MMG Weekly: Congress, The Fed, Low Home Loan Rates, Oh My!

 

Edward F. W. Deanes Home Mortgage Consultant Wells Fargo Home Mortgage Phone: (757) 418-2064 Fax:: (866) 935-0661   edward.deanes@wellsfargo.com www.deanesgroup.com
Last Week in Review: Washington was at it again, with big news from both Congress and the Fed. Learn what this means for you...and for home loan rates! Forecast for the Week: Two juicy economic reports bookend the week, bringing highly anticipated news on inflation and the labor market. View: Hitting the road for July 4th? Want to avoid a speeding ticket? Read on below.

 

Last Week in Review

 

 

	What happens in Washington doesn't stay in Washington! And there was a lot happening in Washington this past week, between the Fed's two-day meeting and actions in Congress. So how will all of these happenings impact you…and home loan rates, which are near all-time lows? Read on for details. Last week, the Fed decided to keep the Fed Funds Rate at 0.25%, and also reiterated in its Policy Statement that economic conditions warrant keeping the Fed Funds Rate low for an "extended period". First, what is the Fed Funds Rate? It is the lending rate banks charge each other for the use of overnight funds, and it is used as a base rate that many other lending rates are based on, for consumer and business loans. And second, why is the "extended period" language significant? The Fed has to time very carefully any action – or even hints of action – on raising the Fed Funds Rate, which they have held at the lowest levels in history for the last year and a half. If the Fed raises the Fed Funds Rate too soon, it could slow economic activity and cause a "double dip" recession. However, if the Fed waits too long to raise the Fed Funds Rate, inflation could result. Remember, inflation is the arch enemy of Bonds and home loan rates...and signs of inflation could definitely cause home loan rates to worsen from their current low levels. Even though there have been more concerns expressed by various Fed members about inflation and the long term effects of keeping the Fed Funds Rate too low for too long, the economic data recently reported (such as the weak Jobs Report and other reports showing inflation is tame at present) as well as the ongoing issues in Europe helped the "extended period" language to survive through another Fed meeting. This is an important issue to keep watch on. Congress was just as busy as the Fed last week. On Thursday, the Financial Reform Bill was finally reconciled between the House and Senate. The final draft includes a Consumer Financial Protection Agency, which will have the authority to police banks for mortgage lending and credit-card abuses. The bill will move to the President for his signature once both houses of Congress approve the final version. However, Congress did not pass the extension of the Home Buyer Tax Credit. Note: This extension was only going to be for people who were under contract by the initial April 30th deadline, extending their June 30th closing deadline to September 30th. The extension was part of the larger Jobs Bill, which included State aid and an extension of unemployment benefits for people out of work more than six months – and would have added $33B to the deficit. Meanwhile, the National Association of Realtors is saying that up to 30% of homes that went under contract by the April 30th deadline of the Homebuyer Tax Credit will likely not close by the current June 30th deadline. There was other housing news last week, as both New Home Sales and Existing Home Sales were well below expectations. While a decline in sales was expected after people were racing to qualify for the April 30th Tax Credit deadline, the numbers are still a bit of a disappointment. However – home prices remain affordable, and home loan rates are far from disappointing at the moment...last week they reached all time low levels! If you or anyone you know would like to learn more about this exceptional opportunity, please don't hesitate to call or email. Or forward this newsletter on to anyone you think may benefit and I'd be happy to consult with them free of charge. The FASTEST WAY TO TAKE THE FUN OUT OF ANY ROADTRIP IS TO COME HOME WITH A SPEEDING TICKET. CHECK OUT THE MORTGAGE MARKET GUIDE VIEW BELOW TO LEARN MORE ABOUT AVOIDING SPEED TRAPS.

 

Forecast for the Week

 

 

	There will be plenty happening this week, ahead of the Independence Day holiday. The week may start with a bang, as Monday's Personal Income and Personal Spending Reports arrive, giving us a look at the Core Personal Consumption Expenditure (PCE) Index as well...which just happens to be the Fed's favorite gauge of inflation. Rest assured the Fed will be watching this report very closely. Any hint that inflation is heating up could definitely impact the Fed's decision on rates and the "extended period" language at future Fed meetings. Thursday brings another Initial Jobless Claims Report. Initial Jobless Claims came in at 457,000 last week and Continuing Claims at 4.55 Million. In addition, an additional 4.73M people are claiming EUC (Emergency Unemployment Compensation) benefits. The continuing high level of unemployment claims is disturbing, but things will improve. Remember, job losses come in the thousands as companies endure sweeping layoffs, but individuals are hired back one at a time. And remember – since the Jobs Bill has not been passed, more people will start to drop off extended unemployment benefits – and rejoin the workforce as formally unemployed. And there could be some real fireworks on Friday, as the Labor Department releases the Jobs Report for June. Last month's Jobs Report showed 431,000 jobs created in May. While on the surface this seems positive, the number was below expectations and also was primarily made up of temporary census workers…who will once again join the ranks of the unemployed when the 2010 Census has been completed. The Unemployment Rate did drop from 9.9% to 9.7%, but overall May's Jobs Report was disappointing. Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while strong economic news normally has the opposite result. As you can see in the chart below, home loan rates hit record low levels last week. I'll be watching closely to see if this trend continues. Chart: Fannie Mae 4.0% Mortgage Bond (Friday, June 25, 2010)

 

The Mortgage Market Guide View...

 

 

	A Safe and Ticket-Free Fourth! In just a few short days, drivers across the country will hit the road to celebrate the Fourth of July with friends and family. If you're heading down the road this coming weekend, remember that it's never a good idea to speed – both for safety and financial reasons. After all, an accident or ticket can ruin your holiday weekend. So make sure you have plenty of time and that you plan the most effective route. And...you may even want to take a minute to find out if there are any speed traps on your route that you should know about. Thanks to the website speedtrap.org, you can easily read about speed traps in communities across the country. Simply visit speedtrap.org and click on the state and then the cities that you'll be driving through. You can even add a speed trap you know about, so others can benefit from your knowledge. Whether you're traveling a few miles or a few hundred, have a safe and ticket-free Fourth of July! Economic Calendar for the Week of June 28 - July 02 Date ET Economic Report For Estimate Actual Prior Impact Mon. June 28 08:30 Personal Income May 0.5%   0.4% Moderate Mon. June 28 08:30 Personal Spending May 0.1%   0.0% Moderate Mon. June 28 08:30 Personal Consumption Expenditures and Core PCE May 0.1%   0.1% HIGH Mon. June 28 08:30 Personal Consumption Expenditures and Core PCE YOY NA   1.2% HIGH Tue. June 29 10:00 Consumer Confidence Jun 62.0   63.3 Moderate Wed. June 30 08:15 ADP National Employment Report Jun 61K   55K HIGH Wed. June 30 09:45 Chicago PMI Jun 59.5   59.7 HIGH Wed. June 30 10:30 Crude Inventories 6/26 NA   2.02M Moderate Thu. July 01 08:30 Jobless Claims (Initial) 6/26 458K   457K Moderate Thu. July 01 10:00 ISM Index Jun 59.0   59.7 HIGH Thu. July 01 10:00 Pending Home Sales May -10.5%   6.0% Moderate Fri. July 02 01:00 Non-farm Payrolls Jun -100K   431K HIGH Fri. July 02 01:00 Unemployment Rate Jun 9.8%   9.7% HIGH Fri. July 02 01:00 Hourly Earnings Jun 0.1%   0.3% HIGH Fri. July 02 01:00 Average Work Week Jun 34.2   34.2 HIGH       [mmgwDisclosure]   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 the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.   Mortgage Market Guide, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated.   Mortgage Market Guide, LLC does not grant to you a license to any content, features or materials in this email.   You may not distribute, download, or save a copy of any of the content or screens except as otherwise provided in our Terms and Conditions of Membership, for any purpose.

Another Business Booster from Edward F. W. Deanes - Proactive or Reactive? It's All Up to You

 

Edward F. W. Deanes Home Mortgage Consultant Wells Fargo Home Mortgage Phone: (757) 418-2064 Fax: (866) 935-0661 edward.deanes@wellsfargo.com www.deanesgroup.com

Proactive or Reactive? It's Up to You

Everyone makes choices. Their outlook on life, whether at home, at work, behind the wheel or at the theater, directly correlates to the decision to be either positive or negative. In essence, it's as simple as whether you see the glass half full or half empty. As author Stephen R. Covey puts it in his much publicized book, The 7 Habits of Highly Effective People,* you can choose to be proactive or you can choose to be reactive. He takes his theory a step further, saying that a proactive stance leads to greater success and contentment. From that perspective, a reactive person is sabotaging himself or herself. Covey contends that every single day, people have 100 opportunities to be proactive or reactive. Let's say you're in your car on the freeway and an overly zealous driver is practically sitting on your tail in the fast lane. You're driving at the speed limit, actually a couple of miles faster than the law permits. But the motorist behind you thinks he's at the Indy 500. You can stay where you are, infuriate him and possibly get rear-ended. Or, you can move out of harm's way, to that opening in the right-hand lane and let him pass. He's in the wrong, and there's no question about it. Will you follow his lead? Will you be proactive or reactive? It's up to you. It's very empowering to look at life from Covey's point-of-view. If you moved to the right lane, the reckless driver didn't force you. He didn't win. A vehicle can be a deadly weapon and you made the sensible, mature decision that shows why you deserve a driver's license and the other driver belongs on roller skates. At work, you can be proactive if you take the time to learn about the principles of nature - in this case human nature and people interaction. "If you ignore the principles of human effectiveness, you (can) work very hard, but still not get what you want," Covey says. Say that you've been working with a prospective client for the past three weeks, really putting a lot of effort into the new relationship. Then you learn, through some mutual acquaintance, that this would-be client ended up going to a competitor for the same service. It happens, and you don't have to necessarily blame yourself. But, you should take time to reflect on the past three weeks. Were you really proactive or were you reactive? How did you interact with the client? Covey says principles are "natural laws that govern the world." To attain a proactive mind-set, he emphasizes one must create beneficial relationships, build trust and commit to self-renewal. "To be trusted, you must be trustworthy over time," Covey asserts. As for self-renewal, he says renewal means "preserving and enhancing your greatest asset - yourself." Stay tuned for more Business Boosters coming your way! *©2003 Fireside Books. ISBN: 0743250974. All rights reserved. Available on www.amazon.com

Licensed Loan Officer - Licensed Real Estate Agent - This information is accurate as of the date posted and is subject to change without notice. All of the views and comments are mine and do not represent Wells Fargo.

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Edward F. W. Deanes
Wells Fargo Home Mortgage
4456 Corporation Lane Suite 100
Virginia Beach, VA 23462

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Another Business Booster from Edward F. W. Deanes - Win the War Against Clutter

 

Edward F. W. Deanes Home Mortgage Consultant Wells Fargo Home Mortgage Phone: (757) 418-2064 Fax: (866) 935-0661 edward.deanes@wellsfargo.com www.deanesgroup.com

Win the War Against Clutter Streamline Your Workspace As the saying goes, "A cluttered desk is the sign of a cluttered mind." How can prospects or clients have any faith in your ability to work on their behalf, if they see a desk overflowing with paper? Or, in this computer age, if they visit your office and watch you spend valuable time sifting through emails and folders, trying to locate pertinent information regarding their account? To the client, a lack of organization projects a negative image. It symbolically waves a distress flag, which could cause them to run in the opposite direction. Take some basic steps to alter the appearance of an overcrowded, unorganized work environment and help fend off clutter. If you have an assistant, delegate some of your responsibilities to free up some of your time. Remember, "No man (or woman) is an island." For your purpose, that means mail can be opened and prioritized by an administrative assistant, while you tend to other business. Some bosses even arrange for their office assistant to have access to their email inbox. If you work alone, then you must handle every facet of your business. Schedule a consistent time each day for opening both mail delivered by the post office and email, and respond immediately whenever possible to get it off your plate. File correspondence systematically so you know exactly where to find it in the blink of an eye. Record notes on a hand-held recorder to follow up on loose ends. Author and efficiency expert Maria Gracia offers simple organizing solutions.* She says regardless of your business stature, whether management, sales staff or administrative assistant, better organization saves time and increases productivity. Garcia notes the importance of learning to say "no." Some people extend themselves beyond reason, then fall short and appear inadequate. But time, like office space, can become cluttered or overburdened, especially for Real Estate professionals, lenders and others who rely on networking as a means of advancing their businesses. She also advises her readers not to feel obligated to say "yes" to everyone who asks for a favor. In other words, don't over-commit. Be selective when it comes to volunteering time and energy. You can offer to assist with a small portion of a project, but don't agree to organize the entire event. And, if you're truly in a time crunch and can't possibly help, politely, but firmly, just say "no." That will earn you greater respect as someone who can organize time and space. Look for more Business Boosters about efficient methods I use to manage my business and provide stellar customer service! *Maria Gracia is the author of "Finally Organized, Finally Free." ©1999, Bluemoon Pub; Illustrated edition. ISBN: 096727950X

Licensed Loan Officer - Licensed Real Estate Agent - This information is accurate as of the date posted and is subject to change without notice. All of the views and comments are mine and do not represent Wells Fargo.

You received this email as a result of your ongoing business relationship with Edward F. W. Deanes. While beneficial to a wide audience, this information is also commercial in nature and it may contain advertising materials.

UNSUBSCRIBE: If you would like to stop receiving emails from Edward F. W. Deanes, you can easily unsubscribe.

Edward F. W. Deanes
Wells Fargo Home Mortgage
4456 Corporation Lane Suite 100
Virginia Beach, VA 23462

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© Copyright 2010. All About News, Inc.