MMG WEEKLY – WHAT ARE THEY SAYING THIS WEEK?

MMG Weekly / Vantage Production.blueForecast for the Week

In a light report week, investors will scour the words of the Fed’’s meeting minutes looking for clues regarding the next hike to the benchmark Fed Funds Rate.

  • On Tuesday, the ISM Services Index will be released.
  • Wednesday brings the March Federal Open Market Committee meeting minutes.
  • Weekly Initial Jobless Claims will be delivered on Thursday.
Remember: Weak economic news normally causes money to flow out of Stocks and into Bonds, helping Bonds and home loan rates improve. In contrast, strong economic news normally has the opposite result. The chart below shows Mortgage Backed Securities (MBS), which are the type of Bond on which home loan rates are based.
When you see these Bond prices moving higher, it means home loan rates are improving. When Bond prices are moving lower, home loan rates are getting worse.
To go one step further, a red “candle” means that MBS worsened during the day, while a green “candle” means MBS improved during the day. Depending on how dramatic the changes are on any given day, this can cause rate changes throughout the day, as well as on the rate sheets we start with each morning.
As you can see in the chart below, Bond prices moved higher recently following remarks by the Fed.

Chart: Fannie Mae 3.5% Mortgage Bond (Friday April 01, 2016)

Japanese Candlestick Chart

The Mortgage Market Guide View…

Upgrade Your Home, Insurance Policy Before Spring Storms Hit
Mother Nature’s forces of wind, water and hail account for more than half of all homeowners insurance losses.

By Pat Mertz Esswein, Kiplinger.com

Standard homeowners and renters policies cover the damage wreaked by wind, hail, falling water or wind-driven rain, but not from rising water from any source, including a sewer or drain backup or sump-pump failure. The cost can be substantial: Mother Nature’s forces of wind, water and hail accounted for more than half of all homeowners insurance losses between 2009 and 2013, with an average claim amount of $7,610, according to the Insurance Information Institute.

If you live in a federally designated flood zone, or if your house could be flooded by melting snow, an overflowing creek, or water or mud running down a steep hill, you can buy flood insurance from the National Flood Insurance Program (www.floodsmart.gov) by calling your insurance agent. The program covers homes for up to $250,000 of the cost to rebuild and insures contents for up to $100,000. The average premium is $700 per year, but rates depend on a home’s features and location.

Prevention pays. You can take steps to minimize the risk. Visually inspect your roof for damage, clean your gutters, and attach extensions to downspouts and regrade soil to divert water away from your home’s foundation. Test your sump pump and recharge its battery.

To avoid coming home and finding that a deluge has created a sodden (or worse, moldy) mess, install a remote alarm system, such as the Samsung Smart-Things Hub (about $300 with five water-leak sensors). It will notify you when the sensors–placed where leaks or overflow are most likely to occur–detect water. Home insurers usually offer their biggest discount for a combination of approved protective devices, which may include a water-leak detection system. State Farm offers discounts of 10% on the ADT Pulse home-monitoring system ($636 a year) and the Comfort and Control Kit for the Iris by Lowe’s smart-home system ($339). Plus, State Farm offers customers a premium discount of up to 10% to 15% for the ADT system and up to 2% to 7% for the Iris.

If your home (or neighbors’ homes) experience sewer backups, hire a plumber to install a sewer-backflow valve ($600 to $1,400) to keep pure nastiness from backing up through toilets and drainpipes into your home. The valve allows waste to flow out but closes when the flow reverses. You can also add, say, $5,000 of sewer-backup coverage to your homeowners policy for about $50 annually.

Fortify your home. Your roof is your home’s first line of defense against the elements. When it’s time to replace it, strengthen it. You can install impact-resistant shingles that are rated for superior resistance to hail damage, and you may earn a premium discount.

Four coastal states–Alabama, Georgia, Mississippi and North Carolina–require insurers to give homeowners a premium discount of 5% to 35% for retrofitting a roof to meet the “Fortified” standards of hurricane resistance developed by the Insurance Institute for Business & Home Safety (see www.smarthomeamerica.org). Florida, Louisiana, South Carolina and Texas have similar programs.

Also consider storm shutters ($9 to $30 per square foot of openings) or impact-resistant windows ($50 to $70 per square foot). Florida requires insurers to discount premiums by 35% to 44% for storm shutters that meet code.

Wherever you live, check with your insurance agent or state department of insurance to learn about incentives for preventing storm damage.

Reprinted with permission. All Contents ©2016 The Kiplinger Washington Editors. Kiplinger.com.

Economic Calendar for the Week of April 04 – April 08

Date
ET
Economic Report
For
Estimate
Actual
Prior
Impact
Tue. April 05
10:00
ISM Services Index
Mar
54.0
53.4
Moderate
Wed. April 06
02:00
FOMC Minutes
Mar
NA
NA
Moderate
Thu. April 07
08:30
Jobless Claims (Initial)
4/02
275K
276K
Moderate

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

Mortgage Market Guide, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated. Mortgage Market Guide, LLC does not grant to you a license to any content, features or materials in this email. You may not distribute, download, or save a copy of any of the content or screens except as otherwise provided in our Terms and Conditions of Membership, for any purpose. The material contained in this newsletter is provided by a third party to real estate, financial services and other professionals only for their use and the use of their clients. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice. Although the material is deemed to be accurate and reliable, we do not make any representations as to its accuracy or completeness and as a result, there is no guarantee it is without errors.

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