The first week of September, though short, was truly a roller coaster ride.  Rates were jumping up and down like jumping beans, and news articles were published left and right about the Fed dropping rates and also about job cuts.  Here is a brief summary of the past week:

Tuesday, September 4, 2007:

1. Thornburg Mortgage sells 20 million of its shares to stay afloat in the mortgage industry.
2. Deutsche Bank declares that the market is stabilizing stating that market liquidity is increasing every day.
3. American Home Mortgage has final approval for their $50 million bankruptcy loan in order to finance the Chapter 11 BK they filed.

Wednesday, September 5, 2007

1. Quality Home Loans agrees to be bought by the hedge fund manager Michael Klein. The company had declared bankruptcy on August 21, 2007.  The company has lent money under the following names: Last Chance Home Loans, Clear Credit Capital, and Last Option Lending.
2. Mortgage Volume raises slightly over the past week, but interest rates remain stagnant.  The report shows a 1.3% increase in home loan volume for applications, and 2.3% increase in refinances where purchase business increased .4%.
3. A J.P. Morgan market analyst stated that a rate reduction wouldn’t benefit homebuilders significantly.
4. Credit card terms will be effected by the mortgage industry events.

Thursday, September 6, 2007

1. Lehman Brothers declare National City Corp. will be releasing 2,000 workers or more to ease the struggling market conditions.
2. A report was published saying Countrywide Financial Corp. will be laying off 900 jobs from its production unit and was among one of the most heavily traded stocks today.
3. The President of the Federal Reserve Bank (William Poole) stated that an economic recession is likely now more than ever!
4. After interest rates on a 30-year mortgage have fallen for 2 weeks, they recently moved up to 6.46% on average this past week.
5. New home foreclosures skyrocket to a record high due to sub-prime struggles. Reported by the Mortgage Bankers Association, this marks the third quarter in a row that a record high has been set.
6. Fed Member Dennis Lockhart discussed the housing slump as not affecting the greater community. While investors were monitoring the speech to hear if any hints were dropped on what interest rates would do, they were very much so disappointed with the outcome of the lecture.
7. The Bank of England (which sometimes mirrors the Federal Reserve Bank) kept interest rates at a steady 5.75% in a release that said it was too early to determine if a rate cut was necessary.

Friday, September 7, 2007

1. The Federal Reserve Bank is now reported to decrease the interest rates at least 3 times prior to year end. This was reported after a survey of the 21 primary dealers. The only dealer that did not see a rate cut coming was Cantor Fitzgerald.
2. Indymac is supposedly releasing as many as 1,000 workers and cut its dividends by half due to continual mortgage troubles. Reports said that they would either just break even for the 3rd quarter, or post a 50 cent loss per share.
3. Countrywide will reportedly cut 12,000 jobs which will save on overall costs which have resulted from a boom in the new foreclosures and defaults. These cuts could reportedly be softened by the lowering of rates by the Federal Reserve.
4. One of the nation’s leaders in homebuilders (Centex Corp) tapped into JPMorgan for credit because of their funding difficulties through their previous lender.

Other new throughout this week included New Century’s label as “the poster child of what not to do in mortgage lending” (Barbara Buckley), when they were confronted by the Nevada Mortgage Lending Division.  The Executive Vice President and Chief Financial Officer of Equity Residential (Donna Brandin) resigned as of Thursday to pursue other professional and personal interests.  Goldman Sachs spent #1.3 million on Friday lobbying for issues on fair mortgage practices, borrower protection, and other real estate issues.  Bear Stearns also reported on Friday that they will attempt to double their management group which will instill a sense of confidence in the market.  As a rebutle to Tuesday’s massive sell in stock, Thornburg Mortgage’s President and COO bought 30,000 shares to attempt a boost of confidence in the company.

The Dow ended the day on Friday 249.97 points down (1.87% loss), and the 10-year bond finished the day at 4.3680% for a loss of .132%.

The national average for 30 year fixed rate dropped during this past week to 5.98% with an APR of 6.16%. The national average 15-year fixed rate dropped to 5.64% with an APR of 5.93%. Adjustable Rate Mortgages (ARM’s) are still over-priced compared to fixed-rate loans.

If you would like to apply for a Mortgage Loan, you can APPLY ONLINE HERE, you can call John Thomas at 302-703-0727.

John R. Thomas – NMLS 38783

Certified Mortgage Planner – Primary Residential Mortgage, Inc.

302-703-0727 DE Office / 610-906-3109 PA Office / 410-412-3319 MD Office

248 E Chestnut Hill Rd, Newark, DE 19713