Weekly Update

“Actions speak louder than words.” There were certainly important words spoken last week by President Obama. Read on to learn what he said, and what the impact could be on home loan rates. Last Thursday, President Obama proposed a $447 Billion Job Stimulus Plan, which was  larger and broader than  most had expected. The program calls for tax cuts, state aid, infrastructure spending, on  the job training, plus some surprises like tax cuts for small  businesses to encourage hiring and a "Helping  More Americans Refinance  Mortgages" or HARP plan.   There are no details to the  HARP plan as of yet, as the President has just instructed his team to work with Fannie  Mae and Freddie Mac,  the Federal Housing Finance Agency (FHFA) and lenders to develop the plan.  I’ll be sure to keep you posted as more details emerge on this plan. Only time will tell how much of the President's plan will only be talked about… and how much will be put into action that will make a difference. But one thing is for sure:  With 400,000 plus brand new people still filing for first time unemployment  benefits every week, action is definitely needed to create jobs. Plus, when you factor in the 3.7 Million people still collecting some sort of benefits, it’s no wonder why consumer confidence and demand is starting to revisit levels seen in the midst of the financial crisis back in 2008. So what could all of this mean for home loan rates? Some of President  Obama’s plan does indeed appear to be stimulative in the short run, and  anything that helps growth would be bad for Bonds and home loan rates  longer-term. However, in the short term, Bonds—including Mortgage Bonds, which home loan rates are tied to—are benefitting from the continued credit crisis in Europe, as investors see our Bonds as a safe haven for their money.  The bottom line is that home loan rates remain near historic lows, which makes this a great time to purchase or refinance a home. Again, if I can answer any questions at all for you or your clients, call or email me anytime.  As we pass the 10th anniversary of the terrible events of September 11, our  hearts continue to go out to the families who were impacted on that  day. It is a time to stop and remember, and also to consider the people in your life and what is most important about our great country. I stand with you in remembrance.

Forecast for the Week

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Sep 09, 2011) This week's economic data is chock full of important reports that could give us hints on whether the economy is slipping into a recession or starting to turn the corner...and the action really heats up in the second half of the week: There will be a double dose of inflation news, beginning Wednesday with the Producer Price Index (which measures inflation at the wholesale level) and then Thursday with the Consumer Price Index. CPI measures changes in the price level of consumer goods and services purchased by households, and this report will tell us if there has been a pick up in prices. If any inflationary signs appear, it could put a dent in Bond prices and home loan rates. Retail Sales for August will also be reported on Wednesday. This gives the investor a gauge on how consumer spending is holding up in these tough times. Thursday brings a double dose of news about the manufacturing sector, with Industrial Production and Capacity Utilization and the Philadelphia Fed Index. Also on Thursday, we'll see another Weekly Initial Jobless Claims Report. Last week's claims equaled 414,000, above that important 400,000 level which indicates real improvement in the labor market. Ending the week, Consumer Sentiment will be delivered on Friday-and after the previous reading, any gain will be met with open arms. 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 and Home loan rates were able to end the week above an important technical level due to continued problems in Europe. If you're wondering if you can take advantage of this situation, now is a great time to call or email me and learn more.

The Mortgage Market Guide View...

Stop Kidding Yourself… And Start Managing Your Stress Just about everyone experiences stress and anxiety on some level. High-pressure jobs, relationship issues, and financial worries are just some of the causes of chronic stress. But the real issue is whether you're managing it correctly. The following information can help you do just that! What Is Stress? First, let’s define what we’re talking about. Stress is the body's way of coping with immediate danger. When confronted by immediate danger, nearly every system in our body modifies itself for the sake of survival. The brain releases hormones that have control over organs, including the heart and lungs, as well as functions such as circulation and digestion. Why Does it Matter? The reality is, when you’re facing a short-term crisis, acute stress can actually benefit you. By having a heart that's capable of beating faster and lungs that can take in more oxygen, the human body is able to react in a fight or flight manner during an emergency. Problems occur, however, when stress is experienced over a long duration—which can wreak havoc on your mind and body. 5 Tips for Reducing Stress If you find yourself experiencing chronic stress, it is important that you make a commitment to changing certain aspects of your life. Here are five tips to help you get started: 1. Identify the Source – Identify your daily sources of stress along with your sources of comfort. If they don't readily come to mind, keeping a journal may help. Take special note of any events that consistently put a strain on your energy and time, especially those that elicit a negative physical response like a headache. After several weeks, you should have a pretty good idea of what's causing your stress. 2. Watch What You Eat – It may sound silly, but a diet that consists of lean proteins, whole grains, fresh fruits, and vegetables has been shown to help reduce stress. It's a good idea to limit foods containing high amounts of caffeine, sugar, and fat, as well as your consumption of alcohol. You should also reduce your intake of overly processed meals and fast foods. 3. Increase Daily Exercise – Exercise strengthens the heart and circulatory system as well as muscles and joints, all of which are negatively affected by chronic stress. 4. Learn to Relax – Relaxation techniques can be as simple as deep breathing and as complex as transcendental meditation. Seek out whatever interests you and learn how to relax. Maybe Yoga or Tai Chi works for you. Maybe it’s just a brisk walk, a short nap, or reading a book during a short break in the day. Or maybe, if your budget permits, you’ll want to try an occasional therapeutic massage. 5. Find Support – If the tips above don’t seem to help, it may be time to seek some help and support. Consult your health plan to see if it covers therapy of this nature. If not, use the Internet to find a support group in your area. Sometimes, just knowing you're not the only one with stress is enough to create a positive change. As we work through challenges in the markets and the financial sector, make sure you’re taking time to take care of yourself. Use the tips above to find a healthy balance of work and play in your life! Economic Calendar for the Week of September 12 - September 16 Date ET Economic Report For Estimate Actual Prior Impact Wed. September 14 08:30 Producer Price Index (PPI) Aug 0.0% 0.2% Moderate Wed. September 14 08:30 Core Producer Price Index (PPI) Aug 0.2% 0.4% Moderate Wed. September 14 08:30 Retail Sales Aug 0.2% 0.5% HIGH Wed. September 14 08:30 Retail Sales ex-auto Aug 0.3% 0.5% HIGH Thu. September 15 10:00 Philadelphia Fed Index Sept -10.0 -30.7 HIGH Thu. September 15 09:15 Capacity Utilization Aug 77.4% 77.5% Moderate Thu. September 15 09:15 Industrial Production Aug 0.0% 0.9% Moderate Thu. September 15 08:30 Empire State Index Sept -4.0 -7.7 HIGH Thu. September 15 08:30 Consumer Price Index (CPI) Aug 0.2% 0.5% HIGH Thu. September 15 08:30 Core Consumer Price Index (CPI) Aug 0.2% 0.2% HIGH Thu. September 15 08:30 Jobless Claims (Initial) 9/10 410K 414K Moderate Fri. September 16 10:00 Consumer Sentiment Index (UoM) Sept 56.3 55.7 Moderate

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