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Market Insight

FNMA 4.5% closed out positive on the day...6pbs UP. Rates that are currently in the 5% range on the 30 year fixed should hold. BILLIONS of Treasury Bills are being auctioned off with $61 BILLION flooding the market today with another $58 billion up for auction TOMORROW. Yikes. Remember: investors who "may" have invested in mortgage backed securities will lean toward the instruments at auction. The "flood" of supply keeps gains in mortgage backed securities in check. Foreign investment remains strong...but rumors last week indicated that US reps were encouraging China to continue investment in the US. Today it was rumored that further "encouragements" were put out to other foreign governments to maintain the appearance of strong demand for our T-notes.

Mark-to-Market: Congress is still deliberation as to what will be done about FASB 157 <click to learn more>. The expectation is that they will temporarily suspend "mark-to-market" accounting requirements to allow the financial sector gain some footing. Remember the "downward spiral" that affected EVEN the HEALTHIEST banks...came from the requirement of them to value their assets based on the "comps" provided by the unhealthy banks "fire sales" of their assets. This is great news for banks...and if they choose to suspend the measure: a sharp rise in value of financial stocks could ensue. When investors pull out of bonds to invest in stocks: rates go up.

Perspective: even if rates go lower, the market values of real estate are in large part now relying on "foreclosure" sales...the WHOLE market is going this way. This means that a person will not necessarily have to purchase a foreclosure to get a "foreclosure" deal. Short sales are on the rise and wise realtors are reasonably pricing homes from the get go... In short: deals are out there now. Rates are good now. If a person is waiting to refinance though: the possibility may go away with the continuation of falling home prices in the short term. Just something to tuck in your hat...

DOW lost 79 points today>>> after a choppy session. OPEC announced that they will cut up to 1 million barrels in production and oil shot up to near $50/barrel this morning.

DJIA 6,547.05 -79.89 NASDAQ 1,268.64 -25.21 SP500 676.53 -6.85

Happy Selling!

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Chad Schauers
Have you metChad?
MetLife Home Loans
406.522.0922
406.522.0924 (fax)
1924 W. Stevens, Ste. 202
Bozeman, MT 59718
Cell: 406 799 8613
ccschauers@metlifehomeloans.com