Ed's Blog

By now we all know that change is the word of the day, with our new administration. But it’s nice to know that some things haven’t changed-like the ongoing historically low interest rates. 30 year fixed mortgages are still in the high 4% to low 5% range, with 15 year fixed mortgages in the mid to high 4% range.

Another item of note that has remained unchanged is the fact that FHA is still offering homes to qualified buyers with as little as a 3.5% down payment. And in California, they continue to lend up to $625K, unlike most other states where the limit is just $271K.

Finally, one last item has remained unchanged in this new era of change: the abundant opportunities to purchase a home at a greatly discounted rate!

So, while I’m thrilled to welcome in a great deal of change, it’s nice that these incentives for homeowners to refinance or home buyers to purchase have remained unchanged.

Need more info? Give us a buzz at 415-406-2330.

Details are still trickling out on the stimulus package, but housing should finally get some major help.

1) Loan limits will revert to last year's limits for high cost areas. In a move that will help higher cost markets that are starting to suffer, conforming loan limits will revert to last year's limits and will not be allowed to be adjusted downward in the future. Nice bit of help for San Francisco, Marin, San Mateo, and other high cost areas.

2) First time homebuyers may get up to a $7,500 tax credit. It looks like the first time homebuyer tax credit will be $7,500 instead of $15,000. Not bad.

3) The Obama administration is devoting $50 Billion to help homeowners stay in their homes and reduce the number of foreclosures. This should pay big dividends if they actually figure out how to implement it so it works.

4) The government and the Fed will continue buying Mortgage Backed Securities from Fannie and Freddie keeping rates low. That's the hope anyway. Sometimes the market doesn't cooperate!

5) Money will be included to help the now defunct CMBS (Commerial Mortgage Backed Securities) Market.  In what is a small drop in the bucket, but still good news for the CMBS market, the government will pour up to $100 Billion into the commercial lending market. Details to follow.

There's more, but this is a recap of the major points. I think this will help. Let me know what you think.

By the way, don't forget that investors can now own up to 10 financed properties instead of only 4. Freddie Mac announced this week that it would allow investors to now finance up to 10 properties. That's great news for those of you working with investors. Give us a call if you have someone who needs pre-approval. We'll be glad to help.

One more thing: In addition to lending, we also do loan modifications, second opinions, and consulting. And I also do work from time to time as an expert witness. If you have clients who need any of these services, contact me and I'll see if we can help them.

I’m certainly not trying to sugarcoat the fact that our economy is in dire straits. However, most economists agree that in order for the economy as a whole to stabilize, the housing market must stabilize, at least a bit. The first step towards stabilization is unquestionably reducing the surplus of homes currently for sale.

That’s why I find the report out this week, that existing home sales rose by 6.5% in December over November to be a small glimmer of hope. Of course, we’re still below sales from last year, but these sales did help. In fact, they helped quite a bit. The number of homes currently for sale nationally declined nearly 12% from the previous month, which again is encouraging.

As mortgage rates continue to stay near historic lows, and home prices remain discounted, it is my hope that this trend will continue. Now, if we could just do something about reducing job losses….like to zero. Sigh.

Till next time,

Ed

Just wanted to send a little uplifting news your way. (Seems harder and harder to find any these days on the news, so I thought I’d help out).

The good news? The surplus of homes for sale in December declined almost 12% over November. Of course short sales are playing a big role, particularly here in the West, but all the same, reducing the inventory to a 9.3 month supply versus 11.7 months in November is welcome news.

Also, keep in mind, rates are eking upwards in recent days, but still remain SO low.

Feel free to contact us with any questions.