5 Ways to Dial Up Your Innovation!

As the marketing environment becomes more competitive, much has been written about the need for business people to innovate in order to succeed. But how does one go about innovating?

Contrary to popular belief, coming up with something new isn't a bolt-out-of-the- blue experience. Successful innovators don't sit around waiting for a new idea to suddenly strike them like lightning. The great inventor Thomas A. Edison famously said, "Genius is one percent inspiration and ninety-nine percent perspiration."

Here are 5 ways to work toward your next game-changing idea:

1. Stay open to new possibilities.

We're all educated to be insightful analysts. This makes us great at seeing how things won't work, makes us justify every idea we come up with and helps us focus on market needs, rather than human desires. Instead of looking for why an idea should be ignored, think of ways to develop it -- turn it into the kind of mind-blowing innovation that will excite and delight your customers and prospects.

2. Be a hunter-gatherer.

Look for ideas and inspiration everywhere you -- and your mind -- wander. Some of the things you gather this way will eventually gel into fresh inspiration and unexpected solutions.

3. Maintain a positive attitude.

When we come up with a new idea, it can seem impossible to make it happen. Don't be discouraged. Take the first step. When you come up with an innovative idea, you must be passionate, diligent and focused on what you have to do to bring it to life. Don't worry about the ups and downs and holdups on the way to getting there. Drop the words "can't" and "don't" from your vocabulary.

4. Share.

When you come up with an innovative idea, share it with friends, colleagues and customers whose opinion you value. Bouncing ideas off other people can sometimes move those ideas forward at an amazing speed. You might want to use social media or a blog to engage customers in the process of developing your innovative idea.

5. Slow and steady wins the race.

Once you have your innovation to the point you want to introduce it, take it slow. Not everyone will be quick to see your brilliance. Take time with employees, customers and prospects to help them understand. Their enthusiasm will soon grow.

As you think about an innovative opportunity, stay focused on the inputs, not the outcomes. And good luck with dialing up game-changing innovations for your business.... Enjoy a great month!

This e-mail is an advertisement for Dan Davidson. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice, or a commitment to lend. Although the material is deemed to be accurate and reliable, there is no guarantee of its accuracy. The material contained in the newsletter is the property of PrimeLending, A PlainsCapital Company and cannot be reproduced for any use without prior written consent. It is designed for real estate and other financial professionals only. It is not intended for consumer distribution. The material does not represent the opinion of PrimeLending, A PlainsCapital Company. © 2012 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; Illinois Residential Mortgage Licensee, IL Dept of Financial and Professional Regulation, - lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender. NMLS# 10331

Inside Lending Newsletter - For the week of February 27, 2012 – Vol. 10, Issue 9

>> Market Update  QUOTE OF THE WEEK..."What is past is prologue." --William Shakespeare INFO THAT HITS US WHERE WE LIVE... January New Home Sales dipped slightly, but only because the past month's sales were revised higher. Together, December and January new home sales were the best they've been in a year, up 3.5% in that time frame. The median sale price squeaked up $1,000 for the month, to $217,500. Best of all, the supply of new homes dropped to 5.6 months, the lowest in six years, with a record low 151,000 new homes for sale. Earlier in the week, January Existing Home Sales came in up 4.3%, but only because the past month's were revised lower. However, this was the third gain in four months and the best level since May 2010. Sales were up in all regions, and the supply of unsold homes dropped to a new post-recession low of 6.1 months. Existing home sales in 2011 were up 1.7% over 2010. The FHFA index of prices for homes with conforming mortgages, was up 0.7% in December and up 1.8% since March, the biggest 9-month gain since 2005-2006. BUSINESS TIP OF THE WEEK...  Business is a network of interconnections. Work the network with ideas and proposals that trigger actions from colleagues, suppliers and clients to help you reach your goals. >> Review of Last Week UNLUCKY OVER 13,000... The Dow made several trips over 13,000, but wasn't lucky enough to ever end a trading day above that number, something it hasn't done since May 2008. Still, all three major indexes enjoyed gains for the holiday-shortened week, with the S&P 500 racking up its seventh advance in eight weeks. However, investors remain concerned about the slow pace of our economic recovery and the continuing financial uncertainty in Europe.  The housing numbers reported above were good news, as it appears the market is starting to heal. The jobs situation needs to be a whole lot better, but at least it's not getting worse, with weekly new jobless claims unchanged at 351,000. Continuing unemployment claims dipped to 3.39 million, their lowest since August 2008. And people seem to be feeling more positive, as Friday, the University of Michigan Consumer Sentiment index climbed to its highest level in a year. For the week, the Dow ended up 0.3%, at 12983; the S&P 500 closed UP 0.3%, at 1366; and the Nasdaq shot up 0.4%, to 2964. Bond prices dipped early in the week, with investors heading back to stocks after a new Greek rescue package was agreed to. But lingering concerns over Europe restored some gains. The FNMA 3.5% bond we watch ended the week up .03, to $103.13. National average mortgage rates edged up slightly for fixed-rate loans, but still remain near the lowest levels on record, according to Freddie Mac's weekly survey. DID YOU KNOW?... A recent National Association of Realtors survey reported that 34% of home transactions had cash down payments at or above 20% of the sale price. >> This Week’s Forecast PENDING HOME SALES, Q4 GDP, INFLATION...  It will be interesting to see today's January Pending Home Sales number, expected up a bit, given the slide we saw last month. Wednesday's Q4 GDP - Second Estimate should match the initial number. Inflation comes Thursday, with the Fed's favorite measure of Core PCE Prices forecast to stay within the central bank's guidelines.  Manufacturing growth should hold steady as reported by the Chicago PMI for that area and by the ISM Index for the whole country. The Fed's Beige Book will give us a region-by-region view of the state of the recovery. >> The Week’s Economic Indicator Calendar Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates. Economic Calendar for the Week of Feb 27 – Mar 2  Date Time (ET) Release For Consensus Prior Impact M Feb 27 10:00 Pending Home Sales Jan 1.0% -3.5% Moderate Tu Feb 28 08:30 Durable Goods Orders Jan -1.4% 3.0% Moderate Tu Feb 28 10:00 Consumer Confidence Feb 62.5 61.1 Moderate W Feb 29 08:30 GDP - 2nd Estimate Q4 2.8% 2.8% Moderate W Feb 29 08:30 GDP Deflator - 2nd Est. Q4 0.4% 0.4% Moderate W Feb 29 09:45 Chicago PMI Feb 60.0 60.2 HIGH W Feb 29 10:30 Crude Inventories 2/25 NA 1.633M Moderate W Feb 29 14:00 Fed's Beige Book Feb NA NA Moderate Th Mar 1 08:30 Initial Unemployment Claims 2/25 355K 351K Moderate Th Mar 1 08:30 Continuing Unemployment Claims 2/25 3.425M 3.392M Moderate Th Mar 1 08:30 Personal Income Jan 0.4% 0.5% Moderate Th Mar 1 08:30 Personal Spending Jan 0.3% 0.0% HIGH Th Mar 1 08:30 PCE Prices - Core Jan 0.2% 0.2% HIGH Th Mar 1 10:00 ISM Index Feb 54.5 54.1 HIGH >> Federal Reserve Watch    Forecasting Federal Reserve policy changes in coming months... The Fed has made it clear they won't raise the Funds Rate before the end of 2014 unless they see higher inflation or a stronger recovery. Neither is happening yet. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same. Current Fed Funds Rate: 0%–0.25% After FOMC meeting on: Consensus Mar 13 0%–0.25% Apr 25 0%–0.25% Jun 20 0%–0.25% Probability of change from current policy: After FOMC meeting on: Consensus Mar 13      <1% Apr 25      <1% Jun 20      <1%

This e-mail is an advertisement for Dan Davidson. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice, or a commitment to lend. Although the material is deemed to be accurate and reliable, there is no guarantee of its accuracy. The material contained in the newsletter is the property of PrimeLending, A PlainsCapital Company and cannot be reproduced for any use without prior written consent. It is designed for real estate and other financial professionals only. It is not intended for consumer distribution. The material does not represent the opinion of PrimeLending, A PlainsCapital Company. © 2012 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; Illinois Residential Mortgage Licensee, IL Dept of Financial and Professional Regulation, - lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender. NMLS# 10331

Inside Lending Newsletter - For the week of February 20, 2012 – Vol. 10, Issue 8

>> Market Update  QUOTE OF THE WEEK..."Strive for continuous improvement, instead of perfection." --Kim Collins, track and field star INFO THAT HITS US WHERE WE LIVE... U.S. homebuilding is certainly following the advice of the first World Champion sprinter from Saint Kitts and Nevis. With housing starts registering a 699,000 annual rate in January, we're still a good way from perfection, but continuous improvement is being demonstrated. Also improved were December's starts, upwardly revised to 689,000. Best of all, the three-month moving average improved to a 697,000 annual rate, a three-year high. And single-family starts are up 16.2% versus a year ago.  New building permits were also up in January 0.7%, to a 676,000 annual rate. Versus a year ago, they're up 55% for multi-family and up 6.2% for single family homes. Even better, the number of single-family homes under construction was up 2.1% in January, the largest gain since 2004. And there were 119,000 more single-family starts than completions in January, the widest gap in those numbers since the housing boom peak in 2006. Builders clearly are more optimistic. BUSINESS TIP OF THE WEEK... It's important to stay optimistic. Every problem has a solution and you'll usually find it more quickly by having a positive attitude from the start. >> Review of Last Week UP... The stock market went in the right direction, enjoying its sixth advance in seven weeks with the S&P 500 at a new nine-month high. It wasn't clear why investors felt so good, as economic signals continued mixed. The Greek parliament approved austerity measures, but the situation is not yet resolved and there are other spendthrift Eurozone countries waiting in the wings. Good news over here included the above Housing Starts, plus weekly initial jobless claims dropping to 348,000. Although declining, this number is still not where it needs to be. Then there's inflation. Core CPI put consumer prices up a greater than expected .02% for January and up 2.3% year-over-year, their biggest gain since 2008. Leading Economic Indicators (LEI) were up a fourth straight month, but lower than expected. Manufacturing showed surprising strength in the Philadelphia and New York regions, yet overall industrial production came in flat. Retail sales were up in January following a flat December, but car sales were stalled. For the week, the Dow ended up 1.2%, at 12950; the S&P 500 closed UP 1.4%, at 1361; and the Nasdaq shot up 1.6%, to 2952. There were small pull backs in bond prices as investors pulled out, hoping the Greek debt crisis would get resolved this weekend. The FNMA 3.5% bond we watch ended the week down only .06, to $103.10. The national average rate on a 30-year fixed rate mortgage stayed at its record low level in Freddie Mac's weekly survey. Average rates overall remain historically low. DID YOU KNOW?...The top reasons people are selling their homes is for job relocation, tied with a need for more space, according to the latest seller profile from the National Association of Realtors. >> This Week’s Forecast HOME SALES, JOBS, CONSUMER MINDSET...  It's a quiet week for economic reports but two big ones will depict the state of the housing market in January. Wednesday's Existing Home Sales are expected up just a bit, and Friday's New Home Sales are also forecast to rise, though still far below where they should be. We'll monitor weekly Initial Jobless Claims and Continuing Claims on Thursday, and Friday brings the final read on University of Michigan Consumer Sentiment for February. The markets will be closed Monday in observance of Presidents' Day.  >> The Week’s Economic Indicator Calendar Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates. Economic Calendar for the Week of Feb 20 – Feb 24  Date Time (ET) Release For Consensus Prior Impact W Feb 22 10:00 Existing Home Sales Jan 4.63M 4.61M Moderate Th Feb 23 08:30 Initial Unemployment Claims 2/18 355K 348K Moderate Th Feb 23 08:30 Continuing Unemployment Claims 2/11 3.450M 3.426M Moderate Th Feb 23 11:00 Crude Inventories 2/18 NA -0.171M Moderate F Feb 24 09:55 Univ. of Michigan Consumer Sentiment-Final Feb 73.0 72.5 Moderate F Feb 17 08:30 New Home Sales Jan 315K 307K Moderate >> Federal Reserve Watch    Forecasting Federal Reserve policy changes in coming months... Last week's FOMC Minutes from the January 25 meeting revealed only one Fed member thought inflation would necessitate a rise in the Funds Rate before the end of 2014. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same. Current Fed Funds Rate: 0%–0.25% After FOMC meeting on: Consensus Mar 13 0%–0.25% Apr 25 0%–0.25% Jun 20 0%–0.25% Probability of change from current policy: After FOMC meeting on: Consensus Mar 13      <1% Apr 25      <1% Jun 20      <1%

This e-mail is an advertisement for Dan Davidson. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice, or a commitment to lend. Although the material is deemed to be accurate and reliable, there is no guarantee of its accuracy. The material contained in the newsletter is the property of PrimeLending, A PlainsCapital Company and cannot be reproduced for any use without prior written consent. It is designed for real estate and other financial professionals only. It is not intended for consumer distribution. The material does not represent the opinion of PrimeLending, A PlainsCapital Company. © 2012 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; Illinois Residential Mortgage Licensee, IL Dept of Financial and Professional Regulation, - lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender. NMLS# 10331

6 points to ponder about selling your home NOW

PLUS...3 ways to prep for April 15

Many homeowners ready to sell are instead waiting a couple of months until the popular Spring home selling season begins. But the fact is, in many locales, NOW may be the right time to put that property on the market. Here are 5 things to think about:

1. Pay no attention to media reports on nationwide statistics for the housing market. They mean nothing to you as a seller because real estate markets are purely local.

2. Remember, the ratio of supply to demand is key to the health of your local real estate market. So no matter what you read about the housing market nationally, the local facts determine your chances of making a sale at any point in time.

3. So, the first question to ask your realtor is how much competition you'd have if you put your home on the market now, before the Spring activity begins.

4. Because not many sellers put their homes on the market the first few months of the year, the inventory of homes for sale usually dwindles during the winter months. So, if your area is shy on inventory of good homes, now could be a good time to sell.

5. interest rates are low but won't stay that way forever. There could be a fair number of savvy buyers in your market who know this and want to take advantage of the situation now.

6. Many experts believe that the big price declines are behind us. More than a few buyers are beginning to realize this and are taking a good look at today's market.

STEP UP TO THAT TAX RETURN!

Preparing your tax return needn't be an annual ordeal. Getting organized can take a whole lot of stress out of the process. Now is the time to gather the information you'll need to do your return or hand over to your tax professional. There are just three categories:

1. Paperwork:

• Last year's return
• All income info: W-2 forms, 1099 forms, alimony, self-employment income
• Any 1098 forms: mortgage, educational institution statements, etc.
• IRA info
• Savings and investments info

2. Deductions:

• Charitable contributions
• Job hunting costs
• Moving costs
• State and local income taxes and sales taxes
• Real estate and personal property taxes
• Home mortgage interest and investment interest
• Points on a home mortgage or refinance
• Casualty and theft losses not covered by insurance
• Non-reimbursed business entertainment and travel expenses, including car use
• Business use of home
• Medical expenses
• Educational expenses

3. Miscellaneous expenses:

• Tax preparation and tax advice fees
• Safe deposit box rental
• Investment fees and expenses, including service charges on dividend reinvestment plans and trustee's fees for your IRA, if separately billed and paid
• Convenience fees charged for paying income tax, including estimated tax payments, by credit or debit card
• Appraisal fees for a casualty loss or charitable contribution
• Ask a tax professional about other expenses you can deduct if you have extensive investments, or estate, trust, IRA or Social Security issues

The above are only guidelines to help you organize some of the information you'll need to prepare your tax return. If you have any questions about these or other tax matters, always consult with a qualified tax professional.

... Have a great day!

PS  With today's mortgage rates at historic new lows and the most affordable home prices ever, many people are upsizing, downsizing or refinancing. Please call or email us now to discuss your situation.

This was sent to you because of your relationship with Dan Davidson. The material provided is for informational and educational purposes only and should not be construed as investment and/or mortgage advice or a commitment to lend. Although the material is deemed to be accurate and reliable, there is no guarantee of its accuracy. The material contained in the newsletter is the property of PrimeLending, A PlainsCapital Company and cannot be reproduced for any use without prior written consent. PrimeLending, A PlainsCapital Company is an Equal Housing Lender. © 2012 PrimeLending, A PlainsCapital Company. Trade/service marks are the property of PlainsCapital Corporation, PlainsCapital Bank, or their respective affiliates and/or subsidiaries. Some products may not be available in all states. This is not a commitment to lend. Restrictions apply. All rights reserved. PrimeLending, A PlainsCapital Company (NMLS no: 13649) is a wholly-owned subsidiary of a state-chartered bank and is an exempt lender in the following states: AK, AR, CO, DE, FL, GA, HI, ID, IA, KS, KY, LA, MN, MS, MO, MT, NE, NV, NY, NC, OH, OK, OR, PA, SC, SD, TN, TX, UT, VA, WV, WI, WY. Licensed by: AL State Banking Dept.- consumer credit lic no. MC21004; AZ Dept. of Financial Institutions- mortgage banker lic no. BK 0907334; Licensed by the Department of Corporations under the California Residential Mortgage Lending Act- lender lic no. 4130996; CT Dept. of Banking- lender lic no. ML-13649; D.C. Dept. of Insurance, Securities and Banking- dual authority lic no. MLO13649; Illinois Residential Mortgage Licensee, IL Dept of Financial and Professional Regulation, - lender lic no. MB.6760635; IN Dept. of Financial Institutions- sub lien lender lic no. 11169; ME Dept. of Professional & Financial Regulation- supervised lender lic no. SLM8285; MD Dept. of Labor, Licensing & Regulation- lender lic no. 11058; Massachusetts Division of Banking– lender & broker license nos. MC5404, MC5406, MC5414, MC5450, MC5405; MI Dept. of Labor & Economic Growth- broker/lender lic nos. FR 0010163 and SR 0012527; Licensed by the New Hampshire Banking Department- lender lic no. 14553-MB; NJ Dept. of Banking and Insurance-lender lic no. 0803658; NM Regulation and Licensing Dept. Financial Institutions Division- lender license no. 01890; ND Dept. of Financial Institutions- money broker lic no. MB101786; RI Division of Banking- lender lic no. 20102678LL and broker lic no. 20102677LB; TX OCCC Reg. Loan License- lic no. 7293; VT Dept. of Banking, Insurance, Securities and Health Care Administration- lender lic no. 6127 and broker lic no. 0964MB; WA Dept. of Financial Institutions-consumer lender lic no. 520-CL-49075. PrimeLending, A PlainsCapital Company is an Equal Housing Opportunity Lender. NMLS# 10331

Inside Lending Newsletter - For the week of February 6, 2012 – Vol. 10, Issue 6

>> Market Update  QUOTE OF THE WEEK..."A story to me means a plot where there is some surprise. Because that is how life is -- full of surprises." --Isaac Bashevis Singer INFO THAT HITS US WHERE WE LIVE..."The Federal Reserve surprised the market last week by indicating that short-term rates were likely to stay at their current low levels until the end of 2014," according to the Mortgage Bankers Association chief economist. He added, "Longer-term Treasury rates dropped... and mortgage rates for the week were down slightly." Freddie Mac's chief economist felt rates had eased because "fourth-quarter growth in the economy fell short of market projections." He did see "one bright spot... residential construction spending rebounded in December, rising 0.7%." For the year, housing starts in fact rose 25%! Maybe that's why the National Association of Home Builders' Market Index rose from 14 in September to 25 in January, a 4-year high. Both new and existing homes are now very affordable, with prices at post-recession lows. Yet the home price decline since the end of the recession in mid-2009 has been a modest 3%-7%.  BUSINESS TIP OF THE WEEK... Have a clear vision of what you want. Success doesn't just happen, you have to work for it. So make sure you know your goal. >> Review of Last Week UP WEEK... The latest surprise was Friday's unexpectedly upbeat January jobs data. This boosted the Dow to its highest close since 2008, while the Nasdaq outdid that, hitting its highest level since December 2000 and the S&P 500 reached its best reading since last summer. The good mood on Wall Street came from the Bureau of Labor Statistics report that nonfarm payrolls were up a greater than expected 243,000 in January and the unemployment rate edged down to 8.3%. Some questioned the numbers coming out of Washington in an election year, but no matter what your politics, you have to hope jobs will improve for the sake of the housing recovery. Another positive sign came with ISM Services, up greater than expected, showing growth for the sector with over 80% of the jobs. But ISM Manufacturing grew less than expected and the Chicago PMI manufacturing read dropped for the month. Also disappointing, Consumer Confidence fell in January after improving the prior month. For the week, the Dow ended UP 1.6%, at 12862; the S&P 500 closed up 2.2%, at 1345; and the Nasdaq gained 3.2%, to 2906. Friday's nonfarm payrolls beat slammed Treasuries, but the mortgage bonds we care about held on well enough. The FNMA 3.5% bond we watch ended the week up just .02, to $103.24. National average rates for some types of mortgages registered new all-time lows in Freddie Mac's weekly survey of conforming mortgages. DID YOU KNOW?...Part of the Treasury Department's monthly budget report, the Federal Deficit is the amount by which government expenditures exceed tax revenues. The difference is made up by borrowing from the public by issuing Treasury Bonds.   >> This Week’s Forecast TRADE AND FEDERAL DEFICITS, THE CONSUMER'S ATTITUDE... Last week's avalanche of economic data is being followed by a light dusting of financial reports. We of course will continue to watch weekly Initial Unemployment Claims. Friday, the December Trade Deficit is forecast up a little, which is not the right direction, after which the Treasury Department gives us the read on the Federal Deficit for January. In between the two deficit measures, we'll check the pulse of the consumer. University of Michigan Consumer Sentiment for February should drop slightly. >> The Week’s Economic Indicator Calendar Weaker than expected economic data tends to send bond prices up and interest rates down, while positive data points to lower bond prices and rising loan rates. Economic Calendar for the Week of Feb 6 – Feb 10  Date Time (ET) Release For Consensus Prior Impact W Feb 8 10:30 Crude Inventories 2/4 NA 4.175M Moderate Th Feb 9 08:30 Initial Unemployment Claims 2/4 370K 367K Moderate Th Feb 2 08:30 Continuing Unemployment Claims 1/28 3.475M 3.437M Moderate F Feb 10 08:30 Trade Deficit Dec -$48.2B -$47.8B Moderate F Feb 10 09:55 Univ. of Michigan Consumer Sentiment Feb 74.0 75.0 Moderate F Feb 10 14:00 Federal Deficit Jan -$40.0B -$49.8B Moderate >> Federal Reserve Watch    Forecasting Federal Reserve policy changes in coming months... The week before last week, the Fed said its goal was to keep the Funds Rate super low through late 2014. No one yet doubts their resolve. Note: In the lower chart, a 1% probability of change is a 99% certainty the rate will stay the same. Current Fed Funds Rate: 0%–0.25% After FOMC meeting on: Consensus Mar 13 0%–0.25% Apr 25 0%–0.25% Jun 20 0%–0.25% Probability of change from current policy: After FOMC meeting on: Consensus Mar 13      <1% Apr 25      <1% Jun 20      <1%

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