From Realtor Magazine Online, Daily Real Estate News September 26, 2008
Freddie Mac's Primary Mortgage Market Survey, released Thursday, shows the 30-year fixed-rate mortgages rose to an average of 6.09 percent this week, with an average 0.7 point.
Rates are up from last week when they averaged 5.78 percent, but are lower than last year at this time, when 30-year rates averaged 6.42 percent.
Thirty-year fixed-rate mortgages are still more than 0.5 percentage points below this year's peak of 6.63 percent, set the week of July 24th.
15-Year Rates at 5.77%
The 15-year fixed-rate mortgage this week averaged 5.77 percent with an average 0.6 point, up from last week when it averaged 5.35 percent. A year ago at this time,15-year mortgage rates averaged 6.09 percent.
Five-year Treasury-indexed hybrid adjustable-rate mortgages (ARMs) averaged 6.02 percent this week, with an average 0.6 point, up from last week when it averaged 5.67 percent. A year ago, the 5-year ARM averaged 6.15 percent.
One-year Treasury-indexed ARMs averaged 5.16 percent this week with an average 0.5 point, up from last week when it averaged 5.03 percent. At this time last year, the 1-year ARM averaged 5.60 percent.
Market Remains Soft
"The latest housing information for the third quarter continues to show some softness in prices and sales activity," said Frank Nothaft, Freddie Mac vice president and chief economist.
He noted that house prices fell 5.3 percent over the twelve months ending in July – weaker than the market consensus – according to the Federal Housing Finance Agency's purchase-only house price index.
Meanwhile, the August median sales price for existing single-family homes fell 9.7 percent over the year earlier, the largest 12-month drop since records began in 1968, according the NATIONAL ASSOCIATION OF REALTORS®.
Source: Freddie Mac
Friday, September 26, 2008
Thursday, September 25, 2008
Consequences of Defaulting on Mortgage Payments
Fannie Mae recently released updated underwriting guidelines for new mortgage loans that directly address individuals with various types of foreclosure history.
* Potential borrowers with a foreclosure on their credit record must wait 5 years to be considered for new funding, and are subject to additional credit and down payment requirements for 5 to 7 years.
* Deed-in-lieu-of-foreclosures warrant a 4 year wait with additional requirements for 4 to 7 years.
* Short Sales require a two year wait.
DOWNLOAD FANNIE MAE GUIDELINES HERE...
https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2008/0816.pdf
* Potential borrowers with a foreclosure on their credit record must wait 5 years to be considered for new funding, and are subject to additional credit and down payment requirements for 5 to 7 years.
* Deed-in-lieu-of-foreclosures warrant a 4 year wait with additional requirements for 4 to 7 years.
* Short Sales require a two year wait.
DOWNLOAD FANNIE MAE GUIDELINES HERE...
https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2008/0816.pdf
Wednesday, September 24, 2008
NAR: August Existing-Home Sales Slide
From Realtor Magazine Online, Daily Real Estate News September 24, 2008
Existing-home sales were down in August following a healthy gain in July as tight mortgage credit curtailed activity, according to the NATIONAL ASSOCIATION OF REALTORS®. Sales rose in the Midwest and South, but fell in the Northeast and West.
Nationally, existing-home sales — including single-family, townhomes, condominiums and co-ops — declined 2.2 percent to a seasonally adjusted annual rate of 4.91 million units in August from an upwardly revised pace of 5.02 million in July, but are 10.7 percent below the 5.50 million-unit pace in August 2007.
NAR President Richard F. Gaylord notes the pendulum in the mortgage market has swung too far. “The difficulty in obtaining a mortgage increased over past couple months, making it more challenging for creditworthy borrowers to find financing,” he says. “Our hope is that overly tight lending criteria can be loosened with reasonable standards and credit so that sales activity can catch up with demand.
"Interest rates have already declined, but there is a serious question as to whether a cash infusion by the U.S. Treasury into Wall Street would help consumers by improving mortgage funding," says Gaylord.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 6.48 percent in August from 6.43 percent in July; the rate was 6.57 percent in August 2007.
However, last week the 30-year fixed had dropped to 5.78 percent.
Lawrence Yun, NAR chief economist, says the recent drop in interest rates is an immediate impact of recent government action. “August sales reflect higher interest rates before the government takeover of Freddie Mac and Fannie Mae, and the sudden drop in mortgage interest rates over the past couple weeks is improving housing affordability,” he says. “With higher loan limits and a beefing up of the FHA program, all the mechanisms have been falling into place to increase mortgage availability.
“However, home sales will be constrained without a freer flow of credit into the mortgage market. The faster that happens, the sooner we’ll see a broad stabilization in home prices that in turn will help the economy recover,” Yun says. “Historically, housing has led the nation out of economic doldrums. There will not be an economic recovery without a housing recovery.”
Median Price Drops
The national median existing-home price for all housing types was $203,100 in August, down 9.5 percent from a year ago when the median was $224,400.“The median home price reflects more transactions related to subprime loans,” Yun adds. “Fewer than 10 percent of home owners have subprime loans, but these mortgages are accounting for a disproportionately high share of sales in the current market. On the other hand, areas that have had sharp price cuts are seeing a turnaround in sales, which are rising very fast now in parts of California, Florida and Nevada.”
Total housing inventory at the end of August fell 7.0 percent to 4.26 million existing homes available for sale, which represents a 10.4-month supply3 at the current sales pace, down from a revised 10.9-month supply in July.
Single-family home sales slipped 1.4 percent to a seasonally adjusted annual rate of 4.35 million in August from an upwardly revised pace of 4.41 million in July, but are 9.6 percent below the 4.81 million-unit level a year ago. The median existing single-family home price was $201,900 in August, down 9.7 percent from August 2007.
Existing condominium and co-op sales dropped 8.2 percent to a seasonally adjusted annual rate of 560,000 units in August from an upwardly revised level of 610,000 in July, and are 19.0 percent below the 691,000-unit pace in August 2007. The median existing condo price4 was $212,600 in August, which is 7.2 percent below a year ago.
Regional Results:
Midwest
Regionally, existing-home sales in the Midwest rose 0.9 percent in August to a pace of 1.14 million but are 12.3 percent below August 2007. The median price in the Midwest was $168,000, down 5.6 percent from a year ago.
South
In the South, existing-home sales increased 0.5 percent to an annual pace of 1.86 million in August, but are 15.1 percent below a year ago. The median price in the South was $176,500, which is 3.4 percent lower than August 2007.
West
Existing-home sales in the West fell 5.3 percent to an annual rate of 1.07 million in August, but are 4.9 percent higher than August 2007. The median price in the West was $251,600, down 23.9 percent from a year ago. “The highest concentration of foreclosures is in the West, which is weighing down the median price because many buyers are taking advantage of deeply discounted prices,” Yun said.
Northeast
In the Northeast, existing-home sales dropped 6.6 percent to an annual pace of 850,000 in August, and are 15.0 percent below a year ago. The median price in the Northeast was $271,000, down 3.8 percent from August 2007.
—NAR
Existing-home sales were down in August following a healthy gain in July as tight mortgage credit curtailed activity, according to the NATIONAL ASSOCIATION OF REALTORS®. Sales rose in the Midwest and South, but fell in the Northeast and West.
Nationally, existing-home sales — including single-family, townhomes, condominiums and co-ops — declined 2.2 percent to a seasonally adjusted annual rate of 4.91 million units in August from an upwardly revised pace of 5.02 million in July, but are 10.7 percent below the 5.50 million-unit pace in August 2007.
NAR President Richard F. Gaylord notes the pendulum in the mortgage market has swung too far. “The difficulty in obtaining a mortgage increased over past couple months, making it more challenging for creditworthy borrowers to find financing,” he says. “Our hope is that overly tight lending criteria can be loosened with reasonable standards and credit so that sales activity can catch up with demand.
"Interest rates have already declined, but there is a serious question as to whether a cash infusion by the U.S. Treasury into Wall Street would help consumers by improving mortgage funding," says Gaylord.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 6.48 percent in August from 6.43 percent in July; the rate was 6.57 percent in August 2007.
However, last week the 30-year fixed had dropped to 5.78 percent.
Lawrence Yun, NAR chief economist, says the recent drop in interest rates is an immediate impact of recent government action. “August sales reflect higher interest rates before the government takeover of Freddie Mac and Fannie Mae, and the sudden drop in mortgage interest rates over the past couple weeks is improving housing affordability,” he says. “With higher loan limits and a beefing up of the FHA program, all the mechanisms have been falling into place to increase mortgage availability.
“However, home sales will be constrained without a freer flow of credit into the mortgage market. The faster that happens, the sooner we’ll see a broad stabilization in home prices that in turn will help the economy recover,” Yun says. “Historically, housing has led the nation out of economic doldrums. There will not be an economic recovery without a housing recovery.”
Median Price Drops
The national median existing-home price for all housing types was $203,100 in August, down 9.5 percent from a year ago when the median was $224,400.“The median home price reflects more transactions related to subprime loans,” Yun adds. “Fewer than 10 percent of home owners have subprime loans, but these mortgages are accounting for a disproportionately high share of sales in the current market. On the other hand, areas that have had sharp price cuts are seeing a turnaround in sales, which are rising very fast now in parts of California, Florida and Nevada.”
Total housing inventory at the end of August fell 7.0 percent to 4.26 million existing homes available for sale, which represents a 10.4-month supply3 at the current sales pace, down from a revised 10.9-month supply in July.
Single-family home sales slipped 1.4 percent to a seasonally adjusted annual rate of 4.35 million in August from an upwardly revised pace of 4.41 million in July, but are 9.6 percent below the 4.81 million-unit level a year ago. The median existing single-family home price was $201,900 in August, down 9.7 percent from August 2007.
Existing condominium and co-op sales dropped 8.2 percent to a seasonally adjusted annual rate of 560,000 units in August from an upwardly revised level of 610,000 in July, and are 19.0 percent below the 691,000-unit pace in August 2007. The median existing condo price4 was $212,600 in August, which is 7.2 percent below a year ago.
Regional Results:
Midwest
Regionally, existing-home sales in the Midwest rose 0.9 percent in August to a pace of 1.14 million but are 12.3 percent below August 2007. The median price in the Midwest was $168,000, down 5.6 percent from a year ago.
South
In the South, existing-home sales increased 0.5 percent to an annual pace of 1.86 million in August, but are 15.1 percent below a year ago. The median price in the South was $176,500, which is 3.4 percent lower than August 2007.
West
Existing-home sales in the West fell 5.3 percent to an annual rate of 1.07 million in August, but are 4.9 percent higher than August 2007. The median price in the West was $251,600, down 23.9 percent from a year ago. “The highest concentration of foreclosures is in the West, which is weighing down the median price because many buyers are taking advantage of deeply discounted prices,” Yun said.
Northeast
In the Northeast, existing-home sales dropped 6.6 percent to an annual pace of 850,000 in August, and are 15.0 percent below a year ago. The median price in the Northeast was $271,000, down 3.8 percent from August 2007.
—NAR
Mortgage Applications Fall
From Realtor Magazine Online, Daily Real Estate News September 24, 2008
Mortgage Applications Fall After Two-Week Spurt
Mortgage application volume fell 10.6 percent on a seasonally adjusted basis to 591.4 compared with 661.7 the previous week, according to the Mortgage Bankers Association weekly survey.
Mortgage applications had risen after the U.S. government took over Fannie Mae and Freddie Mac, but in the wake of more bad economic news and rising interest rates both buyers and refinancers stepped back.
On an unadjusted basis the index decreased 11.1 percent compared with the previous week and was down 9.3 percent compared with the same week last year.
Refinance applications fell 11.2 percent and purchase applications declined 10 percent. Meanwhile, mortgage rates jumped last week:
* 30-year fixed-rate mortgages increased to 6.08 percent from 5.82 percent.
* 15-year fixed-rate mortgages increased to 5.84 percent from 5.54 percent.
* 1-year ARMs increased to 7.01 percent from 6.95.
Source: Mortgage Bankers Association (09/24/2008)
Mortgage Applications Fall After Two-Week Spurt
Mortgage application volume fell 10.6 percent on a seasonally adjusted basis to 591.4 compared with 661.7 the previous week, according to the Mortgage Bankers Association weekly survey.
Mortgage applications had risen after the U.S. government took over Fannie Mae and Freddie Mac, but in the wake of more bad economic news and rising interest rates both buyers and refinancers stepped back.
On an unadjusted basis the index decreased 11.1 percent compared with the previous week and was down 9.3 percent compared with the same week last year.
Refinance applications fell 11.2 percent and purchase applications declined 10 percent. Meanwhile, mortgage rates jumped last week:
* 30-year fixed-rate mortgages increased to 6.08 percent from 5.82 percent.
* 15-year fixed-rate mortgages increased to 5.84 percent from 5.54 percent.
* 1-year ARMs increased to 7.01 percent from 6.95.
Source: Mortgage Bankers Association (09/24/2008)
Tuesday, September 23, 2008
Converting Existing Homes to Rentals-Underwriting Instructions
From U.S. Dept. of Housing and Urban Development
MORTGAGEE LETTER 2008-25
TO: ALL APPROVED MORTGAGEES
SUBJECT: Converting Existing Homes to Rentals-Underwriting Instructions
Through this Mortgagee Letter, the Federal Housing Administration (FHA) takes steps to immediately respond to an unscrupulous practice arising in the housing mortgage market that poses a risk to FHA, FHA-approved lenders, and consequently to FHA's ability to help new homeowners.
Recently, FHA and others in the mortgage industry have observed an increasing number of homeowners who have chosen to vacate their existing principal residence and purchase a new
residence. This has been occurring as some homeowners, given the rising price of fuel, are relocating to homes nearer their employment, or are taking advantage ofother home buying opportunities arising in the marketplace.
Due to FHA's concern that some homebuyers in these transactions may attempt to provide misleading information regarding the rental income of the property being vacated to qualify for the new mortgage, FHA is instituting underwriting guidance designed to assure that the homebuyer can make payments on the full debt service of both mortgages.
Consequently, beginning with case number assignments on or after the date of this Mortgagee Letter and until further notice, the underwriting analysis may not consider any rental income from the property being vacated except under circumstances described in this Mortgagee Letter.
The exclusion of rental income from property being vacated is being instituted on a temporary basis while FHA further analyzes this situation to determine whether permanent measures may need to be taken. This will assure that a homeowner either has sufficient income to make both mortgage payments without any rental income or has an equity position not likely to result in defaulting on the mortgage on the property being vacated.
In either case, this guidance is directed to preventing the practice known as "buy and bail" where the homebuyer purchases, for example, a more affordable dwelling with the intention to cease making payments on the previous mortgage. Although the property being vacated will not have a mortgage insured by FHA, surrounding properties may and, thus, FHA may be indirectly negatively affected should that property result in a foreclosure.
Exceptions:
Rental income on the property being vacated, reduced by the appropriate vacancy factor as determined by the jurisdictional FHA Homeownership Center (see http://www.hud.gov/offices/hsg/sfh/ref/sfhb2-2lu.cfm) may be considered in the underwriting analysis under the following circumstances:
• Relocations: The homebuyer is relocating with a new employer, or being transferred by the current employer to an area not within reasonable and locally recognized commuting distance. A properly executed lease agreement (i.e., a lease signed by the homebuyer and the lessee) of at least one year's duration after the loan is closed is required. FHA recommends that underwriters also obtain evidence of the security deposit and/or evidence the first month's rent was paid to the homeowner.
• Sufficient Equity in Vacated Property: The homebuyer has a loan-to-value ratio of 75 percent or less, as determined by either a current (no more than six months old) residential appraisal or by comparing the unpaid principal balance to the original sales price ofthe pmperty. The appraisal, in addition to using forms Fannie Mae 1004/Freddie Mac 70, may be an exterior-only appraisal using form Fannie Mae/Freddie Mac 2055, and for condominium units, form Fannie Mae107S/Freddie Mac 466.
The guidance in this Mortgagee Letter applies solely to a principal residence being vacated in favor of another principal residence. This Mortgagee Letter is not applicable to existing rental
properties disclosed on the loan application and confirmed by tax returns (Schedule E of IRS 1040).
It is important to note that if the property being vacated had a mortgage insured by FHA, eligibility for a second FHA insured mortgage can only occur under the exemptions described in handbook HUD-4155.1 REV-5, paragraph 1-2.
If you have any questions regarding this Mortgagee Letter, call 1-800-CALLFHA.
Sincerely,
Brian D. Montgomery
Assistant Secretary for HousingFederal
Housing Commissioner
MORTGAGEE LETTER 2008-25
TO: ALL APPROVED MORTGAGEES
SUBJECT: Converting Existing Homes to Rentals-Underwriting Instructions
Through this Mortgagee Letter, the Federal Housing Administration (FHA) takes steps to immediately respond to an unscrupulous practice arising in the housing mortgage market that poses a risk to FHA, FHA-approved lenders, and consequently to FHA's ability to help new homeowners.
Recently, FHA and others in the mortgage industry have observed an increasing number of homeowners who have chosen to vacate their existing principal residence and purchase a new
residence. This has been occurring as some homeowners, given the rising price of fuel, are relocating to homes nearer their employment, or are taking advantage ofother home buying opportunities arising in the marketplace.
Due to FHA's concern that some homebuyers in these transactions may attempt to provide misleading information regarding the rental income of the property being vacated to qualify for the new mortgage, FHA is instituting underwriting guidance designed to assure that the homebuyer can make payments on the full debt service of both mortgages.
Consequently, beginning with case number assignments on or after the date of this Mortgagee Letter and until further notice, the underwriting analysis may not consider any rental income from the property being vacated except under circumstances described in this Mortgagee Letter.
The exclusion of rental income from property being vacated is being instituted on a temporary basis while FHA further analyzes this situation to determine whether permanent measures may need to be taken. This will assure that a homeowner either has sufficient income to make both mortgage payments without any rental income or has an equity position not likely to result in defaulting on the mortgage on the property being vacated.
In either case, this guidance is directed to preventing the practice known as "buy and bail" where the homebuyer purchases, for example, a more affordable dwelling with the intention to cease making payments on the previous mortgage. Although the property being vacated will not have a mortgage insured by FHA, surrounding properties may and, thus, FHA may be indirectly negatively affected should that property result in a foreclosure.
Exceptions:
Rental income on the property being vacated, reduced by the appropriate vacancy factor as determined by the jurisdictional FHA Homeownership Center (see http://www.hud.gov/offices/hsg/sfh/ref/sfhb2-2lu.cfm) may be considered in the underwriting analysis under the following circumstances:
• Relocations: The homebuyer is relocating with a new employer, or being transferred by the current employer to an area not within reasonable and locally recognized commuting distance. A properly executed lease agreement (i.e., a lease signed by the homebuyer and the lessee) of at least one year's duration after the loan is closed is required. FHA recommends that underwriters also obtain evidence of the security deposit and/or evidence the first month's rent was paid to the homeowner.
• Sufficient Equity in Vacated Property: The homebuyer has a loan-to-value ratio of 75 percent or less, as determined by either a current (no more than six months old) residential appraisal or by comparing the unpaid principal balance to the original sales price ofthe pmperty. The appraisal, in addition to using forms Fannie Mae 1004/Freddie Mac 70, may be an exterior-only appraisal using form Fannie Mae/Freddie Mac 2055, and for condominium units, form Fannie Mae107S/Freddie Mac 466.
The guidance in this Mortgagee Letter applies solely to a principal residence being vacated in favor of another principal residence. This Mortgagee Letter is not applicable to existing rental
properties disclosed on the loan application and confirmed by tax returns (Schedule E of IRS 1040).
It is important to note that if the property being vacated had a mortgage insured by FHA, eligibility for a second FHA insured mortgage can only occur under the exemptions described in handbook HUD-4155.1 REV-5, paragraph 1-2.
If you have any questions regarding this Mortgagee Letter, call 1-800-CALLFHA.
Sincerely,
Brian D. Montgomery
Assistant Secretary for HousingFederal
Housing Commissioner
This is Not the Great Depression
From Realtor Magazine Online, Daily Real Estate News September 23, 2008
Comparing the current crisis to the Great Depression is just plain wrong, say historians and veteran financial experts.
"The nomenclature of the word 'crisis' has cheapened," says Roy Smith, a professor at New York University's Stern School of Business and former partner at Goldman Sachs.
“The Great Depression had thousands of banks failing and people losing their life savings, 25 percent unemployment and social unrest and tent cities of the poor," says Allan Sloan, Washington Post and Fortune magazine columnist.
"With just 6 percent unemployment, we are having a debate as to whether we are even in a recession," says Richard Sylla, professor of the history of financial institutions and markets at New York University.
Source: Reuters News, Robert MacMillan (09/22/08)
Comparing the current crisis to the Great Depression is just plain wrong, say historians and veteran financial experts.
"The nomenclature of the word 'crisis' has cheapened," says Roy Smith, a professor at New York University's Stern School of Business and former partner at Goldman Sachs.
“The Great Depression had thousands of banks failing and people losing their life savings, 25 percent unemployment and social unrest and tent cities of the poor," says Allan Sloan, Washington Post and Fortune magazine columnist.
"With just 6 percent unemployment, we are having a debate as to whether we are even in a recession," says Richard Sylla, professor of the history of financial institutions and markets at New York University.
Source: Reuters News, Robert MacMillan (09/22/08)
Cities Where Home Owners Spend the Most
From Realtor Magazine Online, Daily Real Estate News September 23, 2008
Almost 15 percent of American home owners with a mortgage spend half of their income or more on housing costs, according to 2007 data released Tuesday by the U.S. Census Bureau. That is up from nearly 7.1 million in 2006.
Traditionally, the government and most lenders consider home owners spending 30 percent or more of their income on housing costs to be financially burdened. That definition now covers nearly 38 percent of American home owners with a mortgage – 19 million of them.
Here are the top 13 areas where the most mortgage holders spend more than 30 percent of their income on their homes. The information is an estimate based on an analysis of Census data by Harvard University’s Joint Center for Housing Studies.
1. Miami-Fort Lauderdale-Miami Beach, 58 percent
2. Stockton, Calif.,57 percent
3. Riverside-San Bernardino-Ontario, Calif., 55 percent
4. Cape Coral-Fort Myers, Fla., 55 percent
5. Los Angeles-Long Beach-Santa Ana, Calif., 54 percent
6. Modesto, Calif., 54 percent
7. San Diego-Carlsbad-San Marcos, Calif., 53 percent
8. San Francisco-Oakland-Fremont, Calif., 53 percent
9. Sarasota-Bradenton-Venice, Fla., 52 percent
10. Oxnard-Thousand Oaks-Ventura, Calif., 52 percent
11. San Jose-Sunnyvale-Santa Clara, Calif., 51 percent
12. Las Vegas-Paradise, Nev., 51 percent
13. Sacramento-Arden-Arcade-Roseville, Calif., 50 percent
Source: The Associated Press, Adrian Sainz and Alan Zibel (09/23/08)
Almost 15 percent of American home owners with a mortgage spend half of their income or more on housing costs, according to 2007 data released Tuesday by the U.S. Census Bureau. That is up from nearly 7.1 million in 2006.
Traditionally, the government and most lenders consider home owners spending 30 percent or more of their income on housing costs to be financially burdened. That definition now covers nearly 38 percent of American home owners with a mortgage – 19 million of them.
Here are the top 13 areas where the most mortgage holders spend more than 30 percent of their income on their homes. The information is an estimate based on an analysis of Census data by Harvard University’s Joint Center for Housing Studies.
1. Miami-Fort Lauderdale-Miami Beach, 58 percent
2. Stockton, Calif.,57 percent
3. Riverside-San Bernardino-Ontario, Calif., 55 percent
4. Cape Coral-Fort Myers, Fla., 55 percent
5. Los Angeles-Long Beach-Santa Ana, Calif., 54 percent
6. Modesto, Calif., 54 percent
7. San Diego-Carlsbad-San Marcos, Calif., 53 percent
8. San Francisco-Oakland-Fremont, Calif., 53 percent
9. Sarasota-Bradenton-Venice, Fla., 52 percent
10. Oxnard-Thousand Oaks-Ventura, Calif., 52 percent
11. San Jose-Sunnyvale-Santa Clara, Calif., 51 percent
12. Las Vegas-Paradise, Nev., 51 percent
13. Sacramento-Arden-Arcade-Roseville, Calif., 50 percent
Source: The Associated Press, Adrian Sainz and Alan Zibel (09/23/08)
Monday, September 22, 2008
VA Loans Still Don't Require Down Payment
From Realtor Magazine Online, Daily Real Estate News September 22, 2008
The U.S. Department of Veterans Affairs, whose loans remain one of the few no-down-payment options in this tight market, have made more than 162,000 home loan guaranties this year, an increase of more than 31 percent over the same period last year.
The VA has tried to streamline the loan process by allowing veterans to apply for a loan before they obtain a VA Certificate of Eligibility.
Once the borrowers have demonstrated that they are otherwise eligible, lenders can access the program's Web portal to use VA's online Automated Certificate of Eligibility (ACE) system and obtain the certificate for the veteran.
Many times, lenders can receive the certificate within seconds. The VA can process the application in less than 24 hours.
VA-guaranteed home loans are made to eligible veterans, service members, and surviving spouses through private mortgage lenders throughout the United States.
Source: U.S. Department of Veterans Affairs (09/21/2008)
The U.S. Department of Veterans Affairs, whose loans remain one of the few no-down-payment options in this tight market, have made more than 162,000 home loan guaranties this year, an increase of more than 31 percent over the same period last year.
The VA has tried to streamline the loan process by allowing veterans to apply for a loan before they obtain a VA Certificate of Eligibility.
Once the borrowers have demonstrated that they are otherwise eligible, lenders can access the program's Web portal to use VA's online Automated Certificate of Eligibility (ACE) system and obtain the certificate for the veteran.
Many times, lenders can receive the certificate within seconds. The VA can process the application in less than 24 hours.
VA-guaranteed home loans are made to eligible veterans, service members, and surviving spouses through private mortgage lenders throughout the United States.
Source: U.S. Department of Veterans Affairs (09/21/2008)
Saturday, September 20, 2008
Mortgage Rates Drop Dramatically!
Mortgage rates have dropped dramatically over the last few days. If you already have a mortgage or have yet to close on an upcoming purchase, there is likely a tremendous opportunity for you to lower your existing interest rate substantially. Please contact me immediately as there is no way to know how long this window will stay open.
- Tim James
- Tim James
Friday, September 19, 2008
California: Home Sales Rise, Prices Fall
From Realtor Magazine Online, Daily Real Estate News September 19, 2008
California Home sales rose 13.6 percent in August, according to MDA DataQuick.
Nearly 47 percent of all homes sold in California last month were foreclosed properties, pushing the median home price down 35.3 percent to $301,000 compared to August 2007.
Sales were restrained by difficulty obtaining loans for the region's high-priced homes, MDA DataQuick president John Walsh said."Mortgage availability will eventually loosen up, we just don't know when,” Walsh said.
Source: The Associated Press (09/18/08)
California Home sales rose 13.6 percent in August, according to MDA DataQuick.
Nearly 47 percent of all homes sold in California last month were foreclosed properties, pushing the median home price down 35.3 percent to $301,000 compared to August 2007.
Sales were restrained by difficulty obtaining loans for the region's high-priced homes, MDA DataQuick president John Walsh said."Mortgage availability will eventually loosen up, we just don't know when,” Walsh said.
Source: The Associated Press (09/18/08)
30-Year Mortgage Rates Reach 7-Month Low
From Realtor Magazine Online, Daily Real Estate News September 19, 2008
Freddie Mac reports a decline in the 30-year fixed mortgage rate to 5.78 percent during the week ended Sept. 18 from 5.93 percent the prior week, marking the lowest level in seven months.
During the same period, the 15-year mortgage rate dropped to 5.35 percent from 5.54 percent.
Meanwhile, interest on five-year adjustable mortgages slipped to 5.67 percent from 5.87 percent; and the one-year ARM slid to 5.03 percent from 5.21 percent.
Source: San Diego Union-Tribune (09/19/08)
Freddie Mac reports a decline in the 30-year fixed mortgage rate to 5.78 percent during the week ended Sept. 18 from 5.93 percent the prior week, marking the lowest level in seven months.
During the same period, the 15-year mortgage rate dropped to 5.35 percent from 5.54 percent.
Meanwhile, interest on five-year adjustable mortgages slipped to 5.67 percent from 5.87 percent; and the one-year ARM slid to 5.03 percent from 5.21 percent.
Source: San Diego Union-Tribune (09/19/08)
Massive Rescue Effort for Financial Markets
From Realtor Magazine Online, Daily Real Estate News September 19, 2008
Congressional leaders and the Bush administration are working with Treasury Secretary Henry Paulson and Federal Reserve Chair Ben Bernanke to prepare a massive intervention to revive the U.S. financial system.
The proposed plan reportedly includes using hundreds of billions of dollars in government funding to buy bad loans, leaving banks with more money and fewer problems and allowing them to again lend money.
Paulson and Bernanke urged lawmakers to approve the plan rapidly, presenting what some described as a “chilling” picture of the state of the financial system.
Congressional leaders were told that the consequences would be grave if the legislation doesn’t pass by the end of next week.
Taking over Fannie Mae and Freddie Mac, creating a new source of funding for investment banks, and assuming control of insurance giant American International Group obviously hasn’t been enough to end the crisis. It hasn’t stopped $79 billion in withdrawals from money-market funds, which are a critical source of funding for the U.S. financial system.
"The costs of doing nothing are enormous," said Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee.
Source: The Washington Post, Binyamin Appelbaum and Lori Montgomery (09/19/08)
Congressional leaders and the Bush administration are working with Treasury Secretary Henry Paulson and Federal Reserve Chair Ben Bernanke to prepare a massive intervention to revive the U.S. financial system.
The proposed plan reportedly includes using hundreds of billions of dollars in government funding to buy bad loans, leaving banks with more money and fewer problems and allowing them to again lend money.
Paulson and Bernanke urged lawmakers to approve the plan rapidly, presenting what some described as a “chilling” picture of the state of the financial system.
Congressional leaders were told that the consequences would be grave if the legislation doesn’t pass by the end of next week.
Taking over Fannie Mae and Freddie Mac, creating a new source of funding for investment banks, and assuming control of insurance giant American International Group obviously hasn’t been enough to end the crisis. It hasn’t stopped $79 billion in withdrawals from money-market funds, which are a critical source of funding for the U.S. financial system.
"The costs of doing nothing are enormous," said Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee.
Source: The Washington Post, Binyamin Appelbaum and Lori Montgomery (09/19/08)
Wednesday, September 17, 2008
Mortgage Applications Surge
From Realtor Magazine Online, Daily Real Estate News September 17, 2008
Mortgage applications rose 33.4 percent last week on a seasonally adjusted basis, rising to 661.7 from 496.2 the previous week, according to the Mortgage Bankers Association weekly survey of mortgage activity. Total applications reached their highest level since early May.
On an unadjusted basis, the index rose 65.3 percent compared with the previous week, which was shortened by Labor Day. It was down 1.3 percent compared with the same week a year ago.
Refinances fueled the increase. The Refinance Index increased 88.1 percent while the seasonally adjusted Purchase Index increased only 2.4 percent. The refinance share of mortgage activity increased to 51.6 percent of total applications from 36.3 the previous week.
“Renewed financial concerns should keep long-term Treasury yields low and translate to lower mortgage rates in the near term, despite some widening in mortgage spreads,” says Orawin Velz, MBA’s Associate Vice President of Economic Forecasting in a statement. “We expect to see meaningful increases in mortgage demand in coming weeks on both the purchase and refi sides.”
Mortgage rates fell for the week:
* 30-year fixed-rate mortgages decreased to 5.82 percent from 6.06 percent.
* 15-year fixed-rate mortgages decreased to 5.54 percent from 5.73 percent.
* 1-year ARMs decreased to 6.95 percent from 7.00 percent.
Source: Mortgage Bankers Association (09/17/2008)
Mortgage applications rose 33.4 percent last week on a seasonally adjusted basis, rising to 661.7 from 496.2 the previous week, according to the Mortgage Bankers Association weekly survey of mortgage activity. Total applications reached their highest level since early May.
On an unadjusted basis, the index rose 65.3 percent compared with the previous week, which was shortened by Labor Day. It was down 1.3 percent compared with the same week a year ago.
Refinances fueled the increase. The Refinance Index increased 88.1 percent while the seasonally adjusted Purchase Index increased only 2.4 percent. The refinance share of mortgage activity increased to 51.6 percent of total applications from 36.3 the previous week.
“Renewed financial concerns should keep long-term Treasury yields low and translate to lower mortgage rates in the near term, despite some widening in mortgage spreads,” says Orawin Velz, MBA’s Associate Vice President of Economic Forecasting in a statement. “We expect to see meaningful increases in mortgage demand in coming weeks on both the purchase and refi sides.”
Mortgage rates fell for the week:
* 30-year fixed-rate mortgages decreased to 5.82 percent from 6.06 percent.
* 15-year fixed-rate mortgages decreased to 5.54 percent from 5.73 percent.
* 1-year ARMs decreased to 6.95 percent from 7.00 percent.
Source: Mortgage Bankers Association (09/17/2008)
Federal Reserve Holds Key Rate Steady
From Realtor Magazine Online, Daily Real Estate News September 17, 2008
In the wake of economic crisis, the Federal Reserve voted yesterday to keep the federal funds target rate at 2 percent, where it has been since April. This rate influences mortgage rates, which have been sliding since the bailout of Fannie Mae and Freddie Mac.
"Tight credit conditions, the ongoing housing contraction, and some slowing in export growth are likely to weigh on economic growth over the next few quarters," the Fed said in its post-meeting statement.
"The Fed's non-action suggests that things might have reached a bottom," says Richard Yamarone, Argus Research's director of economic research. "But that is not to say that we're out of the woods yet."
The odds for a quarter-point cut at its Oct. 29 meeting fell sharply. "The Fed is holding firmly to keeping rates steady, but the chances of a rate cut have been put back on the table, especially if growth in the fourth quarter appears to be slowing," says Stuart Hoffman, chief economist at PNC Financial Services Group.
Source: Investor’s Business Daily, Brad Kelly (09/16/2008)
In the wake of economic crisis, the Federal Reserve voted yesterday to keep the federal funds target rate at 2 percent, where it has been since April. This rate influences mortgage rates, which have been sliding since the bailout of Fannie Mae and Freddie Mac.
"Tight credit conditions, the ongoing housing contraction, and some slowing in export growth are likely to weigh on economic growth over the next few quarters," the Fed said in its post-meeting statement.
"The Fed's non-action suggests that things might have reached a bottom," says Richard Yamarone, Argus Research's director of economic research. "But that is not to say that we're out of the woods yet."
The odds for a quarter-point cut at its Oct. 29 meeting fell sharply. "The Fed is holding firmly to keeping rates steady, but the chances of a rate cut have been put back on the table, especially if growth in the fourth quarter appears to be slowing," says Stuart Hoffman, chief economist at PNC Financial Services Group.
Source: Investor’s Business Daily, Brad Kelly (09/16/2008)
Tuesday, September 16, 2008
Should U.S. Create Agency to Buy Bad Debt?
From Realtor Magazine Online, Daily Real Estate News September 16, 2008
House Financial Services Committee Chairman Barney Frank said financial market turmoil is likely to force Congress and the Bush administration to consider whether the U.S. government should buy distressed debt and mortgages, according to a Bloomberg news report on Tuesday.
Frank (D-Mass.) says lawmakers and the Bush administration will have to consider whether Congress should create an agency like the Resolution Trust Corp., which took over the assets of failed savings and loan associations almost two decades ago.
Some investors say the government should take on a bigger role in resolving the credit crunch. Worldwide, financial institutions have reported more than $500 billion in losses and writedowns stemming from the collapse of the subprime-mortgage market.
Lehman Brothers became the latest casualty on Wall Street of the subprime mortgage crisis yesterday. Barclays Plc and Bank of America Corp. abandoned takeover talks, forcing Lehman Brothers, the fourth-largest U.S. investment bank, into bankruptcy.
"I wouldn't have said this a week ago,'' Frank said in the Bloomberg news report. ``We just had this test'' with Lehman Brothers and ``there was no self-help capacity in the market.''
He continued: "The question is what are the consequences of the federal government taking the risk of holding those assets."
Some lawmakers say it's a risk that the government shouldn't take on. Creating an agency to buy distressed debt is not the best solution, said House Republican leader John Boehner. "We need this issue to resolve itself, and having more federal involvement or having a new Resolution Trust Corp. is probably not the answer,'' Boehner said.
Source: Bloomberg News
House Financial Services Committee Chairman Barney Frank said financial market turmoil is likely to force Congress and the Bush administration to consider whether the U.S. government should buy distressed debt and mortgages, according to a Bloomberg news report on Tuesday.
Frank (D-Mass.) says lawmakers and the Bush administration will have to consider whether Congress should create an agency like the Resolution Trust Corp., which took over the assets of failed savings and loan associations almost two decades ago.
Some investors say the government should take on a bigger role in resolving the credit crunch. Worldwide, financial institutions have reported more than $500 billion in losses and writedowns stemming from the collapse of the subprime-mortgage market.
Lehman Brothers became the latest casualty on Wall Street of the subprime mortgage crisis yesterday. Barclays Plc and Bank of America Corp. abandoned takeover talks, forcing Lehman Brothers, the fourth-largest U.S. investment bank, into bankruptcy.
"I wouldn't have said this a week ago,'' Frank said in the Bloomberg news report. ``We just had this test'' with Lehman Brothers and ``there was no self-help capacity in the market.''
He continued: "The question is what are the consequences of the federal government taking the risk of holding those assets."
Some lawmakers say it's a risk that the government shouldn't take on. Creating an agency to buy distressed debt is not the best solution, said House Republican leader John Boehner. "We need this issue to resolve itself, and having more federal involvement or having a new Resolution Trust Corp. is probably not the answer,'' Boehner said.
Source: Bloomberg News
Message to Congress: RESPA Reform Needed
From Realtor Magazine Online, Daily Real Estate News September 16, 2008
In testimony to Congress today, the NATIONAL ASSOCIATION OF REALTORS® said it's critical to reform the Real Estate Settlement Procedures Act in a way that truly benefits home buyers by reducing costs, simplifying the closing process, and making closing cost disclosures more consistent and understandable.
“Consumers rely on REALTORS® to help them understand the home buying process,” said T. Anthony Lindsey, a broker-owner from Charlotte, N.C., who spoke on behalf of NAR. “Our members recognize the need for RESPA reform–they work to protect consumers in the real estate transaction and have seen firsthand the problems and confusion with current procedures.”
NAR has expressed concern over the current U.S. Department of Housing and Urban Development proposal for RESPA reform, which it says falls short of its stated goal of simplifying the closing process.
In addition, HUD’s proposed closing script not only lengthens an already long process but also will ultimately increase closing costs.
“The new four-page Good Faith Estimate (GFE), along with the closing script and other changes, will cause additional confusion, reduces the incentive to shop but raises the prices for settlement services,” Lindsey said. “Replacing a two-page GFE with a four-page GFE is not simplification.”
NAR and the Center for Responsible Lending have recommended that HUD develop a one-page summary GFE to help buyers comparison shop, accompanied by a full GFE that includes all closing costs to reduce confusion. NAR also supports improved disclosures of mortgage terms and settlement services.
“The new GFE, with its price guarantees, volume discounts, and price tolerances, is designed to reduce costs, but its provisions will have the unintended consequences of reducing competition in the settlement services industry, favoring large lenders, and ultimately disadvantaging consumers,” said Lindsey.
—NAR
In testimony to Congress today, the NATIONAL ASSOCIATION OF REALTORS® said it's critical to reform the Real Estate Settlement Procedures Act in a way that truly benefits home buyers by reducing costs, simplifying the closing process, and making closing cost disclosures more consistent and understandable.
“Consumers rely on REALTORS® to help them understand the home buying process,” said T. Anthony Lindsey, a broker-owner from Charlotte, N.C., who spoke on behalf of NAR. “Our members recognize the need for RESPA reform–they work to protect consumers in the real estate transaction and have seen firsthand the problems and confusion with current procedures.”
NAR has expressed concern over the current U.S. Department of Housing and Urban Development proposal for RESPA reform, which it says falls short of its stated goal of simplifying the closing process.
In addition, HUD’s proposed closing script not only lengthens an already long process but also will ultimately increase closing costs.
“The new four-page Good Faith Estimate (GFE), along with the closing script and other changes, will cause additional confusion, reduces the incentive to shop but raises the prices for settlement services,” Lindsey said. “Replacing a two-page GFE with a four-page GFE is not simplification.”
NAR and the Center for Responsible Lending have recommended that HUD develop a one-page summary GFE to help buyers comparison shop, accompanied by a full GFE that includes all closing costs to reduce confusion. NAR also supports improved disclosures of mortgage terms and settlement services.
“The new GFE, with its price guarantees, volume discounts, and price tolerances, is designed to reduce costs, but its provisions will have the unintended consequences of reducing competition in the settlement services industry, favoring large lenders, and ultimately disadvantaging consumers,” said Lindsey.
—NAR
Monday, September 15, 2008
Financial Giants Fall Victim to Mortgage Crisis
From Realtor Magazine Online, Daily Real Estate News September 15, 2008
Weighed down by losses in the U.S. mortgage crisis, the stability of major financial institutions continues to be shaky. On Monday, U.S. investment bank Lehman Brothers Holding Inc. filed for bankruptcy and Bank of America announced that it would be buying struggling Merrill Lynch.
Lehman's is the largest casualty, so far, in the past year in the ongoning credit crisis. Lehman filed for bankruptcy on Monday following a failed attempt over the weekend to find a buyer.
Concerns over the stability of other firms also looms, particularly after the U.S. government's decision not to provide any bailout for Lehman. In March the government provided financial backing for JPMorgan's takeover of Bear Stearns, the first big bank to fold under the mortgage crisis.
Also on Monday, No.2 U.S. bank giant, Bank of America announced it would be buying Merrill Lynch in a $50 billion deal.
"Acquiring one of the premier wealth management, capital markets, and advisory companies is a great opportunity for our shareholders," Bank of America Chairman and Chief Executive Officer Ken Lewis said in a statement. "Together, our companies are more valuable because of the synergies in our businesses."
The buyout is expected to close in the first quarter of 2009.
Source: Reuter News, Ellis Mnyandu (9/15/08) and Associated Press, Madlen Read and Tim Paradis(9/15/08)
Weighed down by losses in the U.S. mortgage crisis, the stability of major financial institutions continues to be shaky. On Monday, U.S. investment bank Lehman Brothers Holding Inc. filed for bankruptcy and Bank of America announced that it would be buying struggling Merrill Lynch.
Lehman's is the largest casualty, so far, in the past year in the ongoning credit crisis. Lehman filed for bankruptcy on Monday following a failed attempt over the weekend to find a buyer.
Concerns over the stability of other firms also looms, particularly after the U.S. government's decision not to provide any bailout for Lehman. In March the government provided financial backing for JPMorgan's takeover of Bear Stearns, the first big bank to fold under the mortgage crisis.
Also on Monday, No.2 U.S. bank giant, Bank of America announced it would be buying Merrill Lynch in a $50 billion deal.
"Acquiring one of the premier wealth management, capital markets, and advisory companies is a great opportunity for our shareholders," Bank of America Chairman and Chief Executive Officer Ken Lewis said in a statement. "Together, our companies are more valuable because of the synergies in our businesses."
The buyout is expected to close in the first quarter of 2009.
Source: Reuter News, Ellis Mnyandu (9/15/08) and Associated Press, Madlen Read and Tim Paradis(9/15/08)
Friday, September 12, 2008
Mortgage Rates Drop Below 6%
From Realtor Magazine Online, Daily Real Estate News September 12, 2008
For the first time since early spring, mortgage rates have fallen below the 6-percent threshold.
Freddie Mac reports that 30-year fixed loans came in at an average of 5.93 percent this week, down from 6.35 percent a week ago and 6.31 percent at the same time last year.
A borrower taking out a $200,000 mortgage at 5.93 percent would pay $1,190 for monthly principal and interest payments, which is $54 less than the payments on last week's rate.
"Consumers see a five in front of mortgages, and they get excited," says Keith Gumbinger, a vice president at research firm HSH Associates.
Source: The Washington Post, Dina ElBoghdady (09/12/08)
For the first time since early spring, mortgage rates have fallen below the 6-percent threshold.
Freddie Mac reports that 30-year fixed loans came in at an average of 5.93 percent this week, down from 6.35 percent a week ago and 6.31 percent at the same time last year.
A borrower taking out a $200,000 mortgage at 5.93 percent would pay $1,190 for monthly principal and interest payments, which is $54 less than the payments on last week's rate.
"Consumers see a five in front of mortgages, and they get excited," says Keith Gumbinger, a vice president at research firm HSH Associates.
Source: The Washington Post, Dina ElBoghdady (09/12/08)
Thursday, September 11, 2008
Waterfront Markets: The 10 Most Pricey
From Realtor Magazine Online, Daily Real Estate News September 11, 2008
As Mark Twain might have said, “Buy [waterfront] land; they’re not making any more of it.”
Waterfront properties top Forbes’ list of expensive places to live.
Using Coldwell Banker’s annual Housing Price Comparison Index, Forbes identified the most expensive waterfront neighborhoods. Whether it’s lakeside property in the northern states or riverfront in the Midwest, expect a markup.
Here are the 10 most expensive waterfront markets:
* La Jolla, Calif., median price: $1.85 million
* Santa Monica, Calif., $1.65 million
* Santa Barbara, Calif., $1.6 million
* Newport Beach, Calif., $1.54 million
* San Francisco, $1.51 million
* Boston, $1.5 million
* Palos Verdes, Calif., $1.3 million
* Kihei, Maui, Hawaii, $934,950
* Key West, Fla., $818,239
* Bellevue, Wash., $814,483
Source: Forbes, Matt Woolsey (09/09/2008)
As Mark Twain might have said, “Buy [waterfront] land; they’re not making any more of it.”
Waterfront properties top Forbes’ list of expensive places to live.
Using Coldwell Banker’s annual Housing Price Comparison Index, Forbes identified the most expensive waterfront neighborhoods. Whether it’s lakeside property in the northern states or riverfront in the Midwest, expect a markup.
Here are the 10 most expensive waterfront markets:
* La Jolla, Calif., median price: $1.85 million
* Santa Monica, Calif., $1.65 million
* Santa Barbara, Calif., $1.6 million
* Newport Beach, Calif., $1.54 million
* San Francisco, $1.51 million
* Boston, $1.5 million
* Palos Verdes, Calif., $1.3 million
* Kihei, Maui, Hawaii, $934,950
* Key West, Fla., $818,239
* Bellevue, Wash., $814,483
Source: Forbes, Matt Woolsey (09/09/2008)
Mortgage Rates Drop--At Least for Some
From Realtor Magazine Online, Daily Real Estate News September 11, 2008
In the days since the government assumed control of Fannie Mae and Freddie Mac, the 30-year fixed mortgage rate has dropped to about 6 percent, says HSH Associates.
While many borrowers are rushing to lock in the new rates, experts point out that only those borrowing less than $729,750--the new conforming loan limit--will qualify for the lower rates.
Moreover, with lenders implementing rules slated to take effect at Fannie Mae in 2009 that mandate 15-percent down payments, more borrowers will face a cash hurdle to secure financing.
Source: Los Angeles Times, Scott Reckard (09/11/08)
In the days since the government assumed control of Fannie Mae and Freddie Mac, the 30-year fixed mortgage rate has dropped to about 6 percent, says HSH Associates.
While many borrowers are rushing to lock in the new rates, experts point out that only those borrowing less than $729,750--the new conforming loan limit--will qualify for the lower rates.
Moreover, with lenders implementing rules slated to take effect at Fannie Mae in 2009 that mandate 15-percent down payments, more borrowers will face a cash hurdle to secure financing.
Source: Los Angeles Times, Scott Reckard (09/11/08)
Wednesday, September 10, 2008
Mortgage Applications Are Up Sharply
From Realtor Magazine Online, Daily Real Estate News September 10, 2008
The number of mortgage applications rose 9.5 percent on a seasonally adjusted basis, pushing the Mortgage Bankers Association mortgage index to 496.2, compared with 453.1 the previous week.
This week’s results were also adjusted for the Labor Day holiday. On an unadjusted basis, the index decreased 13.6 percent compared with the previous week and was down 24.4 percent compared with the same Labor Day week a year earlier.
The number of refinance loans rose 15.4 percent and purchase loans rose 6.4 percent. Both would have seen declines if the numbers weren’t adjusted to reflect the Labor Day holiday.
Mortgage rates were down on rumors of an impending federal government takeover of Fannie Mae and Freddie Mac. Since the announcement Sunday, they have declined more:
* 30-year fixed-rate mortgages decreased to 6.06 percent from 6.39 percent;
* 15-year fixed-rate mortgages decreased to 5.73 percent from 5.96 percent
* 1-year ARMs decreased to 7.00 percent from 7.11 percent.
Source: Mortgage Bankers Association (09/10/2008)
The number of mortgage applications rose 9.5 percent on a seasonally adjusted basis, pushing the Mortgage Bankers Association mortgage index to 496.2, compared with 453.1 the previous week.
This week’s results were also adjusted for the Labor Day holiday. On an unadjusted basis, the index decreased 13.6 percent compared with the previous week and was down 24.4 percent compared with the same Labor Day week a year earlier.
The number of refinance loans rose 15.4 percent and purchase loans rose 6.4 percent. Both would have seen declines if the numbers weren’t adjusted to reflect the Labor Day holiday.
Mortgage rates were down on rumors of an impending federal government takeover of Fannie Mae and Freddie Mac. Since the announcement Sunday, they have declined more:
* 30-year fixed-rate mortgages decreased to 6.06 percent from 6.39 percent;
* 15-year fixed-rate mortgages decreased to 5.73 percent from 5.96 percent
* 1-year ARMs decreased to 7.00 percent from 7.11 percent.
Source: Mortgage Bankers Association (09/10/2008)
Tuesday, September 9, 2008
Why This Autumn is a Great Time to Buy
From Realtor Magazine Online, Daily Real Estate News September 9, 2008
This fall could be a particularly great time for first-time or buyers long out of the market to jump in, say a variety of real estate professionals.
Here are the reasons why:
* Prices are probably as low as they are going to go as the market stabilizes, thanks to the government takeover of Freddie Mac and Fannie Mae.
* Interest rates are likely to decline as Freddie and Fannie get government help.
* The Federal Housing Administration recently boosted its loan limits to $729,750 in expensive areas. It's going to take some of that back come Jan. 1, when the loan limit will shrink to $625,500.
The FHA allows down payments of as little as 3 percent, but that will rise to 3.5 percent as of Oct. 1. People scraping dollars together for a down payment should try to set their closing for the end of this month.
* The tax credit will shave $7,500 off a first-time buyer’s federal tax bill due April 15. Buyers who don't owe tax, will get the money as a refund.
The government's definition of a first-time buyer is anyone who hasn’t owned a home in the last three years.
Source: The Washington Post, Elizabeth Razzi (09/07/08)
This fall could be a particularly great time for first-time or buyers long out of the market to jump in, say a variety of real estate professionals.
Here are the reasons why:
* Prices are probably as low as they are going to go as the market stabilizes, thanks to the government takeover of Freddie Mac and Fannie Mae.
* Interest rates are likely to decline as Freddie and Fannie get government help.
* The Federal Housing Administration recently boosted its loan limits to $729,750 in expensive areas. It's going to take some of that back come Jan. 1, when the loan limit will shrink to $625,500.
The FHA allows down payments of as little as 3 percent, but that will rise to 3.5 percent as of Oct. 1. People scraping dollars together for a down payment should try to set their closing for the end of this month.
* The tax credit will shave $7,500 off a first-time buyer’s federal tax bill due April 15. Buyers who don't owe tax, will get the money as a refund.
The government's definition of a first-time buyer is anyone who hasn’t owned a home in the last three years.
Source: The Washington Post, Elizabeth Razzi (09/07/08)
Mortgage Applications Soar on Monday
From Realtor Magazine Online, Daily Real Estate News September 9, 2008
Mortgage brokers say Monday was the busiest day they can remember in the last couple of years.
The average rate for a 30-year fixed-rate loan fell to 6.04 Monday, about a third of a percentage point lower than on Friday, before the federal takeover of Fannie Mae and Freddie Mac.
On a $200,000 loan, that’s about a $500 annual savings – significant but not enough to turn around the housing market, analysts say.
Nevertheless, at online mortgage firm Quicken Loans, applications Tuesday were more than double what they had been in recent weeks, says Bob Walters, the firm’s chief economist.
Source: The Washington Post, Dina ElBoghadady and Renae Merle (09/09/08)
Mortgage brokers say Monday was the busiest day they can remember in the last couple of years.
The average rate for a 30-year fixed-rate loan fell to 6.04 Monday, about a third of a percentage point lower than on Friday, before the federal takeover of Fannie Mae and Freddie Mac.
On a $200,000 loan, that’s about a $500 annual savings – significant but not enough to turn around the housing market, analysts say.
Nevertheless, at online mortgage firm Quicken Loans, applications Tuesday were more than double what they had been in recent weeks, says Bob Walters, the firm’s chief economist.
Source: The Washington Post, Dina ElBoghadady and Renae Merle (09/09/08)
Friday, September 5, 2008
Falling Home Prices Curb Divorce Rate
From Realtor Magazine Online, Daily Real Estate News September 5, 2008
The sluggish housing market in the U.K. has an upside: The divorce rate is falling. In fact, national figures for the U.K. published in late August show the divorce rate last year was the lowest since 1981.
Analysts from real estate services firm Savills say there's a strong correlation between housing prices and the divorce rate.
"As house prices rise, home owners undoubtedly feel wealthier and our supposition is that they also feel able to afford to get divorced," says Lucian Cook, director of Savills Research. "We forecast that the current falls in property prices will result in fewer divorces, even allowing for the overriding downward trend in the UK's divorce rate."
However, family law expert Jill Goldman tells London's Daily Mail that financial woes often will cause arguments and put a strain on relationships; so there may be some divorces that are actually caused by dropping home values.
Sources: REALTOR® Magazine Online, Savills Research, Daily Mail
The sluggish housing market in the U.K. has an upside: The divorce rate is falling. In fact, national figures for the U.K. published in late August show the divorce rate last year was the lowest since 1981.
Analysts from real estate services firm Savills say there's a strong correlation between housing prices and the divorce rate.
"As house prices rise, home owners undoubtedly feel wealthier and our supposition is that they also feel able to afford to get divorced," says Lucian Cook, director of Savills Research. "We forecast that the current falls in property prices will result in fewer divorces, even allowing for the overriding downward trend in the UK's divorce rate."
However, family law expert Jill Goldman tells London's Daily Mail that financial woes often will cause arguments and put a strain on relationships; so there may be some divorces that are actually caused by dropping home values.
Sources: REALTOR® Magazine Online, Savills Research, Daily Mail
Police Arrest Couple in CraigsList Rental Scam
From Realtor Magazine Online, Daily Real Estate News September 5, 2008
A Las Vegas man claiming to be a licensed real estate practitioner and a female assistant have been arrested and jailed for renting out vacant homes belonging to seasonal residents.
Emilio Gonzales and Melissa Cowan advertised properties for rent on CraigsList. They asked potential renters to sign leases and took security deposits totalling several thousand dollars. Rents were collected in cash at various locations the pair specified.
The scam fell apart when the real owners showed up and found people living in their vacation homes. Police arrested Gonzales and Cowan by following a tenant to the agreed upon spot to pay rent. The two are being held on burglary, conspiracy and fraud charges.
Source: KVBC-TV (09/04/2008)
A Las Vegas man claiming to be a licensed real estate practitioner and a female assistant have been arrested and jailed for renting out vacant homes belonging to seasonal residents.
Emilio Gonzales and Melissa Cowan advertised properties for rent on CraigsList. They asked potential renters to sign leases and took security deposits totalling several thousand dollars. Rents were collected in cash at various locations the pair specified.
The scam fell apart when the real owners showed up and found people living in their vacation homes. Police arrested Gonzales and Cowan by following a tenant to the agreed upon spot to pay rent. The two are being held on burglary, conspiracy and fraud charges.
Source: KVBC-TV (09/04/2008)
Mortgage Volume Up 7.5%, Rates Down
From Realtor Magazine Online, Daily Real Estate News September 5, 2008
The Mortgage Bankers Association reports a 7.5-percent increase in home loan demand during the week ended Aug. 29.
The index indicates a 10.5-percent jump in purchase applications and a more modest 2.1-percent rise in refinancing requests.
Additionally, the group's index tracking mortgages backed by the FHA surged 19.9 percent. Refi demand accounted for 34 percent of all application volume and adjustable-rate loans accounted for 6.6 percent--versus 35.2 percent and 7.9 percent, respectively, the prior week.
The report also shows a drop in the 30-year fixed mortgage rate to 6.39 percent from 6.44 percent and a decrease in the one-year adjustable mortgage rate to 7.11 percent from 7.15 percent, while the 15-year fixed rate edged up to 5.96 percent from 5.94 percent.
Source: MarketWatch, Amy Hoak (09/03/08)
The Mortgage Bankers Association reports a 7.5-percent increase in home loan demand during the week ended Aug. 29.
The index indicates a 10.5-percent jump in purchase applications and a more modest 2.1-percent rise in refinancing requests.
Additionally, the group's index tracking mortgages backed by the FHA surged 19.9 percent. Refi demand accounted for 34 percent of all application volume and adjustable-rate loans accounted for 6.6 percent--versus 35.2 percent and 7.9 percent, respectively, the prior week.
The report also shows a drop in the 30-year fixed mortgage rate to 6.39 percent from 6.44 percent and a decrease in the one-year adjustable mortgage rate to 7.11 percent from 7.15 percent, while the 15-year fixed rate edged up to 5.96 percent from 5.94 percent.
Source: MarketWatch, Amy Hoak (09/03/08)
Thursday, September 4, 2008
Where Are Lenders Getting Credit Scores?
From Realtor Magazine Online, Daily Real Estate News September 4, 2008
Consumers often mistakenly believe that mortgage lenders use only credit scores from Equifax, Experian, TransUnion, and Fair Isaac's myfico.com to gauge creditworthiness.
However, Consumer Reports recently found that lenders also use NextGen FICO scores, FICO Expansion Scores, and Industry Option FICO scores — which take car loans into consideration — as well as custom formulas.
Given that these credit scores or scoring models are not available to consumers, experts say that consumers should not rely solely on available credit scores to determine their likelihood of getting a loan. They would be wise to make timely bill payments, make more than the minimum payment, hold down credit card balances, and retain old accounts.
Additionally, experts say it might be worth keeping tabls on other credit scores, such as Experian's PLUS scores, which are not yet sold to lenders but could be in the future.
Source: Allentown Morning Call (PA) (09/02/08)
Consumers often mistakenly believe that mortgage lenders use only credit scores from Equifax, Experian, TransUnion, and Fair Isaac's myfico.com to gauge creditworthiness.
However, Consumer Reports recently found that lenders also use NextGen FICO scores, FICO Expansion Scores, and Industry Option FICO scores — which take car loans into consideration — as well as custom formulas.
Given that these credit scores or scoring models are not available to consumers, experts say that consumers should not rely solely on available credit scores to determine their likelihood of getting a loan. They would be wise to make timely bill payments, make more than the minimum payment, hold down credit card balances, and retain old accounts.
Additionally, experts say it might be worth keeping tabls on other credit scores, such as Experian's PLUS scores, which are not yet sold to lenders but could be in the future.
Source: Allentown Morning Call (PA) (09/02/08)
Wednesday, September 3, 2008
Mortgage Applications Rise for Second Week
From Realtor Magazine Online, Daily Real Estate News September 3, 2008
Mortgage applications rose last week for the second week in a row. They increased 7.5 percent on a seasonally adjusted basis to 453.1 from 421.6 the previous week.
On an unadjusted basis, the index increased 5.8 percent compared with the previous week and was down 27 percent compared with the same week a year ago.
The refinance index rose 2.1 percent and the purchase index was up 10.5 percent. The increases coincided with a decline in mortgage rates.
* 30-year fixed-rate mortgages decreased to 6.39 percent from 6.44 percent
* 15-year fixed-rate mortgages increased to 5.96 percent from 5.94 percent
* 1-year ARMs decreased to 7.11 percent from 7.15 percent
Source: Mortgage Bankers Association (09/03/2008)
Mortgage applications rose last week for the second week in a row. They increased 7.5 percent on a seasonally adjusted basis to 453.1 from 421.6 the previous week.
On an unadjusted basis, the index increased 5.8 percent compared with the previous week and was down 27 percent compared with the same week a year ago.
The refinance index rose 2.1 percent and the purchase index was up 10.5 percent. The increases coincided with a decline in mortgage rates.
* 30-year fixed-rate mortgages decreased to 6.39 percent from 6.44 percent
* 15-year fixed-rate mortgages increased to 5.96 percent from 5.94 percent
* 1-year ARMs decreased to 7.11 percent from 7.15 percent
Source: Mortgage Bankers Association (09/03/2008)
Population Boom Will Drive Real Estate Industries
From Realtor Magazine, Daily Real Estate News September 3, 2008
When the Census Bureau released population projections last month, more attention was paid to the country's changing racial composition than to the massive scope of the increase. What's clear is that the latest numbers will inevitably give the real estate business a boost.
The Census Bureau is projecting an increase of 135 million people in the U.S, a 44 percent rise, by 2050. That’s equivalent to the entire populations of Mexico and Canada moving to the United States.
The bureau estimates that this population boom, largely fueled by immigration, will require 52 million new housing units, along with more places for people to shop and work.
Source: The Washington Post, Steven A Camarota (08/31/2008)
When the Census Bureau released population projections last month, more attention was paid to the country's changing racial composition than to the massive scope of the increase. What's clear is that the latest numbers will inevitably give the real estate business a boost.
The Census Bureau is projecting an increase of 135 million people in the U.S, a 44 percent rise, by 2050. That’s equivalent to the entire populations of Mexico and Canada moving to the United States.
The bureau estimates that this population boom, largely fueled by immigration, will require 52 million new housing units, along with more places for people to shop and work.
Source: The Washington Post, Steven A Camarota (08/31/2008)
Tuesday, September 2, 2008
Apartment Vacancies Reach Record Levels
From Realtor Magazine Online, Daily Real Estate News September 2, 2008
Nationwide, the number of vacant, for-rent housing units reached 2.063 million in the second quarter, as owners who were unable to sell put places up for rent, according to a report by Mission Residential, an apartment company.
“Such shifts from the for-sale to the for-rent segments of the housing market were in full swing, which is likely to continue over the next few quarters," wrote Richard F. Moody, director of research at Mission.
Chris Finlay, managing principal at Mission, says the rental apartment business, particularly in the Washington DC-area, is reaping the benefits of "ideal conditions."
Finlay attributes much of it to the growing demand from the Generation Y population, who are now entering the workforce and looking to rent. He also points to growing numbers of immigrants, who historically have started out in this country as renters."
We view the fundamentals for the apartment market [as] almost unprecedented," Finlay says. "It's really almost an ideal scenario."
Source: The Washington Post, Christopher Twarowski (08/30/2008)
Nationwide, the number of vacant, for-rent housing units reached 2.063 million in the second quarter, as owners who were unable to sell put places up for rent, according to a report by Mission Residential, an apartment company.
“Such shifts from the for-sale to the for-rent segments of the housing market were in full swing, which is likely to continue over the next few quarters," wrote Richard F. Moody, director of research at Mission.
Chris Finlay, managing principal at Mission, says the rental apartment business, particularly in the Washington DC-area, is reaping the benefits of "ideal conditions."
Finlay attributes much of it to the growing demand from the Generation Y population, who are now entering the workforce and looking to rent. He also points to growing numbers of immigrants, who historically have started out in this country as renters."
We view the fundamentals for the apartment market [as] almost unprecedented," Finlay says. "It's really almost an ideal scenario."
Source: The Washington Post, Christopher Twarowski (08/30/2008)
End in Sight for Seller-Funded Down Payments
From Realtor Magazine Online, Daily Real Estate News September 2, 2008
Prospective homeowners have until Oct. 1, 2008, to use down payment assistance from a seller to purchase a house.
The Housing and Economic Recovery Act of 2008 signed into law in July bars such seller-funded aid on Federal Housing Administration-backed mortgages.
Lawmakers added the provision to the housing relief package because about 40 percent of FHA borrowers who went into foreclosure in the past year received down payment assistance from a seller.
However, some industry professionals are worried that the rule change will keep some buyers out of th market.
Scott Syphax, president of The Nehemiah Corp., which runs a privately funded down payment assistance program, cites a report by housing research firm Zelman & Associates.
The report found that 10 to 25 percent of potential home buyers will have no way of securing home ownership without seller-funded down payment assistance, and stated that the rule change will have far-reaching implications for the real estate industry at large.
Source: Augusta Chronicle (GA), Tim Rausch (09/02/08)
Prospective homeowners have until Oct. 1, 2008, to use down payment assistance from a seller to purchase a house.
The Housing and Economic Recovery Act of 2008 signed into law in July bars such seller-funded aid on Federal Housing Administration-backed mortgages.
Lawmakers added the provision to the housing relief package because about 40 percent of FHA borrowers who went into foreclosure in the past year received down payment assistance from a seller.
However, some industry professionals are worried that the rule change will keep some buyers out of th market.
Scott Syphax, president of The Nehemiah Corp., which runs a privately funded down payment assistance program, cites a report by housing research firm Zelman & Associates.
The report found that 10 to 25 percent of potential home buyers will have no way of securing home ownership without seller-funded down payment assistance, and stated that the rule change will have far-reaching implications for the real estate industry at large.
Source: Augusta Chronicle (GA), Tim Rausch (09/02/08)
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