2nd quarter 2009 - 0.7%
3rd quarter 2009 2.2%
4th quarter 2009 5.6%
1st quarter 2010 2.7%
2nd quarter 2010 1.7%
3rd quarter 2010 2.6%
Release dates in 2011 Gross Domestic Product - 4th quarter 2010
Advance Estimate January 28 3.2%
Second Estimate February 25
Third Estimate March 25
Monday, January 31, 2011
Friday, January 28, 2011
Housing & the Economy
“As Housing Goes – So Goes the Economy”
This cycle has not been broken and will not be broken until jobs are created!
This cycle has not been broken and will not be broken until jobs are created!
Thursday, January 27, 2011
Baby Boomers & Social Security
There were 76,000,000 “baby boomers’ born during the period from 1946 to 1964.
If they start to retire this year, there will be approximately 10,000 new people PER DAY added to social security. Maybe they will postpone retirement a few years because the Great Recession has eroded their retirement funds.
It will be interesting to follow the baby boomers and their retirement decisions. Some will take social security early at age 62 because the funds are available now (really?) and some will postpone retirement by working longer. Their decisions will dramatically affect the social security system.
Facts:
The Treasury Department reveals that the Social Security program outlays exceed payroll tax revenues by $76 billion in 2010. The program is in the red!
The Social Security Administration Trustees over estimated the revenue by $50,000,000.
Social Security Program income was $807 billion in 2009
Social Security Program income was $741 billion in 2010
A trend??
The Social Security Administration Trustees reported the following:
"Social Security expenditures are expected to exceed tax receipts this year for the first time since 1983.
The projected deficit of $41 billion this year (excluding interest income) is attributable to the recession.
This deficit is expected to shrink substantially for 2011 and to return to small surpluses for years 2012-2014 due to the improving economy.
After 2014 deficits are expected to grow rapidly as the baby boom generation's retirement causes the number of beneficiaries to grow substantially more rapidly than the number of covered workers.
The annual deficits will be made up by redeeming trust fund assets in amounts less than interest earnings through 2024, and then by redeeming trust fund assets until reserves are exhausted in 2037."
During the years Social Security had a surplus, the Social Security Administration “loaned” the Treasury the money. The Treasury now will have to pay back the Social Security program because the program must make up the deficit between revenues and costs.
Treasury borrowed money to pay Social Security benefits in 15 out of the last 25 months. This will add to our deficit every year!
We are still at a 9.4% unemployment rate and much higher by including the under employed and sole proprietors + small business with no employees (making less during the Great Recession). How can the Social Security deficit “shrink substantially” in 2011 with less workers paying into the system????
Baby Boomers – take your money now and become “vested” or wait and receive a higher monthly payment?
If you and your spouse started to receive social security benefits at age 62 instead of 66, you would be receiving 75% of the total benefit and your spouse 35% of the total monthly benefit if you retire at age 66.
And, that is assuming government officials can even be close to being correct on their revenue/cost projections for the program. Remember, government experts are most always wrong!!
Congress – time to step to the plate and be leaders - do something.
If they start to retire this year, there will be approximately 10,000 new people PER DAY added to social security. Maybe they will postpone retirement a few years because the Great Recession has eroded their retirement funds.
It will be interesting to follow the baby boomers and their retirement decisions. Some will take social security early at age 62 because the funds are available now (really?) and some will postpone retirement by working longer. Their decisions will dramatically affect the social security system.
Facts:
The Treasury Department reveals that the Social Security program outlays exceed payroll tax revenues by $76 billion in 2010. The program is in the red!
The Social Security Administration Trustees over estimated the revenue by $50,000,000.
Social Security Program income was $807 billion in 2009
Social Security Program income was $741 billion in 2010
A trend??
The Social Security Administration Trustees reported the following:
"Social Security expenditures are expected to exceed tax receipts this year for the first time since 1983.
The projected deficit of $41 billion this year (excluding interest income) is attributable to the recession.
This deficit is expected to shrink substantially for 2011 and to return to small surpluses for years 2012-2014 due to the improving economy.
After 2014 deficits are expected to grow rapidly as the baby boom generation's retirement causes the number of beneficiaries to grow substantially more rapidly than the number of covered workers.
The annual deficits will be made up by redeeming trust fund assets in amounts less than interest earnings through 2024, and then by redeeming trust fund assets until reserves are exhausted in 2037."
During the years Social Security had a surplus, the Social Security Administration “loaned” the Treasury the money. The Treasury now will have to pay back the Social Security program because the program must make up the deficit between revenues and costs.
Treasury borrowed money to pay Social Security benefits in 15 out of the last 25 months. This will add to our deficit every year!
We are still at a 9.4% unemployment rate and much higher by including the under employed and sole proprietors + small business with no employees (making less during the Great Recession). How can the Social Security deficit “shrink substantially” in 2011 with less workers paying into the system????
Baby Boomers – take your money now and become “vested” or wait and receive a higher monthly payment?
If you and your spouse started to receive social security benefits at age 62 instead of 66, you would be receiving 75% of the total benefit and your spouse 35% of the total monthly benefit if you retire at age 66.
And, that is assuming government officials can even be close to being correct on their revenue/cost projections for the program. Remember, government experts are most always wrong!!
Congress – time to step to the plate and be leaders - do something.
Wednesday, January 26, 2011
First-Time Buyers: What Research Tells Us
Source: National Association of Realtors®
In 2009, first-time buyers comprised an unprecedented 47 percent of the market, most likely due to the federal tax credit and historic affordability, according to the National Association of Realtors®’ 2009 Profile of Home Buyers and Sellers. And housing economists predict that 2010 will be an even bigger year for first-timers.
Who are these people, and what do they want?
Most are married. Forty-nine percent are a married couple. Single females comprise a quarter of first-time buyers, and single males account for just 12 percent.
They’re young. More than half—53 percent—are between the ages of 24 and 34. And 12 percent are younger than 24.
They’re diverse. Twenty-two percent are part of a minority group, compared with 13 percent of repeat buyers. Six percent speak a language other than English, and 12 percent were not born in the United States.
They like the ‘burbs. Even though 22 percent purchase in an urban area, the suburbs continue to be the most popular locale, with 52 percent buying there. The third most popular spot is a small town.
They take their time. First-time buyers take an average of 12 weeks to find their home, compared with 10 weeks for repeat buyers.
They’re not afraid of foreclosures. Eleven percent of first-timers bought a home in foreclosure, and 56 percent considered it. Only 9 percent of repeat buyers bought a foreclosure, and just 41 percent considered it.
In 2009, first-time buyers comprised an unprecedented 47 percent of the market, most likely due to the federal tax credit and historic affordability, according to the National Association of Realtors®’ 2009 Profile of Home Buyers and Sellers. And housing economists predict that 2010 will be an even bigger year for first-timers.
Who are these people, and what do they want?
Most are married. Forty-nine percent are a married couple. Single females comprise a quarter of first-time buyers, and single males account for just 12 percent.
They’re young. More than half—53 percent—are between the ages of 24 and 34. And 12 percent are younger than 24.
They’re diverse. Twenty-two percent are part of a minority group, compared with 13 percent of repeat buyers. Six percent speak a language other than English, and 12 percent were not born in the United States.
They like the ‘burbs. Even though 22 percent purchase in an urban area, the suburbs continue to be the most popular locale, with 52 percent buying there. The third most popular spot is a small town.
They take their time. First-time buyers take an average of 12 weeks to find their home, compared with 10 weeks for repeat buyers.
They’re not afraid of foreclosures. Eleven percent of first-timers bought a home in foreclosure, and 56 percent considered it. Only 9 percent of repeat buyers bought a foreclosure, and just 41 percent considered it.
Tuesday, January 25, 2011
Mortgage Loan Approval…What’s Involved?
Everyone has heard that mortgage financing is more difficult to obtain these days. What people may not be aware of, however, is the “why” behind the time it takes to get a loan approved and closed in the mortgage industry today.
First, you should talk with your Mortgage Consultant/Loan Officer (MC/LO) to handle the prequalification for your loan AND complete the formal loan application. Remember, prequalification and full loan applications are two different things.
Make sure to have with you all your required documentation of income, employment and assets. In some cases you will also need to provide information on credit such as explanations for any late payments, inquiries, etc.
Your MC/LO then needs to prepare your file to submit to their Processing Center. In most cases, this will take a few days, especially if they are waiting for you to get back to them with additional paperwork and documents.
Typically, if you fill out all your application paperwork, your loan is submitted within 3-5 days. There are 20 business days in the average month which means that you have left the processing and underwriting center on average 15 business days (two weeks) to:
• Review initial package
• Order the appraisal
• Underwrite the loan
• Review the underwriting conditions
• Review the appraisal
• Order and receive back any third party verifications, such as employment, rent etc.
• Review and prepare the closing package
As you can see this is a lot of information to have reviewed in two weeks and remember that, most likely, there are other loan applications like yours in process.
Recently JD Power and Associates put together a study which was quoted in Origination News:
Data shows the average time from application to approval has increased to 27.5 days in 2010 from 20 days in 2009.
And this is much worse than when compared with 2008, when the application to approval turnaround was 10.7 days.
So when you are looking to purchase or refinance, keep in mind that a more realistic time frame from your application date to your close date is 30 business days…not calendar days.
First, you should talk with your Mortgage Consultant/Loan Officer (MC/LO) to handle the prequalification for your loan AND complete the formal loan application. Remember, prequalification and full loan applications are two different things.
Make sure to have with you all your required documentation of income, employment and assets. In some cases you will also need to provide information on credit such as explanations for any late payments, inquiries, etc.
Your MC/LO then needs to prepare your file to submit to their Processing Center. In most cases, this will take a few days, especially if they are waiting for you to get back to them with additional paperwork and documents.
Typically, if you fill out all your application paperwork, your loan is submitted within 3-5 days. There are 20 business days in the average month which means that you have left the processing and underwriting center on average 15 business days (two weeks) to:
• Review initial package
• Order the appraisal
• Underwrite the loan
• Review the underwriting conditions
• Review the appraisal
• Order and receive back any third party verifications, such as employment, rent etc.
• Review and prepare the closing package
As you can see this is a lot of information to have reviewed in two weeks and remember that, most likely, there are other loan applications like yours in process.
Recently JD Power and Associates put together a study which was quoted in Origination News:
Data shows the average time from application to approval has increased to 27.5 days in 2010 from 20 days in 2009.
And this is much worse than when compared with 2008, when the application to approval turnaround was 10.7 days.
So when you are looking to purchase or refinance, keep in mind that a more realistic time frame from your application date to your close date is 30 business days…not calendar days.
Monday, January 24, 2011
7 Trends in the Mortgage Market for 2011
By: Nicole Hale
Aapex Financial Solutions
http://www.aapexfinancial.net/
http://www.aapexfinancial.blogspot.com/
Speculations have been made from some knowledgeable mortgage industry professionals regarding the market for 2011. Among these individuals included Lawrence Yun, Chief Economist for the National Association of Realtors and Holden Lewis, award winning mortgage reporter for Bankrate.com. The Mortgage Bankers Associations also shared their predictions for the upcoming year in the following list:
1. Mortgage rates will slowly rise throughout 2011
Even though rates are historically low, they have been slightly increasing and are predicted to hang around the 5 percent area in 2011 and then rise to about 6 percent in 2012.
2. Overall demand for mortgage loans will decrease
Total originations will decline to less than $1 trillion due to the lack of consumer confidence and slow economic growth.
3. Refinances will drop
In 2010, 80 percent of all mortgages were refinances. This is expected to drop to 40 percent in 2011 and even further to 26 percent in 2012.
4. Home purchases will gain market share
Stabilizing prices and modest increases in home sales will help purchases grow in 2011.
5. Jumbo loans will rise
In 2009 and early 2010, rates for jumbo loans were much higher than conforming. In the last quarter of 2010, the rates for jumbo loans have decreased and are predicted to continue doing so which will allow the higher-end housing market to flourish.
6. Cash purchases will escalate
A fourth of all purchases in the last quarter of 2010 were from all cash purchases and this is expected to continue into 2011.
7. The mortgage loan process will continue to be a complex one
The new levels of documentations and verifications that are needed to close a loan have intensified which makes the loan process proceed at a slow rate. The complexity of second mortgages and home equity lines of credit also make it more difficult for lenders to close.
Aapex Financial Solutions
http://www.aapexfinancial.net/
http://www.aapexfinancial.blogspot.com/
Speculations have been made from some knowledgeable mortgage industry professionals regarding the market for 2011. Among these individuals included Lawrence Yun, Chief Economist for the National Association of Realtors and Holden Lewis, award winning mortgage reporter for Bankrate.com. The Mortgage Bankers Associations also shared their predictions for the upcoming year in the following list:
1. Mortgage rates will slowly rise throughout 2011
Even though rates are historically low, they have been slightly increasing and are predicted to hang around the 5 percent area in 2011 and then rise to about 6 percent in 2012.
2. Overall demand for mortgage loans will decrease
Total originations will decline to less than $1 trillion due to the lack of consumer confidence and slow economic growth.
3. Refinances will drop
In 2010, 80 percent of all mortgages were refinances. This is expected to drop to 40 percent in 2011 and even further to 26 percent in 2012.
4. Home purchases will gain market share
Stabilizing prices and modest increases in home sales will help purchases grow in 2011.
5. Jumbo loans will rise
In 2009 and early 2010, rates for jumbo loans were much higher than conforming. In the last quarter of 2010, the rates for jumbo loans have decreased and are predicted to continue doing so which will allow the higher-end housing market to flourish.
6. Cash purchases will escalate
A fourth of all purchases in the last quarter of 2010 were from all cash purchases and this is expected to continue into 2011.
7. The mortgage loan process will continue to be a complex one
The new levels of documentations and verifications that are needed to close a loan have intensified which makes the loan process proceed at a slow rate. The complexity of second mortgages and home equity lines of credit also make it more difficult for lenders to close.
Friday, January 21, 2011
Summary & Questions
So how many tens of thousands more factories do we need to lose before we do something about it?
How many millions more Americans are going to become unemployed before we all admit that we have a very, very serious problem on our hands?
How many more trillions of dollars are going to leave the country before we realize that we are losing wealth at a pace that is killing our economy?
The deindustrialization of America is a national crisis. It needs to be treated like one.
This gives us a baseline to start talking about 2011 and beyond.
How many millions more Americans are going to become unemployed before we all admit that we have a very, very serious problem on our hands?
How many more trillions of dollars are going to leave the country before we realize that we are losing wealth at a pace that is killing our economy?
The deindustrialization of America is a national crisis. It needs to be treated like one.
This gives us a baseline to start talking about 2011 and beyond.
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