Florida Mortgage Report

Florida Mortgage Report Looking at a New Home

I eluded to the fact I was working on switching this blog to a new domain and new format.  Currently, I am running a WordPress version of this site alongside this and have already transferred all of the posts and comments over to it.  Please check it out at www.flmortgagereport.com.  I will get into why later in this post.

As with any move, there are going to be things that get lost, namely those incoming links and trackbacks already set up for this site.  So, I ask you to please start linking and tracking back to posts on the other site in order to protect the integrity of those links in your own blogs.  No one likes broken links, especially when they are looking for follow up material, so this will help you as much as it will help me.

Also, I am always looking for solid feedback.  Please take a moment and let me know how you like the new site, what you would like to see added, and what you would like to see taken removed.  Also, while you are there, don't forget to subscribe to that feed as this one will shut down eventually.

Why the move?

There are a number of reasons I am moving the blog:

1. I can control, tweak, add and subtract the site easier through WordPress and I control who hosts it as well.  I also maintain it with the latest updates to keep it running as smooth and quickly as possible.
2. Domain names should be indicative of the blog's title.  I was getting tired of having Florida Mortgage report on www.floridamortgagedaily.com when I also have a mortgage market blog called Florida Mortgage Daily that isn't on any domain.  Florida Mortgage Report will now match its name with the new home, www.flmortgagereport.com.
3. That leads into the next reason, which is the expansion of Florida Mortgage Daily.  This site will eventually be moved over to this domain, www.floridamortgagedaily.com, to match it's title.  This is important as I will be offering this service to others in the RE.net.  I will provide more details later as I am ready to launch, but it will likely be a free service.
4. I wanted a new look and feel to the blog.  I like Typepad, but I was not happy with the layout I had and did not feel it was worth the money to upgrade to gain functionality when I could do it basically on my own for free.

So, as you can see, I have many things in the works.  I am constantly trying to upgrade my services to provide better content, education and more for you.  I believe this change will be for the better and will be more user friendly.  Don't forget to provide some feedback so I can make it the best.

The Fed Hasn't Gotten Spanked, At Least Not Hard and Not Yet

I am sure you all have been waiting for me to weigh in on this morning's data, but quit frankly, I have been busy.  Besides my normal workload, I have been toying with the idea of moving the Florida Mortgage Report to a different site using WordPress instead and I am now running this site alongside this domain. 

More on that later in another post, but here is the breakdown of today's data, the way I see it...

There was a bunch of news this morning with the highlight being the PCE data and the Chicago PMI.  On first glance, the PCE looked good, coming in on par with expectations and keeping to just above the Fed's comfort zone.  Dig a little deeper and you will see that it still ticked higher .09%, the most it could tick up and still remain unnoticed due to rounding to the nearest tenth.  Interestingly enough the December gain was .24%, also the highest it could be before rounding made it look worse.  So, though not bad, inflation still grew slightly at the core levels.  Stray away from the core and we have a much worse picture.

Chicago PMI came in lower than expectations as well, providing some relief.  It shows further evidence of a slowing economy, but with inflation above the "price stability" range, it also signifies stagflation.

Other news out on the economic front included Personal Spending and Personal Income.  The bad news is that Personal Income beat expectations (bad news for bonds that is).  Worse news is that Personal Spending beat expectations also.  Both add to inflationary pressures, though the PCE is a better gauge.  The good news is that spending didn't increase as much as income did, so disposable incomes went up also.  Now, take that extra money and invest!

Alright, so what does all of this mean?

Nothing.  Tomorrow is a different day and the next big event of the week hits the airwaves as the gates are opened.  That's right, the Jobs Jamboree is tomorrow and get ready for a buckin' bronco ride in the markets with my bet's on the bull (stock market) taken down the bonds.

Fed Slashes Rate .50%: Mortgage Bonds Throats Slashed Also?

The Fed made their decision and went as most people expected even though their decision may not be the right one.  In another apparent attempt to keep the stock market content, the Fed chose to cut the Fed Funds Rate by another 50bp (.50%) bringing the rate down to 3.00%, fueling speculation of the rate dropping as low as 1.25%.

Before I get into the potential problems, let's look at the potential benefits...

• HELOCs may see a drop in their rates over the next month or two.
• Credit Cards may see drops in their rates over the next month or so.
• ARM holders should rethink their desire to switch to a fixed rate mortgage if their rates are indexed to LIBOR, and possibly other indexes as well.
• "Special financing" deals will likely continue as money is even cheaper.

Certainly some good can come of this, but remember that mortgage rates are not driven by this change directly and, in fact, will likely move higher on this news.  So, let's take a look at the potential problems...

• Mortgage Rates may tick higher (not lower)
• Inflation may grow uncontrollably
• Continued devaluation of the US Dollar = less real wealth for Americans (and foreigners with currencies pegged to the dollar)
• Stagflation environment (slowing economy with rising inflation) - inflation may actually help the cooling of the economy creating larger problems

As you can see, there are some potential problems as well, some big ones at that.  Since no one has a crystal ball, only time will tell, but the first test of their decision comes tomorrow with their favorite gauge on inflation, the PCE report. 

Did the Fed get fooled again?  What is your take?

In Every Crisis Lies Opportunity

That statement is true, no matter how bad it gets and every entrepreneur out there understands its value.  Obviously, the real estate and mortgage industry is in turmoil, but so are many homeowners.  And since there is a foreclosure crisis, someone has found opportunity (you just knew it was coming).

I must admit I was not the one who found this first (hat tip Alex Stenback):

For only $995, you can simply walk away from your mortgage, but you still have to qualify for this program.  Sounds like a good deal to me, how about you?

Am I Worthy?

Many times I think that I am in my own mind, but what really matters is what do you think.  I had the pleasure of being interviewed by Brian Brady last year on BloodHound Blog (podcast)which actually helped my decision to start blogging separately from my ActiveRain blog.  Now, I am honored to say I was tagged for an interview with REMBEX and have joined an great group of RE.net bloggers.  Here is the list of interviews available and I suggest you check them out:

Alex Clark April Groves Ardell Dellaloggia Chris Lengquist Dan Green Dave Smith David Porter Dustin Luther Eric Blackwell Frances Flynn Thorsen Greg Polashock Greg Swann Jay Thomson Jeff Brown Jeff Corbett Jeff Turner Jessica Hughes Jim Cronin Jim Duncan Joeanne Hanson John Harper Jonathan Dalton Kelley Koeler Kristal Kraft Lani Anglin

Laurie Manny Linda Davis Mariana Wagner Marlow Harris Mary Pope Handy Maureen Francis Maureen McCabe Meredith Hanson Mike Mueller Morgan Brown Nicole Nicolay Owen Raun Pat Kitano Phil Hoover Phil Leto Rhonda Porter Rob Blake Robert Ashby Steve Scheer Teresa Boardman Teri Lussier Todd Carpenter Tom Wolf Vali Wimberly Vicki Moore

In case you missed it in the list or just want to go straight to mine, here is the link:  Blogger Spotlight: Robert Ashby

There truly are a lot of great bloggers out there, so take a moment and check out at least a few on the list.  Who knows, maybe you will find a new blog to add to your feed, or even someone you want to work with.

Hold on Tight Folks, We Are Going for a Ride

As I have mentioned repeatedly (too many times to link), the roller coaster ride of mortgage rates will get pretty wild this week with a slew of news coming through and today is the beginning.

This morning's ADP report came in strong and that may weigh on the Fed decision later today as they certainly have to be wondering if another rate cut is a smart move, especially after being a little embarrassed last week with an emergency cut to minimize a financial meltdown created by a "rogue trader".

Why?  The ADP, while not a very accurate predictor, is a good gauge as to how the Jobs Jamboree this Friday will turn out.  As strong as it was, the jobs news is expected to beat expectations now and that spells bad news for mortgage rates.

The good news in that report is that it is time for the Fed to rethink their decision due out this afternoon.  They may very well decide not to cut rates or only cut 25bp on the heels of the ADP report.  That would be good for bonds as it will likely destroy the stock market like last month.

Tomorrow continues the ride with the release of the Personal Consumption Expenditures Index (PCE).  Since this is the Fed's favorite gauge of inflation, and since it has been ticking higher lately, it will likely move the markets with its release.  It may also leave the Fed embarrassed again.  Remember that they said inflation would remain a non-issue so long as the public kept faith in them and that faith is dwindling.

Then, of course, is the Friday Jobs Jamboree, where a whole plague of data will hit the airwaves showing what's happening on the job front and, more importantly, the concerns surrounding wage-based inflation.

As you can see, make sure your seatbelts are fastened because this ride could be a rough one, or even a freefall for mortgage bonds.  See you on the other side!

Florida Property Tax Reform Amendment - Update

As I mentioned earlier today, Floridians may be setting history today with their voting.  Property Tax has been a huge issue with property owners and real estate professionals alike and the controversial amendment was up for vote today as Amendment 1. 

As I mentioned earlier, everyone I encountered and asked how they would vote stated they just wanted something since the state government has not been able to come up with a better plan.  It appears that the amendment will pass with over 70% voting for at this time, showing government officials that Floridians are tired of waiting for nothing and are simply happy getting something, even if it isn't anything close to what they wanted.

So, hopefully this will send a clear message to Tallahassee that more reform is still needed and that Floridians faith in the government providing a genuine solution is lacking.

House Passes $146 Billion Economic Aid Package

The House pushed through their version of the economic stimulus package you likely have been hearing a lot about lately.  The vote was 385-35, but now the package will face issues in the Senate as the Senate version differs from the House, so don't expect a check in the near future, at least not yet.

The plan would send at least some rebate to anyone with at least $3,000 in income, with more going to families with children and less going to wealthier taxpayers.  The House version would speed rebates of $600-$1,200 to most taxpayers.

The Senate version differs as it is a larger package that adds billions of dollars for senior citizens and the unemployed, and shrinks the rebate to $500 for individuals and $1,000 for couples.  The biggest issue between the two versions will likely be that the Senate version would deliver checks even to the richest taxpayers, who are disqualified under the House-passed measure.  The target date to send the bill to the President is February 15, but that looks difficult to achieve at this time. 

I always find it hard to believe how slow the government can work when a bill that helps the majority takes so long, but when a bill that helps the minority passes in just 2 days.  Case in point, the recent change in the retirement age of airline pilots, a change helping the minority while potentially jeopardizing safety.

The question remains not about whether or not there will be an economic stimulus package, but rather when and in what form will that package get approved.  Then we can move on to whether or not it will actually help.

Florida Voters Make History?

Today is a big day in the state of Florida.  No, I am not talking about the Republican Primaries or even the Mayoral elections.  I am talking about the #1 question on the ballot, property tax reform.

That's right, today is the day Floridians get to vote on property tax reform.  With all of the controversy surrounding the amendment, most that I have talked to will vote yes, stating something is better than nothing.  Do you agree?

Take a moment to weigh in on your feelings about the Amendment.  Are you in favor or not?

Florida Real Estate Blogger Sued for $25 Million by Developer

Chances are you have heard about the recent lawsuit brought against Lucas Lechuga by Tibor Hollo about the Opera Tower condos apparently plagued by problems, delaying closings for months.  Rather than go into the details, check out the following links...

Miami blog postings spark $25 million lawsuit (Miami Herald)

Opera Tower, LLC & Tibor Hollo Sues Me for $25M (Miami Condo Investments - Lechuga's blog)

Real Estate Blogger Faces $25 Million Lawsuit (CBS4 (local) Video Clip)

Blogger Sued - $25 Million (Agent Genius - Benn Rosales)

NAR should defend Lechuga (Agent Genius - Ben Martin)

Real Estate Blogger Fired and Sued for $25M (The Phoenix Real Estate Guy)

I am sure there are more out there and likely more to come, so keep looking around the RE.net.