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Dan Rawitch - Market Update 10/26/2010


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2011 Interest Rate Predictions

Published in: Economy & Finance, Business
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Dan Rawitch - Market Update 10/26/2010

  1. 1. <ul><li>The purpose of our coaching call </li></ul><ul><ul><li>to connect as a community, </li></ul></ul><ul><ul><li>to learn the IDEAS that are working best </li></ul></ul><ul><ul><li>to get focused for the week ahead </li></ul></ul>Mortgage Coach Weekly Coaching Call
  2. 2. I’m passionate about finding sales and marketing breakthroughs and then making them predictable and scalable with technology Dave Savage
  3. 3. Connect with the Best Share ideas & strategies with the best in the business
  4. 4. <ul><li>FHA Loan Officer in 1978 </li></ul><ul><li>VP for Bear Stearns working with Larry Kudlow </li></ul><ul><li>Founded Data Fax </li></ul><ul><li>Founded RPM Mortgage in 1989 </li></ul><ul><li>CEO of FiNet </li></ul><ul><li>EVP with WMC </li></ul><ul><li>EVP at Ownit </li></ul><ul><li>Author of “Magnetic Wealth” </li></ul><ul><li>Founder of Milestone Mortgage </li></ul><ul><li>Husband and father of three </li></ul>Dan Rawitch
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  6. 6. Dan do you think interest rate will be higher or lower on Jan 1 st 2011?
  7. 7. What is your advice on how loan officers can use this advice and your presentation to get in front of top Realtors?
  8. 8. Please share your opinions and perspective on the future of interest rates
  9. 9. <ul><li>Key Driver to all other data that follows </li></ul><ul><li>If Inflation kicks above 3.5% the Fed will take foot off of Gas </li></ul><ul><li>Politics could play a role and we could trade short term improvements for long term disaster </li></ul><ul><li>Low risk of inflation, thus adding confidence to forecast </li></ul>Inflation Picture
  10. 10. <ul><li>No Room to go down </li></ul><ul><li>Fed pushes down through Spring of 2011 </li></ul><ul><li>Slight increases as economy improves late Q2 </li></ul>What will the FED do?
  11. 11. <ul><li>2000 point Dow correction in Q1/Q2 </li></ul><ul><li>Based on rising unemployment </li></ul><ul><li>Plunging GDP </li></ul><ul><li>Housing starts drop more </li></ul><ul><li>Drives one last flight to quality! </li></ul>How will the DOW behave?
  12. 12. <ul><li>Unemployment gets worse before improving </li></ul><ul><li>Remains too high throughout 2011 </li></ul><ul><li>Keeps easing pressure on Fed </li></ul><ul><li>Damages Demo chances, thus leading to tax cuts </li></ul>Unemployment Rate
  13. 13. <ul><li>GDP plunges in Q1 proving double dip forecasters right! </li></ul><ul><li>Helps keep pressure on FED </li></ul><ul><li>Provides ok refinance business </li></ul><ul><li>Holds down purchase business </li></ul>Do we double dip?
  14. 14. <ul><li>Housing Starts may lead the turnaround late in Q1 </li></ul><ul><li>Expect anemic starts through the Q4 2011, perhaps dipping once more </li></ul><ul><li>Existing home sales and inventory absorption will be drivers </li></ul>Housing Starts
  15. 15. <ul><li>Fed Intervention will be a huge and unquantifiable driver! </li></ul><ul><li>Expect dip in Q1 prior to a shake out in Q2 </li></ul><ul><li>Overall I see current levels plus or minus 75 bps as sustainable for yr </li></ul><ul><li>Typically this is not a Fed controlled instrument </li></ul>10 Year Bond Behavior
  16. 16. <ul><li>Most of the same logic as ten year comments apply </li></ul><ul><li>Spreads between the 10 year and MBS must remain constant to hold forecast </li></ul><ul><li>Rapid and sudden drop in values will widen the spread, due to quality fears </li></ul><ul><li>Increased Fed control could narrow the spreads </li></ul>Mortgage Rates
  17. 18. Why do I want to buy?
  18. 19. Once in a Lifetime? The Data Speaks Loudly!
  19. 20. Homes were LESS Affordable in the 70’s!
  20. 23. “ Pigs get fat and hogs get slaughtered” 18 months ago…rates were in the mid 6% range!
  21. 25. Key Takeaways <ul><li>2011 will be better than 2010 </li></ul><ul><li>Q1 2011 could be tough without momentum </li></ul><ul><li>Rates NOT purchases will save 2011 </li></ul><ul><li>A hiccup in rates and you suffer without purchase </li></ul><ul><li>It has seldom been easier to work with agents </li></ul><ul><li>Our job is to work together and build one another </li></ul><ul><li>Use Blogs, FTB seminars, press releases and office meetings to tell this story! The press sure is not getting it! </li></ul><ul><li>Scott, Tracy and Roberto will help you tie this together! </li></ul>
  22. 26. Become a “Trusted Advisor” 6% 5%
  23. 27. Simplify the Market & Create a Sense of Urgency
  24. 28. Success Stories in Share Success Stories with your peers & friends
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  29. 33. Thank you Dan Rawitch
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