By Jim Enright   Jim Enright First Financial Services, Inc. Office: 919-489-4949 x 3005 E-Mail: jim@themortgagestrategist.com Website: www.mortgagechoice.com

For the week of Nov 24, 2003 --- Vol. 1, Issue 12

Last Week In Review

TUG OF WAR... this week it may be over the drumstick, but last week it was mortgage bonds that were caught squarely in the middle. Mortgage bonds were pushed and pulled between continued strong economic reports and geopolitical tensions caused by terrorist activity. Last week’s positive reports of our strengthening economy would normally cause the stock market to rally and the bond market to take a beating, thereby causing mortgage interest rates to increase. But tugging bonds in the other direction were continued terrorist attacks. No matter where in the world they occur, the attacks remind investors that the war against terrorism isn’t over and brings uncertainty to the financial markets. This weakens the stock market and causes a move to the safety and stability of bonds, commonly called a “flight to quality”. This movement into the safe haven of bonds offset the positive economic reports and while there was some midweek movement, the “tug of war” translated into no major change in mortgage interest rates last week. Waiting and wishing for the day to arrive that you can keep your cell phone number, but shop for a more cost effective plan with a different service provider? You won’t have to wait for Thursday’s wishbone – cell number freedom day is finally here! But watch your step - be sure to read the Mortgage Market View for very important tips on how to make the change wisely.

Forecast For The Week

For mortgage interest rate activity, this week will probably be as sluggish as the after dinner crowd on Thursday. The bond market closes early on both Wednesday and Friday, and is completely closed on Thursday in observance of Thanksgiving. While low trading volume on Wednesday and Friday may cause some temporary volatility, have a second helping of pumpkin pie, loosen up your belt and relax - mortgage interest rates are expected to remain stable this week, with no meaningful change in direction. In the longer run, keep your eyes open. Another force at work which has been dampening investor enthusiasm for stocks and providing a short term boost for bonds is the declining dollar, especially relative to the Euro. Foreign central banks have been intervening by buying U.S. bonds in an attempt to stabilize the dollar from further declines, which would protect their vast holdings of US dollars and treasury debt. By doing this they also protect against a rapid rise of their currencies against the dollar, which would hurt their exports as the price of their goods would rise. Their intervention is helping to support bonds but it remains to be seen how long this scenario can continue. Many analysts are predicting further pressure on the dollar and continuing additional declines against foreign currencies. Over the long-term this will hurt bonds and cause mortgage interest rates to increase. Chart: Fannie Mae 5.5% Mortgage Bond (Friday Nov. 21, 2003)

The Mortgage Market View…

Many are called but few are chosen... NO MORE! Starting this Monday November 24th, wireless customers will be able to freely choose a new service provider without losing their telephone number. For the first time, customers will not need to go through the aggravation of updating business cards and telling everyone they know if they want to move to a new service. A big shake-up is in store for the wireless market, and with the stakes so high, wireless companies are as nervous as cell phone users are pleased. The start of the number-shifting option comes at the beginning of the busy holiday retail season, when many consumer service plans are due for renewal. Timing alone could prompt customers to switch right away rather than signing a new long term contract. Business accounts are also at risk, as corporations may decide to consolidate wireless accounts to a single company. The law also allows consumers to switch home or office numbers to their mobile phones. Industry studies predict that about half of the more 150 million cell phone accounts in use will switch to new carriers within the next year. Phone number portability sounds good for consumers, and wireless companies are prepared to flood the market with attractive offers. But watch your step as you make your moves. Here’s what you need to know in preparation for making a switch: Wait for the best deal. Wireless carriers will be cutting prices and beefing up promotions over the coming months, so be cautious before signing any long term contracts right away. Select your new carrier carefully. If there is a trial period, make sure the service works well where you live and work, and that you like the phone itself. Compare total cost for making the switch. Your current service can charge for “number porting”, so be sure to find out if there is such a fee involved, and if your new carrier of choice will cover the fee for you. Remember that contracts signed previously are still valid, and you may be subject to fees by breaking the contact to change service providers. Keep your old service active until you sign up with the new carrier. If you cancel service before completing the switch, you may lose the ability to transfer your number. When making the switch, be sure you have a recent phone bill at hand, as your new carrier will need the old account information to transfer your number properly. Think carefully before replacing your landline with mobile service. When you call 911 from your landline, the emergency service knows the address you are calling from. With a mobile phone, they are far less able to pin down your location in case of emergency. Once a transfer request has been made, your old carrier cannot refuse to port a number. Customers who find companies unwilling to transfer their phone numbers should complain directly to the FCC by calling 1-888-CALL-FCC.

The Week's Economic Indicator Calendar

What kind of a table is being set for this week’s economic feast? Wednesday could be stuffed with some extra excitement as it is the last day of economic releases for the week. But while the financial markets will get hit with a full table of reports along all the trimmings, traders may have checked out early for the holiday. Low trading volume due to the holiday may cause some temporary volatility, but no significant changes in trend direction for mortgage interest rates are likely.. Remember that in general, weaker than expected numbers would indicate the economy is not improving as quickly as expected, and could cause mortgage rates to improve. Positive numbers would indicate a strengthening economic climate, and could cause mortgage rates to gradually climb higher. For the week of November 24th - November 28th, 2003

The material provided is for use by real estate professionals only and is not intended for consumer distribution. Although the material is deemed to be accurate and reliable, there is no guarantee it is not without errors. The material provided is for informational and educational purposes only and should not be construed as investment advice. As your trusted mortgage advisor, I am sending you the MORTGAGE MARKET GUIDE WEEKLY because I am committed to keeping you updated on the economic events that impact mortgage interest rates and how they may affect you. In the unlikely event that you no longer wish to receive these valuable market updates, please hit REPLY and type REMOVE in the subject line. The Mortgage Market Guide, LLC is the copyright owner or licensee of the content and/or information in this email, unless otherwise indicated.   The Mortgage Market Guide, LLC does not grant to you a license to any content, features or materials in this email.   You may not distribute, download, or save a copy of any of the content or screens except as otherwise provided in our Terms and Conditions of Membership, for any purpose.