Weekly Rates + Market Update

A Note on Down Payment Assistance...
We have been informed that a bill to reinstate reformed downpayment assistance is being re-introduced to congress. The bill is expected to be introduced by Congressman Al Green (TX) with bipartisan support. The bill will have the same language as unanimously passed last year by the House Financial Services Committee.

We will keep you informed as we continue to support efforts to reinstate downpayment assistance.

Mortgage bond prices fell last week pushing rates higher despite continued signs of economic weakness. The Senate approved additional TARP funding pushing another $350 billion into the effort to stem the credit crisis. Consumer sentiment came in surprisingly better than expected despite headlines dominated by news that financial firms continue to struggle. Fed Chairman Bernanke indicated the timing of a global economic recovery was "highly uncertain."

The housing starts data Thursday will be the most important event this coming week. The bond market is closed Monday in honor of the Martin Luther King Holiday. The market may be volatile when trading resumes Tuesday. Housing starts data is a leading indicator of the state of our economy. This report, provided by the Bureau of the Census, takes into account data from both single-family homes and multi-family dwellings. Building permits are also released with the housing starts data. By knowing the number of permits issued monthly, analysts can attempt to estimate for the upcoming months. Normally, starts are 10% higher than permits since all locations are not required to have a building permit.
Housing starts and permits give a warning of future economic activity. In effect, a rise in housing starts can lead to a fall in the bond market and vice versa. Consumers tend to hold off on the purchase of new homes, new cars, and other big-ticket items if they are worried about the future of the economy. Housing is an important part of our economy. Continued declines in housing starts can lead to continued economic slowdown and essentially a deeper recession. On the other hand, increases in housing starts could signal a possible reversal.

From the opposite perspective, changes in interest rates often lead to changes in housing starts. High interest rates can cause a significant decline in home sales, which can lead to a drop in housing starts. Just the opposite happens when rates drop and is one of the additional reasons the Fed is trying to keep rates low. Low mortgage rates affect both home sales and housing starts.

The housing market across the country is a vital component in sustaining the economy. For some time homeowners generally saw an increase in the value of their homes. Unfortunately now that has all changed. The softening of the housing market tied to credit concerns continues to have many worried.

Please give me a call if you have any financial questions or if you need a second opinion on a loan scenario. You can also go directly to my website: www.creativefinanceaz.com for information or to fill out an application.

Rates for January 16th, 2009. Rates Change Daily. Call for current pricing. #0902429
PROGRAM
30 Year Fixed Conventional 5.00%, 5.113% APR
30 Year Fixed Interest Only 6.50%, 6.613% APR
15 Year Fixed Conventional 4.875%, 4.988% APR
3/1 LIBOR ARM Conventional 4.75%, 4.863% APR
5/1 LIBOR ARM Conventional 4.75%, 4.874% APR
5/1 LIBOR ARM Interest Only 4.875%, 4.988% APR
30 Year FHA/VA 5.00%, 5.252% APR
*30 Day Locks

JUMBO $417,001+
30 Year Fixed (to $600K) 5.75%, 5.851% APR
15 Year Fixed (to $600K) 5.625%, 5.726% APR
5/1 Treasury ARM 5.375%, 5.476% APR
7/1 Treasury ARM 5.625%, 5.726% APR
*30 Day Locks

ONE-TIME CONSTRUCTION
Conforming & Jumbo (to $8,000,000)
5/1 LIBOR ARM (Conforming) 6.00%, 6.382% APR
5/1 LIBOR ARM (Jumbo) 6.375%, 7.757% APR
*60 Day Locks

6,9,12, and 24 month construction phases available. Construction phase interest only rate = PRIME (5%) + up to 1.25%. Perm. rates guaranteed through construction.
Prior to modification, a free one-time float down is available. (30 Year Amortization)

For Realtor purposes only; not for distribution to potential borrowers. Rates are calculated based on no discount points and one origination fee. Conforming rates based on loan amounts greater than $200,000, minimum FICO score 720.