An Interesting Week!

The week is off to an unusual start I say that because the Chicago NAPM (the gauge for manufacturing and non-manufacturing productivity for the Chicago area) came in slightly better than forecast 48.2 (forecast was 46.0); keep in mind anything less than 50 signals contraction. In the past anything that was even close to expectations signaled a big "sell-off" in the MBS (Mortgage Backed Securities) and hence higher rates. However this mornings release has actually held MBS very steady, in fact we are up 12bp since the close on Friday and in turn this mornings rate sheets are slightly better than Friday. The one thing that is constant throughout this is CHANGE in a moment's blink we could see a swing either way and that is why it is so hard to predict rates right now!

In other news Treasury Secretary Henry Paulson is currently speaking on reorganizing the U.S. financial sector governing body. This could be a big reason why the MBS market is doing quite well; perhaps traders feel the increased guidance and legal oversight will help the financial markets perform well over the long term. ``We should and can have a structure that is designed for the world we live in, one that is more flexible, one that can better adapt to change, one that will allow us to more effectively deal with inevitable market disruptions, one that will better protect investors and consumers,'' Paulson said. (Courtesy of Bloomberg.com)

This week will certainly pick up steam as we have other pertinent news to be released Tuesday through Friday. For instance, March ISM Manufacturing, Weekly Jobless Claims, Unemployment Rate just to name a few. Plan for another volatile week (boy this is getting really repetitive) and hold onto to your hats because I am sure we will get some hurricanes of wind!

Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker

Good Bye 100% Hope to See You Again Soon!

Well the bottom "may have" hit as far as underwriting guidelines go this morning. I was just informed that the maximum loan-to-value (ltv) that MI companies will now ensure is 97% (Effective April 1, 2008). This also applies to the ever popular and state specific Missouri Housing Development Corp. or (MHDC) program. After speaking with Don Brinker, Managing Director for the MHDC program the main problem they are having is the appetite for there bonds. In the past companies like Fannie Mae, Freddie Mac, Bear Stearns and Lehman Bros. would purchase the state issued bonds. However, with the "liquidity and credit crisis" Fannie and Freddie have stopped purchasing the bonds all together and "the other" investors like Bear and Lehman want a premium return (i.e. higher interest rate) so the bond basically becomes ineffective. The last bond issue was at 5.99% and the latest bid for the bond was around 7%, therefore there are currently no MHDC funds available until the end of April and unless the appetite for these bonds increases there may be no funds period until the market returns to some normalcy!

There are 7 major mortgage insurance companies (Genworth, MGIC, PMI, Radian, RMIC, Triad and UG/AIG) the one synopsis with all of these insurers is that they will no longer insure 100% financing. Their credit requirements however vary; some require a minimum of 680 while others require a 620. So for now the "floor" (speaking in terms of mortgage financing) is 97% ltv, full-documentation with at least a 620 credit score (Fannie & Freddie speaking).

I cannot begin to tell you how hard being a true mortgage professional is right now! Mortgage rates are the most volatile I have seen in 10 years, underwriting guidelines are constantly changing, lenders are closing their doors, MI companies are changing the rules of the game, and all the while the nationally economy is in a deepening recession! I spend approximately 3-4 hours of my day doing research on everything imaginable regarding the economy and the mortgage industry and I still cannot keep up with all the changes. I subscribe to over 20 websites that constantly send me updates, graphs, and expert opinions and I still feel overwhelmed. As I type this post I have a nagging headache that simply won't go away. However, now that I am done "venting", let me tell you that quality financing programs are still available and at "fair" rates. I cannot speak enough to the fact that if you are not working with a "true" mortgage professional then you better be! Future homeowner's need honest advice on programs, rates, the home buying process, market trends, the Columbia economy, the national economy and to some extent future predictions.

I truly believe we are at the "bottom" as far as possible guideline changes are concerned hopefully in the future (6-12 months) we will see some "normalcy" with lenders, investors, and insurance companies. But for now these are the "rules of the game" that we must all play by.

Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker

Home Buyers... Will you take advantage?

Consumer Confidence was reported this morning and guess what, that's right more bad news! It came in at a 35 year low! The index fell to 64.5 which was lower than the March forecast of 73.3.
If the title of this index doesn't do it for you, this is a gauge of how confident people are in the economy. Also reported today was that housing prices fell once again across the county.

I bring this bad news up for 2 reasons. First, to report it to our readers. Second, to also point out that just because bad news is splashed around in the media doesn't mean it is a bad time for you to buy a home! The media is always looking to break the next story and bad news sells better than good news!

There are many home buyers out there that have been and are taking advantage of these conditions. While the economy is volatile, their situation is much more calm and they are looking to head down the path toward home ownership! The conditions are ideal for people that fall into this category. They don't have to worry about a home to sell, homes are selling at enormous discounts, inventory is high, interest rates are low, and there are still good mortgage products available! Add all this up and I wish I was a buyer again! If you truly are not ready to purchase a home, then please don't. Just continue to save and wait until you are comfortable.
However, don't let all of the negativity make you uncomfortable to buy and make the decision for you.

As a buyer you can be very picky on what you want as more homes have fallen into your price range. You can get more bang for your buck! Be sure to ask for seller paid closing costs and some are even getting allowances for new carpet etc. Remember you won't get them unless you ask! Your realtor will be able to point you toward homes and sellers that are more motivated if you don't know what to look for.

Just be sure to do 2 important things once you feel ready to jump into the market. Find a good realtor to work with (if you are unsure of who to use be sure to look at our strategic partners on our website for contacts) and get pre-qualified with a solid lender. You want to know how much you can spend and what program you will be on. With programs changing rapidly it is important to have a lender stay on top of it and keep you informed.

Just remember, there is a home out there for you and a good realtor and lender at your side will make it a smooth and enjoyable experience!

Don't let all the negativity get you down! After all, if you get a good deal on a home and a solid mortgage that you can afford; why do you care if banks are going belly up because of past bad mortgages? You just got a steal on your new home!

Brought to you by:
Professional Mortgage Group, Inc.

This Week's Financial Data

For the most part this is a "light" first couple of days to the week for "pertinent" economic data being released! Most of the what will influence the markets will be "headline" news, for instance this mornings news that JP Morgan Chase will up its stock offer for Bear Stearns from $2.00 to $10.00 a share and take on the first BILLION in losses. Oh, I almost forget Bear Stearns agreed to sell a 39.5% stake in the company in order to "bypass" shareholder approval! This GREAT (sarcastically stated) news has far out weighed the fact that FHLB (Federal Home Loan Banks) were freed to invest up to $150 Billion in MBS (Mortgage Backed Securities) which would be great for rates and instead the MBS are down over 50bps points and mortgage rates have taken a .25% point hike.

I leave today's post with just the above and include the "pertinent" data being released later in the week!

Tuesday 3/25: March Consumer Confidence Forecast: 73.3

Wednesday 3/26: Feb Durable Goods Orders Forecast: .6%

Wednesday 3/26: Feb New Home Sales Forecast: 575K

Thursday 3/27: 4Qtr Final GDP Forecast: .6%

Friday 3/28: Feb Consumer Spending Forecast: .0%

Friday 3/28: Feb Personal Spending Forecast: .2%

Friday 3/28: Feb Core PCE Price Index Forecast: .1%

Friday 3/28: March Univ. of Michigan Sentiment Forecast: 69.6


Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker

100% Financing!

100% financing is obviously a big deal in the mortgage market! We have been fielding numerous questions on this product lately. Is it still available? How much longer will it be available? Is it harder to qualify for now? These are all valid questions. Some of which we have the answer for and some we don't. 100% programs are still available, but the number of lenders offering them has dwindled. The qualification for this program has changed for some lenders as well. It is harder to qualify with some lenders now as the credit score requirement went up to 680 or above. On top of that a higher rate is offered for borrowers under a 720 score than was previously offered. There are a few out there that haven't changed their requirements, but there is no way of knowing how long this will last! Lastly, there is the question of how long 100% programs will be available period! This is a big unknown. At this point we have not heard confirmation that any changes are being made. However, in this crazy market any change is game! Change can come at any minute and we are at the mercy of the PMI companies, since they are the ones who insure loans above 80%. Any changes they make will be relayed to us through the lenders. If this happens, 100% loans will be gone and we all hope this does not happen. This will knock many potential buyer's out of the market and I cannot see how this is a good thing right now! Lenders have already made all the necessary underwriting adjustments and program changes that are necessary moving forward. It just will take time for them to "right the ship". There is no overnight fix and it seems all sides are trying to find one!
Again, the purpose of this blog is educational and we want to put out what information is out there. It is not our intention to scare anyone off or give the impression there is "new" news out there. This is a topic that has been rumored for quite some time. We have just received more questions on it lately and the rumors have gained more steam. If you are in the market for a home and NEED a 100% program, one way to secure the program is locking in ASAP (if your purchase will occur within one of the available locking periods).

As always we will keep you posted on any new developments!

Brought to you by:
Professional Mortgage Group, Inc.

Boone County Roundtable

I recently attended a "Round Table" Luncheon with some local real estate professionals (i.e. appraisers, real estate agents, bankers, attorneys, brokers, developers and builders) and I thought I would shed some light on the challenges facing many of these individuals. I'll just throw out some of the verbage that was used in the meeting.

- Fear
- Education
- Volatility
- Offers being "low balled"
- Comp concerns and marketing time
- Original List Price to Selling Ratio
- Qualifying for Loans or programs changing at the last minute
- Bad Publicity or Wrongful News
- Interest Rate Volatility

All of the obstacles above and many more are what face real estate professionals in and around Boone County Missouri. I must say that it was very "refreshing" hearing others point of view on what's happening in the industry and how it affects them and their clients. What's my point? Boone County has issues that need to be addressed but given time, careful thought, and learning from errors we will overcome all of these and any others that rear their ugly head. We are a very strong community of individuals that possess uncanny intelligence and creative thinking. Also, we are not in as bad of shape that many have been led to believe! Columbia experienced exponential real estate growth during the "boom" years and in particular 2002'-2005'. It is very hard to sustain this type of growth over an extended period of time and as the cycle runs we have taken a spike downward since mid 2006'. After attending this luncheon I feel very secure that we (lenders, bankers, developers, builders, agents, etc.) are doing the right thing moving forward. We are already starting to see an increase in housing traffic, offers, a decline in housing inventory, and a "pull-back" in spec building. Just like anything else in life we will survive and be a better community for it!

Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker

The Truth on Boone County Missouri

Over the past week or so I have heard so much miss-information concerning Boone County and its designation as a "declining market" that I really feel sorry for the individuals both releasing it and those who read it. So much so that I recently read an article released from a Boone County business that couldn't even spell Fannie Mae (or "May" as they put it) correctly. The purpose of this post to lay out the truth and hopefully lay to rest the rumors that are floating around out there.

First, Freddie Mac (not Fannie Mae) has designated Boone and Howard counties as "declining" markets. What does this mean? Simply put it will impact buyer's loans who want to purchase a home in this area or more specifically reduce their borrowering ability by 5%. For example if you have a buyer wanting to do 100% loan they now must put at least 5% down to qualify for a loan through Freddie Mac.

Second, Fannie Mae although very similar to Freddie considers markets as "soft". They scale this out from 1 to 5 with one being the best and five being the worst. Information released effective March 18th has Boone County as a soft market area of 1. Therefore any loan going through Fannie Mae will be able execute the maximum financing available as long as 3 things happen. First, the appraiser notates that the market is "stable" and not declining. Second, the marketing time for the area in question is less than 6 months. And three the appraiser does not note any other "negative" factors that would "suggest" a declining market. Simply put under normal operating procedures "most" deals should be fine. Anyone designated as a soft market 1-3 will implement the above guidelines. Markets designated as 4-5 must reduce the maximum allowed financing by 5% (like Freddie Mac). Again, Boone County is a 1!!!!

Third, there seems to be a notion that 100% financing is not available anymore and nothing could be further from the truth! There also seems to be a notion that you must have at least a 680 credit score to qualify for 100% financing these days. Again both of these assumptions are not true. I currently have access to 100% programs for Boone County down to a 620 credit score and yes they are through the GSE's or more specially Fannie Mae. There is financing available through the USDA that allows for 100% financing in certain "targeted" areas and at times down to a 580. We, has Missouri residents also have access to MHDC (Missouri Housing Development Corp.) that allows for 100% financing. Oh and let's not forget the growing FHA programs where for as little as 3% down you can qualify for financing regardless of credit score.

Of course changes to these programs happen quite often (none of them very significant) and yes the availability to access the funds to some of these programs can, at times be aggravating. However, the programs are alive and well and I continue to access these programs every day to help my clients purchase their home!

Most of the issues surrounding the rumors concerning the termination or "scaling back" of certain programs come from the changes of the Mortgage Insurance Companies. For those of you who do not know these companies are responsible for ensuring the dollar amounts above and beyond the 80%. For instance, if you have someone purchasing a $150,000 home and doing a 100% loan the "MI Company" would ensure the 20% down payment or ($30,000) that the borrower is financing. Now as you can imagine with the fall out in the mortgage and housing industry MOST of the MI companies have lost billions of dollars. In response to this they have really cut back their product line and in essence there desire to ensure some loans, this is why you see all the guideline changes to ltv, mi premiums, down payment requirements and credit scores. But like anything else in life these same companies have competition so what RMIC cannot do AIG otherwise known as United Guaranty can. And what PMI does not touch anymore MGIC will do and the list goes on and on. The important thing to remember is that there are some MI companies still ensuring 100% loans as long as the borrower meets their guidelines.

Brought to you by Professional Mortgage Group, Inc.
Your Columbia Missouri Mortgage Broker

Today's Rate Cut and Setting Your Expectations!

As expected the FED cut the Federal Funds rate another .75% to 2.25%. Again this is the rate that banks and other institutions borrow money at. (not a rate that directly lowers mortgage rates)The cheaper it is for them, the more liquid they are. It is the FED's hope that this helps during this extremely trying time!
As usual the markets have bounced all over the place as a result of this news. Mortgage rates dropped a ton yesterday and then we have seen numerous re-prices for the worse today! This was expected, but it is extremely frustrating for us and to the public it just flat doesn't make sense! We hope things will settle down just a bit in the coming days, but the answer is we just don't know what will happen!

My advice to anyone getting a rate quote is this. Stay informed and make sure you are dealing with a lender who is experienced. You just can't afford to float your mortgage rate out there with someone who doesn't follow things closely. When you are quoted a rate, take it in stride. If you do not lock the rate at that time, it will change numerous times until you do. Most consumers don't realize this is happening and if the lender does his job, the end rate is what was quoted or better! Only in rare circumstance does the market go sour so fast that locks can't be made, causing your rate to increase form the quoted rate. This does happen from time to time. More often than not it is with a lender that doesn't follow the market and just waits for the rate sheet. However, it can even happen to the best of lenders.

With all this being said, just realize we are working for you. We want you to get the best rate too! This is why we study the market as intensely as we do. When we quote someone, we want it to mean something! We just want to point out that this volatile market "is what it is" and we all must deal with. If you are in the market for a mortgage, please set your expectations appropriately. Realize that the market is extremely volatile and don't get too greedy! We haven't seen more that 4 days of continuous declining rates in quite some time. Especially since the credit crunch hit! You need to have a very clear idea of the rate you want and what you risk tolerance is. Have that max rate in mind so your broker can lock and save you money if the market makes a sudden turn for the worse! If you maintain the correct frame of mind, you will no doubt come away pleased and end up with a quality rate!

Brought to you by:
Professional Mortgage Group, Inc.
"Your Columbia, MO Mortgage Broker"

Monday Madness

The action happening on Wall Street, behind closed doors with The Fed, and the economy certainly isn't hurting mortgage rates, however with every piece of good news there is bad and the fact remains the economy is heading further into the tank!

In a desperate and awkwardly timed move the Fed cut its discount rate a .25% to 3.25% just 1 day ahead of their regularly scheduled meeting on Tuesday. This was an extremely weird and trying move as seen by most in both Washington and Wall Street. Perhaps the U.S. economy and in particular the U.S. Financial Sector is in much worse shape than most anticipated. This could be seen hitting home as Bear Stearns agreed to be bought out by JP Morgan Chase for just $236M! To explain to you how much of a discount this was rumors have been floating that Bear Stearns new headquarters was worth upwards of $1B. This move also required the help of the Fed and opening their money or "discount window" to Bear Stearns via JP Morgan Chase. Loans now made through the discount window are now due in 90 days instead of the traditional 30. They have also opened their "window" to unprecendented larger amount of banking institutions as a means of further hoping to help the "credit freeze" via trying to free up liquidity among the financial sectors and in particular large banking firms.

Will this move work? It might bode well for the larger institutions however lending guidelines for the "consumer level" residential mortgage purchases are becoming more and more strict. I've said this time and again what good do these moves do if the "consumer" cannot get financing for residential mortgages? Don't get me wrong before August 2007' we were on the extreme left end of financing but with that being said we have moved to the extreme right. Hopefully we will find a happy medium some where in the middle in the very near future.

Brought to you by Professional Mortgage Group, Inc.
You're Columbia Missouri Mortgage Broker

Friday Frenzy!

What a day, consumer sentiment hit a 16 year low, inflation stalled in February (very good news for mortgage rates), and the S&P stated late Thursday evening that the sub-prime write downs were toward the end of there rope. Add on this up and what do you have? Another volatile day for both the Dow, MBS (Mortgage Backed Securities) and in turn mortgage rates.

Are we at the bottom? Some analysts seem to think we are very close while others believe we have a little way to go but can see light at the end of the tunnel. What does this mean for mortgage rates? The inflation numbers were a great sign for consumers, traders and the factors that influence rates. However, to some the inflation number was not a surprise as they see this simply as a culmination of less spending and a slowing economy. The Fed will almost certainly cut the Discount & Fed Funds Rate (keep in mind these cuts DO NOT affect mortgage rates) rather it's what these cuts do for the "macro-economic" economy that will determine where mortgage rates are headed. As I stated in earlier posts keep your hat on the ride is not over yet!

Brought to you by Professional Mortgage Group, Inc.
You're Columbia Missouri Mortgage Broker

Retail Sales Plunge

The verdict is out; families are simply not spending their discretionary income! Retail sales plummeted to -.6% (that's right it's a negative); to show you how bad the outlook was on this the forecast was for a -.1% (that's right still a negative)! The market has already dropped almost 200 points and there seems to be strong momentum to support the downward spiral. Why is this statistic so important?

Retail sales account for approximately 1/3 of all GDP (Gross Domestic Product) so having this number be that bad really sets the stage for further declines and in turn stalled spending, credit borrowering, housing purchases and the like. To add to the problem the U.S. Dollar or otherwise known as "the greenback" is at a low against the Yen that has not been seen since 1995. Why is this so important? Simple, the value of "our" dollar is diminishing and at a fairly fast pace. This means that it will take more of our money to purchase the same goods we paid for yesterday. This also has spun negativity amongst foreign investors and in turn could translate into them pulling money out of the U.S. market all together.

Brought to you by Professional Mortgage Group, Inc.
You're Columbia Missouri Mortgage Broker

Rally, Rally, Rally!

That's the word of the day as the last two days have been great to mortgage rates. It seems the confidence, trust, and bearable risk in MBS (Mortgage Backed Securities) the government has instilled in this sector will do some good (at least short-term) for mortgage rates; as we have seen a .50%bps point improvement since the news broke early yesterday morning. As usual however the current market we operate in is still extremely volatile and can swing at a moments notice, however with that being said look for continued improvement in mortgage rates after the release of retail sales data tomorrow morning!

I have also started reading the very interesting (sarcastically stated) novel of "An Analysis and Description of Pricing and Information Sources in the Securitized and Structured Finance Markets". This publication although extremely hard to find really dives into the world of CDO's and MBS asset avenues' both from inception and into the secondary market. The avenues' of investing money have gotten so complicated that the individuals who even launched these products are having to educate themselves on the ongoing change, risk, pricing, structure, cash flow, pass through and other entities that make these investments tick.

Brought to you by Professional Mortgage Group, Inc.
You're Columbia Missouri Mortgage Broker

Market Update

The FED announced today that it will Lend $200 Billion in exchange for Mortgage Backed Securities (MBS). We hope this will help infuse a bit of confidence in this market and help mortgage rates. The FED is also reportedly going to drop the FED Funds rate again on 3/18. Be sure you check back to our site to monitor the market and see how mortgage rates are affected.

There are also a lot of rumors and misinformation floating around. This has to do with Boone County's market status (soft, declining, etc.), mortgage rates, program offerings, and lenders making drastic changes. While everything is extremely volatile, don't believe all that you hear. Information gets passed along and gets distorted. If you have any questions at all about what is going on in the mortgage market, please comment below or call us directly. We monitor all of this very closely and will be happy to help!

Brought to you by:
Professional Mortgage Group, Inc.

What Will This Week Hold For Us?

It's 10:27am CST and I am already exhausted! The MBS (Mortgage Backed Securities) and 10 Year Treasury started the morning out well then in a blink everything went red and then in another split second we were back to gains and substantial ones at that. Why? Well there is not a whole lot of data until Wednesday when retail sales results are released but the market has been anything but predictable for quite some time. I believe investors are just starting to realize that the economic issues are here to stay and the efforts that the Fed, Government, and others attempt to make will not have an immediate impact on the overall economy, if at all. In fact the moves that have been made by the above bodies are being questioned by many "seasoned" economic professionals. Why? Simply put inflation. This is the value of the dollar and too much money being released into the economy. Now I am not going to go into detail but I have read, spoken to, and viewed the information and the individuals releasing it and all I can say is that their claims make a lot of sense.

So where does that leave us this week? The majority of "pertinent" data will not be released until Wednesday morning and will continue through Friday morning. Not to mention we have the Fed meeting again next Tuesday the 18th. For me to say the market will be volatile is an understatement (see my first two sentences of this post) however that does not mean it all won't be good! Keep your hands on your seat and brace yourself for another wild ride as I'm sure this week will take us on one. Below is a list of things to watch for that will (in my belief) impact the mortgage and real estate environment in some fashion.

Wednesday 3/12 Retail Sales:
Thursday 3/13 Weekly Jobless Claims:
Friday 3/14 February CPI (Consumer Price Index):

Not to mention any and all other news releases concerning any financial sector firm; (i.e. Countrywide SEC investigation)

Brought to you by Professional Mortgage Group, Inc.
You're Columbia Missouri Mortgage Broker

Links to Some Top Mortgage / Economic Stories!

There are several news reports out today that impact the economy and mortgage rates. I thought it would be helpful to link to these. With the market being so volatile, it helps to keep informed on these topics.

FED Takes New Steps

FED Projected to Make .75% FED Funds Rate Cut.

Jobs Decline!

Foreclosures at an All-Time high!


All of these stories are big news and affect mortgage rates in some way.
If you have any questions on the information contained in these articles please post your question in our comments section or call.

Have a Great Weekend!

Brought to you by:
Professional Mortgage Group, Inc.

Are Things Getting Worse?

Wow, it is hard to imagine but it seems the national economy; and if you ask Ohfeo (Office of Federal Housing Enterprise Oversight) things locally are "declining" as well. Rates for a 30 year mortgage although still very good are at 6.5%, the price for a barrel of oil is approaching $110.00, the price for an ounce of gold has hinted at $1,000.00, foreclosures are at all-time record highs with no end in sight, mortgage delinquencies are headed for record highs, payrolls are falling as the cost of "goods" are increasing, and the unemployment rate could hit above 5%.

What is the answer for all of this? Well, mortgage rates are on the rise, foreclosures are on the rise, lending guidelines are becoming very strict and now ltv (loan-to-value) guidelines are changing before our eyes! This sounds like a recipe for the "perfect storm" leading to a strong recession! The government better get involved in deeper matters and I mean FAST! Although they have taken valiant steps to remedy the situation the bottom line is it's not enough. They (the government) must think deep and make drastic changes to get the ship righted. Otherwise we will continue to see what we have largely been accustomed to seeing over the past 18 months.

Why do I bring this up? Because I can see where the outlining decisions we've made are headed, especially for the housing and lending industry and it's not good.

Brought to you by Professional Mortgage Group, Inc.
You're Columbia Missouri Mortgage Broker

"Vigorous" Action!

It looks as though FED Chairman Ben Bernanke is finally grasping what is going on in the mortgage market. His recent comments show that he finally is realizing how severe the problem is and that these foreclosures are very hard to stop! We have these new programs in place to help curtail the problem, but they are not enough. Bernanke finally stated in a speech that all banks just need to suck it up and realize these losses are not going away! They are not going to be paid back and they need to just take the losses on their books and move forward! I think this is a great statement! These banks were so spoiled with the amount of money they were making that they just expect for things to work out so they are re-paid their money or are bailed out! It sure doesn't look like this will be the case. Bernanke stated the need to take "vigorous" action in figuring out what to do to resolve the problem. At the very core, reducing the principal homeowners owe and re-amortizing their loans to fixed rates sounds like the plan. The problem is that these loans have been packaged and sold to investors. These investors must all agree to such a plan and this is the tough part! In Bernanke's words, " the brilliant minds who cooked up the complicated financial instruments that got us into this problem can also figure a way to get us out"! I truly hope he is right and there is a solution out there!

Brought to you by:

Professional Mortgage Group,Inc.

"Your Columbia, Missouri Mortgage Broker"

Four Dollar Gas? Not Too Far Around the Corner

At the current time March 3, 2008 10:01AM the price for a barrel of oil is trading at $103.65. This could equate to approximately $3.50 for a gallon of gas! Listen I am not that old and even I can remember paying .90 cents per gallon. It would cost me approximately $22-$25 dollars to fill up my 3/4 ton truck. Now this same truck (although no longer owned by me) would cost over $90.00 to fill.

After doing some research on oil prices I found some very unusual data. First, after 9/11 we experienced a cost of $20.83 for a barrel. The early 80' s experienced a significant rise in oil prices with a high of $95.50 in 1980 followed by retreats all the way to $26.45 by 1988. However, today's environment is not so lucky with continued price increases year over year since 2003' when a barrel was $31.62. That's right we are currently at $103.65 with no threshold to keep us from going any further. We have experience over a 320% increase in just over 4.5 years! What are we to do?

I have been an avid endorser of government "price fixing" of gasoline. What does this mean? It simply means the government would "eat" the cost for a gallon of gas for anything above a certain threshold for instance in this example say $80.00 and that equated to $2.25 a gallon. Any price changes above that amount the government would have to bare the expense, thus essentially fixing the price of gas so the average consumer could afford it. Now I do realize this is wishful thinking but imagine if this were the case. What if the U.S. government spent dollars on making this a reality instead of interviewing professional athletes, spending billions on shooting down a faulty satellite, or even a war overseas.

Brought to you by Professional Mortgage Group, Inc.
You're Columbia Missouri Mortgage Broker