For the week of Oct 24, 2011 — Vol. 9, Issue 43

In This Issue

Last Week in Review:        The Fed made headlines, plus inflation is heating up!

Forecast for the Week:Some key reports on housing, plus the Fed’s favorite gauge of inflation and news from Europe could move the markets.

View:Ever feel like you ramble when you leave voicemails? Check out these tips for surefire ways to leave effective messages.

Last Week in Review

When the Fed talks, people listen.And last week, the Fed made headlines when Fed Governor Daniel Tarullo called for the Fed to engage in another round of Mortgage Bond purchases…or in other words, another round of Quantitative Easing (QE3). Read on to find out what this could mean for the housing market and home loan rates.

In order to really have an impact on housing, the Fed would have to  announce something significant to get people to buy a home. Why? Because even  now, with rates at historically low levels and incredible affordability levels,  the sales pace in housing is tepid, due to structural problems in the labor  market, which the Fed can’t fix.

In fact, there is a lot  to consider before the Fed starts expanding their balance sheet, and the  biggest concern is rising inflation. Contrary to what the Fed has said about it  moderating, year-over-year inflation is on the rise. The headline Producer Price Index (PPI) rose  by a whopping 0.8% in the month of September, elevating year-over-year  wholesale prices by a hot 6.9%. Meanwhile, the Consumer Price Index (CPI) for  September rose by 0.3%, and while this was inline with estimates it pushed the  year-over-year number to 3.9%. This is significant because the year-over-year  figure was just 1.6% in January.

Remember, inflation is the arch  enemy of Bonds and home loan rates. The  concept is very simple: If inflation rises, investors in Bonds demand a higher  yield to offset the lost buying power inflation imposes on a fixed payment. And  as home loan rates are tied to Mortgage Bonds, this would mean home loan rates  move higher.

And let’s not forget the  ongoing drama out of Europe. French and  German leaders will hold two summits in the span of four days to come up with a  resolution to the European debt crisis. Whichever way this news goes could have  a real effect on the markets, including Bonds and home loan rates.

With all the news to  come this week, it’s still important to remember that now remains a great time  to purchase or refinance a home, as home loan rates are still near historic  lows. Let me know if I can answer any questions at all  for you or your clients.

Forecast for the Week

Look for some key reports on the housing market, which come after last  week’s better-than-expected Housing Starts and the softer numbers from Existing  Home Sales.

  • New Home Sales are set to be  delivered on Wednesday. That number has been hovering near record lows, so the  markets will be anxious to see if there’s any indication of an improvement.  Also this week, Pending Home Sales will  be released Thursday.
  • Also on Thursday, Initial Jobless Claims will be released as usual. Plus, the first  reading on Gross Domestic Product (GDP) for the 3rd quarter will be released. Overall, the estimates  don’t appear as if the economy is hitting on all cylinders yet.
  • The markets will see how the American people are  holding up in this economy with Consumer  Confidence and Consumer Sentiment on  Tuesday and Friday, respectively. 
  • Ending the week, Friday’s Core Personal Consumption Expenditure (PCE), the Fed’s favored  inflation measure, is sure to garner some attention.

In addition to those  reports, keep an eye on the news. One story that could gain some attention is  news that the Federal Housing Finance Agency (FHFA) and the Obama  administration will submit proposals to Congress to help the housing market for those  homeowners who are underwater.

Remember: Weak economic news normally causes money to flow out of Stocks  and into Bonds, helping Bonds and home loan rates improve, while strong  economic news normally has the opposite result.

As you can see in the chart  below, Bonds and home loan rates stayed in a tight range last week. I’ll be watching closely to see how the  markets react to Fed Governor Tarullo’s call for QE3, the news out of Europe, and the economic reports of  the week.

Chart:  Fannie Mae 3.5% Mortgage Bond (Friday Oct 21, 2011)
Japanese Candlestick Chart

The Mortgage Market Guide View…

Don’t Say Another  Word!

5 Secrets to  Leaving More Effective Voice Messages

People are busy. That means, even with the wide variety of technical  products developed to keep us in touch, it’s sometimes hard to get a hold of  people. In those instances, we find ourselves transported back to the tried-and-true  technology of the 1980s—that is, leaving a message after the beep.

Same Old, Same Old

While the technology has changed from tapes to megabytes, the basic  concept of a voice message remains the same. You talk; it records; people  listen.

Sadly, that’s not the only thing that’s the same. Many people still  don’t know how to leave a message that provides information but also  establishes a compelling reason for the listener to call back.

Use These Tips  Today!

The following tips can help you be more effective and get better results  with voice messages:

1. Don’t Talk So  Much. You have a limited window to make your point. That means you can’t  provide a lot of background information or cover multiple topics.

Before you call, make sure you have a singular focus to mention if you  get the person’s voicemail. Then, highlight that important point, and leave  the rest of your points for the actual follow-up discussion.

2. Focus on a  Problem. To put it bluntly: People don’t want to hear about you; they want to  hear about themselves.

So before you call, make sure you’ve thought about the person on the other  end—including what she cares about, what she spends her time on, as well as  what she wishes she could spend her time on instead. You could even try to  imagine why she was busy and couldn’t answer the phone. Or imagine where she’s  about to rush off to as soon as your message ends.

Based on those ideas, craft a simple, focused message that hits on ONE  major problem or issue that the listener has.

3. Everyone Likes  a Good Mystery. Once you’ve focused on a single overriding problem, resist the  temptation to go into your sales pitch about solving it. For one thing, the  listener probably doesn’t have time (or want) to listen to your pitch. For  another, if you give your pitch, what reason do they have to call you back?

Instead, only allude to the idea that a solution does exist…but don’t go  into detail. Leave some mystery. That’s your hook for getting them to actually  call you back…because now they actually have a reason to!

Finally, state a number the person can reach you at and say you’d like  to tell/give them some information by chatting for a couple of minutes. You can  even give them a time frame (such as saying they can call you back by a certain  day or time) to help create a sense of urgency about solving the mystery you’ve  established in your message.

4. Energy and  Enthusiasm. Nobody wants to listen to a person who’s boring or sounds bored.

The same is true with voice messages. After all, if you don’t have  energy when talking about something, why should the listener have the energy to  call you back?

So before you call, take a second to raise your energy level. Some  experts recommend standing up when making a call or smiling while talking on  the phone, as a way to subtly convey a pleasant, energetic tone.

5. Phone Home. It’s not enough to  practice in your head. It’s not even enough to practice out loud. You need to  actually leave some practice messages.

So here’s what you do: call your home phone and leave some test  messages. You can even try a few different approaches. When you get home, take notes  about what worked and what you want to improve. Then, try the same process the  next day or even every couple of months to make sure you’re still effective.

Remember: If you don’t want to listen to yourself  or don’t feel compelled to call back, then why would anyone else?

By following these tips and constantly working to  improve your voice message skills, you can help increase your productivity and  the number of responses you receive.

Economic Calendar for the Week of October 24 – October 28

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Tue. October 25
10:00
Consumer Confidence
Oct
46.0
45.4
Moderate
Wed. October 26
08:30
Durable Goods Orders
Sept
-1.0%
-0.1%
Moderate
Wed. October 26
10:00
New Home Sales
Sept
300K
295K
Moderate
Thu. October 27
08:30
Pending Home Sales
Aug
-1.0%
-1.2%
Moderate
Thu. October 27
08:30
GDP Chain Deflator
Q3
2.5%
2.5%
Moderate
Thu. October 27
08:30
Gross Domestic Product (GDP)
Q3
2.2%
1.3%
Moderate
Thu. October 27
08:30
Jobless Claims (Initial)
10/22
403K
403K
Moderate
Fri. October 28
08:30
Personal Income
Sept
0.3%
-0.1%
Moderate
Fri. October 28
08:30
Personal Spending
Sept
0.6%
0.2%
Moderate
Fri. October 28
08:30
Personal Consumption Expenditures and Core PCE
Sept
0.1%
0.1%
HIGH
Fri. October 28
08:30
Personal Consumption Expenditures and Core PCE
YOY
NA
1.6%
HIGH
Fri. October 28
08:30
Employment Cost Index (ECI)
Q3
0.6%
0.7%
HIGH
Fri. October 28
10:00
Consumer Sentiment Index (UoM)
Oct
57.5
57.5
Moderate

The material contained in this newsletter is provided by a third party to  real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors.
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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