As we enter into the second month of 2010 we are starting to see some positive signs returning to the purchase and refinance markets. The normal holiday slowdown started earlier in 2009, lasted longer, was affected by a bump up in rates in late December, and was compounded in most of the Northeast by severe Winter weather. Looking ahead we can see Spring in sight, which historically brings an increase in real estate sales.At Superior, our loan officers are reporting that they are very busy with new customers that want information on qualifying and current rates, which have trickled back down and are still very low when compared to rates over the past 25 years. The Federal Government's tax incentives for first time buyers and existing homeowners are still available for a few more months and home prices are more affordable today then they have been in five years. All this leads us to believe that the housing market recovery continues to make slow but steady progress. In fact, home prices in many areas are considered to be stable and some areas are starting to see the first signs of appreciation.

As most of us realize, the real estate market has always gone through cycles of appreciation followed by a period of flat or declining prices before prices begin to move up again. Even for seasoned veterans, this cycle is one of the most severe but still a cycle. At this point in time our hope is that the Federal Government, who controls most lending sources today, and the big banks recognize where we are in the cycle and stop tightening loan underwriting guidelines and realize that some loosening is needed. From talking to our contacts in the industry we are cautiously optimistic that this is happening.

In the meantime smart buyers will continue to enter the market. They will be helped by qualified realtors and honest lenders leading them to home ownership: one of the best investments the American family can make.

Stephen M. Cors

CEO

Superior Mortgage Corp.