Eve Robin Jarrett
MANAGING DIRECTOR
Senior Mortgage Consultant
Manhattan Mortgage
Office: 631-324-1555 x 25
Blackberry: 631-697-3366
e-Fax: 631-514-3654
Email: EJarrett@manhattanmortgage.com

For the week of Mar 29, 2010 // Vol. 8, Issue 13
In This Issue

Last Week in Review: Learn why March is going out like a lion instead of a lamb. Also, the latest on housing numbers…and more!

Forecast for the Week: The Fed’s Mortgage Backed Security buying program ends Wednesday…what will this mean for home loan rates? Plus – big economic releases on jobs and inflation could be market movers.

The View: Just one month left to take advantage of the Homebuyer Tax Credit, which could mean up to $8,000 in your pocket. Don’t miss the details…or pass them on to someone who could benefit!

Last Week in Review

THEY SAY THAT MARCH COMES IN LIKE A LION AND GOES OUT LIKE A LAMB… But this year, the exact reverse is true when it comes to home loan rates – for quite a few reasons, including the end of the Federal Reserve acting as a large buyer of Mortgage Backed Securities (MBS). The “demand” created by their fifteen-month program has helped Bond prices stay high and home loan rates stay low.

But the Fed’s MBS purchase program will end on March 31st. The Fed has confirmed this several times, including during last week’s testimony by Fed Chairman Ben Bernanke. What’s more, the Fed will likely change sides entirely, and actually become a seller of MBS, since their balance sheet hangs heavy with MBS holdings. However, once the Fed begins selling MBS and puts more supply into the market – at the same time as entirely removing their past demand as buyers – this will pressure Bond prices lower and push home loan rates higher.

If you or someone you know would like to learn more about how you can take advantage of today’s low-rate environment, or the Homebuyer Tax Credit which is due to expire on April 30 (see the below View article for more details), just call or email me. Additionally, consider forwarding this issue to a friend, family member, neighbor or coworker who might benefit from the information.

———————–
Chart: Gross Domestic Product

In other news, the final reading on 2009’s Fourth Quarter Gross Domestic Product (GDP) roared in at 5.6%. While this was the best quarterly performance in six years, the economy shrank 2.4% during 2009, the worst single-year performance since 1946.

However, last week’s housing news arrived with a bit of a whimper. While Existing Home Sales for February were reported in line with expectations, the inventory number swelled to the highest inventory level since last August. In addition, New Home Sales fell slightly in February – the fourth straight monthly drop – to yet another record low. On the new construction front – this may be due in part to buyers feeling a new home purchase may not close in time to take advantage of the Homebuyers Tax Credit before it expires on April 30th…but the bottom line is that the real fix for housing will depend on a stronger labor market.

Weak auction results and the approaching end of the Fed’s MBS purchase program contributed to a volatile week in the markets, causing Bonds to fall below important technical levels. As a result, Bonds and home loan rates ended the week worse than where they began.

THERE’S JUST ONE MONTH LEFT BEFORE THE HOMEBUYERS TAX CREDIT EXPIRES ON APRIL 30! CHECK OUT THIS WEEK’S MORTGAGE MARKET GUIDE VIEW FOR IMPORTANT DETAILS.

Forecast for the Week

March will certainly roar out with a big week of news, beginning with Monday’s Personal Income and Personal Spending Reports. We’ll also get a look at the Core Personal Consumption Expenditure (PCE), which is the Fed’s favorite gauge of inflation. Rest assured the Fed will be watching this report closely!

The Labor Market will also be in the spotlight, first with Thursday’s Initial Jobless Claims Report. Last week’s Initial Jobless Claims were reported lower than expectations and at the lowest reading in 6 weeks. The numbers show modest improvements and are somewhat encouraging.

Hopefully, Friday’s official Jobs Report from the Labor Department for March will also be encouraging. Last month’s report showed that 36,000 jobs were lost in February, which was better than the 68,000+ job losses that were expected. However, while the Unemployment Rate remained stable at 9.7%, a deeper look beyond the headlines of the report showed what many consider to be the Real Unemployment Rate to be near 17%…which includes discouraged workers who are no longer seeking employment, as well as “underemployed” folks who have taken part time or low paying jobs, just to be bringing some money in the door. The bottom line is that real improvement is needed in the labor market for our economy to continue to recover.

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. And with the Fed MBS buying program ending…there will likely be more volatility for home loan rates in store.

With the spring break behind us, the summer rental market is sizzling this year, quite a change from last year when many homeowners remained without viewings…or tenants, as the summer months came and went. There are many wonderful opportunities for your summer vacation rental and I’m finding them for customers for my next weekends customers.   

I’m here to report with great enthusiasm that things have changed dramatically for this coming summer season.  Properties are renting and homeowners and renters are delighted.  The surge of rental transactions despite previous weeks of snowstorms and hurricane like winds and rains has not dampened the spirits of those eager to see spring and summer ushered in.  Plans to enjoy the most wonderful beaches in America has created a "wave" of summer renters who are also seriously contemplating purchasing a home, as the interest rates remain steady, if only for a short time more.

As I do my research to look up listings and preview those I am about to show to rental customers, I am both pleased and a bit frustrated to find so many have already rented.  As a result, fewer homeowners are ringing my iPhone and asking me about the current rental market. Still there remain many fantastic summer rental properties that you will fall in love with…and may even decide you want to own!  

Come on out and select from our many hundreds of beautiful homes for rent…from a small summer cottage to a luxurious estate…we have them all!  I’m here to show you your dream retreat!   Remember, last year is just that…last year…we’re a happy Hamptons again!

Susan McGraw Keber  Associate Broker SVP  Town & Country Real Estate  Southampton Office

Eve Robin Jarrett
MANAGING DIRECTOR
Senior Mortgage Consultant
Manhattan Mortgage
Office: 631-324-1555 x 25
Blackberry: 631-697-3366
e-Fax: 631-514-3654
Email: EJarrett@manhattanmortgage.com

For the week of Mar 22, 2010 // Vol. 8, Issue 12
Last Week in Review

“I WILL ACT NOW. I WILL ACT NOW. I WILL ACT NOW. ” Og Mandino. And wondering what kind of action will happen on Healthcare reform was certainly on everyone’s mind last week. But what does this mean for the markets and home loan rates?

Traders have been watching the debate closely, and it’s possible that passage of the Healthcare Bill could have a negative impact on the Stock market. If this is the case, there could in turn be a positive outcome for Bonds and home loan rates.

But that’s not the only action traders were keeping an eye on last week. Tuesday’s meeting of the Federal Open Market Committee offered little surprise, with no change to the Fed Funds Rate, which is the rate banks charge each other for lending overnight, or the language describing that the Fed Funds Rate would remain “exceptionally low for an extended period of time.”

While there is growing and well-warranted concern that continuing to keep rates low will lead to inflation down the road…and remember, inflation is the arch enemy of bonds and home loan rates…it does appear that inflation is subdued at present. Last week’s reports showed that the Producer Price Index (PPI), which gauges inflation at the wholesale level, was reported well below expectations and at the largest monthly decline since July 2009. Meanwhile, the Consumer Price Index (CPI), which measures inflation at the consumer level, came in just below expectations for February.

And there were additional headlines last week on other possible action that could impact Bonds and home loan rates negatively. Both Fitch Ratings and Moody’s have stated that the US has moved substantially closer to losing its AAA credit rating. This would be a very bad turn of events, as it would cost the US a lot more money in interest payments, by way of higher rates, to attract new investors to buy our Bonds. And higher rates on Treasuries would influence home loan rates higher as well.

If you or someone you know would like to learn more about how you can take advantage of today’s low-rate environment, or the Homebuyer’s Tax Credit which is due to expire on April 30, give me a call.

Bonds were able to improve above important technical levels in the middle of the week, but were unable to hang on to these improvements. As a result, Bonds and home loan rates ended the week about the same as where they began.

SPRING IS IN THE AIR, WHICH MEANS IT’S TIME TO TAKE SOME CLEANING ACTION! CHECK OUT THIS WEEK’S MORTGAGE MARKET GUIDE VIEW FOR SOME SAFE AND HEALTHY SPRING CLEANING TIPS.

Forecast for the Week

The action during Sunday’s healthcare vote will almost certainly impact the markets in the coming week, and there is also a full slate of economic reports to watch for. First up, there will be a double-dose of housing news with Tuesday’s Existing Home Sales Report and Wednesday’s New Home Sales Report.

Also, on Wednesday we’ll get a read on the health of the economy with the Durable Goods Report, which gives us an update on consumer and business buying behavior on big ticket items that last for an extended period of time. Friday will bring another read on the economy with the Gross Domestic Product Report, which is the broadest measure of economic activity.

Not to be missed will be Thursday’s weekly Initial Jobless Claims Report. While last week’s initial claims were essentially inline with expectations, the ugly component of the report was the 5,888,048 people collecting EUC (Emergency Unemployment Compensation) benefits. This is a whopping 360,000 person increase from the prior week. Unfortunately, the labor market continues to be very weak.

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, despite midweek volatility, Bonds and home loan rates ended the week very near where they began. With all the action in store, I’ll be watching closely to see in what direction the markets and rates move this week. As always, please feel free to call or email to get more information on what the current rate climate means to you.

Chart: Fannie Mae 4.5%% Mortgage Bond (Friday Mar 19, 2010)

The Mortgage Market View…

Safe Spring Cleaning for Your Home and Family

Many parts of the country are already warming up to spring…and that means spring cleaning. But have you ever considered what you’re using to clean your home…and if it’s really safe for your family? The problem with cleaning products is that there is very little regulation and virtually no labeling requirements.

“A lot of cleaning products contain toxic ingredients that aren’t properly regulated, disclosed, or in some cases even tested,” said Sara Mohs, co-founder of simplyneutral™, a company that promotes sustainable living through non-toxic cleaners.

In fact, most household cleaners are produced using a petroleum-based formula. That’s right, petroleum! In addition, they typically include chemicals, fragrances, and dyes that can be irritating to your eyes, skin, and respiratory tract.

In light of last week’s Poison Prevention Week, here’s a list of natural alternatives that work great and are probably already in your pantry:

Baking soda – We all know that baking soda absorbs odors, especially in refrigerators, but did you know it’s also a simple and effective cleaner? Just mix baking soda with warm water for an inexpensive cleaner comparable to commercial “abrasive” cleaners.

Vinegar – White vinegar is actually a deodorizer and a disinfectant…making it a great all-purpose cleaner. Avoid using vinegar solutions on marble or grout, but it’s perfect for all of the other surfaces in the kitchen and bathroom.

Lemon juice – Use lemon juice on hard-water stains, soap scum, even rust stains in the shower, tub, and toilet. Mix lemon juice with salt to remove stubborn stains from coffee pots. Or you can mix lemon juice with baking soda for a softer, paste-like cleaning solution. Add a little to olive oil for an effective wood polish. Blend it with water to make a potent air freshener.

Cornstarch – Cornstarch makes an effective glass and surface cleaner. Plus, you can combine 2 tbsp of cornstarch with 3/4 cup of baking soda for an inexpensive carpet freshener.

Borax – Also known as sodium borate, borax is best known as a hard-water laundry soap, but it also cleans wallpaper, painted walls, and other painted surfaces.

In addition to these natural ingredients, there are also a number of non-toxic cleaners that can be bought in stores. But make sure you consider a couple of points before making your purchase.

First, read the label carefully. “Although a cleaner may contain natural ingredients, it may also include dyes, fragrances, or synthetic preservatives,” Mohs said. “For example, if the label says fragrances are added, it may contain up to 150 synthetic chemicals.”

Second, you may want to take a quick look at the company itself to see if it is serious about producing natural cleaners that are safe for your family, your home, and the environment.

For more information and tips about non-toxic cleaning, visit www.simplyneutral.com.

The Week’s Economic Indicator Calendar

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 March 22 – March 26
Date ET Economic Report For Estimate Actual Prior Impact
Tue. March 23 10:00 Existing Home Sales Feb 5.00M 5.05M Moderate
Wed. March 24 08:30 Durable Goods Orders Feb 0.5% 2.6% Moderate
Wed. March 24 10:00 New Home Sales Feb 315K 309K Moderate
Wed. March 24 10:30 Crude Inventories 3/20 NA 1.01M Moderate
Thu. March 25 08:30 Jobless Claims (Initial) 3/20 450K 457K Moderate
Fri. March 26 08:30 Gross Domestic Product (GDP) Q4 5.9% 5.9% Moderate
Fri. March 26 08:30 GDP Chain Deflator Q4 0.4% 0.4% Moderate
Fri. March 26 10:00 Consumer Sentiment Index (UoM) Mar 73.0 72.5 Moderate

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 not without errors.

As your trusted advisor, I am sending you the Manhattan Mortgage Company Mortgage Weekly Update 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: ejarrett@manhattanmortgage.com

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

Eve Robin Jarrett
Manhattan Mortgage
75 Main Street, 2nd Floor
East Hampton, NY 11937
The Manhattan Mortgage Company is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated. The Manhattan Mortgage Company 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.

If you can’t see the newsletter, or would like to view it online, use this link If you have received this newsletter indirectly and would like to be added to our weekly distribution list, use this link
Eve Robin Jarrett
MANAGING DIRECTOR
Senior Mortgage Consultant
Manhattan Mortgage
Office: 631-324-1555 x 25
Blackberry: 631-697-3366
e-Fax: 631-514-3654
Email: EJarrett@manhattanmortgage.com

For the week of Mar 15, 2010 // Vol. 8, Issue 11
Last Week in Review

“IF WE HAD NO WINTER…THE SPRING WOULD NOT BE SO PLEASANT.” 17th-Century poet Anne Bradstreet’s words ring true not only for the seasons, but also for last week’s Retail Sales numbers. Just days before Sunday’s “spring forward” into Daylight Savings Time, the retail sector looked to be unfreezing and showing at least a little spring in its step.

As you can see in the chart below, Retail Sales for February were reported last Friday at 0.3%, which was better than the previous month’s reading and much better than the -0.2% expected. Despite the good news, however, we need to keep in mind that it will be subject to future revisions – just like we saw in Friday’s report, in which last month’s decent 0.5% reading was revised sharply lower to just 0.1%.

———————–
Chart: Retail Sales (Month-Over-Month)

The better-than-expected Retail Sales was good news for the economy, but it could also lead to inflation trouble ahead. Remember, inflation is the archenemy of Bonds. Just last week, fears of inflation in China pressured Bonds around the globe. And here in the US, a number of Fed members have already mentioned inflation as an increasing concern.

And it isn’t just Fed officials who have been warning against inflation; investors around the globe are having increased doubts. Massive debt and massive balance sheet expansion – combined with near zero interest rates for a long period of time – will no doubt conjure a recipe for inflation.

The question is this: Once inflation rears its ugly head…will the Fed have the courage and the will to kill the monster by tightening policy, amidst enormous political pressure not to do so? As you’ll see in the Forecast section below, the next Fed meeting is taking place this week, and the Policy Statement released on Tuesday will garner intense scrutiny.

WHILE THE ECONOMY HAS BEEN SHOWING SOME SIGNS OF RECOVERY LATELY, MANY FOLKS STILL NEED HELP IMPROVING THEIR OWN FINANCIAL PICTURES. CHECK OUT THE MORTGAGE MARKET GUIDE VIEW ARTICLE BELOW FOR A VIDEO FEATURING FIVE WAYS TO GET OUT DEBT FASTER.

Forecast for the Week

There’s a lot of news on tap for this week, starting off right away Monday with the Empire State Index, Industrial Production and Capacity Utilization. These reports will give us a look at the manufacturing sector – and any bad news could certainly shake up the markets.

We’ll also see an update on the health of the new construction sector of the housing market, with reports on Building Permits and Housing Starts coming on Tuesday.

Perhaps the biggest news of the week will be the inflation news carried in the Producer Price Index on Wednesday and the Consumer Price Index on Thursday. As stated above and in the chart below, hints of inflation fears have the potential to negatively impact the markets – and can quickly drive Bond prices lower and home loan rates higher. The news from these reports will be even more interesting, since they come just after the Fed’s Monetary Policy and Fed Funds Rate decision on Tuesday…and many members of the Fed have lately been expressing their growing concerns about inflation. The Policy Statement following the Fed meeting is always dissected carefully – but with the rising fears of the inflation genie escaping the bottle, this Statement takes on even more significance.

Remember: Overall, 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, inflation fears pushed Mortgage Bonds below two key technical levels last week…and those levels now may become “ceilings of resistance” for Bonds, making it harder for them to improve.

Chart: Fannie Mae 4.5%% Mortgage Bond (Friday Mar 12, 2010)

The Mortgage Market View…

5 Ways to Get Out of Debt Faster

Making smart choices with your money is always a good idea, but it’s especially important if you are working to become debt free. Check out this video from www.Kiplinger.com for 5 ways to get out of debt faster.

The Week’s Economic Indicator Calendar

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 March 15 – March 19
Date ET Economic Report For Estimate Actual Prior Impact
Mon. March 15 08:30 Empire State Index Mar 23.45 24.91 Moderate
Mon. March 15 09:15 Capacity Utilization Feb 72.3% 72.6% Moderate
Mon. March 15 09:15 Industrial Production Feb 0.0% 0.9% Moderate
Tue. March 16 08:30 Building Permits Feb 602K 622K Moderate
Tue. March 16 08:30 Housing Starts Feb 570K 591K Moderate
Tue. March 16 02:15 FOMC Meeting .25% .25% HIGH
Wed. March 17 10:30 Crude Inventories 3/13 NA 1.43M Moderate
Wed. March 17 08:30 Producer Price Index (PPI) Feb -0.2% 1.4% Moderate
Wed. March 17 08:30 Core Producer Price Index (PPI) Feb 0.1% 0.3% Moderate
Thu. March 18 08:30 Core Consumer Price Index (CPI) Feb 0.1% 0.2% HIGH
Thu. March 18 08:15 Consumer Price Index (CPI) Feb 0.1% 0.2% Moderate
Thu. March 18 08:30 Jobless Claims (Initial) 3/13 450K 462K Moderate
Thu. March 18 10:00 Index of Leading Econ Ind (LEI) Feb 0.2% 0.3% Low
Thu. March 18 10:00 Philadelphia Fed Index Mar 18.0 17.6 HIGH

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 not without errors.

As your trusted advisor, I am sending you the Manhattan Mortgage Company Mortgage Weekly Update 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: ejarrett@manhattanmortgage.com

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

Eve Robin Jarrett
Manhattan Mortgage
75 Main Street, 2nd Floor
East Hampton, NY 11937
The Manhattan Mortgage Company is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated. The Manhattan Mortgage Company 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.

you can’t see the newsletter, or would like to view it online, use this link If you have received this newsletter indirectly and would like to be added to our weekly distribution list, use this link
Eve Robin Jarrett
MANAGING DIRECTOR
Senior Mortgage Consultant
Manhattan Mortgage
Office: 631-324-1555 x 25
Blackberry: 631-697-3366
e-Fax: 631-514-3654
Email: EJarrett@manhattanmortgage.com

For the week of Mar 01, 2010 // Vol. 8, Issue 9
Last Week in Review

“LIKE SLUGGISH WATERS THROUGH A MARSH…” The poet Sir Walter Scott wasn’t talking about the economic recovery, but his words paint a pretty vivid picture…and after last week’s economic reports, perhaps a pretty accurate one on the state of the recovery.

Last week’s Gross Domestic Product (GDP) report showed that the economy grew 5.9% in the 4th quarter of 2009, which was in line with expectations and the best GDP reading in more than 6 years – which on the surface, sounds like a great number. However, the gains came from rebuilding of inventory and very modest business spending – not from consumer spending. The biggest component of GDP is consumer spending and the revised number on that front came in lower than expected, and far worse than the 3rd Quarter of 2009, when the government’s Cash for Clunkers program temporarily boosted sales.

On the housing front, Existing Home Sales for January were reported at 5.05 Million units, which was less than expectation of 5.44 Million. As you can see from the chart below, Existing Home Sales have now declined for two consecutive months. New Home Sales for January were also reported below expectations last week.

Odds are that inclement weather affected the housing market negatively in January – since people are less likely to go house hunting in the midst of snowstorms and freezing temperatures. But in any case, last week’s data demonstrated that the housing market remains a bit lethargic.

The good news is that today’s affordable home prices and amount of supply on the market – not to mention low rates and the government’s Homebuyers Tax Credit – present tremendous opportunities for homebuyers who are looking for a great deal.

———————–
Chart: Existing Home Sales (By Month)

So how do consumers feel about the economy? Last week, we got a look at two different reports…and both indicated that consumers don’t share the rosy outlook of politicians and the media. Consumer Confidence was reported at 46.0, which was much lower than expectations of 55.0. In addition, the University of Michigan reported that Consumer Sentiment also fell in February. Both reports pointed to ongoing concerns over employment as a major reason for the drop in consumer attitudes about the economy.

To help make ends meet during the recession, some consumers have turned to earning cash as a landlord. If you or someone you know is considering doing the same, read the view article below for important advice to help make sure you’re successful!

Forecast for the Week

This will be a big week of news, starting off right away Monday morning with reports on Personal Income and Personal Spending. We’ll also get a look at the Core Personal Consumption Expenditure (PCE), which is the Fed’s favorite gauge of inflation.

As if that weren’t enough news for one day, we’ll also see the Institute for Supply Management Index on Monday. This is the king of all manufacturing indices and is considered the single best snapshot of the factory sector, so the markets will be paying attention to this report.

Toward the end of the week, we’ll get another look at employment and housing with the reports on Initial Jobless Claims and Pending Home Sales on Thursday.

Finally, the week ends with a bang when the official Jobs Report is released. This report includes the latest government data on job losses and the unemployment rate, as well as the average work week and hourly earnings. With the ongoing concerns over the struggling job market, it will be important to get a current read on the situation.

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, Mortgage Bonds were able to rally last week on weak housing numbers and the struggling jobs market, resulting in improved home loan rates. I’ll be watching carefully in the week ahead to see if Bonds and home loan rates can build on their positive momentum.

Chart: Fannie Mae 4.5%% Mortgage Bond (Friday Feb 26, 2010)

The Mortgage Market View…

Being a Successful Landlord

These days, some homeowners are choosing to rent out all or part of their home to help pay for their mortgage costs. But being a successful landlord is more than just sitting back and collecting the rent. Here are some tips to help if you ever choose to become a landlord.

Charge a Fair Price: All real estate is local, and the best and quickest way to success is to know your marketplace and what you can expect to charge for a fair rent in your area. Some things you can do to determine a fair price include studying local classified ads, scouring the Internet, and finding out what neighbors are charging for rent.

Write the Right Ad: Getting the right tenant is even more important than picking the right price to charge. Attract the right tenants with ad phrases such as “good credit and references,” “no pets,” “no smokers,” etc.

Create a Thorough Application Process: Be sure to require proof of identity, past addresses and landlord contact information, employment information, and references. Also, ask questions like how many people will be living with the applicant and how long they plan to rent.

Check References EVERY Time: Call their previous landlords and ask if the rent was paid on time. Find out how the property was left when they vacated. Were the tenants loud and troublesome? Did they complain a lot? Did they report small repairs in a timely manner? It’s easier to avoid a bad tenant now than to try and evict one later.

A Final Creative Idea: Before signing the deal, make an unexpected visit to your prospective tenants’ current apartment or residence. You will get a good look at how they keep their home as it is likely to be the way they keep yours.

And Always Ask the Experts: Be sure to check with your tax professional to make sure you file your taxes correctly and to see if there are any rebates or other benefits you qualify for.

Some people choose to be landlords, while others have it thrust upon them due to market conditions. Either way, taking the steps mentioned here will help make the experience more successful for everyone involved.

The Week’s Economic Indicator Calendar

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 March 01 – March 05
Date ET Economic Report For Estimate Actual Prior Impact
Mon. March 01 01:00 Personal Income Jan 0.4% 0.4% Moderate
Mon. March 01 01:00 Personal Spending Jan 0.4% 0.2% Moderate
Mon. March 01 01:00 Personal Consumption Expenditures and Core PCE Jan 0.1% 0.1% HIGH
Mon. March 01 01:00 Personal Consumption Expenditures and Core PCE YOY NA 1.5% HIGH
Mon. March 01 10:00 ISM Index Feb 58.0 58.4 HIGH
Wed. March 03 08:15 ADP National Employment Report Feb -35K -22k HIGH
Wed. March 03 02:00 Beige Book Moderate
Wed. March 03 10:00 ISM Services Index Feb 51.0 50.5 Moderate
Thu. March 04 08:30 Productivity Q4 6.2% 6.2% Moderate
Thu. March 04 10:00 Pending Home Sales Jan 1.7% 1.0% Moderate
Thu. March 04 08:30 Jobless Claims (Initial) 2/27 NA 496K Moderate
Fri. March 05 08:30 Unemployment Rate Feb 9.8% 9.7% HIGH
Fri. March 05 08:30 Hourly Earnings Feb 0.2% 0.2% HIGH
Fri. March 05 08:30 Non-farm Payrolls Feb -20K -20K HIGH
Fri. March 05 08:30 Average Work Week Feb 33.7 33.9 HIGH

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 not without errors.

As your trusted advisor, I am sending you the Manhattan Mortgage Company Mortgage Weekly Update 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: ejarrett@manhattanmortgage.com

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

Eve Robin Jarrett
Manhattan Mortgage
75 Main Street, 2nd Floor
East Hampton, NY 11937
The Manhattan Mortgage Company is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated. The Manhattan Mortgage Company 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.

If you have received this newsletter indirectly and would like to be added to our weekly distribution list, use this link
Eve Robin Jarrett
MANAGING DIRECTOR
Senior Mortgage Consultant
Manhattan Mortgage
Office: 631-324-1555 x 25
Blackberry: 631-697-3366
e-Fax: 631-514-3654
Email: EJarrett@manhattanmortgage.com

For the week of Feb 15, 2010 // Vol. 8, Issue 7
Last Week in Review

“IT AIN’T OVER TIL IT’S OVER.” Yogi Berra. And whether you find those words deeply wise or simply puzzling…The Fed has told us repeatedly that their massive purchasing program of Mortgage Backed Securities is just about over – and this translates to home loan rates rising in the near future.

As you can see in the chart below, the amounts of Mortgage Backed Securities the Fed is purchasing are slowly dwindling, as the program is set to wrap up by March 31st, and are clearly trying to ration out the remaining portion. Last week, the Fed purchased $11 Billion in Mortgage Backed Securities, which leaves them with $66 Billion to spend out of their original $1.25 Trillion allotment. So about 95% of the total has already been spent and has purchased about 3 out of every 4 home loans during the past year. When such a large buyer leaves the market, it is very likely that prices will worsen.

This is very important because as the Fed has less money to last through the remaining months of the program, their ability to keep home loan rates low via their purchasing power will wane. And those who can take advantage of currently low home loan rates do not wait, as the clock on these historically low rates is ticking.

———————–
Chart: The Fed’s Purchase of MBS (By Month)

Also last week, Fed Chairman Ben Bernanke provided a speech on a number of topics, perhaps the most important of these being switching the Fed’s benchmark from the commonly watched and monitored Fed Funds Rate, to a new benchmark of “interest paid on excess reserves”. Banks are required to keep money on reserve with the Fed and may, from time to time, have an excess in those reserves, which the Fed can pay interest on. Since the Fed Funds Rate is only a “target rate”, banks can still lend money to other bank overnight at their own negotiated rate. Sometimes near the end of the trading day, banks have been lending their excess reserves out overnight for a rate that differs from the Fed Funds Rate, but is higher than interest on those reserves from The Fed. This undermines the Fed’s ability to set a reliable benchmark.

The Fed wants to fix this by using the amount of interest they pay as the new benchmark, since the Fed has total control of this rate, which should be right at or just under the Fed Funds Rate.

There is one major take-away from this discussion – it appears that the Fed is getting their ducks in a row as they prepare to push interest rates higher. And when they do increase rates, the Fed does not want any obstacles that may undermine their plan.

AND SPEAKING OF OBSTACLES THAT COULD CAUSE PROBLEMS…WATER DAMAGE CAN WREAK HAVOC ON YOUR HOME AND YOUR FINANCES, AND IS ESPECIALLY IMPORTANT TO WATCH OUT FOR DURING COLD WINTER MONTHS. CHECK OUT THE MORTGAGE MARKET VIEW ARTICLE BELOW FOR TIPS ON PROTECTING YOUR HOME!

Forecast for the Week

The financial markets will be closed on Monday in observance of Presidents Day, and in terms of economic reports, there won’t be much action until midweek. On Wednesday, we’ll get a look at the health of the housing industry with reports on Housing Starts and Building Permits for January.

It will be interesting to watch the housing reports over the next several months, as many people are acting to take advantage of currently low home loan rates that may be on the rise soon, as well as the potential of a juicy tax credit. Remember – the Homebuyers Tax Credit is only available on homes purchased with a contract date before April 30th, and the transaction must settle by June 30th.

We’ll also get an update on inflation this Thursday, as the Producer Price Index will be released. This index measures price changes for wholesalers, and prefaces the more important Consumer Price Index coming on Friday, which measures changes in the price paid by consumers for goods and services. These reports are both particularly important, as the Fed will be watching very carefully for any signs of inflation. If inflation begins to rise, the Fed will have no choice but to begin to hike rates to fight off the dangers that inflation could pose to our economy.

In addition to those reports, we’ll get our weekly look at employment through the Initial Jobless Claims data. Last week’s report showed some encouraging signs, but there is still a long way to go before we’ll see stabilization in the Unemployment Rate and some meaningful job creation. At the moment, 6.3 Million people remain unemployed for over six months – an increase of 5 million since the start of the recession in December of 2007. To reach the White House’s projection of a 6% unemployment rate by 2015, the US would need to create 225,000 jobs per month, every month, for the next five years. But that kind of long term job growth has never been seen before. The year 2006, was the only year in US history that had job gains average over 225,000. But that was for just a single year – doing it for five years may be too much of a stretch.

Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bond prices and home loan rates improve, while strong economic news normally has the opposite result.

As you can see in the chart below, Bond prices fell early last week due to weak results from the Treasury auctions, but were able to rally towards the end of the week. When Bond prices are moving higher, home loan rates are improving – so I’ll be watching out to see if the current ground can be held. If you have any questions about how home loan rates move – and if an opportunity exists that would benefit you – please don’t hesitate to call or email me.

Chart: Fannie Mae 4.5%% Mortgage Bond (Friday Feb 12, 2010)

The Mortgage Market View…

Keeping Your Home Safe from Water Damage

Preventing water damage in your home is important at any time of year, but particularly in the winter when the cold weather can wreak havoc on plumbing. Here are some tips to make sure your water bill is as low as it should be…and that your home is as safe and dry as it needs to be:

Pay attention to your bill: Major fluctuations in water usage from one month to the next could mean that you have a problem. Taking just a few minutes to look at your bill each month could make a big difference in your wallet!

Inspect appliances: While much of your home’s plumbing can be hidden behind walls and cabinets, most of your appliances that use water can be easily inspected for potential leaks. Each month, take the time to inspect areas around your water heater, dishwasher, refrigerator, washing machine, sinks, and toilets. If any hoses or seals appear old or damaged, replace them. Also, inspect and repair obvious caulking and tile grout damage. It’s a small price to pay for what could be expensive repairs later.

Inspect the sewer line: Clear away build-up and roots from around your sewer line. Obstructions in this area could create major plumbing problems in the future.

Check your water pressure annually: This is easier than it sounds. Simply purchase a pressure gauge and attach it to the hose faucet. Normal results should range from 45 to 65 pounds per square inch (psi). A reading above 65 psi is considered high and could lead to problems down the line.

Find and fix leaks quickly: Make a habit of checking the main fixtures regularly so that when something out of the ordinary occurs you will notice it and take action immediately. Sometimes, however, slow water leaks aren’t very obvious. A great way to discover hidden leaks is to look for stains in areas where water is often used. For example, if you see even small stains on the cabinet floors beneath the sink in the kitchen or bathrooms, you could have a problem. Warm spots in the floor or tiles could also be an indication of hidden water damage.

Before a vacation: The worst thing to come home to after a great vacation is major water damage. Consider turning off your water while you’re gone. For many homeowners there is a separate shut-off valve for the home that doesn’t affect your irrigation system.

The bottom line is that a little time and effort can make a big difference when it comes to keeping your home safe and dry, and your expenses at a minimum!

The Week’s Economic Indicator Calendar

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 February 15 – February 19
Date ET Economic Report For Estimate Actual Prior Impact
Wed. February 17 08:30 Building Permits Jan 615K 653K Moderate
Wed. February 17 02:00 FOMC Minutes 1/27 HIGH
Wed. February 17 09:15 Industrial Production Jan 0.8% 0.6% Moderate
Wed. February 17 09:15 Capacity Utilization Jan 72.6% 72.0% Moderate
Wed. February 17 08:30 Housing Starts Jan 580K 557K Moderate
Thu. February 18 08:30 Producer Price Index (PPI) Jan 0.8% 0.2% Moderate
Thu. February 18 08:30 Core Producer Price Index (PPI) Jan 0.1% 0.0% Moderate
Thu. February 18 10:00 Index of Leading Econ Ind (LEI) Jan 0.5% 1.1% Moderate
Thu. February 18 10:00 Philadelphia Fed Index Feb 17.0 15.2 HIGH
Thu. February 18 08:30 Jobless Claims (Initial) 2/13 430K 440K Moderate
Fri. February 19 08:30 Consumer Price Index (CPI) Jan 0.3% 0.1% HIGH
Fri. February 19 08:30 Core Consumer Price Index (CPI) Jan 0.2% 0.1% HIGH

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 not without errors.

As your trusted advisor, I am sending you the Manhattan Mortgage Company Mortgage Weekly Update 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: ejarrett@manhattanmortgage.com

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

Eve Robin Jarrett
Manhattan Mortgage
75 Main Street, 2nd Floor
East Hampton, NY 11937
The Manhattan Mortgage Company is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated. The Manhattan Mortgage Company 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.

Subject: MMG Weekly: A Look Behind the Curtain at the Jobs Report

If you can’t see the newsletter, or would like to view it online, use this link If you have received this newsletter indirectly and would like to be added to our weekly distribution list, use this link
Eve Robin Jarrett
MANAGING DIRECTOR
Senior Mortgage Consultant
Manhattan Mortgage
Office: 631-324-1555 x 25
Blackberry: 631-697-3366
e-Fax: 631-514-3654
Email: EJarrett@manhattanmortgage.com

For the week of Feb 08, 2010 // Vol. 8, Issue 6
Last Week in Review

“BOTH OPTIMISTS AND PESSIMISTS CONTRIBUTE TO OUR SOCIETY. THE OPTIMIST INVENTS THE AIRPLANE, AND THE PESSIMIST – THE PARACHUTE.” G.B. Stern. And last week’s Jobs Report had something for both optimists and pessimists, as the numbers were both good and bad…depending on which survey you looked at, and what numbers you focused on.

First, the headline numbers: The Labor Department reported that there were 20,000 jobs lost in January, which was worse than expectations of 15,000 jobs gained. However, the Unemployment Rate came in lower at 9.7%, down from last month’s read of 10.0%. But what do these numbers actually tell us?

Remember that the numbers in the Jobs Report come from two separate surveys: First, the Business Survey – also called the Establishment Survey or Current Employment Statistics Survey – which surveys about 140,000 businesses and government agencies. It uses something called the “birth/death ratio” to provide an estimate of the number of jobs gained or lost each month. This survey is used to report the headline number of jobs gained or lost. Now there is also the Household Survey, also known as the Current Population Survey, which uses actual phone calls to 50 – 60,000 households to gather its data. This survey is used to report the headline Unemployment Rate.

The Business Survey is very susceptible to inaccuracy, particularly during times when the labor market is substantially worsening or improving…and you don’t need to look much further than all the revisions to prior reports to see how inaccurate the report seems to be. December’s report was revised to 150,000 jobs lost, nearly doubling the original report of 85,000 job losses. Although November showed 60,000 additional gains – wait a minute – October’s revisions showed another 100,000 jobs lost. And if that weren’t enough, the Business Survey threw in a “Benchmark Revision”, which indicated that there were an additional 900,000 jobs lost from March 2008 – March 2009 from what was previously reported!

———————–
Chart: Non-farm Payroll Change and Revisions

So what about the other report, the Household Survey? It gives us the headline Unemployment Rate, which was reported at 9.7%. That’s an improvement over last month’s reading of 10.0%. But this survey has its own job creation or loss number, just like the Business Survey does. The Household Survey showed that 540,000 jobs were created during January, which is really good news, and explains why the Unemployment Rate declined in the face of the Business Survey showing job losses.

There are definitely some glimmers of hope for the job market – but any way you look at it, the bottom line is that continued and significant improvements need to be seen in the labor market before the economy can be considered out of the woods.

Another important note for the week – Pending Home Sales for December were up significantly from November’s reading, and up a healthy 10.9% over December 2008, as homebuyers take advantage of today’s low rates and tax incentives. And speaking of low home loan rates, the Federal Reserve purchased $12 billion in Mortgage Backed Securities last week, bringing the total to $1.173 trillion since the program began in January of 2009…which leaves just $77 billion in purchases to be made over the next eight weeks until the program ends on March 31st. While home loan rates improved very slightly during this volatile week – don’t forget that when the Fed is done buying, home loan rates will be very susceptible to moving higher. Please reach out to me to discuss how you or someone you know might benefit from current low rates, or the Homebuyers Tax Credit. The clock is ticking on both these fronts – so why wait?

THE NEW MILEAGE RATES ARE HERE! THE NEW MILEAGE RATES ARE HERE! OKAY…NEWS FROM THE IRS ISN’T NECESSARILY ALL THAT EXCITING, BUT YOU DON’T WANT TO MISS OUT ON A SINGLE TAX DEDUCTION YOU MIGHT HAVE COMING. CHECK OUT THIS WEEK’S MORTGAGE MARKET GUIDE VIEW FOR THE DETAILS.

Forecast for the Week

We have a quiet week ahead when it comes to economic reports, but whether that’s good or bad news remains to be seen. Be sure to look for Thursday’s Initial Jobless Claims Report, as last week’s numbers came in at 480,000, quite a bit worse than the 455,000 expected and the highest count since mid-December. Last week’s Continuing Claims increased slightly to 4.6 million, and remember this…the Continuing Claims number doesn’t even account for the nearly 6 million people whose Unemployment benefits have expired, and are now receiving Extended Emergency Unemployment benefits.

Also on tap for Thursday is the Retail Sales Report for January. This report is the most-timely indicator of broad consumer spending patterns, and it is important to see in which direction the numbers are moving. And the Treasury will be auctioning $40B in 3-year Notes on Tuesday, $25B in 10-years on Wednesday and $16B in 30-year Bonds on Thursday for a total of $81B. These auctions could move the markets, especially in the face of few scheduled economic reports.

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, Bond prices have been improving of late, but there is tough technical resistance ahead. As always, I’ll be watching closely – so give me a call this week if you’d like an update on the market action!

Chart: Fannie Mae 4.5%% Mortgage Bond (Friday Feb 05, 2010)

The Mortgage Market View…

New Mileage Rates for 2010

If you drive a car, truck or van for work, you’ll want to make sure you know the standard mileage rates that the Internal Revenue Service (IRS) has set for 2010. And remember, these mileage rates are not just used to calculate deductible costs for driving an automobile for business, but also for charitable, medical or moving purposes.

New for 2010

As of January 1, 2010, the standard mileage rates are as follows:

Businesses = 50 cents per mile driven
Medical or moving = 16.5 cents per mile driven
Charitable organizations = 14 cents per mile driven

Note: The 2010 rates are slightly lower than last year’s, due to generally lower transportation costs as compared to a year ago.

Make Sure You Qualify

Before you calculate your deduction, make sure you qualify. The IRS reminds taxpayers that they cannot use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for any vehicle used for hire or for more than four vehicles used simultaneously.

Additional Option

Although the IRS provides the standard mileage rate for ease and convenience, you’re not required to use it. If you prefer, you can calculate the actual costs of using your vehicle instead of using the standard mileage rates.

Best yet – most people find that they save money on taxes by working with a tax professional. Let me know if you need a referral!

The Week’s Economic Indicator Calendar

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 February 08 – February 12
Date ET Economic Report For Estimate Actual Prior Impact
Wed. February 10 08:30 Balance of Trade Dec -$35.0B -$36.4B Moderate
Thu. February 11 08:30 Jobless Claims (Initial) 2/6 NA 480K Moderate
Thu. February 11 08:30 Retail Sales Jan 0.4% -0.3% HIGH
Thu. February 11 08:30 Retail Sales ex-auto Jan 0.4% -0.2% HIGH
Fri. February 12 10:00 Consumer Sentiment Index (UoM) Feb 74.8 74.4 Moderate

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 not without errors.

As your trusted advisor, I am sending you the Manhattan Mortgage Company Mortgage Weekly Update 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: ejarrett@manhattanmortgage.com

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

Eve Robin Jarrett
Manhattan Mortgage
75 Main Street, 2nd Floor
East Hampton, NY 11937
The Manhattan Mortgage Company is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated. The Manhattan Mortgage Company 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.

Subject: MMG Weekly: A Look Behind the Curtain at the Jobs Report

If you can’t see the newsletter, or would like to view it online, use this link If you have received this newsletter indirectly and would like to be added to our weekly distribution list, use this link
Eve Robin Jarrett
MANAGING DIRECTOR
Senior Mortgage Consultant
Manhattan Mortgage
Office: 631-324-1555 x 25
Blackberry: 631-697-3366
e-Fax: 631-514-3654
Email: EJarrett@manhattanmortgage.com

For the week of Feb 08, 2010 // Vol. 8, Issue 6
Last Week in Review

“BOTH OPTIMISTS AND PESSIMISTS CONTRIBUTE TO OUR SOCIETY. THE OPTIMIST INVENTS THE AIRPLANE, AND THE PESSIMIST – THE PARACHUTE.” G.B. Stern. And last week’s Jobs Report had something for both optimists and pessimists, as the numbers were both good and bad…depending on which survey you looked at, and what numbers you focused on.

First, the headline numbers: The Labor Department reported that there were 20,000 jobs lost in January, which was worse than expectations of 15,000 jobs gained. However, the Unemployment Rate came in lower at 9.7%, down from last month’s read of 10.0%. But what do these numbers actually tell us?

Remember that the numbers in the Jobs Report come from two separate surveys: First, the Business Survey – also called the Establishment Survey or Current Employment Statistics Survey – which surveys about 140,000 businesses and government agencies. It uses something called the “birth/death ratio” to provide an estimate of the number of jobs gained or lost each month. This survey is used to report the headline number of jobs gained or lost. Now there is also the Household Survey, also known as the Current Population Survey, which uses actual phone calls to 50 – 60,000 households to gather its data. This survey is used to report the headline Unemployment Rate.

The Business Survey is very susceptible to inaccuracy, particularly during times when the labor market is substantially worsening or improving…and you don’t need to look much further than all the revisions to prior reports to see how inaccurate the report seems to be. December’s report was revised to 150,000 jobs lost, nearly doubling the original report of 85,000 job losses. Although November showed 60,000 additional gains – wait a minute – October’s revisions showed another 100,000 jobs lost. And if that weren’t enough, the Business Survey threw in a “Benchmark Revision”, which indicated that there were an additional 900,000 jobs lost from March 2008 – March 2009 from what was previously reported!

———————–
Chart: Non-farm Payroll Change and Revisions

So what about the other report, the Household Survey? It gives us the headline Unemployment Rate, which was reported at 9.7%. That’s an improvement over last month’s reading of 10.0%. But this survey has its own job creation or loss number, just like the Business Survey does. The Household Survey showed that 540,000 jobs were created during January, which is really good news, and explains why the Unemployment Rate declined in the face of the Business Survey showing job losses.

There are definitely some glimmers of hope for the job market – but any way you look at it, the bottom line is that continued and significant improvements need to be seen in the labor market before the economy can be considered out of the woods.

Another important note for the week – Pending Home Sales for December were up significantly from November’s reading, and up a healthy 10.9% over December 2008, as homebuyers take advantage of today’s low rates and tax incentives. And speaking of low home loan rates, the Federal Reserve purchased $12 billion in Mortgage Backed Securities last week, bringing the total to $1.173 trillion since the program began in January of 2009…which leaves just $77 billion in purchases to be made over the next eight weeks until the program ends on March 31st. While home loan rates improved very slightly during this volatile week – don’t forget that when the Fed is done buying, home loan rates will be very susceptible to moving higher. Please reach out to me to discuss how you or someone you know might benefit from current low rates, or the Homebuyers Tax Credit. The clock is ticking on both these fronts – so why wait?

THE NEW MILEAGE RATES ARE HERE! THE NEW MILEAGE RATES ARE HERE! OKAY…NEWS FROM THE IRS ISN’T NECESSARILY ALL THAT EXCITING, BUT YOU DON’T WANT TO MISS OUT ON A SINGLE TAX DEDUCTION YOU MIGHT HAVE COMING. CHECK OUT THIS WEEK’S MORTGAGE MARKET GUIDE VIEW FOR THE DETAILS.

Forecast for the Week

We have a quiet week ahead when it comes to economic reports, but whether that’s good or bad news remains to be seen. Be sure to look for Thursday’s Initial Jobless Claims Report, as last week’s numbers came in at 480,000, quite a bit worse than the 455,000 expected and the highest count since mid-December. Last week’s Continuing Claims increased slightly to 4.6 million, and remember this…the Continuing Claims number doesn’t even account for the nearly 6 million people whose Unemployment benefits have expired, and are now receiving Extended Emergency Unemployment benefits.

Also on tap for Thursday is the Retail Sales Report for January. This report is the most-timely indicator of broad consumer spending patterns, and it is important to see in which direction the numbers are moving. And the Treasury will be auctioning $40B in 3-year Notes on Tuesday, $25B in 10-years on Wednesday and $16B in 30-year Bonds on Thursday for a total of $81B. These auctions could move the markets, especially in the face of few scheduled economic reports.

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, Bond prices have been improving of late, but there is tough technical resistance ahead. As always, I’ll be watching closely – so give me a call this week if you’d like an update on the market action!

Chart: Fannie Mae 4.5%% Mortgage Bond (Friday Feb 05, 2010)

The Mortgage Market View…

New Mileage Rates for 2010

If you drive a car, truck or van for work, you’ll want to make sure you know the standard mileage rates that the Internal Revenue Service (IRS) has set for 2010. And remember, these mileage rates are not just used to calculate deductible costs for driving an automobile for business, but also for charitable, medical or moving purposes.

New for 2010

As of January 1, 2010, the standard mileage rates are as follows:

Businesses = 50 cents per mile driven
Medical or moving = 16.5 cents per mile driven
Charitable organizations = 14 cents per mile driven

Note: The 2010 rates are slightly lower than last year’s, due to generally lower transportation costs as compared to a year ago.

Make Sure You Qualify

Before you calculate your deduction, make sure you qualify. The IRS reminds taxpayers that they cannot use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for any vehicle used for hire or for more than four vehicles used simultaneously.

Additional Option

Although the IRS provides the standard mileage rate for ease and convenience, you’re not required to use it. If you prefer, you can calculate the actual costs of using your vehicle instead of using the standard mileage rates.

Best yet – most people find that they save money on taxes by working with a tax professional. Let me know if you need a referral!

The Week’s Economic Indicator Calendar

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 February 08 – February 12
Date ET Economic Report For Estimate Actual Prior Impact
Wed. February 10 08:30 Balance of Trade Dec -$35.0B -$36.4B Moderate
Thu. February 11 08:30 Jobless Claims (Initial) 2/6 NA 480K Moderate
Thu. February 11 08:30 Retail Sales Jan 0.4% -0.3% HIGH
Thu. February 11 08:30 Retail Sales ex-auto Jan 0.4% -0.2% HIGH
Fri. February 12 10:00 Consumer Sentiment Index (UoM) Feb 74.8 74.4 Moderate

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 not without errors.

As your trusted advisor, I am sending you the Manhattan Mortgage Company Mortgage Weekly Update 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: ejarrett@manhattanmortgage.com

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

Eve Robin Jarrett
Manhattan Mortgage
75 Main Street, 2nd Floor
East Hampton, NY 11937
The Manhattan Mortgage Company is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated. The Manhattan Mortgage Company 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.

If you have received this newsletter indirectly and would like to be added to our weekly distribution list, use this link
Eve Robin Jarrett
MANAGING DIRECTOR
Senior Mortgage Consultant
Manhattan Mortgage
Office: 631-324-1555 x 25
Blackberry: 631-697-3366
e-Fax: 631-514-3654
Email: EJarrett@manhattanmortgage.com

For the week of Feb 08, 2010 // Vol. 8, Issue 6
Last Week in Review

“BOTH OPTIMISTS AND PESSIMISTS CONTRIBUTE TO OUR SOCIETY. THE OPTIMIST INVENTS THE AIRPLANE, AND THE PESSIMIST – THE PARACHUTE.” G.B. Stern. And last week’s Jobs Report had something for both optimists and pessimists, as the numbers were both good and bad…depending on which survey you looked at, and what numbers you focused on.

First, the headline numbers: The Labor Department reported that there were 20,000 jobs lost in January, which was worse than expectations of 15,000 jobs gained. However, the Unemployment Rate came in lower at 9.7%, down from last month’s read of 10.0%. But what do these numbers actually tell us?

Remember that the numbers in the Jobs Report come from two separate surveys: First, the Business Survey – also called the Establishment Survey or Current Employment Statistics Survey – which surveys about 140,000 businesses and government agencies. It uses something called the “birth/death ratio” to provide an estimate of the number of jobs gained or lost each month. This survey is used to report the headline number of jobs gained or lost. Now there is also the Household Survey, also known as the Current Population Survey, which uses actual phone calls to 50 – 60,000 households to gather its data. This survey is used to report the headline Unemployment Rate.

The Business Survey is very susceptible to inaccuracy, particularly during times when the labor market is substantially worsening or improving…and you don’t need to look much further than all the revisions to prior reports to see how inaccurate the report seems to be. December’s report was revised to 150,000 jobs lost, nearly doubling the original report of 85,000 job losses. Although November showed 60,000 additional gains – wait a minute – October’s revisions showed another 100,000 jobs lost. And if that weren’t enough, the Business Survey threw in a “Benchmark Revision”, which indicated that there were an additional 900,000 jobs lost from March 2008 – March 2009 from what was previously reported!

———————–
Chart: Non-farm Payroll Change and Revisions

So what about the other report, the Household Survey? It gives us the headline Unemployment Rate, which was reported at 9.7%. That’s an improvement over last month’s reading of 10.0%. But this survey has its own job creation or loss number, just like the Business Survey does. The Household Survey showed that 540,000 jobs were created during January, which is really good news, and explains why the Unemployment Rate declined in the face of the Business Survey showing job losses.

There are definitely some glimmers of hope for the job market – but any way you look at it, the bottom line is that continued and significant improvements need to be seen in the labor market before the economy can be considered out of the woods.

Another important note for the week – Pending Home Sales for December were up significantly from November’s reading, and up a healthy 10.9% over December 2008, as homebuyers take advantage of today’s low rates and tax incentives. And speaking of low home loan rates, the Federal Reserve purchased $12 billion in Mortgage Backed Securities last week, bringing the total to $1.173 trillion since the program began in January of 2009…which leaves just $77 billion in purchases to be made over the next eight weeks until the program ends on March 31st. While home loan rates improved very slightly during this volatile week – don’t forget that when the Fed is done buying, home loan rates will be very susceptible to moving higher. Please reach out to me to discuss how you or someone you know might benefit from current low rates, or the Homebuyers Tax Credit. The clock is ticking on both these fronts – so why wait?

THE NEW MILEAGE RATES ARE HERE! THE NEW MILEAGE RATES ARE HERE! OKAY…NEWS FROM THE IRS ISN’T NECESSARILY ALL THAT EXCITING, BUT YOU DON’T WANT TO MISS OUT ON A SINGLE TAX DEDUCTION YOU MIGHT HAVE COMING. CHECK OUT THIS WEEK’S MORTGAGE MARKET GUIDE VIEW FOR THE DETAILS.

Forecast for the Week

We have a quiet week ahead when it comes to economic reports, but whether that’s good or bad news remains to be seen. Be sure to look for Thursday’s Initial Jobless Claims Report, as last week’s numbers came in at 480,000, quite a bit worse than the 455,000 expected and the highest count since mid-December. Last week’s Continuing Claims increased slightly to 4.6 million, and remember this…the Continuing Claims number doesn’t even account for the nearly 6 million people whose Unemployment benefits have expired, and are now receiving Extended Emergency Unemployment benefits.

Also on tap for Thursday is the Retail Sales Report for January. This report is the most-timely indicator of broad consumer spending patterns, and it is important to see in which direction the numbers are moving. And the Treasury will be auctioning $40B in 3-year Notes on Tuesday, $25B in 10-years on Wednesday and $16B in 30-year Bonds on Thursday for a total of $81B. These auctions could move the markets, especially in the face of few scheduled economic reports.

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, Bond prices have been improving of late, but there is tough technical resistance ahead. As always, I’ll be watching closely – so give me a call this week if you’d like an update on the market action!

Chart: Fannie Mae 4.5%% Mortgage Bond (Friday Feb 05, 2010)

The Mortgage Market View…

New Mileage Rates for 2010

If you drive a car, truck or van for work, you’ll want to make sure you know the standard mileage rates that the Internal Revenue Service (IRS) has set for 2010. And remember, these mileage rates are not just used to calculate deductible costs for driving an automobile for business, but also for charitable, medical or moving purposes.

New for 2010

As of January 1, 2010, the standard mileage rates are as follows:

Businesses = 50 cents per mile driven
Medical or moving = 16.5 cents per mile driven
Charitable organizations = 14 cents per mile driven

Note: The 2010 rates are slightly lower than last year’s, due to generally lower transportation costs as compared to a year ago.

Make Sure You Qualify

Before you calculate your deduction, make sure you qualify. The IRS reminds taxpayers that they cannot use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for any vehicle used for hire or for more than four vehicles used simultaneously.

Additional Option

Although the IRS provides the standard mileage rate for ease and convenience, you’re not required to use it. If you prefer, you can calculate the actual costs of using your vehicle instead of using the standard mileage rates.

Best yet – most people find that they save money on taxes by working with a tax professional. Let me know if you need a referral!

The Week’s Economic Indicator Calendar

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 February 08 – February 12
Date ET Economic Report For Estimate Actual Prior Impact
Wed. February 10 08:30 Balance of Trade Dec -$35.0B -$36.4B Moderate
Thu. February 11 08:30 Jobless Claims (Initial) 2/6 NA 480K Moderate
Thu. February 11 08:30 Retail Sales Jan 0.4% -0.3% HIGH
Thu. February 11 08:30 Retail Sales ex-auto Jan 0.4% -0.2% HIGH
Fri. February 12 10:00 Consumer Sentiment Index (UoM) Feb 74.8 74.4 Moderate

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