(Bank short sale) Jobless Claims Down, Economy Picks Up – Housing Drags Yields

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Jobless Claims Drop
First-time Jobless Claims fell last week, contrary to what most analysts had expected. It was the lowest reading for initial claims in four months. The four-week moving average fell 9,750 to 311,500, easing some concerns about the job market.
Economy Perks Up
The final second quarter GDP results showed a rather quick 3.8% annual growth rate for the economy. Though less than the previous estimate of 4%, the revision represents a significant upside indicator for economic conditions. Changes to imports were primarily responsible for the downward revision to GDP.
New Home Sales Fall
Thursday’s report on New Home Sales reflected an 8.3% drop in purchases to an annual rate of 795,000 homes It is the largest decline since 1970 and the lowest level in seven years. While much of the economy looks healthy, housing remains a drag, and analysts do not expect to see recovery soon.
Five-Year Auction Draws Strong Demand – Yields Slip
Thursday’s five-year Treasury auction drew solid demand, lifting prices and lowering yields. Some had been concerned that worldwide demand for US debt had softened. The auction results, combined with overall soft sentiment about the economy, pushed MBS and Treasury prices higher, taking yields down. By the end of trading, the 10-year Treasury yield was down to 4.57%.
The next release will be Personal Income and Spending and Core PCE at 8:30 Eastern on Friday.

10-year Treasury Up Seventeen Basis Points

During the heavy economic news week of September 17, the 10-year Treasury yield jumped seventeen basis points, ending the week at 4.63%.
MondayNew York manufacturing missed estimates. 10TSY close: 4.47%
TuesdayThe FOMC lowered the Fed Funds Target Rate by 50 basis points. Energy prices pulled producer prices down significantly; core prices rose. 10TSY close: 4.48%
WednesdayAs with producer prices, consumer prices slid overall, but core prices rose. Housing Starts slipped. 10TSY close: 4.52%
ThursdayJobless Claims dropped slightly. Leading Indicators declined unexpectedly, but Philadelphia manufacturing soared. 10TSY close: 4.67%
FridayNo economic data was released. 10TSY close: 4.63%

Durables Decline, Yields Down

Durable Goods Orders Fall
Wednesday’s report on Durable Goods Orders was expected to show a decline of about 3.5% in August, but the results were even lower – a 4.9% drop in durable goods orders overall. Without transportation equipment, which tend to sway the results widely, orders fell 1.8%. The report is a popular gauge of business sentiment, the thinking being that businesses will invest in durable goods only when their outlook is positive. Wednesday’s report reflected the largest decline in orders in seven months.
Yields Slip
The soft economic news, combined with strong interest in the 2-year Treasury auction, pushed MBS and Treasury prices up on Wednesday, lowering yields. After opening higher, the 10-year Treasury yield was down to 4.62% by the end of the day – even with the previous day’s close.
The next releases will be Weekly Jobless Claims and the final revision to second-quarter GDP at 8:30 Eastern on Thursday.

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(Civil judgement) Durables Decline, Yields Down

More info…
Durable Goods Orders Fall
Wednesday’s report on Durable Goods Orders was expected to show a decline of about 3.5% in August, but the results were even lower – a 4.9% drop in durable goods orders overall. Without transportation equipment, which tend to sway the results widely, orders fell 1.8%. The report is a popular gauge of business sentiment, the thinking being that businesses will invest in durable goods only when their outlook is positive. Wednesday’s report reflected the largest decline in orders in seven months.
Yields Slip
The soft economic news, combined with strong interest in the 2-year Treasury auction, pushed MBS and Treasury prices up on Wednesday, lowering yields. After opening higher, the 10-year Treasury yield was down to 4.62% by the end of the day – even with the previous day’s close.
The next releases will be Weekly Jobless Claims and the final revision to second-quarter GDP at 8:30 Eastern on Thursday.

10-year Treasury Up Seventeen Basis Points

During the heavy economic news week of September 17, the 10-year Treasury yield jumped seventeen basis points, ending the week at 4.63%.
MondayNew York manufacturing missed estimates. 10TSY close: 4.47%
TuesdayThe FOMC lowered the Fed Funds Target Rate by 50 basis points. Energy prices pulled producer prices down significantly; core prices rose. 10TSY close: 4.48%
WednesdayAs with producer prices, consumer prices slid overall, but core prices rose. Housing Starts slipped. 10TSY close: 4.52%
ThursdayJobless Claims dropped slightly. Leading Indicators declined unexpectedly, but Philadelphia manufacturing soared. 10TSY close: 4.67%
FridayNo economic data was released. 10TSY close: 4.63%

Jobless Claims Down, Economy Picks Up – Housing Drags Yields

Jobless Claims Drop
First-time Jobless Claims fell last week, contrary to what most analysts had expected. It was the lowest reading for initial claims in four months. The four-week moving average fell 9,750 to 311,500, easing some concerns about the job market.
Economy Perks Up
The final second quarter GDP results showed a rather quick 3.8% annual growth rate for the economy. Though less than the previous estimate of 4%, the revision represents a significant upside indicator for economic conditions. Changes to imports were primarily responsible for the downward revision to GDP.
New Home Sales Fall
Thursday’s report on New Home Sales reflected an 8.3% drop in purchases to an annual rate of 795,000 homes It is the largest decline since 1970 and the lowest level in seven years. While much of the economy looks healthy, housing remains a drag, and analysts do not expect to see recovery soon.
Five-Year Auction Draws Strong Demand – Yields Slip
Thursday’s five-year Treasury auction drew solid demand, lifting prices and lowering yields. Some had been concerned that worldwide demand for US debt had softened. The auction results, combined with overall soft sentiment about the economy, pushed MBS and Treasury prices higher, taking yields down. By the end of trading, the 10-year Treasury yield was down to 4.57%.
The next release will be Personal Income and Spending and Core PCE at 8:30 Eastern on Friday.

Plenty of Data Due

Tuesday
Consumer Confidence and Existing Home Slaes are due at 10:00 Eastern.
Wednesday
Durable Goods Orders are due out at 8:30 Eastern.
Thursday
Weekly Jobless Claims are due out at their usual 8:30 Eastern time, along with final revisions to second quarter GDP. New Home Sales follow at 10:00.
Friday
Personal Income and Spending is due out at 8:30 Eastern. At the same time, monthly Core PCE figures should be released, followed by the Chicago PMI at 9:45. Construction Spending and Consumer Sentiment finish the data week at 10:00.

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Short Sale Magic – Steps a Huge Profit Margin

A short sale occurs when a property is sold for less than the amount owed on the mortgage or the loan. Financial institutions allow such sales to happen because they fear that the mortgage or loan will not be repaid otherwise. Thus, they can recoup some of the money from a bad loan. Realtors and real estate investors jump at such opportunities because the low prices that these properties sell for offer huge profit margin possibilities. Such short sale magic can be improved and heightened by adhering to some basic rules and following some simple steps.

First, when approaching a financial institution with the intent of purchasing a short sale property, have your homework done. Have a licensed real estate professional prepare a CMA, or comparative market analysis. This analysis, by studying current market prices in a surrounding area, states what a particular property is likely to sell for. The financial institution will also have an independent CMA completed so it best to be as honest as possible about the outcomes of such studies. Keep in mind that results should indicate depressed market values or the short sale would not have been initiated in the first place. Use the information and data gathered by the CMA to help improve your profit margin. Remember that the financial institution is trying to recoup as much of the bad loan as possible, so the more information you have about current market conditions, the better your ability to demand a lower sale price.

The second most important aspect to short sale magic is your ability to negotiate and close the deal. Many a real estate deal has been broken because of bad or unprofitable terms settled upon during the closing process. It is important to negotiate the best deals possible. When considering a short sale possibility, remember that, typically, the purchased property or asset is only in the possession of the real estate agent or investor for a very short period of time. Thus, short term stipulations that may include higher interest rates or seemingly unprofitable stipulations can be acceptable if the bottom line is lowered. The basic principle is to secure the lowest price for the asset, sometimes at the expense of less than ideal financing terms, to help guarantee a high profit margin.

Finally, when pursuing a short sale it is important to keep in mind that, as a realtor or investor, you have the upper hand in the negotiations. The bank or owner of the property is desperate and extremely motivated to sell. This does not mean that negotiations will be smooth. Even though their desperate, most sellers will try to recoup as much of the bad loan as possible. Therefore they want the highest price they can get. Stand firm and, when pressed, rely on current market prices in the surrounding area as a bottom line. Many large scale investors or real estate buyers have begun outsourcing the negotiation process. This is a sign of just how commonplace short sales have become. Follow these simple steps to maximize your profit margin and guarantee your short sale magic.

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