Deanna and I were recently attending our annual sales meeting (Oh by the way we were awarded President's Circle status for 2009, yippee). One of our speakers was the head of the lobby group for the Mortgage Bankers Association (MBA) Mr. Brian Chappelle from Potomac Partners.  

Brian informed us that Potamac Partners called USDA about the funding of their loans and asked how its current situation is different than in years past.  The MBA & Potamac Parters were informed that nothing had changed and they expected congress to get the necessary funding dollars soon.  In fact all that had changed compared to the two past years was who wrote the memo.  This new member to the staff announced that USDA would need additional funds from congress and used poorly selected words causing a panic.  While USDA will need funds this happens annually and since I have been in the business fundings have not been delayed.

So, bottom-line to you, USDA will get appropriations to begin funding loans again soon.  Additionally, the Mortgage Bankers Association is trying to get an updated memo that lessens the "severity" of the message so key USDA servicers will re-engage in buying USDA loans.  Expect all to be business as usual very soon (keep your USDA listings).  Please do note that the USDA eligible footprint is based upon census data this will change when the 2010 census is published.  Now is a good time to buy or sell if you are USDA eligible. 
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Economic News:  There were no major surprises in the economic data or the Fed announcement last week. As a result, while volatility remained day to day, mortgage rates ended nearly unchanged for the third straight week.

As expected at its meeting on Tuesday, the Fed held the fed funds rate steady, and the accompanying statement contained few changes. The statement retained the language about the fed funds rate remaining at extremely low levels for at least several months. The Fed's assessment of the economy was a little more upbeat at this meeting, but pointed out that economic improvement will occur slowly. The Fed continued to signal that the $1.25 trillion MBS purchase program will conclude at the end of March. With less than two weeks of Fed MBS purchases remaining, investors will be watching closely to see if the Fed's exit has an impact on mortgage rates.

Last week's inflation data showed that inflation is not a concern right now. The February Core Consumer Price Index (CPI) increased at a low 1.3% annual rate. The Fed's target range is commonly believed to be a 1.5% to 2.0% annual rate. The current low inflation environment makes it easier for the Fed to continue to hold the fed funds rate low to stimulate the economy.