Steve Papapietro's Mortgage Bulletin: For the Week of Nov 2nd

LAST WEEK IN REVIEW "Don't believe the hype!" The words from Public Enemy's hit song title rang true once again last week when the Commerce Department reported the Gross Domestic Product (GDP) for the 3rd Quarter. As you can see from the chart below, GDP rose by 3.5% for the first gain in a year and the strongest reading in two years. While most media outlets were giddy about the news and started the hype that the recession is behind us, it's important to remember that there's more to the economic data than just the headlines. The temporary "Cash for Clunkers" program has now expired, but was a big part of last quarter's GDP gain. If we remove it from the total, the reading would have been a more modest 1.9%. But there is even more to the rise in the latest GDP number that is just temporary... Also bolstering the economy has been the $8,000 first-time homebuyer tax credit - which is set to expire at the end of this month. Many home buyers have been taking advantage of this program - and wisely so. ----------------------- Chart: US Gross Domestic Product (By Quarter) New Home Sales were reported last week, showing a 7.5-month supply of inventory. While that number is slightly worse than last month's 7.3 reading, it's still a big improvement from where we were in January. Back in January, inventory levels reached a high of 12.4-month supply! The improvement in housing inventories has been due in large part to the $8,000 First Time Homebuyer Tax Credit, which is set to expire on November 30. There is a real possibility of an extension of this program through a proposed Bill, but it is not yet a certainty. The extension Bill still must be reconciled between the House and Senate, and then voted on for final approval. Under the current extension proposal, sales with signed purchase agreements by April 30th that close before June 30th, 2010 would qualify for the credit. Another positive element would be the possible addition of $6,500 tax credit for other primary home purchasers, meaning the tax credit would no longer be limited only to first-time homebuyers. There is also a possibility that qualifying income limits could increase from $75,000 to $125,000 for singles, and from $150,000 to $250,000 for joint tax filers. I will be keeping an eye on this for you, so stay tuned. After all last week's news and movement in the markets, Bonds and rates ended the week slightly better than where they began. DON'T FORGET: THIS WEEKEND MARKS THE END OF DAYLIGHT SAVING TIME. SO MAKE SURE YOU SET YOUR CLOCKS BACK TO AVOID UNEXPECTED PROBLEMS...LIKE THE KIND DESCRIBED IN THE MORTGAGE MARKET GUIDE VIEW ARTICLE BELOW!

FORECAST FOR THE WEEK

	This week brings us new employment numbers...and a chance to see if the labor market is showing signs of recovery. The employment news begins Wednesday with the ADP National Employment Report. Sandwiched between that report and Friday's Jobs Report, is the Initial Jobless Claims report on Thursday. The big news comes on Friday, when the all-important Jobs Report will be released. Last month's report underscored the struggling labor market, as the Labor Department reported 263,000 jobs lost in September and an increase in the unemployment rate to 9.8%. The report due out this week is expected to show 166,000 jobs lost in October, which would be significantly better than the previous month if it happens. However, the Unemployment Rate is expected to continue its climb to 9.9%. In addition to employment news, we'll also see the ISM Index on Monday. This is the king of all manufacturing indices and is considered the single best snapshot of the factory sector. Finally, the Federal Open Market Committee (FOMC) holds its two-day meeting this week, with an announcement of the Fed Rate Decision and Policy Statement due on Wednesday at 2:15 p.m. (ET). 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 bounce back last week with help from weakness in the Stock markets. Chart: Fannie Mae 4.5%% Mortgage Bond (Friday Oct 30, 2009)

THE MORTGAGE MARKET VIEW

	Turning Back the Hands of Time This weekend, the sun set on another season of Daylight Saving Time. The extra daylight we now enjoy was actually the result of the Energy Policy Act, which was enacted by Congress back in 2005. But did you know that throughout its long history, Daylight Saving Time has had a remarkable and sometimes unexpected impact? A man was actually able to avoid the draft for the Vietnam War using a Daylight Saving Time loophole. When he was born, it was just after midnight, DST. When he was drafted, he successfully argued that in his home state of Delaware, standard time - not DST - was the official time for recording births. So he was technically born on the previous date--which had a much higher draft lottery number - and he was able to avoid being drafted. In September 1999, the West Bank was on Daylight Saving Time, while Israel had switched back to standard time. A group of West Bank terrorists prepared some timed bombs - but misunderstood the time change - and the bombs exploded early, killing the terrorists themselves, rather than the intended victims - two busloads of innocent citizens. In the 1950s and 60s, each state and locality was permitted to choose start and end DST dates as they desired. During 1965, Minneapolis and St. Paul - which are considered one metropolitan area - didn't agree on start dates, and for a period of time, these Twin Cities had a one hour time change between them. And on one Ohio to Virginia bus route, passengers technically had to change their watches seven times in 35 miles! To keep to their published timetables, Amtrak trains cannot leave a station before the scheduled time. So when the clocks "fall back" in the fall, all trains that are running on time actually stop at 2 am - the official time of DST change - and wait one hour before resuming their routes. In the spring, the routes instantaneously become one hour behind schedule, but they just keep going and do their best to make up the time. So Daylight Saving Time sure can have some unexpected impact. As we enter the first week of Daylight Saving Time, be sure to double-check all of your electronic devices and confirm that the time is correct. Although you may be accustomed to your computer and maybe even your digital clock in your car automatically updating, the recent change of dates for Daylight Saving Time may require that these devices be manually changed, as they now may NOT be ready to update to the correct time on the correct date!

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 November 02 - November 06 Date ET Economic Report For Estimate Actual Prior Impact Mon. November 02 10:00 ISM Index Oct 53.0 52.6 HIGH Mon. November 02 10:00 Pending Home Sales Sept 0.4% 6.4% Moderate Wed. November 04 10:30 Crude Inventories 10/30 NA 0.78M Moderate Wed. November 04 08:15 ADP National Employment Report Oct -190K -254K HIGH Wed. November 04 02:15 FOMC Meeting 11/4 unch .25% HIGH Wed. November 04 10:00 ISM Services Index Oct 51.5 50.9 Moderate Thu. November 05 08:30 Productivity Q3 5.8% 6.6% Moderate Thu. November 05 08:30 Jobless Claims (Initial) 10/31 520K 530K Moderate Fri. November 06 08:30 Average Work Week Oct 33.1 33.0 HIGH Fri. November 06 08:30 Hourly Earnings Oct 0.1% 0.1% HIGH Fri. November 06 08:30 Non-farm Payrolls Oct -175K -263K HIGH Fri. November 06 08:30 Unemployment Rate Oct 9.9% 9.8% 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 MetLife newsletter 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: spapapietro@metlife.com If you prefer to send your removal request by mail the address is: Steve Papapietro 4300 El Camino Real Suite 100 Los Altos, CA 94022 Mortgage Success Source, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated. Mortgage Success Source, LLC 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. MetLife Home Loans is a division of MetLife Bank, N.A.

Palo Alto Market Update, Single Family Homes: October 25th

Here's today's snapshot of the Palo Alto single family home market:

93 Active listings

61 Pending sales

What does this mean? Inventory has decreased again, down to a more favorable number for sellers, especially in the under 1.5 mil range, and pending sales are up. To me the big news is that between Sept. 1, 2009 and Oct 10, 2009 there were 43 single family home sales on MLS. Of these, three homes sold over $2,000,000 and 40 sold under $2,000,000. That is not good news for sellers in the over 2 million market. That segment has a long way to go before we see any real recovery. However, as of today there are 8 pending sales between $2,089,000 and $2,198,000 which is good for that segment. There are still only 4 pending sales over 2.2 and the 49 remaining pending sales are all under 2 million. My prediction for the upper end market is that we are going to start to see some short sales if the sellers have overleveraged their homes and need to sell. Banks are starting to streamline the short sale process and the credit hit is not nearly as severe as a foreclosure. Added to that is the fact that the debt relief is not taxed by the feds leads me to believe that we will not see a wave of foreclosures in Palo Alto, but maybe a trickle of short sales if the employment picture does not pick up or if a homeowner needs to leave the area.

• If you are interested in finding the final selling price of any home, anywhere, you can do it on my web site. Go to www.marcymoyer.com and click on Cyberhome Home Valuation. You can then type in any address next to the search icon and get the county records.

If you need anything else please feel free to contact me. I am here to help you.

Marcy Moyer Intero Real Estate

marcy@marcymoyer.com

650-619-9285

www.marcymoyer.com

DRE 01191194

Palo Alto Market Update, Single Family Homes: October 13th

Here is today's snapshot of Palo Alto's single family home market:

102 Active listings

55 Pending sales

What does this mean? After a big increase in inventory after Labor Day the inventory has decreased again down to a more favorable number for sellers, especially in the under 1.5 mil range. To me the big news is that between Sept. 1, 2009 and Oct 10, 2009 there were 43 single family home sales on MLS. Of these three homes sold over $2,000,000 and 40 sold under $2,000,000. That is not good news for sellers in the over 2 million market. That segment has a long way to go before we see any real recovery.

• If you are interested in finding the final selling price of any home, anywhere, you can do it on my web site. Go to www.marcymoyer.com and click on Cyberhome Home Valuation. You can then type in any address next to the search icon and get the county records.

If you need anything else please feel free to contact me. I am here to help you.

Marcy Moyer Intero Real Estate

marcy@marcymoyer.com

650-619-9285

www.marcymoyer.com

DRE 01191194

Palo Alto Market Update, September 29th: Single Family Homes

• As of today this is the snapshot of the Palo Alto single family home market:

107 Active listings

51 Pending sales

What does this mean? After a big increase in inventory after Labor Day the inventory has decreased by 10 and the pending sales have increased by 8. This is not because of long escrows because the average length of escrow in the last 3 months is 29 days. This is because there are so few short sales and bank owned properties in Palo Alto. These sales are the ones that take so long to close. The middle section of the market, homes listed between $900,000 and $1,500,000 are the ones with the most activity and offers. In this segment there are 40 active listings and 29 pending sales which is a great ratio. Interest rates are still low and there are certainly buyers out there wanting to living in Palo Alto, and now that prices have dropped 20% the market seems to be picking up.

If you are interested in finding the final selling price of any home, anywhere, you can do it on my web site. Go to www.marcymoyer.com and click on Cyberhome Home Valuation. You can then type in any address next to the search icon and get the county records.

If you need anything else please feel free to contact me. I am here to help you.

Marcy Moyer Intero Real Estate

marcy@marcymoyer.com

650-619-9285

www.marcymoyer.com

DRE 01191194

Steve Papapietro's Mortgage Bulletin

For the Week of Sept 28th, 2009

LAST WEEK IN REVIEW

"BE WILLING TO MAKE DECISIONS." General George Patton. And that's exactly what the Fed did last week at their regularly scheduled Federal Open Market Committee meeting. But just what did they decide...and what do their decisions mean for home loan rates?

The Fed said they are going to ration out the remaining commitment of Mortgage Backed Security purchases through the first quarter of 2010. There will be no additional buying, but instead, a longer weaning off of the program. There was some speculation about the Fed increasing the amount of buying above the $1.25T committed to, and last week's statement is the Fed's nice way of saying "no." They will not be buying more in quantity, but what they will do is attempt to provide a smoother transition to normal market conditions.

It is a given that once the Fed ceases its purchases, that interest rates will climb significantly higher...most likely back above the 6% area. So instead of a hard transition with a large bump in rates, the Fed is attempting to allow rates to gradually rise.This means that waiting to purchase or refinance will very likely mean a higher interest rate.

Their decision also means that the Fed's remaining purchases will all be lower in quantity, as the remaining allotment for purchases will be spread over a longer period of time - and additionally, will not necessarily be spread out as evenly as their past purchases - which could lead to more volatility for rates in the near term.

In other news, Existing Home Sales and New Home Sales were reported slightly less than expected, but both reports continue to show signs of an improving housing market. The inventory of unsold existing homes fell to its lowest inventory level since April 2007, while the inventory of unsold new homes dropped to its lowest level since January 2007. While some of the decline in new home inventory may be due to builders constructing fewer homes - these reports indicate that the housing market is indeed showing signs of life.

Remember, with home loan rates still low - but slated to increase with the Fed's recent decision - as well as a juicy tax credit for First Time Home Buyers that is going to expire on November 30th, it makes sense to get off the fence if you've been considering a purchase or refinance. Or do you have a family member, neighbor, friend or coworker who might benefit from getting some good home loan advice? I'm always glad to get your referrals, so simply let me know who I might be able to help.

Also in the news, Durable Goods Orders for August unexpectedly fell 2.4% for the largest decline since January. The weaker than expected economic data helped fuel a rally in the Bond market and a late week improvement in home loan rates...while on the other hand, Stocks struggled, particularly with the increasing concerns of Iran's construction of nuclear sites. This kind of geopolitical unrest is troubling on many fronts, and if the situation continues to escalate, it could have a big impact on both the Stock and Bond markets.

FORECAST FOR THE WEEK

There are several important economic reports in store for this week, the biggest likely being Friday's Jobs Report for September. The Jobs Report for August showed a troublesome 216,000 jobs lost for the month, with prior months revised to show an additional 50,000 jobs lost. In addition, the last report showed that the Unemployment Rate for August jumped to the highest level in 26 years, at 9.7% from July's 9.4%. This is more than double the rate of unemployment from just two years ago and significantly higher than the 5.9% average during the past 40 years. The Unemployment Rate portion of the Jobs Report is often seen as more reliable than the job loss numbers since it is an actual survey, where about 60,000 households are contacted - so this is a particularly important element of the report, as we watch to see signs of an improving economy.

Also this week, we have a read on Consumer Confidence coming on Tuesday, while Thursday brings the Fed's favorite gauge of inflation, the Core Personal Consumption Expenditure (PCE) Index, found within the Personal Income Report. Thursday will also bring another weekly Initial Jobless Claims Report, just ahead of the Labor Department's big Jobs Report coming on Friday.

It will most certainly be a full week of news, particularly as the aforementioned tension in the Middle East continues to simmer. There is a meeting scheduled for this Thursday with representatives from six nations to discuss this situation further.

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, Bonds were able to mount a late-week rally through a key "ceiling of resistance", and this move higher for Bonds caused home loan rates to improve. I'll be watching closely to see if Bonds can hold their ground, and continue in this improving direction in the week ahead.

Chart: Fannie Mae 4.5%% Mortgage Bond (Friday Sep 25, 2009)

MORTGAGE MARKET VIEW

Financial Benefits of Home Ownership

There are a number of personal and emotional reasons to buy a home. But there are also some strong financial reasons to make the investment. In addition to exceptional home affordability and near historic interest rates, here are some important financial benefits of owning a home:

Increased Net Worth: Few things have a greater impact on net worth than owning a home. In a comparison of renters versus homeowners, the Federal Reserve Board of Consumer Finance found that the average net worth of renters was just $4,000 compared to homeowners at $184,400.

A Big Tax Deduction: One of the largest tax deductions available is the amount of interest paid on a mortgage. In fact, a $150,000 home at a 5.50% interest rate can add up to approximately $8,000 in first year's interest. This amounts to a significant savings - effectively reducing the amount of a homeowner's monthly loan payment.

Long-Term Appreciation: Over the last few years, home prices have corrected and become more affordable. While that's good news for potential buyers, it has overshadowed the long-term appreciation of a home's value. The reality is, despite market ups and downs, real estate historically appreciates around 6% per year. Even if you calculate a modest appreciation of 3%, a home purchased today for $150,000 should grow in value to $364,000 over 30 years.

$8,000 Tax Credit: Don't forget, the government is offering an $8,000 tax credit for first-time homebuyers - or for folks that haven't owned a home during the past three years. However, the program is scheduled to end soon. In fact, the Internal Revenue Service recently reminded potential buyers that they must complete their first-time home purchases before December 1, 2009 to qualify for the special credit, which means the last day to close on a home and qualify for the credit is November 30, 2009.

If you're considering purchasing a home or refinancing, this is an ideal time. Call or email me today to discuss your specific situation and how you can benefit from today's market.

This 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 September 28 - October 02

Date ET Economic Report For Estimate Actual Prior Impact Tue. September 29 10:00 Consumer Confidence Sept 57.0 54.1 Moderate Wed. September 30 08:15 ADP National Employment Report Sept -200K -298K HIGH Wed. September 30 08:30 Gross Domestic Product (GDP) Q2 -1.2% -1.0% Moderate Wed. September 30 09:45 Chicago PMI Sept 52.0 50.0 HIGH Wed. September 30 10:30 Crude Inventories 9/25 NA NA Moderate Thu. October 01 10:00 ISM Index Sept 54.0 52.9 HIGH Thu. October 01 08:30 Jobless Claims (Initial) 9/26 NA 530K Moderate Thu. October 01 08:30 Personal Consumption Expenditures and Core PCE YOY NA 1.4% HIGH Thu. October 01 08:30 Personal Consumption Expenditures and Core PCE Aug NA 0.1% HIGH Thu. October 01 08:30 Personal Spending Aug 1.1% 0.2% Moderate Thu. October 01 08:30 Personal Income Aug 0.1% 0.0% Moderate Thu. October 01 10:00 Pending Home Sales Aug NA 12.9% Moderate Fri. October 02 08:30 Average Work Week Sept 33.1 33.1 HIGH Fri. October 02 08:30 Hourly Earnings Sept 0.2% 0.3% HIGH Fri. October 02 08:30 Non-farm Payrolls Sept -188K -216K HIGH Fri. October 02 08:30 Unemployment Rate Sept 9.8% 9.7% HIGH

A Very Special Duplex in a Very Special Location

10412 Meadow Place, Cupertino

Virtual Tour

This is a special home at the end of a lovely cul-de-sac in a residential neighborhood down the street from Monte Vista Park.

2 units

2 bedrooms in each unit

1 ½ bathrooms in each unit

Large, sunny dining room/sun room in the back unit

9,580 +/- square foot lot with mature landscaping

2,780 square feet of living space

Entire exterior has just been painted

2 car garage

Back unit has new carpet, new kitchen counters, and new bathroom floors

In unit washer and dryer in both units

Fantastic cul-de-sac location

Renowned Cupertino schools including Stevens Creek Elementary, Kennedy Middle School. Monte Vista High School (buyer to verify)

For more information please contact agent:

Marcy Moyer

Intero Real Estate Services

marcy@marcymoyer.com

650-19-9285

www.marcymoyer.com

D.R.E. 01191194

Palo Alto Market Update, September 16th: Single Family Homes

As of today, here's the snapshot of the Palo Alto single family home market:

115 Active listings

43 Pending sales

What does this mean? There was a huge increase in inventory last week. The PA broker’s tour was the biggest it had been all year. This may be a fluke as many people do not put their homes on the market in August so the first week after Labor Day has a lot of pent-up sales. I will know more next week regarding how the pending sales are doing, whether they're still brisk or if there's a slow down. Also it will be interesting to see how many new listings come on the market in the next 2 weeks. If we continue to see huge increases then the gains in the market we saw over the summer will probably not hold. If the inventory does not continure to increase and pending sales keep up then we should go back to a healthy though not overheated market.

• If you are interested in finding the final selling price of any home, anywhere, you can do it on my web site. Go to www.marcymoyer.com and click on Cyberhome Home Valuation. You can then type in any address next to the search icon and get the county records.

If you need anything else please feel free to contact me. I am here to help you.

Marcy Moyer Intero Real Estate

marcy@marcymoyer.com

650-619-9285

www.marcymoyer.com

DRE 01191194

Palo Alto Market Update, Single Family Homes: Sept 6th

Here's today's snapshot of the Palo Alto single family home market:
86 Active listings
50 Pending sales

What does this mean? The inventory of active listings continues to decrease, and the pending sales continue to increase. I think that we are experiencing significant change in the under 2 million dollar market. We have seen a number of multiple offers in Palo Alto and I think by Sept we may start to see that there is an up tick in the prices in the lower than 2 million dollar market.

If you are interested in finding the final selling price of any home, anywhere, you can do it on my web site. Go to www.marcymoyer.com and click on Cyberhome Home Valuation. You can then type in any address next to the search icon and get the county records.

If you need anything else please feel free to contact me. I am here to help you.

Marcy Moyer Intero Real Estate
marcy@marcymoyer.com
650-619-9285
www.marcymoyer.com