SOLD (Removed from list)

928 Wendy Lane – Country Club Ct. #1, APN 131-340-01, Rec. 8/27/10, Fremont Investment & Loan, 3110 E. Guasti Rd. #500, Ontario, CA 91761 – Sold for $250,000

810 Alder – Incline Manor #64, APN 132-030-64, Rec. 7/1310, Bank of New York, 4000 Horizon Way, Irvine, TX 75063 – Sold for $180,000

321 Ski Way– Mtn. Shadows #134, APN 126-142-16, Rec. 7/30/10, JPMorgan Chase Bank, 7255 Baymeadows Way, Mailstop: JAXB2007, Jacksonville, FL 32256 – Sold for $205,000

NEW NODs:

916 Harold – Cedarcrest #12, APN 131-140-12, TS#10-32371-EM-NV, NOD Rec. 8/30/10

824 Ellen Ct., APN 125-223-19, TS#141836NV, NOD Rec. 8/30/10

136 Juanita – Couer du Lac #4, APN 127-320-04, TS#NV-10-374180-AB, NOD Rec. 8/27/10

872 Tanager – Pinebrook #26, APN 132-570-09, TS#10-0104076, NOD Rec. 8/27/10

771 Randall, APN 125-253-07, TS#10-32338-WA-NV, NOD Rec. 8/26/10

738 Kelly, APN 124-031-19, TS#NV09004264-10-1, NOD Rec. 8/5/10

NEW NOTICES OFSALE:

391 Willow #4, APN 124-020-04, TS#10-31091-FF-NV, NOD Rec. 4/9/10 – TRUSTEES SALE SCHEDULED ON TUES.. 9/28/10 AT 11AM

118 Rubicon, APN 122-211-04, TS#09-0137100, NOD Rec. 9/14/09 – TRUSTEES SALE POSTPONED UNTIL THURS. 9/23/10 AT 11AM

1308 St. Gallen Ct. , APN 126-522-04, TS#38716, NOD Rec. 9/24//08 & 2/12/09– Bank & HOA – TRUSTEES SALE SCHEDULED ON WED. 9/29/10 AT 11AM

514 Gonowabie, Crystal Bay, APN 123-132-02, TS#GM-191334-C, NOD Rec. 2/10/09 – TRUSTEES SALE POSTPONED UNTIL THURS. 10/7/10 AT 11AM

 As I was preparing this week's national economic commentary, I began to feel the weight of the bad economic data on my chest. I have felt it necessary to deal with that bad news, of course, and to do so in such a way that my clients and readers don't think I'm trying to paint a happy face on seriously bad news. The existing home sales and new home sales reports were, of course, something of a disaster. Their severity can be explained in part by the confusing workings of the homebuyer tax credit programs' demise, but those programs skewed the numbers of sales beyond understanding--so they don't offer up a clear explanation of where we are right now.

I have written several times about the odd fact that very few businesses seem to be hard-pressed for money. If they were, there would be demand for lending, and it would be very difficult to keep rates as low as they are. Similarly, lenders have been rather comfortable in their "carry trades," borrowing short-term and low, and then investing the money in securities rather than in loans with even a little bit of risk. Sounds like a formula for going nowhere fast, and that is what it has been--and may continue to be for several more months. But as people see that there is more money to be made--including people who want to earn more money with which to pay down existing debt--the markets will come more alive.

This is not a foolproof prediction, of course. One of the specialties of this year's economy has been SURPRISE. But we've reached the point where recovery itself would be such a surprise that it would take us a long time to recognize it. Further, it's probably not going to look the way we expect recovery to look. It hasn't thus far.

In any case, we can hope--and we have reason to do so. We've seen recovery in the luxury home market, in certain areas like Inclin Village Nevada and the San Francisco Bay, in formerly comatose markets like Stockton (once the foreclosure capital of the nation), and rising median prices throughout California. Other states are likely to follow this lead--gradually...as California itself moves forward--gradually.

KEY INDICATORS

Gold $1250.20/ounce [up]

Crude Oil (Brent) $75.06/brl [up]

U.S. Dollar to…

    Euro .7912 [up slightly]

    Japanese Yen 84.14 [down]

6-mo Treasury Bill Yield 0.18%

10-yr Treasury Note Yield 2.48%

[6-month unchanged, 10-yr down 2 bps]

11^th Dist Cost of Funds 1.797%[+]

30-yr Fixed-rate Mortgage 4.78%

15-yr Fixed-rate Mortgage 4.24%

1-yr ARM 3.84%

[HSH averages rates: 30-yr

down 2 bps;15-yr down 4 bps; 1-yr ARM down 6 bps]

Mortgage Bankers Association Mortgage Applications Index

week ending 8/20

  Overall

    870.3 (up 4.9%; up 13%

the week prior)

  Purchase Money Loans

    170.5 (up 0.6%; down 3.4%

            the week prior)

  Refinancing Loans

    4944.7 (up 5.7%; up 17.1%

the week prior)

Jobless Claims 8/21

    473,000 – prior week 500,000 – continuing claims at 4.456 m

New Home Sales July

    Down 12.4% m/m – inventory rose to 9.1 months

Gross Domestic Product (GDP) second quarter revision

    Down from 2.4% to 1.6%

Consumer Confidence Aug

    Up from 51 to 53.5

Weekly Commentary

For the past year or more, there has been a nagging question that those offering up negative forecasts have failed to answer: How can the economy be on the edge of another swan dive into recession if most American companies have an unusually large amount of cash stowed in their bank accounts?

There’s a fairly obvious related question, though: Why aren’t American companies busily hiring up new workers when they have plenty of money with which to do so?

The answer to the second question, as we’ve recently seen, is that no one wants to lose money; therefore, until such time as demand for their goods and services looks like it will continue to grow in the future (and not sputter like a wickless candle, as it has seemed ready to do recently), companies can simply hold back on further hiring, comfortable enough because there is plenty of money in their coffers. And most companies have artfully met momentary increases in demand with their existing employees, sometimes abetted by the hiring of temporary workers.

But back to the first question: The inactivity in the markets—including the real estate market—has looked very much like a downward slide. Perhaps, instead, the economy has simply been stuck in the mud, like a bunch of little children standing at the edge of the lake waiting for someone to be the first to actually step into the water.

So instead of going proactive, hiring new workers, making new loans, and pushing the economy into second gear at last, everyone has been waiting. Notice, by the way, that it’s much easier and safer in an uncertain economy to borrow money at rock bottom short terms rates and then invest that money for a secure higher yield than it is to wade into the slightly riskier waters of loaning that money. That will very likely change relatively soon; banks need better yields than the “carry trade” now provides.

With an increasing ability to borrow at favorable terms, and with money already in the banks, businesses are in a position to grow—to hire, to invest, to market themselves aggressively. Before too many months pass, this should be far more obvious to the entire American marketplace, including the real estate marketplace.

NOD's SOLD (Removed from list)

593 N. Dyer Circle, APN 124-082-21, TS#1262451-11, Rec. 8/16/10 - Sold for $539,476

801 Northwood – Incline Manor #21, APN 132-03-021, TS#15717NV, Rec. 8/25/10 – Sold for $160,000

449 Lakeshore (lot), APN 123-250-08, TS#09007287, NOD Rec. 8/4/10

866 Northwood – Northwood Estates #26, APN 124-340-26, TS#136442NV, Rec. 7/20/10 – Sold for $179,500

CANCELLATION OF DEFAULT (Removed from list)

383 Willow Ct. –Tahoe Pines #3, APN 124-390-03, TS#10-31911-LL-NV, Rec. 8/20/10

1311 Moritz Ct. APN 126-460-14, TS#10-0062271, Rec. 7/1/10

929 Southwood, Tahoe Sierra Pines #22, APN 127-500-03, TS#10-41584-AS-NV, Rec. 8/20/10

NEW REOS:

807 Alder- Woodstock #19, APN 132-043-02, Rec.  8/23/10 – Back to beneficiary, no recorded docs yet

730 Country Club Dr., APN 128-051-04, Rec. 8/20/10, JPMorgan/Chase Bank, 7255 Baymeadows Way, Jacksonville, FL 32256

939 Incline Way – McCloud #216, APN 127-077-14, Rec.8/10/10, Wells Fargo, Bank, 1610 E. St. Andrews Pl., Santa Ana, CA 92705

NEW NODS:

400 Fairview – Bitterbrush #155, APN 126-292-295, TS#1249277-11, NOD Rec. 11/10/09 & 8/23/10

NEW NOTICES OF SALE:

321 Ski Way– Mtn. Shadows #71, APN 126-110-13, TS#09-0173885, NOD Rec. 12/3/09 & 3/19/10 – TRUSTEES SALE POSTPONED UNTIL WED. 10/6/10 AT 11AM

989 Tahoe Blvd. – Tahoe Racquet Club #17, APN 127-363-25, TS#14682NV, NOD Rec. 3/4/10 – TRUSTEES SALE SCHEDULED ON THURS. 9/9/10 AT 11AM

872 Tanager – Pinebrook #40, APN 132-560-23, TS#10-0003933, NODs Rec. 1/21/10 & 2/18/10  – TRUSTEES SALE POSTPONED UNTIL FRI. 9/17 AT 11AM

929 Southwood – Pinewood #18, APN 127-490-03, TS#NV0957972-2, NODs Rec. 10/13/09 & 1/22/10 – TRUSTEES SALE POSTPONED UNTIL TUES. 10/26/10 AT 11AM

590 McDonald, APN 124-083-15, TS#09-47885-WF-NV, NOD Rec. 1/4/10 09 - TRUSTEES SALE POSTPONED UNTIL MON. 10/25/10 AT 11AM

929 Dorcey, APN 125-161-25, TS#1241431-11, NOD Rec. 9/24/09 – TRUSTEES SALE SCHEDULED ON TUES. 8/31/10 AT 11AM

1049 Tomahawk, APN 130-081-15, TS#NV-09-299746-CL, NOD Rec. 7/14/09 – TRUSTEES SALE POSTPONED UNTIL THURS. 9/3/10 AT 11AM

806 Geraldine, APN 125-233-06, TS#134134NV, NOD Rec. 4/27/09 –TRUSTEES SALE SCHEDULED FOR FRI. 9/17/10 AT 11AM

SOLD (Removed from list)

540 Gonowabie, Crystal Bay, APN 123-101-04, Rec. 8/18/10 – Sold for $1,900,000

NEW NODs:

730 Martis Peak, APN 122-191-12, TS#137869NV, NODs Rec. 11/2/09 & 8/17/10

1073 Sawmill, APN 130-162-17, TS#F514155NV & TS#10-66019-NV, NODs Rec. 6/29/10 & 8/17/10

559 Len Way

751 Tahoe – Toepa #19, APN 132-191-01, TS#141587NV, NOD Rec. 8/12/10

NEW NOTICES OF SALE:

321 Ski Way – Mtn. Shadows #71, APN 126-110-13, TS#09-0173885, NOD Rec. 12/3/09 & 3/19/10 –  TRUSTEES SALE POSTPONED UNTIL WED. 9/1/10 AT 11AM

831 Lakeshore, APN 122-181-55, TS#2010-12662, NOD Rec. 2/3/10 – TRUSTEES SALE SCHEDULED ON WED. 9/15/10 AT 11AM (previously removed due to cancellation)

517 Fairview, APN 131-211-17, TS#10-0012661, NOD Rec. 2/3/10 – TRUSTEES SALE SCHEDULED ON TUES. 9/14/10 AT 11AM

400 Fairview – Bitterbrush #120, APN 126-295-12, TS#09-0181759, NOD Rec. 12/23/09  – TRUSTEES SALE POSTPONED UNTIL THURS. 9/16/10 AT 11AM

730 Country Club Dr.

725 Fairview – Incline Pines #10, APN 126-302-16, TS#NV-09-280377-CL, NOD Rec. 5/8/09 – TRUSTEES SALE POSTPONED UNTIL THURS. 9/16/10 AT 11AM

837 Southwood – Creekside West #19, APN 127-120-19, TS#NV0955014-2, NOD Rec. 9/1/09 – TRUSTEES SALE SCHEDULED ON WED.10/13/10 AT 11AM

920 Wendy #1, APN 131-410-01, TS#136854NV, NOD Rec. 8/28/09 - TRUSTEES SALE ON 8/27/10 CANCELLED

, APN 128-051-04, TS#138620NV, NOD Rec. 12/24/09 - TRUSTEES SALE POSTPONED UNTIL FRI. 9/3/10 AT 11AM, APN 125-492-11, TS#10-0059740, NOD Rec. 8/16/10

KEY INDICATORS [8/25/10]

Gold $1227.20/ounce [up]

Crude Oil (Brent) $77.37/brl [down]

U.S. Dollar to…

    Euro .7792 [up]

    Japanese Yen 85.56 [down]

6-mo Treasury Bill Yield 0.18%

10-yr Treasury Note Yield 2.65%

[6-month unchanged, 10-yr down 18 bps]

11^th Dist Cost of Funds 1.797%[+]

30-yr Fixed-rate Mortgage 4.79%

15-yr Fixed-rate Mortgage 4.26%

1-yr ARM 3.80%

[HSH averages rates: 30-yr

down 8 bps;15-yr down 8 bps; 1-yr ARM down 5 bps]

Mortgage Bankers Association Mortgage Applications Index

week ending 8/6

  Overall

    734.3 (up 0.6%; up 1.3%

the week prior)

  Purchase Money Loans

    175.4 (up 0.3%; up 1.5%

            the week prior)

  Refinancing Loans

    3993.0 (up 0.5%; up 1.3%

the week prior)

Jobless Claims 8/7

    484,000 – prior week 479,000 – continuing claims at 4.452 m

Retail Sales July

    Up 0.4% total – excluding auto sales, up 0.2%

National Association of Home Builders Market Index August

    Down 7.1%

Housing Starts July

    Up 1.7% - SFRs down 4.2% -

Permits also down

Weekly Commentary

“By 2011, it is expected that the national economy will have reached a point of self-sustaining growth, which will foster a stronger rebound. An end to house price declines in early 2011 will eliminate the final constraint on housing demand, and existing-home sales will take off.” [Michael Zoller, Moody’s Economy.com]

Zoller’s (Moody’s Economy.com) forecast has not changed for several months and, indeed, it has had little reason to do so. Moody’s/Zoller predicted the current slowdown well before it arrived, cautioned against getting overly gloomy about it, and suggested the economy (and, in particular, the real estate market) would remain slow into 2011. Then, the economy becomes “self-sustaining” and “existing-home sales will take off.”

The summary statement is simple: Be patient. Easy for Zoller to say, perhaps, but tough to put into practice!

In any case, in the midst of today’s prevailing gloom, it seems a good time to look at what some of our indicators are telling us about current investor sentiment. Let’s take it from the top of the list.

Gold. You’ve most likely noticed that gold, over the past couple of weeks, has moved back above $1220 an ounce. This remarkably high price for a relatively small amount of metal has been achieved because gold is considered, especially by investors in very traditional markets like the Far East, the safest  and most widely accepted form in which to hold your wealth. Gold is the wealth preserver, for most investors. And when they become worried about the security of a currency—the dollar, yen or euro, for example—they tend to rush to gold, and the resulting increased demand for gold pushes up the price of the metal, which is precisely what has been happening recently.

It’s worth noting, too, that investors have been putting their money into Treasury securities, which are considered the safest interest-bearing investment, since they are backed by the full faith and credit of the United States Treasury. A little more worrisome has been the shifting value of the U.S. dollar, especially against the euro. If global investors lose confidence in the U.S. economic recovery while retaining confidence in the European Union’s ability to ward off debt problems, the euro’s value will rise against the dollar—even if Treasury securities remain strong–as has recently been the case.

Tim Lampe, Incline Village, Nevda Realtor  

There seems to be some confusion among many agents (and loan officers) about the maximum debt ratios that FHA is approving.   Currently most investors are still imposing hard "Debt To Income" (DTI) ceilings on FHA borrowers, that were in place 2 years ago (when the market was a mess) and have fallen into a "comfort zone" for underwriting loans.: 45% as the recommended max DTI, with the absolute "drop dead" being 50%.
Because FHA does not impose a "hard ceiling" for debt ratios this is now rapidly changing.   Now new investors are aggressively entering the market place and competing for a bigger a share of the FHA pie.

These new investors are basing their approvals up to 55% DTI. If FHA agrees to buy the loan there is no risk to the investor. The loan is insured by a hefty PMI (aka" MIP") upfront premium of 2.25% and a monthly premium of .55%.
It takes just 30 minutes to determine if FHA will approve your buyer by analyzing the borrower's information thru FHA's "DU" ("desktop underwriting") program. If the loan is approved, the borrower can buy the home....and you earn your commission!
Here (in order) are the factors FHA considers when "expanding the debt ratios" in a typical transaction:
1) Down Payment: Typically borrowers get in for the minimum 3.5 % down payment. If your borrower is putting down 10% (or more), you are well on your way to a commission check.
2) Liquid Reserves: A borrower may put down only 3.5% but if they have liquid reserves (401k, IRA, savings, etc.) the investor looks very favorably upon that borrower.
3) Credit History: If your borrower has over a 720 (median) FICO score, FHA sees the file VERY favorably (the average FHA borrower has a 660 median FICO score).
4) Length of time on a job and source of borrower's income: For example if your borrower has bonus / overtime/ commissions or a second job, there must be a two year history. If any of these incomes are in "decline" your borrower is in trouble.
Once a borrower's information is "analyzed " thru underwriting program, the results come back as one of the following:

a) Accepted/Eligible
b) Refer Eligible
c) Approved Ineligible
d) Refer Ineligible (i.e. Declined)

A1: The status: "Accepted/Eligible" is obvious. "Pass Go" and collect your commission check.

A 2: The status: "Refer/Eligible" is a little more nuanced. This is where the experience of your loan officer and the relationship with the borrower is critical.

For all practical purposes, "refer" means referred to the underwriter (U/Ws) who, based on vast their experience, makes a judgment call if the borrower is able to maintain the loan payments. In other words "underwriters" are the "Gatekeepers of your Commissions" and should be treated that way.  
When dealing with U/Ws the loan officer must be patient and thorough BEFORE submitting the package to the investor.   The more issues left unaddressed (credit/debt/income) before the file is submitted will increase the chance the loan is declined.   Like parents, it's always easier to say "no" than "yes".
A3: Approved/ Ineligible: This means your borrower is VERY marginal and does not fit into the program that they were submitted into.   Most commonly the borrower's debt ratios are too high for a fixed rate loan and needs to be resubmitted to a lower adjustable rate program.   Or perhaps the borrower needs to pay off debts or have a larger down payment. In any case, the deal may be salvageable.

A4: Refer/Ineligible: The deal is dead. In fact the application should never have been originated. The loan agent has just wasted your time, soured your client's confidence in you and cost you referrals.

Fed Issues New Mortgage Disclosure and Compensation Rules

The U.S. Federal Reserve on Monday published a long list of new rules intended to protect consumers from what the central bank describes as “unfair, abusive, or deceptive lending practices.” The documents outline new requirements that will govern compensation to mortgage professionals and disclosures to borrowers regarding their home loans.

The Fed announced final rules prohibiting mortgage brokers and lenders’ mortgage loan officers from receiving compensation based on the interest rate or other loan terms – the practice commonly referred to as yield spread premiums, in which brokers and loan officers receive a bigger kick-back for steering borrowers to accept a higher interest rate than that required by the lender.

This controversial pay structure has been widely blamed for pushing unwitting consumers into high-cost, unsustainable mortgages.

“[The new rule] will prevent loan originators from increasing their own compensation by raising the consumers’ loan costs, such as by increasing the interest rate or points,” the Fed said in a statement. “Loan originators can continue to receive compensation that is based on a percentage of the loan amount, which is a common practice.”

The final rule also prohibits a loan originator that receives compensation directly from the consumer from also receiving compensation from the lender or another party. It addition, it makes it illegal for loan originators to direct a consumer to accept a mortgage loan that is not in the consumer’s interest in order to increase the originator’s compensation.

These final rules on mortgage broker and loan officer compensation become effective April 1, 2011.

In addition, an interim rule has been published that revises the disclosure requirements for closed-end mortgage loans under Regulation Z-Truth in Lending Act

Tim Lampe, your Realtor by Choice for 28 years.

SOLD (Removed from list)

855 College, APN 124-082-18, Rec. 8/9/10, California Bank & Trust/Vineyard Bank NA, 1900 Main St., Ste. 145, Irvine, CA 92614 – Sold for $1,415,000

872 Tanager – Pinebrook #30, APN 132-570-13, TS#1259497-11, Rec. 8/9/10 – Sold for $98,000

1457 Glarus, APN 126-550-04, Rec. 4/22/10, Frontline Trust, 9850 S. Maryland Pkwy, A-5156, Las Vegas, NV 89183 – Sold for $250,000

807 Alder Ave. - Woodstock #27, APN 132-043-06, Rec. 8/6/10, US National Bank c/o 400 Countrywide Way, Simi Valley, CA 93065 – Sold for $155,000

NEW REO:

290 Deer Ct., APN 127-570-07, Rec. 8/9/10, Bank of America, 475 Crosspoint Pkwy, Getzville, NY 14068

NEW NODs:

1047 Warbonnet, APN 130-083-10, TS#20100159902932, NOD Rec. 8/10/10

867 Jennifer, APN 125-242-01, TS#07-SF-98781, NOD Rec. 8/9/10

522 McDonald, APN 124-072-08, TS#NV09004384-10-1, NOD Rec. 8/9/10

NEW NOTICES OF SALE:

872 Tanager – Pinebrook #40, APN 132-560-23, TS#10-0003933, NODs Rec. 1/21/10 & 2/18/10  – TRUSTEES SALE POSTPONED UNTIL THURS. 9/2/10 AT 11AM BY BANK AND SCHEDULED ON MON. 8/23/10 AT 1PM BY HOA

929 Southwood – Pinewood #18, APN 127-490-03, TS#NV0957972-2, NODs Rec. 10/13/09 & 1/22/10 – TRUSTEES SALE POSTPONED UNTIL THURS. 8/26/10 AT 11AM

730 Country Club Dr., APN 128-051-04, TS#138620NV, NOD Rec. 12/24/09 - TRUSTEES SALE SCHEDULED ON MON. 8/16/10 AT 11AM  (This was previously marked postponed, but I can’t find any record of the new date now, sorry.)

1013 Galaxy, APN 125-411-20, TS#0934445FFNV, NOD Rec. 9/22/09 – TRUSTEES SALE POSTPONED UNTIL WED. 9/15/10 AT 11AM

862 Jeffrey, APN 125-244-04, TS#0946425WFRNV, NOD Rec. 9/21/09 – TRUSTEES SALE SCHEDULED FOR TUES. 10/12/10 AT 11AM

118 Rubicon, APN 122-211-04, TS#09-0137100, NOD Rec. 9/14/09 – TRUSTEES SALE SCHEDULED FOR TUES. 9/7/10 AT 11AM

837 Southwood – Creekside West #19, APN 127-120-19, TS#NV0955014-2, NOD Rec. 9/1/09 – TRUSTEES SALE CANCELLED ON 8/12/10

803 Jennifer, APN 125-192-12, TS#09-45219-WFR-NV, NOD Rec. 7/15/09 – TRUSTEES SALE POSTPONED UNTIL WED. 9/15/10 AT 11AM

725 Fairview – Incline Pines #10, APN 126-302-16, TS#NV-09-280377-CL, NOD Rec. 5/8/09 – TRUSTEES SALE POSTPONED UNTIL MON. 8/16/10 AT 11AM

225 Pinecone, APN 130-203-29, TS#133971NV, NOD Rec. 4/24/09 - TRUSTEES SALE POSTPONED UNTIL FRI. 10/15/10 AT 11AM

514 Gonowabie, Crystal Bay, APN 123-132-02, TS#GM-191334-C, NOD Rec. 2/10/09 – TRUSTEES SALE POSTPONED UNTIL TUES. 9/7/10 AT 11AM

820 Oriole – Royal Pines #56, APN 132-252-33, TS#09-30336-FF-NV, NOD Rec. 1/8/09 & 1/21/09 –– TRUSTEES SALE POSTPONED UNTIL TUES. 9/7/10 AT 11AM

Now the national economic summary:

Amazingly, a very weak employment report only resulted in minor damage to the Dow Jones Industrial Average, though it sent interest rates scooting lower. While there is more talk of a slowdown, a second leg of the recession or a season of deflation... there is little consensus on such a forecast. Uncertainty rules at the moment.

There are, nonetheless , continuing signs that the recovery is edging forward, and they are worthy of attention. The forecast that Moody's Economy.com has been publishing for months - that the economy will slow down in the coming months and regain its forward momentum at the end of the year - seems as credible as any.

With interest rates this low, though, our complaints about this economy should be muted a bit. There are many who can and should take advantage of today's rates, though there are far too many who - because their homes are underwater - simply can't do anything with the opportunity presented by record low rates. Time will improve this. And possible new programs like an equity share refi that lowers the borrower's principal and provides the lender an equity position in exchange...these ideas are worth looking at.

Tim Lampe, Incline Village Realtor.  Your Realtor by Choice for 28 Years.

KEY INDICATORS 8/15/2010

Gold $1199.10/ounce [up]

Crude Oil(Brent) $79.57/brl [down]

U.S. Dollar to…

    Euro .7528 [down]

    Japanese Yen 85.81 [down] 

6-mo Treasury Bill Yield 0.18%

10-yr Treasury Note Yield 2.83%

[6-month down 1 bp, 10-yr down 8 bps]

11^th Dist Cost of Funds 1.797%[+]

30-yr Fixed-rate Mortgage 4.87%

15-yr Fixed-rate Mortgage 4.34%

1-yr ARM 3.85%

[HSH averages rates: 30-yr

down 5 bps;15-yr down 6 bps; 1-yr ARM down 4 bps]

Mortgage Bankers Association Mortgage Applications Index

week ending 7/30

  Overall

    730.2 (up 1.3%; down 4.4%

the week prior)

  Purchase Money Loans

    174.9 (up 1.5%; up 2%

            the week prior)

  Refinancing Loans

    3969.0 (up 1.3%; down 5.9%

the week prior)

Jobless Claims 7/31

    479,000 – prior week 457,000 – continuing claims at 4.537 m

ISM Non-Mfg Index July

    Up to 54.3 from 53.8

Employment Report July

    131,000 net payroll jobs lost – unemployment still at 9.5%

Productivity 2^nd Quarter

    Down 0.9% - unit labor costs up 0.2%

Weekly Commentary

The employment report seemed to confirm the negative short-term forecasts for the economy. Not only were the financial news pages full of declarations that we are falling into the second leg of the recession, which is still a very doubtful belief, but the dreaded word, “deflation,” was very much in the air.

The latter is to be taken somewhat seriously. The famed bond guru Bill Gross of PIMCO announced that his firm’s policy had turned around rather sharply. Only a few months ago, Gross was assuring us that interest rates were on the rise and would remain that way for a long time to come. As a result, PIMCO stopped buying many Treasury securities. Now, they’re buyers again. And Mr. Gross suggested that deflation is already upon us.

To verify this assertion, the economy will need to start showing deflation in the consumer and producer price indices and economic growth gauges, and though we are not far from that of late, we are not there yet.

This means most of us are sifting busily among the day’s supply of tea leaves. For example, we can say that the sharp post-tax-credit decline in mortgage applications seems to have stalled, at the least, if not turned around—though the number of loans being applied for remains very low.

We can also shine a bright light on the ISM (Institute for Supply Management) Non-Manufacturing Index. It rose by an admittedly small half a point to 54.3 in July, but this was in contrast with the decline in the ISM Manufacturing Index and also with June’s Factory Orders, which were down 1.3%. It would seem that the nation’s service sector is taking up where the manufacturing sector is leaving off. If true, this could be good news and verify the view that this is a rolling recovery, showing up consecutively in various sectors of the economy—and also showing up in the real estate sales in various geographical regions of the nation.

Meantime, the importance of the higher Non-Manufacturing Index number was underscored by the fact that the ISM Non-Manufacturing Employment Index rose to the highest level it has reached in its current upswing. This is precisely what is needed from an improving non-manufacturing sector, and it will continue to be watched closely.

Lastly, the Productivity report attached to the second quarter Gross Domestic Product data showed a decline of 0.9%, with a resulting rise of 0.2% for labor costs. This doesn’t seem to be particularly good news, but weaker productivity may increase the need to hire new workers in many industries, and that would be very good news.

Obviously, we need more tea leaves, but these do provide evidence that the recovery is continuing to move forward, though very slowly.

KEY INDICATORS [8/3/10]

Gold $1189.30/ounce [up]

Crude Oil (Brent) $82.64/brl [up]

U.S. Dollar to…

    Euro .7600 [down]

    Japanese Yen 85.85 [down]

6-mo Treasury Bill Yield 0.19%

10-yr Treasury Note Yield 2.91%

[6-month down 1 bp, 10-yr down 14 bps]

11^th Dist Cost of Funds 1.797%[+]

30-yr Fixed-rate Mortgage 4.92%

15-yr Fixed-rate Mortgage 4.40%

1-yr ARM 3.89%

[HSH averages rates: 30-yr

up 2 bps;15-yr up 2 bps; 1-yr ARM down 6 bps]

Mortgage Bankers Association Mortgage Applications Index

week ending 7/23

  Overall

    720.6 (down 4.4%; up 7.6%

the week prior)

  Purchase Money Loans

    172.3 (up 2%; up 3.4%

            the week prior)

  Refinancing Loans

    3918.1 (down 5.9%; up 8.6%

the week prior)

Jobless Claims 7/24

    457,000 – prior week 464,000 – continuing claims at 4.565 m

Gross Domestic Product (GDP) Second Quarter 2010

    Up 2.4%

Construction Spending June

    Up 0.1% over May – down 7.9% below June 2009

Personal Income June

    Unchanged (along with spending) with wages down 0.1%

Weekly Commentary

“While this year will be an improvement over the last, overall gains will be minor. Robust growth will not resume until 2011, when the second wave of house price declines stops and the labor market is strong enough to boost consumers’ spirits.” [Michael Zoller, Moody’s Economy.com]

Let’s start with a few seemingly insignificant details. The Eleventh District Cost of Funds Index (COFI), measuring the weighted average of what S&Ls in the three southwestern states have to pay for the money they then loan out, rose from 1.791 in its May reading to 1.797 in its June reading—the figure used for many adjustable rate mortgages for their August computations. (That is, the raw data from June is processed through July and the resulting COFI index is used in August.)

Now, a rise of six basis points isn’t something to get excited about, especially when it’s only shown up in one month’s COFI. But it is possible, especially after such a long string of declines for the index that we’re seeing the first hint that rates will soon start to edge north. If it costs the lenders more to put together money for loans, after all, the loans will cost borrowers more, and that added cost will show up in the interest rates they must pay.

We seem to be at a point where many rates are making—perhaps—their final small moves downward, and others are stopping or turning slightly higher. The Freddie Mac average for its 30-year fixed rate, for example, squeezed out a decline of two more basis points last week. The HSH Associates compilation of conforming and jumbo rates rose by two basis points. The two-year and five-year Treasury notes this past week reached new record lows in their auctions; and when the 7-year note auction rolled around on Thursday, attendance was softened by the expectation that the resulting yield would be very low – still, the yield wasn’t proportionately as low as those on the 2-year and 5-year notes.

The stock markets, in theory, should be losing ground if interest rates are reaching for record lows. But the Dow Jones Industrial Average rose a hefty 7.1% in July, and is holding its own as these words are written. Either the stock and credit markets are being pushed and pulled by sets of investors with opposite expectations, or investors are hedging their bets, just in case stocks OR bonds wind up on top here. Or—another alternative—we are on the edge of a change, as rates begin to solidify (rising a bit) and the stock markets continue to strengthen. None of this, at least as of yet, is negative news, since it’s still giving us extremely attractive rates and a decent level of apparent confidence in the stock markets. We can only hope that this confidence will soon work its way through to the ordinary consumer and his/her employer.

Tim Lampe, your Realtor by Choice for 28 years.

SOLD (Removed from list)

1343 Tirol, APN 126-510-20, TS#T09-57432-NV, Rec. 7/30/10 – Sold for $425,000

321 Ski Way - Mt. Shadows #68, APN 126-110-10, Rec. 7/12/10, Federal National Mortgage Assoc. FNMA c/o Countrywide Home Loans, 400 Countrywide Way, Simi Valley, CA 93065 – Sold for $194,250

NEW NODs:

809 McCourry, APN 124-042-04, TS#10-0081612, NOD Rec. 7/22/10

NEW NOTICES OF SALE:

400 Fairview – Bitterbrush #120, APN 126-295-12, TS#09-0181759, NOD Rec. 12/23/09 – TRUSTEES SALE POSTPONED UNTIL MON. 8/16/10 AT 11AM

929 Northwood – Third Creek #6, APN 132-061-23, TS#NV09573831, NOD Rec10/1/09 & 10/7/09– Bank & HOA - TRUSTEES SALE CANCELLED ON 7/30/10

1013 Galaxy, APN 125-411-20, TS#0934445FFNV, NOD Rec. 9/22/09 – TRUSTEES SALE SCHEDULED FOR FRI. 8/13/10 AT 11AM

807 Alder- Woodstock #19, APN 132-043-02, TS#NV09479103, NOD Rec. 6/22/09 – TRUSTEES SALE POSTPONED UNTIL MON. 8/23/10 AT 11AM

225 Pinecone, APN 130-203-29, TS#133971NV, NOD Rec. 4/24/09 - TRUSTEES SALE SCHEDULED ON FRI. 8/13/10 AT 11AM (Not previously on list)

978 Glenrock Dr. #59, APN 131-021-25, TS#132807NV, NOD Rec. 3/24/09 – TRUSTEES SALE CANCELLED ON 7/21/10

Tim Lampe, your Realtor by Choice for 28 years.

National Summary:

The surprisingly large jump in the number of new home sales in June may prove to be significant. It has been a standard assumption among economists that new home sales will pick up after existing home sales, perhaps with a lengthy lag. The concern, of course, is that builders have to deal with remaining inventories and, today, the plentiful supply of foreclosure properties competing for the potential buyers of new homes. New homes may have some advantages that have not been acknowledged fully by analysts, like their ability to offer homes that can be customized to fit the buyer's needs and wishes.

Time will tell, of course, but I suspect we will learn a great deal about this real estate market from the strength of the new home market in coming months. Also to be watched: The areas where sales are strong--both for new and for existing homes--are micromarkets. They are not cities or counties or states or regions. They are more likely neighborhoods or developments or parts of neighborhoods or developments. This makes them invisible to many methods of gauging sales data. But they are increasingly important, it seems.

KEY INDICATORS [7/26/10]

Gold $1183.00/ounce [down]

Crude Oil(Brent) $78.98/brl [up]

U.S. Dollar to…

    Euro .7687 [down]

    Japanese Yen 87.90 [up]

6-mo Treasury Bill Yield 0.20%

10-yr Treasury Note Yield 3.05%

[6-month up 1 bp, 10-yr up 11 bps]

11^th Dist Cost of Funds 1.791%[-]

30-yr Fixed-rate Mortgage 4.90%

15-yr Fixed-rate Mortgage 4.38%

1-yr ARM 3.95%

[HSH averages rates: 30-yr

down 8 bps;15-yr down 8 bps; 1-yr ARM down 8 bps]

Mortgage Bankers Association Mortgage Applications Index

week ending 7/16

  Overall

    753.5 (up 7.6%; down 2.9%

the week prior)

  Purchase Money Loans

    1638.9 (up 3.4%; down 3.1%

            the week prior)

  Refinancing Loans

    4161.9 (up 8.6%; down 2.9%

the week prior)

Jobless Claims 7/17

    464,000 – prior week 429,000 – continuing claims at 4.487 m

Existing Home Sales June

    Down 5.1% month-to-month – up about 10% from year ago

Conference Board Leading Indicators Index June

    Down 0.2%

New Home Sales June

    Up 23.6%

Weekly Commentary

“Now that the smoke has cleared a little, it is evident that the extended and expanded federal tax credit boosted sales of new homes only slightly. Moreover, the retrenchment on the backside of the credit has been large.” [Celia Chen, Moody’s Economy.com]

The markets were surprised by a seemingly outsized gain in sales of new homes in June. According to the Census Bureau, there were 23.6% more sales of new homes in June than in May. (But this, as will soon be clear, could be revised at any time.)

There is more to the story than the headlines tell. The monthly figures for new home sales are extraordinarily volatile and subject to revision. Indeed, the Bureau revised its April and May figures from gains of 27% and 15% respectively, trimming those gains to 11% and 10%, making April sales less than half as strong as they appeared before the revision. The earlier numbers seemed appropriate, given that homebuyers were rushing to complete transactions in time to qualify for the $8,000 and $6,500 federal tax credits. It seemed likely, further, that the extreme decline in the number of sales when the tax credit programs ended were caused by the programs’ termination.

Now, however, we must revise our perception of reality to match the changed numbers. The revised numbers for April and May, which were most strongly affected by the tax credit programs’ end, suggest that the tax credit programs had less impact on new home sales than had been assumed, and quite possibly that the tax credit programs had less impact on new home sales than on existing home sales.

There are many tentative conclusions that we could reach. For one, it appears that even the tax credits program couldn’t breathe much life into the new homes market.

Another take on these figures, though, suggests that though sales are very slow overall, there may be more resilience in the new homes markets than is discernible unless we look closely.

As with existing homes, there are pockets of strong new home sales in different areas of the country. Why? The question is as important and, perhaps, mysterious as why sales jumped 23.6% in June. The answer may be that a very unusual rolling recovery has begun, in both new and existing homes, as buyers in certain categories find they can now afford what they’ve long wanted. Further, new styles of homes, aimed specifically at first-time buyers and retirees, have been well-received by the market. Transactions may be spotty, but it looks like there are buyers entering specific micro-markets. This trend should be watched carefully.