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Take a look at the chart below, which shows how home loan rates have climbed dramatically over the last several weeks. In fact, home loan rates are at their highest levels since the Federal Reserve announced their Mortgage Backed Security purchase plan at the end of 2008. While the chart below is just a rough indicator of present rates that require points and fees to be paid, it’s clear to see the dramatic climb rates have taken in recent days.

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Chart: Freddie Mac 30-Yr Fixed Rates

As we’ve mentioned in recent issues of this newsletter, added supply has been one of the main culprits behind the recent sell-off in Bonds and corresponding climb in home loan rates. So where is that supply coming from? First, all those refinances you’ve heard about lately are actually turned into Mortgage Backed Securities after they’re closed, which adds more Bonds to the market. Plus, government spending plans have to be paid for somehow.so record levels of Treasury Securities are being auctioned off these days. Although the Fed has a program to purchase some of these Mortgage Bonds, the number of new Bonds simply outweighs what the Fed is able to buy – therefore driving Bond prices lower and home loan rates higher.

There was some good news for the economy as Consumer Sentiment came in at its highest level in 9 months, and Retail Sales were inline with estimates, marking the biggest rebound for Retail Sales in 4 months. There was mixed news on the Jobs front: While Initial Jobless Claims were below estimates, continuing claims rose to 6.82 million, which is another new record. And US exports fell to the lowest level in almost 3 years, as the US Balance of Trade widened in April for the second month. However, US exports should improve a bit in the coming days, as the US Dollar recently sank against foreign currencies, which makes US goods cheaper and more attractive to buy. The flip side of that coin however, is that since oil is Dollar denominated, the price per barrel rises to compensate for the erosion in the Dollar.meaning higher prices at the pump and elsewhere.

Bonds and home loan rates were able to muster up some improvement on Thursday and Friday, helped in part by news that the Paulson & Co. hedge fund is purchasing distressed debt and Mortgage Backed Securities, which will help alleviate some of the supply mentioned above. However, home loan rates still ended the week .25% to .375% worse than where they began.

Since Bond prices react negatively to any news of economic recovery, it’s important to work with a knowledgeable advisor who monitors the markets every move. Let me know if you have any questions about your situation.

WHEN IT COMES TO BROADCASTING, CHANGE IS IN THE AIR. TUNE INTO THIS WEEK’S MORTGAGE MARKET VIEW FOR IMPORTANT INFORMATION ON THE SWITCH TO DIGITAL TELEVISION.

Tuesday and Wednesday should also bring us a clearer picture of where things stand on the inflation front. Tuesday brings the wholesale price inflation measuring Producer Price Index (PPI) Report, while Wednesday delivers the inflation news on the retail level, via the Consumer Price Index (CPI) Report. Remember: Inflation is the arch enemy of home loan rates, so it will be very important to see what these reports reveal.

Thursday also brings news from the manufacturing sector with the Philadelphia Fed Report. This monthly survey of manufacturing purchasing managers conducting business around the tri-state area of Pennsylvania, New Jersey, and Delaware is one of the most-watched manufacturing reports overall. And with last week’s continuing Jobless Claims reaching another record, this week’s Initial Jobless Claims Report will be another important one to watch.

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, Bonds were able to rebound and see some improvement late last week, and I’ll be staying tuned to see if Bonds are able to continue in this direction.

Chart: Fannie Mae 4.5% Mortgage Bond (Friday Jun 12, 2009)

On Friday, June 12, 2009, the nationwide switch to digital television (or DTV) took place. Although the transition has been in the works for a decade, many people still aren’t sure what DTV is or why the government made the switch.

The information below can help clear some of the confusion.

What is DTV?

The “DTV switch” refers to the switch from using analog signals to broadcast stations like NBC, CBS, ABC, and PBS. Essentially, the switch to DTV means that over-the-air analog broadcasts are discontinued and replaced by digital signals. This transition to digital signals is expected to help free up the cluttered airwaves so that additional wireless services can be offered-including important programs like more emergency response services. As an added benefit, digital signals deliver a clearer picture as well as more programming options for consumers.

What’s the Problem?

The problem is that older televisions were not designed to receive and interpret digital signals. So, when digital signals replace analog broadcasts, those televisions go blank-that is, unless they have been converted.

What Does it Mean to You?

Even though the transition date is upon us, some people still aren’t sure what-if anything-they need to do.

So… to be clear: If you have an older analog TV and you use an over-the-air antenna, you need an analog-to-digital converter box to receive the new digital signal.

But don’t panic… you don’t necessarily need to buy a new TV or stare at a blank screen. Just make a trip to your local electronics or department store and ask the clerk where you can find their digital converters.

To learn more about the government’s coupon program for purchasing a converter, visit the coupon page on the government’s DTV website.

Now…if you have one of the following, you should be all set:

• Cable or satellite service-If you receive your television channels through cable or satellite, you’re already taken care of. You may want to check with your local cable provider to make sure you don’t need extra equipment or a converter box for televisions that plug directly into the cable socket, rather than going through a cable box. Some news stories have reported that those customers need to pay additional fees. So your best bet is to call your local cable provider and ask.
• A TV with a digital tuner-If you own a newer TV with a built-in digital tuner, you’re also ready. To find out if your TV has a digital tuner, check your owner’s manual or look for a label on your television that includes the words “digital tuner” or “digital receiver” as well as “DTV” or “ATSC.” Also, if you have a high-definition television (HDTV), you’re good to go. If your TV already has one of these labels on it, you should be all set. If it doesn’t-and you’re considering purchasing a new TV-make sure your next TV does.

To learn more about DTV and the options available to you, visit the government-sponsored DTV website at: https://www.dtv2009.gov/. You’ll find frequently asked questions, info about the transition, and other helpful articles.

Economic Calendar for the Week of June 15 – June 19

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.

In the unlikely event that you no longer wish to receive these valuable market updates, please USE THIS LINK or email: stdrake@windermere.com

If you prefer to send your removal request by mail the address is:

Stacey Drake
2416 Second Avenue
Suite 101
Seattle, WA 98121

Mortgage Success Source, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated.   Mortgage Success Source, 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.

Friday’s Jobs Report showed that 345,000 jobs were lost in May, far better than expectations for 520,000 jobs lost. And adding to the positive tone were revisions to the two prior months, showing 82,000 fewer jobs lost than previously reported. So all in all, about 260,000 fewer jobs lost than had been forecast. But let’s take a closer look.

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Chart: Non-Farm Payroll

Despite the positive news in the estimated number of jobs lost, the official Unemployment Rate, which is regarded as a more reliable indication of the employment situation, actually came in higher than expectations, climbing from 8.9% in April to 9.4% in May…and this wouldn’t seem to make sense, given the decline in job losses, so what caused this apparent discrepancy?

The figures come from two separate surveys. The job creations/loss number is mostly derived from the “birth-death ratio” of business creations and those going under, which is subject to enormous and repeated revisions – while on the other hand, the Unemployment Rate is a real survey of about 60,000 households that are asked about their current employment situation, and therefore, is truly a much more reliable number. And even though traders know this, the market tends to respond to the headline number, which points more at a future trend than the Unemployment Rate, which paints a picture of the current situation. Since positive economic news typically is not a friend of Bonds and home loan rates, this report added to the worsening trend both have experienced recently.

And here’s another very interesting note, pertaining to the collection of the US Census numbers, which are vital for state and federal budgets and appropriations, amongst other things. The Census occurs every decade, and as we approach 2010, the government has already begun the temporary hiring of approximately 1.2 Million people. These individuals will be put to work for just a few months, but will count as new jobs created.therefore potentially making the numbers appear a bit better over the short term.

In other news, Personal Spending declined slightly in May, while Personal Income came in better than expectations, thanks in part to the economic stimulus package. Overall, indications are that the economy may be strengthening, but this process will likely be marked by continued market volatility. And this volatility we have seen in the financial markets is partly why the Treasury Department announced that they are scaling back their upcoming auctions, as the massive supply has started to weigh heavily on the Bond market and the US Dollar.

All the twists and turns we are seeing make it more important than ever to follow the advice of a knowledgeable mortgage professional who stays tuned in, and can offer good advice as to smart moves to take right now. Let me know if you or someone you know has any questions about your personal situation.

WANT TO PREVENT LOSING YOUR MIND FROM “SCHEDULE-OVERWHELM” THIS SUMMER? CHECK OUT THIS WEEK’S MORTGAGE MARKET VIEW FOR A GREAT TOOL THAT CAN HELP YOU KEEP TRACK OF EVERYTHING YOU HAVE PLANNED…AND BEST YET, IT’S FREE.

Also on Thursday will be the next Initial Jobless Claims Report. Particularly given the high Unemployment Rate in last week’s Jobs Report, it will be important to see if this number shows any improvement.

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, Bonds have traded lower recently, causing home loan rates to move higher. The reasons are many, but certainly due in part to all the extra Bond supply in the market. The Treasury has to have some way to pay for all the massive government stimulus plans, so Treasury auctions have been increasing dramatically – but the added supply is driving prices lower, with home loan rates moving higher. I will be watching closely to see if this trend continues.

Chart: Fannie Mae 4.5% Mortgage Bond (Friday Jun 05, 2009)

Summer schedules always seem to be hectic. Between sporting events, graduation parties, weddings, family vacations and more, it can be hard to keep track of everything your family and friends will be doing this summer.

That’s where a helpful little tool from Google™ – called Google Calendar – can come in handy. As with most of Google’s applications, Google Calendar costs nothing and signing up is easy.

Getting Started

Just log on to Google.com/calendar and create a free account, which will take all of two minutes.

Once you’ve registered, organizing your schedule is only a few clicks away. If you’re still apprehensive, take comfort in knowing that Google Calendar works like most personal scheduling programs, but with a few added perks.

More Than Just a Calendar

For starters, Google Calendar is fairly user-friendly, offering daily, weekly, and monthly views of your schedule. The program also offers the ability to create personal calendars for things like American holidays or birthdays. Any calendar you set up can be easily integrated with Google’s email program, Gmail. This allows you to quickly add events mentioned in Gmail conversations as well as most other events you find online.

Google Calendar also gives you the ability to share your schedule with others and vice versa. Perfect for families on the go or business associates at opposite ends of the country, Google Calendar maintains your privacy by allowing you to pick and choose which events you want others to see. The program also allows you to plan and promote events by giving you the ability to send invitations as well as track RSVPs.

Perhaps the most exciting feature of Google Calendar is the options it gives you in terms of reminders. Whenever you schedule an important event, Google Calendar gives you the option to receive reminders via email, an online pop-up, or a text message on your cell phone!

Google Calendar also has a really great tool that allows you to search all of your calendars for specific information.

One other feature worth noting is called “Quick Add.” This enables you to add events to your schedule simply by clicking a link and then typing in the relevant event information in “natural language” (i.e. Tom’s party next Saturday at 8:00pm).

Finally, Google Calendar does integrate fairly well with most existing scheduling programs; however, it may require a little manipulation in some instances.

Whether you’re completely overwhelmed by your summer schedule or simply on the fence about your current scheduling program, you may want to give Google Calendar a try. It may open your eyes to some interesting new options!

Economic Calendar for the Week of June 08 – June 12

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.

In the unlikely event that you no longer wish to receive these valuable market updates, please USE THIS LINK or email: stdrake@windermere.com

If you prefer to send your removal request by mail the address is:

Stacey Drake
2416 Second Avenue
Suite 101
Seattle, WA 98121

Mortgage Success Source, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated.   Mortgage Success Source, 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.