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| September 2009 |
Vol 1, Issue 2 | |
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| Greetings! |
 Where did the time go?? Seems like just yesterday we were getting ready for Spring's big "selling season." I hope everyone's summer went as well as ours. Of course we could not have done it without the help of your referrals.
So don't forget our
Customer Appreciation Cook Out
this Friday, September 18th, right outside our office.
Lunch kicks off at noon and will feature hamburgers, hot dogs and chili! We may even break out the football and hold quarterback tryouts! Bring a co-worker! Bring a friend!
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| Numbers from Stat Man |
We are seeing an increase in the ads to buy gold as a safe haven
against inflation. But is it?
· $1 invested in stocks in 1801 would be worth $8.8 million
· $1 invested in bonds in 1801 would be worth $13,975
· $1 invested in gold in 1801 would be worth $14
(source: Jeff Dobyns, Raymond James) |
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Contact Us |
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(865) 692-0899
Click on below names for e-mail.
Managing Partner
Loan Officers
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| Loan Modifications - A Different Perspective |
 Many of you have questions about loan modifications. Why aren't the banks modifying more mortgages? Why do they make it so difficult? Aren't they better off accepting a short-sale as opposed to foreclosing?
And who could blame the regular consumer for wondering such? However, one of my favorite bloggers, Drew Sgt, explains that "banks money on foreclosures." While I encourage everyone to read his Reality NOT on TV - Banks Make Money on Foreclosures blog, here is a quick re-cap of his numerical data.
Chase Bank purchases Washington Mutual for 1.9 BILLION dollars. In exchange, Chase gets 310 BILLION dollars in assets. This amount includes a $176 billion dollar mortgage portfolio. Regardless of how this mortgage portfolio is producing, this is one heck of a deal, folks!!
Here's where it gets good. "Assuming an average loan balance of around $300,000, that's almost 600,000 mortgages and corresponding homes. That means they paid an average of only $3,000 for each of those loans. Even if they foreclose on the ENTIRE portfolio, do you think they can make money by reselling houses they got for $3,000 each?"
Right now...business appears GOOD for the banks. |
| Interest Rate Movements |
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Mortgage rates are under the radar. The last time we were at this level it was the headline of USA Today and the lead story in the national news' telecasts. The focus of the media may change but the math doesn't - we have an historic window of opportunity at hand.
The Fed continues on their purchasing plan of Mortgage Backed Securities, and the added demand has kept Bond prices high and home loan rates low. Last week, they purchased another $32.4B, bringing the total to $849B out of the $1.25T they committed to. While these Fed purchases have helped home loan rates stay near present low levels, remember that their buying program is set to be over near the end of the year. There is talk that the program will be extended - but there has also been talk that it will end early - so nothing is a guarantee, except for the fact that when the Fed purchasing program is over, home loan rates will assuredly rise.
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If you got this far down in the newsletter, THANKS!! Do me a favor and forward this to someone who may be thinking of buying a home or refinancing.
Please continue to refer us to your friends, family and co-workers! The combination of reduced home prices, motivated sellers, low home loan rates, and the potential of a juicy tax credit is too great an opportunity to miss.
Sincerely,
Ronnie Wilson
Peoples Mortgage, Inc.
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