MMG Weekly 12/14/15

Guy R. Vetrano NMLS# 183357
Mortgage Loan Originator
Bay Equity Home Loans
Phone: 480.500.6000 x 6017
Mobile: 602-692-7196
E-fax: 602.532.7304
gvetrano@bayeq.com
www.bayequityhomeloans.com/guy-vetrano

In This Issue  
Last Week in Review: The labor sector and consumer spending show positive signs. 

Forecast for the Week: Investors will be tuned in to the Fed’s Monetary Policy Statement. 

View: Deal with difficult clients easily thanks to these tips.


Last Week in Review  
“What’s going on?” Marvin Gaye. A final wave of economic data has rolled in ahead of the Fed’s last Federal Open Market Committee meeting of the year. Did the numbers instill confidence that what’s going on in the economy is enough to justify a change to long-standing monetary policy?

Following two strong monthly Jobs Reports for October and November, weekly Initial Jobless Claims continue to show a strengthening jobs market. Although claims rose from the week prior, this was the 39th straight week that unemployment benefits held below 300,000, which is a level that signals a strong jobs market.

The improved jobs market—combined with lower prices at the gas pump—also has driven consumer sentiment and spending up modestly.

Based on the current economic climate, investors are betting on a 90 percent chance the Fed will increase its benchmark Fed Funds Rate when it meets December 15 and 16. This rate, which has been near zero since 2008, is the rate at which financial institutions lend money to each other overnight. When this rate changes, other rates could follow based on market reaction and the economy. Stay tuned to the headlines following the Monetary Policy Statement release at 2 p.m. EST on Wednesday!

For now, home loan rates remain in attractive territory.

If you or someone you know has questions about the housing market, refinancing or home loan options, please don’t hesitate to contact me.


Forecast for the Week  
While the week’s releases include consumer inflation, manufacturing and housing data, investors will be awaiting the Fed’s release of its Monetary Policy Statement on Wednesday at 2 p.m. EST.
  • Consumer inflation, manufacturing and housing data will be released Tuesday in the form of the Consumer Price Index, Empire State Index and Housing Market Index.
  • More housing data will be reported on Wednesday with Building Permits and Housing Starts.
  • Finally, the Philadelphia Fed Index manufacturing data will be released Thursday, along with weekly Initial Jobless Claims.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based. 

When you see these Bond prices moving higher, it means home loan rates are improving—and when they are moving lower, home loan rates are getting worse.

To go one step further—a red “candle” means that MBS worsened during the day, while a green “candle” means MBS improved during the day. Depending on how dramatic the changes are on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning. 

As you can see in the chart below, Mortgage Bonds have seesawed a bit lately due to economic headlines leading into the FOMC meeting. 

Chart: Fannie Mae 3.5% Mortgage Bond (Friday Dec 11, 2015)
Japanese Candlestick Chart

The Mortgage Market Guide View…  

4 Pointers for Dealing With Difficult Clients

Some clients are more difficult than others. Here are four of the most common types you will meet, and tips for setting expectations without losing your cool—or their business: 

After-hours urgency. You just received four voicemails from a client … at 8 p.m. The needs are not urgent, but you want to be responsive. How do you let the client know you are accessible without setting a precedent that infringes on your personal time? If it’s a new client, call back and field the questions. Then, let him know when you are typically available by phone, or when you normally check and respond to voicemails, texts and emails. As a good business practice, let all clients and partners know your availability and response times, so expectations are clear. 

Nitpicking. Sometimes nitpickers can improve processes and routine communication with new insights. But nitpickers also can slow you down by stalling or derailing a process. Clearly articulate processes, timelines and deliverables with all clients. Also set limitations on the number of changes or alterations you’re willing to make on a project before additional charges ensue and timelines are pushed back. 

Ongoing delays. People delay for any number of reasons. Some like to gather more (and more) information to feel they are fully informed about a decision they are about to make. Others like to analyze (and overanalyze) a situation. Some simply like to “sleep on it” to process information. Gently remind clients when time is of the essence and how delays could cost them. 

Penny pinching. A client who seems more focused on cutting costs than getting value from your work may have a hidden issue, like a cash-flow problem. Clearly outline services and associated fees with all clients from the get-go. If you have a penny pincher, see if you can identify reasons for the concerns. Perhaps you can work out alternative billing arrangements or modify services if it’s a win-win for you both. 

The bottom line is to stay positive and be clear about what clients can expect throughout all stages of working with you. In many cases, the next job clients hire you to do will go smoother with clear expectations on both sides. Ultimately, though, remember it’s okay to part ways with a client who continues to be disrespectful of your time and regularly pulls you away from serving other clients. 

Feel free to pass these pointers along to your team, clients and colleagues. 

Source: Entrepreneur

Economic Calendar for the Week of December 14 – December 18
Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Tue. December 15
08:30
Core Consumer Price Index (CPI)
Nov
NA
0.2%
HIGH
Tue. December 15
08:30
Consumer Price Index (CPI)
Nov
NA
0.2%
HIGH
Tue. December 15
08:30
Empire State Index
Dec
NA
-10.7
Moderate
Tue. December 15
10:00
Housing Market Index
Dec
NA
62
Moderate
Wed. December 16
08:30
Building Permits
Nov
NA
1150K
Moderate
Wed. December 16
08:30
Housing Starts
Nov
NA
1060K
Moderate
Wed. December 16
02:00
FOMC Meeting
Dec
NA
0.25%
HIGH
Thu. December 17
08:30
Jobless Claims (Initial)
12/12
NA
282K
Moderate
Thu. December 17
10:00
Philadelphia Fed Index
Dec
NA
1.9
HIGH

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As your mortgage professional, I am sending you the MMG WEEKLY because I am committed to keeping you updated on the economic events that impact interest rates and how they may affect you.
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