Week of May 25, 2008 Mortgage Rte Commentary

Mortgage rates spent another week moving in a relatively tight range. The minutes from the Fed's most recent meeting were released last week. The comments made it fairly clear that the Fed is done lowering rates. Most analysts now expect the Fed's next move to be an interest rate increase. There is an expectation that this latest round of rate cuts, and all of the government's effort to stimulate the economy, will soon begin to produce additional economic growth. With the inflationary pressures already existing in the market, any additional growth would likely spawn some additional price pressures. This would force the Fed to begin increasing rates. However, this scenario may not happen in the near term. We may spend the summer waiting for some clear economic direction.

This week does contain some significant data. We'll get our first glimpse at the 1st quarter's GDP. If it falls in line with expectations, at just under 1.0%, mortgage rates may stay fairly flat. However, a surprise spike could prod traders into worrying about that future rate hike, with rates moving upward.

Mortgage Rate Commentary Week of May 18, 2008

Last week saw mortgage rates holding fairly steady again. Economic news continues to be mixed, with no real strong indication either for or against future growth. Retail Sales did dip 0.2% in April, but removing autos from the calculation, sales actually rose 0.5°/0. Industrial Product sank more than expected. However, Housing Starts bounded up 8.0%, rather than declining as predicted. The best news of the week was that both the headline and core readings of the Consumer Price Index came in lower than expected. If inflation would moderate just slightly, and housing would pick up, we are likely to see mortgage rates move lower. However, the continued increase in oil prices has many analysts worried that inflation will grow throughout the economy, dragging GDP downward.

Mortgage rates may remain relatively flat again this week with a bit less data due. The biggest news of the week could be the Producer Price Index. If it comes in lower than expected, like the CPI last week, we could see the beginnings of some downward movement in mortgage rates.

A Credit Score Is Just a Credit Score?

Not that long ago, the credit score was a mysterious number. Whether you were shopping for a car, a house, or a credit card, you could be told your score was too low, and you would not be able to get any financing. Alter­nately, the paperwork might be presented to you and all you had to do was sign. Rarewly would you be told your actual score. As time has gone on, and laws have been passed, consumers now know not only what their credit score is, but also what factors are used to create credit scores. Unfortunately, the term "credit score" is used for any model that creates a number indicating your creditworthiness.

Each of the major reporting bureaus has developed their own scores. For example, Experian has a PLUS score, and Equifax offers a ScorePower number. Fair Isaac, the company that developed the classic FICO® score, of­fers multiple types of credit scoring models for its corporate customers. They have developed models specifi­cally for the auto industry, the credit card industry, the banking industry, and they've even built a model that is specific for home equity lending. The variety of credit scores, and the fact that scores can change on a daily
basis, has caused widespread confusion for many people. It is not uncommon for someone to get a credit score online, or from an auto dealer, or somewhere else, and then be shocked when they begin the mortgage buying process because their "credit score" varied significantly from what they thought it was.

The home mortgage industry continues to primarily use the classic FICO® score as the basis of evaluating creditworthiness. Whether you are currently in the market for a mortgage or may be in the future, one of the most important factors is your credit score. Please give me a call at (804) 433-1510 with any questions about your credit, and how we can get the best financing available for you

Mortgage Rate Commentary Week of May 11, 2008

Last week, mortgage rates held steady again as the week's economic indicators continued to reveal an economy that is neither growing nor shrinking. The most positive news of the week was the ISM Services Index surprise 52.0 reading. Any reading over 50 is considered to be a sign of growth in the service segment of the economy. Analysts had expected the index to hold steady around 49.5.

This week has three very important monthly economic reports: Retail Sales, Industrial Production, and the Consumer Price Index, If Retail Sales and Industrial Production both show unexpected signs of strength, we could see some upward movement in mortgage rates. However, the CPT could trump such a situation by coming in lower than anticipated. With inflation fears all over the market, any signs of weakening inflation would be very positive. The bond market would likely rally with mortgage rates stepping down slightly. The worst case for mortgage rates would be a spike in the CPI with great economic news. This might increase the odds of the Fed increasing rates fairly soon.

If you would like to receive weekly market updates via email, contact Paul Cantor, CMPS, TrustMor Mortgage Co., (804) 433-1510 or on the web at www.PaulCantor.com .

Weekly Mortgage Rate Commentary

From some perspectives, last week was a good week for economic data. While there were no clear signs that the economy is rebounding, there were some signs that this economic slump may be short-lived. GDP for the 1st quarter of 2008 came in at a meager 0.6%, which was above what many experts were predicting. More encouraging news came from the labor market. The US economy lost 20,000 jobs, again fewer than most estimates. While most experts were predicting an unchanged or increased unemployment rate, the rate actually ticked down to 5.0%. Other data still points to challenges, but we're seeing some hopeful signs. While the Fed did adjust rates down by a '/4-point, they omitted a phrase from their policy statement indicating they have some optimism for the future.

This week has significantly less data than last week for markets to consume. Mortgage rates may not move too much as we continue to wait for more indications of the economy's health. However, any signs that housing is recovering could spur some investor interest in mortgages and move rates lower.

Paul Cantor ican be reached at (804) 433-1510 or at www.PaulCantor.com.