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Last Updated:
October 15, 2009

July 2009 Summit County Real Estate.Net Notices

Communication on the new $789 Billion Stimulus Plan has been flying fierce over the past week, resulting in late nights for Congress and probably more than a few cups of coffee. President Obama is certainly hoping the new plan will wake up the struggling economy, and breathe some life back into the housing market as well.

The tax credit in the Stimulus Bill has been scaled down to $8,000 from its previous level of $15,000, or 10% of the value of the home for any first time homebuyers who purchase homes from the start of the year until the end of November. It starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000, and buyers will have to repay the credit if they sell their homes within three years.

In addition, there's news that the Obama administration is trying to hammer out a new program to subsidize mortgages to fight the credit crisis. The plan would seek to help homeowners before they fall into arrears on their loans, whereas current programs only assist borrowers that are already delinquent. There are no details yet on this plan, but I will be monitoring this news closely in the weeks ahead.


Ski Run Ranch current price $4,675,000

Auction Started

Price to be Reduced $75,000 each week

Come home to Ski Run Ranch. This pristine 17.22 acre estate parcel features all the best that a mountain property can offer. Situated only steps away from the newly developed Breckenridge Peak 7 Ski Base, the BreckConnect Gondola mid-station, and minutes to historic Main Street Breckenridge. Ski Run Ranch is nestled on a gentle slope surrounded by 95 acres of preserve and National Forest with amazing alpine views. This Estate site can remain your private ski-in sanctuary or offer great investment potential. Truly the most unique and exclusive real estate offering in the Rocky Mountains.

MLS# S363940

Dutch Auction: Price Reduced by $75,000 each week

Compensation: 3% to selling broker. Commission would be $142,500K!

Earnest Money: May be paid in cash, cashiers check, or wire transfer. Bidder is required to sign a real estate purchase agreement and deliver 10% of the bid price as earnest money to Land Title Guarantee Company.

Property Type: Land Views: Mountains, National Forest Taxes: If any, paid by Seller Acres: 17.22


Refinancing Initiative

Under current rules, those families who own less than 20% equity in their homes have a difficult time refinancing and taking advantage of the historically low interest rates. This initiative is open to homeowners who have conforming loans which are guaranteed by Fannie Mae and Freddie Mac, and who owe up to 5% more than their home is worth.

According to the plan, "credit-worthy" or "responsible" homeowners can refinance their mortgage into a 30- or 15-year, fixed-rate loan based on current market rates. The refinanced loan, however, cannot include prepayment penalties or balloon payments. For many families, this low-cost refinancing may help reduce their mortgage payments by up to thousands of dollars per year.

As with the rest of the plan, details about this initiative will be released at a future date--including what, if any, credit score requirements will be included.

Economic Calendar for the Week of February 02 – February 06

Date ET Economic Report For Estimate Actual Prior Impact Mon. February 02 08:30 Personal Income Dec -0.4% -0.2% Moderate Mon. February 02 08:30 Personal Spending Dec -0.9% -0.6% Moderate Mon. February 02 08:30 Personal Consumption Expenditures and Core PCE Dec NA 0.0% HIGH Mon. February 02 08:30 Personal Consumption Expenditures and Core PCE YOY NA 1.9% HIGH Mon. February 02 08:30 ISM Index Jan 32.0 32.4 HIGH Wed. February 04 10:00 ISM Services Index Jan 39.0 40.1 Moderate Wed. February 04 10:30 Crude Inventories 1/30 NA 6.2M Moderate Wed. February 04 08:15 ADP National Employment Report Jan -515K -693K HIGH Thu. February 05 08:30 Productivity Q4 1.0% 1.3% Moderate Thu. February 05 08:30 Jobless Claims (Initial) 1/31 592K 588K Moderate Fri. February 06 08:30 Average Work Week Jan 33.3 33.3 HIGH Fri. February 06 08:30 Hourly Earnings Jan 0.3% 0.3% HIGH Fri. February 06 08:30 Non-farm Payrolls Jan -500K -524K HIGH Fri. February 06 08:30 Unemployment Rate Jan 7.5% 7.2% HIGH


Homeowners who are current on their mortgages but are struggling can still apply for this program. As such, this is one of the few programs designed to help homeowners who may face delinquency soon, but are current at the moment.

This initiative also includes a number of additional elements and incentives, including an extra incentive for borrowers to keep paying on time. The initiative will provide a monthly balance reduction payment that goes straight towards reducing the principal balance of the mortgage loan. As long as a borrower stays current on his or her loan, he or she can get up to $1,000 each year for five years.

Since the focus of this initiative is on helping families and neighborhoods, investment properties do not qualify.

The Week's Economic Indicator Calendar

Remember, as a general rule, weaker than expected economic data is good for rates, while positive data causes rates to rise.

Economic Calendar for the Week of February 23 – February 27

Date ET Economic Report For Estimate Actual Prior Impact Tue. February 24 10:00 Consumer Confidence Feb 36.0 37.7 Moderate Wed. February 25 10:00 Existing Home Sales Jan 4.81M 4.74M Moderate Thu. February 26 10:00 New Home Sales Jan 329K 331K Moderate Thu. February 26 08:30 Jobless Claims (Initial) 2/21 NA 627K Moderate Thu. February 26 08:30 Durable Goods Orders Jan -2.3% -2.6% Moderate Thu. February 26 08:30 Crude Inventories 2/20 NA -138K Moderate Fri. February 27 08:30 Gross Domestic Product (GDP) Q4 -5.4% -3.8% Moderate Fri. February 27 08:30 GDP Chain Deflator Q4 -0.1% -0.1% Moderate Fri. February 27 09:45 Chicago PMI Feb 34.0 33.3 HIGH Fri. February 27 10:00 Consumer Sentiment Index (UoM) Feb 36.0 37.7 Moderate


Several reports could cause some action in the markets this week. First, we'll get a look at the housing market with Wednesday's Existing Home Sales Report and Thursday's New Home Sales Report.

Thursday also brings the Durable Goods Report (i.e. items that are non-disposable, like cars, furniture, appliances, games, cameras, business equipment, etc), which will give us a read on consumer and business consumption and buying behavior. And we can't ignore Friday's Gross Domestic Product (GDP) Report, as GDP is the broadest measure of economic activity. Given the state of our economy, it might not be too much of a surprise if these reports are negative.

Remember: Weak economic news normally helps Bonds and home loan rates improve, as money flows out of Stocks and into Bonds. When Bond prices move higher, home loan rates move lower. As you can see in the chart below, Bonds and home loan rates continue to face some tough technical resistance overhead, hindering their path to improvement. I will be watching closely to see what happens this week.

Chart: Fannie Mae 4.5% Mortgage Bond (Friday Feb 20, 2009)

So why is the Fed buying Bonds? Well if you think about it, it's very smart of the Fed...and maybe even a little sneaky...because 5.5% Bonds actually represent outstanding mortgages with rates of 6 - 6.50%, which are precisely the loans being refinanced at today's great interest rates.

Stay with me here...

With rates at present low levels, many of the mortgages in these FNMA 5.5% pools being bought up by the Fed will be refinanced and paid, thus giving the Fed a quick recoup on some of their investment. And this is likely a big reason why the Fed said they could continue this purchasing program beyond June, if necessary. Bottom line, the Fed buying these higher rate coupons will not necessarily help rates to move lower, as their actions do not impact the loans being originated at today's low rates.

Here's the most important part...

Sometimes I talk to clients who are in a situation where it makes sense to refinance right now, and save $250 per month for example. But when they hear the media throwing around teases of lower rates ahead, they decide to hold off on making the decision to save the $250 per month right now, in the hopes of gaining another $30 per month in additional savings with a lower rate than where we stand presently. Now clearly, rates could turn higher, and this window of opportunity could pass them by entirely.


'Stimulus' and 'Stability' Equal Help for Homeowners

Here is an overview of some benefits of the Economic Stimulus Plan for 2009 and the Homeowner Affordability and Stability Plan that may impact you.

Stimulus Plan - Tax Credit for Homebuyers

The $787 Billion stimulus bill is made up of tax cuts and spending programs aimed at reviving the US economy. Although the package was scaled down from nearly $1 Trillion, it still stands as the largest anti-recession effort since World War II. One of the major benefits of the plan is a tax credit for new homebuyers. According to the plan, first-time homebuyers who purchase homes from the start of the year until the end of November 2009 may be eligible for the lower of an $8,000 or 10% of the value of the home tax credit.

It's important to remember that the $8,000 tax credit is just that... a tax credit. The benefit of a tax credit is that it's a dollar-for-dollar tax reduction, rather than a reduction in a tax liability that would only save you $1,000 to $1,500 when all was said and done. So, if you were to owe $8,000 in income taxes and would qualify for the $8,000 tax credit, you would owe nothing.

Better still, the tax credit is refundable, which means you can receive a check for the credit even if you have little income tax liability. For example, if you're liable for $4,000 in income tax, you can offset that $4,000 with half of the tax credit... and still receive a check for the remaining $4,000!

The tax credit starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000.

The tax credit is applicable to any home that will be used as a principle residence. Based on that guideline, qualifying "homes" include single-family detached homes, as well as attached homes such as townhouses and condominiums. In addition, manufactured or homes and houseboats used for principle residence also qualify. Buyers will have to repay the credit if they sell their homes within three years.

While details are sketchy - we will expect to get some clarity soon as to an additional tier of conforming loan amounts which had been first established in 2008. This tier of home loans are those greater than $417,000, and with a maximum that depends on the area, but is not greater than $729,750. These loans would be eligible for rates that are slightly higher than conforming loan rates, but less expensive than the standard "jumbo" loan rates.

The clincher is this:

Even if clients ultimately are correct in timing the market, and eventually grab that lower rate and save another $30 per month - think of what they have lost by waiting. While they delayed, they lost the savings they could have gained by taking action sooner - or in the example used, $250 - for every single month they waited. So even if they got lucky and obtained the rate they were looking for, it could take years to make up what they lost by waiting.

I don't want anyone to miss an opportunity by either waiting, or not understanding what is at stake. Rates have already moved up .25% or more in the last few weeks. Let's talk further on this - call or email me and let's discuss what this might mean for you or someone you know.



Forecast for the Week

The week ahead will be bookended with two very important economic reports, and could be volatile in between with more details on the Homeowner Affordability and Stability Plan due to be released on Wednesday.

Among the details to be released is information on whether loans that are in good standing, and which are already guaranteed by Fannie Mae and Freddie Mac, will be able to refi, even if the loan balance is 5% greater than the home's current value. This will determine the ability of many homeowners to benefit from lower rates.

Currently many homeowners would love to cut their monthly expenses with the lower home loan rates available today, but are unable to due to the drop in home values. This new provision could help many people solve that dilemma.

I will be watching this closely and would enjoy speaking with you more about this as details are released to see if this can benefit you.

Monday brings the details on the Fed's favorite gauge of inflation, the Core Personal Consumption Expenditure (PCE) index, found within the Personal Income report. Given the recent concerns on deflation, it will be interesting to see what this report shows.

On Friday, the Labor Department releases its Jobs Report for February. Last month's report showed that 598,000 jobs were lost in January, and that about 3.6 Million jobs have been lost since December 2007. Given the number of new Initial Jobless Claims filed last month, Friday's Jobs number probably won't be a pretty one.

Weak economic news normally helps Bonds and home loan rates improve, as money flows out of Stocks and into Bonds. However, Bonds and home loan rates worsened last week, despite the weak economic news, due to tough technical resistance and the enormous supply of Bonds being put out on the market. But as you can see in the chart below, an important floor of support kept Bonds and home loan rates from worsening further. I will be watching closely to see if Bonds and home loan rates can reverse course and find some improvement in the coming days.


On Wednesday, the Fed announced that it decided to keep the Fed Funds Rate steady at the current 0 - .25% range, the lowest ever. They also indicated that "economic conditions are likely to warrant exceptionally low levels of the Federal Funds Rate for some time" and that "inflation pressures will remain subdued in coming quarters".

Also last week, the Federal Deposit Insurance Corp (FDIC) announced that it may set up a "bad bank" as a vehicle to buy toxic or illiquid assets from banks. What does a "bad bank" do? No, it doesn't talk back to you, give you attitude and treat you with disrespect. Lenders and the entire financial sector are struggling with "mark-to-market" accounting issues, and in the absence of a repair of the mark-to-market system, lenders are forced to sell assets in a market where there are few buyers. Hence the bad bank plan, to create an entity that will purchase the assets that no one else will buy, which is yet another very creative way for the government to breathe life back into the financial sector. This action is not finalized, so we'll keep watching closely to see how it plays out in the days ahead.


I have done a lot of housing market feasibility.  Organic demand is about 1.5 million new units each year based on 3% growth (household formation) and replacement of 150,000 units that are destroyed for one reason or another.  Production has been at 500,000 now for nearly a year --- so we are eating through the 2.0 million overhang.  Note there needs to be about 4% vacancy to sustain fluidity in the market.

California is leading the way back with sale up 50% over last year --- also has a big overhand; behind Las Vegas and Phoenix. and interest rates are at a historic low ---- down from 6.5% to 4.5% in two years ---- that is a drop of 30% --- or pushes the value of housing back up 30% over the next two - three years.


 There is very promising evidence that the government is now starting to direct their buying power in the lower coupon range.    Why haven't rates dropped more?

Three reasons why rates haven't been affected too much:

-As rates drop, the value of existing servicing portfolios decline due to higher potential that loans will pay off early.

-Large whole loan purchasers (our investors) offset losses from their existing servicing portfolio with lower servicing values on new business.  In other words, our prices do not reflect the full value of servicing that we would typically get in a normal market environment.

-Large foreign investors/banks have been selling Mortgage Backed Securities just as quickly as the Fed has been buying them.  As a result, simple supply-side economics have not forced higher prices/lower rates.

Will rates go lower?

If they go lower, it won't be much lower than today's rates.  And when will it drop, if it does?    On the fence and can’t decide?   You may be trying to jump over a quarter to save a dime.  The longer you wait for the ‘bottom’, the longer you are paying your higher rate of interest.  The longer you wait to buy, the greater your chances of missing historic low rates


I have received rental data for the following:

S367240, S366126, S365965, S366841, S361491, S364237, S366903, S365688, S366936

I have posted details for S367240 here.

This is one that would seem to make a good investment property.


Of the remaining properties that I have received rental information for, River Mountain Lodge

W303 (S366126) is one of the better ones and I have posted listing details and rental data here.

Rental income here is covering HOA dues, Taxes, Utilities, etc. but it would not cover mortgage payments with $200K down at Closing.

Of the properties that I do not have rental data for yet, I expect Trails End and Tannhauser will be the better locations and I will continue to try to get rental data for these properties.

Below is the rental data that I was provided for Tannhauser #322.

The listing is almost a year old (it started out at $414,500) and so is the rental data.

This is one of the better rental properties other than Beaver Run but I can see at first glance that it will not cover the whole cost of a mortgage with $200K down.

Unit #322 was blocked off by the owner for 150 days in '07 and took in $22,251. Data for several other comparable properties is provided because of this owner use.


Below are the rental numbers for Trails End Condo #406. I am afraid that this property will not be cash flow neutral with $200K down either. This leaves only Beaver Run condo #4323 which I sent you details for earlier in the week.

There are two other one bedroom Beaver Run condos in building 4 of 617 Sq.Ft. but they are both priced over $400K.


Below you will find the Breckenridge Sign Ordinance adopting provisions concerning OPEN HOUSE SIGNS.


The SUCCESS of the Open House REALTOR signs is in your hands and we must be very diligent in following the rules to the letter.....

(UPDATE AS OF April 2, 2009)

#1 It has been brought to SAR's attention that the background color of Burgundy, does not have to match exactly the burgundy color the town uses for their signs, but must be a mixture of 1/2 Red and 1/2 Brown.  (Please read specifically under Section 2, item H and i, color and logo).  The color must be burgundy.

#2  ALL Lettering must be in White. 

#3  Your sign does not necessarily have to have your Office Logo name or phone number.  Your sign can just say OPEN HOUSE.  However, if your sign says Open House only, there is a greater chance that your sign could be taken. 

#4  If you do not comply with the ordinance to the letter, then the Town of Breckenridge will remove your signs and they will be thrown  out.

#5  The only specifics of size on the sign lettering is the Logo, it cannot be larger than 9"x 6" in area.  The size of other lettering or numbers is your choice. Please disregard the earlier email this week that was sent out on specific measurements.

Everyone is at liberty to use any sign company they choose, however after contacting 3 local Sign companies in Summit County and getting pricing, SAR has contracted with a sign company in order to bring you a savings in price per sign if you wish to order through SAR and keep your business local. We felt it was important to show our local merchants that we support them, especially in this economy. 



The effective date of the ordinance is Wednesday, April 8th. 


Last Week in Review

"IT REQUIRES A GREAT DEAL OF BOLDNESS AND A GREAT DEAL OF CAUTION TO MAKE A GREAT FORTUNE." Ralph Waldo Emerson. And last week's headlines contained a mix of items to inspire both boldness and caution. Here are the highlights.

Friday's news showed that consumers are being understandably cautious with their finances, as the Personal Savings rate remained above 4% once again in February and among the highest savings levels seen in a decade. The last five years can be seen in the chart. And notice it wasn't that long ago that the US had a negative savings rate - that's right, as a nation, we regularly spent more than we made.

Meanwhile, the government continues to make bold moves to help our economy. On Monday, Treasury Secretary Geithner unveiled a plan to remove toxic assets from financial institutions by using money from the $700 Billion TARP fund. The government will help mitigate the risk by offering private investors Billions of dollars in low-interest loans to help finance the purchases. Indeed, it's a bold strategy - let's see if it pays off!

And...there's room for cautious optimism on the economy, as good news was noted on several fronts last week. The housing market received good news when both Existing Home Sales and New Home Sales came in stronger than expected. Additionally, Durable Goods Orders for February came in better than expected, showing the first increase in six months, and the Core Personal Consumption Expenditure Index (Core PCE) showed inflation is presently at tolerable levels. Plus, the US Dollar received a boost when China said it will continue to purchase US Treasuries.

Bonds were jostled around mid-week, but home loan rates ultimately ended the week very close to where they began...near historic lows. Give me a call or email me if you want to discuss whether now may be the perfect time for you to add a bit to your own fortune through a smart purchase or refi.


Forecast for the Week

A very important week is in store, with two important announcements due toward the end of the week. As you know, the "mark-to-market" accounting issue has been discussed in this newsletter many times, and this Thursday should be a big day on that front. The Financial Accounting Standards Board (FASB) is set to announce their ruling on whether to modify mark-to-market, and perhaps allow cash flow analysis to determine valuation of financial assets. Not a coincidence, the strength we have seen in Stocks over the past couple of weeks has been fueled by speculation that mark-to-market will be modified, thereby helping reinvigorate the financial system of our country. I will be watching very closely to see what happens and how the markets respond.

On Friday, the Labor Department will release their Jobs Report for March. Last month's report showed that 651,000 US jobs were lost in February, while revisions for the prior two months showed that an additional 161,000 jobs were lost between December and January. Given that last week's Initial Jobless Claims report showed that the number of people collecting state unemployment benefits has reached a record high - jumping to a seasonally adjusted 5.56 Million - it will be important to see what Friday's report reveals.

As you can see in the chart below, Bonds are currently trading between key technical levels, with a ceiling of resistance overhead, and a floor of support underfoot. But remember: Strong economic news - such as a positive change in the "mark-to-market" situation - will likely cause Stocks to rally, and Bonds and home loan rates may worsen in response. Please call me to discuss how the current rate situation may benefit or impact you.


"AN OPTIMIST WILL TELL YOU THE GLASS IS HALF FULL; THE PESSIMIST, HALF EMPTY; AND THE ANALYST WILL TELL YOU THE GLASS IS TWICE THE SIZE IT NEEDS TO BE." Anonymous. And indeed - last week certainly contained news that could cause you to view the economy in an optimistic or pessimistic light - let's take a closer look.

Good earnings reports from financial companies continued as Bank of America reported earnings that were ten times greater than expectations - that's right, TEN times better. The company also said it earned more in the first quarter of 2009 than through all of 2008, largely a result of enormous refinancing activity. In addition, Treasury Secretary Tim Geithner said that most banks are well capitalized, and there are signs that credit market conditions are improving, which is definitely something to be optimistic about. However, as earnings season marched on, there were also some weak reports, including clinkers from The Bank of New York, Caterpillar, Dupont, Coca-Cola, Merck and United Technologies.

On the housing front, New Home Sales came out slightly better than expected, and it was especially good to see that the inventory number continues to fall - now at a 10.7 month supply, compared with February's 11.2 months. Existing Home Sales came in slightly below market estimates - and while the report showed that Existing Home inventory in March fell by a modest 1.6%, at the current sales pace it would take an estimated 9.8 months to sell that inventory of properties, slightly longer than February's 9.7 month reading. The path back to economic recovery will go through housing, and these reports will be important to watch in the months ahead.

In other news, Initial Jobless Claims were reported in-line with expectations. Initial Jobless Claims are a leading indicator and last week's number does not yet suggest that the employment market is starting to improve. And March's Durable Goods Orders marked the 7th negative reading in the last 8 months, as tighter credit and lack of business investment is continuing to fuel these negative numbers. However, it will be interesting to see how these numbers change with lending abilities now freed up following the recent relaxation of mark-to-market accounting rules, which will in turn make it easier for businesses and consumers to buy and spend.

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. And last week's mix of news saw money flowing back and forth from Stocks to Bonds, with Bonds and home loan rates ultimately ending the week very close to where they began.


Forecast for the Week


There are several important reports and events to look for this week, and whether they will lean towards optimism or pessimism remains to be seen. On Tuesday the Consumer Confidence Report will show us if consumers are feeling their own glass is half full or half empty, while on Wednesday we will get a read on the economy with the Gross Domestic Product (GDP) Report, which is the broadest measure of economic activity.

Also this week, we have the Fed's next regularly scheduled Federal Open Market Committee meeting, followed by their Policy Statement and Interest Rate Decision coming on Wednesday afternoon. It will be important to see if the Fed has a positive or negative read on the economy, and if they comment on any of the recent whispers of inflation. And speaking of the Fed and inflation, the Fed's favorite gauge of inflation, the Core Personal Consumption Expenditure (PCE) index found within the Personal Income Report, will be released on Thursday.

As you can see in the chart below, Bonds were unable to break through a strong overhead ceiling of technical resistance, which is preventing any improvements in home loan rates. Remember: home loan rates are still near historic lows, but the market is volatile. If we have not yet discussed your own situation, give me a call or quick email so that we can ensure you are positioned properly. And if you have any friends, family members, neighbors or coworkers who might need a word of advice, please remember I'd be honored to hear from them as well.



With the economy in the news every day, more attention is being focused on the Federal Reserve than ever before. Let's look at some of the facts, and understand exactly what they do and how they do it.

The Federal Reserve System was created on December 23, 1913 by President Woodrow Wilson to act as the central bank of the United States. It was created to provide the nation with a safer, more flexible, and more stable monetary, banking and financial system.

The Federal Reserve System is made up of twelve Federal Reserve Banks, overseen by the Board of Governors. The Board of Governors is located in Washington DC and is comprised of just seven members, who are appointed by the President and confirmed by the Senate. The full term of each member of the Board of Governors is 14 years, and the appointments are staggered such that one term expires on each even-numbered year. This system ensures that "fresh blood" will be brought to the Board every two years. When your term is up as a Board Governor, you are done, and cannot be reappointed. But if a member leaves the Board before his or her term expires, the person appointed to fill the remainder of the term can be reappointed for another full term. The terms for the Chairman and Vice Chairman are four years, but may be reappointed for additional four-year terms. The current Chairman, Ben Bernanke, and Vice Chairman Donald Kohn lead the Board of Governors.



Continental Divide Land Trust has a full year of exciting and unique events planned for 2009. Please see below for event details and dates. We are seeking partners to sponsor these 2009 events.

As a 2009 business sponsor, your company will gain year-long exposure through the marketing of the events and CDLT promotions. Rather than just one event, this program provides a package of opportunities to reach out to the wide variety of people -- locals and visitors -- who attend our events and programs. In addition to specific promotion with each event, CDLT's 2009 Sponsors will be listed in our annual report and newsletters published throughout the year, linked to our website, and receive complimentary tickets to each event.

As a partner with CDLT, Summit County's leading land conservancy, your business will regularly be in front of CDLT's constituents. Our marketing outreach includes a significant list of contacts, advertising in the local newspaper, posters and flyers, direct contact with event participants, and more.

We hope you will want to be part of this exciting year-long opportunity to partner with CDLT on our event and outreach programs. Scroll down for sponsorship opportunities and event descriptions. Please contact us for more information or to become a 2009 sponsor today!

For the week of Feb 23, 2009 ...

Last Week in Review

"I WILL ACT NOW. I WILL ACT NOW. I WILL ACT NOW." Og Mandino. And acting now - more than once - is exactly what Congress and the President did last week, as two major economic plans were released that impact the mortgage and housing industries.

The first plan, the Economic Stimulus Plan for 2009, was finally approved by Congress and signed by President Obama. In addition, the President unveiled the initial details of his Homeowner Affordability and Stability Plan, which is designed to help stabilize the housing market and keep millions of borrowers in their homes. Many of the details of these plans are still being worked out, but read this week's Mortgage Market View article below for an overview of some benefits that may impact you.

In other news, the Stock market plunged last week on continued fears of a deepening recession, a failing banking system, weak corporate earnings and forecasts. The 113 year old Dow Jones Industrial Average closed the week down almost 7%, reaching a six-year low, which you can see in the chart below.

Not accounting for dividends, the Dow is at a level equal to what it was twelve years ago. Oftentimes Stock prices rebound once previous lows are let's hope that happens now, as the Stock market is due for a rally! The plunge in the Stock market did not lead to any significant improvement for Bonds or home loans rates last week, but the week ended with Bonds and home loan rates unchanged to slightly better from where they began.



Last Week in Review

"THE FACT THAT AN OPINION HAS BEEN WIDELY HELD DOESN'T MEAN THAT IT'S NOT UTTERLY ABSURD." Bertrand Russell. True words - and last week was one that was full of opinions that moved the financial markets - here are some highlights.

The week began with bank analyst Mike Mayo spewing out a negative forecast, which included his thoughts that loan losses by financial institutions would ultimately exceed levels from the Great Depression. This was followed by word from hedge fund giant George Soros that the US banking system is insolvent and that the economy won't recover in 2009.

However, as mentioned in many previous newsletters, the recent changes to mark-to-market should prove to have a positive impact on the economics and overall operations of financial institutions. Why? Because the recent ruling to look at mark-to-market accounting in a more relaxed light will free up the banks' capital ratios and allow them to do more lending, which will help their profitability, as well as ultimately help the economy unlock as businesses and consumers are once again able to borrow and use credit in a more normal fashion.

Lo and earnings season began last week, there was already evidence of this playing out as true, when Wells Fargo said Thursday that it expects record 1st quarter earnings and that their Wachovia acquisition was exceeding their expectations. In addition, the New York Times said Thursday that the US banking system overall may be in better shape than most people think.

As you can see in the chart below, Stocks hit an all time high in October 2007...until mark-to-market accounting practices were instituted. And notice also that Stocks reversed course, and have been on a strong rise since early March of this year, buoyed simply by the speculation that there would be a change in mark-to-market, which was finally announced on April 2nd by the Financial Accounting Standards Board.


Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. And this is exactly what happened in the early part of the week when Stocks were plagued by the negative opinions mentioned above. However, Stocks rallied on the good news that ended the week, causing Bonds and home loan rates to give back some of the gains they had made, ending the week unchanged to slightly worse from where they began. The Bond market closed early Thursday and both the Stock and Bond markets were closed Friday in observance of the holiday weekend.


Forecast for the Week

Last week may have been a quiet one in terms of economic reports, but the middle part of this week will be jam-packed with reports. Tuesday will bring the Retail Sales Report for March. We know that consumers continue to watch their spending, but how much they are still doing so will be interesting to see.

There's also news on the inflation front coming both Tuesday and Wednesday. Tuesday brings the wholesale measuring Producer Price Index (PPI) Report, while on Wednesday we get the Consumer Price Index (CPI) Report. It will be important to see if these reports are inflationary or deflationary in direction. Given the low interest rate environment we are in, along with all the recent economic stimulus provided, it seems a foregone conclusion that inflation will become an issue that must be dealt with. These reports will give us clues on any significant changes to the rates of inflation, which is the arch enemy of home loan rates.

Thursday will be a busy day as well, as we will get a read on the Housing Market with the Housing Starts and Building Permits Reports. The Philadelphia Fed Report will also be released Thursday, and this monthly survey of manufacturing purchasing managers conducting business around the tri-state area of Pennsylvania, New Jersey, and Delaware is one of the most-watched manufacturing reports.

As you can see in the chart below, stocks' late week rally pulled money out of the Bond market, and caused Bonds to fall below a key floor of support. I will be watching closely to see if Bonds and home loan rates can reverse direction this week and find some improvement.

The Mortgage Market View...

 File Your Taxes on Time. Even If You Can't Pay!

The deadline to file your taxes is practically here!

But what do you do if you've completed your tax returns only to find out that you owe way more to Uncle Sam than you were expecting - or worse, that your tax bill is more than you can possibly afford to pay right now?

Don't worry. If this is the case, you're not alone. especially in today's economy. And more importantly, you're not going to jail just for being a little short on cash.

Rest assured, the IRS only seeks criminal charges for those who the agency can prove intentionally chose not to file and pay taxes. So, even if you can't pay your bill right away, file your return on time, and not only will you stay off the IRS's bad side, you'll avoid some hefty financial penalties in the process.


According to the IRS, the penalty for filing late is generally 5% per month, or up to 25% of the total tax amount due. Not to mention interest charges, which the IRS changes quarterly, and which range between 4% and 9%. This interest applies to the unpaid balance, penalties, and to any interest that has been charged to the account as well.

If no effort is made to pay back-taxes, the IRS can impose stricter penalties, including levying bank accounts, wages, other income, or taking other assets like houses and cars. A Federal Tax Lien could also be filed, which could ruin your credit history for years to come.

The penalty for filing on time but paying late, however, is only half of one percent or .5% per month, up to 25% of the total amount owed. If you choose an installment plan to pay your debt, interest will accrue on the unpaid debt amount only.

Therefore, when you file your return, pay as much as you can and cut down the penalties even more.


It is possible to get a 30- to 120-day extension to pay your taxes after filing a return on time. Soon after filing, the IRS will send you a tax bill for the amount you still owe. Simply call the number on the bill and request an extension and explain your situation. If granted an extension, the penalties and interest will be much lower.

If you cannot pay any part of your tax bill, the IRS may temporarily delay collection until your financial situation improves, although interest and penalties will accrue throughout this time. But this extension is reserved for what the IRS calls "significant hardship."


Last Week in Review

"LET'S GIVE THEM SOMETHING TO TALK ABOUT..." Bonnie Raitt. Better believe that last week's news gave us plenty to talk about.and even a few things to smile about. Here are the highlights.

You know this newsletter has been talking about the mark-to-market issue for some time now, and everyone was talking last Thursday about the Financial Accounting Standards Board's (FASB) favorable vote to relax mark-to-market accounting, which will help to unlock the continuing freeze in the credit markets. The big change is to allow financial companies to use alternate models, like cash flow analysis, in valuing their assets. This was great news for the financial markets and our economy at large, as this will help money and credit flow more normally in our economy again.

In fact, since the March 12th Congressional hearing on mark-to-market, Stocks have risen 23% just on the speculation a change could be coming. And just one short day after the FASB mark-to-market ruling, there were stories of banks already saying they may not need to sell assets to raise capital, as they will no longer have to take massive paper losses by pricing their assets to the "fire-sale" comps that were created in some of the illiquid markets. Capital ratios are now more in line for many institutions, which will also help their ability to lend - in turn helping consumers and businesses alike. Yesterday's ruling is a dramatic step towards unwinding the negative spiral created by mark to market, and in fact, the ruling on mark-to-market accounting could well go down in history as a turning point in the US financial crisis.

Speaking of turning points, while Friday's Jobs Report certainly had its share of the bad (the economy lost 663,000 jobs in March) and the ugly (there have been 5.1 million jobs lost since the recession began in December of 2007), there was also some good. For the first time in a very long while, there were no downward revisions to a prior month's reading, as February's number came back with no change. This, as well the actual job losses for this month being improved from January's levels, and not much worse than expectations, could mean there is some level of stabilization at hand for the labor market. Something else worth smiling over on the job front was Wednesday's news that Challenger, Gray & Christmas, an executive outplacement company, found that planned layoffs at US firms fell in March to their lowest levels in six months.

While Stocks were buoyed by the Mark-to-Market announcement and optimism that the G20 meeting in London will lead to an agreement on ways to pull global economies out of the current recession, Bonds were unable to hold onto recent gains. As a result, Bonds and rates ended the week .125-.25 percent worse than where they began.


Forecast for the Week

There aren't too many scheduled economic reports to talk about this week, but don't expect the rest of the news to be quiet. First quarter earnings season begins, and while the change to mark-to-market take effect for the second quarter, it can be applied to first quarter earnings. In fact, rumors are already swirling that the change in mark-to-market will boost earnings of banks by 20% or more for the first quarter.

In addition, the US is prepared to sell an estimated $59 Billion in notes and inflation-indexed securities this week, and it will be important to see what impact that supply has on Bonds and home loan rates. And as we continue to watch the labor market, it will also be important to keep an eye on Thursday's Initial Jobless Claims report to see if the news is good, bad, or ugly.

But remember: Strong economic news will likely cause Stocks to move higher, and Bonds and home loan rates may worsen in response as we saw last week. As you can see in the chart below, Bonds worsened on the heels of last week's positive mark-to-market ruling, as well as Friday's Jobs Report failing to meet the worst fears.

Rates remain near historic lows, but last week, Jack Koskinen, interim chief executive of Freddie Mac, said that he feels home loan rates are near a bottom. We should talk to discuss if the current rates may present an opportunity for you or someone you know.

The Mortgage Market View...

What the "Making Work Pay" Tax Credit Means For You

The economic recovery package that Congress passed in February included a "Making Work Pay" tax credit that eligible workers will receive through their paychecks in 2009 and 2010. Employers will use new withholding tables to lower the amount of tax that is withheld from eligible workers' paychecks. And since the Obama administration has asked that employers begin implementing these changes this month, you may have already noticed an increase in your paycheck

While single filers can receive up to $400 a year from these changes, ($800 a year for joint filers), just how much extra money you will get depends on a number of factors, including your salary, marital status, and the allowances or exemptions you claim. Here are the highlights:

The full amount will be paid to single filers with modified adjusted gross incomes of $75,000 or less, ($150,000 or less for joint filers). Partial amounts will be paid to single filers earning between $75,000-$95,000, and to joint filers earning between $150,000-$190,000. Since the amount is based on modified adjusted gross income, any income earned in a foreign country, or in Puerto Rico or American Samoa, will also be factored in.

Anyone who is claimed as a dependent on another person's tax return is not eligible, even if the dependent works and earns income

If lower-income workers do not make enough money to have taxes withheld, they won't receive any extra money in their paychecks but they can claim the amount when they file their 2009 tax returns.

In addition, it's important to make sure you aren't overpaid since you will have to repay the amount when you file your taxes next year, or have the amount deducted from your refund. Here are a few things to look out for:

If you are a joint filer and your spouse works... Both you and your spouse may receive extra money in your paycheck, resulting in an overage.

If you have more than one job... You may receive the amount from both of your employers, resulting in an overage.

If you receive investment or rental property income...If you are paid the amount from your employer, but the other income you earn increases your modified adjusted gross income above the eligibility limits, you may owe the IRS for the overage you receive.

Also, take note of when your company starts paying. The new withholding tables are structured so that payments starting in April will equal the appropriate amounts by the end of the year. If your payments started in your February or March paychecks, you may receive a bit more than you were due. And if your payments start later in the year and you receive less than you are entitled to, you can claim the difference on your 2009 tax return.

The above article is provided for informational purposes only. It's always a good idea to consult an accountant or tax professional if you have any questions about your specific situation. Let me know if you would like me to recommend someone.



Voice Your Support for Open House Signs In Breckenridge

On Tuesday, March 10th at 7:30 P.M., the Breckenridge TownCouncil will consider an important issue to buyers, sellers, andREALTORS. The ordinance will allow REALTORS to place 3directional signs to an open house. It is very important thatREALTORS attend this council meeting to show the importance ofthis issue to our community.


The Breckenridge Town Council will consider an ordinance thatwill allow REALTORS to use 3 directional signs to an open house.Last Fall, SAR, along with a number of REALTORS, requested thatthe town amend its sign code policy to allow directional openhouse signs to better market listings. Negotiations with thetown have been tough. Council members are hesitant to allowsigns because of a fear of clutter, and hurting the character ofBreckenridge. After many talks with the town, the followingpoints encompass the proposed ordinance. Our concerns are inparentheses.

* Allowing up to three (3) off-site directional open house signsoutside of the Conservation District. (REALTORS initially askedfor up to five signs.)

* Prohibiting off-site directional open house signs inside theConservation District.

* Allowing the off-site open house signs in the Townright-of-way,

* Prohibiting open house signs in the rights-of-way for MainStreet, Park Avenue and Highway 9. (REALTORS believe that it is important to allow open house signs on these main roads.)

* Establishing time limits for the display of off-sitedirectional open house signs.

* Establishing a standard design, including color and logos, for all off-site directional open house signs. (Some REALTORS are opposed to this requirement, since they already have already purchased customized open house signs.)

While the proposed ordinance is not ideal, it is an improvement over what the current open house sign policy is, and we would like the ordinance approved. At the last work session, the council voted by a slim majority to move forward in with consideration of a new open house sign policy. The vote was 4-3 with Jen McAtamney, Rob Millisor, Jeffrey Bergeron, and Dave Rossi supporting. Mayor Warner, Eric Mamula, and Peter Joyce dissented.


Another update for condos:

1.  Fidelity bond insurance is a stumbling block for project approvals for conventional loans and investor specific loans.   Projects with more than 20 units must have fidelity bond insurance (in addition to liability insurance).  This was not a requirement in the past and is a big roadblock for many condo complexes.

2.  Purchasers of condos will need “walls in”insurance for some investors prior to closing and will need to document it provides at least 20% of the appraised value in protection for the interior.

Older projects have language in their CC&Rs that will preclude them from being approved for financing.  If you are listing a property, get ahead of the curve and have the legal documents and budget reviewed to be sure the project can be agency-acceptable.  Project review is the LAST of the underwritten requirements for a mortgage (due to the requirement for legal documents, budget, titlework and appraisal) and then becomes an 11th hour issue/roadblock to closing.

The word LODGE in the name of a condo is potentially a deal breaker; it connotes the image of ‘condotel’ and must be aggressively addressed by the appraiser and project approval specialist.

The presence of any kind of ‘rental’ desk in a condo project is enough to identify it under the condotel description.

More than 20% commercial usage in a condo building will preclude it from agency (Fannie Mae/Freddie Mac) loans

The presence of timeshares within a complex precludes it from agency loans (this is applicable to both full HOA reviews and limited HOA reviews)

If you were not already aware, condos have become red flags for most investors and the approval process is stringent.  Please contact me for more information if needed!


"IT'S A RECESSION WHEN YOUR NEIGHBOR LOSES HIS JOB; IT'S A DEPRESSION WHEN YOU LOSE YOURS." Harry S. Truman. The big headlines of the week had everything to do with job losses...and some surprising twists within the monthly Jobs Report that arrived on Friday, and caused home loan rates to worsen yet once again. Despite their efforts to improve early in the week, Bonds and rates ended the week .375% to .5% worse than where they began

Friday's Jobs Report showed that 345,000 jobs were lost in May, far better than expectations for 520,000 jobs lost. And adding to the positive tone were revisions to the two prior months, showing 82,000 fewer jobs lost than previously reported. So all in all, about 260,000 fewer jobs lost than had been forecast. But let's take a closer look.

Despite the positive news in the estimated number of jobs lost, the official Unemployment Rate, which is regarded as a more reliable indication of the employment situation, actually came in higher than expectations, climbing from 8.9% in April to 9.4% in May...and this wouldn't seem to make sense, given the decline in job losses, so what caused this apparent discrepancy?

The figures come from two separate surveys. The job creations/loss number is mostly derived from the "birth-death ratio" of business creations and those going under, which is subject to enormous and repeated revisions - while on the other hand, the Unemployment Rate is a real survey of about 60,000 households that are asked about their current employment situation, and therefore, is truly a much more reliable number. And even though traders know this, the market tends to respond to the headline number, which points more at a future trend than the Unemployment Rate, which paints a picture of the current situation. Since positive economic news typically is not a friend of Bonds and home loan rates, this report added to the worsening trend both have experienced recently.

And here's another very interesting note, pertaining to the collection of the US Census numbers, which are vital for state and federal budgets and appropriations, amongst other things. The Census occurs every decade, and as we approach 2010, the government has already begun the temporary hiring of approximately 1.2 Million people. These individuals will be put to work for just a few months, but will count as new jobs created.therefore potentially making the numbers appear a bit better over the short term.

In other news, Personal Spending declined slightly in May, while Personal Income came in better than expectations, thanks in part to the economic stimulus package. Overall, indications are that the economy may be strengthening, but this process will likely be marked by continued market volatility. And this volatility we have seen in the financial markets is partly why the Treasury Department announced that they are scaling back their upcoming auctions, as the massive supply has started to weigh heavily on the Bond market and the US Dollar.

All the twists and turns we are seeing make it more important than ever to follow the advice of a knowledgeable mortgage professional who stays tuned in, and can offer good advice as to smart moves to take right now. Let me know if you or someone you know has any questions about your personal situation.

Forecast for the Week

In terms of economic reports, Thursday will be the big day this coming week. We'll learn more about the health of the retail sector via the Retail Sales Report for May. April's Retail Sales Report was worse than expected and marked the eighth decline in the past ten months for Retail Sales. While May's Report isn't expected to show the consumer out spending wildly, it would be a positive sign to see a turnaround instead of a continued slide lower.

Also on Thursday will be the next Initial Jobless Claims Report. Particularly given the high Unemployment Rate in last week's Jobs Report, it will be important to see if this number shows any improvement.

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 have traded lower recently, causing home loan rates to move higher. The reasons are many, but certainly due in part to all the extra Bond supply in the market. The Treasury has to have some way to pay for all the massive government stimulus plans, so Treasury auctions have been increasing dramatically - but the added supply is driving prices lower, with home loan rates moving higher. I will be watching closely to see if this trend continues.

Rate Review

In Freddie Mac Primary Mortgage Mkt Survey (for the week ending June 5) in which the 30-yr fixed-rate mortgage (FRM) avg. 5.29%, up from last week when it avg. 4.91%. Last year at this time, the 30-yr FRM avg. 6.09%.

The 15-yr FRM avg. 4.79%, up from last week when it avg. 4.53%. A year ago at this time, the 15-yr FRM avg. 5.65%.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) avg. 4.85%, up from last week when it avg. 4.82%. A year ago, the 5-yr ARM avg. 5.51%

One-year Treasury-indexed ARMs avg. 4.81%, up from last week when it avg. 4.69%. At this time last year, the 1-yr ARM avg. 5.06%.


"I'M FREE...FREE FALLIN'." Tom Petty. And a free fall indeed was the case last Wednesday, as Bonds had their worst one-day performance since last October, losing an astounding 206bp. So what caused this free fall...and what helped Bonds and home loan rates rally back and improve later in the week? Here's what you need to know.

The main culprit for Wednesday's sell off was supply. The Treasury auctions and the increased number of refinance transactions closing have added hundreds of Billions of dollars of new Bond supply to the market. Economics 101 tells us that anytime supply vastly exceeds demand, prices will move lower, and that's exactly what we saw last week...and as Bond prices move lower, home loan rates move higher. And the trend isn't likely to end anytime soon, as the Treasury will have to continue to pump out major supply of Bonds, in order to pay for the massive government stimulus plans...and the Fed buying plan simply won't be enough to balance out supply and demand - it's like trying to sop up a flood with a sponge. Bottom line - rates are likely on the rise, but still near historic lows. Let's talk and make sure you have taken necessary actions for your own financial situation.

Yet the news wasn't all doom and gloom - as both the Dow and S&P 500 have seen three months of positive gains for the first time in over a year! And the National Association for Business Economics (NABE) said that the end of the recession is in sight, noting that, "While the overall tone remains soft, there are emerging signs that the economy is stabilizing." The Commerce Department's report that Gross Domestic Product for the first quarter fell at an annual rate of 5.7% was better than initial estimates, also indicating that the recession may be slowing down and turning more moderate. Important reminder: An improvement in the economy will likely push rates higher over time, which is why it's important to take action during this opportunity of low rates.

In other news, Initial Jobless Claims were better than expectations, but a higher revision to the prior week's reading offset the slightly positive headline number. Durable Goods Orders in April also came in a bit better than expectations. On the housing front, while New Home Sales were just under estimates, Existing Home Sales came in higher than expectations. These reports didn't impact the markets a great deal last week, as the impact from all the extra supply was the real mover and shaker.

Bonds were able to regain some ground Thursday and Friday after their steep free fall on Wednesday, but even with the improvement, home loan rates ended the week .25% to .375% worse than where they began.


 Forecast for the Week

There will be big economic reports to bookend the week ahead, starting with Monday bringing the Fed's favorite gauge of inflation, the Core Personal Consumption Expenditure (PCE) index, which is found within the Personal Income Report. Remember, inflation is the archenemy of Bonds and home loan rates, and if this report shows inflation is on the rise, it could dampen the improvement that Bonds and home loan rates mustered up on Friday.

To end the week, Friday will bring the always important Jobs Report. Last month's report showed that there were 539,000 jobs lost in April versus expectations of a 610,000 loss, representing the smallest job loss since October. Even though the Unemployment Rate moved higher and hit a 26-year high of 8.9% in April, this is a lagging indicator, and many other data points have hinted that the worst could be over for the job market. It will be important to see if the most recent numbers continue to move in that direction.

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, Bond prices and home loan rates were able to end the week on an improving trend after record supply caused them to worsen dramatically midweek. I will be watching closely to see if Bonds can continue to climb their way out of last week's free fall.

Not All Yard Sales Are Created Equal

Summer is one of the most popular seasons for holding a yard sale. But simply holding a yard sale doesn't necessarily mean you'll end the day with lots of extra money in your pocket. If you're planning on clearing out your clutter this summer, here are ten tips to help make your yard sale a success:

Start your yard sale earlier than other yard sales in your area so shoppers will start their shopping day with you.

Don't schedule your yard sale on a holiday weekend or during a big event in your area (like a sporting event or festival).

If it rains, take down your signs and reschedule your sale so you can maximize traffic on the day of your sale.

Before your own yard sale, visit other sales in your neighborhood to get an idea of typical prices.

Place all of your items (except for large items) on tables so shoppers don't have to bend.

If you plan to sell electrical items, have an outlet and extension cord handy so you can show shoppers that the items work.

If you want to sell larger ticket items, look for those items in a local circular and then attach the ad to your item so shoppers can see that they are getting a great deal.

If you have a variety of items that men would like, place them on their own table. If married couples stop by your sale, both parties will enjoy looking.

Advertise your sale ahead of time in your local newspaper classified section, on community boards at your local food stores, and online at places like

Wait until the morning of your garage sale to hang signs in your neighborhood, and make sure you take them down that day to avoid any fines from your homeowner's association or your town. You don't want to have to use all the cash you earn to pay a fine!

And remember, a successful sale is also a safe sale. Keep money in a pouch around your waist instead of in a cash box (which could get stolen while you are helping shoppers), don't accept checks (which could bounce), and never allow strangers inside your home to use the bathroom or telephone.

Follow these tips, and you'll be well on your way to having less clutter in your home, and more cash in your pocket!



Updated 06/05/2009

Some Realtors Struggling With New Open House Sign Policy In Breckenridge

Over Memorial Day weekend, there were more than eight(8) open house sign code violations in Breckenridge. Six (6) open house signs were placed on Park Avenue, which is not allowed, and other signs were not in compliance with the new uniform sign requirements. The Town of Breckenridge has notified us of these violations, and indicated if it happens again, at a minimum, the signs will be confiscated. The Summit Association of REALTORS is working to identify the violators as well as continue educating REALTORS on the new sign code. REALTORS have been given one year to prove they can abide by the open house sign policy. If the town finds REALTORS not in compliance with the law, the sign code will be changed or completely revoked prior to completion of the first year of the law.

Eagle County Property Valuations Appeal Deadline is TODAY, June 1st.

Today is the deadline to appeal property valuations in Eagle County. Forms and more information can be found at . Citizens continue to be concerned about increased property valuations in Eagle County after a 42 percent increase in valuations in 2007. Rather than lower their mill levies as required by law, most Eagle County tax districts froze them, and received a windfall in tax revenues, at the expense of all property owners. Commercial real estate was hit even harder. According to a local Eagle County "Tea Party" group, property valuations across Eagle County just increased again despite a down economy and a real estate market that?s swirling in the toilet. The median increase for residential real estate is 13 percent this year, with some properties increasing by 100 percent and more. This is because Colorado law requires county assessors to value real property based on the market values from last year, or, technically, the 18-month period ending June 30, 2008, before the economy tanked. The Tea Party group is encouraging citizens to get involved to prevent property taxes going up again next January.



Tax Credit Guidance for FHA Loans Announced by HUD; Colorado benefits

In his speech at the National Association of REALTORS? Housing Summit on May 12, 2009, US Department of Housing and Urban Development (HUD) Secretary Shaun Donovan announced a program that allows borrowers to use the first-time homebuyer tax credit for a down payment or closing costs on a FHA-insured mortgage.

The details of the program were announced on Friday in Mortgagee Letter 2009-15. Government entities and instrumentalities of government may provide a second mortgage. Colorado is one of 10 ten states that offers a program buyers can use to monetize the tax credit for down payment purposes. Get information on these programs at . State Associations are encouraged to work with their respective housing finance agency to implement similar programs. The 3.5 percent down payment may also be a gift from a family member, employer or nonprofit, charitable organization.

The original guidance permitted lenders and HUD-approved nonprofits and lenders to offer bridge loans via second lien financing or short term loans. Guidance released today allows lenders to offer the monetized tax credit for down payments in excess of 3.5 percent, closing costs and interest rate buy downs. Mortgage industry leaders have indicated that this type of product may not be immediately available to consumers. Lenders will need some time to develop documentation for what will effectively be personal loans to the home buyer.



Glenwood and Aspen REALTORS Hold First Successful Fundraising Event!

Last Wednesday, the Glenwood Springs Association of REALTORS and Aspen Board of REALTORS cohosted a fantastic PSF (Political Survival Fund) fundraising event at the River Valley Ranch in Carbondale. The Glenwood Board raised almost $2900, and increased their percent to goal for 2009 from 23% to 60%! The event was held at the beautiful Destination Holdings Barn and was attended by many REALTORS and guests.

Many state and local executives attended the event including Amy Dorsey, CAR President, Bob Golden, CAR CEO, Rachel Nance, CAR VP of Public Policy, Wes Parham, CAR Government Affairs Manager, and Chris McElroy. In addition, State Senator Al White and State Representative Tom Massey attended, and Aspen County Commissioners and Garfield County Commissioners spoke to the REALTORS on local issues. Lois Dunn, from the Grand Junction Area REALTORS Association spoke on the importance of PSF and how the local associations work together on Government Affairs issues. It was a fantastic fundraising event and GSAR's local PSF chair Cheryl Chandler and State Chair Bob Fullerton were thrilled with the event and participation.


The Mortgage Market View...


If you've been following the financial news, you've probably heard that the Fed's been buying Mortgage Backed Securities and will continue to do so as needed. Unfortunately, some media outlets have picked up on the news and mistakenly reported that these purchases will continue to cause rates to drop lower into the summer.

But is that really what it means? No.

The truth is, the Fed has been buying Mortgage Bonds. BUT... more precisely, they're buying a lot of FNMA 30-yr 5.0% and 5.5% Bonds. Many of the mortgages in these pools are outstanding home loans with rates between 6.0% and 6.5%, as the rate that a borrower pays is different than the coupon rate given to an investor buying into that mortgage pool, with the difference being taken by Wall Street firms and government agencies. The loans in these pools the Fed is buying hand over fist are likely be refinanced and paid - because current rates make it very attractive to refinance a loan over 6.0% - and thus giving the Fed a quick recoup on some of their investment.

Bottom line: The Fed's purchase of higher rate coupons will not necessarily help rates to move lower, as their actions do not impact the loans being originated at today's low rates.


Last week saw the start of earnings season for the fourth quarter of 2008, and this is likely to be one earnings season everyone hopes passes quickly.

The beleaguered banking sector was in the spotlight throughout the week, as Citigroup reported an $8.29 Billion loss, completing its worst year ever since its inception in 1812. Bank of America also lost $1.79 Billion in the fourth quarter, making 2008 the bank's first yearly loss in 17 years.

And the news extended overseas as Deutsche Bank, which is Germany's largest bank, warned of a fourth-quarter loss of $6.3 Billion

There were a few bright spots to note during the week, however, as JP Morgan Chase surprised the market with an earnings report that beat's been awhile since a financial Stock actually surprised to the good side! In addition, Bank of America received a lifeline of $138 Billion from the government's $700 Billion rescue fund to help absorb their purchase of Merrill Lynch.

And in inflation - or lack thereof - headlines, the Consumer Price Index for 2008 was reported the lowest since 1954, indicating that inflation is definitely not a threat at this time.

So what did all the news of the week mean for Bonds and Home loan rates? They did manage to hold steady for most of the week as Stocks struggled with the barrage of poor earnings reports...but when Stocks rebounded on Friday, Bonds and home loan rates worsened, leaving rates at least .125% worse than where they began the week.

Remember, while Bonds and home loan rates are still at historic levels, there will be some volatile changes due to the many variables affecting the markets. It's more important than ever to have an advice-based strategy when it comes to your home loan, and we appreciate you trusting us with this role.




"BAD NEWS GOES ABOUT IN CLOGS, GOOD NEWS IN STOCKINGED FEET." Welsh Proverb. And while last week did have some negative economic reports clomping through the headlines, there was also some good news tiptoeing around.

The unemployment line is getting even longer, as Initial Jobless Claims showed that the number of people collecting benefits reached a record high of 5.11 million. Not surprisingly, Consumer Confidence fell to its lowest reading since records began in 1967. The sour report indicates that the fear of losing one's job has made the consumer more reluctant to spend.

Gross Domestic Product (GDP) is the broadest measure of economic activity - and for the 4th quarter of 08, came in worse than expectations and at its lowest reading since 1982. You can see the comparison for the last four years in the chart below.

The news on the housing front was also gloomy; as New Home Purchases dropped to the lowest level since data collection began in 1963. Existing Home Sales for January came in lower than expected; however, that number was probably influenced by buyers waiting to see what the government's Stimulus Plan might have in store for them.

The Treasury Department announced on Friday that they plan to take a 36% stake in Citigroup by converting $25 Billion of preferred shares into common stock. The move will dramatically dilute shareholder value, but should help bolster the struggling bank's capital base.

Some good news from Reuters, as they released the results of a survey of 47 professional forecasters, predicting that the economy will begin to recover in the second half of this year. Additionally, the Chicago Purchasing Managers Index was better than expected, and being a forward-looking indicator, gives another bright spot of hope down the road.

Despite the negative news, Bonds and home loan rates were not able to make improvements over the course of the week, and ended a bit worse than where they began.



The week ahead looks to be loaded with action yet again, as two key reports bookend the week. On Monday, we will get the details on the Fed's favorite gauge of inflation, the Core Personal Consumption Expenditure (PCE) index, found within the Personal Income report. As mentioned above, the Fed said they believe that "inflation pressures will remain subdued in coming quarters", so it will be important to see what this report reveals.

On Friday, the Labor Department releases their Jobs Report for January. Last month, they reported 524,000 jobs lost during the month of December. The employment environment continues to be shaky, with many major companies such as Home Depot, Caterpillar, Sprint, and Texas Instruments announcing job cuts recently. While all those cuts won't take place at once, Friday's number probably won't be a pretty one.

Remember: When Bonds prices move higher, home loan rates move lower and vice versa. As you can see in the chart below, Bonds and home loan rates lost some ground since the Fed's meeting last week. As always, I will be watching closely to see what happens this week - and encourage you to call me to learn more or discuss your own financial picture.



Higher, Non-Jumbo Loan Amounts Extended

For those who are considering taking advantage of the $8,000 tax incentive for first-time homebuyers which is included in the president's economic stimulus bill, there is some more good news that could make doing so easier and more accessible.

An extension is now officially in place on the higher loan limits for mortgages in the tier that lies just below what is considered a "jumbo" loan.

First established last year, and now extended through the end of 2009, limits on this additional tier provide opportunities for many who are looking to either refi or, better yet, take the plunge into first time home ownership and grab a piece of the highly publicized $8,000 tax incentive.

Here are some key points about this higher loan limit extension, announced by the Fair Housing Finance Agency this past week:

The non-jumbo, middle tier of home loans begins at loan amounts greater than $417,000 for single-unit homes.

The top end for this tier is $729,750 for single-unit homes.

The rates for these loans will again be slightly higher than conforming loan rates, but less expensive than the standard "jumbo" loan rates.

This higher limit on the non-jumbo tier is available in 250 counties across the United States.

We can provide you with information about qualifying for the opportunities that are provided by the stimulus plan.

Speaking of qualifying, if you are not sure if you if you can take advantage of the $8,000 tax incentive, here are some examples to help you better understand the income limits and phase-out structure.

The $8,000 incentive starts phasing out for couples with incomes above $150,000 and single filers with incomes above $75,000 and is phased out completely at incomes of $170,000 for couples and $95,000 for single filers.

To break down what this phase-out means, the National Association of Homebuilders (NAHB) offers the following examples:

Example 1: Assume that a married couple has a modified adjusted gross income of $160,000. The applicable phase-out threshold is $150,000, and the couple is $10,000 over this amount. Dividing $10,000 by $20,000 yields 0.5. When you subtract 0.5 from 1.0, the result is 0.5. To determine the amount of the partial first-time homebuyer incentive to this couple, multiply $8,000 by 0.5. The result is $4,000.

Example 2: Assume that an individual home buyer has a modified adjusted gross income of $88,000. The buyer's income exceeds $75,000 by $13,000. Dividing $13,000 by $20,000 yields 0.65. When you subtract 0.65 from 1.0, the result is 0.35. Multiplying $8,000 by 0.35 shows that the buyer is eligible to reduce the tax liability by $2,800.

Remember, these are general examples. Borrowers should consult a tax advisor to provide guidance relevant to their specific circumstances.


The Mortgage Market View...

Higher, Non-Jumbo Loan Amounts Extended

For those who are considering taking advantage of the $8,000 tax incentive for first-time homebuyers which is included in the president's economic stimulus bill, there is some more good news that could make doing so easier and more accessible.

An extension is now officially in place on the higher loan limits for mortgages in the tier that lies just below what is considered a "jumbo" loan.

First established last year, and now extended through the end of 2009, limits on this additional tier provide opportunities for many who are looking to either refi or, better yet, take the plunge into first time home ownership and grab a piece of the highly publicized $8,000 tax incentive.

Here are some key points about this higher loan limit extension, announced by the Fair Housing Finance Agency this past week:

The non-jumbo, middle tier of home loans begins at loan amounts greater than $417,000 for single-unit homes.

The top end for this tier is $729,750 for single-unit homes.

The rates for these loans will again be slightly higher than conforming loan rates, but less expensive than the standard "jumbo" loan rates.

This higher limit on the non-jumbo tier is available in 250 counties across the United States.

Teaching Moment for Children...

While you're watching the news on television or listening to it on your car's radio, your kids can probably hear--but not completely understand--the news too. That means now's a perfect time to turn the current economic news into a lesson on money and finances. One terrific website can be found at, which gives a very simple overview of the Fed and what they do, including a great definition of inflation that any small child can understand.



Government Affairs Alert: Proposed Shared Driveways Ordinance Revised

The Breckenridge Town Council has been considering a ordinance that would prohibit parking on shared driveways within the town limits except in approved spaces. That language would have prohibited a homeowner or guest from parking on a shared driveway even temporarily. Late last week the town attorney removed the contentious language from the proposed ordinance.

The revised ordinance will be proposed to the Town tomorrow night, but it will only limit parking on a shared driveway that blocks or hinders lawful access or which blocks emergency vehicles. The part about no parking at all on shared driveways has been removed entirely.

The Summit Association of REALTORS is now comfortable that the proposal does not violate private property rights, and will not oppose the measure at tomorrows council meeting.



Rate Review

In Freddie Mac Primary Mortgage Mkt Survey (for the week ending February 27) in which the 30-yr fixed-rate mortgage (FRM) avg. 5.07%, up from last week when it avg 5.04%. Last year at this time, the 30-year FRM avg 6.24%.

The 15-year FRM this week avg 4.68%, unchanged from last week. A year ago at this time, the 15-year FRM avg 5.72%.

Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) avg 5.06%, up from last week when it avg 5.04%. A year ago, the 5-year ARM avg 5.43%.

One-year Treasury-indexed ARMs avg 4.81%, up from last week when it avg 4.80%. At this time last year, the 1-year ARM avg 5.11%.


the Week's Economic Indicator Calendar

Economic Calendar for the Week of February 09 – February 13


We will provide details on our new broker loyalty program, the VRDC Pinnacle Program. This is specifically designed for Summit County Brokers for the winter season of 2008/2009.

If you sold a residence at One Ski Hill Place, Crystal Peak Lodge, Mountain Thunder Lodge & Townhomes or a lot at Timber Trail, you may collect your recognition gift at this event.

Recognition Breakfast:

Date and Time: Thursday, December 11th: 8:00 - 10:00 am

Location: Mountain Thunder Lodge, Breckenridge

Park in the gondola lot or in the garage below Mountain Thunder Lodge