ChadCan.com

Mortgage Meltdown in 1500 words or less...

2012-01-10T12:23:00.000-07:00

Over the last several years now there has been a severe downturn in the economy that has created opportunity for some and devastation for others. The mortgage market is just one piece of that picture, though a very important one. For years, people saw their home as a "piggy bank" and it often was the only retirement or other savings that they had. Their monthly payments would generally pay off the debt against the home, they would enjoy the tax benefit of home ownership (pay less taxes) and the home would continue to grow in its value. The home was a "piggy bank" in that they could easily pour some of that money back out of the home through refinancing or home equity loans. The money was often used to enrich their lifestyle with items such as a new boat or even to consolidate the boat, truck, motorcycle and credit card money owed into a neat little stack of debt against the big "piggy". Another version of the piggy bank home was the savvy investors who chose to get cash out of their home to invest in the stock market. Still others would simply sell their home at their whim and pay off all of their debt only to start fresh with a home that they could buy with no money out of pocket or no real qualification. In short: the market encouraged us to think that their was not a ceiling on the price homes would appreciate to...and we couldn't lose! There were products available that also helped us to think that buying a home was a
as an member of society here in the good 'ole U.S. of A. In fact, roughly 8 out of 10 people who applied for a loan with me during those "boom" years could be qualified for some form of RESPONSIBLE home finance...with the last two possibly choosing to finance elsewhere with the "questionable" mortgage broker lot.

Unfortunately, all of that came to an end and the "riches" of our homes became liabilities that we owed more on than they were worth. Blaming the mortgage professionals who encouraged "sneaky mortgages" for all of our housing market's ailments is like blaming the soldiers for the war in Iraq. However, the catalyst for the unraveled market certainly may have been in large part due to people giving up on paying their mortgages that maybe they never should have chosen or been encouraged to choose in the first place.
on our part as the general public was accepting the belief that home ownership is a right that should be afforded to everyone regardless of whether they are prepared to accept the responsibility or not.

Without going too far into the reasons for all of the "exotic" mortgages that were available to buyers for a few years, I will share that they were needed to meet a demand for Mortgage Backed Securities. Mortgage Backed Securities or "MBS" are simply little "shares" of a group of mortgages just like "shares of stock" is a portion of ownership of a publicly traded company like Apple. Investments such as stocks and bonds are backed with a promise that you will earn some sort of interest or return. Mortgage Backed Securities are no different and are traditionally offering a reasonable return on your money with minimal risk. (Traditionally, people were putting 20% of their
money into their homes up front!) You are buying mortgage shares. As the borrowers pay their payment, the shares pay a return and everyone is happy. Those who securitize mortgages or actually split them up into shares are referred to as the "agencies" (Fannie Mae, Freddie Mac, Ginny Mae, etc.) The marketplace for the selling of the shares is referred to as the "secondary market". With increasing world wealth and a desire for reasonable returns for minimal risk: DEMAND for MBS went through the roof and the Agencies were having a hard time keeping up with demand. They needed to have more product (MBS) to sell to interested investors. This can be traced to a need for more mortgages to be securitized.

What changed was the rating system. The way the rating of the MBS changed allowed the bond to be offered on mortgage batches that were "
" a good rating BUT there were MANY stinkers in the pile. People wanted a reasonable return on their investment with reasonable risk and had boatloads to invest so the "AAA rated" Mortgage Backed Securities a.k.a. Mortgage Bonds sold like HOT CAKES. In other words, people were buying "AAA" rating but it was really like a burrito wrapped in "AAA" rated loans, but FULL of Garbage and indigestion. With the new rating system, the agencies could offer HIGHER RISK loans and effectively "qualify" a MUCH broader group of people. They were able to offer mortgages with the new products to people who NEVER should have had or would have had a mortgage before or since.

A few years later, the rubber met the road. People stopped making their mortgage payments and in many cases with some of the "no job, no asset verified loans, NEVER made even one payment. That meant that the investors who bought shares of those mortgages unknowingly were not getting paid. They couldn't sell their shares unless they sold them for pennies on the dollar to other investors. The exotic mortgages went away...making the group of people who qualified for a mortgage MUCH smaller. Less people available to be financed meant less people to buy the homes on the market. Less people demanding homes on the market left more homes for sale and degraded their value. Entire developments sat empty because there simply was not enough people qualified to even purchase any of the lots anymore. Example: how many people qualify for a loan that requires zero down payment, no income verification and no assets vs. a loan that requires a down payment of 3% of the purchase price? When homes were devalued, people felt hopeless. Many walked away from homes that they were perfectly qualified for because the home was worth several hundred thousand less than what they bought it for and it was wiser to start over somewhere else. We didn't feel so "RICH" anymore and stopped spending money so readily. This led to less profit reported by many companies and so lower values in the stock market so our 401k's were also devalued often by thousands upon thousands of dollars. What a slump.

Okay, all of this is depressing right? Fortunately, with every misfortune for one, there is a fortune to be made by another. Opportunities abound for people who are interested in exploring this real estate market.

Three opportunities for buyers right now:

1. The feds stepped in and have invested over a trillion dollars in Mortgage Backed Securities over the last 3 years. Agency guidelines have changed making the MBS a very reasonable investment with a decent return. Confidence is UP in the once tarnished investment. This is keeping rates at all time lows. The MBS market will very likely stay strong in the near future but it is stronger NOW than EVER so now is a great time to take them in with mortgage financing.

2. Home prices are starting to level and in some areas are actually marking increases. For the last few years the market has been FLOODED with short sale and foreclosure opportunities. In many markets, the "fire sale" home has actually provided more comparable sales for appraisers to consider than homes sold by people who are making the payments just fine. The fire sale home has decreased the market to a place where it is now starting to go back up...the time to buy is now.

3. The best remain. Now, more than ever: it matters who you do business with. So many of the "fly by night" or part-time realtors and lenders simply haven't made it through this recent cycle of tumult and have decided to hang it up. Many of the professionals that are left are the best out there. Take time to investigate this for yourself and you will find that there are more people interested in helping you right now with sincerity and integrity than ever before.

Good luck in whatever you endeavor. Mortgages have been my life for over a decade and I have been in finance for longer. I have never seen an opportunity like this before and until you are ready, I will be available. Naturally, if you have questions on any of the above or would like to discuss further, please don't hesitate to reach out.

Cheers,

Chad

HARP 2.0...RATED R for REFINANCE and the 3+2 rule and MY NEW PHONE NUMBER!

2011-10-27T17:23:00.001-06:00

Harp 2.0 was announced earlier this week. What is it? HARP stands for "Home Affordable Refinance Program" and was aimed at people holding conventional mortgages to help them refinance. It was actually a version "2.0" of the George Bush plan aimed at helping underwater mortgagors in the U.S. The Bush plan was rated "R" for "RESTRICTED" and only actually helped a handful of people.

The HARP program helped more home owners but there were still some pretty good roadblocks such as those self-employed individuals who were making payments but showing a decline in year over year income or those whose homes were too far underwater. The Obama Program was GETTING THERE but not quite. We have personally helped out MANY home owners through the HARP program though there were also too many that we had to turn away. Read more on "HARP Roadblocks" <here>

The NEW HARP program has yet to be finalized but changes are said to include:

Removing the current 125 percent loan-to-value ceiling on refinanced mortgages;

Waiving risk-based fees on borrowers who take shorter term mortgages and reducing those fees for others;

Eliminating the need for a new property appraisal where there is a reliable AVM (automated valuation model) estimate provided by the GSEs;

Eliminating certain representations and warranties required of lenders to obtain the GSE guarantee. This will protect lenders from many of the buy-back requirements they face under current guidelines.

Extending availability of the program through the end of 2013.

Rates Popped up today with the FNMA 3.5% coupon ending the day DOWN 72 bps at 100.47. Looks like investors like the "plan" that the Europeans have put together to save their bacon over there. The money that left the bond market seemed to go to stocks.

The 3+2 Rule is a way to Prioritize your life each day. Watered down version: Pick the THREE most important things to get to and then 2 more bonus items. For the full version: <click>

Finally:

After almost 6 years of living in Bozeman, I am finally getting a personal BOZEMAN cell number. Please update your phone and forgive me if you get this notice more than once: (406) 219-7873 or (406) 219 - S-u-r-e

Cheers!

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana

NMLS# 583046

fax: 406 522 0929
Personal Cell: 406 219-7873
Personal Email: metchad@gmail.com

From the Horses Mouth...

2011-10-12T17:09:00.000-06:00

For those who may be interested...there is a nationally recognized mortgage company for sale as of 5pm eastern standard time today. If you have already heard, that mortgage company is ours.

It has a great products offered, considerable market share, excellent processing and underwriting teams and a great reputation. Purchaser will need to continue to offer competitive rates/fees, continue providing quick turn times and closings through the underwriting and processing department, continue to practice "make sense" underwriting and continue to provide LOW Jumbo Financing rates to our clients.

We are not worried. It is business as usual. IN FACT: after a tough day in the markets, our rates actually got BETTER today...by 1/2 point in pricing on the 30 year fixed!

If you have questions or concerns, reach out. We'd love to hear from you.

Cheers!

Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana

NMLS# 583046

fax: 406 522 0929
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

2 Tricks, one Treat...

2011-09-30T13:55:00.001-06:00

Some quick Items. RATES dropped (yawn) and are in the UNDER 4% range on a 30 year fixed loan.

Quick version of the rest of this post:

RD is adding monthly RD FEE but reducing upfront fees...it is NOT Mortgage Insurance Monthly though
FHA is lowering loan limits...but apparently not in Gallatin County. The FHA loan LIMITS Tool is here
Treat: VA is lowering their funding fees! (by 50% with 5% down...see chart below)

Cheers! Chad

Details: >>>>

VA Funding Fee Changes Effective October 1, 2011

(YES we do offer VA loans!)

VA's funding fee is an upfront fee that is often financed so it increases the loan amount an payment slightly. VA doesn't charge a monthly mortgage insurance fee so the upfront "VA Funding Fee" compensates for that. If a veteran is disabled due to military service, they may be eligible to have the fee waived altogether. Remember that National Guard Reservists with active duty service MAY also qualify for a VA loan and other VA benefits.

FHA Changes as of 10/1/2011 for Montana and everywhere else.

You may also see that FHA has announced the lowering of its limits effective 10/1/2011. I don't see where our county for Bozeman Montana FHA loans (Gallatin) is going to be affected so please let me know if you know something different. For your reference, here is a link to HUD.Gov's loan limit tool. You can see what limits are for FHA loans in Montana or anywhere FHA loans are offered. The counties that are most affected are the ones that were considered "high cost" where their limits are dropping from $729,000 and change to $625,500. The MINIMUM floor...so the most the loan amount is dropped to is $271,050.

The FHA loan LIMITS Tool is here

Rural Development loans!

RD or USDA guaranteed loans are also changing as of 10/1/2011. They are lowering their upfront fee from 3.5% to 2% but adding a monthly fee equal to .00030% of the loan amount monthly. (About $30 on a $100,000 loan)

HOWEVER: when a client is financing in LESS money with the lower up front fee, the net difference is just over $20 bucks/month.

Example: Currently for a $100,000 Montana Rural Development Purchase Loan there is an additional $3500 financed in. With changes to the RD Guaranteed Loan program as of October 1, 2011 there will only be an additional $2000 financed. The smaller loan amount makes a smaller payment...

Note that the monthly "RD FEE" is NOT considered Mortgage insurance so if you check with your accountant, none of the tax benefits sometimes associated with mortgage insurance apply.

Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana

NMLS# 583046

fax: 406 522 0929
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Believe...

2011-09-29T15:01:00.001-06:00

This is a gem I found today...read the whole article here.

"Pick something to believe in and stick with it." When I first started racing motorcycles the then-World Champion told me he always walked an unfamiliar track before riding any laps, a ritual that allowed him to see surfaces, bumps, and potential racing lines he might otherwise miss. Good enough for him, good enough for me, so I started doing the same thing. Did it work? I certainly thought so… so it did. Pick something tangible and do it every time, whether preparation, follow-up, processes… you'll feel more confident and your performance will be better. Think of it like wearing lucky socks, except in this case your "superstition" actually makes a difference.

Rates are steady! Low 4% range for 30 years seems ridiculous. Snoopy is here...throw us a bone, eh?

Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana

NMLS# 583046

fax: 406 522 0929
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

ZING!!!! Tips for your STALE listings...how to MOOOVE 'em.

2011-09-27T13:44:00.000-06:00

This is a GREAT article from Trulia.com that can be found <here>

Let me know if I can help you with tip #5...

Tips to Get Your Stale Listing SoldSeptember 25, 2011|Sellers6 Comments

In today's market, most listings aren't instantly flying off the market. While we all know price is one of the most important factors in the sale of a home, there are other factors they can improve the saleability of your listings. Here are a few tips to get that stale listing sold plus a handy download designed just for sellers.

(1) Offer incentives or alternative financing options

Incentives can make a big difference for buyers who are stretching to find the down payment to buy a home or who may be sitting on the edge of loan limits. Seller incentives such as paying for closing costs, inspections, or repairs, or providing allowances or credits for home upgrades after closing can make a big difference to home buyers short on cash. Other alternatives could include pre paying taxes, homeowners dues and insurance. Consider offering buyer incentives to encourage on the fence buyers to take action on your listing.

(2) Make it accessible

Take a hard look at the accessibility of a home. Today's home buyer is impatient. They want to see homes and they want to see them now. Make sure your listings are simple and easy to show. Carl Medford, an agent with Prudential California Realty in the San Francisco Bay Area believes home accessibility is the #1 reason homes don't sell. "If we can't get in, we can't show the house. If we can't show the house, we can't sell it. We frequently end up showing less than six homes because we can't get access to homes on the list."

(3) Expose it- everywhere!

We are often surprised by the number of homes with property addresses undisclosed on the internet. It's no secret homebuyers are looking on the internet for homes, make sure they can easily find it. Two popular search filters we see prospective homebuyers using on Trulia.com are filters for listings with open houses and filters for listings with price reductions. Want more eyeballs on your listings? Make sure they are updated weekly on popular real estate search sites like Trulia and Craigslist and be sure to list your open home times to get the max exposure for your listings. Want more info? Check out 3 free ways to rank higher on Trulia.

(4) Refresh your photos

Today's homebuyer spends a lot of time online. As your listing becomes stale, so do the property photos. Consider retaking the photos, especially if seasons have changed. If taking new photos is out of the question, you may want ot consider changing up the order your photos display online to give it a fresh appearance for web browsing buyers. Many agents start their photos with a picture of the front of the house when they would be better served displaying the huge backyard or the amazing chef's kitchen.

(5) Put some zing in your marketing copy

In addition to stale photos, your marketing copy may be putting prospective buyers to sleep. "Check out my 3 bedroom, 2 bath home in a great location." Yawn. Add some zing to your headlines and descriptions to draw the attention of homebuyers. Your marketing copy needs to tell a story that appeals to the people most likely to buy your listing. Your copy can get old too. Simply freshening it up frequently is a good way to capture more attention to your listings.

It's your turn- what other tips do you use to move your listings?

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana

NMLS# 583046

fax: 406 522 0929
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Wax on Wax off...

2011-09-26T16:18:00.001-06:00

Anyone else feeling like you need to know a form of "Kung Fu" to get anything done in the real estate world the last few years?

It seems to take so much more energy to get buyers, sellers, lenders/underwriters, title folks, inspectors, appraisers and others with their hand in the pie to all work together and deliver the service we NEED to be competitive in this marketplace.

Sometimes, if it aint broke, don't fix it with some of our relationships...but too many of them ARE BROKE.

If yours is: Please call me. I am a professional with carefully developed processes to successfully deal with the speed bumps and bone-breaking obstacles we sometimes encounter.

You may have noticed that rates are ridiculously low. Part of this comes from fears of default on notes in Europe. The loose U.S. equivalent of this would be if there was worldwide fear that we wouldn't be able to pay what is due to those holding our treasury notes and savings bonds. That would make holders of those notes a little shaky and looking for other places to stash their cash.

In fact, much of the money that has come to and stayed in our markets is "safe haven" money as holders of those European notes are cashing in and fleeing those markets. Nobody wants to be the one optimist holding a ton of money in a collapsing environment.

We are hoping that rates stay low as things continue to ease with mortgage insurance companies, people have adjusted their expectations (we are not hearing stuff like: "What do you mean I have to show you a paystub?" anymore) and the demand for home ownership put on by a whole new generation of first time home buyers is warming up.

Cheers,

Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana

NMLS# 583046

fax: 406 522 0929
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

KARATE CHOP!

2011-08-09T11:13:00.001-06:00

Hiiiiigh-YAW!

What's up with mortgage lending these days? It seems like a person needs a black belt in Karate to get anything done.

I have one...a black belt. Although not a black belt in Karate, I am wearing it now and it seems to work.

Financing a home or refinancing a home may not be right for everyone, but it may be right for you. It can be the best move you can make if you make it with your eyes open and understand what you are undertaking. I can help you with that. I have been in finance since 1999 and my processor/underwriter partner since 1986. Yes, we have even won some awards. Of course, we have met some great people and want to meet you. Our process is efficient and effective. I have even thought of filing for a trademark on it.

I work for a national brand that needs to remain nameless on Craig's list, but I would be glad to share it with you when you call for more information.

Be brave, DO SOMETHING...

Call me if I can help:

406) Seven99-86Thirteen

Cheers,

Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana

NMLS# 583046

fax: 406 522 0929
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Self-Promotion...I am a Jerk.

2011-07-05T12:25:00.001-06:00

Hey all: I want you to know that I am a Jerk.

Ever notice how the "jerks" seem to be getting the lion's share of the business? I am afraid that the reason is simply because the "jerks" tend to be better at promoting themselves as people who can get the job done.

I personally know that X.X. individual at "BRAND X" here in Bozeman has HORRIBLE customer service scores...however, this person is really good at converting real estate partners and clients into believing that he/she is the competent choice when they need to get a deal done.

YES, referrals ARE an intimate request. KNOWING that a deal is going to get beat to death until it closes on time because the loan officer/Realtor/CPA/Attorney or other partner is just JERKY enough to get it done is a bit of confidence we all need in this marketplace.

Yes, I am a jerk, but I tend to also have higher than average customer service scores. This is because I have discovered a proprietary blend of JERKY-ness and Finesse that just can not be duplicated.

My business is built on referrals from past clients and Partner referrals, why don't you be a pal and send me some nice warm referrals to chew on.

Cheers,

Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana

NMLS# 583046

fax: 406 522 0929
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

2011-06-20T16:52:00.001-06:00

http://arazsuccess.com/bai3.html

CENTER OF YOUR PHYCHE...the Subconscious MAP

2011-06-14T11:22:00.001-06:00

Just for fun, I wanted to share this.

Have I ever shared my "Levels of Intelligence" theory with you? The premise is easy to see, but more involved to explain. You can stop reading here if you want and just check out the attached picture.

Higher level thinking comes from the center. Lower level thinking comes from the outer levels. Isolation, conflict and other low frequency thoughts that lead to the same type of experiences come from the outer levels. Love, purity, trust, openness and other high frequency thoughts leading to the same experiences come from the center. The first three levels are what you are...the outer three design what you become as you live on this plane of existence.

Level 1: CENTER

I have imagined the center of my ever-expanding imagination. The "stone" that was dropped into the vapor igniting it to life. That center of each of us from which all life and light radiates out is pure creative energy...some call it GOD. The center of your imagination and therefore yourself is GOD. This is magical to realize. GOD is all things...or "pure creative light/energy" if a person doesn't like the emotional luggage that come through the word GOD. Because GOD is in all things, we connect with ALL THINGS there.

Level 2: DESIGNATION

Around that "LIGHT" in the center is the set of intelligence that comes from being HUMAN. Every cell in our body grows a certain way because that intelligence (and others) are passed forward from now to forever. Because we are HUMAN, we can connect there with anyone.

LEVEL 3: ENVIRONMENTAL ADVANTAGES

Around our HUMAN-ness is a set of "TRIBAL" intelligence that is passed forward. This IS your DNA and the intel contained in each strand. It is what turns on and off certain aspects of how you manifest on a physical plane as a human BODY. This is integral in your personality...though subconscious. This intelligence allows us to adapt physically to the environments that our bodies "anticipate". This is why some store energy differently, have different features like larger ears, longer legs/arms etc based on "tribal intelligence" passed from generation to generation DIRECTLY.

LEVEL 4: SPIRITUAL INTERNETWORK

Around that...is a sense of subconscious intelligence that I consider "social consciousness" or an acute awareness or atmosphere of ALL things that ANY human experiences on this earth. This is a spiritual or pre-physical realm that provides a detailed accounting of all "experiential" knowledge that has been gathered since the beginning of time. All things "known" by experience live here...in your subconscious. HOWEVER: at this level there is a departure from "TRUTH" as "impressions" begin to float around here BECAUSE "experience" is processed by fallible individuals. Some of this experience we are aware of because we hear the history of it through others or other resources. The "spin" or "impressions" on those stories tend to skew the mind into designing its own impressions to match that. Example: "WE ARE IN THE USA and this is the BEST COUNTRY IN THE WORLD" may be something that a person CLINGS to and seeks evidence over while someone else completely disagrees with that impression added to the truth that this is the USA.

LEVEL 5: INDIVIDUALITY

From there: PERSONAL experience becomes the next level or layer of your subconscious mind...PLUS your impressions based on your "perspective." This is VERY important. It is the "impressions" or "stories" we build immediately based on our limited perspective that can change YEARS LATER as perspective changes. Because we like to be "right": we tend to constrain ourselves to our perspectives by constantly seeking to uphold them with "EVIDENCE". Example: A person may say "I am un-lovable" because they set that theorem out there due to one "event" in their personal experiences. They will then spend a considerable amount of effort "supporting" that with "evidence" they tend to find for themselves readily since they are focused on seeing that "evidence" even if it isn't there. It is similar to the glass is half-empty or half-full effect.

LEVEL 6: OPERATING SYSTEM

All of this rolls up through your operating system which many call the EGO. It is the EGO that is just on the other side of your conscious mind so we are quite aware of it. EGO is CONSTANTLY telling us stories and trying to manage our "impressions". The EGO is responsible for this and feels it's sense of worth as it "translates" all the other truth from the levels under it into a form that your intellectual self can digest. Unfortunately, most people operate from this level. The EGO is MOSTLY "impressions" since it is the FURTHEST from the center...GOD.

Truth Encountered must get ALL THE WAY THROUGH to the center to be validated by the source of ALL truth and then make it all the way out to the conscious mind to resonate and be confirmed. If the "filters" of the rest of your sub-conscious prevent that truth from validation, a person can't truly tell the difference.

When a person operates ONLY from a place of EGO drawing on the "truth and impressions" of Personal Experience: perspective is limited and resonance is restricted. They are more isolated and less likely to connect well with others.

When they operate with EGO using truths and impressions from social and personal levels: they may connect a bit more readily with others, but will be generally distrustful and less grounded or resonant individuals.

In operating with the "center" left dormant or otherwise intentionally turned off, all of that light and knowledge becomes less available. It really is like a hole in the whole.

Turning to that center and realizing all that a person really is can be very important and empowering. Operation with all levels of intelligence working together to digest opportunity and convert it into true and trustworthy light and knowledge is honorable and fulfilling. A person is connected to all things as they connect with the center of their being.

Cool, huh?

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana

NMLS# 583046

fax: 406 522 0929
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

R-E-L-I-E-F in the bond market...and HELPFUL body language article

2011-04-12T16:32:00.000-06:00

Yes! Finally some relief in the bond market which will lighten up mortgage rates. (REMEMBER that we are still offering a purchase incentive of 3/4 point to buy your rates down on purchase loans.)

FNMA 4.0% bond is UP 56 basis points on the day today and closed out at $97.84. OIL is also heading in the right direction and is DOWN to $105.90 a barrel and hopefully heading lower.

In the interest of helping you with your business here is a GREAT article with some quick info on "Body Language" that you may find very helpful to review. It is posted here if you want to check out the author's blog.

Cheers!

Chad

What Does Your Body Language Say About You? How To Read Signs and Recognize Gestures

Art by LaetitziaAs we all know, communication is essential in society. Advancements in technology have transformed the way that we correspond with others in the modern world, yet when conversing face-to-face, it's not only speech we verbalize that matters. Body language is truly a language of its own. We all have quirks and habits that are uniquely our own. What does your body language say about you? And what can you learn about others by becoming aware of what some of the signs mean?

I thought it would be fun to list some of the well-known signs that body language experts study and recognize. It is said that when talking to a person the information that we receive can be broken down as:

10% from what the person actually says
40% from the tone and speed of voice
50% is from their body language.

Lowering one's head can signal a lack of confidence. If someone lowers their head when complimented, they may be shy or timid

Touching or tugging at one's ear can indicate indecisiveness

Sincere smiles encompass the whole face (noticeable in the eyes)

A false smile usually only engages the lips

Tilting one's head can symbolize interest in something or someone

Overly tilted heads can be a sign of sympathy

Closing of eyes or pinching at the bridge of one's nose is often done when making a negative evaluation

When a listener nods, this is usually a positive message and relays that they are interested and paying attention

However, excessive nodding can imply that the listener has lost interest but doesn't want to be rude

Touching/rubbing one's nose may indicate doubtfulness or rejection of an idea

Sticking out one's chin toward another may show defiance

Resting a hand on one's cheek is often done if they are thinking or pondering; and stroking the chin can mean the person is trying to make a decision

Pushing back one's shoulders can demonstrate power and courage

Open arms means one is comfortable with being approached and willing to talk/communicate

Folded arms show that there is a sort of barricade between them and other people (or their surroundings) and indicate dissatisfaction

Resting one's arms behind their neck shows that they are open to what is being discussed and interested in listening more

Pointing one's finger can be construed as aggression or assertiveness

Touching the front of the neck can show that someone is interested and concerned about what another is saying

Hand movements that are upward & outward signify positive and open messages

Palms that are faced outwards towards another indicate one's wish to stop and not approach

If one's fingers are interlaced or if the finger tips are pressed together, it usually shows that a person is thinking and evaluating

If offering ideas to other people, many times the sides of one's palms are close together, with fingers extended

Putting your hands on your hips can show eagerness and readiness (also, at times, aggression)

Hips pushed forward, while leaning back can show that one feels powerful (also can be a suggestive gesture)

A wide stance - where one's feet are positioned far apart - signifies more power and dominance

When one sits with legs open and part, they might feel secure in their surroundings

Crossed legs can mean several things: relaxed/comfortable, or defensive - depending on how tense the leg muscles are

When you cross your legs towards another person, you are showing more interest in them than when they are crossed away in the other direction

A confident and powerful position is the "Figure of Four Cross" when one's ankle is atop the other leg's knee and the top leg is pointed sideways

Bouncing your foot if your legs are crossed can show that you are bored or losing patience

The lowering of the eyes can convey fear, guilt or submission

Lowered eyebrows and squinted eyes illustrate an attempt at understanding what is being said or going on

A lack of confidence or apprehensiveness can be displayed when you don't look another person in the eyes

One tends to blink more often if nervous or trying to evaluate someone else

If you look directly into another person's eyes you are displaying self-assurance

Wide eyes show more of an interest in a subject or person

If you are irritated with a comment made by another during a conversation, a common movement is to take a quick glance sideways

Staring at someone can be an aggressive gesture or suggest that the one staring feels dominant

Recalling a memory is usually done by looking up and to the right

Looking directly upwards can indicate that one is thinking

Eye contact is normally broken if someone feels insulted by another

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana

fax: 406 522 0924
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Though Averted: How Might a Government Shutdown Impact the Loan Process?

2011-04-11T09:27:00.001-06:00

Good Morning!

Though it was averted, the effects of a government shutdown may have reached some of us. Although we would still "fund" government loans, effects such as the inability to verify someone's employment who happened to be working for a "shut down" federal agency and perhaps inconvenience if FHA websites were shut down temporarily rendering us unable to order a FHA case number or others. We scoured our pipelines and took care of any items last week that may have been issues...just to be sure.

I pushed out a quick email last week that we were able to discuss deeper and some meaningful conversations came out of it. Thanks for your participation in our success!

I have attached a Great article from a newsletter I get from Mortgage News Daily.

This morning: Rates are steady and we are ready. Oil is up over $111/Barrel and Gold is at $1471 an ounce. Are you ready for an inflation tsunami this summer? Fence-sitting buyers may want to consider getting in while the getting is good.

Cheers,

Chad

Apr 6, 2011 2:32PM

How Might a Government Shutdown Impact the Loan Process?

Congress needs to pass a "Continuing Resolution" by midnight on Friday, April 8th to avoid a government shutdown. From Wikipedia : A continuing resolution is a type of appropriations legislation used by the United States Congress to fund government agencies if a formal appropriations bill has not been signed into law by the end of the Congressional fiscal year. The legislation takes the form of a joint resolution, and provides funding for existing federal programs at current or reduced levels. Reuters...

Apr 8, 2011 4:10PM

Mortgage Rates: Visualizing the Spike

Mortgage rates moved higher this week following a RELEASE OF STORED ENERGY. The chart below graphs the average origination closing costs tied to specific note rates (as quoted by the five major mortgage lenders). Our most updated chart does a great job illustrating the recent spike in home loan borrowing costs. Stored energy was released in an unfriendly direction! If the note rate line is moving up, the closing costs associated with that note rate are rising. Each line represents a different 30...

View: Front Page | Headline Viewer

Micro News

3:58 PM:	Next Week: No Scheduled Data Monday, Busy After That
3:36 PM:	HUD Issues Shutdown Guidance to Housing Counselors
2:38 PM:	The Upside of Declining Lock Volume
2:25 PM:	Reprices for the Better Reported as MBS Reach New Highs
10:17 AM:	Highlights From Fed's Fisher
9:34 AM:	Wells Fargo cuts 1,900 jobs as refinancings slow
9:15 AM:	Highlights From Fed's Lockhart
8:56 AM:	No Agreement on Continuing Resolution. Rates on the Rise

»View All Micro News

Around the Web

»View More Around the Web

Video News

	Fed Rate Hike Ahead?
	Shutdown's Collateral Damage: Housing
	Buy Real Estate At The End of Q2

»View More Video News

Today's Comments

	"re: The Upside of Declining Lock Volume, The SECONDARY MARKET CURRENT COUPON went out at 4.304%, +3.7bps vs. 5pm yesterday. The CC hit its tightest marks..."
	"Competition: An extended period of low monetary policy rates" . This is the root cause of the boom and bust--who is "they" that said it..."
	"I see Tammy's point, but I would also like to point out that if the salaries in congress were affected by a government shut down, it would add bias..."

»View More Comments

Today's Q&A

	"Is real estate tax Paid "in advance" or for the past..."
	"I have excellent credit rating/score/history but low income,..."
	"I stopped paying my mortgage for 9 months but it has been a year..."

»View More Q&A

Today's Forum Discussions

	"Loan Scenario View All Post A Scenario Loan State: Rhode Island Loan County: --- Loan Type: Purchase Loan Amount: $200,000 Property Value: $250,000 LTV..."
	"Loan Scenario View All Post A Scenario Loan State: Rhode Island Loan County: --- Loan Type: Purchase Loan Amount: $200,000 Property Value: $250,000 LTV..."
	"If living in another state and want to buy in New Jersey, can I apply in state where I live."

»View Forum Discussions

Chad Schauers

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Market Data

Mortgage Rates (National Average)

30YR	5.02	0.04

15YR	4.27	0.02

FHA30YR	4.81	0.01

Jumbo30YR	5.70	0.01

5/1ARM	3.53	0.01

MBS Quotes

FNMA 3.5	93-06	-0-07

FNMA 4.0	97-19	-0-07

FNMA 4.5	101-07	-0-05

FNMA 5.0	104-07	-0-04

Treasuries

2 YR	0.8141	0.0281

3 YR	1.3182	0.0412

5 YR	2.3135	0.0365

7 YR	2.9912	0.0342

10 YR	3.5829	0.0339

30 YR	4.6436	0.0286

Recent Housing Data

Visit our Market Data Center for all of the latest housing numbers, graphs, etc.

Homeownership	-0.60%

Home Vacancy	8.00%

S&P/Case Shiller	-0.96%

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&copy 2011 Brown House Media, Inc. All rights reserved.
Brown House Media Inc. - 19706 One Norman Blvd - Cornelius, NC 28031

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana

fax: 406 522 0924
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

FYI...Government Shut Down!

2011-04-07T12:41:00.001-06:00

A government shut down is "looming" if a spending plan (A.K.A. Budget) is not approved by Friday. A government shutdown would keep soldiers, intelligence and other employees engaged while closing doors on the Smithsonian Museums and other such "non-critical" federally funded entities.

We experienced a government shutdown in 1995 and 1996 for a few days at a time.

Unless the shutdown is prolonged we won't likely see any effects of it. The concern was raised over the funding of FHA loans today. FHA loans will continue to be funded by us here just as RD loans were funded long after RD "ran out of money" in 2009.

The budget presented to be approved initially was well over 3.7 trillion dollars so obviously represented unsustainable government spending. To put it into perspective: it would be like spending $3169.00 EVERY SECOND for a year.

Cheers,

Chad

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana

fax: 406 522 0924
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Mortgage biz 2011

2011-03-23T14:59:00.001-06:00

I wrote up this powerpoint for a presentation to business associates this morning. It is applicable to any business in "these times". The importance of a SIMPLE, MEASURABLE and EXECUTABLE business plan around creating and maintaining "branding" is powerful.

Cheers,

Chad

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana

fax: 406 522 0924
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

HARP program Extended in Montana and Nationwide...The "Japanese Condition" and Market Insight

2011-03-16T14:38:00.001-06:00

(More pictures and Source of this one HERE)

HARP in Montana and elsewhere is extended another year! The Home Affordable Refinance Program was scheduled to be OVER as of June 30^th 2011. See more details on this program's specifics directly from "e.fanniemae.com" here See more details on the HARP program extension here.

The FNMA 30 year 4.0% note is UP another 62 basis points currently on the day and we are seeing levels that we haven't seen for a few months in the mortgage bond market. This does mean lower rates in the short term but I am conscious of the fact that it is temporary as people seek for "safe havens" for their money. Unfortunately, the longer-term view is that as inflation picks up steam we are in for a ride so the "get it while you can" cliché applies to mortgage rates right now. Of course, we have been expecting a sudden rise in rates for far too long. It reminds me of lighting a really long fuse and watching it slowly go into the sticks of dynamite as we wait for the explosion. It is coming, but there seems to be factors that keep postponing it…

Oil is sitting at $98.27/barrel currently and is UP about a dollar on the day.

GOLD is at $1397/oz and down from recent highs.

Dow is off about 242 points currently and was down over 300 points at one point today.

Many are waiting to see what the effects of the Japanese condition will be. Until there are "actual" and measurable results we will see extreme volatility as people continue to "GUESS" what they will be and attempt to find safe bets for their money.

Speaking of the "Japanese Condition": Watch them closely. When a culture is driven by "honor" as the Japanese have been for centuries I am sure we will see some very beautiful stories come from this current catastrophe. They are a people to be revered and respected in my opinion and we have seen such beauty in them amidst such turmoil. Just for some perspective: there have been over 500 "aftershocks" and several of them in the 6.0 range on the richter scale including one this morning outside of Tokyo. We have no way of truly knowing the effects on millions of families as with any major disaster such as this one but my prayers are with them.

Cheers,

Chad

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana

fax: 406 522 0924
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Great Article and Mortgage Rate Observations...

2011-03-15T16:30:00.000-06:00

Have you looked around lately and noticed that there are some people who just seem to be really doing well even "in this economy?"

Taking a closer look there are some real common denominators with those doing well. The following is from a great article I found here.

5 Characteristics That Enable Accidental Success

Being opportunistic. That means taking advantage of opportunities as they arise, including a willingness to act boldly and decisively and to take risks without overanalyzing possible outcomes. Successful invention requires a lot trial and error. That's the mindset of an entrepreneur.
Ability to network, schmooze, persuade. Not social networking, but old school networking. In fact, the actual definition of schmooze is "to converse informally, to chat, or to chat in a friendly and persuasive manner especially so as to gain favor, business, or connections." That's what opens doors.
Having a can-do attitude. You can be presented with all the opportunities in the world, but if you're a negatron - always seeing the glass half empty, the fly in the ointment, why it can't or shouldn't be done - you'll never capitalize on any of it. You'll be the guy who's always saying, "I almost [fill in the blank]; I don't know what went wrong."
Being genuine and open. Some people think BSers and those who sugarcoat the truth or tell people what they want to hear get ahead. Now that's BS. Smart, successful people are attracted to those who are genuine and open about their feelings. Being genuine entices others to open up and share their thoughts and feelings.
Being inquisitive or searching for answers, how things work, a place in the world. This characteristic is difficult to explain or quantify, but I think it comes down to a genuine need to figure things out, understand how things work, or do something important. It drives certain people and, one thing's for sure: we don't stop until we find what we're looking for.

For Market News:

FNMA 4.0% bond is UP 22 bps after spending much of the day up MUCH higher than that. "FEAR" money is flowing into securities and even treasury notes have been snapped up today driving up pricing on the 10 year t-note by another 44 basis points to $102.59.

The anticipation of Japan's lower demand for oil has made a mark on the oil price driving prices down to just over $97 a barrel today.

Dow closed out the day at 11,855 which is about 137 points lower than it started...but considering it was down over 300 points at one moment in the session, that is pretty good.

More wisdom from my Kids: My 8 year old Miles turned to me the other day and recited a quote hanging in his school right now. "GOOD, BETTER, BEST: NEVER LET IT REST...UNTIL YOUR GOOD GETS BETTER AND YOUR BETTER IS BEST!" I love it.

Cheers!

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana

fax: 406 522 0924
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

NERF guns, Japan's Earthquake, FNMA 4.0% bond and MORE Dark Laboratory...relating to business.

2011-03-11T17:44:00.001-07:00

Click here to seeHigh Quality March 11, 2011 Japanese Tsunami Footage

Japan experienced a THIRTY MINUTE earthquake this morning that measured 8.9 on the Richter Scale! GEEZ. This is a MAJOR movement of the tectonic plates and was the strongest quake on record for the last 140 years. Watch for Japan's offering of some bonds to pay for the massive reconstruction projects that are sure to ensue. This will present additional "supply" and an opportunity for further degradation of the US bond pricing (and and increase in yield) It is just amazing how many earthquakes there has been in the last few years.

FNMA 4.0% bond lost 31 bps this session to close at $98.44. Some of that is profit taking and analysts are pointing to the Consumer Sentiment report's indication of inflation as another factor. Remember that when the value of Mortgage backed securities go UP...rates get better. When the value of mortgage backed securities go down (like today) rates go UP.

More "DARK Laboratory"

Interesting shift occurred with me this week. On Wednesday I related the story of the "Dark Laboratory" that you can peruse <here>.

Over the last few days, my five-year-old has given me some more details of the "ride" that he envisioned. Each detail was thought of as "cute" by me but they really hit me this morning in a different way.

The ideas he shared:

The ride would have mechanisms that would keep you in it…even when it went underwater. If you did happen to fall out: there was a mechanism that would put you back in.
The ride would give you a "nerf gun" to shoot at the "bad things" as you went through the ride…but when you got done with the ride you got to keep it.

As I mentioned: at first I just throught it was pure "cuteness" but it seemed to resonate with me differently this morning.

Thinking about the "mechanisms" to keep you "in the ride" and "put you back in" I got the feeling that there are many forces at work in my life keeping me in one path or even RUT that I may or may not want to be in. When I try to get free of those things it seems as though there is always something encouraging me to get back in. I suppose that can be the converse as well where there are forces that want to keep me in the BEAUTIFUL ride of life and when I slip off there are forces there to pick me up and put me back in. I think I would like to make that important decision Einstein References and decide that there are forces keeping me IN the BEAUTIFUL parts of my life.

As for the "nerf guns" I would have to say that this reminds me of the TOOLS that I am given to DEAL with life. If there is no way out of the ride, but I have the resources necessary to "fight off the bad guys" or to effectively protect and provide for myself. The more I use the TOOLS (nerf gun, YEAH!), the better I get at using them. Interesting to note that when the ride is done: the tools are mine. When we go through things that are difficult like the ride to the "Dark Laboratory" we are able to develop parts of ourself that we wouldn't otherwise been able to. We get to see what we are "MADE OF" and we become made of better or stronger stuff.

I don't know…just a thought.

Cheers,
Chad

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana

fax: 406 522 0924
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

200 Dollar Oil and Saudi "DAY OF RAGE"? FNMA 4.0% bond UP 50 BPS

2011-03-10T17:20:00.001-07:00

Oil closed out the day today with a bit of a loss at $102.56 a barrel.

Yikes! Remember in early 2009 when it got down to $27 bucks or so? That was when many were actually stockpiling thousands of barrels on container ships since it was cheaper to wait until there was a price recovery than the bring the barrels to market.

Watch out. There is something afoot. Political unrest in Egypt and then Libya is just the beginning. Check out the "protests" in Saudi Arabia. Staged or not...they could be a catalyst for some real outrage as most of those in that country are NOT rich with oil money. In fact they have a 40% unemployment rate. This is potentially a volatile situation. If the regime is overthrown there...the "replacements" may not be too favorable. Remember that to push people into purchasing technologies that "conserve" we need to have ridiculously high gas prices. What would it take to push us into choosing to buy a Prius? Gas at $6 a Gallon? $9 a Gallon? Hmm, you decide. The short term could see massive run-up in oil prices as the fear of supply issues escalates. Tomorrow is the "Day of Rage" organized for Saudi protesters. Yikes.

See more on the Saudi Issue and watch a clip on the "Day of Rage" here:

Bond Markets are on the rise with the fear of unrest. Today's bond Auction garnered an A+ rating and the FNMA 4.0% bond is UP 50 bps on the day. This could be good for rates in the short term, but higher gas prices would be devastating for our economy. Remember that many of our goods require transport and therefore GASOLINE. If the price of delivery and production for some of our goods increases by 40% AND the Dollar ERODES as we are expecting it to over the next 18 months: we are in a world of HURT.

Stock up now. If the dollar is eroded severely and the pain is exacerbated with higher production cost due to energy cost: we could not only see $6-$8 gasoline but $20 cans of TUNA.

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana

fax: 406 522 0924
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Arrogance of Authority

2011-03-10T09:21:00.000-07:00

I love this. Not sure of who the author is but please make yourself known if you run across this and thank you for putting this together.

Cheers!

             The Arrogance of Authority

A DEA officer stopped at a ranch in Texas , and talked with an old rancher.

He told the rancher, "I need to inspect your ranch for illegally grown drugs."

The rancher said, "Okay , but don't go in that field over there.....", as he pointed out the location.

The DEA officer verbally exploded saying, " Mister, I have the authority of the Federal Government with me !"

Reaching into his rear pants pocket, he removed his badge and proudly displayed it to the rancher.

"See this badge?! This badge means I am allowed to go wherever I wish..... On any land !!

No questions asked or answers given!! Have I made myself clear......do you understand ?!!"

The rancher nodded politely, apologized, and went about his chores.

A short time later, the old rancher heard loud screams, looked up, and saw the DEA officer running for his life, being chased by the rancher's big Santa Gertrudis bull......

With every step the bull was gaining ground on the officer, and it seemed likely that he'd sure enough get gored before he reached safety. The officer was clearly terrified.

The rancher threw down his tools, ran to the fence and yelled at the top of his lungs.....

(I just love this part....)

"Your badge, show him your BADGE........ ! !"

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana

fax: 406 522 0924
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Wisdom from My 5 year old...and quick Market news

2011-03-09T14:58:00.001-07:00

THE "DARK LABORATORY" and Some Market News...

Oil is trading at $104 a barrel. There is a set of "behind the scenes" reasons for this that I would be happy to discuss with you if you like individually.

FNMA 4.0% bond is UP on the day by 47 BPS! This is good and is keeping the bond in a place where our rates are staying pretty steady in the "just-under-5% range on 30 year fixed money. Some of this is due to a very successful bond auction today. 21 Billion in 10-year notes were auctioned off and sold like crazy garnering an "A" rating for the auction.

GOLD closed at $1430/ounce.

Interesting announcement today: the LARGEST bond fund IN THE WORLD (Pimco) has a fund called a "Total return fund". They have taken ALL holdings of government related securities and sold them out of that fund. This is an indicator that they may not be expecting the best. See more HERE

Shortest version: Rates are steady or better tomorrow. And now the "Dark Laboratory":

When I was on my way out the door this morning, my 5-year-old son broke from the table where he was eating breakfast and caught me for a moment. He wrapped his wiry little arms around my neck as I stooped down to him to get one last goodbye for the day. He pressed his soft little face against mine as he hugged me "real good".

When I stood up he was still looking up at me through his beautiful green eyes which were as wide as saucers. He inhaled deeply and said: "DAD! When I grow up I want to design a ride! It will be called the "DARK LABORATORY" and when you get in it it will say: "YOU ARE ON YOUR WAY TO THE DARK LABORATORY!!!"

Both times, he made sure to say "Dark Laboratory" in his most sinister sounding voice. I was really impressed at his imagination and thanked him for sharing such a great idea with me!

I walked out the door and to my car with a smile.

Interestingly, what he said really resonated with me.

How often do I get into my car lately to go to work and turn the key only to hear my mind's narrator say "YOU ARE ON YOUR WAY TO THE DARK LABORATORY!!!".

I have got to level with you: The mortgage biz has not been nearly as fun lately. Unless you are this guy and are cool with the pain involved:

: OUCH!!

Sometimes I feel like I am stuck in an episode of "American Gladiators" and my best is just short of what is required to complete some of these loan files. It is disheartening to visit with 20-30 people a month who are interested in mortgage finance...but do not qualify.

Face it: things are going to get tougher.

Will I get tougher, too? Will you?

The way I see it I need to find a way to fit the "HOLY TRINITY" of one's career into what I do:

1. What I like

2. What I am good at

3. What the market needs and desires.

If I can't find a way to do that: I am destined to work at the "DARK LABORATORY".

Cheers,
Chad

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana

fax: 406 522 0924
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

At the BASE of your Brand...

2011-02-11T13:04:00.001-07:00

Hey all,

At the base of your brand is your Unique Service Proposition.

I have been able to get with a few of you to discuss yours. It is like the red cellophane glasses that allow you to see the "secret message" on the back of a cereal box in that performing according to your USP can help you to cut through so much of the "noise" in your business.

What is your USP? If you could sum up your "brand" in one sentence: what would it be?

I have been able to support many of you through our relationships together and I have also appreciated your support. Now more than ever is the time to find those willing to work toward a common goal and gain positive relationships through business and community that will support your highest and best practice.

I have been absent from your inbox for some time...but felt the need to reach out today. If you are not working on your personal "brand" or "identity" I would encourage you to define that. It needs to come from the inside out and permeate your entire business model. If you are interested in discussing this further, please don't hesitate to connect with me.

I have not been just "feeding and pleading" with my partners for them to trust their paycheck to me and my team, but feel that helping them establish who they want to be in our business is giving something much more valuable. We spend the only TRUE currency in the UNIVERSE on the things that interest us and if we are interested in our business we will give it that very thing: "ATTENTION>"

Cheers,

Chad

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana

fax: 406 522 0924
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

What is an IPO and why is it bringing my rates up?

2010-11-18T16:52:00.001-07:00

FNMA 3.5% bond was down almost 90 basis points today before closing at $98.31. Compare that with well over $101.00 just at the beginning of last week.

In addition to inflation fears, something else is cropping up.

HOPE>

Remember when GM was taken over by the feds in 2009 when they filed a Chapter 11 Bankruptcy? The feds came in with nearly FIFTY billion dollars to bail them out. Thankfully for GM the business was restructured and the "initial public offering" was made today on the open market allowing investors to express themselves with an overwhelming sense of hope for the future of GM.

This "hope" is tempered with the fact that much of GM's massive debt has been forgiven or covered by your tax dollars which put them in a much better position that they were in. There is also that little fact that they have been deemed "too big to fail" in a way through the government rescue action of 2009.

Here is a great explanation of just what an IPO is if you are interested. <click>

There are many "better than expected" items coming forward like Dell's double the expected profit, the higher than expected consumer confidence numbers of last week and the Philly Fed Index today. The Philly Fed Index is a number that gives us a prediction on upcoming manufacturing numbers. It came in at 22 vs the 5 that was expected. (A zero is a "break even" with that number)

So: Hope that manufacturing is up. Consumer hope is up. Real numbers reported by companies are up. Investors feel like things really are heating up. When that happens they put their money into stocks.

Dow was up 173 points today.

Money goes away from Mortgage backed securities leaving the rates a little higher.

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana

fax: 406 522 0924
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Do Something Sexy to a tractor...and other news.

2010-11-16T17:17:00.000-07:00

> Cletus is passing by Billy Bob's hay barn one day when, through a gap in the door, he sees Billy Bob doing a slow and sensual striptease in front of an old green John Deere.

> Having seen enough Cletus rushes in and says, "What the heck are you doing, Billy Bob?"

> "Jeez, Cletus, ya scared the snot outta' me!" exclaims Billy Bob. Then, obviously embarrassed, he says, "Me and the old lady been having trouble lately in the bedroom department, and the therapist suggested I do something sexy to a tractor."

How is that for misunderstanding? This one had me thinking about how easy it is to have something we say to our clients in a professional setting taken totally the wrong direction. I think careful and concise communication is the key that unlocks this problem.

In the news!

FNMA 3.5% note is DOWN about 300 basis points from its recent highs. We were actually up on the day today about 44bps and the security was trading at $98.56 at the bell.

Rates got a little better today, but are way off lows experienced recently. Purchase money 30 year fixed loans are trading right in the 4.25% range today.

We hope to see some rate improvement tomorrow as well. I don't suspect we will see some immediate inflation as expected in the Consumer Price Index reported tomorrow and that could help ease rates some.

BOUNCE: Remember what bounce is? Bounce is when a market sees some recovery after a severe deterioration in pricing like we have seen over the last several days. Bounce happens when investors see the unraveling investment as an opportunity and buy back into it. Sometimes bounce sticks and sometimes it does not. We saw some bounce today in the bond market.

I am hoping that the hemorrhaging is over in the bond market for a minute. A borrower I visited with today had to lower his expectations by about $20,000 to keep the same payment for a loan he is shopping. (Higher rate = higher payment...so the loan amount would need to be lowered to keep the same payment.)

Gold has relaxed back down to $1338/oz as markets are still waiting for the effects of QE2 to take hold.

Remember that much of the volatility is due to expectations of inflation. We don't see actual inflation for some time from activity such as what the feds are doing with QE2...that is if for whatever reason we actually see it at all in the short term. Make no mistake: I feel like the effects will hit. I just am not sure if they will be what is expected or in the timeline expected.

Cheers!

Chad

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana

fax: 406 522 0924
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

I will gladly pay you Tuesday for a Hamburger today...

2010-11-10T16:06:00.001-07:00

Quick and dirty: Fnma 3.5% bond is currently UP 12 bps on the day after spending much of the week WAY underwater. Rates have risen as much as 3/8 of a percent this week on 30 year fixed money. GOLD is at $1405 an ounce and OIL has been UP for the last few weeks as well...trading at $88.04/barrel right now.

Purchase money went from 3.99%-ish for a 30 year fixed money with me to 4.25%-ish today.

Gasoline average price nationally is on the rise...

If you have no interest in why rates and the price of gas will likely continue to rise and how this may affect the price of housing in the United States, please feel free to delete this email now. The commentary below may be worth checking out though. It may be just what you need to inspire some urgency in your buyers and borrowers.

Cheers!

Chad.

Okay for those still with me:

Remember "Wimpy" from Popeye? He was always offering to pay you Tuesday for something today.

Does this sound familiar to anyone?

We are in such an interesting place right now. For those interested: when you purchase a treasury note, the feds promise to pay you interest on that "note". When you are ready to cash it in, you receive your initial investment back plus interest. The only thing binding the feds to pay you interest is their promise. The only thing you are purchasing is that promise that you will receive interest. The way the feds pay you actual money is to sell more bonds to get money to pay out. As long as they are selling more bonds than they are cashing out, they are okay.

Does anyone remember Bernie Madoff? When you bought shares with him, you were promised a return. When you came to him to cash in some shares, he would pay you as agreed...but would need to sell more shares to get the money together to pay you your promised return. This is all well and good unless too many people want to turn in their shares for payment. This is because Bernie was spending MILLIONS on himself and family without EVER wisely investing any of the money he was receiving to "earn" the promised returns for his investors. As long as he sold more shares than he cashed in, he was safe.

This type of thing is also called a Ponzi scheme.

About 19 months ago, the feds announced that they were going to increase their purchases of Treasury notes to about 500 billion dollars worth of their own treasury notes. A few months ago in August,, they announced that they were going to re-invest the mortgage backed securities they purchased in 2009 (1.25 trillion) AS THEY PAID OUT. SO: As the mortgage backed securities came due or were refinanced, the feds were paid a return on that investment. They have been re-investing that in T-notes. A few WEEKS ago, it was announced that the feds were going to invest another 500 billion into the "longer term treasury offerings". In addition to the projected returns on the mortgage backed securities that are being re-invested, this puts about 75 billion dollars a week...or 15 billion a day worth of fed dollars into U.S. Treasury notes.

Remember the difference between a Mortgage Backed Security and a Treasury note? Basic difference: one represents ownership in a mortgage note secured with a piece of real property and one represents a sense of "ownership" of a promise of a return. See where this is heading?

Interestingly, many in the media are saying that this purchase program they are calling "Quantitative Easing II" or "QE2" will actually bring down long-term interest rates. I really can not find an explanation on how this may occur. I suspect that there is just a general lack of understanding on the part of the media...or maybe it is me.

The thought I have found that tends to drive the reasoning behind QE2: they are trying to create inflation. Inflation will combat "deflation" and "stagflation". Inflation = weaker dollar. Weaker dollar = it costs more for the same basket of groceries.

How?

Remember the Supply and demand thing? More supply vs. the demand = less VALUE. When the feds simply PRINT such massive amounts of "promises" in the form of T-notes THEN sell those notes to themselves: they are watering down the money supply. It is Creating MONEY from NOTHINGNESS.

The logic I am reading is that it will make our GDP go UP...or the amount of goods we export will go up because OTHER currency will be stronger against the dollar. SO: if you hold a YUAN, you can BUY MORE US GOODS with it as it gathers strength and the dollar is weaker. China's imports actually are up 25% this last quarter so they are spending some money in the world economy. Unfortunately, much of the goods we export rely on the assembly of parts made in China...so our manufacturing becomes more expensive. Also, how in the world can we compete with 70 cents an hour wages that the world's labor providers can pay? The answer: we can't. We would have to completely devastate our dollar to have this logic make any sense at all.

The other half of the inflation equation.

Traditionally an inflationary environment (more money chasing the same goods and services = more expensive goods and services) we are beginning to boom. The "more money" is coming from higher wages, companies making more money etc. Inflation is simply a symptom of this. UNFORTUNATELY...the feds are trying to create the SYMPTOM FIRST hoping that the traditional other side of that symptom will present itself. This simply will not do. It doesn't make sense.

OF COURSE...I am just a SCHMUCK looking for logic when I may not have all the info so I need to qualify myself. HOWEVER: it doesn't seem that complicated. I am seeing smoke screen in the media and a general disregard for what the long-term ramifications could be with this.

So how could this affect us?

In an inflationary environment, money moves AWAY from the fixed rate returns and into items that gain value along with inflation. Remember that even when you purchase stocks in a company who can raise their prices: they are spending more to produce their product so their net profit is no better. If you own a CD or something with a fixed income coming to you monthly: your same monthly money will buy less and less as the dollar loses value. Inflation is actually BAD for stocks and BONDS BOTH.

Example: if you get $100 U.S. in dividends or interest every month...that same $100 U.S. just won't go as far a few months from now in an inflationary environment.

People tend to invest in commodities during inflationary times. Commodities generally go up in value in an inflationary environment. This is why Oil and especially GOLD have been very much on the rise lately. Weaker dollar = more expensive gold and oil...so more money for those who own them. With oil on the rise and the lack of refineries in the U.S. (one hasn't been approved for construction since the '70's) we will have a restricted supply of gasoline along with more expensive raw material to produce gasoline. Inflation + lack of refining capacity = EXPENSIVE gasoline. (Remember how I feel about gold? It is pretty, but only worth something if someone will buy it from you...it has no other value except intrinsic value to support its market value. You can't eat it and when the gold market unwinds, it tends to unwind quickly.)

With inflation, people who DO invest in fixed return investments like the Mortgage Backed Security tend to want a higher return on them (imagine that?). This brings a tendency for those investments to offer higher yields and in effect it deteriorates the pricing on them since you actually "pay" less than they "pay" for the same investment. Here is a different way to look at it: if they can't securitize mortgages that have a 4% note by offering a 3.5% FNMA security...they may have better luck securitizing a 7% mortgage with a 6.5% return offered in the form of a FNMA 6.5% security. SO: mortgage rates go up.

Alright, I know this is getting long but stay with me.

When mortgage rates go up...it is more expensive to pay the mortgage, right? A $200,000 mortgage at 4% is $4.77 for every thousand you borrow putting the Princ & Interest payment at $954 monthly. A $200,000 mortgage at 7% is $6.65 per thousand putting the payment at $1330/month (a 39% increase!). Effectively in this scenario the price of housing increases 39%. This also cuts MANY buyers right out of the market. When buyers are taken from the market, we have less demand for the same supply. Less demand = lower prices.

This is not to say that I see prices diving...only that I think the recovery in the real estate market is fragile and things could prove volatile unless the feds alter their current course.

Whew...I needed to get that off my chest.

The best thing we can do right now is understand what we are holding onto. We have some of the best deals on housing we have seen in years. We have actually seen underwriting guidelines remain in a much less volatile state. Money is CHEAP to borrow and mortgage insurance companies are starting to be competitive again with their rates and product offerings.

There are plenty of "green shoots" to be excited about and when we look around...we have much to be grateful for.

Cheers,

Chad

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana

fax: 406 522 0924
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

WHOA! Gold is at $1384/oz and Oil is Climbing...Why?

2010-11-04T13:51:00.001-06:00

Latest news from the fed released yesterday that they will be purchasing 600 billion dollars worth of "longer-term" treasury notes from the US government. Essentially, this is like the right hand saying to the left hand: I will give you $600 billion...if you sell me a promise to pay me back with interest written on a piece of paper. It is a way to move money around.

They also STILL feel that keeping the fed funds rate low for "an extended period" is wise.

Mortgage Backed securities have been really beat up and then making recoveries over the last several weeks. Today the FNMA 3.5% security is UP to $101.38 which is 47 basis points higher than it started this morning. We seem to be on a Rally... Yesterday however, we saw indications that the market really doesn't know how to react at all as the bond traded in a VERY wide range with pricing improving then deteriorating rapidly. There seems to be conflicting philosophy on how the latest change in the House will affect the financial and healthcare changes we are all bracing for as well as the announcement for further "easing" through more government spending.

GOLD is trading at $1384/oz and Oil us up almost 2 bucks trading at $86.73. Both of these may be due to the heightened perception that we are in for some serious inflation.

The thought is:

Inflation = DEVALUED U.S. Dollar.

Devalued U.S. Dollar = other countries can buy more of our stuff.

Inflation can be an indicator that an economy is turning around for the better (since it would mean that more money is chasing the same goods and services). The interesting thing here though is that the "more money" appearance is created by essentially "printing" more money instead of actual economic strength. Inflation is in-part controlled by making money harder to get...so fed funds rates would have to be raised.

In the Bozeman Montana Mortgage department: We are seeing some great things starting to slowly come around. For instance: processes with us have actually gotten more streamlined thanks to the addition of a local operations manager and more local processing staff. The mortgage insurance companies are starting to make conventional lending more attractive with products like split MI and the return of second home mortgage insurance. The appraisal process with us is getting more streamlined. I am excited!

Cheers,

Chad

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Really? Rates are still low?

2010-10-19T17:55:00.001-06:00

Okay so rates are still low...I hope nobody has any objections to that. Remember though ALL rates are low and we have been very competitive with Jumbo financing rates.

Buyers? Hope you have 'em. I talked to two people today in our industry who have seen several purchase agreements coming in on their listings. This is a good sign as a home purchased takes it out of inventory. When there is less for sale: values start to stabilize. Unfortunately: I have no idea what is to come and we may or may not be at the bottom of this in our local market. The marketing platform has switched from "buying a home makes you money" to "buying a home is a value right now...but you are buying a HOME."

Home ownership is less perceived as a "right" and it is getting back to where it traditionally belongs and that is that home ownership is a privilege. In no way to I advocate a "one size fits all" approach to home ownership as there are so many people who really find it wise to simply rent right now.

Market info:

Rate still low with the FNMA 3.5% bond up OVER 101 dollars closing the day at $101.31

A group of financial companies including Blackrock and Pimco announced that they are suing Bank of America today. This hit hard. There are some interesting things going on there. Remember the announcement last week of a foreclosure freeze? You can bet that is a knee jerk reaction to something much bigger than we even know. In the short term: keeping foreclosures frozen will allow the markets to soak up excess inventory and may even give the illusion of some housing recovery. I the long term though: we may either see another collapse of some major financial institutions involved with all that is going on behind the scenes here OR we will see tremendous pain as the foreclosures all start hitting the market at once again.

Oil was down $3.50 and is back under $80 a barrel.

Dow was off today 165 points and closed the day at just under 11000 (10978). Much of that comes from losses in the financial sector.

Gold is still breaking records and today was trading at $1332 an ounce.

Beige book is released tomorrow which outlines thoughts from the latest Fed Meeting. I don't see that any surprises are anticipated so with that being the only major report for release the markets will be reacting to the news...

Be well!

Chad

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

My ignorance...revealed!

2010-10-05T23:49:00.000-06:00

Okay so I feel the need to run a quick apology.

I forwarded a piece of propaganda without really investigating it today. The "FHA" story is likely a load of crap. In my world, all we care about is a chain of title for 12 months. We are looking for various things with that.

In the world of Title Insurance as I understand: the ownership is researched all the way back to the original patent or claim to the parcel they are insuring.

Very likely, the letters exchanged were not between a person and FHA...but a person and a title insurance underwriter.

Not that it changes the way I feel about the Federal Government's ability to efficiently run anything as complicated as Healthcare, but the letter was perhaps unfair and unintentionally misleading.

Cheers!

Chad

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

FHA...New Orleans chain of title Story. FNMA 3.5% bond is DOWN.

2010-10-05T17:40:00.001-06:00

Ha! You will appreciate the story below. WE are in an interesting position as a country right now and this is an example of what happens when the power is turned over to committees and taken away from communities and individuals. Don't worry, we only look at chain of title for 12 months with FHA loans traditionally. This was a special case.

FNMA 3.5% bond was down 9 bps and closed at $100.94. This is close to all time highs keeping rates in a very comfortable range close to 4.25% on 30 year fixed money.

Jumbo loans! We have had some great rates on Jumbo loans and have seen more and more jumbo buyers interested in our marketplace here. Today I quoted an interest only payment on a 5/1 Jumbo arm loan for a 2nd home in Montana at 3.75%.

Enjoy the evening and the scenario laid out below...

Chad

Part of rebuilding New Orleans caused residents often to be challenged with the task of tracing home titles back potentially hundreds of years.. With a community rich with history stretching back over two centuries, houses have been passed along through generations of family, sometimes making it quite difficult to establish ownership. Here's a great letter an attorney wrote to the FHA on behalf of a client:

You have to love this lawyer.......

A New Orleans lawyer sought an FHA loan for a client. He was told the loan would be granted if he could prove satisfactory title to a parcel of property being offered as collateral. The title to the property dated back to 1803, which took the lawyer three months to track down. After sending the information to the FHA, he received the following reply.

(Actual reply from FHA):
"Upon review of your letter adjoining your client's loan application, we note that the request is supported by an Abstract of Title. While we compliment the able manner in which you have prepared and presented the application, we must point out that you have only cleared title to the proposed collateral property back to 1803. Before final approval can be accorded, it will be necessary to clear the title back to its origin."
Annoyed, the lawyer responded as follows:
(Actual response):

"Your letter regarding title in Case No.189156 has been received. I note that you wish to have title extended further than the 206 years covered by the present application.
I was unaware that any educated person in this country, particularly those working in the property area, would not know that Louisiana was purchased by the United States from France , in 1803 the year of origin identified in our application. For the edification of uninformed FHA bureaucrats, the title to the land prior to U.S. ownership was obtained from France , which had acquired it by Right of Conquest from Spain . The land came into the possession of Spain by Right of Discovery made in the year 1492 by a sea captain named Christopher Columbus, who had been granted the privilege of seeking a new route to India by the Spanish monarch, Queen Isabella.
The good Queen Isabella, being a pious woman and almost as careful about titles as the FHA, took the precaution of securing the blessing of the Pope before she sold her jewels to finance Columbus's expedition...Now the Pope, as I'm sure you may know, is the emissary of Jesus Christ, the Son of God, and God, it is commonly accepted, created this world. Therefore, I believe it is safe to presume that God also made that part of the world called Louisiana . God, therefore, would be the owner of origin and His origins date back to before the beginning of time, the world as we know it, and the FHA. I hope you find God's original claim to be satisfactory. Now, may we have our loan?"

The loan was immediately approved.

and you want Government running health care?

________________________________________

PeoplePC Online

A better way to Internet

http://www.peoplepc.com

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Whoa...Check this out. As a Parent, this is something for me to teach.

2010-09-30T12:32:00.000-06:00

This is an interesting clip from the movie REVOLVER and well worth the watch in my opinion.
http://www.youtube.com/watch?v=Rd0i3_mXdTo&feature=related

Don't neglect your opportunity to watch it, but it is 10 minutes long.

I chose YOU to share it with today for whatever reason...and I want you to know that I appreciate you!

Anyone recognize the tone of the advice given? Love your enemies, etc.

Forgive the swear words and don't let it taint the message.

In this scene, the main character is using humility and confronting his "fear" of small spaces (elevator) to overcome Ego. This movie presents Ego as a WHOLE vs. something invented by and carried by each person individually. Generally we think: "My Ego" or "Your Ego" but really it is JUST "EGO" It is something that lives and Rules here on earth. It sees all and knows all. I feel it has a primitive purpose that has been lost by many carrying the "parasite" of Ego and doing anything to protect it. It becomes a parasite when it is carried, protected and preserved by each of us and it takes on a "life" of its own through this. When we push it back out into the "Ego sphere" as my brother Aaron coined on our Timpanogos Mountain Hike this summer: it is able to re-assimilate and the original purpose of the Ego Sphere can be realized by each of us.

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Important Upgrade Announcement

2010-09-27T13:29:00.001-06:00

Quick Market Info: FNMA 3.5% bond is UP 53 basis points on the day trading at $100.81. Rates are still as low as they ever have been.

For those who noticed the great article on the front page of Sunday's Bozeman Daily Chronicle: It is a great time to purchase. (Click to read it.)

Interestingly, I spent a considerable amount of time with the journalist and she boiled our conversations down to put out some random quotes from me that don't seem to make sense when taken out of context.

"Drinking the Kool-aid" referred to the media push for several years that helped everyone feel like if they didn't own a home, they were worth less than others. . I don't agree with that mindset at all. Buying a home is not for everyone.

When I mentioned the "price of gasoline" analogy I was saying that though rates may be the same, it DOES matter who you do business with in this market. This is no market to qualify professionals to work with by whether or not they are your brother-in-law's best friend's wife. Professionals who are "in it to win it" are golden right now.

To this theme, please review the notice below. I am very excited about this important change. (No, I am not switching jobs or going to a different company. :-))

To my valued relationships,

I am super excited to relay an important development in my mortgage lending business. For those of you who have loans in process with me, you may have recently experienced the effects of this change.

I am very proud to announce my partnership with Debra Gebhart! She is a brilliant loan officer with over 20 years of experience in the mortgage business.

She is teaming up with me in my business to help provide a seamless service experience to my clients. Debra's focus will be on the process of providing a platinum lending experience. She will effectively communicate with our clients and partners keeping them updated on loan status, fielding questions on existing loans and putting loan files through the lending process. She will work to coordinate the transaction and help orchestrate all parties involved to consistently deliver a great loan product to our borrowers. I am counting on Debra to add the "engineer" to the artistry of my business.

Meanwhile, I will be more focused on the marketing and mortgage consulting aspect of our business together. It is up to me to ensure that clients get the immediate sense of our professionalism, our confidence in our brand and the ability we have to navigate them smoothly through the loan process. I am also putting my effort into ensuring that each borrower gets the time and effort in consultation to help them understand what the custom tailored options are for them as it pertains to home finance.

Both Debra and I work to enrich your relationships with your clients by providing great service as an extension of your business and relating our praise for you through the process.

Be well and we look forward to serving you!

Chad

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Yeah Hoo! Big UP in the bond market today...and the RECESSION IS OVER.

2010-09-21T16:56:00.001-06:00

Did you hear? The recession is officially over? Yes...it was over as of June of 2009 as announced yesterday. This recession started in December 2007 and has been the longest economic downturn since WW II.

Hooray! No more recession, right?

No, this announcement did not come from consulting the magic 8 ball. The "recession" is in fact "over" according to the experts.

Let's examine the definition though: according to the "newspaper definition" as explained here a recession is when we experience more than 2 quarters of negative economic growth. In other words a decline in our GDP.

That may be a little oversimplified as the GDP number is such a jumble of data that can be examined from a number of different angles. Additionally, there are other factors that contribute to a recession that simply wouldn't be a part of GDP.

The National Bureau of Economic Research or NBER has come up with a more comprehensive way to look at things. Naturally, much more complicated than I can seem to get a handle on but the gist is that things like joblessness, expansion, consumer confidence and other factors are taken into account. Because of the complexity of the work put into determining whether or not we are in a "recession", it can take several months to actually know if we are in one. If you remember it was finally announced we were in a recession that "started" in December 2007 in late 2008. It is the Business Cycle Dating Committee that puts this together. (I don't know about you, but I am not sure if I trust any "dating committee" as it relates to government affairs.)

So: YES, according to the NBER we are "out of the recession. But according to many people who are hurting right now, we have a way to travel through this dark valley.

The question is: Now What?

Recessions are in part caused by a general fear of spending money and that fear of major purchases like a new car is no different today after the announcement of the end of the recession than last week in my household.

Recessions are also in part supported by ongoing joblessness...and that is not yet any better either. Consumer Confidence also continues to be low. The general perception is that this is such a complicated mess to figure out (whether we have exited the recession or not) that it is just a "convenient" truth with elections coming up. I really don't know for sure, but a shred of good news was nice to get yesterday.

Rate news:

Still holding in the low 4% range on 30 year money. Has anyone seen the Intermediate ARM loan pricing lately though? We were looking at 7 year arm loans that were in the 3.5% range today. Naturally, an ARM is not a good fit for everyone but what an opportunity.

FNMA 3.5% bond actually was UP over 70 bps today closing out the day at $100.59 which is up over 100 basis points from the end of the session on Friday.

Be well,

Chad

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

To stream today's Town Hall Meeting

2010-09-20T09:10:00.001-06:00

I have been instructed to go to this site:

http://www.whitehouse.gov/live

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Rates up and Another 8% drop in home prices...

2010-09-17T14:39:00.001-06:00

Hellos and happy Friday!

Rates are up slightly today still in the low 4's for 30 year money. The FNMA 3.5% bond is off about 16 basis points again today trading at $99.44. Money is trending up for now.

I just read an article suggesting that Moody's is of the opinion that there will be an additional 8% drop in home prices.

What? I would be interested in hearing where they come up with that number. Yes, I agree that we may have some deterioration to go in many markets but some of the markets that were the MOST beat up over the last few years that are starting to show signs of recovery.

Unfortunately, when news like this comes over the wire, buyers grab onto the fence just a little bit harder and take their chances sitting there waiting for the "8% off" sale on the homes they are interested in. (Despite continued efforts to create a sense of uncertainty around where the rates could be when the "8% drop in values" happens.)

It just feels so arbitrary..."Uh, we need a number so why don't you close your eyes and reach into the hat on my desk" followed by an "okay, 8% decrease in value story coming right up."

The fact of the matter is that nobody really knows what comes next. We had no way of knowing that homes were going to appreciate for 10 years due to all the artificial addition of borrowers with the exotic mortgage products qualifying people who never would have or should have been qualified. We had no idea that the feds would start purchasing mortgage backed securities by the billions a week keeping rates low for so long. WE didn't know that investors would actually keep rates where they are from the number of countries experiencing a "debt crisis" or whatever the reason someone tries to pin on it.

The real truth is that if a person feels as though purchasing a home is right for them and they are excited about their rate and price: they WIN.

Remember the old cliche about a bird in your hand? We have an opportunity now. We have uncertainty "then".

Cheers,

Chad

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

http://www.youtube.com/watch?v=MroBJsi9y6g

2010-09-16T23:27:00.001-06:00

Dancing Wu Li Masters

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Hey all!

2010-09-07T13:30:00.001-06:00

I am here...here is good!

Just wanted to get a quick note out.

FNMA 3.5% coupon is a winner today and looks like it will close the session UP today. Currently the bond is UP 62 basis points. This is after a few days of losing steam and rates coming up. Look for rates to get better in the morning but we are currently in the 4.25% range on 30 year fixed money. It is exciting to offer this kind of rate as it is INSTANT enhanced buying power to our borrowers.

The kicker now: How do you help your clients feel comfortable purchasing in this marketplace? Remember that the median home sales price has actually been holding steady and came up a little bit over the last few months. I know there are several foreclosures that have not yet hit the market and there are other reasons to perhaps feel that this may be the "eye of the storm" but the bottom line with housing: it is a HOME that people want.

People buying today are getting in on the best mortgage rates in the history of the WORLD. They are finding that they are spending thousands less than a few years ago in purchase price and payment and are purchasing to OWN. We are seeing home ownership as a long-term part of a person's strategy vs. a short-term "investment". This is healthy. Waiting only serves to prolong the inevitable for those looking to buy...each month is another month of renting.

Many criticize the $8000 tax credit (I myself doubt the cost-to-benefit ratio was worth it with all the fraud that needs to be investigated etc.) but one thing it has done: put home ownership in the minds of many.

Money is here...and we are looking for good borrowers to give it to. What does that look like? 620 credit score or higher, a job that pays money, money for a down payment or ability to qualify for down payment assistance. Do you know someone who fits this criteria? We would be happy to help.

Have a great week and be well.

Cheers!

Chad

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Corporate america...

2010-08-30T14:58:00.001-06:00

This is funny!

Sometimes, we all seem to take the blame for things we didn't "doo"

<Dog Poop Skit>

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Home Price Index Report...FNMA 3.5% bond steady...Home appreciation nationwide.

2010-08-25T12:04:00.001-06:00

FNMA 3.5% bond is steady ($100.66, up zero bps on the day) after a disappointing reading with the existing home sales report yesterday and more disappointing New home sales report today. In fact: the new home sales as reported are some of the lowest on record. 276,000 were reported vs. the 334,000 that were expected. Also, today's t-note auction was rated a "C-" due to signs that there is a lower demand for the instrument. Some of this is due to constant worry about the decline in the value of the dollar. Remember that when the dollar is "devalued" we have inflation. With a devalued dollar and a fixed return investment: inflation EATS up your profits. (Example: if you were making 50 dollars a month off of a fixed return investment and the price of groceries goes up by $100 due to weakness in the dollar. OR If you convert that $50 into YEN and the weakness of the dollar give you LESS yen for $50 US.)

Durable goods orders were also reported this morning. This came out with a number that was about 10 times less than what was expected reporting a 0.3% increase vs a 3.0% increase in orders.

Remember that it is "expectation" that drives the markets. That is where the "buy on the rumor and sell on the news" cliche comes from.

Rates are steady for now at historic low levels. It could be a good time to think about refinancing your JUMBO loans. I have been having some great luck with those lately and would be happy to

visit with you or yours at earliest convenience. Jumbo rates have relaxed to levels not seen for some time especially on the intermediate ARM products. Borrowers will need to have at least a 680 credit score and a loan-to-value of less than or equal to about 75% depending on your lender. (*** What a great reason to re-connect with your clients and see how they are doing!) I have run scenarios lately that are saving home owners up to $1200/month in payment. This is nothing to sneeze at.

Be sure to check out the "appreciation" graphic below. There are some surprises on there.

Cheers!

Chad

The NEW FHFA Home Price Index Report for Q2-2010

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Walmart vs. bigger Government...the power of accountability

2010-08-17T00:17:00.001-06:00

Hey there! This is a fun set of facts to chew on...I think I just threw up a little bit in my mouth. Needless to say this is not going out to everyone in my address book as it may be slightly offensive, just wanted to share with a few who may appreciate the perspective. No one can deny the power of accountability. Shareholders want efficiency and they get to vote with their wallets.

Cheers,

Chad

Wal-Mart vs. The Big Government Machine

1. Americans spend $36,000,000 at Wal-Mart Every hour of every day.

2. This works out to $20,928 profit every minute!

3. Wal-Mart will sell more from January 1 to St. Patrick's Day (March 17th) than Target sells all year.

4. Wal-Mart is bigger than Home Depot + Kroger + Target +Sears + Costco + K-Mart combined.

5. Wal-Mart employs 1.6 million people, is the world's largest private employer, and most speak English.

6. Wal-Mart is the largest company in the history of the world.

7. Wal-Mart now sells more food than Kroger and Safeway combined, and keep in mind they did this in only fifteen years.

8. During this same period, 31 big supermarket chains sought bankruptcy.

9. Wal-Mart now sells more food than any other store in the world.

10. Wal-Mart has approx 3,900 stores in the USA of which 1,906 are Super Centers; this is 1,000 more than it had five years ago.

11. This year 7.2 billion different purchasing experiences will occur at Wal-Mart stores. (Earth's population is approximately 6.5 Billion.)

12. 90% of all Americans live within fifteen miles of a Wal-Mart.

You may think that I am complaining, but I am really laying the ground work for suggesting that MAYBE we should hire the guys who run Wal-Mart to fix the economy.

This should be read and understood by all Americans Democrats, Republicans, EVERYONE!!

To the President of the USA and all 535 voting members of the Legislature,

It is now official you are ALL corrupt morons:

a.. The U.S. Postal Service was established in 1775. You have had 234 years to get it right and it is broke.

b.. Social Security was established in 1935. You have had 74 years to get it right and it is broke.

c.. Fannie Mae was established in 1938. You have had 71 years to get it right and it is broke.

d.. War on Poverty started in 1964. You have had 45 years to get it right; $1 trillion of our money is confiscated each year and transferred to "the poor" and they only want more.

e.. Medicare and Medicaid were established in 1965. You have had 44 years to get it right and they are broke.

f.. Freddie Mac was established in 1970. You have had 39 years to get it right and it is broke.

g.. The Department of Energy was created in 1977 to lessen our dependence on foreign oil. It has ballooned to 16,000 employees with a budget of $24 billion a year and we import more oil than ever before. You had 32 years to get it right and it is an abysmal failure.

You have FAILED in every "government service" you have shoved down our throats while overspending our tax dollars.

AND YOU WANT AMERICANS TO BELIEVE YOU CAN BE TRUSTED WITH A GOVERNMENT-RUN HEALTH CARE SYSTEM ??

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

FNMA 4.0% is at 100.28%...BOING!

2010-08-12T18:06:00.001-06:00

Watch for the rates to come up slightly in the next few days.

We have been almost like a slingshot with rates going lower and lower. There was talk by the feds last week that they needed to create some urgency around rates. It was interesting to see how there were several factors pushing rates lower and now there seems to be reasons to push them higher again. (Did you see that GM posted a $1.33 BILLION dollar PROFIT in the 2nd quarter?)

Watch for the release of more favorable news this weekend.

Higher rates = sense of urgency for people to do something!

The FNMA 4.0% bond crashed some leaving 44bps on the table today causing rates to come up slightly in the middle of the session.

30 year fixed rates are still in the 4.25% range y'all.

Cheers!

Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Rumors: MAGICAL FHA/VA refinance with NO underwriting requirements and Feds NEW Mortgage Securities purchase program

2010-08-05T13:38:00.000-06:00

FNMA 4.0% bond is holding steady and quoted currently at $102.38 which is near record levels. We are up 9 basis points on the day but were up over 25 basis points at times during this session.

Rates continue to be low... Sometimes this feels like a "Captain's log". You know: "Stardate xyz...rates still low, etc. FHA 30 year fixed is STILL at the bottom of the chart. The bottom of the chart is 4.25%-ish. (The "ish" is because I can not quote specific rates here...you would have to call me for that.)

Rumor #1: I have switched jobs. This is not true. YES I am still at ML. I can't say the company name here because this letter is archived at www.chadcan.com andwww.bozemanmortgageblog.com and I can not mention my company name...hence the "Montana Mortgage Lender" title at the bottom.

Rumor #2: Feds will open another Mortgage Backed Security Purchase program.Remember when the feds purchased $1.25 TRILLION dollars worth of mortgage backed securities over 2009 and the first quarter of 2010? They were a MAJOR investor in the securities and greatly increased the "DEMAND" which when versed against supply: created an increase in coupon values and then LOW Mortgage interest rates. Yes, that is the one.

The truth to this one as I can tell: there is much talk of actually simply RE-INVESTING the return from coupons owned already by the feds as they come due. This is actually a good thing since the feds exiting the market would naturally leave a huge hole. Continuing to make mortgage backed security purchases a part of a long-term plan will eliminate any reimbursement to the taxpayers who indirectly pay for the mortgage backed securities, will maintain our liability with the current nearly 1 trillion dollars invested, will KEEP THAT MONEY OFF THE STREETS so to speak which controls inflation with all the fed dollars injected in the economy among other projected effects. It is all rather interesting and I am hoping this one comes with a long-term exit strategy. Of course, if the feds maintain their position, it puts the tax payer on the hook with any future problems.

Rumor #3: There is some MAGICAL government refinance programs coming that will allow ANYONE with a govie loan to refinance regardless of equity position, income or otherwise. HARP has not gotten the traction or respect that was projected. It looks almost like a "college try" and has taken some criticism. A sweeping program that allowed all govie loans to refi at lower rates could be disastrous though. The cost alone would be immense. Other features though: It would simply transfer risk from the current lenders and bond holders to new ones. The problem though: who wants to purchase the new bonds? With such loose guidelines there is no telling what kind of credit a person would be buying into. The bonds would be a total crap shoot and the only purchaser would have to be the feds...are you smelling that these two rumors may go together? With a lack of enthused purchasers of these bonds: government rates could go up a few percentage points or the program would have to be offered at a few percentage points higher than current rates...which really wouldn't help as many people. The thought was good: save people money monthly on their current government (FHA or VA) loan...and they will spend it in our economy. When the rubber meets the road on this one though, it may not be too good for us.

Cheers,
Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

FNMA 4.0% bond UP...what is it?

2010-07-30T13:00:00.001-06:00

FNMA 4.0% bond is still on the rise and trading at $102.47 currently.

What is it? The FNMA 4.0% bond represents a little "piece" of a mortgage that has been securitized by Fannie Mae.

When investors are offered a 4.0% bond, it generally represents a mortgage that was given to a borrower at about 1/2 to 5/8 of a point higher. The mortgages "securitized" today were "opened" by their borrowers "closing" them a few months ago.

Here is an in depth explanation for the process of getting loans to the secondary market.

Cheers!

Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

My Triathlon...Competed to Complete It.

2010-07-29T11:36:00.001-06:00

My Triathlon.

On Sunday July 25, I completed my first triathlon. I didn't come in last.

There were several lessons I picked up along the route. The "route" was a 700 meter swim, a seven mile Mountainous bike ride and a three mile mountain trail run. The Swim was in a frigid mountain lake, the bike was 5 steep miles uphill and 2 really steep and rocky miles downhill on a narrow track and the run was a rocky and root riddled dust trail through the mountain forest.

I would be lying if I didn't tell you that I actually ENJOYED every MINUTE of it.

You see, I was advised to simply "compete to complete" by a friend of mine who regularly does "REAL" triathlons. (I did the "short course" which is about half the distances.)

Compete to complete puts things into perspective. It challenged me to concentrate on one stroke at a time in the lake, one roll of the pedal at a time up the mountain on my bike and one foot in front of the other on the run. It was ME and it was 100% MY time. I loved it.

I noted that although there was only one official "winner", there were no losers. I noted that each time I passed someone or someone passed me on the trail we encouraged each other. "Good job! or "You got this!" or "Atta kid!" was sincere and meaningful on my personal journey.

When it was done, I felt great. I KNOW I could have dug in an trimmed at least 8-10 minutes off of my time...but I ENJOYED every minute of it. Life can be like that.

Cheers,
Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Yo! Rate talk, DEFLATION explanation and my Triathlon

2010-07-29T11:16:00.001-06:00

You are not going to believe this...but FHA rates are at the BOTTOM of the chart. They simply can not go lower...but only get cheaper. Today's rate is in the 4.25% range for the 30 year fixed, but that rate with the right conditions actually allows me to waive some of the origination fee!

The Conventional rate is in the 4.375% range for 30 year fixed with the option to purchase a rate of 4.25% for additional fees.

This is very strange indeed.

The FNMA 4.5% bond is trading at $102.28 and on an upward trend today.

DEFLATION talk is the latest driver cited.

Deflation is what happens when a currency buys MORE goods. With inflation, if you took a basket of goods and paid a certain price last week for them: you would be paying more this week and more still next week. With DEFLATION: that basket of the SAME goods would actually cost less this week.

Why do we care? With deflation: the "strength" of our money actually makes it MORE expensive for other currency to purchase our goods. This is great for those who already are holding US dollars, but not so great for those who want to convert money to US dollars and invest in our economy. Unfortunately, we have set ourselves up to REALLY heavily rely on foreign investment in our economy. If that were to "dry up" overnight: it would be devastating.

The "FEAR" of deflation makes it seem as though our "goods and services" will become more "expensive" to the rest of the world and therefore the "value" of stocks traditionally goes down. (Less people purchasing the goods=less profit)

The FEAR of deflation puts a sense of urgency into foreign investors wanting to get a piece of the bond and Treasury note market. Why? When they can buy while the exchange rate is favorable, they can convert the promised return on their investment to their own currency and EFFECTIVELY make more money. Investors at home also like the guaranteed return on investment that effectively is worth "more" because each dollar returned buys more.

Example: Person buys a bond with a 5% annual return for $100. They convert from their currency to ours at a rate of really close to 1 to 1. One year later: With deflation, the exchange may be 2 US dollars to 1 unit of another currency. The $5 in "return" can be converted for 10 units of the other currency. Same for a domestic investor. If the $5 return buys MORE goods and services than the same $5 when they initially invest, their "return" is "effectively" higher than 5%.

Naturally, this is a ridiculous example...but hopefully the theory comes across.

The funny thing: Deflationary fear usually subsides quickly. There are way too many things pointing to inflation. However: remember when I pointed out that the Financial Reform Legislation would SUCK a whole bunch of money out of the economy due to higher reserve requirements? When a glut of currency is removed, the "supply" is less vs. the demand so the value goes up.

More to come.

_______

My Triathlon.

On Sunday July 25 I completed my first triathlon. I didn't come in last. There were several lessons I picked up along the route. The "route" was a 700 meter swim, a seven mile Mountainous bike ride and a three mile mountain trail run. The Swim was in a frigid mountain lake, the bike was 5 steep miles uphill and 2 really steep and rocky miles downhill on a narrow track and the run was a rocky and root riddled dust trail through the mountain forest.

I would be lying if I didn't tell you that I actually ENJOYED every MINUTE of it.

You see, I was advised to simply "compete to complete" by a friend of mine who regularly does "REAL" triathlons. (I did the "short course" which is about half the distances.)

When it was done, I felt great. I KNOW I could have dug in an trimmed at least 8-10 minutes off of my time...but I ENJOYED every minute of it. Life can be like that.

Cheers,

Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Stated Income Loans coming back?

2010-07-21T11:58:00.001-06:00

One of the things I have been visiting about with those interested is the strange rates phenomenon.

Our 30 year fixed mortgage rates have been in the low 4% range for several weeks now.

We have explained this by an overwhelming desire of investors to seek a safe parking spot for their money with a relatively decent return on their investment.

LIQUIDITY in the world with the massive exodus from the Stock Market, the troubles in Europe and other factors including the ever expanding wealth in China and India as manufacturing powers NEEDS to be placed somewhere. This ALL adds up to a DEMAND.

Mortgage Backed Securities are one such parking place. Remember that Mortgage Backed Securities are actually representing real estate (however indirectly.) They are securitized mortgages. Mortgages have been REALLY scrutinized over the last few years, so the quality of the mortgage paper is WAY UP compared to where it was. Better borrowers = more likely to pay their mortgage = more attractive and likely to actually pay out mortgage backed securities.

Remember too that the Feds have extended a $200 BILLION dollar "backstop" line of credit to Fannie and Freddie at the end of 2008 to "guarantee" investors that they will be paid on the Mortgage Backed Security holdings they have.

All this adds up to the attractiveness of the Mortgage Backed Security to meet the above DEMAND.

SO:

We had a similar situation about 12 years ago. World liquidity was reaching a point where there was so much demand for this type of parking space that we could hardly print enough paper to meet it. THEN: we needed more mortgages to be able to securitize and sell as Mortgage Backed Securities.

SO: the agencies simply loosened up the guidelines. Loose guidelines and marketing home ownership to ALL was one way to create more paper to sell...and meet the world's demand for this type of investment. Rates actually WOULD have been similar to where they are NOW...back then. Supply vs. Demand...and we simply created more supply.

NOW:

We are in a similar place where investors want OUT of the stock market and worldwide need a place to park money. BUT: we can not simply loosen guidelines and sell more mortgages. I have been waiting for it, but this morning I read an article suggesting that "home loans with stated income and stated asset applications and a loan-to-value of less than 75% are actually performing relatively VERY well." We will likely see more of this type of thing to test the public response before the agencies ultimately roll out the product line again.

ALL things depend on consistency in the trend we are on though. There is NOTHING propping everything up as it is now except for blindness and speculation at this point. None of the traditional indicators are seeming to get a bite or give us a decent prediction of things to come. WE are in an interesting predicament.

Cheers,

Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Stated Income Loans coming back?

2010-07-21T11:57:00.001-06:00

One of the things I have been visiting about with those interested is the strange rates phenomenon.

Our 30 year fixed mortgage rates have been in the low 4% range for several weeks now.

We have explained this by an overwhelming desire of investors to seek a safe parking spot for their money with a relatively decent return on their investment.

All this adds up to the attractiveness of the Mortgage Backed Security to meet the above DEMAND.

SO:

NOW:

Cheers,

Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Financial Reform...LOL. FNMA 4.5% bond still up.

2010-07-21T11:40:00.001-06:00

WOW. Among some fanfare, the financial reform bill was signed into law this morning.

The 2200 page bill has been criticized for not addressing any of the items that "caused" the financial meltdown in the first place and is putting controls in place that are so convoluted that there are thousands of attorneys dissecting it for the financial companies who are wondering how it will really affect them.

For now, mortgage backed securities are up. The FNMA 4.0% coupon we watch is 19 basis points up trading at $101.75

Interestingly with all the glut of US dollars that we have literally "printed up" and sold to the world: we needed a parking spot for them. The financial reform bill is creating a need for banks to have MORE funds on reserve. This keeps money off the streets and will control inflation in the short term.

Watch for more info soon. China alone is holding 2.5 TRILLION in US debt in the form of Mortgage Backed Securities and US treasury bonds. Remember that it takes 3400 YEARS spending ONE MILLION dollars a day to reach ONE trillion dollars. This is a MASSIVE holding.

Talk of the "super sovereign" currency is still buzzing. If something is reached or leaked to create one: the US dollar will dissipate overnight and values could be SO low for each dollar (hyper inflation) that "stuff" or "produce" will become very valuable. (This has happened in other countries...and is not a myth.)

With a super sovereign currency, we will likely see a very QUICK unwinding or conversion process. It is the conversion and the quickness that worries me.

I see the "financial" reform bill as a charade at this point and am trying to learn more about it to report to my readers.

Cheers,

Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Yuan, Rates and FNMA 4.0% Bond Steady...

2010-07-09T21:42:00.001-06:00

The FNMA 4.0 Bond held steady today leaving rates in the great place they have been. 30 year fixed rates were at 4.57% on average nationwide today.

Oil is climbing with summer demand. Interesting how the millions of gallons of lost oil from this rig in the gulf is only a drop in the bucket compared with world production and demand.

I saw an article today suggesting that Tim Geithner was supposed to somehow "reprimand" the Chinese for "manipulating" their currency. This is an interesting bit of news. Isn't monetary policy in general "manipulating" currency? I think there is a group of people hoping that if the YUAN goes up in value, we will see a rise in consumption in China thereby expanding sales elsewhere. On the other side of that: If the YUAN goes UP, so does production costs. China's product IS production. Their role is to produce right now. That is what is giving them such great power: we all rely on them to provide "cheap" production.

Cheers,
Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

FNMA 4.0% bond is steady...

2010-07-02T11:31:00.001-06:00

Bond watching has been quite sporting over the last few years. At times it is as if goals are scored, penalties are dealt with or even amazing plays are carried out to bring the complete unexpected.

It is the unexpected that can be the most interesting. Opportunity always has an expiration date and sometimes you know it, sometimes you don't.

The FNMA 4.0% bond is dead level on the day at the moment as all is quiet after this morning's jobs report. We will be interested to see what the news over the weekend brings but it appears as though investors are interested in leaving their money parked for now.

Independence day has taken on different meaning for many people living on unemployment benefits or being introduced to the wonders of social assistance. My heart goes out to them.

Cheers,

Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Extension of Homebuyer tax credit approved!

2010-06-30T09:44:00.001-06:00

The Senate approved the extension this morning after it passed through the House of Representatives. I just saw the news on the wire a few minutes ago. It is NOW official. I believe the projected extension date was to be September 30.

Remember that this is only for home buyers who were under contract by April 30 to purchase a home.

Rates are at LOWEST EVER again... Sometimes this feels like we are a furniture store going out of business. You know, the ones with the "everything must go" or "complete liquidation" labels emblazoned on their front windows for months at a time. It seems to go on and on...but don't be fooled.

What is driving it? Not the feds anymore...directly anymore. They stopped buying Mortgage Backed Securities a few months ago. It is actually the NEED for relatively safe places to put money. There is no safety in the volatile gold, oil or commodities market as we have seen violent price shifting there in the past.

Interestingly, this is the same contributing factor to the run-up that became the mortgage meltdown. How? The world needed a parking space for it's wealth at the turn of this century and created a HUGE demand for the limited supply of Mortgage Backed Securities, bonds and T-notes (like there is now). The difference then: the powers that be decided to ADD SUPPLY of mortgage backed securities to meet the demand. The only way to add supply was to do more mortgages for more people...even people who didn't qualify at that time. They "lightened up" the guidelines and continued to do that until we were eventually using the "pulse" and "ability to fog a mirror" to qualify some borrowers in this industry. What a mess. Granted, this is only a contributing factor (increase supply to meet overwhelming demand). Rates were kept lower then.

NOW: We will NOT increase supply of Mortgage Backed Securities with lighter guidelines at least for a few more years so the lack of supply meeting overwhelming demand is keeping the rates at lowest levels in history.

FNMA 4.0% bond IS actually off best levels today though. WE are DOWN 25 basis points on that one. I would expect pricing to get a little worse this afternoon but for now the 30 year fixed loan is in that sweet spot of 4.375-ish making homes very affordable.

Cheers!

Chad

Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Rates down again...as the public yawns.

2010-06-28T18:33:00.001-06:00

FNMA 4.0 Bond Up another 47 basis points. I am quoting rates in the 3% range for 5/1 arms lately.

Some of why: Feds announced that they will agree to swap the higher priced coupons like the FNMA 5% or 5.5% bonds for the lower priced 4% and FNMA 4.5% bonds. This created IMMEDIATE though artificial "demand" for the FNMA 4.0 and 4.5% bonds. Supply vs. Demand: pricing soared. Rates are almost at the top of the sheet though and I have been just as amazed as ever to see them continue to fall.

This has almost turned into the "shit show" as a friend of mine says.

Down held on and closed down just 5 points but is hovering back in the 10,000 point range at 10,138 at the end of the day.

With ZERO Treasury Note Auctions on the schedule this week, and not too many market moving reports due out: we are at the mercy of breaking news.

Cheers,

Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

FNMA 4.0 Bond DOWN...Rates Up. Where is the money? Tomorrow's rate Prediction...

2010-06-24T16:01:00.001-06:00

FNMA 4.0% bond actually tanked today. I have been watching for that as the bond has been really oversold. Rates went UP this afternoon. The bond ended the session down 34 bps at $100.44...and was down MUCH lower than that for some of the session. The T-note auction today was received very well...and investors saw it as a sign to put money back into bonds later in the session. This is what saved us from further rate increases this afternoon.

Generally, when we see money going from bonds, we see it going to somewhere. I am sure someone wiser could tell you where...but I don't see it.

I can tell you where it is not:

The Dow was beat-up today and off 145 points at the bell to close at 10,152. Remember the Dow is only comprised of 30 stocks, but they are a pretty good cross section to watch.

Gold was actually DOWN a buck to $1245.00 and Oil was UP but only by 6 cents to $76.57

Today's lows could potentially be just profit taking. Many investors preserve their profits by selling when the market is high or have computer programs to sell for them when the market reaches a certain point on investments they set. They can then park their money somewhere until the market bottoms and then invest again. (Short selling is employing this strategy in a sense where they sell today with a guarantee to buy a stock back after a specified time at whatever the market value is.) This activity can cause pretty massive downturns as so many sales orders are put in at once when things get oversold as they have been in the bond market...which deteriorates the bond market.

Why? Supply vs. Demand. With the added "supply" in the form of sale requests, the scale moves toward the over supply side vs. demand and value deteriorates.

Look for higher rates tomorrow potentially as we may see a higher than expected consumer sentiment report and if the final read on the GDP is higher than initially reported money will move further out of bonds. If these numbers are in line: we could actually see a bounce in the market...and rates could hold.

Cheers!

Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

FNMA 4.0% UP, New Home Sales DOWN, Fed rate unchanged

2010-06-23T17:02:00.001-06:00

YIKES!

May's new home sales number slipped 33%! The lowest number on record: 300k homes.

Remember that tax credit thing that expired in April? Yeah. That is likely the culprit.

FNMA 4.0% bond is steady and closed out the day at $100.78...up 3 bps.

Jobless claims and durable goods orders reports come out tomorrow. Shouldn't have too much influence on the market. I am hoping rates hold steady as there are way too many people out there who actually QUALIFY for purchase or refinance but just don't know it yet.

IBM is hiring 600 employees and will start servicing mortgages evidently. WOW. Good for them I suppose. They will be able to pick up some pretty good deals in purchasing service contracts from other lenders who are in need of cash infusion.

FED notes were released today. The fed funds rate will remain unchanged. Voting to increase the rate was 9-1 against it. The economy is still a bit wobbly to suggest that we need to "slow" things up a bit by making money more expensive. Higher funds rate=more expensive to get money=less expansion in the economy=higher credit card rates=lower retail spending...and so on.

Cheers!

Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Eating MY HAT...Rates fall again.

2010-06-22T23:17:00.000-06:00

I have got to level with you, I am beginning to get a little hoarse from shouting off the rooftop of my office complex.

"HEAR YE, HEAR YE: RATES are AS LOW as they HAVE EVER BEEN."

Yesterday's China news moved things when investors salivated over the incredible opportunity to sell our goods and services to their ever increasing "middle class" if the value of the YUAN was to increase since they were "unpegging" it from the dollar.

That was yesterday. Reality set in that China will not likely let the value of the YUAN get too inflated vs the dollar since they have such a HUGE investment in the dollar...still.

MONEY POURED back into the bond market today.

40 BILLION worth of t-notes were auctioned with really low yields offered meaning there is still a HUGE demand for "safe" places to put money and the dollar picked up some gains today.

The FNMA 4.0, the FNMA 4.5% and other mortgage backed securities reaped the benefits. FNMA's 4.0% bond actually closed UP 44 basis points on the day today putting 30 year fixed rates SQUARELY in the mid 4%- range.

I promised a client that if rates got to the 4.5% range again, I would eat my hat. It was delicious.

Have a great eve!

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

I EAT MY HAT...Rates fall again.

2010-06-22T18:55:00.001-06:00

I have got to level with you, I am beginning to get a little hoarse from shouting off the rooftop of my office complex.

HEAR YE, HEAR YE: RATES are AS LOW as they HAVE EVER BEEN.

That was yesterday. Reality set in that China will not likely let the value of the YUAN get too inflated vs the dollar since they have such a HUGE investment in the dollar...still.

MONEY POURED back into the bond market today.

40 BILLION worth of t-notes were auctioned with really low yields offered meaning there is still a HUGE demand for "safe" places to put money and the dollar picked up some gains today.

The FNMA 4.0, the FNMA 4.5% and other mortgage backed securities reaped the benefits. FNMA's 4.0% bond actually closed UP 44 basis points on the day today putting 30 year fixed rates SQUARELY in the mid 4%- range.

I promised a client that if rates got to the 4.5% range again, I would eat my hat. It was delicious!

Have a great eve!

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

YUAN to UNPEG? Why we care. FNMA 4.0% bond UP 16 bps.

2010-06-21T17:56:00.001-06:00

WHOA...

This weekend and just before the latest "G-20" summit China announced that the YUAN was not going to be pegged to the dollar any longer. Markets reacted this morning and then relaxed throughout the day.

Why is this a big deal?

When the value of the YUAN was "pegged" to the dollar (unofficially) for the last 2 years or so...the value of the YUAN would go UP or DOWN in tandem with the value of the US dollar. This meant that even when the US dollar was DOWN vs. other worldwide currency, our dollar was still was able to purchase the same amount of goods and services when converted into the YUAN. Additionally when the value of the dollar (and yuan) was down vs. other currency: the OTHER CURRENCY could BUY MORE goods and services from CHINA. Sound confusing?

With the increase in EXPORTS (due to the "artificially" weaker yuan since it was pegged to the weaker US dollar), China's currency SHOULD have had an increase in value. The move to peg the yuan with the US dollar actually had a positive effect on China's cash position because the US and the rest of the world still found extremely cost effective goods there with the excellent exchange rates while the US dollar was weaker. Fortunately for the US: they have been spending that money here in buying treasury notes.

If the YUAN is MORE valuable than the dollar: China's holdings in US dollars (Nearly 825 billion dollars worth) are WORTH less when converted into their currency. They can then BUY more t-notes with less of their money...or they will discontinue their practice of massive purchasing of our debt. If China becomes a net seller of our bonds or sells more than they buy: we could be in trouble.

Either one of those actions can have effects on our Mortgage interest rate market.

The good news: as of yet there is not a better place to park money than in the US.

"Unpegging" the yuan hasn't had an effect yet. They just announced that they would do that. The value of the Yuan vs. the dollar actually hasn't changed yet.

The other side:

A stronger YUAN opens up a HUGE market for consumers looking to purchase goods and services from other countries. The people of India stand to gain much if China's currency picks up strength and all of the sudden millions of "middle class" are interested in imported goods. This is why the knee jerk in the DOW this morning (triple digit gains) and when reality set in that this will be over some time: values recovered (Dow was off 8 points at the bell.)

The FNMA 4.0% bond was DOWN 30 basis points early in the session on this news as investors put money into stocks...but closed out the day UP 16 basis points as investors shook off the pixie dust and put their money back into the safety of the bonds.

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Are you a victim of the corporate mentality?

2010-06-17T15:36:00.001-06:00

BP Spills Coffee - watch more funny videos

This video seems absolutely ridiculous to watch. However, for those of us who have lived under the corporate mentality for most of our careers this is really scary. This is exactly how much of the financial disasters of late have been handled. Enjoy.

Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

FNMA 4.0% bond is UP on the day!

2010-06-16T19:31:00.001-06:00

The FNMA 4.0% bond is up on the day by 28 bps and closed at $99.72,

Housing starts were reported down today though the West actually reported higher numbers.

Senate approved the proposal to extend The CLOSING deadline for the $8000 tax credit to Sept. 30th today.

BP announced that they were going to discontinue paying out their dividends to stockholders until next year.

Mortgage Applications are UP this last week.

Cheers,

Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Obama's Oil Czar...the 17th. FNMA 4.0% bond is DOWN 19 bps.

2010-06-15T11:49:00.000-06:00

Remember the FNMA 4.0% bond? We had been watching the FNMA 4.5% bond to see where rates were going and now we are watching this one. The coupon is another Mortgage Backed Security offered by FNMA and because rates are so low it more closely relates to the loans being securitized today. The FNMA 4.0 Bond is Currently down 19 bps. When the pricing goes DOWN on these: rates come UP.

30 year fixed rates have come up some but the average is still at 4.75%-ish out there.

Oil Companies are on Capitol Hill in front of the House Energy and Commerce Committee today discussing offshore drilling. The story I read suggested that the "other guys" are throwing "BP" under the bus and looking to convince the Energy and Commerce Committee that offshore drilling needs to get going again. Really, with the millions of gallons of oil pumped each day at thousands of rigs: a disaster like this one has got to be an anomaly.

Obama will be addressing the nation tonight at 6pm Mountain time so watch for that.

Fed Members are divided. Janet Yellen the San Francisco Fed President was quoted this morning for her opinion that the Fed Funds Rate should stay the same until 2012. There are other members that side with her. Even though they are all looking at the same data: they are starting to disagree here. Other members are seeing signs of recovery and would like to start raising that rate again very soon. Remember that when the Fed Funds Rate is higher: money is more expensive and therefore it tends to slow inflation, decrease retail spending and have other affects on the economy. It is like a little button that they can push but do not see the effects for several months.

Below is an article I wrote this morning about Obama's Oil Czar that may be interesting.

Cheers!

Chad

____

watch?v=XLiqvZOP8TY

Obama is naming an oil recovery czar according to news released this morning. This comes after criticism by "experts" who don't feel like the head of the coast guard Thad Allen is capable of such a huge undertaking as the clean-up efforts. (This guy has been doing this for decades and it is the responsibility of his position to do so.)

In defense of the critics: we have NEVER seen anything of this magnitude that will require this much clean up. "Experts" are estimating this to be a 25 million gallon mess by the time they get a handle on it. (By the end of the month 90% of the remaining leaking oil will be able to be recovered and the leak will be much less daily volume with relief efforts.) Valdez was a 10 million gallon spill. There was a 173-million-gallon spill in 1979 in Mexico, but that oil mostly washed up on the sandy beaches instead of the wetlands that are being affected by this spill.

Why a czar? This White House has almost found a "magic loophole" with the Czar concept, they have appointed SIXTEEN of them. Czars are EASY. They report directly to the president. Their salary is what he says it is. They don't answer to congress. They are not elected. They are not "vetted". (Vetting is the process whereby any "skeletons in the closet" are brought out into the open for consideration by committee) Here is a great article for more info.

An "Oil Recovery Czar" would be someone solely responsible to oversee the clean-up effort over the next several years which will be a huge job.

To better answer "Why a czar?"
1. It is QUICK and 2. requires less oversight or rule by committee. It is like the difference between picking up some "handy" men and women from Home Depot to build a home yourself vs. and wading through the bids process with licensed and bonded contractors and getting plans/specs/bids approved by a committee.

What about BP?
Unfortunately, BP's cap on liability is at $75 million for a disaster such as this one unless there is negligence that can be proven. BP stock has lost something like 40 billion worth of value through this though and they have shown that they want to do the right thing and be involved with efforts to get through this. (They have been spending 6 million dollars a day to try and keep the spill contained.)

What do you think?

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

What is your Spark Plug?

2010-06-14T14:53:00.001-06:00

In April, I came back into the mortgage business after taking four months off to do chemotherapy and deal with the death of my mother. The Mortgage business and real estate in general has been so very good to many members of my family over the last several decades.

In the last few years, we have seen things revert back to the way they were when I first got into the business.

You know: fully documented loans with extra documentation at the whim of the underwriter, appraisal question and answer sessions that may or may not result in an extra appraisal or even a dead deal...that kind of stuff. In short we went from lower stress to REALLY stressful in a matter of months.

Stress: is a killer.

In the last 12 years of living with cancer, I have found that when I get stressed out: my tumors grow. It is just the way it has been. Tumors are not scary to me, but when they start affecting how my organs are functioning or cutting off blood supply: they get scary really quick.

SO: Stress = scary tumors.

Not everyone gets to have this "stress barometer" and I consider it a "special power" that I have to keep me from allowing me to get too stressed for too long. In fact: to go 3-4 years without treatments with the type of cancer I have is really pretty good.

Needless to say, this year has been a great time for me to reflect again on why I am in the business in the first place.

Money? Not really. Working for a national brand (benefits y'all) for the last 10 years has been excellent for my family, but the compensation is not nearly what it would have been working for myself.

Fame? Right. How many of us have fame beyond the supermarket or gym where we are lucky enough to run into a handful of people we know each time we go there?

Respect? Maybe some. I respect myself at the way we have been able to deliver our services over the last 10 years with my team, but I don't seem to get nearly as much respect for what I do after the mortgage meltdown of a few years ago. (Guilt by association, right? Though: I didn't write a single sub-prime or negative amortized loan.)

I have got to say that the primary reason I do what I do is for a sense of CONNECTION. I feel connected to my partners and clients. I feel connected to my community and IN my community. I get a chance to help the RIGHT people connect with homes who are taking advantage of the ridiculously low interest rates and property values right now.

Reason two is Innovation. Since I was a child, I have enjoyed making things better. From renovation projects to helping people repair their credit score: I like to IMPROVE things or help others improve things.

Improving delivery despite the mortgage finance environment is actually why I have created the "Premium Service Delivery Platform(tm)" and have been very excited to start coaching others to add it into their business.

SO yes: I DO like this. Connecting to why I like this has been a challenge at times, but it is always there like a beacon to refer back to...or some sort of spark plug that continually ignites my passion for helping others.

Fortunately for me, my health outlook is good. I want to stay healthy and I feel that if I can connect with my purpose and help others do the same: I will be taken care of.

What is your spark plug? Like a spark plug ignites the explosion that is harnessed to power a gas engine, your purpose becomes that little thing that can keep you going.

How many reasons as you can think of for connecting to your business? If you can't think of any for your current business: what are some reasons to connect to a different one?

Cheers,

Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

FNMA 4.0% bond EVEN on the day, GREEK debt downgraded

2010-06-14T14:39:00.001-06:00

Market news first: FNMA 4.0% bond is DEAD even on the day. The mortgage backed security is trading at $99.72.

Fears in Europe have pretty much run their course and the investors affected have moved their monies around. (Greek bonds were downgraded to "JUNK" by moody's today.) Oil is UP on the day but only to $75.07/barrel and gold is back to $1223/oz. The Dow is at 10,191 and we are just minutes from the end of the session as I write this.

Cheers,

Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

FNMA 4.0% bond lower...Mortgage Rates UP

2010-06-10T15:00:00.000-06:00

Ouch!

FNMA 4.o% bond is DOWN 75 basis points on the session today! The coupon closed at $99.59 at the final FNMA 4.0% bond quote that I got.

Mortgage rates went up quite a bit.

The best consumer confidence readings since 2007 and the biggest exports increase in six years reported by China for May are among the reasons cited for the movement of money out of the bond.

DOW was up 273 points a minute ago as investors are feeling some sense of security and seeking more risk/higher return possibility.

Today was actually the 3rd best day of the year for the index.

Mortgage rates tomorrow will likely stabilize as bonds recover some on the "bounce" that generally occurs after such a heavy sell-off day like today.

Cheers,

Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

By the time you see the Robins, Spring is over! FNMA 4.0 bond is UP, Rates are Down.

2010-06-09T15:33:00.001-06:00

FNMA 4.0% bond is UP another 19 cents today to close at $100.34. This is great news and rates actually improved AGAIN today. We are in such a ridiculously low rate environment that people are starting to get complacent.

Applications are down! According to a release by the Mortgage Bankers Association refinance applications are down 14.3% and purchases are also down by just over 5%. Applications in general are actually down just over 12%. Why is this? Remember that people who are interested in refinance or purchase of real estate are people. What do I mean by that? Even though it makes good sense to think that lowering a mortgage interest rate or purchasing a home in today's incredible marketplace full of "good deals": people are still a complex set of individuals. Each person has different reasons for "why not" vs. reasons "why" they would want to explore purchase or refinance real estate in places like Bozeman, Montana where I am or in any given market place. The biggest reason "why not" which seems to override any "good sense" in "why to" is FEAR.

Fear of rejection is one form. Fear of purchasing now and having rates or market values go lower still is another. Fear that a person's exit residence will not sell could be one reason. Fear of job security and others one could imagine. Unfortunately: most of what we worry about is completely based on past experience or the experience of others. The good news: these are different times than we have really ever seen before.

Also Good News: those who are able to take an honest look at whether or not purchase or refinance is right for them and get an honest answer are taking advantage of a very rich marketplace. Remember that when 30 year fixed interest rates are in the 4.5% range as they have been again: a person's money goes a long way in a marketplace where homes are undervalued as they have been getting here in Bozeman lately.

Ever hear the Warren Buffet quote about fear? "When people are scared: get greedy...and when people are greedy, get scared." We are moving closer to the middle of that everyday. Remember the other quote about opportunity from Warren Buffett? "By the time you see the Robins, spring is over."

Good luck in your marketplace finding good buyers who are looking for what you provide so well.

Cheers,

Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

FNMA 4.0 Bond, T-note sales and Are you a Barracuda?

2010-06-08T10:24:00.001-06:00

Hey there! For those who missed yesterday's updates we are now watching the FNMA 4.0% bond vs. the FNMA 4.5% bond.

Today the FNMA 4.0% bond coupon is dead even on the day at $100.16.

$70 billion worth of T-notes are on the auction block this week and with all the money staying home in the US, coming home to the US or flowing to the US with financial crisis news abroad we haven't seem much effect yet. Interestingly, as oversold as the bonds seem to be the market is still swallowing them up.

Oil is at $71.37 a barrel still so money is not really coming into that market like it did with Mortgage Backed Securities were in question as a reasonably conservative investment a few years ago. Gold is on the rise again and hit 1255 an ounce for a minute this morning though it is trading at $1247 right now.

Below is an article I wrote this morning. Enjoy!

A friend of mine recently got back from the beautiful Yucatan Peninsula in Mexico. He spent his vacation in a little resort which was located about halfway in between Cancun and Playa Del Carmen. For those of you who have been down there in that area you know that not all of the beach front is white sand and pina coladas.

My friend went to the Yucatan to fish.

The resort he chose was statistically not as busy as others in the area and was secluded. The beach was loaded with Mangrove trees on both sides of the resort area and it didn't take him long to find a suitable place to begin his fishing adventure.

He was fly-fishing in the ocean as the tide was coming in and spotted a barracuda in the surf. Because they are such toothy fish, aren't really fun to catch and generally destroy the fly: he started to pull his line in. He didn't want that fish.

Interestingly, the fish saw the fly and decided to go for it. The faster my friend the fisherman pulled in his line, the faster the fish was going after it.

The fisherman pulled the line out of the water with a whipping motion and the barracuda actually jumped right out of the water after it!

The lesson is in what happened next. You see: at that point in pulling in the line, there was only shore. When the barracuda jumped out of the surf, he landed right on the beach!

Are we ever that single minded like the fish? Are we going after the false promise of something without realizing it and following it with all our might even though it may actually be a "trick" like an oasis in the desert?

On the other hand, one has to admire the Barracuda. He gave his ALL in pursuit of what he wanted.

Are we like the fisherman? Avoiding business that may be a "pain" to deal with or avoiding business that we expect to be one way or another as the transaction progresses?

The rest of the story is also interesting.

The fish was taken care of. As he lay there glistening and flopping in the sand taking on a new texture as the sand stuck to him: the tide was coming in. In a few moments the tide took hold of the fish, washed it clean and allowed him a new chance to pursue something else.

Cheers,

Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

HERS rating...not to be confused with the "his and hers" rating of the master bathroom.

2010-06-07T17:42:00.001-06:00

Here is a GREAT article explaining more about the Home Energy Efficiency Rating System that was put together by the people at Energy Star.

The gist:

The HERS rating shows HOW much BETTER the efficiency is than if the home were to have just been built to the most current "code."

SO: a home built to code would have a rating of 100.

A more energy efficient home would have a HERS index rating of LESS than that.

Each "point" is a "percentage of efficiency." SO: if a home is rated an 85, it is 15% MORE efficient than a standard home built to code.

The homes with high enough HERS ratings will give the home an opportunity for an Energy Efficient Mortgage or EEM.

Read on directly at the HUD site here. if you are interested.

Cheers,

Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

FNMA 4.5% bond is WAY UP...rates down. Hungary News?

2010-06-07T15:42:00.001-06:00

WOW. The FNMA 4.5% bond closed out the day at $102.90. This is as high as it has been and mortgage rates out of my office in Bozeman Montana and elsewhere continue to tumble.

The FNMA 4.5% bond is actually so high valued and rates are so low that it becomes appropriate to start watching the FNMA 4.0% bond. We haven't watched that one since rates were at their lowest last year.

Remember that watching the FNMA 4.0% bond represents watching how the market receives 4.5% mortgages that have been securitized.

Hungary?

Hungary has come into the spotlight as speculation was raised as to whether or not they are the next "financial crisis". They insist they are not. Check out the article in the New York Times for more info.

They are not a member of the European Union so they do not affect the Euro...directly. However, when their money is down vs. the euro: they do not tend to purchase goods and services that are priced in "Euros" as they are then "more expensive" with the conversion rate.

In the last several years: many of the mortgages obtained in Hungary have been from banks in the European Union.

When their money is "down" vs. the Euro:

1. They are a market segment that would then take a dive for banks in the E.U. providing them with mortgage financing.

2. Making their mortgage payment becomes MORE difficult when it takes more of their currency to convert to Euro to make the payment.

In other words the worry is that default rates could go up while business goes down.

Cheers!

Chad

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Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Boy were they wrong...jobs report. FNMA 4.5% soaring.

2010-06-04T11:47:00.001-06:00

Jobs report came in Lower than expected with 430,000 new jobs created. Numbers I put out last night suggested that they were anticipating 417,000 new jobs (temporary positions) with the census.

This morning I see that the number is closer to 411,000.

This is not so good for the private sector. Even when we look at the number of "created jobs" at 430,000: that means that 96% of the new jobs are coming from the government...AND are temporary.

Unemployment is still hovering in the 10% range, although with all the 'new' jobs it is being reported at 9.7% today. Here in Montana, we are at 7.1%

Bad news for jobs is good news for the bond market. Investors are dumping money in this morning and the FNMA 4.5% bond is UP 59 basis points on the day. Mortgage Rates just keep getting better.

The key now: get some of the "fear of the market" to subside as consumers really don't care what the rate is if they are not interested or don't think they qualify for a home purchase or refinance.

Cheers,

Bozeman Home Mortgage Lender

Bozeman, Montana

406 799 8613

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Jobs report! FNMA level, rates steady...for now.

2010-06-03T17:00:00.001-06:00

FNMA 4.5% bond trading at $102.06 at the end of the session and is down 3 cents.

Investors are waiting on the news tomorrow morning with the release of the jobs report. Analysts expected the "creation" of 500k jobs in the report which would be some good news for the stock market and could cause pricing erosion in the bond market (and higher mortgage interest rates as a result.)

The prediction was actually increased to 660,000 "new" jobs I read today. However: over 417,000 of the new jobs are "temporary" census worker jobs paying 12-15 dollars an hour. With the census numbers out of there, I don't think the markets will react too much. OR The markets will react to the initial announcement and them back off when the number is dissected.

Cheers!

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com

Garbage...is stinky.

2010-06-03T11:28:00.001-06:00

As we were preparing to leave on our Memorial Day trip last Friday my wife and I thought to put the garbage can out to the curb since there was a slight possibility we were not going to get back in time to put it out on Tuesday morning.

By the time we were ready to leave, it was pouring rain and since the lid wasn't all the way closed on the big blue can: I knew the garbage could be a sloppy mess by Tuesday morning.

I made a snap decision: If we was not able to come back in time Tuesday, I would just have my neighbor run the trash around for me. In the meantime, I would put the garbage in my garage for the weekend.

We left. It rained all weekend, so was cold. My garage is heated.

WOW. When we came home I stopped at the street to grab our mail and left the window down as we opened up the garage door to pull in. The smell reached into my car and shocked my nostrils awake.

We opened up all the garage doors immediately, took the garbage can to the curb and cleaned out our travelling car as rapidly as possible to avoid exposure to the stinky green fumes that were swirling throughout the cozy, heated space in our garage.

The Lesson didn't hit me at first, but I think I have got it now.

How often do we do something like this without even thinking about it? Are we taking garbage into our homes, our businesses or even our MINDS and then shutting the door on it to let it marinate and fester? Are there toxic people in your business or life that you need to protect yourself emotionally, financially or physically from?

Now is the time for action.

Once you recognize it: don't UN-recognize it.

Just as the Garbage: the stink will eventually permeate all areas of your existence.

The interesting thing about this type of exposure: it took a full 24 hours of airing out the garage to get that smell out. It is not easy to remove toxic people or ideas and even when we choose to do that: it takes time for the "smell" to subside. The more "airing out" we do, the faster the recovery time.

Just something to share.

Cheers!

--
Chad Schauers
Montana Mortgage Lender, Bozeman, Montana
Personal Cell: 406 799 8613
Personal Email: metchad@gmail.com