Monday, December 31, 2007
Friday, December 21, 2007
Prior to this action, forgiven mortgage debt due to foreclosure, short sale, or deed in lieu of foreclosure, was considered taxable income. The new law, however, temporarily waives these taxes for debts forgiven (as high as 35%) from the beginning of 2007 to the end of 2009. The bill also extends the tax deduction for mortgage insurance premiums through 2014.
"This is going to make a happy holiday for many homeowners," President Bush said yesterday before signing the bill in to law. During the press conference he added the following:
"When you're worried about making your payments, higher taxes are the last thing you need to worry about. So this bill will create a three-year window for homeowners to refinance their mortgage and pay no taxes on any debt forgiveness that they receive. And it's a really good piece of legislation.
The provision will increase the incentive for borrowers and lenders to work together to refinance loans – and it will allow American families to secure lower mortgage payments without facing higher taxes."
"There's more work to be done," Bush added, saying that Congress needs to pass legislation to strengthen Freddie Mac and Fannie Mae, to modernize FHA, and to allow the government to issue tax-exempt bonds for refinancing existing home loans.
Tuesday, December 18, 2007
Now they want to impose rules on lenders to safeguard us some more. They are proposing: 1) Barring or restricting lenders from penalizing subprime borrowers — those with tarnished credit or low incomes — who pay their loans off early. 2) Forcing lenders to make sure borrowers set aside money to pay for taxes and insurance. 3) Barring or limiting loans that do not require proof of borrower's income. 4) Setting new standards for how lenders determine a borrower's ability to repay a home loan. All of this seems like common sense to me.
I am a firm believer in the free market. I don't think the Fed making new rules solves anything. I think borrowers have to make their own decisions and Lenders have to qualify people for loans they can afford. Easy credit is a good thing for qualified borrowers, and a bad thing for the non-qualified.
What do you think?
Tuesday, December 11, 2007
The Discount rate (what the Fed charges banks for loans) was also lowered, this time by .25% to 4.75%.
It is my opinion that the Fed will have to continue to lower rates for the forseeable future in order to keep our economy moving. Our dollar should start to get stronger in the second quarter of 2008.
The home is located at 431 Calle de Castellana, Redondo Beach, CA. 90277 and is almost 2300 square feet. It has 4 bedrooms and 2.5 baths and is situated on a 6600 square foot lot on a very family oriented street. It was built in 1962 and awaits your 'touches' to make it your own. It is priced at $1,185,000.
Wednesday, October 31, 2007
I believe that the Federal reserve should have cut interest rates at least1/2 point today and really gave a boost to the economy, so personally I was disappointed knowing that the worst of the sub-prime problems have yet to be devulged. But... we all know that the fed tends to be much more conservative with their "cuts" than they are with their increases.. So, we will all be watching 'consumer' numbers as we approach the holiday season to see if consumers keep spending... any blip in consumer numbers will almost guarantee another cut in December.
Tuesday, October 02, 2007
For example, if a $500,000 home appreciated 5 percent in the next year, could you sock away an extra $25,000 in after-tax savings to counter that gain? This also does not take into account additional tax savings from the mortgage-interest deduction. Or, if the market remains flat and mortgage interest rates rise, will you still even be able to qualify for the home of your choice?
Thursday, September 27, 2007
Wednesday, September 19, 2007
It also cut its discount rate by the same amount, also bringing it to 5.25 percent.
The cuts could be a mixed blessing for homebuyers, pushing fixed-rate mortgages higher if inflation worries grow, economists say.
But relief could come in other ways. Consumers should start feeling the impact quickly in the form of reduced payments on home-equity lines of credit, credit cards and some car loans.
There is likely to be little immediate relief for borrowers with many adjustable-rate mortgages because the rates on roughly half of these loans are tied to the London interbank offered rate (LIBOR). Libor recently jumped sharply above the Fed funds rate because of the continuing credit crunch in the markets.
"If Libor doesn't come down, there is no relief" for many mortgage borrowers, says James Bianco, president of Bianco Research LLC, a market-research firm in Chicago.
Source: The Wall Street Journal, Jane J. Kim and Ruth Simon
Thursday, September 06, 2007
Vigorous support helped push the measure, HR 1427, through the House in May, but it has since stalled in the Senate. The bill would raise the current maximum size of a conforming mortgage loan from $417,000 to a capped amount at 150 percent of the national limit or $625,500, allowing low- and moderate-income home buyers in high-cost areas better access to low-cost, low-rate fixed mortgages.C.A.R.
President Colleen Badagliacco was recently quoted in a "San Jose Mercury News" story on the issue, saying that a loan of $417,000 "may buy a mansion in Des Moines but it doesn't buy anything in San Jose."
Friday, August 10, 2007
Thursday, August 02, 2007
Wednesday, August 01, 2007
A recent survey of more than 200 brokers across the country shows that although prime loan activity in April fell to 56 percent compared to 61 percent in March, only 11 percent of the loans originated in April were subprime.
In 2006, only 13 percent of all loans originated were subprime or non-traditional loans created for home buyers with credit scores lower than 620, NAMB says."This data shows that brokers are anticipating and meeting the changing needs of their customers," said NAMB President George Hanzimanolis. "The shift in the market toward more traditional loan products is yet another reason we have cautioned Congress not to overreact to existing concerns and allow the market to adjust."
Monday, July 09, 2007
This is a fantastic, cozy home that has been remodeled and is ready for you. It is located in Hollywood Riviera on one of the nicest streets.
It has 3 bedrooms, 1.75 baths, beautiful hardwood floors, a deck with a pergola, 2 car garage and a good size backyard with a view.
You have to see this one in person. See it on the web first at http://rivieraway.com/
Wednesday, June 27, 2007
California Home Sales decrease 25% in May, median price of a home in California at $591,180, up 4.8 percent from year ago.
According to the report, the median price of an existing, single-family detached home in California during May was $591,180, a 4.8 percent increase over the revised $563,860 median for May 2006. Also last month, closed escrow sales of existing, single-family detached homes in California totaled 366,370 at a seasonally adjusted annualized rate, down 25 percent compared with the sales pace recorded one year earlier and down 1.9 percent from home resale activity in April 2007.
Wednesday, May 30, 2007
According to the Wall Street Journal:
Federal Reserve officials have become slightly more upbeat about U.S. economic prospects despite a more pronounced drag from housing, according to the minutes of the Fed's most recent policy-setting meeting. Core inflation, meanwhile, remained "uncomfortably high," according to the May 9 minutes, further indicating that the Fed isn't inclined to lower rates in the near future.
Friday, May 25, 2007
Thursday, May 17, 2007
Wednesday, May 09, 2007
WASHINGTON (MarketWatch) -- The Federal Reserve decided Wednesday to hold short-term interest rates steady and said nothing that indicates it is prepared to move interest rates anytime soon.
Following a one-day meeting of the Fed's policy-making Open Market Committee, the central bank indicated that its target for the key federal-funds interest rates, at which banks lend each other money overnight, remains 5.25%.
The vote to hold rates steady was 10-0.
In its policy statement, the Fed repeated the key statement that it could choose to move rates in either direction depending on the data even though inflation risks remain the paramount concern.
The Fed made only a few changes from its March 21 statement.
In a nod to the weak first quarter growth rate, the Fed said growth had slowed, and adjustments in housing were ongoing. The last statement had said recent indicators were "mixed."
But the Fed repeated that its outlook for a second half pickup remains on track.
"Nevertheless, the economy seems likely to expand at a moderate pace over coming quarters," the statement said.
The Fed made no changes to its inflation outlook, saying that core inflation remains "somewhat elevated" and "although inflation pressures seem likely to moderate over time, the high level of resource utilization has the potential to sustain those pressures."
"It is kind of a yawner," said Dan Seto, economist with Sumitomo Bank. "There were minimal changes [to the statement] and none are significant," he said.
Wall Street had concluded that the Fed wouldn't make a move Wednesday and there was not much reaction in the stock market. Read Market Snapshot.
"No one is really surprised," said Jay Suskind, director of trading at Ryan Beck & Co. "The market whisper was that they would show more concern about inflation."
"The market rallied back up because the flipside is that this means the economy is doing well enough and earnings will stay strong," Suskind said.
As usual, economists disagreed about what the statement's details reveal.
Some analysts had expected the Fed to tip its hat to the recent good news on inflation, so the fact that the Fed stuck to language that inflation was "elevated" was seen as hawkish.
Others said the Fed was dovish and the language saying growth has slowed was a baby-step toward an eventual ease.
Mike Moran, chief U.S. economist at Daiwa Securities, said the Fed did not intend to make any policy hints with the changes to the statement. He said the central bank simply recognized the slower growth.
"My view the Fed will be on hold steady through the rest of the year," Moran said.
The Fed hasn't made a move since last August, when it completed an unprecedented series of seventeen straight one-fourth-of-a-percentage-point rate hikes. See MarketWatch's complete Fed coverage.
Many Fed watchers on Wall Street expect rates to remain unchanged at least through midyear and maybe much longer.
The central bank expects the economy to pick up on its own during the second half of the year, with a gradual ebbing of core inflation, and is likely to be patient to see if that forecast is correct.
"They think the economy will gradually recover. There is no reason to rush and do something" [with rates], said Jim Glassman, economist at JP Morgan Chase.
Fed chairman Ben Bernanke said that the risks have grown on both sides of its forecast, meaning that growth could be lower and inflation higher.
The big question is whether the recent slowdown in the economy is the "pause that refreshes" or the start of a worrisome downward trend.
Real GDP grew only 1.3% at an annual rate in the first quarter and the outlook for consumer spending has worsened. See full story.
In addition, the April nonfarm payroll report was uniformly weak, with job growth at the slowest pace in nearly four years. See full story.
Added to the existing concern about the housing sector, the recent spike in gasoline prices has also complicated the outlook for spending.
Since January, U.S. pump gasoline prices, averaging all grades, have soared by 36% to $3 a gallon, according to Richard Berner, economist at Morgan Stanley.
One camp believes that this weakness may continue for a few more months, pushing the Fed off the sidelines with a rate cut.
Ian Shepherdson, chief U.S. economist at High Frequency Economics, forecasts that the data between now and the next FOMC meeting on June 28 will be "substantially weaker on all fronts."
"If we're right, it would be reasonable to expect a serious shift in the Fed's stance at that meeting, followed by the first ease in August," Shepherdson said.
But some economists believe growth is not as weak, nor inflation as benign, as recent data suggest. They believe the next move by the central bank will be a rate hike.
John Ryding, chief U.S. economist at Bear Stearns, said his indicators of future inflation "point to a pickup in price pressures."
"In addition, there is evidence that the weather was a factor in the below-trend payroll reading for April," Ryding said.
Greg Robb / MarketWatch.com
Thursday, May 03, 2007
Before we can find the perfect home and negotiate the best price and terms, we have to tackle the most difficult part of the transaction - finding out how much house you can afford and the perfect loan for that house. To present the offer on the home you want successfully, you must have a solid loan pre-qualification letter.
Every homebuyer should do comparison shopping among lenders. I can refer you to several reputable lending institutions or mortgage brokers as well. Once you've made a choice, the loan officer will take your application and have you sign all the necessary papers to authorize credit and employment verifications.
Request periodic progress reports to make sure that all of the details are taken care of. These reports will help to ensure that any potential problems are discovered and addressed before they can threaten the timeliness of the transaction.
You will find the home buying process much less stressful when you know you can afford that special property. Loan pre-qualification puts you in the driver's seat!
Saturday, April 28, 2007
It would make more sense to provide an incentive to buyers. That is, if incentives work. However, the promise of a free trip stands little chance of convincing today's value-conscious buyers that they should buy your home. When builders have trouble moving a new product, they offer meaningful incentives, such as upgraded finishes or landscaping, which actually add value to the property.
Don't offer gimmicks; instead, correct defects -- cosmetic and structural -- and price the property right. The biggest incentive you can give a buyer is a well-prepared home that's listed for a realistic price. The listings that are selling in today's market are priced right for the market, they look good and there's no doubt in anyone's mind that the property is available.
Selecting a listing agent who understands how to sell homes like yours in this market is one of the keys to distinguishing your listing from the others. A good agent will speak candidly with you about the probable selling price of your home. An experienced agent will also be able to advise you about what work is worthwhile to do to your home prior to marketing.
Before you even begin preparing your home for sale, it's a good idea to consult with your agent to make sure that the improvements you have in mind are worthwhile. Good agents are in tune with home-buyer preferences such as paint colors, lighting fixtures and floor coverings. Your agent can put you in touch with home stagers and designers who can help you select the right colors and floors.
Good merchandising is critical to a successful home sale, particularly when there are many listings on the market. Before you sign a listing, make sure that your agent will provide you a marketing campaign that will attract as many buyers as possible to your home.
Exposure is essential. You want an agent who will provide your home with extensive exposure to the local and broader markets, and who will also pay close attention to the quality of exposure your home receives.
HOME SELLER TIP: Internet advertising has revolutionized the way the residential real estate is sold. So, it's important that your agent's marketing plan include broad internet exposure. At a minimum, your home should be listed, with photos, on www.realtor.com, the largest residential real estate Web site.
Recent studies show that 80 percent of home buyers use the Internet during the course of their home purchase. Studies also show that buyers reject a listing if it doesn't have photos because they think there must be something wrong with it.
Not only do you need photos of your home on the Internet, but they need to be good photos. Home buyers who have limited time screen the inventory of homes for sale online and eliminate listings based on the photos. Make sure that your agent provides good-quality photos of your property.
Avoid the temptation to oversell your property. A buyer who was recently looking for a luxury home complained that the photos of many listings she'd seen were so good that she was often disappointed when she saw the properties in person.
- Dian Hymer
- from my monthly Newsletter - Jack McSweeney
Monday, April 23, 2007
The Conference Board said its Index of Leading Economic Indicators climbed a tepid 0.1% to 137.4 in March, as analysts had expected. The latest reading reverses two straight months of declines. The index is designed to forecast economic activity over the next three to six months.
Retail sales rose 0.7% in March, up from a 0.5% gain in February. It was the best showing since a 1.1% rise in December, the Commerce Department reported April 16. Analysts had predicted a 0.8% increase.
Construction of new homes edged up 0.8% in March, the second straight monthly rise, the Commerce Department reported April 17. Applications for new building permits also rose by 0.8% in March, the first advance in three months, providing a glimmer of hope that the worst of the housing downturn might be over.
For the week ending April 19, interest rates on 30-year and 15-year fixed-rate mortgages declined, remaining well below year-ago levels, Freddie Mac said April 19.
Friday, March 23, 2007
Thursday, March 08, 2007
Low interest rates typically spell good news for home buyers and sellers since they lead to low mortgage payments and allow consumers to buy more house for the buck. But analysts are mixed about whether that stability will trigger increased sales.
Short-term rates are going to stay fairly steady," says Mike Fratantoni, senior economist with the Mortgage Bankers Association. "We also see the 30-year fixed mortgage rate creeping up -- about 6.2 percent today to about 6.5 percent by the end of the year -- and then basically holding steady from there.
The Mortgage Bankers Association isn't alone in its assessment of a fairly stable interest rate environment. In its January 2007 Economic Outlook, Freddie Mac predicted the interest rates for 30-year fixed mortgages will remain below 6.5 percent in 2007. The National Association of Realtors in its February 2007 forecast predicted that the interest rates for 30-year-fixed mortgages will rise to 6.7 percent by the second half of the year. But rates will rise in such a gradual manner that, potential buyers will have some time to weigh purchase decisions," NAR Chief Economist David Lereah said when the report was released.
So what's fueling this interest rate environment? Some say globalization. "Foreign investors are now extremely active in buying U.S. debt securities," Fratantoni says. "That adds another set of buyers to the market and helps keep rates down and fairly stable.
Could the interest rate environment change? "If, for some reason, foreign investors decided to stop investing in U.S. securities, we would see a spike in interest rates," Fratantoni says. "There is a risk there, but I don't think it's a likely outcome."
The rate effect
Nobody denies that low interest rates can spark the market.
"Just look at how a person's monthly payment changes on their home when the interest rate changes by 1 percentage point," says Chris Porter, senior consultant with Irvine, Calif.-based John Burns Real Estate Consulting. "It has a significant impact on their monthly payment." A $300,000 home, for example, would cost a buyer $1,610.46 per month with a 5 percent interest rate and $1,798.65 with a 6 percent interest rate -- nearly a $200-per-month difference. -Posted March 8, 2007 By Tamara E Holmes. Bankrate.com
Friday, February 09, 2007
WASHINGTON (MarketWatch) -- The U.S. economy should grow at a sustainable pace while inflation should continue to decline, said William Poole, the president of the St. Louis Fed bank, in a speech presenting his outlook on Friday.
"As I step back and survey the economic landscape, I see an economy that appears to be transitioning quite nicely from last year's slow patch, to more sustainable growth," Poole said in a speech prepared for delivery to the AAIM Management Association in St. Louis.
Poole, a voting FOMC member this year, is one of three top Fed officials discussing the economic outlook on Friday. Next week, Fed chief Ben Bernanke will deliver the Fed's formal economic forecast to Congress when he testifies on Fed monetary policy.
Financial markets pay close attention to speeches by the St. Louis Fed president. A recent study of market impact of Fed speakers listed Poole as the second most market-moving Fed official after Bernanke.
In his speech, Poole was upbeat on growth and inflation. He said the economy was fundamentally sound and that past Fed actions had kept inflation largely in check.
In common with speeches recently from other top Fed policy makers, Poole said there were tentative signs that the housing market was stabilizing, but he was very cautious not to declare victory. Housing was a significant drag on GDP growth in 2006.
"While recent data seem to point in a favorable direction, we must recognize that the housing market is not out of the woods yet," Poole said.
Most importantly, there is no evidence that home prices have stabilized after pervasive weakness last year, he said.
Poole said inflation was headed in the right direction and should fall into a "reasonable range" this year.
But Poole said he would fight for higher rates if core inflation "seems to be settling at a rate above 2%.
Poole said he detected a "firmer tone" in the most recent economic data.
Poole also said more rate hikes may be needed if growth in 2007 comes in stronger than expected.
Poole presented his personal inflation target, saying he would "do what I can to promote policy adjustments that will yield an inflation outcome, on average over a period of several years, centered on 1.5% on the core PCE price index."
Greg Robb is a senior reporter for MarketWatch in Washington.
Wednesday, January 31, 2007
The Conference Board Consumer Confidence Index, which had improved in December, edged up slightly in January. The Index now stands at 110.3 (1985=100), up from 110.0 in December. The Present Situation Index increased to 133.9 from 130.5. The Expectations Index, however, declined to 94.5 from 96.3 last month.
The Consumer Confidence Survey is based on a representative sample of 5,000 U.S. households. The monthly survey is conducted for The Conference Board by TNS. TNS is the world's largest custom research company. The cutoff date for January's preliminary results was January 23rd.
"This month's slight increase in confidence was solely the result of an improvement in the Present Situation Index, fueled primarily by a more favorable job market," says Lynn Franco, Director of The Conference Board Consumer Research Center. "Looking ahead, however, consumers are not as optimistic as they were in December. All in all, the Index suggests a moderate improvement in the pace of growth in early 2007."
Consumers' overall assessment of current-day conditions was more upbeat than in December. Those claiming conditions are "good" increased to 28.1 percent from 27.4 percent. Those saying conditions are "bad," however, rose to 16.5 percent from 14.9 percent. Labor market conditions also improved from last month. Consumers saying jobs are "hard to get" declined to 19.7 percent from 21.3 percent. Those claiming jobs are "plentiful" increased to 29.9 percent from 27.6 percent in December.
Consumers' outlook for the next six months was less optimistic than in December. Those anticipating business conditions to worsen edged up to 8.0 percent from 7.8 percent. Those expecting business conditions to get better decreased slightly to 16.2 percent from 16.7 percent.
The outlook for the labor market was mixed. Consumers expecting more jobs to become available in the coming months edged up to 14.0 percent from 13.9 percent, while those anticipating fewer jobs edged up to 15.7 percent from 15.5 percent. The proportion of consumers expecting their incomes to increase in the months ahead declined to 19.8 percent from 21.4 percent in December.
The next release is scheduled for February 27, Tuesday at 10 A.M. ET.
Thursday, January 04, 2007
The point of calculating APR is to let the consumer know what the actual cost of their financing is in the form of a yearly rate. APR factors in certain closing costs and fees associated with the loan, and spreads this total over the life of the loan along with the actual note rate. The objective is to give the consumer a clearer picture of what their actual costs are, and this inhibits lenders from hiding fees or upfront costs behind low interest rates in their advertising.
Fees that are generally included in the APR calculation are points, pre-paid interest, loan processing fees, underwriting fees, document preparation fees, and private mortgage insurance. On occasion, lenders will include a loan application fee and/or credit life insurance. Fees that are normally not included in the APR calculation are fees from Title, Escrow, attorney, notary, document preparation, home inspection, recording, transfer taxes, credit report and appraisal.
Remember, all lenders do not perform the calculation the same way. Moreover, APR does not consider the possibility of making pre-payments, moving or refinancing. Unless the interest rate is tied to a fixed instrument, APR is even more confusing. Calculating APRs on adjustable rate and balloon mortgages is more complex because we really have no way of knowing what future rates will be.
If all lenders calculated APR the same way, we could make easy comparisons when deciding on what loan program to go with. Since they don't, the consumer should know that APR is simply a starting point for comparison. They should rely on the skills of a well-versed loan professional to assist them in obtaining the loan that meets their specific needs. The more important things to consider are how long the loan is needed. What are the long-term goals of the borrower? If the homebuyer only expects to stay in the home for five years, there's not a lot of sense in looking exclusively at 30-Year Fixed rates because the APR seems more reasonable. If a young couple is buying a home, knowing they will refinance in eight years to pay for their son's college education, then once again, APR is not a realistic factor to take into consideration.
The Loan Executive should be prepared to answer questions about APR once the lender provides the Truth-in-Lending Disclosure Statement (Reg Z), such as why the “amount financed” listed in Box C is not the same as the actual loan amount, and why the APR is higher than the interest rate on the loan in most cases. The consumer will get a clear definition about the fees associated with their loan in the good-faith estimate, but the Truth-in-Lending Disclosure is often an area that is confusing to the borrower.