St. Louis Refinancing Group » unemployment

St Louis Mortgage Lending and Brokers: 9 Percent Unemployment

liberty — Mon, 06 Feb 2012 19:49:55 +0000

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St. Louis Mortgage Refinancing, Home Loans and Customer Financing News: 9% Unemployment Still Hitting Economy Hard

St Louis Home Loan, Financing for Customers and Consumer Lending | Principal Reduction Program | 314-334-0210 | St Louis Commercial Mortgage, Consumer Finance and Principal Loan Reduction

The government reported 80,000 total jobs were added in October. There were 104,000 private sector positions added in professional and business services, leisure and hospitality, health care and mining, and 24,000 government jobs were lost. The unemployment rate fell slightly to 9 percent from 9.1 percent in September.

“We have to remind ourselves that things are so bad that this looks good. In the context of what we’re living through, it’s not a bad report,” said Dan Greenhaus, global market strategist at BTIG. There were a few positives in the report, including upward revisions to September and August payroll employment. August non-farm payrolls nearly doubled, from 57,000 to 104,000 and September was revised up to 158,000 from 103,000.

“Rescued by revisions,” writes Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi. “It feels like there’s more small business formation that’s going on that’s not getting reported right away. This is the second month in a row where we had substantial revisions,” said Moody’s Economy.com chief economist Mark Zandi.

The average work week for private sector workers was unchanged at 34.3 hours, but the manufacturing work week rose by 0.2 hours to 40.5 hours, and production and non supervisory employees’ work week rose by 0.1 hour to 33.7. Average hourly earnings for all private sector employees rose by 0.2 percent. “That’s fodder for spending,” said Zandi.

Zandi said, however, the positives have to be taken in the context of lowered expectations. He said the report shows the recovery has overcome obstacles and is showing resilience.

“This is still too early whether to assess whether the coast is clear. Europe is still raging,” Zandi said. The highest monthly employment gain in the recovery so far was February, 2011 when 235,000 jobs were added, but job growth has been stubbornly slow and slowed to a trickle in the summer. Over the past 12 months, payroll employment has increased by an average of 125,000 per month. This week, the Fed revised its economic forecast to include a high unemployment rate of through 2014, adding to speculation the Fed will do more easing in an effort to boost employment. Even in 2012, the Fed does not expect the unemployment rate to fall below 8.5 percent. “We’ve been at 9 percent since 2009. This is a major problem,” said Greenhaus.

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In addition, if you need commercial financing or a merchant account company that will save you money, Floyd Tapia and his lending and new business resources team can focus on bringing you innovative private lending solutions and financial services to meet all types of financing needs. Let us turn your challenges into closings (or from being underwater equity wise) and help you get a St Louis commercial lending, mortgage or financing loan.

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St Louis Mortgage Lending or In House Financing: Another Recession May Be Coming

liberty — Wed, 11 Jan 2012 19:58:08 +0000

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St. Louis Finance and Customer Financing News: Recession To Be or Not To Be?

St Louis Home Loan, Financing for Customers and Consumer Lending | Principal Reduction Program | 314-334-0210 | St Louis Commercial Mortgage, Consumer Finance and Principal Loan Reduction

A summer of modest economic growth is helping dispel lingering fears that another recession might be near. Whether the strength can be sustained is less certain.

The economy grew at an annual rate of 2.5 percent in the July-September quarter, the Commerce Department recently said. But the growth was fueled by Americans who spent more while earning less and by businesses that invested in machines and computers, not workers.

The expansion, the best quarterly growth in a year, came as a relief after anemic growth in the first half of the year, weeks of wild stock market shifts and the weakest consumer confidence since the height of the Great Recession.

The economy would have to grow at nearly double the third-quarter pace to make a dent in the unemployment rate, which has stayed near 9 percent since the recession officially ended more than two years ago.

For the more than 14 million Americans who are out of work and want a job, that’s discouraging news. And for President Barack Obama and incumbent members of Congress, it means they’ll be facing voters with unemployment near 9 percent.

“It is still a very weak economy out there,” said David Wyss, former chief economist at Standard & Poor’s. For now, the report on U.S. gross domestic product, or GDP, sketched a more optimistic picture for an economy that only two months ago seemed at risk of another recession.

Some economists doubt the economy can maintain its modest third-quarter pace. U.S. lawmakers are debating deep cuts in federal spending next year that would drag on growth. And state and local governments have been slashing budgets for more than a year.

Obama’s $447 billion jobs plan was blocked by Republicans, meaning that a Social Security tax cut that put an extra $1,000 to $2,000 this year in most American’s pockets could expire in January. So could extended unemployment benefits. They have been a key source of income for many people out of work for more than six months.

Nor is the economy likely to get a lift from the depressed housing market. Typically, home construction drives growth during an economic recovery. But builders have been contributing much less to the economy this time. Wyss said that the collapse of housing had probably depressed annual growth by as much as 1.5 percentage points in the past two years.

Paul Ashworth, chief U.S. economist for Capital Economics, predicts that growth will cool in the fourth quarter and next year. “While our baseline forecast does not include an outright contraction, we expect GDP growth to average a very lackluster 1.5% next year,”Ashworth said in a note to clients.

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St Louis Mortgage Lending and Customer Financing: More Foreclosures Coming

liberty — Fri, 06 Jan 2012 14:32:34 +0000

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St. Louis Home Loan Mortgage and In-House Financing News: More Foreclosures on the Way

St Louis Home Loan, Financing For Customers and Consumer Lending | Principal Reduction Program | 314-334-0210 | St Louis Commercial Mortgage, Consumer Finance and Principal Loan Reduction

Two key indices of home prices likely fell in August, suggesting large numbers of foreclosures and continued high joblessness are acting as a drag on the market, according to a new forecast.

The Case-Shiller 20-city composite home price index, scheduled to be released on Tuesday, likely fell 3.8 percent in August from a year earlier and 0.3 percent from July on a seasonally adjusted basis, said a forecast from Zillow Inc. chief economist Stan Humphries. The downward trend will continue through the end of the year, he predicts.

“We expect to see continued home value depreciation as unemployment and negative equity remain high,” said Humphries. “The large foreclosure pipeline will produce relatively low priced REOs in the market, putting downward pressure on prices going forward, and we do expect the pace at which homes exit this pipeline to pick up in the near-term.”

The Case-Shiller 10-City composite index is expected to register a seasonally adjusted decline of 3.5 percent in August from the previous year, and 0.2 percent compared to July.

“After showing monthly appreciation earlier this year and building some momentum, recent weak economic data is starting to be reflected in home values,” Humphries said. “Existing home sales have been disappointing, with September sales down 3 percent from August.” Humphries is bearish on the overall housing market for at least the next year.

A survey of more than 100 economists by Pulsenomics shows the median expectation for that group is a decline in the Case-Shiller 20-city index of 2.8 percent in the fourth quarter from the final three months of 2010.

Zillow, on the other hand, is projected a 4.5 percent decline, and then another 2.5 percent drop from the fourth quarter of 2011 to 2012. Zillow has a strong track record of accurately forecasting changes in these Case-Shiller indices.

Zillow’s July forecast for the non-seasonally adjusted 20-city index was off by just 0.1 percentage point, coming in at 4.0 percent compared to the actual number of 4.1 percent.

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St Louis Mortgage Broker and House Loan: Misery Index Is Bad News

liberty — Sun, 15 May 2011 14:41:03 +0000

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St Louis Finance Lending and Customer Financing News: Misery Index Means Trouble For Current Administration
St Louis Home Mortgage and Commercial Loans | Principal Reduction Program | 877-334-0210 or 314-334-0210 | Floyd Tapia, St Louis Commercial Lending, Consumer Lending and Loan Modification

The Misery Index has proven costly to past presidential administrations.

This index is a simple calculation that became a political hot potato in the late 1970′s and early 1980′s.

By adding the unemployment rate and inflation together, the index gave policy makers a tool by which to measure economic misery.

The Misery Index ultimately helped Jimmy Carter to the White House in 1976 and then helped Ronald Reagan to evict him in 1980.

Carter rode to power claiming that a ‘Misery Index’ of 13.5 percent was far to high for a country of America’s dominance before watching in horror as the very same index jumped to over 20 percent during his one, and only term in office.

“As a glance at US history shows, the Misery Index is a good predictor for political change,” Guy Monson, a fund manager at Sarasin, told CNBC.com in an interview.

Monson continues: “Typically, the social challenges imposed by a higher cost of living and/or unemployment often prove a catalyst for change in leadership, and even more dramatic political turbulence. The underlying assumption here is that a rising combination of prices and joblessness will have economic and social consequences.”

And as President Barack Obama prepares for his re-election run, the U.S, Misery Index currently stands at 11 percent and could go higher.

Would this be high enough for a political shift?

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St Louis Home Mortgage: Foreclosures Spreading

liberty — Mon, 18 Apr 2011 15:18:46 +0000

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St Louis Finance and Loan News: Foreclosures Spread
St Louis Mortgage Refinancing and Commercial Loans | Principal Reduction Program | 877-334-0210 or 314-334-0210 | Floyd Tapia, Commercial Lending and Loan Modification Advocate

According to a report released early in 2011 by RealtyTrac, one out of every 9 homes in Las Vegas, Nevada received some kind of default notice in 2010.

But there seems to be a silver lining: The foreclosure rate is actually dropping in Vegas which was down 7 percent compared to the end of 2009 according to the St Louis Refinancing Group news team.

In fact, rates fell in all top 10 foreclosure markets of 2010. In second highest foreclosure market, Cape Coral, Florida, the filings dropped 28 percent.

In third place came Modesto, California, which filings fell 13 percent. And in forth place was Phoenix which numbers dipped to 7 percent.

But even as foreclosures fell in the worst-hit areas, they rose in 72 percent of the 206 metro areas covered by RealtyTrac’s report.

Foreclosures have spread beyond the original bubble cities as the economy melted down through this mortgage crisis.

Unemployment rates spiked nearly everywhere, and people out of work cannot make their mortgage payments.

In addition, under the new FHA rules, they can no longer count unemployment benefits as income when applying for a loan modification.

As a result, there is now a cohort of metro areas that did not enjoy the housing boom but are now enduring double-digit foreclosure spikes.

For example, Houston foreclosures grew by 26 percent which is the biggest jump by any of the 20 largest metro areas to one for every 62 households.

The city especially suffered from a bleak job picture, with unemployment rising to 8.6 percent in November 2010 from 8.1 percent a year earlier.

Atlanta rose to 25th place with a 21 percent jump in 2010 filings following a 42 percent spike in 2009.

And heading westward, Salt Lake City filings ballooned by 30 percent in 2010 which placed them a solid 27th place.

Bubble state cities still dominate the top of the list, however, accounting for 19 of the 20 top markets.

And the easing in these worst-hit markets may be temporary, said Rick Sharga, spokesman for RealtyTrac.

He forecasts a foreclosure rise again in the Sand States in 2011 as banks restart their engines.

Overall, he thinks, foreclosures should plateau and stay at about the same level throughout 2012.

“Until jobs come back, we won’t see much of a change,” Sharga said.

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St Louis Home Mortgage: Federal Reserve Did Not Help Economy

liberty — Thu, 07 Apr 2011 16:38:15 +0000

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St Louis Finance Lending and Loan Reduction News: Surprising Financial Turn as Federal Reserve’s Policy Helped Stocks And Not Economy
St Louis Mortgage and Commercial Loans | Principal Reduction Program | 877-334-0210 or 314-334-0210 | Floyd Tapia, Commercial Lending and Loan Modification Advocate

According to a CNBC Fed Survey in December, the Federal Reserve’s policy to purchase $600 billion of bonds in a program widely known as QE2 has been mostly ineffective at lowering interest rates and will do little to improve the unemployment rate.

The survey of 76 economists, bond and stock traders, and analysts, found about 62 percent saying the Fed’s program has been ineffective at lowering interest rates.

A similar percentage believes the program will not help lower the unemployment rate.

But respondents to the survey say the Federal Reserve’s program has played an important part in raising stock and commodity prices.

In fact, nearly three-quarters of the group say the Fed’s bond purchase program has helped raise stock prices, while 63 percent see it as a reason why commodity prices are higher.

The Federal Reserve has been the subject of strong criticism since launching its QE2 program in November.

Fed Chairman Ben Bernanke suggested it was a way to lower interest rates and unemployment.

Since November, however, yields on treasuries have risen by nearly a percentage point.

Asked the reason for the increase in yields, 62 percent of the survey respondents said the main reason was a stronger growth outlook.

Their next choice was a worsening outlook for the deficit, likely the result of the recent tax compromise in Washington, followed by a rise in the inflation forecast.

“The economy is strengthening and the extension of the Bush tax cuts for all taxpayers is playing a more important role in boosting growth expectations than QE2 is,” says RDQ Economics chief economist John Ryding.

Overall, 71 percent believe the Fed will follow through and purchase the entire $600 billion of Treasuries announced in November.

Twenty-one percent believe the Fed will do less than that amount, and 8 percent think the Fed will do more.

As for QE3, 42 percent of market participants think there is a chance the Fed will continue to increase the size of its portfolio after June 2011.

On average, those who believe in QE3 look for the Fed to add an additional $340 billion in purchases.

But Mark Zandi, Chief Economist at Moody’s Analytics, disagrees, saying, “The passage of the tax cut deal significantly improves the economy’s prospects in 2011 and reduces the need for any additional QE.”

Add it all up, and 41 percent of survey participants give Fed Chairman Ben Bernanke a “B” grade and 27 percent give him an “A.”

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St Louis Mortgage: Weak Recovery For Years

liberty — Sun, 06 Mar 2011 02:38:45 +0000

St Louis Mortgage and Real Estate News –

St Louis Loan and Finance News: Federal Reserve Predicts Weak Recovery For Years
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According to minutes from the Federal Reserve’s November 2010 meeting, more than half of the central bank’s policymakers thought it would take about five or six years for unemployment, growth and inflation to return to more normal levels.

Other Fed members warned the full economic recovery could take even longer than that. The much weaker forecast is the major reason that policymakers decided to try and jump start growth by pumping an additional $600 billion into the economy through the purchase of long-term bonds.

That plan, known as quantitative easing (QE), has been criticized by several economists, politicians and foreign central bank officials.

The Fed now expects the economy to grow between 2.4 percent to 2.5 percent this year, compared to an earlier forecast of growth between 3.0 percent and 3.5 percent.

The Fed also trimmed its 2011 forecast to growth of between 3 percent and 3.6 percent. Its earlier estimate was for growth of 3.5 percent to 4.2 percent.

And the Fed now forecasts unemployment will only fall to between 8.9 percent to 9.1 percent in 2011, well above the 8.3 percent to 8.7 percent unemployment rate it previously predicted for 2011.

The Fed also indicated it expects unemployment to only drop to between 6.9 percent to 7.4 percent by 2013. To put that into context, the unemployment rate was 4.6 percent in 2007, the last year before the recession.

The central bank also maintained that inflation should not be a problem for the foreseeable future.

Prices for consumer goods are expected to rise a little faster than in the Fed’s previous estimate, but still well less than 2 percent through at least 2012.

The Fed stated that price increases are now judged to be too low to maintain its goal of price stability, but some policymakers at the Federal Reserve have expressed concern that the steps the central bank is taking to stimulate growth could lead to higher inflation down the road.

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Loan Reduction St Louis: Foreclosure Starts Rise

liberty — Wed, 02 Mar 2011 19:05:40 +0000

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St Louis Loan Audit and Finance News: MBA Says Foreclosures Down While Foreclosure Starts Rise
Home Mortgage and Commercial Loans | Principal Reduction | 877-334-0210 or 314-334-0210 | Floyd Tapia

According to the Mortgage Bankers Association’s (MBA) National Delinquency Survey (Foreclosures), the delinquency rate for mortgage loans on one-to-four-unit residential properties decreased to a seasonally adjusted rate of 9.13 percent of all loans outstanding as of the end of the third quarter of 2010.

This was a decrease of 72 basis points from the second quarter of 2010, and a decrease of 51 basis points from one year ago according to loan reduction experts.

The non-seasonally adjusted delinquency rate decreased one basis point to 9.39 percent this quarter from 9.40 percent last quarter.

The delinquency rate includes loans that are at least one payment past due but does not include loans in the process of foreclosure or in need of seeking a principle reduction program.

The percentage of loans on which foreclosure actions were started during the third quarter was 1.34 percent, up 23 basis points from last quarter and down eight basis points from one year ago.

The percentage of loans in the foreclosure process at the end of the third quarter was 4.39 percent, down 18 basis points from the second quarter of 2010 and down eight basis points from one year ago.

The seriously delinquent rate, the percentage of loans that are 90 days or more past due or in the process of foreclosure, was 8.70 percent, a decrease of 41 basis points from last quarter, and a decrease of 15 basis points from the third quarter of last year.

The combined percentage of loans in foreclosure or at least one payment past due was 13.78 percent on a non-seasonally adjusted basis, a 19 basis point decline from 13.97 percent last quarter.

“Mortgage delinquency rates declined over the quarter and over the past year, due primarily to a large decline in the 90+ day delinquency rate.The number of loans in foreclosure also dropped, bringing the serious delinquency rate to its lowest level since the second quarter of 2009,” said Michael Fratantoni, MBA’s Vice President of Research and Economics.

He goes on to say: “However, the foreclosure starts rate increased for all loan types and the foreclosure starts rate for prime fixed loans set a new record high in the survey, as more loans entered the foreclosure process.”

Most often, homeowners fall behind on their mortgages because their income has dropped due to unemployment or other causes.

Although the employment report for October was relatively positive, the job market had improved only marginally through the third quarter, so while there was a small improvement in the delinquency rate, the level of that rate remains quite high.

As we anticipate that the unemployment rate will be little changed over the twelve months, most financial professionals are expecting only modest improvements in the delinquency rate.

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St Louis Finance: Will Housing Struggle In 2011

liberty — Mon, 28 Feb 2011 17:42:30 +0000

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St Louis Loan Audit and Principal Loan Reduction News: According To A Rent Reuters Report The Housing Market Will Struggle In 2011
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According to a Reuters poll, the United States housing market will stagnate this year as foreclosures and joblessness sap the demand needed to mop up an excess of homes on the market.

While a housing recovery will be sustained, home prices, which have plunged by about a third since their 2006 peak, will barely rise next year.

Medians from the poll showed a mere 1.1 percent rise in 2010 and 1.0 percent in 2011.

Expectations for next year haven’t budged from the August poll, and won’t even keep up with the expected 1.6 percent rise in the consumer price index next year.

“Housing activity has likely bottomed, but the recovery will be slow and long-developing,” David Berson, chief economist at California-based mortgage insurer PMI Group, said.

The poll showed US homes are currently fairly valued, the same as in the last poll, assigning a score of 5 on a 10-point scale where 1 is extremely undervalued.

But medians from the poll suggest they have 5 percent still to fall from here.

Negative housing sentiment has grown with the U.S. unemployment rate lingering at 9.6 percent.

“The simple fact is that prices will not be able to rise when poor economic conditions continue to undermine demand and when foreclosures will continue to boost supply,” said Paul Dales, US economist at Capital Economics in Toronto.

After one or two months of delayed foreclosures, the country is likely headed for a record 1.2 million bank repossessions this year, said Rick Sharga, a vice president at RealtyTrac, a foreclosure listings and data firm in California.

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St Louis Home Loans: 2011 Is Looking Dismal

liberty — Fri, 25 Feb 2011 01:21:16 +0000

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St Louis Finance Lending and Loan Reduction News: Orszag Says 2011 May Be Looking Worse Than Originally Expected
St Louis Home Mortgage and Commercial Loans | Principal Reduction Program | 877-334-0210 or 314-334-0210 | Floyd Tapia, Commercial Mortgage Loan Modification

About two months ago, Peter Orszag, Obama’s former director of the Office of Management and Budget, offered his views to the media in a conference call entitled: “Out with the Rhetoric and In With the Facts on the Budget.”

The tectonic shifts in the financial sector, housing market, and subsequent (and ongoing) consumer de-leveraging pose drastically difficult obstacles for the Federal Reserve.

Orszag noted that, unlike slowdowns that are associated with monetary policy being tweaked in order to address inflation concerns, downturns triggered by the financial sector tend to take result in longer and more sluggish recoveries.

A recent study by Reinhart and Reinhart of roughly 30 similar instances of economic downturns triggered by difficulty in the financial sector suggests the following: that the average unemployment rate in the decade following such crises is 5 percent higher than immediately pre-crisis, that housing prices are 15-20 percent lower over the entire subsequent decade versus pre-crisis levels, and that government debt as a percentage of GDP is 90 percent higher than the pre-crisis level.

The increase in debt, according to Orszag, reflects the downturn itself and the policy measures that are taken to offset it. So what does the next 12-to 24 months look like?

First the positives:

1. Real exports are growing quite rapidly (aided by the weakened U.S. Dollar).

2. Investment in equipment and software has been growing nicely and firms are making significant investments in short-term assets. The problem on the investment side is in the long-term — assets with longer depreciation schedules are seeing a historically low share of investment allocation.

3. Corporate profits have improved. They were 12 percent of GDP in 2006 and 2007, falling to 9 percent in 2009 and are now back up to 11 percent of GDP on 2010. The difference between 9 percent and 11 percent represents $300 billion in GDP, so it’s significant step up.

One caveat pertaining to point number 3 is that the surge in corporate profits is not resulting in significant hiring or long-term investments. Rather the profits are being retained as liquid assets.

The psychological impact of the Great Recession is clearly impacting the behavior of both the consumer and corporate America.

The effectiveness, or lack thereof, of the Federal Reserve’s actions is leaving a huge question mark over the economic outlook.

Now the negatives: (The factors that supported growth in late 2009 and 2010 will become significant headwinds in 2011.)

1. The inventory cycle is going the wrong way in the first part of 2011; moving to net-neutrality towards impact on GDP growth. As a side note, Orszag noted that the sequential improvement in GDP in the third quarter was unintentional as some firms were caught out by the slump in demand during the summer and unintentionally built up inventories. That trend, Orszag expects, will reverse itself in the fourth quarter and the early part of 2011.

2. The Recovery Act, despite the controversy, added 2 percent or more to GDP in the first half of 2010. By design, the act called for all the money to be “out the door” by the end of September. Going forward, the cost of the Recovery Act will be net neutral and eventually in terms of cash flow will be a net negative to GDP growth.

3. The final factor is state and local deficits, which are projected to be $100 to $150 billion a year for the next two tears. Going forward, a much smaller share of them will be offset by federal subsidies, therefore a much larger share of the deficits will need to be reduced through tax increases and spending cuts at the state and local level.

Taking points two and three together added a net 2 percent to GDP in first half of 2010 and will be a negative 2 percent to growth in the first half of 2011.

If you then add the positive inventory cycle of 3.4 percent in the first half of 2010, you get the total contribution to GDP growth from the three factors of 5.4 percent during the first half of the year.

Depending on your view of the inventory cycle, we are looking at a potential year-over-year swing in GDP in the first half of 2011 of around 5.4 percent, which becomes a headwind in the next 12 to 24 months.

At best, we are looking at 0-2 percent GDP growth for the next 12-24 months.

What does all this mean for the consumer and the unemployment rate?

Under a good scenario, it’s going to be a hard slog of 1-2 percent GDP growth, which will prove to be inadequate to reduce the unemployment rate.

Here’s Orszag’s rule of thumb on this: Take whatever the GDP growth rate is, subtract 2.5 percent, and divide by two to get to the percentage change in unemployment.

So, to get a 1 percent reduction in the unemployment rate you need GDP growth of 4.5 percent for one year (4.5 minus 2.5 divided by 2).

Given the GDP headwinds outlined on the call, it seems unlikely that the unemployment rate will improve meaningfully any time soon.

This is particularly problematic for U.S. corporations levered to domestic demand.

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