Mel's Blog

Bond prices are modestly higher this morning as the quiet trading of late continues.  But this could be the quiet before the steam, with bonds "overbought" and the Jobs Report looming. 

For what it is worth, the usually unreliable ADP National Employment Report from Automatic Data Processing, Inc. is showing job growth at 57,000.  When adding a three-month average of 7,000 new government hires, the ADP report is estimating 64,000 new jobs - this is considerably less than estimates of 100,000 for this Friday’s jobs number coming from the Department of Labor.  Although the ADP number has been way off in the past - Traders can't seem to help themselves in putting some belief in the number. 

The ADP data has been notoriously inaccurate over the past six months, with estimates missing by 78,000 jobs while the Labor Department’s estimates have been off by 40,000.  Stung by criticism, ADP in conjunction with Macroeconomic Advisers, LLC, has revised their ADP National Employment Report using a “newly enhanced methodology.”  We’ll have to see if their new methods become more accurate in forecasting the official government monthly new jobs growth.  Until their accuracy greatly improves, the ADP jobs number will be taken with the proverbial “big grain of salt.”  

A market mover this afternoon could be the Federal Reserve's “Beige Book,” which describes current economic conditions in regions throughout the US when it is released at 2:00pm ET.  Later this evening, US Treasury Secretary Henry Paulson speaks on China's financial market reform in Shanghai, China and his comments could affect Asian stock market trading overnight, and as we've seen by the action a couple of weeks ago, it could carry over and have a significant effect on our markets. 

There are also concerns that the European Central Bank (ECB) might raise interest rates tomorrow.  If the ECB does raise rates, their move could put some selling pressure on US bond prices tomorrow, because attractiveness of European yields will increase and potentially draw from US Bonds.   

Stocks have opened lower after a nice rebound higher yesterday.  Should stocks regain their footing and move higher again later today, Bond pricing may worsen. 

The big news of the day was the Core Personal Consumption Expenditure (PCE) Index.  The report showed that the inflation level increased by 0.3% in February from the previous month.  This is the largest monthly increase since August and above expectations of 0.2%.  The important year-over-year Core rate of PCE rose to 2.4% from the previous reading of 2.3%.  Remember, the Fed wants the Core rate of PCE no higher than 2.0% and this morning's number wipes out any possibility of a fed rate cut over the next few months.   

Also of note, the Personal Savings Rate remains negative at -1.2%.  This poses many opportunities for you to help your clients and relationship partners.  We have received so many wonderful emails and success stories from people literally dialing for dollars and using the Average Weighted Interest Rate calculator to help people save money.  Please listen to the most recent MMG Minutes, where both Barry and Sue lay out the groundwork for you to gain an extra loan every two hours.  The negative savings rate also underscores the need for a wealth creation mortgage plan.  With this in mind, we will be rolling out a new wealth creation kit in the next couple of weeks to help you.

The Chicago Purchasing Managers Index  was reported at 61.7, which was not only past expectations of 49.5, but was the largest monthly gain in the history of the 39-year old index.  Needless to say this number was hot and suggests that the economy continues to expand. 

This morning's initial pop higher in prices after the release of both stronger economic news and higher inflation numbers really made no sense.  But the euphoria has worn off and the Bond's advance was stopped in its tracks by the 100-day Moving Average.  Prices have now reversed, well off the best levels of the day, and are trading beneath the 50-day MA.  The next level of support lies at $98.71.  But should the Bond take out this floor, prices could drift lower still to test strong support at the 200-day MA, presently at $99.22 or a whopping 62bp lower than current levels.  Once again, the negative stochastic crossover from overbought levels proved to be a very accurate indicator.  The crossover and alert to lock have preserved 57bp in pricing in the past 7 days.

As we’ve written many times in our morning Update, the Fed’s number one mission is to fight inflation.  Many so-called experts look to grab headlines by calling for the Fed to lower rates in a effort to bolster housing, stocks, employment, sub-prime...you fill in the blank.  But they were proved incorrect again, as Chairman Ben Bernanke underscored that "core inflation remains uncomfortably high" and also suggested that despite recent signs of slower economic growth, the Fed isn’t inclined to lower interest rates anytime soon.   

The media is already trying to downplay Bernanke's testimony, spin the story, and suggest that the Fed may cut rates to help the sub-prime mortgage sector.  This isn't going to happen and it is your job as a mortgage planner and financial expert to get the real word out...the Fed will not cut rates, even at the expense of an economic recession, as long as core inflation remains above their target zone of 2% on the Core Personal Consumption Expenditure Index (PCE).  And you won't have to wait very long to get the latest read on PCE, as it is due out tomorrow at 8:30am ET.  More on PCE tomorrow. 

Bond prices are modestly lower so far today on some positive economic news and are attempting to grope for support at the 100-day Moving Average.  Initial Jobless Claims were reported at 308,000, which was lower than expectations of 320,000 and the lowest reading in more than two months.  This breaks the recent negative string of worsening jobless claims. 

The final reading on 4^th Quarter GDP showed the economy grew by an annual rate of 2.5%, which was hotter than expectations of 2.2%. Both reports suggest the economy and labor market continue to lumber along at a reasonable pace.

Today at 1:00pm ET, the bond market will be delivered some extra supply of paper by way of $13 Billion in new 5 Year Treasury Notes.  This event could spark a market reaction if the foreign buying and overall auction results don't meet expectations.  

With the Bond trying to hold its ground at the 100-day Moving Average, we want to be patient and give this floor an opportunity to hold.  As long as prices stay above or near this support level, we will cautiously float, but if prices drift beneath this floor we will shift towards locking.

Mortgage Bonds are just slightly higher as traders wait to hear what Fed Chairman Bernanke says before Congress this morning at 10:30am ET.  His assessment of economic growth, inflation and Fed monetary policy could have an impact on trading.  There is a possibility that Big Ben will address the recent string of slowing economic reports, higher Initial Jobless Claims, as well as the potential problems from the sub-prime fallout.  If Bernanke leans towards a potential ease later this year Bonds could see an improvement.

Durable Goods Orders for February was reported at 2.5%, which was worse than expectations of 3.5%.  The lower than expected Durable Goods Orders sparked only a mild improvement in Bond pricing as traders also contend with higher oil prices.  The escalating tension in Iran over the past couple of weeks has pushed oil prices back up near $65 a barrel this morning.  Higher oil prices brings fears of inflation, and Bonds hate inflation.  

So while this morning's weaker than expected Durable Goods gave prices a modest boost higher, the gains are being tempered by escalating oil prices and anticipation of Bernanke's remarks to Congress.   

Bond prices remain in a tight range between resistance at the 25-day Moving Average at $99.19 and support at the 100-day MA, presently at $99.01.  We advise cautiously floating into Bernanke's testimony as prices remain above a solid support level.

It's been a volatile ride in the Bond market and yesterday was no exception.  A worse than expected report on New Home Sales for February pushed Bonds higher.  But it turned out to be a head fake, as prices retreated back under the ceiling of resistance at the 25-day Moving Average, to finish the day with only a modest gain. 

This morning, Bonds are once again unable to muster much strength on weaker economic news.  Consumer Confidence for March was reported at 107.2, which was slightly worse than expectations of 109.

Traders are looking ahead to Fed Chairman Ben Bernanke’s scheduled testimony before Congress tomorrow at 9:30am ET about the economy and Fed policy.  Mr. Bernanke could spark even more price volatility on this already jittery market once he starts discussing housing, inflation and Fed policy. 

Since Friday's negative stochastic crossover and breach of support at the 25-day MA, Bond prices appear to have a downward bias.  The Bond does have support around $99.00, but unless prices are able to break back above the 25-day MA, a bias towards locking appears prudent.

The recent skid is extending itself so far this morning as the Bond is trading at its worst level since 2/27.  The lock alerts from last week saved your clients 37bp in price, as the tough ceiling of resistance has forced prices lower.  

Foreign bond prices are lower as well, with prices in both Japan and Europe being pressured by inflation fears.   

New Home Sales for February will be released shortly, with market expectations of 995,000 sales for the month.  

A steady parade of economic news reports fills out the remainder of the week with Consumer Confidence tomorrow, Durable Goods Orders on Wednesday, the Final 4^th Quarter GDP on Thursday, and the potentially high-impact Personal Income and Spending Report with its imbedded inflation-measuring Core Personal Consumption Expenditures Index on Friday.   

Technically, bonds have been pushed below the 25-day MA support level last Friday and are continuing to be pushed lower toward a test of support at the 100-day MA at $99.00.  If the 100-day MA does not hold, further support is found at the 50-day MA at $98.87.  The 25-day MA will now serve as the closest level of overhead resistance at $99.18.   

A look at the Bond Page shows that we now have a clear negative stochastic crossover.  Unfortunately, this is a pretty reliable indicator that prices will continue to worsen.  But the news items of the week may come to the rescue if inflation is shown to be headed lower.  

It's Fed Day and at 2:15pm ET the Federal Reserve will release their interest rate decision and policy statement.

There is virtually no chance that the Fed will take any action regarding rates and we also feel there will be little change in the policy statement or change in their bias.  At the moment, the Fed still has a bias towards tightening as inflation remains above the Fed's target zone.  Many of the daydream believers who are mistakenly betting that the Fed will come to the rescue of the subprime arena by cutting rates will have their hopes dashed this afternoon...and depending on how hard or easy the Fed lets them down by the tone of the policy statement, this afternoon could see a bit of a selloff in Bonds, as these dreamers come to the realization that the Fed's mission is to fight inflation, period.  Until we see the Core Personal Consumption Expenditure (PCE) dip below 2% for a couple of consecutive months, don't expect the Fed to cut rates in the immediate future.   

Many times when the market trades quietly as we have seen for the past couple of days, it can often be followed by extra volatility.  So be sure to stay tuned to the Bond Page and text messaged quotes as the Fed meeting could spark price movement.

Cold weather in February didn't freeze Housing Starts, as New Home Starts were reported at 1.525 million homes, greater than expectations of 1.445 million.  Building Permits were reported at an annual rate of 1.532 million, just slightly below expectations of 1.55 million.  The media is already spinning the lower than anticipated Building Permits as the end of the world as we know it...but we feel this decent report tells us that the housing market is continuing to show stabilization.  Good news for Bonds today, as the recent “unwinding” in the Japanese Yen carry trade may go on pause for awhile.  Late yesterday, the Bank of Japan (BOJ) decided to keep its benchmark interest rate (like our Fed Funds Rate) on hold at 0.50%.  In fact, if the currency markets and hedge funds believe the BOJ will keep their funds rate on hold for the foreseeable future, the Yen carry trade could resume, as Yen carry traders borrow on the Yen at 0.50% and then invest the money at higher yields in US Bonds.  This trade appears to make sense, unless the Dollar weakens against the Yen - in which case, the loss of valuation in currency would outweigh the gain in yield.     

So while Bonds are up modestly this morning, tomorrow's Federal Reserve rate decision and Policy Statement is what Traders are looking ahead to.  With all of the recent volatility in the Stock and Bond markets due to subprime lending concerns, there is chatter that the Fed may throw the markets a bone with a delicate signal or change in bias indicating the Fed may be more open to cutting interest rates this year if the economy shows signs of faltering.  We don’t see this scenario happening at the present time, as the Fed's primary concern is inflation...and inflation has been stubbornly persistent, remaining above the Fed’s target zone.  We believe the Fed will continue to hold the Fed Funds Rate at 5.25%, and while their statement will likely be a reminder that they are remaining vigilant, we don't believe they will signal that a rate cut will be in the near future.      

Bond prices are presently in a holding pattern ahead of tomorrow's announcement at 2:15pm ET, and have been trading in a range between a ceiling of resistance at $99.41 and a floor of support at the 25-day Moving Average at $99.11.  With Bond prices squarely in the middle of a range, and Traders not likely to take much action one way or another going into the Fed announcement, we advise floating into the Fed Policy Statement at 2:15pm ET because we would still have the ability to protect pricing if the statement shakes the market.   

Bond prices are trading lower and are following through on the negative technical signals seen last week.  This trend will likely worsen throughout the day, as stocks appear headed higher and there are no economic reports scheduled for release.  

The calendar will heat up a bit later this week, but the main event happens Wednesday afternoon with the Fed Meeting and Policy Statement.  Bond traders won’t be too anxious to place any large bets one way or another until they get a chance to hear the Fed’s Policy Statement.  While the Fed may make mention of the recent troubles facing the mortgage industry with subprime lending, don’t expect them to bail out the financial markets with a cut in interest rates any time soon.  Battling inflation is still the Fed’s number one job, and inflation currently remains above the Fed’s comfort zone of 2% with the Personal Consumption Expenditure (PCE) Index above 2% with the Core PCE at 2.3%.  

Technically, bond prices are trapped between a ceiling of resistance formed by a rising Lower Trend Line at $99.38 and support provided by the 25-day MA at $99.07. 

A slightly hotter than expected reading on inflation has pressured Mortgage Bonds a bit lower so far today. 

The Consumer Price Index (CPI) rose 0.4% in February which was a touch more than expectations of 0.3%, while the more closely watched Core CPI which strips out volatile food and energy prices rose by 0.2% and was in line with expectations. 

The year over year rate for Core CPI held steady at 2.7%.  Even though the Core CPI was reported in line with expectations, the fact that the year over year Core went unchanged has to be a little concerning for the Fed as inflation does remain stubbornly above the Fed's desired target range.  On the news, Fed Fund Futures forecasted a 30% chance of a cut in July, which was a sharp drop from the 46% forecast before the CPI was released.  Share this news with your clients and partners, because if the Fed doesn't cut rates, this means that Home Equity Lines of Credit and ARM loans tied to short-term Bonds like the 6-month LIBOR will not be moving lower in the near future.

Speaking of the Fed, there is talk about a rate cut to help the housing market or to smooth out the Sub-Prime problem.  Don't believe it.  The fed will only cut rates if the Core rate of inflation, as measured by the Personal Consumption Expenditure (PCE) Index, falls below 2% for a couple of consecutive months.  The latest Core PCE was 2.3%, with the next report due out on March 30th.

Industrial Production was reported at 1.0%, which was greater than expectations of 0.3% and was due primarily to the cold weather and increased utility usage.  Capacity Utilization was reported at 82.0%, which was hotter than expectations of 81.3%.  More importantly, inflationary pressures begin once Capacity Utilization nears maximum levels.  This allows for a rise in prices, and this increase in the cost of goods can thereby be passed on to the consumer.

Bond prices have been pushed below support provided by the Trend Line.  This comes of no surprise as Bonds have been unable to pierce resistance at the $99.41 level.  With prices now below the nearest floor of support, bonds could continue to drift lower to test the next closest floor of support at the 25-day Moving Average, presently located at $99.04 or 18bp worse than the current price.  Stay tuned because this may happen later today and create the need for a re-price alert to lock.

Inflation at the wholesale or producer level was reported far hotter than expectations with the Producer Price Index (PPI) coming in at 1.3% versus expectations of just 0.5%.  And the Core PPI, which strips out volatile food and energy, was reported at 0.4%, which was also higher than the 0.2% expected.  Producer Prices have increased 2.5% over the past 12 months, reaching their largest year-over-year gain since last August, while the Core Prices are up 1.8% in the past 12 months, matching January's year-over-year increase.  

The key here is whether higher PPI, or higher wholesale inflation will pass through to consumers and result in a higher Consumer Price Index (CPI) Report tomorrow.  Producers or wholesale manufacturers can see their costs to produce products increase, but not have the power to pass them on to consumers in a competitive marketplace.  The result is that the producers earn a little less, but consumer inflation - the key measure for the Fed - remains favorable.  It will be interesting to see how this plays out tomorrow, when we will get the results of the CPI Report.  

Mortgage Bonds did not move much lower on this inflationary data because of a very weak NY Empire State Index.  The index was reported at a sloppy 1.9 reading in March which was far lower than expectations and the lowest reading since May of 2005.

Initial Jobless Claims were reported at 318,000, which showed improvement and were better than expected.  The four week average, which gives a better overall trend, also improved.  So labor remains healthy. 

The Philadelphia Fed Index will be released at Noon ET and it could be a market mover if the reading is significantly out of line.  

Stocks are looking a little stronger this morning after shrugging off the inflationary news and weaker than expected economic data.  Yesterday, stocks made a big reversal off the lows and each of the major stock indices have favorable looking chart patterns.  Should stocks continue to grind higher, it may be at the expense of Bonds and prices may worsen.

When you factor in the chance of a hot CPI tomorrow on the heels of a hot PPI , the overbought state of bond prices, tough overhead resistance, as well as a stock market that is attempting to reverse higher from a sell-off, it appears prudent and conservative to lock today in advance of tomorrow's CPI Report. 

As we mentioned yesterday, the overbought state doesn't necessarily mean that Bonds are going to move lower, but if they start to move lower on a hot inflation reading tomorrow, the price erosion could be exaggerated.  Additionally, if the number comes in weaker than expected, the Bond's upside move will likely be somewhat muted.

Bond prices are slightly lower this morning after being pushed back once again from a tough layer of resistance at the $99.41 level. 

It's a quiet news day, so Stocks will once again have some influence.  And currently, Stocks look like they may have reversed yesterday's course and be headed upwards.  This will likely put some selling pressure on Bonds, which are already pressed up against the aforementioned tough ceiling of resistance.

Bond prices had made a nice bounce off support from the Trend Line, and the recent move higher has the Bond in an even more "overbought" state than before, as shown by the stochastic indicator on our Bond Page.  This doesn't necessarily mean that Bond prices are going to head lower, but it does mean that a move lower in Bonds could be exacerbated.  Tomorrow's Producer Price Index and Manufacturing Reports are generally not as weighty as Friday's Consumer Price Index, but with tough overhead resistance and an overbought status, the Bond is sitting in a position vulnerable to a move lower.  Beyond the Trend Line just underlying the Bonds present level, the next nearest floor of support for the Bond lies at the 25-day Moving Average at $99.02, about 32bp lower than present levels.

Bond prices are trading higher this morning, but off of the best levels of the day.  This as a result of stocks moving lower on Japanese Yen strength and unwinding of the "carry trade"

Also adding a bid to the Bond market was a weak reading on Retail Sales, reported at 0.1% and less than expectations of 0.3%.  When excluding auto sales, which happened to be strong in February, Retail Sales were -0.1% - the first decline since last October.  Even though this is a weak number, it must be taken with a grain of salt since February was very cold across most of the nation and likely kept many people away from shopping malls.  Additionally, the back to back soft readings in Retail Sales in both January and February shouldn't be viewed as a negative economic trend just yet, because income growth remains strong as evidenced by the Personal Income report last week, and the unemployment rate remains at a low 4.5%.  

The drama in the sub-prime market continues as New Century's stock has been delisted by the New York Stock Exchange because the stock is "no longer suitable for continued listing on the NYSE".  The shares of New Century will now likely trade on the Pink Sheets following the delisting.  For those of you familiar with trading stocks, you know that seeing a company's shares pushed down to the Pink Sheets is definitely not a good sign for the longer term outlook of the company.

Some good news on Housing to share with your clients and relationship partners.  David Lareah, the Chief Economist of the National Association of Realtors said a recovery in the nation's Housing market is "likely" this year.  We have been saying that August of 2006 looks like the bottom in housing to us.

On a technical level, bond prices have forged their way back above the Trend Line which will now continue to be a line of support.  However, a very stubborn layer of resistance lies just overhead at the $98.38 - $98.41 level.  In fact, prices touched this ceiling earlier today and have since backed off.  The Bond does remain overbought and ripe for a reversal lower, so we need to be very cautious during these volatile times.  We will float here, but with a finger close to the lock trigger as traders likely won't place any big bets one way or another ahead of two reads on inflation by way of Thursday's Producer Price Index (PPI) and the more important Consumer Price Index (CPI) on Friday.

Mortgage Bonds are flat this morning, even as Stocks are headed higher.  In yesterday's update, we discussed the implications of the Japanese Yen moving higher against other currencies, which in turn had sparked a sell-off in our markets.  But this morning, the Yen has backed off a bit, hence the nice move higher in Stocks.

If you remember the movie "Nightshift", the classic line was "This is Chuck to remind Bill to shut up!"...and you can't help but think that this is just how Ben Bernanke must be feeling, as former Fed Chairman Alan Greenspan, who recently turned 81, has been grasping for face time in the media, spewing contradictory remarks to those of the current Fed Chair.  In an interview with Bloomberg, Mr. Greenspan is saying he expects a "one-third probability" of a US recession later this year, and that the current expansion won't have the staying power of its decade-long predecessor.  

After a wild ride, Bonds have been very quiet over the last four trading sessions, and are smack in the middle of a ceiling of resistance and floor of support.  Of concern is the "overbought" position that Bonds are still in, which can be clearly seen on the stochastic indicator on the Bond Page.  This position tells us that when the market does make a sharp move in reaction to news, a move to the upside will still be favorable, but could be somewhat muted - while a move to the downside may be exacerbated. 

"Carry on my wayward son, there'll be peace when you are done" - Kansas.  And you can't turn on any business channel without hearing about the "carry trade".  Today, Stocks are under selling pressure in response to weak Asian stock markets from what appears to be an unwinding of the carry trade.  Let's explain what this means.  The carry trade means borrowing in a low interest rate currency, like the Yen, and investing the proceeds in higher interest rate assets in other countries such as the US or Australia.  While this strategy may appear to make sense and be relatively safe, the risk is in fluctuations between the two currencies.  For example, with low interest rates in Japan, they may decide to go for higher yields in the US, by purchasing our Bonds and dividend yielding Stocks.  But if the Dollar weakens against the Yen, the percentage loss in the currency can more than wipe out any percentage arbitrage in the yield.  And of late, the Japanese Yen is strengthening against foreign currencies, wiping out any gains in the carry trade - and this is putting some selling pressure on both Stocks and Bonds in other nations, including the US as the carry trade is "unwound".

The Institute of Supply Management (ISM) Services was reported at 54.3, which was lower than expectations of 57.0.  This is another concern for the long term health of our economy, and comes on the heels of Alan Greenspan's warning of a potential recession.  The chances for a Fed rate cut later this year have been escalating, and this adds even more importance to Friday's Jobs number.

On the technical side, Bond Traders are trying to figure their next move and will be highly influenced by Stocks.  At the moment, the Dow has tested and bounced higher off of support near the 12,000 level.  Should stocks remain above this important level, Bonds may move lower, especially since they are overbought and ripe for a reversal lower.  We will continue to float, but cautiously, as the market is very volatile and the Bond appears unstable at the moment.

In this Issue:

	THE BEST THINGS IN LIFE ARE FREE! But...you can't tell that to the tax man. So make sure you dot your I's and cross your T's...even the smallest mistake can cost you. For instance, did you know that the way alimony is paid can wipe out the deduction? The tip below can help you avoid this costly mistake. Speaking of paying...there's a good chance you might be overpaying your property taxes. As many as 60% of homes are assessed too high...resulting in a larger property tax bill. This month's issue may help you save a nice chunk of change! Don't forget to spread the wealth. The info below may benefit your friends, family, and coworkers. So pass it along! And call or email me with any questions.

LOVE AND MARRIAGE, LOVE AND MARRIAGE, GO TOGETHER LIKE...

	Well, you know the song. But more than 50% of marriages end in divorce, and the lyrics quickly change from "love and marriage" to "alimony and child support." Most people know their alimony payments are tax deductible and most also know alimony received is taxable income. But some innocent and seemingly harmless changes in the way alimony is paid can wipe out the deduction and make receipt of it tax free. And in an already emotional environment, more misunderstandings and legal battles are less than welcome. According to the IRS, alimony can be claimed as a deduction in the year paid if the payment is made in cash. That's the key point - it has to be paid in cash or by check. If it is used as part of a buyout or trade for personal items, furnishings or home equity, the deduction is disallowed. This can be a major issue, especially where home equity buyouts are concerned. Picture a divorce situation where, after a legal battle, it is determined one spouse is obligated to pay the other alimony. And because the legal settlement took some time to reach, there is back alimony owed by Spouse A to Spouse B of $20,000. Additionally, Spouse A is leaving the marital home but has the right to half the equity in the home, which comes to $20,000 for their share of the home equity. So...in the interest of keeping things simple and not having to take out loans or sell the marital home, the parties agree to trade the $20,000 owed to Spouse A in home equity for the $20,000 owed to Spouse B for back alimony. While this may appear to be a fair and reasonable way to settle the issue, it does not meet the IRS requirement for alimony to be paid in cash in order for it to be tax deductible. This issue is surprisingly common, and just recently the IRS Tax Court disallowed an ex-husband's deduction for alimony (2006-122 Rocke Richard LaBozetta, Petitioner v. Commissioner of Internal Revenue, Respondent) because it was a trade of equity for back alimony and not paid in cash. Had the ex-husband known this prior to the settlement, he may have structured the settlement agreement differently to take advantage of the tax deduction. Again, this could be a very common mistake for many individuals and could be a very costly mistake when counting on an extra tax deduction. It is important to take the time to meet with divorce and tax professionals that can help you make the correct financial decisions. If you need or know of someone who needs a referral for a tax or divorce professional, please contact me and I will be happy to recommend either to you.

DON'T OVERPAY...FILE A PROPERTY TAX APPEAL

	Income tax, sales tax, estate tax, excise tax, alternative minimum tax...and just when you thought you'd paid them all...along comes your property tax bill as a homeowner. But did you know that the National Taxpayers Union estimates that as many as 60% of homes are assessed for too high of a value, resulting in an incorrectly larger property tax bill? Chances are good you might be in that group of people paying too much, so taking the time to review your property tax bill could save you a nice chunk of change. 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.