Five Reasons Why You’ll Never Be Rich And One Reason Why You Already Are – Personal Capital May 2014

Salient to Investors:

5 habits that prevent you from becoming wealthy:

  1. Being a “C” student who thinks they deserve an “A” lifestyle
  2. Inability to delay gratification by taking on debt. Credit card interest at 15%+ leads to financial failure –  even Warren Buffet has not returned greater than a 15% annual compound return on his investments.
  3. Spending too much on a car.
  4. Unwillingness to go the extra mile at work. Never take your work for granted – come in early, leave late, frequently ask colleagues if they need help, and be proactive with new responsibilities.
  5. Saving as if Social Security or a pension will support you. In its current state, Social Security can only provide 70% of benefits in the next couple of decades, while pensions are disappearing fast. Max out your 401(k), or save at least 20% of your after tax income.
  6. Not building enough passive income; like from dividend yielding stocks, REITs, rental properties, tutoring, starting a sideline business, earning royalties, and building a CD ladder.

If you have a net annual salary of $30,000 a year then you are in the top 1.23% of richest people in the world.

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Priced Out: Where Higher Rates Could Hurt Home Buyers Most – Bloomberg 01-09-14

Salient to Investors:

Zillow expects 5 percent mortgages by year-end and the 10 places where the percentage of monthly income will be pushed furthest above the average are, in order:

  1. Stockton, Ca – where the median price of a home will rise 22.8 percent by September.
  2. Honolulu, Ha – where the median price will rise 4.2 percent by the end of September.
  3. Portland – where the median price will rise 4.6 percent by September.
  4. Sacramento, Ca – where the median price will rise 16.7 percent by the end of Q3.
  5. Riverside, Ca – where the median price will rise 23.9 percent by September.
  6. San Jose, Ca – where the median price will rise 7.4 percent gain by the end of Q3.
  7. San Diego, Ca – where the median price will rise 8.4 percent by September.
  8. Santa Rosa, Ca – where the median price will rise 9.5 percent by September.
  9. San Francisco, Ca – where the median price will rise 8.1 percent by September.
  10. Los Angeles, Ca – where the median price will rise 10.6 gain by September.

If mortgage rates rise to 6 percent by year-end, the 10 places where the percentage of monthly income will be pushed furthest above the average are, in order:

  1. Fresno, Ca – where the median price will rise 10.8 percent by September.
  2. Phoenix, Az – where the median price will rise to rise 9 percent by the end of Q3.
  3. Bakersfield, Ca – where the median price will rise 18.2 percent by September.
  4. Visalia, Ca – where the median price will rise 16.4 percent by September.
  5. Miami, Fl – where the median price will rise 2.1 percent by September.
  6. Seattle, Wa – where the median price will rise 8.1 percent by September.
  7. Denver, Co – where the average price will rise 1.3 percent by September.
  8. Sarasota, Fla – where the average price will rise 0.7 percent by the end of September.
  9. Virginia Beach, Va – where the average price will fall slightly by the end of September.
  10. Modesto, Ca – where the average price will rise 23.7 percent by September.

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Jumbos Surge 34% With Record ARMs Belying ’08 Anxiety: Mortgages – Bloomberg 12-09-13

Salient to Investors:

Guy Cecala at Inside Mortgage Finance said jumbo loans, mostly adjustable but also fixed-rate, increased by 34 percent in the first 9 months of 2013.

Greg McBride at Bankrate said cash-rich banks, including Wells Fargo and Bank of America are using ARMs to hedge the loans’ longer-term payments with expected increases in borrowing costs as interest rates rise.

Richard Lepre at RPM Mortgage said people have decided that whatever happened in 2008 will not repeat and there is more concern about bank borrowing costs going up than about home values falling again. Lepre said some jumbo borrowers don’t need a mortgage but get a jumbo loan to put into investments.

Bankrate said jumbo ARM rates dropped to a national average of 2.78 percent in the last week of November, the lowest in more than a year, and versus the jumbo fixed rate of 4.41 percent, the average ARM rate on conventional mortgages of 3.54 percent and average fixed rate of 4.33 percent.

ARMs often have rates that can triple when they reset, usually after a fixed period of 5 or 7 years. The first rate adjustment may be as high as 5 percent or 6 percent, with subsequent annual changes capped at 2 percent.

Jack Hartings at Peoples Bank said jumbo ARMs generally are lower risk than conventional ARMs because borrowers have greater resources: jumbo ARMs often require credit scores of 740 or higher, and owners must usually have at least 20 percent to 25 percent equity in the property.

CoreLogic said both ARM and fixed jumbos performed poorly in 2009, with US home loans of more than $1 million going bad at almost twice the rate of all mortgages.

Daren Blomquist at RealtyTrac said wealthy borrowers are not immune to foreclosure and it is harder to sell a $5 million home and the maintenance costs are higher. Blomquist said the higher default rate for high-balance loans stems partly from more affluent borrowers being more willing to walk away from mortgages they could afford when they see it as financially smarter to cut their losses when a home is losing a large amount of value.

Emmanuel Saez at the University of California said that in 2013, the share of income earned by the richest 10 percent of Americans was the biggest in about a century. Those in the top one-tenth of income distribution earned almost 12 times earnings in the bottom tenth.

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Bernanke Faith in Housing Seen Shaken in Bonds: Credit Markets – Bloomberg 09-19-13

Salient to Investors:

30-year mortgage rates were at 4.86 percent last week.

Robert Bostrom at Greenberg Traurig said the Fed finally realized that housing is fading in anticipation of the tapering and even higher rates, and could not taper without irreparable damage to the housing recovery.

Anish Lohokare and Timi Ajibola  at BNP Paribas said it is essential for the Fed to convince the market of its commitment to keep rates low because many holders of mortgage bonds use borrowed money in their investing,

The Mortgage Bankers Association said weekly applications to refinance mortgages have dropped 66 percent from a 2013 high, while applications for loans to purchase properties are just 1.3 percent higher than a year ago.

Anthony Hsieh at said the era of record low rates is over and rates will rise.

Amherst Securities said the increasing share of Fed buying would pressure it to cut back, but Citigroup said investors shouldn’t conclude the Fed would need to taper to avoid disrupting the market’s liquidity.

Scott Buchta at Brean Capital sees no significant impact on refinancing activity unless mortgage rates fall below 4 percent based on the current mix of existing loan rates and borrower credit profiles.

Walt Schmidt at FTN Financial said mortgage lenders will pass on most of the recent decrease in mortgage bond yields to new borrowers.

Ohmsatya Ravi  et al at Nomura Securities Intl said money managers, banks, overseas investors, REITs and government-sponsored companies such as Fannie Mae have all reduced their holdings during the round of purchases, even as the market grew by $170 billion to $5.3 trillion.

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Borrowing costs for U.S. home buyers are poised to extend declines from the highest level in two years after the Federal Reserve unexpectedly refrained from slowing its debt buying and bolstered expectations for how long it will keep short-term interest rates at about zero percent.

A Bloomberg index of Fannie Mae securities that guide 30-year loan rates dropped about 0.2 percentage point yesterday, the most since last September, to 3.39 percent, the least since Aug. 9. Yields, which rose 0.02 percentage point as of 11 a.m. in New York, soared as high as 3.81 percent on Sept. 5 from 2.28 percent in May as speculation mounted that the central bank would pare its $85 billion of monthly bond buyingincluding $40 billion of government-backed mortgage securities.

After signaling his faith that real estate could weather increasing home-loan rates in June, Fed Chairman Ben S. Bernanke opted to exercise caution in reducing support for the economy. He said yesterday at a news conference in Washington that policy makers are seeking more information on how higher borrowing costs are affecting the housing recovery.

“I think they saw tightening financial conditions to be troublesome, especially when seeing the weaker housing data,” said Brad Scott, the head trader of pass-through agency mortgage securities at Bank of America Corp.’s Merrill Lynch unit in New York. “There were very few who were looking for no tapering.”

30-Year Mortgages

Rates on 30-year mortgages reached 4.93 percent in the week ended Sept. 6, the highest since April 2011 and up from a record low 3.57 percent in December, according to Mortgage Bankers Association data. The rate declined to 4.86 percent last week.

Builders began work on fewer U.S. homes than projected in August and applications for future work declined more than forecast, according to Commerce Department data released yesterday that followed reports last month showing falling new and existing home sales and slowing property appreciation.

Fed officials “finally realized that housing is fading in anticipation of the tapering and even higher rates, and that they could not do it without irreparable damage to the housing recovery,” said Robert Bostrom, a former general counsel at Freddie Mac who’s now at law firm Greenberg Traurig LLP.

A report today from the National Association of Realtors showed that sales of previously owned U.S. homes unexpectedly rose in August to the highest level in more than six years as buyers rushed to lock in rates before they rise further.

Default Swaps

With the central bank announcing its policy forecasts and the decision to sustain its bond purchases, futures trading signals a 35 percent probability that the Fed will lift the benchmark overnight rate by at least a quarter-percentage point at its December 2014 policy meeting. That’s down from 49 percent prior to the statement.

“It is essential for the Fed to convince the market of its commitment to keep rates low” because many holders of mortgage bonds use borrowed money in their investing, BNP Paribas SA analysts Anish Lohokare and Timi Ajibola wrote yesterday in a report. Higher financing rates for buyers require steeper yields to maintain returns.

Elsewhere in credit markets, the cost of protecting corporate debt from default in the U.S. rose, with the Markit CDX North American Investment Grade Index, which investors use to hedge against losses or to speculate on creditworthiness, increasing 0.3 basis point to a mid-price of 69.8 basis points as of 11:19 a.m. in New York, according to prices compiled by Bloomberg.

Bondholder Protection

The measure typically rises as investor confidence deteriorates and falls as it improves. Credit-default swaps pay the buyer face value if a borrower fails to meet its obligations, less the value of the defaulted debt. A basis point equals $1,000 annually on a contract protecting $10 million of debt.

The U.S. two-year interest-rate swap spread, a measure of debt market stress, was little changed at 15.88 basis points as of 11:17 a.m. in New York. The gauge narrows when investors favor assets such as company debentures and widens when they seek the perceived safety ofgovernment securities.

Bonds of Verizon Communications Inc. are the most actively traded dollar-denominated corporate securities by dealers today, accounting for 12 percent of the volume of dealer trades of $1 million or more as of 11:12 a.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The New York-based telephone carrier raised $49 billion on Sept. 11 in the largest corporate bond issue ever.

Forecasted Cut

Economists had expected the Federal Open Market Committee to reduce its monthly Treasury purchases by $5 billion to $40 billion, while maintaining buying of mortgage-backed securities, according to a Bloomberg News survey. The FOMC has pledged for more than a year to press on with bond buying until achieving substantial labor market gains.

Among investors polled by JPMorgan Chase & Co. analysts last week, 75 percent expected purchases of home-loan bonds to drop by $1 billion to $5 billion. The mortgage-bond analysts led by Matt Jozoff, who topped this year’s Institutional Investor magazine survey for research on the securities, forecast a $10 billion reduction in Treasury buying and $5 billion decline in mortgages in a Sept. 13 report.

Without a cut, the central bank is set to buy 88 percent of mortgage bonds being issued in the types of securities it’s targeting, a share that’s growing amid a slump in new loans to help homeowner refinance, according to Morgan Stanley analysts including Vipul Jain.

Refinancing Slump

Weekly applications to refinance mortgages have slumped 66 percent from a 2013 high, according to Mortgage Bankers Association data released yesterday. Applications for loans to purchase properties have declined 15 percent on a seasonally adjusted basis since the start of May, and are just 1.3 percent higher than a year ago.

“We do want to see the effects of higher interest rates on the economy, particularly mortgage rates on housing,” Bernanke said yesterday at the news conference.

At a similar event in June, the Fed chairman had said that building optimism about home prices could compensate for slightly higher mortgage rates., which has been originating about $1.3 billion of mortgages a month, is still anticipating that the era of record low rates is over, Chief Executive Officer Anthony Hsieh said yesterday in a telephone interview.

Liquidity Disruption

“We all know the trend,” he said. “This is just an extra little stop that the mortgage industry will welcome. But make no mistake about it, rates are still going up over time from here.”

With higher rates having already choked off refinancing, monthly issuance of government-backed mortgage bonds is set to fall to $70 billion to $75 billion, down from an average of about $150 billion since last June, according to Morgan Stanley.

Along with the Fed’s $40 billion of new buying in the market, it has also been purchasing $31 billion a month under a program in which it reinvests proceeds from previous purchases, a figure set to fall to $10 billion to $15 billion with lower prepayments, the bank’s analyst estimated in a Sept. 6 report.

While Amherst Securities Group LP analysts had said the increasing share of Fed buying would pressure the central bank to cut back, Citigroup analysts said that investors shouldn’t jump to the conclusion that the central bank would need to taper to avoid disrupting the market’s liquidity.

‘Capacity Constraints’

There’s unlikely to be a “significant impact on refinancing activity” unless mortgage rates fall below 4 percent based on the current mix of existing loan rates and borrower credit profiles, said Scott Buchta, head of fixed-income strategy at New York-based brokerage Brean Capital LLC.

Unlike after the Fed began its latest round of bond purchases a year ago, mortgage lenders probably will pass on most of the recent decrease in mortgage bond yields to new borrowers, said Walt Schmidt, a Chicago-based mortgage strategist at FTN Financial.

“Part of that was capacity constraints” at lenders, which caused the firms to keep rates high to restrain demand, he said. Amid layoffs by lenders including Bank of America and Wells Fargo & Co. “you have fewer employees at originators now but also” even lower refinancing opportunities.

The Fed’s mortgage-bond purchases since September have expanded its holdings to almost $1.3 trillion, surpassing a previous peak of $1.1 trillion in June 2010 after an earlier round of buying initiated during the financial crisis sparked by Lehman Brothers Holdings Inc.’s failure five years ago.

Housing Starts

Money managers, banks, overseas investors, real-estate investment trusts and government-sponsored companies such as Fannie Mae have all reduced their holdings during the round of purchases, even as the market grew by $170 billion to $5.3 trillion, according to Nomura Securities International analysts led by Ohmsatya Ravi.

Housing starts rose 0.9 percent last month to an 891,000 annual rate, the Commerce Department said yesterday. Existing home purchases climbed 1.7 percent to a 5.48 million annual rate, the highest since February 2007, according to Realtors data today.

Purchases of new U.S. homes plunged 13.4 percent in July, the most in more than three years, to a 394,000 annualized pace, according to Commerce Department data released on Aug. 23.

The S&P/Case-Shiller index of property values in 20 cities released Aug. 27 showed prices rising 12.1 percent in June from the same month in 2012 after climbing 12.2 percent in the year ended in May, the biggest gain since 2006.

Fannie Mae

Mortgage securities guaranteed by government-supported Fannie Mae and Freddie Mac or U.S.-owned Ginnie Mae lost 2.8 percent from the end of April through Sept. 17, according to Bank of America Merrill Lynch index data.

Losses among Fannie Mae’s current-coupon securities, or those trading closest to face value and the largest target of the Fed’s buying, have been more extreme, totaling 8.3 percent since April, Bank of America Merrill Lynch index data show.

Expectations for when the Fed’s target for overnight loans will rise have contributed to the slump because yields on longer-term bonds mainly “represent the market’s expectation of short-term rates over time,” said Jim Vogel, a debt analyst at FTN Financial in MemphisTennessee.

Carry Trades

Investors also funded $554 billion of government-backed home loan securities and $86 billion slices of repackaged mortgage bonds through short-term loans in the tri-party repurchase agreement market as of Aug. 9, according to monthly data from the New York Fed. The cost of one-month repo on agency mortgage yesterday was 0.11 percent, down from as high as 4.55 percent in 2008, according to data from ICAP Plc, the world’s largest inter-dealer broker.

Real-estate investment trusts that rely on the borrowing owned $343 billion of the securities on March 31, while commercial banks, whose deposit costs are also tied to the Fed rates, now hold more than $1.3 trillion, central bank data show.

“Ability to fund cheaply remains critical for these levered carry trades,” as well investments often made by hedge funds known as inverse interest-only notes, the BNP analysts wrote.


Financial advice that is popular — and wrong – Financial Post 08-01-13

Salient to Investors:

The maxim “Don’t take a mortgage into retirement with you”’ is no longer true given mortgage rates close to historic lows and lower than on any other loan now or in the future.  Better to invest surplus money dollars in a retirement investment account which should return more than the 3 or 4% mortgage interest, which is tax-deductible.

The maxim “The older you get, the less you should have invested in the stock market” is no longer true because 60 isn’t the old 60, and bank deposits yield little and bond yields are near historic lows and carry the risk of loss when interest rates rise. The average 60-year-old faces a retirement that will last 25 or 30 years and over time stocks still outperform other investments. Large company stocks returned just under 10% a year between 1970 and 2012, a period that covers several market meltdowns.

The maxim “A debit card is safer than a credit card” is only true if you don’t have the discipline to charge only what you can afford to pay off.  Credit cards offer cash rewards, insurance if stolen, and no overdraft fees.

Spend less by going to a less expensive college if it means following your bliss.

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Americans Gambling on Rates With Most ARMs Since 2008 – Bloomberg 07-24-13

Salient to Investors:

ARM applications in late June rose to the highest level since 2008.

Cameron Findlay at Discover Financial Service said we’ve seen a shift in the way people look at adjustable-rate mortgages: they are still skeptical but the sticker shock of fixed rates is making them look for alternatives.

Keith Gumbinger at said when you give unqualified buyers a rate they won’t be able to afford based solely on the presumption that home prices will always go up, it’s not going to end well.

Mortgage qualification standards have become the tightest in at least two decades, with lenders often requiring 20 percent down payments. Guy Cecala at Inside Mortgage Finance said the average FICO score of an ARM borrower is 771 on a scale of 300 to 850, and better than the 755 average FICO score for fixed-rate borrowers.

Zillow said home prices rose 2.4 percent in Q2 from Q1, the biggest Q2 gain since 2004.

The MBA said the dollar value of ARM applications were 16 percent of mortgage requests in the last week of June, the highest share since July 2008.

Erin Lantz at Zillow said home prices probably will continue to rise nationally, but it’s more difficult to predict by region.

Henry Savage at PMC Mortgage said ARM applicants assume their income will be higher by the end of the loan’s fixed period so are playing golf in the dark. Savage said the dilemma of choosing a fixed rate over a bigger and better house with an ARM is the same dilemma we saw before the housing crash.

A 1 percent change in fixed rates means applicants who before qualified for a $400,000 house may now have to look at a $350,000 house. The loan rate on a typical ARM could go as high as 8.5 percent.

Jay Westbrook at the University of Texas said if Jamie Dimon can’t predict the future rate environment with assurance in 5 years, neither can homebuyers.

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Wealthy Americans Benefit From Banks Hunting Jumbos – Bloomberg 07-03-13

Salient to Investors:

Banks are offering jumbo mortgages – too big for government programs – at rates at or below taxpayer-backed loans, while the extra cost of 30-yr fixed jumbo loans averaged a 6-year low of 0.16 percent in June.

Paul Miller at FBR Capital Markets said bigger loans are becoming relatively cheaper because they are mostly put on bank balance sheets instead of packaged into securities that get sold to investors. Miller said banks are seeking those loans because there is insufficient economic growth to create the lending opportunities needed to support their capital.

FDIC says the difference between deposits at banks and their lending is at a record $3.2 trillion versus the average of $430 billion in the decade before the 2008 financial crisis. Credit Suisse says the ratio of loans to deposits for the big 8 commercial banks was at a 5-year low of 84 percent at the end of 2012, down from 101 percent in 2007.

Wells Fargo is offering 30-yr fixed jumbo loans at lower than the rate for conforming loans. Ditto JPMorgan.

Keith Gumbinger at said it is unusual to see jumbos priced below the conforming rate – competition for this small group of very valuable customers can be intense.

Anthony B. Sanders at George Mason University said wealthy borrowers are good candidates for adjustable-rate mortgages, which banks prefer because they share the risk of rising rates with the homeowners.

Zillow said the median sale price of properties between $1 million and $5 million rose 13 percent in April from a year earlier, versus the 5.1 percent increase for all homes.

Mark Zandi at Moody’s Analytics said tighter underwriting means new jumbo loans have been performing beautifully.

David Hilder at Drexel Hamilton said the banks are awash in liquidity.

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Housing Seen Shrugging Off Loan Rate Rise as Banks Loosen – Bloomberg 06-21-13

Salient to Investors:

Paul Willen at FRB of Boston said if people believe house prices are going up, credit availability will evolve because there is too much money to be made lending to homebuyers.

Freddie Mac said the average rate for a 30-year fixed loan is at 3.93 percent versus 3.35 percent in May and the record low of 3.31 percent in November 2012. Mortgage rates were 6.8 percent in 2006 and more than 10 percent in 1990.

Home prices are 28 percent below the 2006 peak.

Mark Fleming at CoreLogic said availability of credit is tilted closer to the averages seen in the late 1990s based on factors like loan-to-value, debt-to-income and credit scores.  Fleming said getting a new or refinanced mortgage remains frustrating because lenders are making more meticulous demands for evidence of borrowers’ finances.

The Mortgage Bankers Association said rising rates have already quashed refinancing, which has fallen to 68.7 percent of the market from 76 percent at the start of May – lenders will see their refinance business fall to 45 percent of originations in half2 2013 and 35 percent in 2014.

Doug Duncan at Fannie Mae said further rate increases will flatten the wave of refinancing and force lenders to compete more aggressively for homebuyers, and with easing underwriting standards, banks will have to consider layoffs to cut costs and lower margins to make up for lost refinancing revenue.

Guy Cecala at Inside Mortgage Finance said in the last 3 or 4 years lenders were skittish about doing something wrong so only did the safest loans – unless they start being more flexible, volumes will go down. Cecala said underwriting standards are far more restrictive than during the real estate boom, but lenders are becoming more flexible.

Erin Lantz at Zillow Mortgage Marketplace cites a 570 percent increase in the number of lenders offering conforming loan quotes with down payments of 3.5 percent to 5 percent in March 2013 compared with 2 years earlier.

Mahesh Swaminathan and Vikram Rao at Credit Suisse said more buyers are getting low down-payment loans backed by Fannie Mae and Freddie Mac – in May, 20 percent of purchase mortgages in the US were Fannie Mae or Freddie Mac loans requiring private mortgage insurance, versus 9 percent 2 years earlier. FHA and VA remained at 40 percent in May from May 2011.  Swaminathan said as long as jobs growth, sentiment and outlook remain solid then even a 5 percent mortgage rate is not the end of the world.

Jeff Lazerson at Mortgage Grader said even amid rising interest rates, more people are refinancing their mortgages because rising prices have helped them gain equity, which makes loan approval easier.

Lazerson said buyers offering low down payments are locked out of the market in California because appraisals haven’t been keeping pace with price increases and other bidders can offer more reliable financing, and listing agents are not willing to accept buyers with low down payments. Lazerson said it is a sellers’ market and every house has 5 or 10 offers if it’s priced right.

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Diminished Housing Wealth Effect Keeps Pressure on Fed – Bloomberg 05-05-13

Salient to Investors:

The wealth effect from rising house prices may no longer be as effective in spurring the US economy as homeowners increasingly pay down mortgage principal and shorten maturities. Freddie Mac said cash-in refinancings outnumbered cash-outs by more than 2-to-1 in Q4 2012.

Amir Sufi at the University of Chicago said the wealth effect is much smaller and estimates each dollar increase in housing wealth may yield as little as an extra cent in spending – versus 3-to-5-cent estimate by economists prior to the recession. Sufi said homeowners with low credit scores were most prone to pulling money out of their properties during the housing boom.

In Q1 2013, 65 percent of Americans owned their own dwelling, the lowest in almost 18 years and versus more than 69 percent in 2004.

Many homeowners cannot refinance their mortgages because banks have tightened credit conditions so much.

Rob Nunziata at FBC Mortgage is seeing few cash-out refis and more shortening of mortgage terms.

Homeowner equity was $8.2 trillion in Q4 2012, $6.2 trillion in Q1 2009 and $13.5 trillion in 2006.

The S&P/Case-Shiller index of property values in 20 cities rose 9.3 percent in February from a year earlier, the biggest year-to-year advance since May 2006.

Karl Case and Robert Shiller found that changes in housing wealth have a much bigger impact on spending than do variations in financial wealth – due to volatility of stock prices and equity holdings that are concentrated among the rich.

John Stoltzfus at Oppenheimer said Fed easy-money is helping the stock market and is very positive on equities.

David Stevens at Mortgage Bankers Assn said credit will get tighter before it gets easier as Dodd-Frank is just starting to take effect, and lenders await even more regulations before the end of 2013.

Frank Nothaft at Freddie Mac said 10 million homeowners cannot get cash out of their properties through home-equity loans because they are under water.

Neal Soss and Henry Mo at Credit Suisse found that the wealth effect from housing has fallen to just over 3 cents on the dollar from 5 cents, while the effect on consumption from rising stock prices has dropped to just over 1 cent from 1.5 cents. Soss says we need an even bigger bull market, means Fed easing for longer.

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How to Borrow Money if You Are Bankrupt – MoneySmartLife 01-23-13

Salient to Investors:

Look for lenders that specialize in poor credit or after-bankruptcy loans.

Be prepared to pay a much higher interest rate, secure the loan with assets, accept a smaller loan amount.

Improve your credit before you borrow by making all of your utilities to insurance premiums to credit cards on time.

Apply for a secured credit card to help rebuild credit.

Use alternative credit scoring to establish a positive payment record with non-credit accounts.

Add a statement to your credit report to tell your side of the story.

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