What's up with the rates going up?

Many explanations are floating around that include, but are not limited to the following:

• QE2
• Passing tax cuts / not having taxes go up
• The European debt crisis
• North Korea
• Employment is increasing
• Employment is still lousy

All of the above definitely do influence the direction of the Bond market. However, the long and short of it is that 90% of what you see in the markets on a day-to-day basis is nothing more than fight-or-flight between Bond buyers and sellers. As control of the Bond market began shifting from the bulls to the bears in October and early November it started putting everyone who bought bonds in the recent past underwater.  As very few traders like holding losing positions, they sell.  This creates further erosion in prices, which causes more selling and the pattern continues.  Everyone runs for the exits and the market deteriorates as the selloff fuels itself causing mortgage rates to rise.

Federal regulators issued guidelines late last week clarifying accepted procedures for real estate appraisals and evaluations.

The guidance - which is not part of changes coming under the Dodd-Frank bill -- discourages institutions from using automated valuation models in transactions requiring an appraisal.

Regulators called on depositories to use only appraisals that sufficiently support credit decisions, use appraisal criteria that are consistent with safe and sound banking practices, and implement internal controls to ensure compliance with an institution's appraisal program. The guidelines also reaffirmed the need to maintain a standard of independence when it comes to appraising collateral values.

This week we'll explore payment history.

Account payment information on specific types of accounts (credit cards, retail accounts, installment loans, finance company accounts, mortgage, etc.)

Presence of adverse public records (bankruptcy, judgments, suits, liens, wage attachments, etc.) collection items, and/or delinquencies

Severity of delinquency (how long past due)

Amount past due on delinquent accounts or collection items

Time since past due items, adverse public records or collection items

Number of past due items on file

Number of accounts paid as agreed

Next issue we will discuss amounts owed and length of credit history.

Homebuyer tax relief bill passes legislature on the last day of 2010 session 
 

Still 6 months or less

Source: Ann Arbor Area Board of Realtors

A recent nationwide survey done by Fannie Mae revealed that most Americans think the housing market has hit bottom. Some 67 percent believe that housing is a safe investment. Most consumers think that it's still a buyer's market. However, they are taking a more cautious approach to home buying.

To purchase all of the items mentioned in the Twelve Days of Christmas this year amounts to a whopping $44,592. By the way, that would include 184 birds!

• Additional Jobs to be Had - There were 3.4 million job openings nationwide at the end of October 2010, an increase of 351,000 job openings from just 1 month earlier. (Source: Department of Labor)
• Coming up Short - 65% of nearly 1,800 working Americans surveyed admit that they should be saving more today for their future retirement. (Source: Wells Fargo)
• Down, Down, Down - Revolving credit, largely credit card debt, has fallen on a month-over-month basis for the last 26 consecutive months through 10/31/10. Total revolving credit as of 10/31/10 was $800 billion, roughly the same amount as the $799 billion total from 12/31/04 or 6 years ago. (Source: Federal Reserve)

Dear Mary Frisinger,

I enjoyed working with you. As far as my thoughts on the process go, I was extremely impressed and felt very comfortable working with you - you always kept me in the loop and you were available any time I was having a mini mortgage meltdown and needed some reassurance! I sincerely appreciate that Mary. Being a first time home buyer, you were really key in making this all such a positive experience.

Thank you again.
Emily W.