Move My Realty - Real Estate News

• The refinancing option is available only for certain loans owned or securitized by Fannie Mae and Freddie Mac. Home owners should contact their lender to see if they're eligible. Borrowers who are delinquent on their mortgage will not qualify.
• To be eligible for a modification, borrowers must live in their property and be able to pay the mortgage after the modification. The first mortgage may not exceed 105 percent of the current market value of the property. The unpaid principal balance must be equal to or less than $729,750 for one-unit properties. The loan must have originated before Jan. 1, 2009. A borrower must have a payment (including taxes, insurance and homeowners association dues) that is more than 31 percent of the borrower's gross monthly income.
• Consumers can find more information about these programs at FinancialStability.gov.

Source: USA Today (06/19/2009)

Ron Mastrodonato / movemyrealty.com does not claim credit for writing this article

Fed to Keep Short-Term Rates Low

The Federal Reserve announced Wednesday that it expects to keep short-term interest rates “exceptionally low” for the next few months. It also underscored its commitment to make $1.25 trillion in total purchases of mortgage-backed securities by the end of year.

Both actions are likely to keep mortgage rates low through the end of 2009.

The Fed failed to raise a cap of $300 billion in purchases of Treasury securities, which could lead indirectly to higher mortgage rates because mortgage rates tend to rise in conjunction with Treasurys.

In response to the possibility of rising mortgage rates, the Mortgage Bankers Association this week cut its forecast for total 2009 mortgage originations by 27 percent.

Source: Inman News (06/25/2009)

Ron Mastrodonato / movemyrealty.com does not claim credit for writing this article

Are REITs a Key to Real Estate Recovery?

If you want to bet on the real estate recovery without finding financing and taking possession of property, then consider buying real estate investment trusts.

Fortune magazine says that blue-chip REITs offer a reasonably conservative opportunity for individual investors to profit from the coming real estate rebound. Boston Properties (BXP), Regency Centers (REG), Simon Property Group (SPG), and Vornado Realty Trust (VNO) appear to be among the strongest, the magazine says.

Philip Martin, a senior vice president of Golub & Co., a real estate investment and development firm, thinks there isn’t an oversupply of commercial properties.

"So when we do recover, you are likely to see a pretty healthy snap-back in real estate prices," he says. "This is an excellent environment for those REITs with the right combination of knowledge and capital. They are going to have an opportunity to make some great deals, and the risk-adjusted returns at this point in the real estate cycle are going to be pretty darn good."

Source: Fortune, Michael V. Copeland (06/22/2009)

Inflation index reading angers saver

I question the -5.56 percent inflation rate. Do the people that determine this rate live in the real world? I only wish that milk, bread and other essentials were going down almost 6 percent. Someone should give those statistics experts a wake-up call.
-- Annoyed Andrew

A: Dear Andrew,
I understand your frustration with the inflation index. The inflation component in the yield of a Series I savings bond is based on changes in the Consumer Price Index for All Urban Consumers.

While that may not correlate well with the inflation you're experiencing, the statisticians compiling the index do live in the real world, and they don't need a wake-up call.

The Bureau of Labor Statistics publication, "The Consumer Price Index -- Why the Published Averages Don't Always Match An Individual's Inflation Experience," provides a nice overview of the topic. It won't make you feel any better about earning zero percent interest over the next six months on your Series I savings bonds -- see my reply to Tom in yesterday's column for the interest rate cycles -- but it should help reduce your frustration with government statisticians.

Read more Dr. Don columns for additional personal finance advice. 

By Don Taylor, Ph.D., CFA, CFP • Bankrate.com

Ron Mastrodonato / movemyrealty.com does not claim credit for writing this article

ORLANDO, Fla. – June 19, 2009 – Speculators are buying up an uncounted but certainly significant percentage of homes for sale in cities where the meltdown hit hardest.

Homes.com reports a 30- to 50-percent year-over-year increase in home searches in foreclosure-heavy states, including California, Michigan and Florida. In these states, helping long-distance investors find and close on properties has become a burgeoning real estate specialty.

The investors run the gamut from international speculators seeking a house or two to venture capital firms that buy bundles of homes for 25 cents on the dollar — most in need of renovation and some with substantial tax liens.

Will these investments lead to riches? Possibly, if housing prices go back up and if investors are able to fix up and rent the properties out while they wait to sell, experts say.

Source: Smart Money, Anne Kadet (06/01/2009)

© Copyright 2009 INFORMATION, INC. Bethesda, MD (301) 215-4688

Ron Mastrodonato / movemyrealty.com does not claim credit for writing this article

FHA’s market share has grown from less than 3 percent to more than 25 percent in a short period of time. NAR submitted testimony to the House Financial Services Subcommittee expressing support for increased FHA staffing and resources to keep up with this rising demand.

“As the leading advocate for homeownership, NAR strongly supports FHA’s single- and multifamily mortgage insurance programs, and we have worked diligently with Congress to fashion housing policies that ensure federal housing programs meet their mission responsibly and efficiently,” said NAR President Charles McMillan, a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. “FHA is now the primary source of safe affordable mortgage financing for American families. To keep up with increasing demand, FHA must expand its capabilities, but FHA has not yet received the additional staffing and other resources commensurate with its expanded role in financing mortgages.”

"H.R. 2336 would establish incentives to encourage energy efficient building, rehabilitation and upgrades. In addition, the bill provides a loan fund for states to implement renewable energy projects and would encourage a number of U.S. Department of Housing and Urban Development demonstration and pilot programs that would provide best practices and great experiences for promoting energy efficiency in housing."

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This week is fairly busy with five economic reports scheduled to be released. Two of the five are considered to be of high importance to the markets and mortgage rates. The remaining three are of interest to the markets but likely will not cause a large change in mortgage rates unless they vary greatly from forecasts.

The first data of the week comes Tuesday when there are three reports scheduled to be posted. The day's reports are a broad spectrum of data ranging from housing figures to manufacturing output to an important inflation reading. Their importance to the markets also is a wide variety. The first report of the day is May's Housing Starts that tracks starts of new home projects. It is the week's least important report and likely will not affect mortgage rates unless its results vary greatly from the 5.5% increase that has been forecasted.

The second is one of the two highly important reports of the week. May's Producer Price Index (PPI ) will also be posted early Tuesday morning. It helps us measure inflationary pressures at the producer level of the economy. There are two readings of this index, the overall and the core data. The core data is considered to be the more important of the two because it excludes more volatile food and energy prices. A large increase could raise concern about inflation rising as soon as the economy pulls out of the recession. This would not be good news for bond prices or mortgage rates since inflation erodes the value of a bond's future fixed interest payments. Rising inflation causes investors to sell bonds, driving prices lower and mortgage rates higher. Analysts are expecting to see an increase of 0.6% in the overall index and a 0.1% rise in the core data. It will not take much of a variance from forecasts for the markets to react, which would most likely lead to changes in mortgage rates.

The third and final piece of data scheduled for T uesday is May's Industrial Production. This report will be released at 9:15 AM ET and is considered to be moderately important. It measures output at U.S. factories, mines and utilities, giving us a fairly important measurement of manufacturing sector strength. If it reveals that production is rising, concerns of manufacturing strength may come into play in the bond market. A larger than expected 0.8% decline would indicate that the manufacturing sector is weaker than expected and should help push mortgage rates lower. That is assuming that the PPI doesn't surprise us.

Wednesday's only data is the week's most important and arguably the single most important report we see each month. This is when we will get May's Consumer Price Index (CPI). It is very similar to Tuesday's PPI, but measures inflationary pressures at the more important consumer level of the economy. It is expected to show a 0.3% rise in the overall reading and a 0.1% increase in the core data. Larger than expected increases will most likely lead to noticeable upward changes to mortgage rates Wednesday.

May's Leading Economic Indicators (LEI) will be posted late Thursday morning. The Conference Board, who is a New York-based business research group, will post this data. It attempts to predict economic activity over the next three to six months. If it shows rapidly rising levels of activity, bond prices will probably drop, pushing mortgage rates higher Thursday morning. But, a weaker than expected reading could lead to lower mortgage pricing. It is expected to show a 0.9% increase.

Overall, look for Tuesday to be the big day of the week. Not just because it brings the release of three of the five reports, but also because it brings us the PPI that is considered to be a key inflation reading. Wednesday is also very important with the CPI being posted, so look for the most movement in rates during the middle part of the week.

If I we re considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Lock if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

©Mortgage Commentary 2009

25% of Sellers Reduce Asking Price

Sellers have dropped their asking prices on 25 percent of homes listed for sale on Trulia.com, according to a report the online real estate company released last week.

The average price-reduced home has seen a listing price cut of 10.6 percent.

Not only are cities with lots of foreclosures hard hit, but traditionally strong markets also are among those with large-percentage price reductions.

Among the 50 largest U.S. cities, the 12 locales with the largest percentage of price reductions are:

1. Jacksonville, Fla. – 36 percent
2. Tucson – 32 percent
3. Boston – 32 percent
4. Los Angeles – 32 percent
5. Columbus, Ohio – 31 percent
6. Dallas – 31 percent
7. Honolulu – 31 percent
8. Minneapolis – 31 percent
9. Austin – 30 percent
10. Washington, D.C. – 30 percent
11. Baltimore – 30 percent
12. Las Vegas – 30 percent

Source: Trulia.com (06/05/2009)

A secondary mortgage market model that includes some level of government participation is necessary to ensure affordable and available home mortgages. That is the message the National Association of Realtors^® delivered during a House Financial Services Subcommittee hearing today.

“Fannie Mae and Freddie Mac serve an important role in expanding homeownership and providing a solid foundation for our nation’s housing financial system,” said Realtor^® Frances Martinez Myers, who spoke on behalf of NAR. “Unlike private secondary market investors, Fannie and Freddie remain active in housing markets during downturns, using their federal ties to facilitate mortgage finance and support homeownership opportunities for all qualified borrowers.”

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Stocks advanced Thursday after a report showed jobless claims fell last week and banks gained.

The  Dow Jones Industrial Average rose about 75 points, or 0.9 percent. The S&P 500 gained 1.1 percent and the Nasdaq added 1.3 percent.

This came after stocks snapped a four-day winning streak Wednesday after a trio of weak economic reports tarnished the shine on recovery hopes.

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U.S. private employers shed 532,000 jobs in May, fewer than the revised 545,000 jobs lost in April, a report by a private employment service said Wednesday.

The April figure was originally reported as a decline of 491,000.

The median forecast of economists surveyed by Reuters for the ADP Employer Services report, jointly developed with Macroeconomic Advisers LLC, was for 520,000 private-sector jobs lost in December.

The ADP job reading is seen as a predictor of the government's monthly payroll figure. The Labor Department will release its May employment report at 8:30 am Friday.

Read More...

Daily Rate Lock Advisory
    

This week brings us the release of a couple important pieces of economic data in addition to some moderately important reports. The first data is April's Personal Income and Outlays data at 8:30 AM tomorrow. This report gives us an indication of consumer ability to spend and current spending habits. An increase in income means that consumers have more money available to spend. Since consumer spending makes up two-thirds of the U.S. economy, this data can cause movement in the financial markets and mortgage rates. Current forecasts are showing a 0.2% decline in income and spending. Weaker readings would be considered good news for bonds and mortgage rates.

The Institute for Supply Management's (ISM) manufacturing index will be posted late tomorrow morning. This highly important index measures manufacturer sentiment. A reading below 50 means that more surveyed manufacturing executives felt that business worsened during the month than those who felt it had improv ed. Analysts are expecting to see a 42.0 reading in this month's release, meaning that sentiment strengthened slightly during May. A smaller reading will be good news for the bond market and mortgage shoppers while an unexpected increase could contribute to higher mortgage rates tomorrow.

There is no relevant data due to be posted Tuesday, but Wednesday has two reports scheduled for release. The first and possibly the only relevant news is the Commerce Department's release of April's Factory Orders data late morning. This manufacturing sector report is similar to last week's Durable Goods Orders release, but also includes orders for non-durable goods. It can cause some movement in the financial markets if it varies from forecasts by a wide margin, but it isn't expected to cause much change in rates this month. Current forecasts are expecting to see an increase in orders of 0.3%.

The second report of the day may have a noticeable impact on the markets or be a non-factor depending on its results. The Institute for Supply Management will release its services index late Wednesday morning. It is expected to show a reading of 45.0, with the same principals as Monday's manufacturing index. If this reading varies greatly from forecasts, we may see volatility in the markets and mortgage rates. However, if its results are in the general area of expectations, it will likely have no influence on the markets and mortgage pricing.

The revised 1st Quarter Productivity and Costs report will be released Thursday morning. This data measures employee output and employer costs for wages and benefits. It is considered to be a measurement of wage inflation. It is believed that the economy can grow with low inflationary pressures when productivity is high. Last month's preliminary reading revealed a 0.8% rate, but I don't think this piece of data will have much of an impact on the bond market or mortgage pricing unless i t varies greatly from its forecasted revised reading of 1.2%.

Friday's sole report is arguably the single most important report that we see each month. The Labor Department will post May's Employment data early Friday morning. This report gives us key employment readings such as the U.S. unemployment rate and the number of jobs added or lost during the month. Analysts are expecting to see the unemployment rate climb to 9.2% with approximately 550,000 jobs lost during the month. A higher than expected increase in the unemployment rate and a larger drop in payrolls would be great news for the bond market. It would probably create a sizable rally in bonds, leading to lower mortgage rates Friday. However, stronger than expected numbers may lead to a spike in mortgage rates Friday.

Overall, tomorrow or Friday are likely to be the most important days of the week as they bring us the two most important reports on the agenda. If they give us weaker than expect ed results, we will probably close the week with lower mortgage rates than tomorrow's opening levels. However, if we see stronger than expected readings in those two releases, I expect mortgage rates to move higher on the week.

If I were considering financing/refinancing a home, I would.... Lock if my closing was taking place within 7 days... Float if my closing was taking place between 8 and 20 days... Float if my closing was taking place between 21 and 60 days... Float if my closing was taking place over 60 days from now... This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

©Mortgage Commentary 2009