Taos Real Estate

Market Direction:

Rates are: FLAT Rate

Volatility: HIGH

Interest Rate Trends: Long Term (4-6 weeks): FLAT

Short Term (1-2 weeks): FLAT

THE MORTGAGE MARKETS... IN TECHNICOLOR... Well it looks like our pattern of fluctuating rates will continue. The volatility is probably here to stay - even once markets regain stability - due to the SEC's elimination of the 'uptick rule' last year. Simply put, this rule prevented shorting of stocks once they were in free-fall... the stock would have to 'tick up' in price before a short could be placed... it was enacted after the Crash of 1929 and seen as a contributing factor in the Crash. Guess when the SEC eliminated the rule? July 6, 2007.

http://en.wikipedia.org/wiki/Uptick_rule I guess I should quit trying to forecast rates based on market fundamentals - or even technicals - as long as all the major overhauling is taking place. For example: last week I mentioned OFHEO had just lifted caps on Fannie and Freddie allowing them to take on $200 billion more in mortgage securites.

This is going to have the effect of lowering rates - and keeping them low - even in the face of inflationary pressures, economic recession, etc, etc. This is great news, but as you can see it affects my ability to forecast with any certainty. A nice bit of news: last week's sales of existing homes rose unexpectedly - the first increase in seven months. This could be a sign that the market is beginning to stabilize.

A great bit of news: Taos Lending Team has negotiated new lending sources for land financing with screaming rates as low as 4.875% (ARM), 6.000% (fixed) and as little as 10% downpayment! We can do both purchase or cash-out refinances with these sources. Keep pushing those land deals! Life is good, enjoy your week.

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