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MMG Weekly Mortgage Update

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Provided to you Exclusively by Andrew Zemon, CMPSByAndrew Zemon, CMPS

For the week of Nov 08, 2010 | Vol. 8, Issue 45
Andrew Zemon, CMPS

Andrew Zemon, CMPS
Senior Loan Consultant
Greenwood Lending
Office: 434-975-4600
Fax: 434-975-4700
Toll Free: 877-636-4600
E-Mail: azemon@greenwoodlending.com

Greenwood Lending
“Financial Planning Strategies for Home Owners”
In This Issue

Last Week in Review: Election results, the Fed’s announcement, and the Jobs Report – what a full week it was! So what was the impact on home loan rates?

Forecast for the Week: It’s a quiet week on the economic report front, but don’t expect the volatility to die down as the markets continue to digest last week’s news.

View: Leasing a car may be easy, but getting out of a car lease is another story. Luckily, this week’s View article has some ideas that can help.
Last Week in Review

“TOMORROW IS OFTEN THE BUSIEST DAY OF THE WEEK.” Spanish Proverb. And it sure seemed that way every day of last week, with one of the busiest economic calendars seen in years. Friday’s Jobs Report capped off a week filled with election results and a big announcement from the Fed regarding the next round of Quantitative Easing (QE2). So what impact did all of this news have on Bonds and home loan rates? Let’s break it down.

On Friday, the Labor Department reported that 151,000 jobs were created in October, all in the private sector. This was much higher than the 60,000 job creations that were expected – and while the economy needs a lot more job creations to put a dent in the unemployment rate, this is a great start to a recovery in the labor market.

Adding to the positive tone of the report, there were upward revisions to both August and September’s numbers, and the Unemployment Rate held steady at 9.6%. The Average Hourly Wage increased as well – and across the board, the numbers were stronger than anticipated. Should this trend continue in the coming months, it would support the notion that labor has not only stabilized – but is perhaps even expanding, which would be welcome news indeed.

And while this is great news for the economy, remember that when good economic news arrives, investors move money into Stocks… and this pulls money out of all types of Bonds, including Mortgage Backed Securities, which home loan rates are based on. When money moves out of Bonds, it causes Bond pricing and home loan rates to worsen – and that’s exactly what happened, following the better than expected Jobs Report. Although we all like to hear good news for the economy – any strong, positive economic news is bad news for Bond pricing and home loan rates.

Home loan rates were exceptionally volatile all last week – and likely to remain so ahead. While rates are still at very low, affordable levels – they won’t last forever, so please get in touch if you have questions about how the current rate climate might benefit your situation.

In other big news last week, the Federal Reserve Board made their much anticipated announcement regarding another round of “Quantitative Easing” or QE2, where the Fed will participate in purchasing Treasury Securities in a bid to keep the economic recovery on track. On Wednesday, the Fed announced that they intend to purchase $600 Billion in Treasuries, starting now and continuing through mid-2011, which equates to about $75 Billion in purchases per month. So how will this impact home loan rates ahead?

We need to be mindful that the Fed initiated QE2 for three reasons. One, to help lower interest rates in order to spur consumer and business spending… which in turn will create inflation. Two, to help lower the unemployment rate via an economic boost. And three, to help push Stock prices higher. And all three of these factors will cause headwinds for Bonds and home loan rates down the road.

As the Fed gets to work on putting their latest plan into effect – we can be sure that inflation readings in various economic reports will likely be more highly scrutinized by the markets. Upcoming reports will reveal whether the Fed will be successful in their quest to fight deflation, and create a level of Goldilocks inflation that is not too hot, not too cool… but juuuust right. Ultimately, if inflation expectations creep higher, interest rates for long-term Bonds – like Mortgage Bonds – will rise as well.

One thing is certain, the volatility we saw in the markets last week is sure to continue. If you have any questions about how you can take advantage of today’s historic low rates, please contact me, and let’s evaluate your current situation. And feel free to forward this email to any friends, family members, or colleagues who may have questions as well – I’m always pleased to talk with anyone you’d refer my way.

THINK YOU’RE STUCK IN YOUR VEHICLE LEASE? THINK AGAIN. CHECK OUT THE MORTGAGE MARKET GUIDE VIEW FOR SOME TIPS THAT COULD MAKE GETTING OUT OF IT EASIER THAN YOU THINK.
Forecast for the Week

After all last week’s big news, Traders will continue to digest all the happenings… and will have a somewhat quiet economic news week ahead, including the Bond Market being closed on Thursday in honor of Veteran’s Day

There are no major economic reports until Wednesday, which will bring another look at employment with the Initial and Continuing Jobless Claims Report. Last week’s Initial Jobless Claims were 457,000, above the 445,000 that was expected, while Continuing Jobless Claims fell 42,000 to 4.34 Million. Initial Jobless Claims have been stuck to that mid-400’s level like a magnet for a very long time – and a real, sustained movement below 400,000 is needed in order for the market to feel confident that labor is recovering.

Also this week we’ll get a read on Consumer Sentiment on Friday – always an important number, but particularly of note for retailers, especially as we head into the holiday shopping season.

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 had some ups and downs last week in response to the QE2 announcement and the Jobs Report. I’ll be keeping a close eye on the volatility as this week progresses.

———————–

Chart: Fannie Mae 3.5% Mortgage Bond (Friday, November 5, 2010)
The Mortgage Market Guide View…

Getting Out of a Car Lease

Car leases can pose many advantages for consumers. Typically speaking, lease payments are less than payments on a car loan, thus allowing a consumer to lease a vehicle that he or she couldn’t afford to actually buy. Many people also like the idea of avoiding major repairs by handing back their car after a predetermined amount of years. However, being tied into a lease can be a negative burden at times – especially in today’s uncertain economic climate.

Let’s say that after signing on the dotted line to lease a car, your financial situation changes for the worse and you can no longer afford it. Just turning the car into the dealership and walking away from the lease could impact your credit dramatically, even to the point of a “repossession” showing up on your credit report.

But what option do you have? It may surprise you to find out that you actually have a few options.

One option is something known as an “early termination” of the lease. The problem with early termination, however, is that it can be costly, very costly. Aside from paying off the amount owed on the lease, there can also be penalty fees and other miscellaneous charges padded into the contract. Another option is to sell your leased car privately. The problems with this option are that it requires a lot of hard work on your part and it only benefits consumers with cars that have an equal or greater value than their current “buy out” price.

But there is another option for getting out of your car lease, and it can prove to be the best one for many people. It is something known as a “lease transfer” and the process is just as it sounds. A leaseholder finds someone who is not only credit-worthy, but also willing to assume his or her car lease. Once the terms are negotiated and ratified the remainder of the lease is transferred into the new leaseholder’s name.

If a lease transfer sounds like a complicated process, it’s because it can be. The good news, however, is that thanks to websites like http://www.leasetrader.com and http://www.swapalease.com the lease transfer process has been fully explained and streamlined. These companies basically act as middlemen between the buyer and the seller, providing a forum for listings, as well as hands-on help with expediting the process.

It is important to know that the aforementioned websites – as well as most car leasing companies – will charge a fee for a car lease transfer. But… those fees can be negotiated between the buyer and the seller, and they are also much less costly than the fees associated with terminating your lease early.

————————–

Economic Calendar for the Week of November 8-12, 2010

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of November 08 – November 12
Date

ET

Economic Report

For

Estimate

Actual

Prior

Impact
Wed. November 10
08:30
Jobless Claims (Initial)
11/06

450K

457K

Moderate
Wed. November 10
08:30
Balance of Trade
Sept

-$46.2B

-$46.3B

Moderate
Fri. November 12
10:00
Consumer Sentiment Index (UoM)
Nov

69.0

67.7

Moderate
The Zemon Team at Greenwood Lending is a place where our clients, their family, friends and co-workers become “Friends for Life”. We are committed to making our clients a part of our family. We will assist our clients in achieving their dreams and aspirations by providing solid, goal oriented, consultative financial planning with respect to their mortgage.

The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. 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, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors.

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: azemon@greenwoodlending.com

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

Andrew Zemon, CMPS
615 Woodbrook Drive
Charlottesville, VA 22901

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.

Equal Housing Lender

2011 Tax Changes at a glance…

Ameriprise Financial

Hancock, Engel & Associates Joseph R. Feola, CFP®

 

 

^{Associate Financial Advisor} 2011 Tax Changes At-a-Glance

 

 

941 Glenwood Station Lane
Suite 203
Charlottesville, VA 22901
434.220.4671
joseph.r.feola@ampf.com

 

October 31, 2010

 

 

 

 

 

2011 Tax Changes At-a-Glance

 

 

 

 

 

A host of tax provisions enacted in 2001 and 2003–commonly referred to collectively as the “Bush tax

 

 

 

cuts”–expire at the end of the year. While it’s possible that new legislation could extend some or all of these expiring tax provisions, election-year politics make it difficult to predict what action, if any, Congress will take. With that in mind, here’s what you need to know about the major changes that are scheduled for 2011.

 

 

Federal income tax brackets

 

 

Right now, there are six income tax brackets: 10%, 15%, 25%, 28%, 33%, and 35%. For 2010, these brackets apply to married couples filing joint federal income tax returns in the following manner.

 

 

2010 Income Tax Brackets–Married Filing Jointly

Taxable Income Marginal Tax Rate

Not over $16,750 10%

Over $16,750 to $68,000 15%

Over $68,000 to $137,300 25%

Over $137,300 to $209,250 28%

Over $209,250 to $373,650 33%

Over $373,650 35%

 

 

As it stands now, there will be no 10% bracket for 2011, and the remaining bracket rates will return to their original 2001 levels: 15%, 28%, 31%, 36%, and 39.6%.

 

 

Long-term capital gains tax rates

 

 

For 2010, if you sell shares of stock that you’ve held for more than a year, any gain is a long-term capital gain,
generally taxed at a maximum rate of 15%. If you’re in the 10% or 15% marginal income tax bracket, however,
you’ll pay no federal tax on the long-term gain (a 0% tax rate applies). That means if you’re a married couple
filing a joint federal income tax return, and your taxable income is $68,000 or less, you pay no federal tax on
the gain.
However, these rates expire at the end of 2010. Beginning in 2011, a 20% rate will generally apply to
long-term capital gains. Individuals in the 15% tax bracket (remember, there won’t be a 10% bracket in 2011)
will pay the tax at a rate of 10%. Special rules (and slightly lower rates) will apply for qualifying property held

for five years or more. Finally, while qualifying dividends are taxed in 2010 using the same capital gains tax rates described above (i.e., 15% and 0%), in 2011 they’ll be taxed as ordinary income subject to the increased 2011 tax brackets.

 

 

The estate tax

 

 

There is currently no estate tax for 2010, and special rules are in place that govern the way basis is calculated for property passing upon death. The estate tax reappears in 2011, however, with a $1 million exclusion amount (meaning that up to $1 million of assets will be exempt from estate tax) and a top tax rate of 55%. To put that in context, for 2009, the top estate tax rate was 45%, and estates received an exclusion of $3.5 million.

 

 

Year 2009 2010 2011

 

 

Estate tax exclusion $3.5 million N/A $1 million

 

 

Top estate tax rate 45% No tax 55%

 

Other important changes

Other changes for 2011 include:

 

 

• Phaseout of itemized deductions and exemption amounts–Itemized deductions and personal exemption amounts will once again be phased out for higher-income individuals

 

 

 

October 31, 2010

 

 

 

•• The “marriage penalty” returns--Changes made to correct the federal income tax “marriage penalty” expire at the end of 2010, resulting in a reduced standard deduction amount and lower tax bracket thresholds (i.e., higher rates will apply at lower income levels) for married couples filing jointly in 2011

Tax credits get cut–The child tax credit will be reduced and both the Hope education tax credit and the earned income tax credit become less generous (the Making Work Pay tax credit also disappears)

Section 179 small business expensing–The increased IRC Section 179 expense limit ends (Section 179 allows small businesses to elect to expense the cost of qualifying property rather than recover the cost through depreciation deductions); the amount that a small business may expense will drop from $250,000 in 2010 to $25,000 in 2011

 

 

 

 

See disclaimer on final page October 31, 2010

 

 

 

 

 

 

 

Ameriprise Financial

Hancock, Engel & Associates Joseph R. Feola, CFP® Associate Financial Advisor 941 Glenwood Station Lane Suite 203 Charlottesville, VA 22901 434.220.4671 joseph.r.feola@ampf.com

 

 

The information contained in this material is being provided for general education purposes and with the understanding that it is not intended to be used or interpreted as specific legal, tax or investment advice. It does not address or account for your individual investor circumstances. Investment decisions should always be made based on your specific financial needs and objectives, goals, time horizon and risk tolerance.��

The information contained in this communication, including attachments, may be provided to support the marketing of a particular product or service. You cannot rely on this to avoid tax penalties that may be imposed under the Internal Revenue Code. Consult your tax advisor or attorney regarding tax issues specific to your circumstances.��

Neither Ameriprise Financial Services, Inc. nor any of its employees or representatives are authorized to give legal or tax advice. You are encouraged to seek the guidance of your own personal legal or tax counsel. Ameriprise Financial Services, Inc. Member FINRA and SIPC.��

The information in this document is provided by a third party and has been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Ameriprise Financial Services, Inc. While the publisher has been diligent in attempting to provide accurate information, the accuracy of the information cannot be guaranteed. Laws and regulations change frequently, and are subject to differing legal interpretations. Accordingly, neither the publisher nor any of its licensees or their distributees shall be liable for any loss or damage caused, or alleged to have been caused, by the use or reliance upon this service.

 

 

 

 

 

Prepared by Forefield Inc. Copyright 2010 Forefield Inc.

 

 

October 31, 2010

 

 

Economic Update

Last Week in the News Existing home sales rose 10% in September to a seasonally adjusted annual rate of 4.53 million units from a revised 4.12 million units in August. The inventory of unsold homes on the market declined 1.9% to 4.04 million, a 10.7-month supply at the current sales pace, down from a 12-month supply in August. The Standard & Poor’s/Case-Shiller 20-city housing price index — on a seasonally adjusted basis — fell 0.3% in August after a 0.2% decrease in July. On a year-over-year basis, prices rose 1.7% compared with August 2009. The Mortgage Bankers Association said its seasonally adjusted composite index of mortgage applications for the week ending October 22 rose 3.2%. Refinancing applications increased 3%. Purchase volume rose 3.9%. Orders for durable goods — items expected to last three or more years — rose 3.3% in September after decreasing a revised 1% in August. Excluding volatile transportation-related goods, orders posted a monthly decrease of 0.8%. New home sales rose 6.6% in September to a seasonally adjusted annual rate of 307,000 units from a rate of 288,000 units in August. Economists had expected a pace of 300,000 units. The Commerce Department announced that gross domestic product — the total output of goods and services produced in the U.S. — increased at an annual rate of 2% in the third quarter of 2010. Initial claims for unemployment benefits fell by 21,000 to 434,000 for the week ending October 23. Continuing claims for the week ending October 16 fell by 122,000 to 4.35 million, the lowest level since the recovery began. Upcoming on the economic calendar are reports on construction spending on November 1, factory orders on November 3 and pending home sales on November 5.

Certified Financial Planning update from Ameriprise

Samblogarticle

Just listed 4130 Rising Sun Lane Priced under $150,000 in Albemarle County!

 

Residential – Detached

Click Photo for Additional Media and Enlargement

MLS#: 482039m Stat: ACT Typ: DET ListPrice: $139,900 OrigLP: $139,900 Addr: 4130 RISING SUN LN (ALBEMARLE) SqFtF/U: 1,008/0 NORTH GARDEN, VA 22959 SFSrc: TAXA VSH#: BedRms: 3 Area: 01 Albemarle BathsF/H: 1/0 Subdiv: NONE Acres: 1.00 PropNm: YrBlt: 1950 Design: Ranch Style: 1 Story GarPrk: None DivRghts: Tax/Yr: $0/ New?: Deed Bk: Page#: Historic: Parcel ID: 09900-00-00-084B0 Basemnt: N ElemSch: Red Hill Middle: Walton High: Monticello OthrSch: Legal: PT L-1, GAR STORE Zone: Dir: From Charlottesville Follow 5th St. Extended out onto Old Lynchburg Rd. Cross over Red Hill Rd., Rising Sun Lane on Right, follow drive up to the right DtMod: 10/19/2010 KOut: N DOM/CDOM: 11/11

---

Remarks: OWNER FINANCING AVAILABLE!!!!! Charming Ranch with interior completely re-done in great location in Albemarle County. Great for a starter home or for those wishing to down-size. New kitchen, new floors, new windows (low e/argon energy efficient), plus much more. You have to see this charmer and feel the warmth of such a great home. Ready to move in, all the work has been done for you! Call agent for showing instructions!

---

Room Type Lvl Dimnsns Bedroom 1 Bedroom 1 Kitchen 1 FullBath 1 LivngRm 1 Bedroom 1 DiningRm 1

Fndatn: ConcreteBk Siding: Wood Wndws: DblHung, Insul, LowE, Scrns, TiltSash, Vinyl Heat: Bsebrd Roof: Walls: DryWall Ceiling: 8′ Cool: HtPmp Floors: Hardwd Doors: NA Porch: Front, Patio, Porch Basmnt: None Depend: None Secure: None Kitchn: N/A KitCab: Birch KitCntr:Formica Applnc: None Lndry: DryrHkup, WashrHkup Bath: NA Firepl: WoodBurn FrplLoc: MiscInt: None Amenit: Yard: NearlyLvl, Sunny Land: Fence: FrmImp: Animal: FarmRem: Access: Drive: View: Woods, Resid’l WatrPrp: None Eco Cert: Accessibility: HOAIncl:

---

#FP:

Attic:

Pool:

Water:

WELL

Sewer:

SEPTK

Utilities:

ElecAbvgrnd

Gas:

None

CntlHt:

Y

CntlAC:

Y

Gar:

N

#CarGar:

Carport:

Y

#CarCprt:

Fence:

Histrc:

HOA:

N

HOAAct:

HOAAmt:

$0/

RdMaint:

$0

HmWarr:

BldWar:

WatrHtr:

Elec

CnstrStDt:

CnstrEndDt:

Buildr:

Add’lItems: NegItems: Reserved:

---

–Information deemed reliable but not guaranteed–Copyright: 2010 by the Charlottesville Area Association of REALTORS®

Prepared by QUINN BEVERSLUIS of KELLER WILLIAMS REALTY on 10/19/2010 8:57:13 AM
For More information on this listing please visit http://buysellbuildva.blogspot.com or https://buysellbuildva.wordpress.com, as well as http://buysellbuildva.net.Please call with any questions, 434-987-6049

Market Comment

At The Batesville Store This SATURDAY, October 16, 6:30 – 9:00 p.m. – Great Jazz from Hod O’Brien & Stephanie Nakasian – Quiche, Soup & Salad Buffet

Sam Parkins
Realtor, LEED AP
Buy Sell Build Virginia, in affiliation with:
Keller Williams Realty | I & J Home Builders
21708 James Madison Highway, Troy VA 22974

434-63-BUILD | Cell: 434-987-6049
Licensed to sell real estate in Virginia. Each office independently
Owned and operated. Sent from Charlottesville, VA, United States.
sam@BuySellBuildVA.com facebook.com/buysellbuildvirginia

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BlueRidgeMobileHome.com facebook.com/lakemonticellorealestate

SEARCH OUR LISTINGS: http://www.mycaar.com/buysellbuildva

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New Homes and Mortgages…

Yesterday, the Minutes from the Sept 21st Fed Meeting pretty much confirmed that another round of Quantitative Easing (QE2) is coming, and is likely to be announced at the November 3rd Fed Meeting. Now that it is clearly evident that more QE is coming, it appears for the moment that Bonds ˆ including Mortgage Bonds ˆ are “selling on the news,‰ and taking profits from the recent price appreciation. Bonds will have another big hurdle to face with the 1:00pm ET auction results from today’s $21B 10-Year Note offering. Yesterday‚s $32B 3-Year Note offering was not received well, and Bonds started their afternoon move lower following that announcement. For now, I will recommend a Locking bias. If there are any changes, I will get back to you. 30 Year Conventional Fixed 4.25% with 1 origination 30 Year FHA Fixed 4.25% with 1 origination Other risk factors may apply

From Leonard Winslow

leonard.winslow@newamerican.com

New American Mortgage is an Equal Housing Lender”.  New American Mortgage is licensed by the Virginia State Corporation Commission License #: MC-5112 and the “State of North

Carolina Commissioner of Banks” L-142670.