Thursday and Friday brought headlines from European markets, with the Italian Prime Minister tendering a surprise resignation, and weak economic news from Germany. Additionally, the US Treasury auctioned off $13 Billion in 5-year notes, and the level of foreign buying of these notes was much lower than expected. Strong foreign demand for our Bonds has helped keep our US Bond prices high and interest rates low - so the auctions are important to watch.

News from other US financial markets showed stocks might be ripe for a move lower. In fact, the S&P 500 has gone almost 1000 trading days without suffering a 10% decline, the second longest stretch in history. So something to watch - if Stocks do reverse, Bond prices and home loan rates may benefit, as money flows out of Stocks and into Bonds.

SPEAKING OF MONEY FLOWING…TAX SEASON IS UPON US, AND FOR MANY HOUSEHOLDS, IT SEEMS LIKE THE ONLY DIRECTION MONEY WILL BE FLOWING IS OUT! BUT IF YOU’RE A HOMEOWNER, YOU MIGHT HAVE A “TAX LEAK” THAT CAN POSIBLY BE STOPPED UP, AND POTENTIALLY SAVE YOURSELF THOUSANDS OF TAX DOLLARS. READ THIS WEEK’S MORTGAGE MARKET VIEW.

If the news of the week comes in looking like the economy is hot, with higher inflation to match, expect to see Bond prices worsen and home loan rates increase. If the news shows some economic weakness and reduced inflation, Bond prices and home loan rates will improve. So hold on to your hat - and stay in touch with me for updates throughout the week!

The good news is that it’s easy.

First, contact your local tax assessor’s office and ask for someone in the reassessment area. Find out when appeals are heard, and how the process for submitting a property tax appeal works. Additionally, ask for a copy of your property card. Review the card and confirm that the basic information about your property is correct. For example, is the square footage and number of rooms for your home accurate? If the number is incorrect, the county may change the assessment without a formal appeal. If everything on the property card is correct but the assessed value still seems too high, your next step is to gather the following documentation to support an appeal. And don’t be surprised if the assessed value is lower than what you think the market value for your home is - many counties use a formula which uses a percentage of market value to determine assessed value. Ask what the formula is, because an assessment which is less than market value still might be too high.

If you have a current appraisal that supports the value being lower using recent market-value information, many counties will accept a copy of the appraisal with the appeal. If the appraisal is outdated, you can order a new one - just call me for a referral to a great appraiser. You can also visit the local assessor’s office or search online, and look through the public records for other homes that have similar features to yours, but have lower assessments. Additionally, contact me to get in touch with a great Realtor who knows your area. They will be able to give you current market information for your neighborhood, and help you see how your market value and assessed value stacks up against your neighbors.

Submitting an appeal is generally a fairly simple process, but make sure to take the time to fill out all forms in advance and be prepared with your documentation if there is an in-person hearing that needs to take place.

More good news - according to the National Taxpayers Union, about 33% of property tax appeals succeed! Taking the time to review the accuracy of a tax bill could easily save you hundreds of dollars per year, adding up to thousands of dollars during the time you own your home. Please feel free to contact me for more information on this money-saving tip.

Economic Calendar for the Week of February 26 – March 02

The MORTGAGE MARKET GUIDE WEEKLY is the industry’s leading publication of this type, and I am pleased to provide this valuable resource to you. If you feel any of your family, friends, clients or associates would benefit from keeping up-to-date on market and economic trends in this easy to read format, please let me know, and I would be more than happy to add them free of charge.

In any event, Daylight Saving Time (DST) will be springing a bit further this year. Back in 2005, Congress enacted the Energy Policy Act, which will extend DST by one month - beginning earlier in the spring and lasting later into the fall - beginning on March 11th and ending on November 4th.

Originally the bill was written to extend Daylight Saving by two months, but some very verbal opponents fought the change. Farmers say that DST has a negative impact on their livestock in general - as it is tough for them to adapt to the time change, and they therefore produce less milk, eggs, etc. Because DST is not followed uniformly around the world, airlines claim that it might mean many missed international flight connections. Additionally, TV and Cable stations argued that they will lose viewers and advertising revenue, simply due to less time spent in front of the television because of more time spent outdoors in daylight. So a compromise of one additional month of DST was reached - and Congress did retain the right to revert back to the old dates if the change proves to be widely unpopular, or if the energy savings aren’t significant.

Why the change?

After making the adjustment to getting up an hour early, Americans overwhelmingly like Daylight Saving Time. There is simply more sunlight in the evenings to enjoy the outdoors and get things done. Additionally, there may be emotional benefits, as we typically feel better with more daylight. Plus, increased hours of daylight saves energy on a national scale. Less electricity is needed, as fewer lights are turned on as early in the evening…and with energy costs so high, even a small amount of savings is very welcome.

And brighter is safer - studies have shown that the DST shift reduces traffic accidents. An increase in accidents in the dark mornings is more than offset by the evening decrease in accidents, due to the increased visibility gained with more sunlight. Halloween will be much safer too - child pedestrian deaths are four times higher on Halloween than any other night of the year. Now, young trick-or-treaters are able to spend an extra hour out getting treats in the light. Candy manufacturers are happy too, as they’ve lobbied for years to have DST extended through Halloween.

A study by the US Law Enforcement Admin also determined that crime is consistently lower during DST, with violent crimes down as much as 10 - 13%. For many crimes, like mugging, darkness is a factor - so more light in the evening hours reduces these types of crimes.

And throughout its long history, Daylight Saving Time has had a remarkable and sometimes unexpected impact.

A man was actually able to avoid the draft for the Vietnam War using a Daylight Saving Time loophole. When he was born, it was just after midnight, DST. When he was drafted, he successfully argued that in his home state of Delaware, standard time - not DST - was the official time for recording births. So he was technically born on the previous date - which had a much higher draft lottery number - and he was able to avoid being drafted.

In September 1999, the West Bank was on Daylight Saving Time, while Israel had switched back to standard time. A group of West Bank terrorists prepared some timed bombs - but misunderstood the time change - and the bombs exploded early, killing the terrorists themselves, rather than the intended victims - two busloads of innocent citizens.

In the 1950’s and 60’s, each state and locality was permitted to choose start and end DST dates as they desired. During 1965, Minneapolis and St Paul - which are considered one metropolitan area - didn’t agree on start dates, and for a period of time, these Twin Cities had a one hour time change between them. And on one Ohio to Virginia bus route, passengers technically had to change their watches seven times in 35 miles!

To keep to their published timetables, Amtrak trains cannot leave a station before the scheduled time. So when the clocks “fall back” in the fall, all trains that are running on time actually stop at 2:00am - the official time of DST change - and wait one hour before resuming their routes. In the spring, the routes instantaneously become one hour behind schedule, but they just keep going and do their best to make up the time.

So Daylight Saving Time sure can have some unexpected impact - and we’ll all have to be ready early this year.

In particular, be sure to double-check all of your electronic devices and confirm that the time is correct. Although you may be accustomed to your computer and digital clock in your car automatically updating, the recent change of dates for daylight saving time may require that these devices be manually changed, as they now may not be ready to update to the correct time on the correct date!

As always, please feel free to pass on this article to family, friends and coworkers who might find this interesting as well. And although we’ll be losing an hour on March 11th, I’m always happy to make time for you - so if I can be of any assistance to you, please don’t hesitate to call or email.

So what happened Friday? First, some Traders saw prices as topping out, and decided to sell and take their profits. Additionally, there were several Fed officials on tour, including St. Louis Fed President William Poole. Poole mentioned increased defaults in home loans to risky borrowers, and said that rates may rise as a result. The talk of rising home loan rates was enough to spook Traders ahead of the weekend – and many decided to take even more chips off the table.

The Fed Chairman himself was on the speaking circuit, and an interesting comment Mr. Bernanke made had to do with the increasing differential between earnings of a four year college grad, vs. a high school grad with no college experience. A college graduate made 75% more than their high school graduate counterparts last year – a trend that has been increasing for many years. For example, in 1979, the differential between the college and high school grads earnings were 38%. Still significant, but the importance of that college diploma appears to be growing every year.

AND WHEN THE FED ISN’T ON TOUR, THEY’RE PROBABLY ON THE PHONE…AND JUST LIKE US, THEY ARE CONCERNED ABOUT THE INCREASING COSTS OF TELECOM SERVICES. MAYBE THEY SHOULD READ THIS WEEK’S MORTGAGE MARKET VIEW TO LEARN HOW TO TRIM THEIR BILLS EVERY MONTH.

After a couple of weeks of improvement, Bond prices hit a tough ceiling and have retreated lower. Unless there is some Bond-friendly economic news in store, Bond prices will likely follow this trend, causing home loan rates to worsen slightly this week.

In the fast moving telecom industry, loyalty pays. Call up your current provider, and ask what benefits you might be able to gain the longer you stay their client, by locking in a longer contract, or bundling several services or lines into their company. But at the same time, watch for getting too “bundled up”…although packaged deals can simplify life and consolidate the monthly bills, convenience could be costly. Be sure to research both individually packaged telecom services and bundled packages, and then make the best cost decision.

Plus, new deals are rolled out almost every single day, so it’s worthwhile to make a quick call to see if another plan has become available that might more closely suit your needs. Take a good look at the plan you are on, and make sure that it makes sense based on your actual usage patterns. Many flat fee plans seem like a good deal, but if you are routinely not using a good percentage of those minutes, another plan might make more sense. In fact – did you know the average cell phone customer only uses 25% of the minutes they have paid for on their flat fee plan? If this is you…consider changing to a smaller package. Additionally, if your package allows for unlimited local and long-distance calls for a flat fee and you use less than 300 long-distance minutes per month, a per-minute plan may actually be less expensive than a flat fee plan. And don’t worry about dragging out all your old bills to analyze it – it takes only a quick phone call to your current provider, and they can help you quickly and easily review your usage patterns.

Being “telecom-hip” can also come with a steep price tag for all the extra bells and whistles…so make sure you really need them. Determine what features you have on your landlines and cell phones, and see what you can shave off. For example, if you select caller ID but opt out of *69, you could save a few bucks a month. And if your package has caller ID, you probably don’t need *69 anyways, which simply lets you dial back the number that just called you. With a cell phone it can be pretty cool to use the internet, send and receive pictures and video…but how much is cool costing you? This service alone could be costing as much as $20 per month, so if you’re not using it regularly, consider scratching that feature.

Telecom services are now a part of our everyday lives and expenses…so taking just a few minutes to do some research could save you big bucks every single month!

Economic Calendar for the Week of February 12 – February 16

ARE YOU READY FOR SOME TAX PREP?? OK, ALTHOUGH IT’S NOT MOST PEOPLE’S FAVORITE TASK, SOME NEW CHANGES RECENTLY SIGNED INTO LAW JUST MIGHT MAKE GETTING READY FOR TAX TIME A LITTLE BIT MORE BEARABLE. READ THIS WEEK’S MORTGAGE MARKET VIEW TO LEARN ABOUT SOME OF THE NEW TAX PROVISIONS, AND HOW THEY MIGHT BENEFIT YOU!

Many teachers pay for classroom supplies from their own personal funds - but can now deduct $250 of the expense. And better yet, if the expenses exceed the $250 amount, there can be other benefits available by itemizing the supply deductions. Link here to learn more: Educator Expense Adjustment. If you aren’t a teacher yourself - being aware of how much is paid out of pocket by teachers - it may be a nice idea to ask your local school or your child’s teacher if they need any supplies donated to their classrooms.

If you feel any of the above items might apply to you, be sure to gather the additional documentation, and take the time to ask your accountant if you can benefit from these specific changes. And if you need the referral of a qualified tax professional, I’d be happy to provide a contact. Asking just a few simple questions could give you a well-deserved break!

Economic Calendar for the Week of February 05 – February 09