Update #2/ Week of February 22, 2010

Good Morning Everyone and Happy Tuesday! Yesterday we had a very rare negative close in equity markets for a Monday. Yesterday’s small lost of 19 points on the Dow ended a 4-day rally that happened all week last week. Today’s drop in equities appears to be a continuation of that direction as all three indices and commodities are in negative territory. Fortunately for us (I love saying that) credit markets are moving in the right direction and pricing is improved today about (.375) from yesterday’s morning rate sheet. Nice!

The cool mood on Wall Street is in reaction to the consumer confidence report from the Conference Board released this morning at about 7:00 a.m. our time. Up to that point the markets had been moving sideways, but when traders saw that February’s confidence index came in at 46.0 – all markets dropped, including commodities. This is the lowest reading in 10 months, and consumers surveyed blamed the jobs market as the biggest reason for their pessimism. No real news there.

The S&P/Case-Schiller Home Price Index for December came in pretty much as expected. Their reading of 145.9 is just slightly below the 146.3 anticipated. However, the 20-city composite report showed continued year-over-year decline of 3.1%, a bit better than the 5.3% decline posted the month previous. Southern California continues to post modest gains – no real trend one way or the other, so they said in their report this morning. A bottom to this housing market, especially in our State, would be nice. Yet, we have 40-50 BILLION DOLLARS of adjustable notes due to mature here in the next couple years and foreclosures still on the rise . . . and unemployment at near 10% levels . . . no real comfort in housing numbers quite yet.

It sure seems as though activity is picking up though. Maybe brokers are finally getting used to the new GFE . . . and with rates heading south, we all hope to get production numbers back up again. Call me or email me here early and have a terrific Tuesday!

Update #3/ Week of February 15, 2010

Good Morning Everyone and Happy Wednesday! Today’s fractional gains in equities are impressive in light of the rally stocks enjoyed yesterday. The Dow ended the day yesterday with a near 170 point gain! Even better, credit markets improved throughout the day, too! Some of our investors repriced in the afternoon, some didn’t, but we’re pretty much back to where we were yesterday morning on today’s rate sheet. Equities seem to have pocketed the gains from yesterday, and a flat market seems to be in order for today.

Today’s market scene is opposite of yesterday’s . . . gold is down, oil prices are flat (were down earlier), the dollar is showing considerable strength and equity and credit markets are basically flat. Everyone seems to be taking a breather from yesterday’s action. Our pop in stock indices helped to fuel market rallies in Asia and Europe as Asian stock markets in particular rallied nearly 3%.

Housing starts data for January reported this morning a 2.8% rise month-over-month, besting estimates. Building permits, however, fell 4.9% m-o-m, a bit of a surprise to analysts. Much is being made of this report this morning in the financial news, but the housing industry doesn’t really need new houses . . . there’s plenty of inventory out there waiting to be sold to keep us busy for the next several years. Many of those interviewed this morning are pointing toward tax incentives for first time home buyers as a reason for this rise in housing starts. One question, will the tax incentives still be around when these homes are completed? That’s yet to be seen.

I will be coming back to you soon with some updates to our policy for GFE and new disclosures. I want to get these rates to you so we can get some loans locked today. I will be here all day, call me here or email me with your loan scenario or pricing questions . . . and have a terrific Humpday!