinions that could shake up the market!
FRIED GREEN TOMATOES - YES, THEY'RE FINE...BUT BE CAREFUL IF THEY'RE RAW, RED, AND ROUND...AS A RECENT SALMONELLA SCARE IS PLAGUING THE NATION. CHECK OUT THIS WEEK'S VIEW FOR IMPORTANT TIPS AND INFORMATION ON HOW TO PROTECT YOUR FAMILY.





Forecast for the Week

There are several reports due this week that could "plague" the markets and home loan rates. Tuesday will bring the wholesale inflation measuring Producer Price Index, as well as a read on the housing market via the Housing Starts and Building Permits Report.

Also, on Thursday, the Philadelphia Fed Report hits the wires. This monthly survey of manufacturing purchasing managers conducting business around the tri-state area of Pennsylvania, New Jersey, and Delaware is one of the most-watched manufacturing reports, and it will be important to see if concerns about inflation have had an impact.

Remember when Bond prices move higher, home loan rates move lower...and vice versa. The chart below shows how Bond prices moved sharply lower last week on inflation concerns, so stay tuned this week! If inflation continues to shake up the markets, Bond prices and home loan rates could have another troublesome week...but prices are at the same low levels they hit last year before starting to improve. Oftentimes, history repeats itself, and should Bonds receive some friendly economic news, it is likely they will gain back some of the ground recently lost.
Chart: Fannie Mae 6.0%% Mortgage Bond (Friday Jun 13, 2008)

"IN THE SPRING, I HAVE COUNTED 136 DIFFERENT KINDS OF WEATHER. AND THAT WAS JUST INSIDE OF 24 HOURS." Mark Twain. And Bonds have certainly weathered all kinds of days this spring, with this past week being no exception. Bonds did enjoy some high times starting with Monday's move to the upside after National City Corporation announced they would be receiving a $7 Billion cash infusion. This move suggests that investors are seeing value in the battered financial sector, and perhaps are feeling that there is a bottom being reached in the credit crunch.
In other headlines, Existing Home Sales met expectations, but New Home Sales numbers for March were worse than expected, possibly due to the large increase in the costs for materials needed to construct a home. But then there was a change in climate on Friday, as inflation news from around the World created some strong adverse headwinds for Bonds and home loan rates. Overall, home loan rates ended the volatile week unchanged to slightly higher.
Now is still a good time to take advantage of historically low home loan rates before more inflation talk pushes them higher. I'm always here to help advise you, your friends, and your colleagues...no matter the season!
SPRING ISN'T JUST THE SEASON FOR CRAZY WEATHER...IT'S ALSO THE PERFECT TIME FOR SPRING CLEANING. CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW FOR SOME GREAT SPRING CLEANING TIPS AND ADVICE!



Forecast for the Week




After last week's relatively slow economic news calendar, things will heat up this week with several events that have the potential to move the market. On Wednesday, the Fed will announce their interest rate decision...and then the very next day, the Fed's most favored gauge of inflation will be released, the Personal Consumption Expenditure Index (PCE). It will be interesting to play armchair quarterback to the Fed's decision, and watch what the inflation numbers reveal! And let's not forget, on Friday we will see the important Jobs Report, where early estimates are for a net loss of 80,000 jobs.
As you can see in the chart below, Bond prices ended the week between a technical "floor of support" at the 200-day Moving Average and an overhead "ceiling of resistance" at the 50-day Moving Average...and that ceiling might just stop any improvement for Bonds and home loan rates for the short term, unless the news of the week is really Bond-friendly. We'll have to wait and see if the week's upcoming news leads to calm or stormy times ahead.
Chart: Fannie Mae 5.5%% Mortgage Bond (Friday Apr 25, 2008)



The Mortgage Market View...




SPRING HAS SPRUNG...
...and that means it's time to wash away those winter blues! In fact, according to the Soap and Detergent Association - did you even know there was such a thing? - three-quarters of Americans engage in spring-cleaning. In fact, their surveys indicated that more than 80 percent of people who spring clean agree that it helps them save time throughout the year, and 96 percent of people donate or discard items during their spring-cleaning.
But the advantages can go much further than that. Check out these top ten spring-cleaning activities, compiled by http://www.medicinenet.com/, that can help make your home healthier and safer:
Thoroughly dust your home. Also clean any air conditioning and heating filters, ducts, and vents to minimize pollens and other airborne allergens.
Organize your medicine cabinet. Throw away expired medications and old prescription medicines that you no longer need.
Inventory your garage and basement. Get rid of any old paint, thinners, oils, solvents, stains, and other similar items you no longer need. Note: You may need to take these items to a hazardous waste drop off center.
Inventory under your sinks and around your house. Dispose of old or potentially toxic cleaning products.
Have your chimney professionally cleaned. This will help you lessen the chances of carbon monoxide exposure when the cold weather returns.
Clean all mold and mildew from bathrooms and other damp areas. Use non-toxic cleaning products.
Check your rugs. Make sure that rugs on bare floors have non-skid mats and that older or dusty mats are either washed or replaced.
Inspect outdoor playground equipment. Make sure that all elements are sturdy and safe, especially guardrails, protruding bolts, and other potential sources of injury.
Change your batteries. Do so for both smoke detectors and carbon monoxide detectors.
Collect old batteries throughout the house for disposal. Dispose of them in a battery recycling or hazardous waste center.
And make it easy on yourself - take it one room, one cleaning task at a time. You'll be more likely to accomplish more if you tackle each spring-cleaning project separately. And that's great advice...any time of year!

Last Week in Review




"I KNEW THE RECORD WOULD STAND UNTIL IT WAS BROKEN." ~ Yogi Berra A record was broken on the job front last Friday as the Labor Department reported a much worse than expected loss of 80,000 jobs in March - the greatest jobs loss reported in five years. In addition, revisions to both January and February's Jobs Report delivered an additional loss of 67,000 jobs - that's on top of the previously reported loss of 85,000 jobs for that two-month period.
And...the story might be even a bit gloomier than it already appears. The Labor Department uses a lot of averaging to help it come up with its numbers more quickly, but this practice can skew the current picture significantly. Think of it this way - and because it's now baseball season, here's a Baseball analogy - let's say that mid-way through the season, a red-hot hitter with a batting average of 340 declines into a bad slump for several weeks. While he now can't even hit a basketball thrown underhand to him, his average - while lower to 300 - is still very strong due to his previous hot performance. So someone looking at just the statistics may think that this batter is still absolutely terrific, but he is really someone the fans are booing as he approaches the plate. This is not very different from current numbers being reported by the Labor Department - previous averaging is likely causing an understating of the ACTUAL number of job losses...which somewhat masks how bad the job market really is.
This bleak Jobs Report greatly boosts the odds of not only a first-quarter recession, but perhaps a worse economic downturn than many economists fear. The Federal Reserve may respond to this increasing trend in job losses with additional interest rate cuts when they next meet to determine monetary policy on April 30 and June 25. As we've seen in the past though, such rate cuts do not translate into lower long-term rates for mortgages, so there is no better time than right now to refinance an existing mortgage or to structure a new one. Let's work together to make sure your current financing is a home run!

SPEAKING OF HOME RUNS, ARE YOUR CREDIT CARD INTEREST RATES IN THE RIGHT BALLPARK...OR WAY OUT OF SIGHT? CHECK OUT THIS WEEK'S MORTGAGE MARKET VIEW FOR TIPS ON MAINTAINING A WINNING CREDIT CARD INTEREST RATE!



Forecast for the Week




Another classic Yogi Berra-ism is, "I never said most of the things I said." Luckily, the Fed can't make the same claim. This coming Tuesday, the "Meeting Minutes" or open commentary of the Fed's last monetary policy meeting will be released to the public. If there are inflammatory comments, the market could respond quickly.
Remember, when Bond prices move higher, home loan rates move lower. And as you can see in the chart below, Bonds have rebounded higher off of their key 50-day moving average support level, and are moving back toward the upper portion of their current trading range. This means if Bond prices continue to move toward the upper boundary of the range, we could see home loan rates improve slightly.
Chart: Fannie Mae 5.5%% Mortgage Bond (Friday Apr 04, 2008)



The Mortgage Market View...




TAKING AN INTEREST IN YOUR CREDIT CARD RATE...
Credit cards are one of the most pervasive forms of your financial picture. On a daily basis, they provide the flexibility and freedom to reserve a hotel room, travel without carrying cash, and purchase just about anything at anytime.
As such, your credit cards can have a major impact on your financial wellbeing and even your credit score. But did you know that your credit score can also impact your credit cards...specifically your interest rates? Although some companies have abandoned the practice, many won't hesitate to raise your interest rate if your credit score declines - even if you are paying them on time! By following these tips, you can help avoid inflated interest rates on your credit cards...and perhaps even enjoy more trips to the ballpark:
Understand the terms. The best way to protect yourself from high interest rates and hikes is to read and understand your credit cards policy terms. Pay particular attention to the interest rate, how long that rate is in effect, and what actions can lead to a hike - such as a late payment on your card, a declining credit score, or even a late payment on a completely unrelated bill.
Don't be late. Making a late payment can lead to increased interest rates on all your cards. In addition, they can lower your credit score, causing you even more problems down the road. So make a schedule and always pay on time.
Watch the mail. We all get junk mail, but some of it may not be junk after all. Whenever you receive any information in the mail from your credit card, read it carefully in case any policies or interest rates are changing.
Make a call. If your rate does change, call the company. If you've made your payments on time consistently, you may be able to get your original rate restored. If the company seems hesitant, you may want to threaten to transfer your balances to another card - customers in good standing may find they have more bargaining power than they realize. And don't just threaten to make a change...actually do it if it makes sense. You may find the grass actually is greener on the other side.
Be careful what you close. Closing a card that has a current balance will likely send your interest rate soaring. In addition, closing your oldest credit cards can have a negative impact on your overall credit score. So make sure you check and double check which cards are best to close.
To find out more about your own credit score - and what you can do to improve it - call me today. You'll be surprised how a few simple steps can make a big difference and can improve your overall financial picture.



The Week's Economic Indicator Calendar




Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.
Economic Calendar for the Week of April 07 – April 11
Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Tue. April 08
02:00
FOMC Minutes
3/18/08



HIGH
Wed. April 09
10:30
Crude Inventories
4/05
NA

7317K
Moderate
Thu. April 10
08:30
Jobless Claims (Initial)
4/05
380K
357K
410K
Moderate
Thu. April 10
08:30
Balance of Trade
Feb
-$57.4B
-$62.3B
$-59.0B
Moderate
Fri. April 11
10:00
Consumer Sentiment Index (UoM)
Apr
69.0
63.2
69.5
Moderate



I guarantee my service to you
The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial services and other professionals only and is not intended for consumer distribution. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is not without errors.
As your trusted advisor, I am sending you this newsletter because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.
In the unlikely event that you no longer wish to receive these valuable market updates,

please USE THIS LINK or email: jesse@jessevasquez.net
If you prefer to send your removal request by mail the address is:
661 West 10600 southSouth Jordan Utah84095

Should I Stay or Should I go?

On a lighter note today! I will skip the mortgage talk to inform you of something that will afect the way you are approved for a loan or not, or the way a UW will look at you or the company.

Did you know that replacing an employee could cost you up to three times that
employee's annual salary? That's right. Recent studies cite productivity, recruitment,
and training costs associated with hiring new employees as major contributors to this
surprisingly expensive statistic. More importantly, employees take knowledge,
experience, and contacts with them to their next company, often a direct competitor,
as most people tend to stay in the same or similar field.
And while many companies are implementing retention programs to recognize and
limit the cost of employee turnover, research reveals that few companies truly
understand why employees leave in the first place. According to Leigh Branham,
author of The Seven Hidden Reasons Employees Leave, 90% are directly linked, not
simply to money issues, but to issues involving their job, manager, culture, or work
environment.
The following are a few of the top reasons why people quit their jobs, according to research from the Harvard Business
Review, HR Magazine, and other recent studies. Use it as a guide to recognize signs of unhappy employees and to cut
down on the major expense associated with employee turnover:

1) Stress: Departing employees reported that stress from overwork or a work-life imbalance is a big reason for calling it
quits. They might smile through it all, but if employees are consistently working late, working through lunch or on
weekends, you may have a stressed out employee on your hands. Combine this with a personal crisis at home, and the
pressure can be overwhelming.
2) Unrecognized: Many employees quit their jobs because they perceive, whether it's real or not, that their work is
unappreciated. Causes include being paid the same as or less than poor performers or new employees with less
experience; hiring or promoting outsiders instead of from within the company; and even an inkling of favoritism could
create tensions that drive some employees to quit.
3) Money: Many employees don't just quit, they move on to what they perceive as a better opportunity . which may or
may not be true. Either way, you can lose great employees who do not see advancement opportunities within your
company. By knowing your employees' career goals, you may find that the best path for long-term growth is in another
area of your company.
4) Motivation: People don't quit jobs, right? They quit managers. You've heard it before. Well, it turns out that it's actually
true. According to studies, employees seek feedback, not just criticism. They want coaching and direction, assistance and
communication. When they don't get it, they leave. Think about it this way: Have you ever sat down with an employee and
asked what motivates him or her? Do you know why they come to work every day? These are much easier questions to
ask than, .Why are you quitting?.
5) Company Culture: Former employees often describe their previous job as a .bad fit,. a code word for a number of
problems that are often difficult to recognize until it's too late.

Studies suggest that by establishing clear job descriptions
and utilizing personality assessment tools (such as DiSC® profiling), you can better match an employee's specific skills
and talents to his or her job. If you'd like more information about DiSC® profiling or would like to discuss more about this
fascinating topic, give me a call. I'm always looking for ways we can improve our businesses together and be more Productive!

Historic Fed Move Cuts Both Ways for Borrowers
Hot on the heels of its surprise inter−session rate cut of 75 basis points last week, the Federal Reserve cut key interest
rates again, the fifth straight cut since September 2007. In its statement last week, the Fed said it had decided to cut the
federal funds rate "in view of a weakening of the economic outlook and increasing downside risks to growth." In other words,
economic data suggests the US is on the brink of recession, and the Fed is acting accordingly.
Who benefits from this cut?
If you have a loan that is directly tied to the Prime Rate, you will see an immediate benefit. Home equity lines of credit
(HELOCs) and variable rate charge cards are the types of loans that will have an interest rate reduction on their next
statement.
What does this mean for long−term rates?
Long−term mortgage rates, the lowest we've experienced in years, could actually increase after today's cut, based on
historical performance and recent trends.
So if you're waiting for long−term rates to fall further, don't count on it. Your best chance to lock in the lowest rates since
2005 is now. Getting your application in process now will allow you to capture a great rate before it's too late.
What REALLY moves mortgage rates?
Fixed−rate mortgage rates aren't directly tied to Fed interest rate moves. Instead, they tend to follow in the direction of other
long−term government bond yields, such as the 10−year Treasury, which historically moves in accordance with the
economic outlook and in advance of Fed actions. The performance of Mortgage Backed Securities, issued by Fannie Mae
and Freddie Mac, is what really determines long−term mortgage rates.
How does the economic stimulus package fit into the picture?
The economic stimulus package from Congress and the White House could be a double−edged sword for borrowers.
Combined with recent Fed actions, the package could create inflation and bring about higher long−term interest rates.
On the positive side, conforming loan limits are likely to be raised from the current $417,000 to upwards of $625,000. This
means great potential savings for purchase and refinance candidates who live in 20 high−cost areas across the country.
What should you do next?
If you're unsure how the rate−cut or the proposed legislation affects your mortgage, don't worry, you're not alone. There's no
one−size−fits−all answer. Give us a call right away. We'll review your mortgage and see what, if anything, can or should be
done to make the most of your individual financial goals and needs.