Today, CoreLogic released its “U.S. Housing and Mortgage Trends Report” which stated “their research indicates that the most popular measure of existing home sales is overstated by 15 percent to 20 percent. ”
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St. Louis MORTGAGE RATES for February 16, 2011: Conventional 30-Year Fixed 5.125% Conventional 15-Year Fixed 4.25% Conventional 5/1 ARM 3.750% FHA/VA 30 Year Fixed 5.00% Jumbo 5/1 ARM 3.875% Jumbo 15 yr Fixed 4.625% Jumbo 30 yr Fixed 5.750% Continue Reading → Much has been written (including by me) about the negative impact foreclosures and other distress sales have on home prices so this is no new issue. In fact, most readers have probably seen (or felt) the impact of this in their own neighborhood. The charts below which show the percentage of mortgages that were 90 days or more past due and in foreclosure for 2007 through 2010 illustrate well just how ugly this issue is. In the lower left hand corner of each chart is depicted the national house-price index through the period and it is easy to see that Continue Reading → This past Friday Federal Reserve Board Governor Sarah Bloom Raskin spoke at the 2011 Midwinter Housing Finance Conference about the powerful impact the housing and mortgage markets have had on the nation’s economy recovery. Governor Raskin began by point out that, “speaking strictly in an economic sense, the recession that emerged in 2008 is over.” She then followed by saying “I know that the millions of Americans still looking for work, living in cars or motels, or trying to keep their businesses out of bankruptcy would beg to disagree.” Gov Raskin went on to state that our economy is in Continue Reading → “It seems like we will be making house payments forever. We owe $140,000 at 6% interest and are paying $1000 a month. How much sooner could we pay it off if we started paying an extra $100 a month?” The above is a hypothetical question, but it could be you. There are two answers: the quick one and the dig deeper one. By clicking a few buttons on a financial calculator we discover the quick answer is 21 months; paying an extra $100 will reduce the payoff from 20 years to 18 years and 3 months. Missouri Housing Development Commission offers first-time home buyers a forgivable 3% Cash Assistance Loan (CAL) for down payment and closing costs. Terms of this program include: A federal grand jury indicted a Brookwood man yesterday on wire fraud and false statement charges related to a more than $1 million mortgage fraud scheme in the Birmingham area, announced U.S. Attorney Joyce White Vance. A 34-count indictment filed in U.S. District Court charges SCOTT ERIC PERRY, 34, with 17 counts of wire fraud and 17 counts of making false statements to lending institutions in connection to real estate transactions between February and December, 2006. The Federal Housing Finance Agency (FHFA) back in August, 2010, published proposed “guidance” related to private transfer fee covenants that applied to Fannie Mae, Freddie Mac and Federal Home Loan Banks (the “regulated entities). The message in this guidance was that private transfer fees are bad and those regulated enterprises should stay away from lending on real estate subject to such covenants. St. Louis MORTGAGE RATES for February 2, 2011: Conventional 30-Year Fixed 4.875% Conventional 15-Year Fixed 4.250% Conventional 5/1 ARM 3.250% FHA/VA 30 Year Fixed 4.750% Jumbo 5/1 ARM 3.500% Jumbo 15 yr Fixed 4.250% Jumbo 30 yr Fixed 5.375% Continue Reading → Yesterday my wife received a letter from the condo association for a complex she owns a rental in with “OWNER ALERT!!!!!!!” (yes, that many exclamation points) at the top of it in big letters. The reason for the “alert” was to let condo owners know that FHA certification for this condominium complex expired December 31, 2010 (as it did for many complexes across the country) and that, in order to be eligible for FHA-insured financing the complex would have to obtain re-certification. Now, in this particular case, the board is using this as a scare tactic to try to convince Continue Reading → The Federal Housing Administration (FHA) announced the temporary waiver of the “anti-flipping” rule has been extended through December 31, 2011. In my opinion the “anti-flipping” rule was a bad idea to start with and in the current housing market the last thing we need is anything to discourage investors from buying homes so this is a good move by FHA. Dennis Norman The National Association of REALTORS Pending Home Sales Index for December shows an increase of 2.0 percent in the index from the month before (seasonally adjusted), and a 4.2 percent decrease from a year ago. Even though over the past few years, ARM’s (adjustable rate mortgages) have received somewhat of a “bad name”, there are truly benefits to them including: ARM rates are now more attractive than ever before. Rates have fallen to 3.50% for a 5/1 ARM. ARMs are predictable. Rates are capped so there are no surprises for borrowers. Rates adjust only on the remaining principal of the loan. Rate adjustments could decrease (increases are limited to the prevailing index in which the ARM is based). Lower Monthly Payments – Increases the buying power of borrowers which attracts buyers to new homes. Continue Reading → Today, the U.S. Department of Housing and Urban Development and U.S. Census Bureau released new home sales data for December 2010 showing an increase of 17.5 percent from the month before, but a decrease of 7.6 percent from a year ago. The seasonally-adjusted new home sales rate for December was 329,000 homes, a 17.5 percent increase from November’s revised rate of 280,000 homes. The supply of new homes on the market decreased from an adjusted 8.4 month supply in November to a 6.9 month supply in December. The median new home price increased for the month to $241,500 whopping 12.0 Continue Reading → Dennis Norman The St. Louis foreclosure rate shot up 7 percent in November to 1.67 percent, according to a report published by CoreLogic. The report also shows that the rate of serious mortgage delinquencies in St. Louis (90+ days delinquent) increase slightly to 5.18 percent in November from 5.17 percent the month before. A “first-look” report issued by Lender Processing Services, one of the countries largest loan servicers and aggregators of loan performance data, is somewhat encouraging as it shows the U.S. mortgage delinquency rate (not including foreclosures) for December was 8.83 percent which is a decrease of 2.1 percent from November’s rate of 9.02 percent. Today’s existing home sales report from the National Association of REALTORS(R) shows St. Louis area existing home sales for December were 3.1 percent higher than a year ago and St. Louis area home prices in December were 7.8 percent higher than the year before. Nationally, existing home sales in December were at at a seasonally adjusted-annual rate of 5.28 million units which is an increase of 12.3 percent from November and is a decline of 2.9 percent from a year ago. Preliminary numbers for 2010 show 4,908,000 existing homes sold which is a decrease of 4.8 percent from 2009 when Continue Reading → Private Mortgage Insurance, also known as PMI, is a supplemental insurance policy you may be required to obtain in order to get a mortgage loan. PMI is provided by private (non-government) companies and is usually required when your loan-to-value ratio — the amount of your mortgage loan divided by the value of your home — is greater than 80 percent. Mortgage Insurance isn’t a bad thing — it allows you to make a lower down payment and still qualify for a mortgage loan. In fact without PMI, many of us would not be able to Continue Reading → You finally reach a deal with a buyer to sell your house, or strike a deal with the seller of your dream home, only to see the deal fall apart later when the house doesn’t appraise for the price that has been agreed upon…what are you to do? This is a plight that has become all too common today for many buyers and sellers. Why? Several reasons….appraisers have, after being blamed by many for causing or contributing to the downfall of the housing market, understandably so become cautious and somewhat conservative when putting a value on a home today. Not Continue Reading → A report released by CoreLogic showed that the St. Louis foreclosure rate increased in October marking the fourth-consecutive month of increases. The report shows St. Louis to have a foreclosure rate in October of 1.58 percent, a slight increase from September’s 1.57 percent, however an increase of over 11 percent from a year ago. The foreclosure rate in the U.S. in October was 3.33 percent, an increase of 14 percent from the year before. The FHA 203K rehab program is intended to promote and facilitate the restoration and preservation of existing homes. It enables borrowers to finance the acquisition and rehab of a property in one step; the loan value is based on the projected value of the home at the completion of the rehab. The real estate market has not been very nice to us over the past 3 years or so and we are all anxious to see the light at the end of the tunnel. With that in mind, and 2011 in front of us, where is the real estate market headed in 2011? Before I take my humble stab at answering this question I need to remind you I am not an economist nor do I have a PhD behind my name, in fact I have nothing behind my name. All I can offer is a whole lot of experience “in Continue Reading → The President has signed the bill extending Mortgage Insurance tax deductibility through December 31, 2011. Borrowers can use Mortgage Insurance (MI) to buy a home sooner and enjoy predictable payments, while benefiting by deducting the premiums from their income taxes. And MI can be canceled once the home buyer builds enough equity. MI is required on all mortgage loans that exceed an 80% loan to value. As 2010 quickly comes to an end I sat here early this morning pondering the real estate market and reading reports on the housing industry. One thing that caught my attention was an article titled “The Mortgage Interest Deduction and Negative Equity” by Ted Gayer, the co-director of economic studies at the Brookings Institute (and occasional contributor to this blog). Ted’s article made some interesting points related to the mortgage interest deduction, negative equity and home-ownership rates in the U.S. In his article Ted states “It seems semantically incorrect to call someone who owes more on an asset than it’s Continue Reading → As your kids grow up, you support them through their bumps and bruises, pay for their braces, school and much, much more. Over the past few years, I have run into the issue of young adults not being able to qualify for a mortgage without a parent’s help. So, the big question is: should you offer to co-sign on your child’s loan? Your kid may need something more than your money… It seems we always need to find someone to blame for our problems… When it comes to the meltdown in the housing market that has taken place over the past three years there has been no lack of finger pointing by many inside and outside the industry as to factors that either caused or contributed to the collapse of the housing market. Sub-prime lending, Wall Street, mortgage fraud, the mortgage industry, banks, community reinvestment act, real estate brokers and agents, fannie mae, freddie mac, federal government over-regulation, federal government under-regulation, appraisers, unemployment, the economy in general, “flipping”, sellers, buyers and Continue Reading → First-time home buyers receive a forgivable 3% cash assistance loan for down payment and closing costs. The Missouri Housing Development Commission (MHDC) provides a competitive interest rate on a safe 30-year fixed rate 1st mortgage. Your 3% advance loan is treated as a 2nd mortgage completely forgivable after five years of continuous occupancy. New, Constant Funding means MHDC will have the monies available for the borrowers regardless of bond issuance. For more information about this program, go to http://www.box.net/shared/s2x9zriz1g or www.MHDC.com . A report released this week by Standard & Poor’s and Experian showed an increase in monthly default rates on first mortgages to 3.05 percent and an increase in default rates on second mortgages to 1.80 percent. The increase in default rates for first mortgages is the first increase since December 2009. The good news is that even though the rate in November increased, it is still down 34.84 percent from a year ago at the same time. Today’s existing home sales report from theNational Association of REALTORS(R) shows existing home sales in November were at at a seasonally adjusted-annual rate of 4.68 million units which is an increase of 5.6 percent from October and is a decline of 27.9 percent from a year ago. Ah, it is so much fun to be able to write something positive about the real estate market! According to an economic outlook report just issued by Fannie Mae, our country’s economy should “kick into higher gear” by the second quarter of 2011. This positive outlook is the result of improvements in consumer spending, consumer confidence, increased demand for goods and services and falling unemployment claims. For 2011, Fannie Mae, in their December 2010 forecast, is forecasting growth of 3.4 percent which is an improvement from the 2.9 percent growth in 2011 they previously forecast. The big caveat is that Continue Reading → |
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