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Over the last several months we've seen our economy take a severe beating. It started with the mortgage meltdown and is now seeping its way through Wall Street, the stock market and straight toward the credit card issuers. There are also signs that this trend has trickling down and is beginning to impact aspects of the consumer credit lending environment. These factors alone leave little doubt that we're facing one of the most severe economic environments since the great depression. While financial analysts and economists continue to debate over the impact that the $700 billion bail out will have on the average American consumer, none of us really knows for sure what will happen over the next 12 to 24 months. What we do know is that lenders have already begun to tighten up their lending requirements and this means continued changes in the consumer credit environment as this crisis evolves. It also means that many Americans are facing a stern wakeup call in regards to the way we currently view and manage our credit. It doesn't take a financial genius to figure out that the mortgage industry's lending practices were in dire need of a complete facelift. Two years ago, you could pretty much qualify for a mortgage with a minimum FICO score of 580 -- as long as you had a pulse. Not enough consideration was given to whether or not you could actually afford the loan or whether or not you had a high risk of defaulting on the loan itself. These days 'easy money' is a thing of the past. To give you an idea of how things have changed, in order to get the best deal on a mortgage today you're going to need a score in the 720+ range. And the score alone won't guarantee an approval - you'll also need to meet the new income and collateral requirements. And if you think this is only happening in the mortgage industry, think again. We're also beginning to see changes in the auto and credit card industries. Take GMAC for example, who recently announced that they would no longer approve loans for consumers that had FICO scores below 700. Other lenders like USAA, have not only increased their score cutoffs on their auto loans, but also on credit card and personal loan approvals. See the pattern? Make no mistake, lenders across the board are becoming more cautious and are beginning to safeguard themselves by looking for borrowers that pose less risk. Less risk means higher credit scores and more lenders are going to place even more emphasis on your credit scores and credit report data. So how does this impact the rest of us? The current state of our economy has many of us worrying about what tomorrow may bring. This means that a lot of us will need to take a step back, re-evaluate the way we manage our finances and our credit obligations, and start living within our means instead of beyond them. There are two important lessons that we can learn from this debacle: - Credit isn't a right - it's a privilege. How we manage our credit reports and credit scores are a direct reflection of our credit risk. For high scorers (750-780+), the credit crunch probably won't impact your ability to obtain credit when you need it. But for those that have poor credit and credit scores, it's going to be even more important than ever.
- It's time to start living within our means. That's right, it's time to take a step back and reevaluate our relationship with money and realize that if you can't afford something, then you shouldn't be buying it. This means reevaluating how and why we use credit cards. Is it to live an unrealistic lifestyle? If so, time to make the change.
The current financial crisis is a wake up call for all of us. And while many blame the current crisis on the sub-prime mortgage industry giving loans to consumers that shouldn't have been approved in the first place, (which may be true) -- we can't ignore the fact that consumers that got themselves into these loans should at least share a part of the responsibility. At some point, we all need to accept responsibility and be accountable for our own actions. CLICK HERE TO LEARN MORE ABOUT WE CAN HELP
Mortgage Bonds are trading higher, as Stocks trade slightly lower. There are no high-impact economic news reports scheduled for release today, so Bonds will likely take their direction from Stocks. In other news, it appears a $15 Billion rescue plan for GM, Ford and Chrysler is close to agreement in Congress. Also this morning, news reports indicate that five members of the House Financial Services Committee are sponsoring a bill that would force the SEC to reinstate the uptick rule. Since the removal of the uptick rule in July 2007, market swings have gone wild. So reinstating this rule could help alleviate the excessive volatility in both Stocks and Mortgage Bonds. For now, Bonds are holding steady at current levels. Therefore, I recommend continuing to float. I will keep an eye on the markets and let you know if the situation changes.
The November jobs report was released today showing some of the worst numbers in decades. Non-farm payrolls dropped 533,000 last month and was only the fourth time in 58 years that our economy lost over 500,000 jobs. The unemployment rate ticked up to 6.7%, the highest since October of 1993. The news sent the Stock markets lower while the Bond markets didn't have much of a reaction. We are currently in a bad economy and only news of a better report would have been a surprise. For today, I will continue to recommend floating, but be ready to lock because sentiment can quickly change.
For the 11th straight day Mortgage Bonds have touched the 200-day Moving Average. After a higher open, prices have bounced around and are now trading just above this important level. On the news front, Overall Consumer Price Index fell a record -1.0%, thanks to an 8.6% decline in energy prices. Housing Starts also fell 4.5% in October. And yesterday, Mortgage Bonds bounced higher after news that giant hedge fund Paulson & Co. has started buying beaten-up Mortgage Bonds in its Advantage Plus fund. The 200-day Moving Average is an amazing level to watch. Mortgage Bonds dipped below this level earlier today and now have settled right above this important floor. I recommend carefully floating for now, as we watch to see if Mortgage Bonds can build on the recent positive momentum.... More
Bad news continues to infiltrate the market today, as Japan becomes the latest economy to fall into a recession and fears of a worldwide recession have forced Stocks around the globe lower. In other news, banking giant Citigroup announced it will lay off 50,000 people on top of the 23,000 jobs they cut earlier this year. Additionally, Industrial Production showed a 1.3% rise; however, September's was revised lower to -3.7%--making it the largest monthly drop in industrial production in over 60 years. Currently, Mortgage Bonds are near unchanged levels and linger near the 200-day Moving Average for the 9th consecutive trading session. For now, I recommend floating, but be ready to lock if pricing drifts down...more CLICK HERE
Mortgage Bonds are higher this morning after Retail Sales numbers fell for the fourth straight month and plunged to their worst level since record keeping began in 1992. This is important information because it indicates a bad outlook for the retail industry overall and comes as we head into what looks to be the worst holiday shopping season in a long, long time. In other news, Fed Chairman Ben Bernanke spoke in Germany today, indicating that central bankers worldwide are prepared to take additional actions to unfreeze global credit markets. Earlier this morning, Bonds opened above the 200-Day Moving Average, but have since dipped back below this important level. For now, I recommend floating as we watch to see how Bonds react to the market news. However, if the situation changes, I will keep you posted. For Detailed video CLICK HERE
Bonds are facing some selling pressure this morning, as Stocks are attempting to stabilize and move higher after three days of hard losses. The modest rally in Stocks is a bit puzzling when you consider the continuing barrage of bad news, including lower future earnings guidance from Wal-Mart and Intel as well as the worst initial unemployment claims data since 2001. In other news, a $10 Billon auction in 30-year Treasury Bonds will hit the market at 1 pm Eastern Time. If the auction is not well embraced, Bonds could face additional selling pressure. Currently, both Stocks and Bonds continue to trade near important support levels. I recommend floating for now, but I will let you know if Bonds fall below support and a change in course is needed... more
Mortgage Bonds are trading higher so far this morning, in reaction to continued weakness in the Stock market. Adding to the negative sentiment in Stocks this morning are the poor earnings outlooks for Best Buy and Macy’s. These negative outlooks come right on the heels of Circuit City closing 150 stores. Suffice it to say, this holiday season doesn’t look good for retailers. There are no economic reports due out today, but at 1 pm Eastern Time the Treasury is set to auction off $20B in 10-Year Notes. If this auction is not well received, it could temper the current rally in Bonds. For now, I recommend floating as I continue to monitor the direction of Stocks and the reaction of Bond prices. For a detailed report CLICK HERE
I invite you to view our monthly "Did you Know" by numbers... CLICK HERESincerely, John Franco Credit Expert Aggressive Credit Restoration Services Office: 661.310.1514 Fax: 661.310.0447 www.ficorepair911.com Blog: www.johnfranco.com FOR VIDEO UPDATES VISIT www.videosbyjohn.com
Every month the coupon "rolls over". In this case, this month's coupon is closed out and all new loans are placed into next month's coupon. Think of it as the time they mature. The recently closed issue, loans that are satisfied 30 years from now, are packaged and sold. Because the seller or wholesale lender now has an additional 30-days, it is like having a 30-day extension on their rate lock. John Franco For Video Clips CLICK HERE
Stocks are higher this morning on the heels of a Stock rally in China that was ignited by the Chinese government's plan for a $586 Billion stimulus package. Should Stocks hold or add onto their gains, it will likely add selling pressure to Bonds. Also adding selling pressure to Bonds this week will be auctions of Treasury Notes today and Wednesday. In other news, the poor economy is being felt across the board, as Circuit City filed for Chapter 11 Bankruptcy and the department store Nordstrom is reporting that its growth rate is down 16%. Additionally, the automobile industry’s woes continue, as Deutsche Bank downgraded shares of General Motors from hold to sell, giving a price target of $0...yes, $0. Currently, Bonds sit very close to both the 50 and 200-day Moving Averages. For now, I recommend floating, but I will keep you posted of any changes. The Bond market closes early today at 2 pm Eastern Time and will be closed tomorrow for Veterans Day. Stock markets, however, will conduct their normal business hours this week. For a detailed video clip CLICK HERE
The Labor Department's Jobs Report came in much worse than analysts expected, with 240,000 jobs lost in October. In addition, the Unemployment Rate jumped to its highest level since 1994. In market news, Stocks are coming off their worst back-to-back days since the 1987 Stock Market crash. Although Stocks opened higher this morning, they could be in for more of a decline as today's poor Jobs Report sinks in. This could create selling pressure on Stocks, which may help bonds improve. Currently, prices are battling a strong ceiling of resistance. Should prices break out above current levels, it would be very bullish. Therefore, I recommend floating, even though prices are modestly weaker right now and may even worsen slightly before bouncing. For a detailed video clip CLICK HERE
Within the delinquent accounts on your credit report, there is a column called “Past Due”. Credit score software penalizes you for keeping accounts past due, so Past Dues destroy a credit score. If you see an amount in this column, pay the creditor the past due amount reported. Click for a VIDEO CLIP
1. GET RID OF YOUR COLLECTION ACCOUNTS. Did you know that paying a collection account can actually reduce your score? Here’s why: credit scoring software reviews credit reports for each account’s date of last activity to determine the impact it will have on the overall credit score. When payment is made on a collection account, collection agencies update credit bureaus to reflect the account status as “Paid Collection”. When this happens, the date of last activity becomes more recent. Since the guideline for credit scoring software is the date of last activity, recent payment on a collection account damages the credit score more severely. This method of credit scoring may seem unfair, but it is something that must be worked around when trying to maximize your score. How is it possible to pay a collection and maximize your score? The best way to handle this credit scoring dilemma is to contact the collection agency and explain that you are willing to pay off the collection account under the condition that the all reporting is withdrawn from credit bureaus. Request a letter from the collector that explicitly states their agreement to delete the account upon receipt/clearance of your payment. Although not all collection agencies will delete reporting, removing all references to a collection account completely will increase your score and is certainly worth the involved effort. For more info CLICK HERE
Well, needless to say the election was a landslide...Honestly, I kind of felt it was headed in that direction. I truely hope that he will live up to his WORD and help get this great Country back on track. Farewell to George W. Bush, love him or hate him, really, who would want to be in his shoes. The same goes for Obama, let's pray that he can ge the job done. Let's stick together as American's, fight and strive to be the great America that we are. God Bless to you all! Enjoy this pictures:
  
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