Mortgage Pros, Inc.

Treasury 10-Year Note Yield Drops to Lowest Level This Year on Euro Crisis Treasuries climbed, pushing the 10- year note’s yield to the lowest level this year, as the response of European authorities to the sovereign-debt crisis drove investors to the relative safety of U.S. bonds.
Jobless Claims Declined 4,000 to 444,000 Last Week, and the number of people continuing to receive jobless benefits fell by 40,000 in the week ended May 8 to 4.63 million. They were forecast to drop to 4.61 million. It is not uncommon for claims to rise unexpectedly, especially when the labor market remains so fragile. This latest gain provides a stern reminder that the recovery will not be easy. The labor market situation has improved considerably from a year ago, but it will take several years more before returning to prerecession conditions.
Import Prices increased 0.9% in April, Ex- Petroleum costs of imported goods rose 0.3%. Prices for U.S. exports also increased in April, rising 1.2 percent after a 0.7% advance in March.
Philly Fed Business Outlook Survey Increased to 21.4 from 20.2 in April, as regional manufacturing activity continues to expand. Firms reported some expansion of overall employment again this month.
Conference Board Leading Indicators Index fell 0.1% in April, declining for the first time in more than a year. March’s increase was revised down to 1.3% from 1.4%. Key drags last month were shorter manufacturing delivery times, a smaller money supply, and fewer building permits. The coincident index rose 0.3%, the most since November. Together these indices signal that the burgeoning economic expansion remains fragile.
Idle Capacity in U.S. Economy Keeps Fed From Rushing to Sell Mortgage Debt The U.S. economy still has too much idle capacity and too little inflation for the Federal Reserve to start considering sales of $1.1 trillion in mortgage debt, central bank officials signaled at their meeting last month.
Fed Raises 2010 U.S. Growth Forecasts, Predicts Lower Unemployment Rates Federal Reserve officials raised their U.S. growth estimates for 2010 and lowered forecasts for unemployment and inflation, according to minutes of the Federal Open Market Committee meeting on April 27-28.
For those attending the MBA Secondary Conference: New York City Weather Forecast Highs near 80, low’s in the 60’s, chance of rain less than 20%.

Economic Indicator News Release Calendar for the weeks ahead

Thursday, May 20
United States
Date Value Consensus Forecast Previous
8:30 AM Jobless Claims 5/15/2010 440,000 442,000 444,000
10:00 AM Business Employment Dynamics 2009Q3 n/a n/a 6,420.0
10:00 AM The Conference Board Leading Indicators April 0.2% 0.2% 1.4%
10:00 AM Philadelphia Fed Survey May 22.0 21.3 20.2

Friday, May 21
United States
Date Value Consensus Forecast Previous
10:00 AM Regional and State Employment April n/a n/a N/A
10:00 AM Mass Layoffs April n/a n/a 1,628
10:30 AM ECRI Weekly Leading Index 5/14/2010 n/a n/a 132.0

Monday, May 24
United States
Date Value Consensus Forecast Previous
8:30 AM Chicago Fed National Activity Index April n/a n/a -0.07
10:00 AM Existing-Home Sales April 5.59 mil n/a 5.35 mil

Tuesday, May 25
United States
Date Value Consensus Forecast Previous
7:45 AM Chain Store Sales Snapshot 5/22/2010 n/a n/a 0.1%
9:00 AM S&P/Case-Shiller® Home Price Indexes March n/a n/a 0.6
10:00 AM The Conference Board Consumer Confidence May 59.1 n/a 57.9
10:00 AM FHFA Purchase-Only House Price Index March n/a -2.5% -3.4%
10:00 AM Richmond Fed Manufacturing Survey May n/a n/a 30
5:00 PM ABC News/Washington Post Consumer Comfort Index 5/23/2010 n/a n/a -47

Wednesday, May 26
United States
Date Value Consensus Forecast Previous
7:00 AM MBA Mortgage Applications Survey 5/21/2010 n/a n/a 578.1
8:30 AM Durable Goods (Advance) April 0.9% n/a -1.3%
10:00 AM New-Home Sales (C25) April 420,000 n/a 411,000

Thursday, May 27
United States
Date Value Consensus Forecast Previous
8:30 AM Jobless Claims 5/22/2010 n/a n/a 444,000
8:30 AM GDP 2010Q1 3.2% 3.5% 3.2%
11:00 AM Kansas City Fed Manufacturing Survey May n/a n/a 24

Friday, May 28
United States
Date Value Consensus Forecast Previous
8:30 AM Personal Income April 0.4% n/a 0.3%
8:30 AM ISM – NY Report May n/a n/a 429.4 index
9:45 AM ISM-Chicago May 63.0 n/a 63.8
10:00 AM University of Michigan Consumer Sentiment Survey May 73.5 74.5 73.3
10:30 AM ECRI Weekly Leading Index 5/21/2010 n/a n/a 132.0
3:00 PM Agricultural Prices May n/a n/a

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Consumer Price Index Declined 0.1% in April, Core CPI Unchanged for the second straight month. The top-line CPI is up 2.2% since February 2009, while the core rate rose 0.9 percent from April 2009, the smallest increase since January 1966, after a 1.1 percent year- over-year advance the prior month. Wide slack exists in key parts of the economy, keeping a lid on inflation.
FOMC Minutes to be released at 2:00 PM today.
Mortgage Purchase Applications Plummet While Refinance Applications Increase in Latest MBA Weekly Survey: The Market Composite Index -1.5%, Refinance Index increased 14.5% and the Purchase Index decreased 27.1%, the lowest Purchase Index observed in the survey since May of 1997. “Purchase applications plummeted 27 percent last week and have declined almost 20 percent over the past month, despite relatively low interest rates. The data continue to suggest that the tax credit pulled sales into April at the expense of the remainder of the spring buying season. In fact, this drop occurred even as rates on 30-year fixed-rate mortgages continued to fall, and at 4.83 percent are at their lowest level since November 2009,” said Michael Fratantoni, MBA’s Vice President of Research and Economics. “However, refinance borrowers did react to these lower rates, with refi applications up almost 15 percent, hitting their highest level in nine weeks.” The refinance share of mortgage activity increased to 68.1% from 57.7%, and the ARM share of activity remained constant at 6.3%. The average 30-year rate decreased to 4.83% from 4.96% and the average 15-year fixed-rate decreased to 4.19% from 4.32%.

Treasuries Fall as Euro Advances Versus Dollar, Global Stocks Trim Losses Treasuries fell as the euro rose against the dollar and global stocks pared losses, damping investor appetite for the refuge of U.S. government debt.
Delinquencies, Foreclosure Starts Increase in Latest MBA Survey. “Overall, we see a continuation of the pattern of declines in short-term delinquency rates, at least on a non-seasonally adjusted basis, the continued historically high share of delinquencies that are 90 days or more past due, and a leveling off in the pace of foreclosures. The percent of loans behind one payment had been declining as first-time claims for unemployment began falling in March 2009. Those new claims stopped falling during the first quarter of this year, which likely halted the decline in the underlying 30-day delinquency rate. If mortgage delinquencies are not yet clearly improving, it also appears they are not getting worse. However, a bad situation that is not getting worse is still bad. “For several years, the four states of Florida, Arizona, Nevada, and California have dominated the national delinquency and foreclosure numbers. Florida is still getting worse, but California is showing signs of improvement. However, Washington, Maryland, Oregon, and Georgia showed the greatest overall increases in foreclosures started compared to last quarter,” Brinkmann said.
Home Prices Projected to Begin Rebound in 2011 says consensus of analysts surveyed by professor Robert Shiller’s MacroMarkets and home prices will increase by more than 12.4% between 2010 and the end of 2014. The survey also revealed that home prices nationwide are expected to have risen 4.9% in the 12- month period ended March 2010. “The survey results are important because they represent a consensus view among experts with rich and diverse knowledge. In the May survey they see only the slightest hint of a downdraft in home prices this year, and after that a respectable uptrend in prices, well ahead of the likely inflation rate,” said Robert Shiller, MacroMarkets co-founder and Chief Economist. “However, there were a number of panelists more or less sanguine than average, some significantly so, and this reflects continuing volatility and risk in the U.S. housing market. The expectations within this first survey were provided following the end of the homebuyer tax credit and of the Federal Reserve’s $1.25 trillion mortgage-backed securities purchase program. It will be interesting to see how panelist views evolve in future months.”

Volcker Says Time Is `Growing Short’ for U.S. to Tackle Its Fiscal Deficit Former Federal Reserve Chairman Paul Volcker, a top outside adviser to President Barack Obama, said time is “growing short” for the U.S. to address problems ranging from its budget deficit to Social Security obligations.

Economic Indicator News Release Calendar for the weeks ahead
Wednesday, May 19
United States
Date Value Consensus Forecast Previous
7:00 AM MBA Mortgage Applications Survey 5/14/2010 n/a n/a 578.1
8:30 AM Consumer Price Index April 0.1% -0.1% 0.1%
10:00 AM MBA Delinquency Rates 2010Q1 n/a 9.12% 9.47%
2:00 PM FOMC Minutes April n/a n/a N/A

Thursday, May 20
United States
Date Value Consensus Forecast Previous
8:30 AM Jobless Claims 5/15/2010 440,000 442,000 444,000
10:00 AM Business Employment Dynamics 2009Q3 n/a n/a 6,420.0
10:00 AM The Conference Board Leading Indicators April 0.2% 0.2% 1.4%
10:00 AM Philadelphia Fed Survey May 22.0 21.3 20.2

Friday, May 21
United States
Date Value Consensus Forecast Previous
10:00 AM Regional and State Employment April n/a n/a N/A
10:00 AM Mass Layoffs April n/a n/a 1,628
10:30 AM ECRI Weekly Leading Index 5/14/2010 n/a n/a 132.0

Monday, May 24
United States
Date Value Consensus Forecast Previous
8:30 AM Chicago Fed National Activity Index April n/a n/a -0.07
10:00 AM Existing-Home Sales April 5.59 mil n/a 5.35 mil

Tuesday, May 25
United States
Date Value Consensus Forecast Previous
7:45 AM Chain Store Sales Snapshot 5/22/2010 n/a n/a 0.1%
9:00 AM S&P/Case-Shiller® Home Price Indexes March n/a n/a 0.6
10:00 AM The Conference Board Consumer Confidence May 59.1 n/a 57.9
10:00 AM FHFA Purchase-Only House Price Index March n/a -2.5% -3.4%
10:00 AM Richmond Fed Manufacturing Survey May n/a n/a 30
5:00 PM ABC News/Washington Post Consumer Comfort Index 5/23/2010 n/a n/a -47

Wednesday, May 26
United States
Date Value Consensus Forecast Previous
7:00 AM MBA Mortgage Applications Survey 5/21/2010 n/a n/a 578.1
8:30 AM Durable Goods (Advance) April 0.9% n/a -1.3%
10:00 AM New-Home Sales (C25) April 420,000 n/a 411,000

Thursday, May 27
United States
Date Value Consensus Forecast Previous
8:30 AM Jobless Claims 5/22/2010 n/a n/a 444,000
8:30 AM GDP 2010Q1 3.2% 3.5% 3.2%
11:00 AM Kansas City Fed Manufacturing Survey May n/a n/a 24

Friday, May 28
United States
Date Value Consensus Forecast Previous
8:30 AM Personal Income April 0.4% n/a 0.3%
8:30 AM ISM – NY Report May n/a n/a 429.4 index
9:45 AM ISM-Chicago May 63.0 n/a 63.8
10:00 AM University of Michigan Consumer Sentiment Survey May 73.5 74.5 73.3
10:30 AM ECRI Weekly Leading Index 5/21/2010 n/a n/a 132.0
3:00 PM Agricultural Prices May n/a n/a

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Net long-term capital flows to the U.S. jumped to $140.5 billion in March from $47.1 billion the prior month, the largest gain in recent years, as private foreign investors and foreign official institutions loaded up on dollar-denominated financial assets. Motivated by safe haven concerns and worries about the Greek debt crisis, private foreign investors increased their purchases of U.S. Treasury bonds and notes, government agency bonds, and even private corporate bonds. Foreign official institutions also were heavy buyers of safe U.S. Treasury bonds and notes.
Federal Reserve Bank of New York’s general economic index fell to 19.1 from 31.9 in April, which was the second- highest level in four years. Readings greater than zero signal gains in the so-called Empire State Index that covers New York, northern New Jersey and southern Connecticut.
Treasury Bears Retreat from Rate Rise Forecasts as Europe Demands Dollars Europe’s sovereign debt crisis is prompting some of the Treasury market’s biggest bears to reverse calls for Federal Reserve interest-rate increases this year.
Mortgage Rates Fall to 2010 Low in Freddie Mac Survey. The 30-year fixed-rate mortgage averaged 4.93% for the week ended Thursday, down from last week’s 5% average but up from 4.86% a year ago. Rates on 15-year fixed-rate mortgages were 4.3%, compared with 4.36% and 4.27%, respectively.
Recovery Rewards U.S. Investors With Unemployed Denying Historical Rebound The U.S. economy may return to its pre-crisis peak next quarter after a recovery former Federal Reserve official Peter Hooper calls “surprisingly strong, historically weak,” which has seen corporations and the rich prosper while small companies and the unemployed struggle.

Economic Indicator News Release Calendar for the weeks ahead
Monday, May 17
United States Date Value Consensus Forecast Previous
8:30 AM NY Empire State Manufacturing Survey May 19.1 30.0 30.7 31.9
9:00 AM Treasury International Capital Flows March $140.5 bil n/a n/a $47.1 bil
1:00 PM NAHB Housing Market Index May 20 19 19

Tuesday, May 18
United States Date Value Consensus Forecast Previous
7:45 AM Chain Store Sales Snapshot 5/15/2010 n/a n/a 0.1%
8:30 AM Producer Price Index April 0.1% -0.3% 0.7%
8:30 AM New Residential Construction (C20) April 0.650 mil 0.645 mil 0.626 mil
10:00 AM Internet Sales (E-Commerce Sales)* 2010Q1 n/a n/a 35.9 bil
10:00 AM Risk of Recession April n/a n/a 26%
5:00 PM ABC News/Washington Post Consumer Comfort Index 5/16/2010 n/a n/a -47

Wednesday, May 19
United States Date Value Consensus Forecast Previous
7:00 AM MBA Mortgage Applications Survey 5/14/2010 n/a n/a 578.1
8:30 AM Consumer Price Index April 0.1% -0.1% 0.1%
10:00 AM MBA Delinquency Rates 2010Q1 n/a 9.12% 9.47%
2:00 PM FOMC Minutes April n/a n/a N/A

Thursday, May 20
United States Date Value Consensus Forecast Previous
8:30 AM Jobless Claims 5/15/2010 440,000 442,000 444,000
10:00 AM Business Employment Dynamics 2009Q3 n/a n/a 6,420.0
10:00 AM The Conference Board Leading Indicators April 0.2% 0.2% 1.4%
10:00 AM Philadelphia Fed Survey May 22.0 21.3 20.2

Friday, May 21
United States Date Value Consensus Forecast Previous
10:00 AM Regional and State Employment April n/a n/a N/A
10:00 AM Mass Layoffs April n/a n/a 1,628
10:30 AM ECRI Weekly Leading Index 5/14/2010 n/a n/a 132.0

Monday, May 24
United States Date Value Consensus Forecast Previous
8:30 AM Chicago Fed National Activity Index April n/a n/a -0.07
10:00 AM Existing-Home Sales April 5.59 mil n/a 5.35 mil

Tuesday, May 25
United States Date Value Consensus Forecast Previous
7:45 AM Chain Store Sales Snapshot 5/22/2010 n/a n/a 0.1%
9:00 AM S&P/Case-Shiller® Home Price Indexes March n/a n/a 0.6
10:00 AM The Conference Board Consumer Confidence May 59.1 n/a 57.9
10:00 AM FHFA Purchase-Only House Price Index March n/a -2.5% -3.4%
10:00 AM Richmond Fed Manufacturing Survey May n/a n/a 30
5:00 PM ABC News/Washington Post Consumer Comfort Index 5/23/2010 n/a n/a -47

Wednesday, May 26
United States Date Value Consensus Forecast Previous
7:00 AM MBA Mortgage Applications Survey 5/21/2010 n/a n/a 578.1
8:30 AM Durable Goods (Advance) April 0.9% n/a -1.3%
10:00 AM New-Home Sales (C25) April 420,000 n/a 411,000

Thursday, May 27
United States Date Value Consensus Forecast Previous
8:30 AM Jobless Claims 5/22/2010 n/a n/a 444,000
8:30 AM GDP 2010Q1 3.2% 3.5% 3.2%
11:00 AM Kansas City Fed Manufacturing Survey May n/a n/a 24

Friday, May 28
United States Date Value Consensus Forecast Previous
8:30 AM Personal Income April 0.4% n/a 0.3%
8:30 AM ISM – NY Report May n/a n/a 429.4 index
9:45 AM ISM-Chicago May 63.0 n/a 63.8
10:00 AM University of Michigan Consumer Sentiment Survey May 73.5 74.5 73.3
10:30 AM ECRI Weekly Leading Index 5/21/2010 n/a n/a 132.0
3:00 PM Agricultural Prices May n/a n/a

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