The past 3 days, the Resistance top has held steadfast, now creating a double top, which is even more difficult to move through. Where as sometimes rates will stay and linger at the top before pushing to the next level, today's indication is that there is still enough doubt in the world's economy that rates will soon again be heading back towards the 3.75% to 4% range from it's current rate of 4.25%, thereby creating a continuation of a low interest rate environment. Perhaps the world economy had nothing to do with it, and instead the FED stepped in these past 2 days to once again prevent a selloff in the rate. That kind of information is never shared. These indications are valid regardless if you are buying an Oregon Home Loan or a California Home Loan.

It is so interesting that mortgage interest rates are still tied to the 10 year bond. Understand what is happening to the bond and it is easier to predict where interest rates are heading. By the way, it does not matter if you are seeking an Oregon Home Loan or a California Home Loan, the 10 year bond affects all loans.

During the 1st week of November, interest rates hit a high point at 4.25%. From then until now, the 21st of March, rates moved up and down and eventually landed at its low point of 3.875%. However, these past 10 days, people started to sell the bond and invest elsewhere, and when that happend the interest rate started to rise.

On March 20th, the interest rate returned to the 4.25% high of November 1st and what happened on March 21st; the interest rate started to fall and it fell pretty significantly. Why did this happen? Because those that bought at the low of 3.75% sold at the November high of 4.25%. This simplifies the process, but is good enough for this blog.

It was a classic case of buy at the low point of the range and sell at the top of the range - a classic day trading strategy.

Now that rates dropped with the selloff at the high, it remains to be seen just what the rates will be doing in the next few weeks and months. If the March 20th high sticks and rates do not go higher, there is a good chance that the range since November 1st will continue, and we could see rates return to 3.875% - eventually.

If the bond breaks through the March 20th high (which created a double top with the November 1st high), after this pullback, then a new range higher is possible, with the March 20th high turning into the new low, and the next high point determined at a later date.

I think that most of this will depend on the earnings season that is soon upon us. If stocks show good gains and project strong future earnings, rates will probably go higher. If they show stagnation, there is a good chance that the 3.875% to 4.25% range will hold for the near future.

However, this does not take into account a few unknown variables. First how long will the FED continue to help subsidize  the bond market to keep rates low and how badly is the situation with the European Union. These two factors will also have their share of input into what happens to rates.

It does not matter if you are looking for California Home Loans or Oregon Home Loans, Bank of America is a giant in the industry who is responsible for many of the home mortgages sold in the United States. Even if you do not get a loan from this company, about half the time, Bank of America will end up owning your loan. It is part of their business to buy packages of loans from other lenders. After all they are number 1 in bank wealth.

But..... the bigger they are, the harder they fall and now Goliath is starting to fall...... Did you know that Bank of America has twice as much money, is twice as wealthy, as its nearest US bank rival Chase? Did you know that Bank of America HAD to buy Countrywide and Merrill Lynch as ordered by then Bush's Secretary of the Treasury Hank Paulson? Did you know that the CEO of Bank of America was told he would be FIRED if he did not? Now it is the same Countrywide and Merrill Lynch that are bleading this huge company dry. A simple twist of fate..... perhaps, or part of the Bush era manipulation of some of the largest companies in America. And who did Hank Paulson use to work for? Answer:  Goldman Sachs, who probably made the most moeny of any of them during the financial crisis. Go figure.

FYI - It was Ken Lewis who was told he would be fired if he did not buy Countrywide and Merrill Lynch.... now you know some of the rest of the story

NEW YORK (Reuters) - When Sean McGowan signed a contract to buy a New Jersey home in November, he didn't expect he'd still be living with his parents nearly a year later.

The deal fell through after two appraisals came in tens of thousands of dollars below the contract price, part of a wider trend of differences over property valuations that is compounding the U.S. housing crisis.

"It was very frustrating. We really wanted to move in," said McGowan, a 31-year-old real estate lawyer.

Many housing experts say low appraisals are yet another headwind for a housing market already suffering from a plunge in prices, high unemployment and tight credit.

Lenders are forced to cap their mortgage loans at the value set by appraisers and buyers and sellers often can't agree on how to make up the difference with an original deal price.

"It's hard to talk about any recovery of the housing market and home prices until the appraisal issue is squared away, and that is a broad issue," said Guy Cecala, publisher of Inside Mortgage Finance, a Maryland-based trade publication.

Sixteen percent of Realtors reported contract cancellations in July, matching June's level, which was the highest since March 2010, when the National Association of Realtors began collecting data.

Nine percent reported contract delays due to low appraisals, and 13 percent reported a contract was renegotiated to a lower price because an appraisal came in below the original price in the last three months, the NAR said.

Appraisers in the United States have long been used to controversy for their role in the country's housing market.

The appraisal system has been reformed in recent years to put a stop to the high estimates of property values that even appraisers admit helped inflate the housing bubble.

Many industry watchers argue the new regime has caused the pendulum to swing too far to the other side, inadvertently causing the opposite problem: artificially low appraisals.

"The industry, both from a lending perspective and appraising perspective, has gotten as outrageously conservative now as they were outrageously aggressive a few years ago," said Rick Sharga, senior vice president of data firm RealtyTrac.

APPRAISER PURSES PINCHED

In the run-up to the housing crisis, appraisers were accused of inflating home values to get work with realtors and mortgage brokers.

Mortgage finance agencies Freddie Mac and Fannie Mae have barred brokers and Realtors from any role in selecting appraisers since 2009. The Federal Housing Authority, which plays a key role in the U.S. housing market by insuring loans for low- and middle-income Americans, adopted a similar ban.

The three agencies together owned or insured around 90 percent of mortgages issued in the first half of the year.

As a result, 300 to 400 appraisal management companies (AMCs) have sprung up, mostly since 2009, to act as intermediaries between appraisers and lenders, according to the Appraisal Institute, an industry association.

AMCs hire contractors to provide 70 percent of residential appraisals, while the appraising arm of banks perform the rest, according to the same group.

Realtors and mortgage brokers, upset that their deals are often stymied by low valuations, say AMCs are to blame in large part for the conservative estimates. Some appraisers also resent the loss of high fees they used to receive.

"They are hiring these young guys and it's all based on price and not expertise," said Mike Evans, an appraiser and former president of the American Society of Appraisers, a trade organization.

"Some guy blows in from 300 miles away and grabs three comps that may not be in the right area, and leaves," he said, using the industry jargon for comparable sales that are used to evaluate a property's value.

Appraisers in Mexico, Britain and other countries are typically more educated than U.S. appraisers and work at small firms, according to David Bunton, President of the Appraisal Foundation.

AMCs and appraisal arms of banks take a cut of the appraisal fee which averages around $400, according to Evans. That leaves appraisers pushing for volume, not quality, he says.

"Because they don't want the scrutiny, they don't want to seem like they are going high, they just grab the three lowest sales" as comparables, said David Demuro, a residential appraiser in Florida.

Demuro mostly works for AMCs that pay at least $275 per job, but says some appraisal fees are as low as $150. Demuro averages 15 to 35 appraisals per month.

The Nine Most Important Rules when Applying for a Mortgage

Do not change jobs, become self-employed or quit your job.

Do not buy a car, truck or van.

Do not use charge cards excessively or let your accounts fall behind.

Do not spend money set aside for closing.

Do not stop making your mortgage payments while waiting for a refinance to go through.

Do not agree to have your credit be run.

Do not make large deposits, cash or otherwise, into your savings or checking account unless it is from your paycheck(s) or you can verify their source. 

Do not change bank accounts

Do not co-sign for a loan for anyone.

How the Bubble Destroyed the Middle Class
by Rex Nutting

Commentary: Sluggish growth is no mystery: No one has any money

A lot of people say they are deeply puzzled by the slow recovery in the U.S. economy. They look at the 9+% unemployment rate and the mediocre growth in national output, and they scratch their heads and wonder: Where is the boom that inevitably follows a deep bust, such as we experienced in 2008 and 2009?

But there is no mystery. What other result would you expect from the financial ruin of the once-great American middle class?

And make no mistake, the middle class has been ruined: Its wealth has been decimated, its income isn't even keeping pace with inflation, and its faith in the American economy has been shattered. Once, the middle class grew richer each year, grew more comfortable, enjoyed a higher living standard. It was real progress in material terms.

But that progress has been halted and even reversed. In some respects, the middle class has made no progress in a generation, or two.

This isn't just a sad story about a few losers. The prosperity of the middle class has been the chief engine of growth in the economy for a century or more. But now our mass market is no longer growing. How could it? The middle class doesn't have any money.

There are a hundred different ways of looking at the economy, and a million different statistics. But if you wanted to focus on just one number that explains why the economy can't really recover, this is the one: $7.38 trillion.

That's the amount of wealth that's been lost from the bursting of housing bubble, according to the Federal Reserve's comprehensive Flow of Funds report. It's how much homeowners lost when housing prices plunged 30% nationwide. The loss for these homeowners was much greater than 30%, however, because they were heavily leveraged.

Leverage is an amazing thing: When prices go up, the borrower gets all the gains. And when prices go down, the borrower takes all the losses. Some families lost everything when the bubble collapsed, others lost very little. But, on average, American homeowners lost 55% of the wealth in their home.

Most middle-class families didn't have much wealth to begin with — about $100,000. For the 22 million families right in the middle of the income distribution (those making between $39,000 and $62,000 before taxes), about 90% of their assets was in the house. Now half of their wealth is gone and it will never come back as long as they live.

Of course, rich folk lost lots of wealth during the panic as well. Their wealth is mostly in paper not bricks — stocks, bonds, mutual funds, life insurance. The market value of those assets fell further than home prices did during the crash, but they've mostly recovered their value now. The S&P 500 lost 56% of its value when it crashed, but it's doubled since then. Stocks are down about 13% from peak.

The rich recovered; the rest of us didn't.

If losing half your meager life savings weren't bad enough, the middle class has also been falling behind in terms of income for decades. Families in the middle make most of their money the old-fashioned way: Working their fingers to the bone for 40 years for wages and a modest pension.

Their wages have been flat after adjusting for inflation. In the late 1960s, the 20% of families right in the middle were earning almost their full share of the pie: they had 17.5% of total income. Their share has been falling steadily ever since. Now, that 20% is earning just 14.6% of all income. Meanwhile, the top 5% captured a growing share, going from 17% in the late 1960s to 22% today.

The housing bubble was the last chance most middle-class families saw for grasping the brass ring. Working hard didn't pay off. Investing in the stock market was a sucker's bet. But the housing bubble allowed middle-class families to dream again and more importantly to keep spending as if they were getting a big fat raise every year.

Now that the bubble has burst, homeowners are putting money INTO their homes, not taking it out. The impulse to pay down the mortgage and the credit card is reducing the amount of money we're spending on other things. Since 2007, instead of taking $2 trillion out of their house, homeowners have put $1.3 trillion into them.

You think that might be having an impact on consumer spending? No one knows how far it needs to fall before American families are comfortable with how much they owe.

The slow growth in the economy is no mystery: Most families don't have any extra money to spend. It will take a long time for the middle class to rebuild its wealth, especially if we don't find some work.

The crazy thing is that our leaders aren't even talking about this crisis. With the upper classes prospering and global markets booming, they don't need the U.S. middle class any more. The market is up, profits are soaring, and the corporate jet is fueled and ready for takeoff.

And if the middle class can't buy bread? Let them eat cake.