Fannie Mae has established a points-and-fees test on subprime loans to provide lenders with clearer guidance on what high-cost loans the mortgage company will not purchase. “Fannie Mae will not purchase or securitize a mortgage if the total points and fees charged to the borrower exceed the greater of 5% of the mortgage amount or a maximum dollar amount of $1,000,” says an April 14 announcement that goes into effect June 1. Current guidance states that Fannie will not purchase high-cost loans as defined by state predatory-lending laws. The government-sponsored enterprise also has a long-standing policy against purchasing high-cost loans as defined by the federal Home Owners and Equity Protection Act. Fannie Mae can be found online at http://www.fanniemae.com.

 

 

 

Thursday’s bond market has opened fairly flat despite weaker than expected economic news. The stock markets are mixed with the Dow up 57 points and the Nasdaq down 12 points. The bond market is currently nearly unchanged form yesterday’s close, therefore we should see little change in this morning’s mortgage rates.

The Conference Board posted its Leadin g Economic Indicators (LEI) late this morning, showing a decline of 0.1%. This means that the index expects to see a slight decline in economic activity over the next few months. This is good news for the bond market, especially since no change from February’s reading was expected. Further good news came in a 0.3% downward revision to February’s reading of a 0.2% drop.

The Labor Department released weekly unemployment claims figures this morning, saying that 303,000 new claims were filed. Analysts were expecting to see 308,000 new claims, so we can consider this news to be negative towards bonds. However, the data usually has little impact on bond trading or mortgage rates.

There is no relevant economic news scheduled for release tomorrow. This should keep bond prices and mortgage rates relatively calm unless we see significant moves in the major stock indexes. We are in the midst of earnings season for stocks, therefore we may see volatility if key earn ings reports miss or beat expectations. Those gains or losses in stock could affect bond trading and possibly mortgage rates.

If I were considering financing/refinancing a home, I would…. Lock if my closing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… Float if my closing was taking place between 21 and 60 days… Float if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

 

 

 

 

What It Costs

Housing economist Robert Sheehan calculated major repair and replacement costs on an upscale hypothetical brick house over 30 years. The analysis assumed the home was priced at $38,300 new in 1968 and is worth $250,200 today. Mr. Sheehan used standard industry sources to estimate the lifespan of various components as well as the cost of labor and materials.

Total Out-of-Pocket Costs

Bathroom update: $ 26,194

Kitchen update (minor): 7,743

Kitchen update (major): 29, 767

Exterior paint (trim only, three times): 911

Interior paint (four times) 9,161

Carpet replacement (three times): 10,201

Furnace/air conditioning: 3, 088

Water heater: 642

Roofing: 2,082

Insulation: 68

Window replacement: 9,796

Door replacement and garage-door openers: 1,861

Deck addition and replacement: 18,905

New light fixtures: 191

Six ceiling fans: 1,323

Smoke detector: 105

Washer replacement: 466

Dryer replacement: 348

Finish basement and one update: 17,934

Total: $140,786

 

Read more…

By Jim McCraigh

Successful marketers constantly test new direct marketing headlines. Even when they think they have a good one, they keep testing. One small change to a headline can cause one to outperform another by a HUGE margin. Let me explain.

Consider an ad tested with these two headlines: 1.) “How to Avoid These Mistakes in Painting Your House”

2.) “How to Paint Your House Yourself” Headline #2 out-performed #1 by 16 percent. Here is another example, same body copy, different headlines:

3.) “A Warning to Dog Owners!”

4.) “Keep Your Dog Safe This Summer” Headline #4 out-pulled #3 by 60 percent. Here is an example of a wildly profitable headline that ran for decades. Can you tell which one it is?

5.) Do You Make These Mistakes in English?

6.) Do You Make Mistakes in English?

There is only one word difference between these two headlines. Copywriting experts at the time were divided 50-50 on which one would produce the best results. The #5 has the reader wondering if they make those mistakes, a possible source of embarrassment. Or they may read it to prove to themselves that they are actually in command of the English language and feel better about themselves. The second asks a question that can be answered with a simple yes or no, and does not engage the reader beyond that. As you correctly guessed by now, headline #6 was a flop. Headline #5 went on to become a huge moneymaker over many years for the company.

The key to improving your headlines is to TEST, TEST, and TEST! Split testing is the most common way to test headlines. Sure, you can show them to employees and friends around the office for some directional feedback, but you’ll never be sure which headline will actually outperform another without a true market test.

For example, a direct mailer can be tested by printing half with one headline and the other half with another. Use a code on your materials to track results. (Ask buyers for that code when accepting orders). Keep quantities mailed small at first until you are able to clearly identify which one works best. That way the bulk of the mailing can enjoy use of the best headline. (This is usually 5000 or fewer pieces or emails.) Change only the headline when you test, nothing else, not even the weight of the paper, day of the week, or ink color – or you won’t be able to accurately tell what caused any difference in response.

When you think that you have a really good headline, run with it for a while. Then test it against others at some point see if you can find another that outperforms it. Top marketers will continually test even top performing headlines to see if they can improve upon there success! If you are really serious about testing your headlines, create a fresh point of view by using a second copywriter to develop alternative headlines! Never be satisfied!   Jim McCraigh is the author of “How to Write Words that Sell.” His website is McCraigh.com.