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This Week in Your Mortgage World

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Ricky Khamis
President Team Growth
Amerifirst Financial, Inc
Phone: 480-559-9609
Fax: (480) 907-1451
License: Arizona
ricky@ApprovingAZ.com
www.ApprovingAZ.com
  In This Issue  
     
 

Last Week in Review:The Fe d met and extended their twist into things.

Forecast for the Week:June comes to an end with a full week of economic reports, with news on housing, inflation, consumer sentiment and more.

View:Forgetting someones name is never good, be it in a personal or professional setting. The tips below can help sharpen your memory...and prevent that embarrassment.

 
     
  Last Week in Review  
     
 

"Twist and shout." Operation Twist is back on the table after the Fed said last week that it is extending the program. But will this decision or the Feds lowered forecasts for US growth and inflation be cause for shouting? Read on for details.

The we ek began with speculation that the Fed would extend Operation Twist after its two-day meeting of the Federal Open Market Committee. Remember, Operation Twist is where the Fed sells its holdings of short-term securities and Notes and then purchases longer-term Notes and Bonds in order to try and lower longer-term rates even further. The Fed extended the program, which began last fall, because the Fed feels that access to cheaper money will help spur on economic growth. And while the Fed did not mention anything about another round of Bond buying (called Quantitative Easing, or QE3), they laid some groundwork for additional stimulus if necessary.

The Feds decision to extend Operation Twist and their lowered forecasts for our economic growth partly came from disappointing economic reports weve seen recently. The Fed noted that "growth in employment has slowed in recent months, and the unemployment rate remains elevated." Last weeks higher than expected Initial Jobless Claims exemplified that. In addition, the housing market continues to muddle along the bottom with numbers showing only modest improvement. Though there was some good news last week even though Housing Starts were a bit below expectations, Building Permits (a sign of future construction) surged 8%.

So what does all of this mean for home loan rates? Home loan rates continue to benefit from the drama in Europe and the weak economic reports here at home, as investors continue to see our Bonds (including Mortgage Bonds, to which home loan rates are tied) as a safe haven for their money. But its important to note that additional hints of QE3 could push Stock prices higher, shifting cash out of the Bond trade and hurting home loan rates in the process.

The bottom line is that now continues to be a great time to purchase or refinance a home, as home loan rates remain near historic lows. Let me know if I can answer any questions at all for you or your clients.

 
     
  Forecast for the Week  
     
 

The economic calendar heats up this week, with several important reports:

  • The economic calendar kicks off on Monday with the New Home Sales data for May. This comes after last week's weaker than expected Existing Home Sales data. Pending Home Sales will be released Wednesday.
  • Consumer Confidence will be delivered on Tuesday, followed by Consumer Sentiment on Friday. These reports will gauge how the consumer is holding up in a weakening economic environment.
  • Another look as to how the consumer is doing will be Wednesday's Durable Goods report, which measures products lasting at least three years, such as washing machines and dishwashers.
  • Gross Domestic Product (GDP) will be reported on Thursday for the final reading of the first quarter of 2012.
  • Weekly Initial Jobless Claims will also be reported on Thursday and have remained stubbornly high.
  • In addition, the Treasury will sell $99 Billion total in 2, 5 and 7 year T notes this week and the results could impact trading.

    Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve, while st rong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond that home loan rates are based on.

    When you see these Bond prices moving higher, it means home loan rates are improving and when they are moving lower, home loan rates are getting worse.

    To go one step further a red candle means that MBS worsened during the day, while a green candle means MBS improved during the day. Depending on how dramatic the changes were on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.

    As you can see in the chart below, Bonds and home loan rates remain near record best levels. Ill continue to monitor this situation closely.

    Chart: Fannie Mae 3.5% Mortgage Bond (Friday Jun 22, 2012)
    < !-- BEGIN CANDLE_CHART_IMAGE -->
    Japanese Candlestick Chart
     
         
      The Mortgage Market Guide View...  
         
     
         
     

    Exercise Your Brain

    Forgetting names or important details never feels good...be it in a personal or professional setting. The key is to stay mentally active. Here are some great tips you can share with your clients, referral partners, and family members that can help keep their memory in tip top shape:

    1. Memorize Something New. Memorizing almost anything is one of the best exercises you can give your brain. Start small by memorizing your shopping list or daily schedule, or you can take it to another level by learning a musical instrument or a new language. Doing any of these exercises can potentially lead to quick and substantial improvement in memory, which will be helpful both personally and professionally.

    2. Get a Hobby. Whether you choose something like gardening, bird watching, or flying model airplanes, taking on any new hobby is good for mental stimulation as well as overall mood. Look for activities you really enjoy and that allow you to learn and have fun, simultaneously. All of these traits are components to living a happy and rewarding life, and remaining mentally sharp.

    3. Challenge Yourself. Daily patterns can be the enemy of mental sharpness. Its one thing to keep a sc hedule or to plan out daily events. What we're talking about is having the exact same routine, nearly every day. Falling into rigid patterns promotes mental passivity, or the opposite of stimulation. So try mixing things up a bit. Challenge yourself by participating in new activities. Join a softball league, a reading club, or even a theater group. At the very least, play around with your daily schedule.

    The brain is a complex organ, able to create new connections between nerve cells when it is properly stimulated. Those connections lend themselves to optimal brain function, increased intelligence, and improved memory. The above tips will help people notice a difference in their memory in no time.

    Economic Calendar for the Week of June 25 - June 29

    Date
    ET
    Economic Report
    For
    Estimate
    Actual
    Prior
    Impact
    Mon. June 25 New Home Sales
    May
    NA
     
    343K
    Moderate
    Tue. June 26 Consumer Confidence
    Jun
    NA
     
    64.9
    Moderate
    Wed. June 27 Durable Goods Orders
    May
    NA
     
    0.0%
    Moderate
    Wed. June 27 Pending Home Sales
    May
    NA
     
    -5.5%
    Moderate
    Thu. June 28 GDP Chain Deflator
    Q1
    NA
     
    1.7%
    Moderate
    Thu. June 28 Gross Domestic Product (GDP)
    Q1
    NA
     
    1.9%
    Moderate
    Thu. June 28 Jobless Claims (Initial)
    6/23
    NA
     
    NA
    Moderate
    Fri. June 29 Personal Income
    May
    NA
     
    0.2%
    Moderate
    Fri. June 29 Personal Spending
    May
    NA
     
    0.3%
    Moderate
    Fri. June 29 Personal Consumption Expenditures and Core PCE
    May
    NA
     
    0.1%
    HIGH
    Fri. June 29 Personal Consumption Expenditures and Core PCE
    YOY
    NA
     
    1.9%
    HIGH
    Fri. June 29 Chicago PMI
    Jun
    NA
     
    52.7
    HIGH
    Fri. June 29 Consumer Sentiment Index (UoM)
    Jun
    NA
     
    74.1
    Moderate
         

     

    The material contained in this newsletter has been prepared by an independent third-party provider. The content is provided for use by real estate, financial services and other professionals only and is not intended for consumer distribution. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, there is no guarantee it is without errors.

    As your mortgage professional, 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.

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


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    Ricky Khamis
    NMLS 173141 | LO-0911814 | CA-DOC173141
    Branch Manager | Corporate Office
    Arizona and California CE Instructor

    Email: Rick@amerifirst.us

    480-344-1900 office
    602-758-7425 mobile
    480-339-1615 fax

    AMERIFIRST FINANCIAL, INC.
    NMLS 145368 

    1550 E. McKellips Rd, Suite 117
    Mesa, AZ 85203
    480-344-1900
    1-866-276-12974
    BK0013635

     

    Amerifirst Financial Disclosure-  The opinions expressed here are the personal opinions of Ricky Khamis.  Content published here is not read or approved by Amerifirst Financial before it is posted and does not necessarily  represent the views and opinions of Amerifirst Financial.

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