Mortgage bond prices rose pushing mortgage interest rates lower. Higher than expected weekly jobless claims and continued claims helped mortgage interest rates remain very favorable. Higher than expected existing home sales and leading economic indicators data prevented rates from improving dramatically. Stocks remained volatile, which also resulted in some mortgage interest rate volatility.

Rates fell by about 1/8 of a discount point for the week.

The most important data will be the gross domestic product and employment cost index. The Treasury auctions may also result in mortgage interest rate volatility as foreign appetite for US debt instruments is gauged.

LOOKING AHEAD

FED “BEIGE BOOK”

The Fed “Beige Book” is a summary of economic conditions from each of the 12 Federal Reserve regional districts. The release takes place eight times a year approximately two weeks ahead of each of the Federal Open Market Committee meetings. The report is used at the FOMC meetings, which tends to be one of the most influential events in the market.

Market participants are continually attempting to determine what FOMC interest rate policy will be ahead of the next meeting. Any deviation from expectations usually results in extreme short-term market volatility. The timing of the “Beige Book” provides analysts a valuable look at one of the many factors the FOMC consider.

RATE LINK is provided by Market Information for Mortgage Professionals. 1-800-938-5193. Copyright 2010. All Rights Reserved. Mortgage Market Information Services, Inc. The information contained herein is believed to be accurate, however no representation or warranties are written or implied.

Mortgage bond prices were near unchanged holding rates unchanged overall for the week. We started in positive territory as rates held low following the extended holiday weekend. Unfortunately some considerable stock strength pressured mortgage bonds lower and rates higher mid week. There wasn’t much data but the weekly jobless claims did come in better than expected which didn’t help rates. Rates initially fell by about 1/8 of a discount point the beginning of the week only to have those improvements erased Wednesday afternoon and Thursday morning.

The most important data will be the inflation releases the latter portion of the week. The Treasury will have another round of record auctions with a 3-year auction Monday, 10-year auction Tuesday, and a 30-year auction Wednesday. Foreign appetite for US debt will continue to play a key role in the ability of interest rates to remain low.

LOOKING AHEAD

RETAIL SALES

Retail sales data is the first indication of weakness or strength in consumer spending released each month. The Bureau of the Census of the US Department of Commerce provides information on how much the consumer spends on the purchase of goods. This data provides the consumption part of the gross domestic product. Retail sales data represents merchandise sold for cash or credit by retailers. Durable goods, such as autos, make up 35% of the figure. The balance consists of non-durables such as gasoline, restaurants, and general merchandise.

There are several drawbacks to the report. The data covers purchases of goods only, not services. It is also not adjusted for inflation and is extremely volatile. Economists are concerned that the current economic uncertainty will continue to curtail consumer-spending habits. Consumers have generally been given credit for sustaining the economy even amid the economic turmoil.

RATE LINK is provided by Market Information for Mortgage Professionals. 1-800-938-5193. Copyright 2010. All Rights Reserved. Mortgage Market Information Services, Inc. The information contained herein is believed to be accurate, however no representation or warranties are written or implied.

This relatively small actual number is nevertheless causing the credit industry to look at new ways to evaluate walk-away risk even among the very creditworthy.

Credit bureau Experian reports that borrowers in California, Florida, and other hard-hit states are more likely to walk away than people living in states with more stable markets. Also, residents of states where lenders have no recourse are more likely to toss in the towel.

People with small amounts of negative equity also are more likely to stay and pay.

Source: Washington Post (07/03/2010)

www.coachingtoexcellence.com/ahwd

Mortgage bond prices rose last week pushing mortgage interest rates lower. We started the week in positive territory as oil prices fell amid reports that supplies increased and adverse weather may miss the Gulf. Stocks generally struggled. Global economic instability continued which resulted in increased demand for mortgage bonds. The employment report was mixed with the unemployment rate a better than expected 9.5%. However, the payrolls component was weaker than expected and helped bonds stay positive Friday morning. Rates fell by about 1/2 of a discount point for the week.

Traders will look to stocks, oil prices, and continued global conditions with the lack of significant data this week. The bond market is closed Monday for the holiday. Trading conditions may be choppy Tuesday morning as trading resumes following the extended holiday weekend.

LOOKING AHEAD

CREDIT DEMAND

Inflation is typically the most important focus for the mortgage interest rate market. Inflation remains a concern as the Federal Government continues to print and spend money in an effort to spur the economy. Unfortunately, mortgage interest rates also continue to be pushed around by gyrating stocks and weak demand as performance uncertainty looms. Most of the recent increases in interest rates have come following stronger stocks. As stocks struggle we often see rates improve. In addition, mortgage bonds have benefited from global economic uncertainty as investors search for safe havens amid sovereign debt defaults in Greece. This flight to quality buying of mortgage bonds has pushed prices higher and mortgage interest rates lower.

The level of interest rates reflects the balance between the supply of money from investors and the demand for money by borrowers. Rising inflationary expectations and uncertainty about the performance of the debt cause investors to require higher rates of return on investments to compensate for the erosion of the principal that eventually is returned to them or the risk of non-performance. Regardless of inflation levels, though, rising economic activity can increase the demand for investors’ funds, and thereby lead to higher interest rates. Investors pulling money out of bonds and into stocks could pressure mortgage rates.

The demand for money diminishes as the economy struggles. The Fed lowers interest rates as an incentive to businesses and consumers to increase their borrowings. The Fed hopes manufacturers will increase their investments in plants, equipment and inventories and that consumers will push housing construction along with consumer spending and with that, consumer debt.

Analysts will monitor this week’s consumer credit levels. There is much debate in the financial community about the future. Economists, market analysts, and traders all seem to have a different opinion about the future state of the economy and especially whether or not we have hit the bottom of the economic slide. One thing most market participants agree on is both the bond and stock markets are going to see additional volatility. Now is a great time to take advantage of rates at the still historically favorable levels.

RATE LINK is provided by Market Information for Mortgage Professionals. 1-800-938-5193. Copyright 2010. All Rights Reserved. Mortgage Market Information Services, Inc. The information contained herein is believed to be accurate, however no representation or warranties are written or implied.

By Kerri Westenberg

RISMEDIA, June 30, 2010–(MCT)–Americans will grab their suitcases — and their precious dollars — to head out for vacation this summer. That’s good because getaways have been proved to reduce stress. The key is making sure the trip itself does not induce stress by, say, costing boatloads of money. Fortunately, there are ways to hit the road without taking a detour to the poorhouse. Let us count the ways (while you count your cash).

1. Exchange sweat equity for sweet deals. If the idea of chopping firewood near the shore of a deep blue lake revs up your inner lumberjack, consider a work weekend at Gunflint Lodge. This classic resort on the Gunflint Trail north of Grand Marais, Minn., hosts weekends each spring and fall during which guests work on Saturday mornings preparing the resort for the coming season (planting flowers, wielding an ax), but pay just $99 for their two-night stay plus a Saturday-night dinner buffet. The amount you save depends upon the type of cabin you score; sign up early to get the best: romantic cottages with a steam shower, two-person spa, a deck and other amenities. Fall work weekends are scheduled for Nov. 5-7 and 12-14 (www.gunflint.com; 1-800-328-3325).

2. Say “au revoir” to Paris and London, and “cze” (that’s “hello” in Polish) to Warsaw and Podgorica, the capital of Montenegro. So-called “second cities” in Europe are less expensive because they get fewer tourists. I call that a win-win.

3. Sleep on a sofa. Sure, it feels odd to crash on a stranger’s couch (or in her guest room), but the heebie-jeebies should dissipate in the morning when said stranger (who is quickly becoming a friend) plies you with strong coffee and insider information on spots to see. The other cool part: no bill. CouchSurfing (at www.couchsurfing.org) is a nonprofit organization that links travelers with hosts in more than 230 countries. You need to join and create a bio of yourself before you can “surf” (the organization’s parlance for “find a bed.”)

4. Join a museum at home. You can get free admission to similar institutions across the country. Heading to Chicago with children? A membership to the Science Museum of Minnesota ($69 for two; $95 for a family) will get you in the door fee-free at four Windy City biggies: the Adler Planetarium, the Field Museum of Natural History, the Museum of Science and Industry and Chicago’s Children’s Museum. You’ll also get free admission to more than 200 other museums around the country. “Friends” of the Walker Art Center waltz in to more than 300 museums elsewhere, including the Figge Art Museum in Davenport, Iowa, and the Los Angeles County Museum of Art, which is as star-studded as the Sunset Strip about 3 miles north (friending the Walker costs $100). A mere $45 membership at the Minnesota Landscape Arboretum can find you smelling the roses at more than 200 other arboretums across the land.

5. Hungry for some upscale grub? Dine at the fancy restaurant on your to-do list during lunch, when the cost can be half of what it might be at dinner. At Commander’s Palace in New Orleans, for instance, the three-course Creole lunch, which culminates in a bread pudding souffle, rings up at $30, less than the cost of many of the restaurant’s dinner entrees.

6. Embrace visitors bureaus. Vacation hot spots have convention and visitors bureaus, and most use coupons and discounts as lures. For instance, at the website of the Orlando/Orange County Convention & Visitors Bureau (www.orlandoinfo.com), you can print a “Magicard” good for discounts at places such as Sea World and Nickelodeon Suite Resort. The visitors bureau of Rapid City, S.D. (www.visitrapidcity.com), offers coupons for the Black Hills area. Click on the “plan your trip” tab and scroll down to “coupons.”

7. Win a trip. The odds may be slim, but someone’s got to be the lucky one. Most contests for free getaways are an attempt by a visitors bureau to get you dreaming of its destination — and perhaps to nab your e-mail address for future promotions. Cases in point: Travel Oregon will soon give away three weeklong “adventurecations” (think biking, golfing and kayaking), and at the end of its short online entry form, the organization invites you to receive monthly newsletters. (Enter at www.traveloregon.com by July 18.) Visit Sweden, along with the West Sweden Tourism Board and Volvo, is offering a chance to win a one-week trip to West Sweden (complete with a Volvo loaner car). To enter, you must submit a “dream itinerary,” created with the trip planner that pops up as you register. By the time you’re done, you’ll want to take the trip even if it isn’t free. (Enter at www.carplusvacation.com by July 1.) For more free getaway contests, search online for “vacation giveaways.”

8. Skip buying a guidebook. Instead, put that $15.95 toward a dinner at a restaurant you discovered while researching your destination online. Guidebooks can illuminate the history and culture of a destination, but they are sometimes years old. Browsing the Web can offer the same insights, but also yields tips on the currently cool night clubs or restaurants. Most of the big names in travel guides have a website (www.ricksteves.com, www.fodors.com, www.frommers.com). But to tap into the latest about a destination, read travel forums written by real travelers. One of the best is Lonely Planet’s Thorn Tree Travel (www.lonelyplanet.com/thorntree). Virtual Tourist (www.virtualtourist.com) is also worth a look.

9. Rent a car using a card. Many credit cards insure you against accidents, so you can skip the often expensive supplemental collision damage coverage offered by car rental companies. Not all credit cards are created equal, though. Check to see if your card offers coverage where you’re traveling and what the deductible might be. Also, be sure you understand all the rules. One reader told me that when he rented a car in Germany, he had to decline all of the car rental company’s insurance options or his Visa card would not cover the rental at all.

10. Take your chances and save a bundle on a hotel. At Priceline.com, you choose your location and star rating, offer a low-ball price and plug in your credit card number. Then you pray for the best, because if your bid is accepted, the deal is done. Only then do you get the name of the hotel. Hotwire.com, another opaque site that lets you search by location and number of stars, lists deals by rates, but no specific hotel names until you pay. Both sites are known for their hotel deals, but you can also try for flights and rental cars on the sites. If you’re game for the unknown (and how far can you stray from acceptable if you request three- or four-star hotels?), it’s worth the gamble.

11. Travel when others won’t. At many places off-season, you’ll find cheap sleeps, empty museums and open tables at the dinner hour. If you can embrace the beauty of winter in Grand Marais (not difficult, I assure you) and don’t mind skipping a port of call because a hurricane is blowing in, what’s not to love? Beyond off-season, there’s off-limits. When the state department warns people to use caution in Jamaica and Thailand due to unrest, a certain kind of traveler packs the bags, anticipating unprecedented deals.

12. If you want to get away, but can’t stomach the idea of eating out (and paying restaurant rates) for every meal, consider renting a home. These can be a real bargain, particularly if you travel and share the home with another couple or family. Vacation Rental by Owner (www.vrbo.com) is a top site. Homeaway.com is another with rentals around the world. For a cabin on the North Shore, check with Cascade Vacation Rentals (www.lakesuperiorrentals.com). Also, www.lakeplace.com offers rentals from Michigan to North Dakota.

RULES TO FLY BY:

13. Before you hit the Minneapolis-St. Paul airport, log onto its website (www.mspairport.com). There you’ll find coupons good for discounts at the airport, such as $3 off a $10 purchase at French Meadow Bakery. And who couldn’t use an ice cream treat ($1 off at Ben & Jerry’s) to soothe the jangled nerves that come with the flying experience. Click on the “eat, shop, relax” button and then click on “save.”

14. Buy when the time is right. According to farecompare.com, airlines begin to manage a flight’s revenue three months before departure. If you buy before the three-month mark, you’re probably paying too much because the airline hasn’t adjusted prices downward if the flight is looking empty. Also, prices rise 14 days before departure. Farecompare also reports that airlines typically file airfare sales on late Monday evening and during the morning hours of Tuesday. Other airlines often meet those fares, so Tuesday afternoon is a great time to shop. Sales generally end late on Thursday, leaving weekends (when many busy people take time to plan a trip) with the highest airfares.

15. Fly when the time is right, too. Tuesdays, Wednesdays and Saturdays, typically the slowest days in the air, offer the cheapest fares. Heading out in the early morning can also reduce the price.

16. Be certain before you book. Changing your flight can cost as much as $150 on many carriers.

17. Know the market. To grab a deal, you need to know it when you see it. There are a few ways to get a feel for pricing. Once you’ve decided on a destination, even if you aren’t ready to book, start checking airfares. Or you can go to websites that do the research for you. Sign up for airfare pricing alerts with sites such as farecompare.com and airfarewatchdog.com. And go to Bing.com/travel, which searches the flight you want and predicts whether the prices will go up or down.

18. Pack light. Not only do airlines charge for checked bags, the costs go through the roof if those bags are overweight or oversized. For the first checked bag, Delta charges $23 if paid in advance online, or $25 if paid at the airport; other airlines charge similar prices. (A few exceptions: Southwest Airlines lets you check a bag for free and some airlines, including Delta, wave first-bag fees for people who carry an airline-branded credit card and pay for tickets with the card.) A second bag would cost you $32 or $35. Bring in a bag weighing more than 50 pounds, and you’ll be charged $90 — unless it weighs more than 70 pounds, in which case the charge jumps to $175. A bag that measures more than 62 inches overall (add the length, width and height) will run you $175; if it’s more than 80 inches, you’ll want to just stay home: the charge is $300.

19. Bring your own meal and an empty water bottle. Unless you’re flying first-class (and if you are, why are you reading this story?), you’re headed to a foreign land, or you want to pay $9 for a stale turkey sandwich, it’s best to brown-bag it. Just skip the yogurt, cream cheese or any other gooey delight that would get nabbed by security. (The 3-1-1 rule applies to your dinner — all liquids must be in 3.4-ounce or smaller containers, fit into one quart-sized zip-locked bag, and each passenger is entitled to one such bag.) That Transportation Security Administration rule also means your water bottle must be empty. Just fill it in a fountain once you’ve been waved through.

20. Book online. Most U.S. carriers don’t charge for bookings online, but do for telephone reservations and purchases at a ticket counter.

21. Sign up for fare alerts and e-deals. Many websites — including farecompare.com, kayak.com, airfarewatchdog.com, travelocity.com and orbitz.com — will send you notices when prices drop on a specific route. Airlines themselves send mid-week e-mails about last-minute bargain fares.

22. Call a travel agent. Most charge a fee, but it can be worth the minimal cost, especially when itineraries are complicated. Agents possess the know-how to track down cheap fares and good routes.

23. Know the fees. TripAdvisor.com and kayak.com both have the option to include airline fees in a search for cheap airfares. Farecompare.com has a comprehensive fee chart, including those pesky ones for seat selection, reserving by phone and meals.

24. Follow the low-fare carriers. If you’re flexible about where you vacation, consider choosing a locations served by low-fare carriers such as Southwest and Sun Country. Where those airlines fly, prices tend to drop as other airlines compete.

25. Consider driving or taking the train. Especially if you are traveling with a group (sometimes known as family), you’ll save money by loading up the car for a drive. Plus, you’ll see the country (or at least freeways) and get to spend quality time with the gang. If an extended drive doesn’t qualify as “quality time,” try the train (www.amtrak.com), where you can kick back in seats as spacious as those in the first-class section of airplanes.

———

WEBSITES TRAVELERS SHOULD BOOKMARK

FareCompare.com lists fare sales and offers fare alerts so you know when airlines drop prices. It also has an airline fee chart.

Airfarewatchdog.com highlights the lowest fares from cities across the country. You can also sign up for fare alerts here.

Kayak.com scans numerous booking sites, from online travel agents to airlines, and lists the results for air, car and hotel. The site can compile an airfare search that includes fees such as those for checked bags. It also offers fare alerts.

Bing.com/travel searches for flights and predicts whether the prices will go up or down.

Hotels.com sells discounted rooms at more than 70,000 properties, including some hostels.

Travelzoo.com, smartertravel.com and budgettravel.com are bargain sites that list vacation deals.

Priceline.com and hotwire.com, so-called opaque sites, provide exceptional savings for anyone who is willing to book a room without knowing which hotel it’s in. The sites apply the same no-name approach to cars and airfare.

(c) 2010, Star Tribune (Minneapolis)

By Dan Serra

RISMEDIA, June 28, 2010–(MCT)–While most financial-savvy consumers do their best to avoid debt, one debt that is unavoidable to many families is a mortgage. Because many of us feel more in control of our home and expenses without a mortgage, a common question is whether to pay it off as quickly as possible.

The answer depends on each person’s financial situation. A mortgage can actually be a blessing to some.

For example, mortgage interest is tax-deductible. This deduction saves taxpayers about $103 billion a year, according to the U.S. Treasury. The benefit is less to owners of low- to moderate-valued homes who may not have much interest or enough to claim it by itemizing deductions. But for families with a higher net worth, it allows a tax savings and may encourage them to buy larger homes.

With tax brackets for the wealthy rising next year, this tax break becomes more valuable. When the break is included, a 6 percent mortgage could have a rate closer to 4 percent in reality. Calculate your mortgage’s effective rate by subtracting your tax rate from 100 and multiplying that number by the interest rate. For example, a 28 percent tax bracket with a 6 percent mortgage would result in (.06 x 72) to equal the equivalent of a 4.32 percent mortgage rate after considering tax savings if itemized. That helps the interest look less daunting.

In addition, with the possibility of investing with a goal of a 5 or 6 percent return, instead of putting that money into a mortgage the homeowner could get a return higher than the effective rate, which could help grow net worth. On the other hand, if the effective rate is higher, it may make sense to pay down the mortgage.

Another situation that makes paying off a mortgage attractive is for someone at risk of bankruptcy. Many states offer protection from creditors seizing a home to pay debts. If a home is paid in full, it is more likely the owner could stay in it if he goes broke, providing he can pay for the upkeep.

Money taken out for a mortgage also could reduce net worth later in life. The potential for higher investment returns are gone; that money will not be able to grow if investments grow over the long term. Not to mention having too much invested in a house. That could be detrimental at retirement. While we can get a loan for a house, there are no loans to finance retirement.

(c) 2010, McClatchy-Tribune Information Services

Mortgage bond prices rose last week applying downward pressure on mortgage rates. Volatility in both the stock and bond markets remained high with broad swings occurring on a daily basis. Mortgage rates moved lower following the release of weak housing data. The improvements seen earlier in the week were reversed following a weak 5-year Treasury auction on Wednesday. The volatility seen this week is expected to continue until the future of the economy becomes clear.

Rates fell by about 3/8 of a discount point for the week.

Personal income and outlays will set the tone for trading this week. The employment report to be released on Friday will be the most important release this week. The focus lately has been on the payrolls component rather than the headline figure. If payrolls come in stronger than expected, mortgage interest rates may worsen.

LOOKING AHEAD

EMPLOYMENT

The employment report provides an abundance of information for almost every sector of the economy. Not only does the employment report give basic employment payroll statistics for the major working sectors, it also provides the average hourly earnings and the average workweek. Using this information provided by the Bureau of Labor Statistics (BLS) of the U.S. Department of Labor, economists estimate many other economic indicators such as industrial production, personal income, housing starts, and GDP monthly revisions. Since there is little data for economists to base their estimates on, the margin of error for the estimates tends to be high. As a result, the employment report can cause substantial market movements.

The BLS compiles data from two unrelated surveys that they conduct, the household survey and the establishment survey, in order to complete the employment report. This explains why sometimes there is an unexpected divergence between the unemployment rate and payrolls figures each month.

This week’s employment data will provide valuable insight into factors the Federal Open Market Committee will use to make future rate decisions. An employment rebound may prompt the Fed to raise short-term interest rates. However, if employment remains weak, then the Fed may seriously consider keeping rates low. Floating into this report is very risky without considerable gains Thursday afternoon heading into it.

RATE LINK is provided by Market Information for Mortgage Professionals. 1-800-938-5193. Copyright 2010. All Rights Reserved. Mortgage Market Information Services, Inc. The information contained herein is believed to be accurate, however no representation or warranties are written or implied.