Flagstone Financial

I Need Your Help!

2007-02-08T03:11:00.000-06:00

From day one Flagstone has had a corporate policy of giving back to the community. With every closing we make a donation in the name of our clients to Houston Habitat For Humanity and The Brookwood Community.

I can tell you from personal experience that of the over sixty company checks I sign per month it’s these two checks that make it all worthwhile. Amazingly every time like clockwork, within twenty-four to thirty-six hours of sending these two great organizations the proceeds something unbelievably wonderful happens at Flagstone.

Maybe a major issue on title will get cleared so that another client can close on their home, or one or all of us will get a ton of new referrals. What ever it may be I am convinced it comes down to the old adage, “the more you give the more you receive.”

We began our donation program to help others, honor our clients, and give back to the community we are so fortunate to serve. As I said earlier a by product of our giving is that we become more and more blessed with business and new wonderful clients.

Over the holidays I wanted to start the New Year off right. So I designed a campaign to ask all of our clients, friends, vendors, and family members to visit our website and donate just a dollar so we can raise money for Houston Habitat For Humanity and The Brookwood Community.

But more importantly I wanted to spread the word to every one and all businesses big or small. And let them know how much better life is along with how much more you’re blessed when you give back some of what has been sent your way.

Believe me it’s true “when you give with a cheerful heart you truly get back more than ten time what you give.”

So I invite you to please join our campaign of donating just a dollar in the month of February and let’s see how much we can raise for a good cause. There is no better feeling in life than “To Pay it Forward”.

God Bless,
Cary

Happy New Year and Rates

2007-01-17T04:41:00.000-06:00

The question everyday in my world is, “What are interest rates going to do?’ Well I could get out my crystal ball or do what we have done for years to better benefit our clients. In all situations you should consult an expert, and in this case the expert is Barry Habib.

We subscribe to Barry’s Mortgage Market Guide so we can deliver the best advice to you on when you should lock your loan. Because they follow the Mortgage-Backed Securities market minute by minute we always know in advance if the market is worsening or improving. This knowledge allows us to deliver you the best rate possible.

Barry has an uncanny ability to understand technical analysis of bonds and is regularly featured on CNBC, CNN, and other financial sources. His yearly predictions for the last several years have been spot-on.

So with a special thanks to Flagstone’s rate advisor Barry Habib here is the –

Mortgage Market Forecast 2007
By Barry Habib

It’s that time of year again…and for the fifth year running, we’re ready to lay out our thoughts and forecast for the year ahead. They say “hindsight is 20/20”, and looking back, we’re quite proud of how well our past predictions have held up, especially in terms of interest rates. So crystal ball, Ouija board, and Tarot Cards aside, let’s do our best to see into the future, and how 2007 might look on some specifics that could impact us. And most importantly, let’s understand how we, our clients and our referral partners can benefit from these insights.

The big picture

So we’ll start out by looking at the US economy at large. Things began to slow down in 2006, which was not only needed after its former torrid pace, but also exactly what the Fed wanted to see happen. A “soft landing” for an overheated economy is something you often hear the Fed wants, but rarely can achieve…yet so far, the cooling has indeed been gradual and orderly. We expect more of the same in 2007 – a gradual cooling, without the economy crashing.

Job growth will likely stabilize, and unemployment rates may click just very slightly higher as the economy cools. Overall, the labor market in the US remains quite strong. And this is good news for the housing market, since healthy job markets often help housing markets remain stable. The more susceptible areas for increasing unemployment and flat or declining job growth are where manufacturing plays a key role in the local job scene, since the manufacturing sector never fully recovered as strongly as other parts of the US economy.

Former Fed Governor, Dr. Edward Gramlich: “Central Bankers are paid to worry – every silver lining has a cloud.”

After nearly nineteen years in office, 2006 also saw the baton passed from former Fed Chairman Alan “The Maestro” Greenspan to the rookie, new Fed Chair Ben Bernanke. And both deserve credit for orchestrating favorable economic conditions, while reining in inflation. And that’s what the Fed is charged with doing…controlling inflation so that the economy can sustain ongoing financial health. This sometimes means short term pain, like the seventeen Fed Funds Rate hikes that both Greenspan and Bernanke oversaw. In the past, the Fed has often gone too far with hikes – and that’s easy to do, because it takes six to nine months for the effect of a hike to filter its way through the economy. But the Fed has been commendably patient, although not unanimously so, in allowing the seventeen hikes to slowly take the steam out of an overheated economy. We know the Fed wants core inflation to ride between 1 and 2% - and they are getting closer and closer to this target.

The Fed finally did pause in June of ‘06, with a Fed Funds Rate of 5.25%. This appears to be the top of the current hiking cycle – and in last years forecast, we had expected a pause slightly sooner at 5%. So what will the Fed do in 2007? The inflation-measuring Core Personal Consumption Expenditure (PCE) will need to be at 2% or less for two or three consecutive months, before the Fed starts to talk rate cuts. Always wanting to remain ahead of the curve, and fully cognizant of the delay between Fed action and economic impact – the Fed will be worrisome that the economic decline will go too far. So we anticipate a Fed rate cut cycle to start in 2007, but not until the summer or fall.

This will be some welcome news for individuals with Home Equity Lines of Credit. And while it will eventually benefit those with ARM’s, the damage has already been done for those expecting adjustments during the year. And with $1.5 Trillion dollars of mortgage loans set to adjust during 2007, to significantly higher interest rates – we have an incredible opportunity to help our clients, gain new business, and increase our own production significantly. But don’t expect to have your phone just ringing off the hook – you’ll have to be proactive in reviewing your database, personally contacting your customers to congratulate them on the interest saved by using an ARM, and determining if a different strategy may make sense for them at this time.

Stocks and Oil – they Rocked and Roiled

In our 2006 forecast, we thought stocks would be a bright spot…and that’s exactly how things turned out, with healthy gains in all the major averages. We also cited how earnings were very healthy, and how that trend should continue. We see more of the same for 2007, and although stocks may come in short of their 2006 performance, they will still yield a handsome return in the 8 -11% range.

A very slippery area for 2006 was the oil markets – and how the volatile swings affected what we paid at the pump, how much we had left to spend, and inflation in general, since oil is in everything. Last summer, an oil pipeline disruption in Alaska sent prices at the pump screaming up above $3 per gallon. Some felt the need for a cash out refi, just to fill up the tank! And not coincidentally, mortgage rates spiked to their highest levels of the year – near 7% – due to the threat of increased inflation. Thankfully, prices have moderated – but the lesson is how delicate and volatile this area is, as well as how wide an impact that oil can have. That makes forecasting oil prices very challenging, but we can see oil in a $55 – $65 per barrel range, keeping prices at the pump hovering a little above $2 per gallon.

“The rumors of my death have been greatly exaggerated.”

Mark Twain might have coined the phrase when his death was reported while he was still alive and well…but it is also a rather fitting phrase for the housing market of 2006. Many so-called “experts” had forecast a housing bubble bursting, a crash, big doom and gloom to grab headlines…the reality was an orderly slowdown, along with some price softening, which we see continuing in ’07. Last year, the softest areas included condos, investment properties and vacation homes, and as mentioned earlier, areas with weaker job markets. These areas will continue to soften, but markets that are predominantly owner-occupied with solid employment have and should continue to hold up well.

Reasonably priced homes continue to sell, although time on the market is longer than experienced a few years back – and this pace will continue this year. But look at the bright side of this. Remember how buyers complained that they could barely pull into the driveway of a house, let alone look around and think a few minutes, before having to write up an offer that was way above list price? The cooling off of an overheated market allows buyers to make more reasonable decisions, without rushing into something that may not be right for them, their family…or their budget.

Drum roll please…

And of perhaps the most interest – no pun intended – where do we see mortgage interest rates in 2007? Last years forecast was incredibly accurate, which called for rates to be above 6% and below 7%, with an average between 6.25% and 6.625%...which is exactly how the year played out. For 2007, we actually see interest rates slightly lower, within a range of 5.75% and 6.75%, with a sweet spot between 6.00% and 6.375%.

What’s your take on interest-rates? I’d love to hear e-mail me at cary@flagstonemortgage.com

Cary

2006-12-07T14:17:00.000-06:00

“A Date That Will Live in Infamy”

Today is the 65^th Anniversary of the bombing of Pearl Harbor and we celebrate “Pearl Harbor Remembrance Day”. In my opinion this date and the brave men and women of “The Greatest Generation” should never be forgotten.

Yesterday I had the privilege of listening to Rear Admiral John J. Mumaw speak to my Houston Kiwanis Club. His talk about that day was both moving and inspiring. It should be noted that most of the survivors of Pearl Harbor will reunite this year for possibly the last time, because they are all now in their eighties and nineties.

Prior to his talk the speaker of the day Dwight Beach, Colonel US Army Retired, had each of the men in the Houston Kiwanis Club that fought in World War II stand-up and be recognized. There were about a dozen in all – each had volunteered and served bravely. That was even more moving than the speech itself.

The most fascinating part of the day was when we learned that one member had commanded a landing craft at Normandy for the D-Day Invasion, and another was a real-life hero of the movie “Flags of Our Fathers” having been in Iwo Jima the day the historic raising of the American Flag took place.

The Invasion of Normandy and Iwo Jima were two of the bloodiest battles and costliest in terms of lives lost in all of World War II. And in my presence were two brave men that had volunteered to fight for our country knowing they very well may have never made it home.

You can be rest assured that it’s no coincidence that all of the men that stood up at that meeting have lead very productive and successful careers and lives. These men have heart, determination, and character.

I look at them with admiration and am very proud to say that Flagstone patterns the way we run our company, treat our clients, and give back to the community based on the characteristics that these men displayed bravely and valiantly so that we could all live and work in freedom.

Flagstone salutes and honors these members of my Houston Kiwanis Club and every man and woman that has served our country.

A Heartfelt Thanks to All of You From Everyone at Flagstone!

God Bless!

Pearl Harbor, Hawaii (Dec. 6, 2006) - The city lights of Aiea, Hawaii, provide a backdrop for the USS Arizona Memorial, on the morning prior to a Joint U.S. Navy/National Park Service ceremony commemorating the 65th Anniversary of the attack on Pearl Harbor. More than 1,500 Pearl Harbor survivors, their families and friends from around the nation will join more than 2,000 distinguished guests and the general public for the annual observance.

Quarterbacks, Politics, and Interest Rates

2006-11-13T11:05:00.000-06:00

The question that everyone seems to want answered is what are interest rates going to do with the change of control of congress and the senate?

The government with the economy is a lot like the quarterback with a football team – you’ve heard the quarterback gets too much credit for a win and too much blame for a loss.

It’s the same with politics except those in power take too much credit for a good economy and get too much blame for a bad economy. As former Labor Secretary Robert Reich said, "Anyone who thinks the market reacts to who's in charge of Congress or even the White House doesn't know economics and is blissfully ignorant of politics.

Though he sounds like a smarty-pants, he’s correct. Our economy and the global economy are just too big and complex for any one person or body to have a sustainable control of it.

However we can anticipate how interest-rates will behave over the short-term by watching key indicators such as the trend direction of the Fannie Mae Bonds in the mortgage backed securities market. It’s the supply and demand in this arena that determines where interest rates are headed.

Flagstone Mortgage stays on top of the direction of Fannie Mae Bonds for our clients by subscribing to the Mortgage Market Guide. This firm monitors the market daily and advises us to lock or float our clients’ loans to insure the best rate possible prior to closing.

Right To Vote, Right To Blog

2006-11-06T04:53:00.000-06:00

Today is my first blog and instead of talking interest rates or loan programs I’ve decided to blog about something way more important – something that I hold very dear as a citizen of our great country – the right to vote!

Voting is the preeminent expression of our first amendment right to free expression, speech, right of assembly, and petitioning the government for a redress of grievances as guaranteed by the bill of rights.

At my company we truly care about our clients and the communities they live in, because without them there is no Flagstone Mortgage. That’s why I encourage you no matter your party affiliation – Democrat, Republican, or Libertarian please vote and help change our communities for the better.

My company and I support children, education, and community through the charities that we contribute to with proceeds from each closing – they include Make-A-Wish Foundation, Houston Habitat For Humanity, Texas Special Olympics, and The Brookwood Community.

I mention the above because I find it appalling that we will get out and vote to give individual professional owners literally billions of dollars for professional sports, but vote down school bonds.

In Houston alone we gave $317 million to one man and his very small ownership group to build a stadium that will bring him profits and us the taxpayers nothing. I ask you what is more important to you, your children and our great nation – professional sports stadiums or our children’s education?

Vote yes for School Bonds and Our Future!