9-30-04

   The third quarter was at pace or equal to last quarter. Because of good turnover in loans, the average age of my loan portfolio is only 58 days. With the economy continuing to recover, along with a short supply of homes, and strong demand, the turn over will continue.

   Uncle Al did what was expected of him. He raised rates again by a quarter point. The stock market loved this because it shows belief that he still sees strength in the economy. The bond market shrugged it off, and the mortgage brokers, hardly reacted. It is odd, but not an unexpected reaction from something they all had been planning for. Mortgage rates are still historically low and will remain that way for sometime.

   The economy supposedly hit a soft patch at the beginning of summer, and didn't really catch fire again until near the end of the quarter. Perhaps between the hurricanes and people taking vacations again, there was a slowing of growth. However, nothing is pointing toward an overall slowdown. In fact the pace of the GDP has picked up since the beginning of the year.

   This quarter was the best quarter I've ever had in raising new funds. Nearly $800k of new investment money came in during the last three months. That puts the portfolio at $5.8 million. I currently have a number of people that are planning to add to their investment, and some new interested parties who are contemplating coming aboard as new investors in the coming weeks. Many of the new investors came from your referrals once again - thank you.

   There are presently 61 loans; with homes valued at $9.7 million. I funded 49 new loans and had 49 loans close. Even though there isn't a large increase in the number of new loans over last quarter the average size of a loan has gone from $82k to $98k. With eight of the last 10 loans, have all been over $110k.

   I have updated the pictures of the current properties on the site. I appreciate your continued trust and your referrals.

   Denny J. Chittick