Update #2/ Week of September 28, 2009

Good Morning Everyone and Happy Tuesday! Wow . . . what an exciting afternoon we had yesterday! Can you believe this pricing? As we’ve seen so many times in the past, we get an afternoon price improvement, followed by a little pull back the next morning. However, how often do we see the stock market rally and the credit markets improve significantly in the same afternoon? That’s what happened yesterday, and this morning we’re seeing a little caution. The cautious mood in credit markets is due to the quick start the stock market had and in the first ½ hour of trading this morning. It appeared we were off to another rally in equities, and credit markets took a step back to see what would happen.

The positive tone on Wall Street this morning was due to some economic news that hit the wires early. First of all, we had the IMF revise their forecast for the world economy for 2009 and 2010 from it’s previous prediction in July. They changed their outlook from a decline of 1.4% in 2009 to a drop of only 1.0%, and their 2010 forecast from a growth of 2.5% to a positive 3.0%. This story put traders in a good mood going into the opening bell.

Then we rec’d word from the S&P Case/Schiller about home prices in our country. In it’s 20-city composite, it’s home price index reported that we only dropped 13.3% in July compared to the same month last year. Isn’t that great news!?!?! Experts were looking for a drop of 14.2% -- and the spin doctors are doing their best to make this out to be a positive thing. We’re sinking, but not as quickly as we thought we were.

Thus, things are good and the stock market continued it’s rally from yesterday . . . that is, until the Consumer Confidence report came out from the Conference Board. It’s index for September came in at 53.1, just below the 54.1 in August, but considerably below the 57.0 anticipated by the experts. Hence, the stock market began to sell off and credit markets are creeping positively back to the unchanged mark.

Pricing has taken a bit of a hit, but not too bad. We’re somewhere in between where we started yesterday and where we finished. The Confumbo 5/1 ARM several of you were asking about yesterday has actually improved. Take a look on page 2 and you will see what I’m talking about.

I’ll be in the office all day and as long as you need me to be in order to get your loans locked. Be sure to call me here or email me to let me know your lock is coming and I’ll be sure to get it locked for you. Have a terrific Tuesday!