Jul 26 2014

Low mortgage rates drag down housing market

WASHINGTON – Would-be home sellers across the country are grappling with a once-in-a-lifetime problem: They have mortgage rates so absurdly low it would hurt them financially to sell.

Doing so would mean giving up an irresistible rate in exchange for a new mortgage carrying a rate up to a percentage point higher. Thats discouraging some people from selling, thereby limiting the supply of available homes and contributing to slower home sales.

Its a significant shift from the way the US housing market has worked for the past 30 years. For most of that time, whenever a homeowner decided to trade up to a better home, mortgage rates usually were lower than the previous time they had bought.

But that is changing. The average rate on a 30-year mortgage fell below 4 percent in late 2011 and reached a record low level of 3.3 percent in November 2012. It didnt top 4 percent again until mid-2013. A refinancing boom ensued.

More than one-third of homes with a mortgage now have rates below 4 percent, real estate data provider CoreLogic estimates. Yet mortgage rates now average 4.2 percent. That is still low by historical standards but up about three-quarters of a point from a year and a half ago. And should mortgage rates rise later this year and next, as many economists expect, even more homeowners will be affected.

As a result, many homeowners with low rates are staying put. Others are moving and buying new homes, but keeping their old ones and renting them. Both choices mean that fewer homes are listed for sale, which drives up prices. Higher prices and limited selection have put the brakes on a housing recovery that began in 2012.

And slower home sales, in turn, drag down economic growth.

Mark Fleming, chief economist at CoreLogic, estimates that as many as 3.6 million homeowners are unlikely to sell this year because they would have to give up a lower rate.

They got the deal of the century, says Glenn Kelman, CEO of real estate brokerage Redfin. I dont think in 100 years anyone will be lending money at 3.5 percent. How do you walk away from a deal like that?

Remodeling instead

Youd think Ryan Carson, an attorney in Seattle, would be ready to sell. He and his wife have one young child, and they are expecting twins. They are going to hire a live-in nanny, which means there will be five people living in their four-bedroom house.

I could probably use the extra space, honestly, he said. And he would make money off the sale, because his homes market value is above what he paid.

But Carson, 39, has a 30-year, 3.85 percent mortgage rate, so he isnt going anywhere. He refinanced into the lower rate last summer, reducing his monthly payment to $2,200 from $2,600.

I have no interest right now in selling, he said. He and his wife plan to remodel instead.

Supply shortage

A shortage of homes for sale has plagued the housing market since late 2012. The number of available homes last year was the equivalent of just 4.9 months worth of sales, according to the National Association of Realtors. Thats far below the typical figure of six months.

Inventory has recovered somewhat this year, but it was still equal to just 5.6 months of supply in May.

Meanwhile, sales of existing homes have fallen 5 percent in the past year. Yet prices rose 8.8 percent nationwide during the same period, according to CoreLogic, partly because of the limited supply.

What economists call rate lock-in is one of several reasons so few houses are for sale. Another factor is that almost 40 percent of homeowners still dont have enough equity to enable them to sell.

We are in a uniquely difficult period for matching buyers and sellers, says Stan Humphries, chief economist at real estate data provider Zillow.

Home prices are expected to keep rising in the coming months, though at a slower pace than the double-digit gains that occurred earlier this year. Higher prices should lower the number of underwater homes and enable more people to sell.


But as the number of underwater homes falls, several studies suggest the effect could be offset by higher mortgage rates. Most economists expect mortgage rates to rise later this year as the Federal Reserve ends its bond-purchase program, which is intended to keep borrowing rates low.

Humphries forecasts that rates will reach 5 percent by the first three months of next year. That would mean those buying or refinancing now, at the current rates of about 4.1 percent, might never want to sell either.

Paul Bernard, a recruiter in New York City, says the issue has begun to interfere with some of his clients willingness to move for a new job. In one recent case, an employee at a large technology firm decided to postpone a job-related move to San Francisco partly because it would have forced him to take out a mortgage at a half-percentage point higher than his current one.

The job market in some cases is less mobile than it used to be, he said.


A 2011 study by the Federal Reserve Bank of New York concluded that for every $1,000 increase in a homeowners annual mortgage payment, the likelihood that homeowner would sell fell as much as 16 percent.

Jul 25 2014

Absolute Home Mortgage Corp. raises $3480 for Warren County Habitat for …

The Hackettstown office of Absolute Home Mortgage Corporation sponsored a charity event on behalf of Warren County Habitat for Humanity on June 24. The golf outing was held at Panther Valley Golf Club in Allamuchy and was attended by real estate professionals throughout the area.

The day of golf was the brainchild of Manny Rizzuto, branch manager of Hackettstown AHMC, who conceived and organized the event along with partners Stephanie Speal and Bob Forte. As Manny explained, real estate professionals by their nature know their communities intimately and are concerned about the welfare of those communities. Put them together with Habitat, providers of affordable housing with a world-wide reputation, and it really is a natural fit.

Ben Eskow, executive director of Warren County Habitat for Humanity addressed the donors, thanking them for their generosity and challenging them with a call to further action in support of their communities. This outing is a tremendous help for our efforts to complete our current partner family home in Independence by March of next year, he said. The funds raised today will cover the cost of the floor framing and deck were currently working on.

The event was billed as the first annual golf outing and its success highlights the promise of similar events in the future. Its uplifting to be involved in an event which benefits local families and directly reaches people obviously willing to help themselves, said Stephanie Speal. Im proud to have been a part of it.

Manny, Bob, and Stephanie not only have their place of business in Hackettstown, but they each reside in Warren County as well. These local residents run a full service mortgage bank serving the lending needs of homeowners, real estate professionals, and homebuyers throughout the Tri-State area. They have built a strong reputation for providing the local community and surrounding areas with top shelf customer service in home mortgage lending. Learn more about the Hackettstown mortgage bank on hackettstownmortgage.com.

Warren County Habitat for Humanity is the local affiliate of Habitat for Humanity, International and has been serving Warren County since 1999. An accredited 501 (c)(3) charitable organization, its mission: Seeking to put Gods love into action, Habitat for Humanity brings people together to build homes, communities, and hope. Learn more at warrenhabitat.org.

Jul 24 2014

Can You Make Some Green by Investing Green?

Prepared by Broadridge Investor Communication Solutions, Inc. Copyright 2013 for use by Evan R. Guido

The release in April of the long-awaited report from the United Nations Intergovernmental Panel on Climate Change has spurred renewed discussion of ways to combat climate change and its effects. The report, written by leading scientists from around the globe, says that to keep greenhouse emissions below critical levels, the world must make substantial changes–and quickly–in how energy is produced and consumed.

That finding has focused fresh attention on so-called green investing. Here are some considerations that can be especially important in this arena.

No shortage of choices

Jul 24 2014

Search Payday Loans Announces Their New Payday Loan Form Simplifies …

MESA, Ariz., July 10, 2014 /PRNewswire-iReach/ — SearchPaydayLoans.org, a company that specializes in searching for loans from multiple services using a centralized interface, has announced the roll-out of their new single-form search. This new service allows users to search 100+ lenders using a single form. Traditionally, people interested in obtaining loans have had to apply to potential lenders individually, which was often times consuming. After a simple two-step sign-up atwww.searchpaydayloans.org, users are ready to start searching hundreds of potential lenders to find the best lender for each and every user.

After filling out a 100% secure and confidential form, SearchPaydayLoans.org will automatically find users a loan of up to $1,000. This service is completely free, with no hidden charges or user fees. When conducting a search, SearchPaydayLoans.org scours through a large number of lenders, which allows the user to find the lender that best fits their financial situation. Bad credit that could potentially cause a person to be rejected from other loans will not impact the likelihood of receiving a loan because credit is not factored into the loan contracts.

Unlike many other services that help users findpayday loans, there is no credit check or fax required. This means that users can potentially receive the money they requested sooner than other services. Once the user verifies their bank account (either checking or savings), SearchPaydayLoans.org will display a list of potential lenders. After browsing through the list and finding their desired lender, the user simply clicks the loan that best suits their needs and submits for review. Once the payday loan request is approved, the user confirms the loan, which instantly triggers an electronic approval process. In as little as 1 hour, the money is wired to the users bank account and is available for immediate use. Those interested in obtaining a loan can clickhereto get started.

About SearchPaydayLoans.org

SearchPaydayLoans.org has been helping people find loans since 2012. In that time, over 55,000 customers have used Search Payday Loans to successively obtain a loan. Since the Great Recession many people have not had liquid assets when they needed them most. SearchPaydayLoans.org is here to help those that have fallen on hard times, regardless of credit score. SearchPaydayLoans.org takes the struggle out of finding a payday loan by functioning as a middleman, finding the loans that a user will actually qualify for. Users pay nothing to use this service, and leave with cash in their accounts.

Media Contact: D. Lockard, Search Payday Loans, 623-738-5237, contact@searchpaydayloans.org

News distributed by PR Newswire iReach: https://ireach.prnewswire.com

SOURCE Search Payday Loans



Jul 24 2014

Most affluent Americans engage in hobby investing

A key reason why most (62 percent) of the countrys affluent engage in hobby investing is because it is fun, according to new research.

BMO Private Bank, a unit of BMO Financial Group, discloses this finding in a new survey on high-net-worth Americans (those with at least $1 million in investible assets) and hobby (or passion) investing. The study, the fifth and last in a series by BMO Private Bank that examines trends among the affluent, finds that just over half of the countrys wealthy engage in some form of hobby investing.

Hobby investing is defined as adding collectible assets to ones portfolio as a means of diversification and, just as important, as a way to have and to hold the things investors love the most.

The study found that the items in which the countrys affluent are most passionate about investing include:

  • Coins (38 percent)
  • Art (36 percent)
  • Jewelry (31 percent)
  • Antiques and stamps (28 percent each)
  • Wine (25 percent)
  • Classic cars and sports memorabilia (24 percent each)

Were finding that an increasing number of our clients are engaging in some form of hobby investing, says BMO Private Bank Chief Investment Officer Jack Ablin. People who choose to invest in their hobbies often do so because it allows them to feel a sense of engagement without having to spend a lot of time on them.Many hobby investors are keen to create a legacy to pass on to their heirs one that is unique to them and reflects their interests, he adds.

According to the study, other reasons for which the affluent engage in hobby investing included:

  • Combining interests with investing (54 percent)
  • Something unique to pass down to heirs (40 percent)
  • Provides sound investments that will grow in value (39 percent)
  • Allows one to show off my investments to others (38 per cent)

Regardless of what influences people to combine their hobbies with investing, Ablin notes that, as with any form of investing, there are a few cautionary factors Americans of all income levels need to consider. For example:

Antiques: can be very illiquid and therefore not suitable for those who may need to convert them to cash in a short period of time.

Wine and art collecting: are long-term propositions, so not appropriate for those with a short-term investing horizon.

Stamps and coins: there is a robust counterfeit market in both these items, so investors need to be careful about their authenticity and well educated about the risks.

Comic book collecting: may be trendy today, but the market may not be so strong in the long or even the medium term.

The online survey was conducted by Pollara between March 28th and April 11th, 2013 with a sample of 482 American adults who have $1M+ in investable assets.

Jul 23 2014

CFPB Takes Action Against Ace Cash Express for Pushing Payday Borrowers …

“ACE used false threats, intimidation, and harassing calls to bully payday borrowers into a cycle of debt,” said CFPB Director Richard Cordray. “This culture of coercion drained millions of dollars from cash-strapped consumers who had few options to fight back. The CFPB was created to stand up for consumers and today we are taking action to put an end to this illegal, predatory behavior.”     

ACE is a financial services company headquartered in Irving, Texas. The company offers payday loans, check-cashing services, title loans, installment loans, and other consumer financial products and services. ACE offers the loans online and at many of its 1,500 retail storefronts. The storefronts are located in 36 states and the District of Columbia. 

Payday loans are often described as a way for consumers to bridge a cash-flow shortage between paychecks or other income. They are usually expensive, small-dollar loans that must be repaid in full in a short period of time. A March 2014 CFPB study found that four out of five payday loans are rolled over or renewed within 14 days. It also found that the majority of all payday loans are made to borrowers who renew their loans so many times that they end up paying more in fees than the amount of money they originally borrowed.

The CFPB has authority to oversee the payday loan market and began supervising payday lenders in January 2012. Today’s action resulted from a CFPB examination, which the Bureau conducted in coordination with the Texas Office of Consumer Credit Commissioner, and subsequent enforcement investigation.

Illegal Debt Collection Threats and Harassment

The CFPB found that ACE used unfair, deceptive, and abusive practices to collect consumer debts, both when collecting its own debt and when using third-party debt collectors to collect its debts. The Bureau found that ACE collectors engaged in a number of aggressive and unlawful collections practices, including:


         Threatening to sue or criminally prosecute: ACE debt collectors led consumers to believe that they would be sued or subject to criminal prosecution if they did not make payments. Collectors would use legal jargon in calls to consumers, such as telling a consumer he could be subject to “immediate proceedings based on the law” even though ACE did not actually sue consumers or attempt to bring criminal charges against them for non-payment of debts. 


         Threatening to charge extra fees and report consumers to credit reporting agencies: As a matter of corporate policy, ACE’s debt collectors, whether in-house or third-party, cannot charge collection fees and cannot report non-payment to credit reporting agencies. The collectors, however, told consumers all of these would occur or were possible.


         Harassing consumers with collection calls: Some ACE in-house and third-party collectors abused and harassed consumers by making an excessive number of collection calls. In some of these cases, ACE repeatedly called the consumers’ employers and relatives and shared the details of the debt.


Pressured into Payday Cycle of Debt

The Bureau found that ACE used these illegal debt collection tactics to create a false sense of urgency to lure overdue borrowers into payday debt traps. ACE would encourage overdue borrowers to temporarily pay off their loans and then quickly re-borrow from ACE. Even after consumers explained to ACE that they could not afford to repay the loan, ACE would continue to pressure them into taking on more debt. Borrowers would pay new fees each time they took out another payday loan from ACE. The Bureau found that ACE’s creation of the false sense of urgency to get delinquent borrowers to take out more payday loans is abusive.


ACE’s 2011 training manual has a graphic illustrating this cycle of debt. According to the graphic, consumers begin by applying to ACE for a loan, which ACE approves. Next, if the consumer “exhausts the cash and does not have the ability to pay,” ACE “contacts the customer for payment or offers the option to refinance or extend the loan.” Then, when the consumer “does not make a payment and the account enters collections,” the cycle starts all over again—with the formerly overdue borrower applying for another payday loan.


The ACE cycle-of-debt training manual graphic is available at: http://files.consumerfinance.gov/f/201407_cfpb_graphic_ace-cash-express-loan-process.pdf


Enforcement Action

Under the Dodd-Frank Wall Street Reform and Consumer Protection Act, the CFPB has the authority to take action against institutions engaging in unfair, deceptive, or abusive practices. The CFPB’s order requires ACE to take the following actions:


         Pay $5 million in consumer refunds: ACE must provide $5 million in refunds to the overdue borrowers harmed by the illegal debt collection tactics during the period covered by the order. These borrowers will receive a refund of their payments to ACE, including fees and finance charges.  ACE consumers will be contacted by a third-party settlement administrator about how to make a claim for a refund.


         End illegal debt collection threats and harassment: The order requires ACE to ensure that it will not engage in unfair and deceptive collections practices. Those practices include, but are not limited to, disclosing debts to unauthorized third parties; directly contacting consumers who are represented by an attorney; and falsely threatening to sue consumers, report to credit bureaus, or add collection fees.


         Stop pressuring consumers into cycles of debt: ACE’s collectors will no longer pressure delinquent borrowers to pay off a loan and then quickly take out a new loan from ACE. The Consent Order explicitly states that ACE may not use any abusive tactics.  


         Pay a $5 million fine:  ACE will make a $5 million penalty payment to the CFPB’s Civil Penalty Fund.


The full text of the Bureau’s Consent Order is available at: http://files.consumerfinance.gov/f/201407_cfpb_consent-order_ace-cash-express.pdf


CFPB takes complaints about payday loans. To submit a complaint, consumers can:


            Go online at consumerfinance.gov/complaint

            Call the toll-free phone number at 1-855-411-CFPB (2372) or TTY/TDD phone number at 1-855-729-CFPB (2372)

            Fax the CFPB at 1-855-237-2392

            Mail a letter to: Consumer Financial Protection Bureau, PO Box 4503, Iowa City, Iowa 52244

                                       * * *

 The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.

Jul 23 2014

How To Disrupt The Investing Business, With Katina Stefanova (Ex-Bridgewater …

I had a conversation recently about the investing business with Katina Stefanova, who recently left Bridgewater, the largest hedge fund in the world. I’ve always had great respect for Bridgewater, which unlike most investing organizations realizes just how critical processes and culture are to investing success.

Katina served as a Senior Executive and Management Committee Advisor at Bridgewater Associates. Reporting directly to the CEO, Katina managed various departments including Back and Middle Office, IT, Recruiting and Talent, Client Service Reporting, Fund Legal and Compliance. During her tenure, the fund grew from $15 billion to $150 billion in AUM and from 200 to 1400 employees.

(Interestingly, the New York Times just ran an interview withJames Gorman, CEO, Morgan Stanley, which showed that he shares the Bridgewater focus on management as a discipline. That is one of the reasons why he’s CEO, despite not coming from a traditional investment banking or trading Wall Street background.)

Jul 23 2014

Wounded veteran and his family get dream home mortgage-free in Forney

Sgt. Justin Lynn hugs his wife, Gabrielle, at their new home in Forney. (Photos by David Woo/Staff Photographer)

Jul 23 2014

30-Year Mortgage Rates Lowest In One Year; 15-Year Mortgage Rates Drop, Too

30-Year Mortgage Rates Lowest In One Year; 15-Year Mortgage Rates Drop, Too

  • Mortgage Rates

Current 30-year mortgage rates are dropping — and its shocking to Wall Street analysts.

Late last year, with mortgage interest rates in the fours, the Federal Reserve announced that it would begin ending its support for low mortgage rates, prompting experts to call for rates climbing to the 5s or higher.

Yet, since the Feds withdrawal began, mortgage rates have done nothing but drop. The average 30-year mortgage is down by close to one-half percentage point since January; and many lenders now quote rates in the 3s.

Buyers and refinancing households now have a second chance to lock-in low, long-term mortgage rates for their homes. Keep reading for more on the recent rate drop, or skip directly to today’s rates here.

30-Year Mortgage Rates Lowest Since June 2013

Todays mortgage rates continue to defy expert predictions. Last weeks pullback of 0.02 percentage points has lowered the average 30-year fixed-rate mortgage rate to 4.12% nationwide.

This is a three-eights improvement over mortgage rates from one year ago, which represents a 5% increase in purchasing power from last June.

If you could afford a home for $400,000 last year, all things equal, you can afford a home for $420,000 today.

15-year mortgage rates are similarly low. According to Freddie Macs weekly Primary Mortgage Market Survey (PMMS), the average 15-year mortgage rate is now 3.22%. This, too, is a one-year low.

Even better is that falling mortgage rates have been accompanied by falling closing costs.

Mortgage lenders now charge an average of 0.5 discount points to lock a mortgage interest rate. Last year at this time, the average fee was 0.7 discount points. Todays buyers and refinancing households are saving $200 in costs for every $100,000 borrowed.

Click here to get a rate quote.

The Fed Cant Make Mortgage Rates Rise

Falling mortgage rates have come as a surprise to market watchers, many of whom expected 2014 mortgage rates to rise.

The main reason mortgage rates were expected to rise was the Federal Reserves wind-down of its rate-suppressing program known as QE3. 

QE3 is the Feds third round of quantitative easing, a program by which the Federal Reserve purchases mortgage-backed securities (MBS) on the open market. QE3 is meant to create a surge of demand for MBS which causes their prices to rise which, in turn, causes mortgage rates to sink.

The launch of QE3 in September 2012 is linked with the lowest mortgage rates ever recorded by Freddie Mac and the subsequent end of QE3 was supposed to signal rates returning to normal.

Strangely, that hasnt happened.

As QE3 has tapered to nearly half of its original size, mortgage rates have shed close to 1/2 percentage points. The Federal Reserve is exiting the mortgage-backed securities market but the effect of its withdrawal have been muted.

One reason is that mortgage origination volume is lower in 2014, and there are fewer mortgage bonds to purchase. Therefore, the Federal Reserves purchases as a percentage of all new MBS issuance has remained relatively high.

A second reason is that foreign investors are buying MBS as quickly as they can be sold. Theres been evidence of global economic weakness and mortgage-backed securities have provided a safe haven for investors looking to shield against risk.

The result is lower mortgage rates for US consumers.

Lock A Low Mortgage Rate Today

Its an ideal time to lock a purchase or refinance mortgage rate. Eventually, mortgage rates are expected to rise. Today, however, theyre at their lowest levels in one year and not far from their lowest levels of all-time.

Compare todays 30-year mortgage rates and lock in something great. Low mortgage interest rates make for low home mortgage payments for today and for the future. Free mortgage rate quotes are available online with no social security number required to get started, and no obligation to proceed.

Click here to get started.

Jul 22 2014

A Value Investing Framework: BE GREEDY

Warren Buffett (Trades, Portfolio) is the world’s greatest value investor. One of his memorial lessons is: “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful.” Is greed good? According to the book, “Business for the Glory of God” by Wayne Grudem, “Earning a profit is fundamentally good and provides many opportunities for glorifying God, but also many temptations to sin.” Being a little greedy can be good in the sense that it helps people allocate time, money and resources to more important and more profitable investments.

Are Warren Buffett (Trades, Portfolio), Seth Klarman (Trades, Portfolio), or Howard Marks (Trades, Portfolio) greedy? I am not sure, but they sure helped a lot of people with their retirement funds so that is fundamentally good. How do you invest like these great value investors? You invest in good companies that are trading below their intrinsic value and wait until the stock realizes its fair value. This is true, but what does it mean to an average investor.

Like building a house, you start out with a framework and build from there. A framework is the basic structure of something: a set of ideas or facts that provide support for something. A Value Investing Framework I developed is: BE GREEDY. It stands for the following:

  • Better
  • Examine
  • Growth of Sales and Earnings
  • Relative Value
  • Effective Profits
  • Efficient Cash Conversion Cycle
  • Discounted Cash Flow and other Intrinsic Valuations
  • Yield

How do you recognize a company is a good company when you are reading its financial statements? In this article, I will discuss: 1) some important Fundamental Analysis tools you can use to identify good healthy companies and 2) the principles when to invest in their stocks.

What is Fundamental Analysis?

Fundamental Analysis involves analyzing a company’s financial statements, business model, management, competitive advantages and its competitors along with its markets. There are many Fundamental Analysis tools out there, but I have chosen some of the most important ones to help you find good companies.

Growth of Sales and Earnings

Growth of both Sales and Earnings are important when measuring the financial health of a company. Sales is a top of the line figure, while Earnings is a bottom line figure. What I mean is Sales is the first thing on an Income Statement then after expenses and taxes you arrive at Earnings.

Sales Growth

Analyzing Sales Growth is important and can be broken down into two components: 1) Price per unit of product/service increases and 2) Volume of unit sales increases (Sales = Price per Unit * Volume of Units). As a result, companies can be broken into four quadrants.