Doctors’ Opinion of Financial Bail Out Package:

The Allergists voted to scratch it, and the Dermatologists advised not to make any rash moves.

The Gastroenterologists had sort of a gut feeling about it, but the Neurologists thought the Administration had a lot of nerve, and the Obstetricians felt they were all laboring under a misconception.

The Ophthalmologists considered the idea shortsighted. The Pathologists yelled; ‘Over my dead body!’ while the Pediatricians said, ‘Oh, Grow up!’

The Psychiatrists thought the whole idea was madness, the Radiologists could see right through it, and the Surgeons decided to wash their hands of the whole thing.

The Internists thought it was a bitter pill to swallow, and the Plastic Surgeons said, “This puts a whole new face on the matter.”

The Podiatrists thought it was a step forward, but the Urologists felt the scheme wouldn’t hold water.

The Anesthesiologists thought the whole idea was a gas, and the Cardiologists didn’t have the heart to say no.

In the end, the Proctologists left the decision up to the “folks” in Washington.

Whats up with rates and the markets

Let’s hope that potential home buyers aren’t keeping their down payment monies in the stock market! This morning stock futures are down their limit. At some point it seems that money managers enjoy pushing a certain market one way or the other, and this time it is stocks to the downside. Asian markets were mauled overnight – with the stock markets in most countries losing about 10% on fears of a global recession. Hong Kong, Australia, Singapore and Taiwan markets dropped to their lowest levels in at least three years. Japan’s Nikkei was down 9.6% to end at 7,649, the lowest its been in 5 ½ years. Their stock market is at one fifth (as in 1/5) of its all-time high of 38,915, which it hit in December 1989.

 

The stock prices of banks are being hit hard so far. Bank of America’s are -9% to $20.90, Citi -10% to $11.85, Goldman Sachs -12% to $95.65, JPMorgan Chase -8% to $34.90, Merrill Lynch -12% to $15.35, Morgan Stanley -14% to $15.53, Wachovia -9% to $5.26, and Wells Fargo -8% to $28.90.

 

But hey, it costs you less money to fill up every week, so all is not bleak. Oil is down another $4 to $63. The Organization of Petroleum Exporting Countries (made up of 11 countries) cut oil production targets by 1.5 million barrels per day for the first time in almost two years to stem a collapse in prices, down from their current 28.8 million barrels a day. Thankfully for Hummer owners, oil has dropped 57% since mid-July when we were seeing $147 a barrel.

 

What is all this doing to interest rates? 10-yr notes from the Treasury were up earlier 1.25 in price, with the yield down to 3.49%, and the 2-yr was down to 1.36%. Things are not that good now, however, with the 10-yr back “up” to 3.54%. But mortgage prices are not along for the ride. Yesterday mortgage prices held in during the morning, but then faded during the day, and several investors changed prices for the worse as our stock market rallied. This morning mortgage prices are actually worse by .375 to .5 in price from yesterday afternoon. The only scheduled economic news is September’s Existing Home Sales, expected +.8%, but really, is anyone going to be waiting for that number?

Thanks again Rob for your valuable info

Do Rates Seem High?

One answer is that in order to fund the rescue and the new government guarantees, our Treasury must sell more new Treasury securities to raise money. And the Treasury has to offer higher interest rates to sell them. On top of that, mortgage related bonds always trade at a slightly higher yield due to the prepayment and delinquency risk. Lastly, the cost of financing mortgages has increased for Freddie and Fannie due to the plan for the FDIC to back the newly issued, unsecured debt of some banks. Obviously by guaranteeing bank debt, the government is making that debt more attractive for investors, and consequently creating more competition for Fannie and Freddie when they look to sell their own securities. To compete for buyers, the mortgage giants will have to raise their own yields – and to pay for that they’ll have to charge borrowers higher interest.

Strategic Financing Sells Homes Faster

With interest rates on the rise, it’s become increasingly difficult for many homeowners with Adjustable Rate Mortgages. Each month, they watch their monthly payments increase as interest rates climb closer to the lifetime caps of their loans. In addition, property owners who are looking to sell are finding that their properties are staying on the market for longer periods as buyers have more options to choose from.

Thankfully there is a solution for both of these issues. This special mortgage program has no margin and no index, yet it offers greater financial flexibility because of its tiered interest rates. During the first year of the loan, the borrower pays a rate that’s 2 full percentage points below the current prevailing rate for a 30-year fixed. During the second year, the borrower pays a rate that’s a full 1 percentage point below the prevailing rate. From years 3 through 30, the loan caps out at a rate that’s much lower than their current loan’s cap rate. This provides the borrower with greater cash flow, stability, and instant relief from interest rate nightmares.

For those who are seeking to sell homes more rapidly, attaching a strategic financing program to a specific property for a limited time will create both buyer incentive and a sense of urgency, making marketing and selling the property a breeze. Buyers are inspired to act quickly in order to take advantage of this unique financial benefit. Strategic financing is a perfect solution to today’s challenging market.

Stop Creditors Junk Mail

Most people already do this, but through the wonders of modern technology, You are able to “opt-out” of pre-screening by all of the major repositories. Remember, as soon as you run a credit report, you will very likely be inundated with offers for mortgages/credit unless your client has previously “opted-out” of such pre-screening. With the refi boom underway, this will spare you the waiste of time answering telmarketing calls. To opt out go to www.optoutprescreen.com and take the following three steps to avoid solicitations.