January 28, 2008
The article below from Reuters News could provide great opportunities for home buyers hesitant to jump into a Jumbo loan program. By significantly raising the conforming loan limits, buyers with loans greater than the current $417,000 limit (but still within the yet-to-be-announced new limit) will enjoy a lower interest rate than were possibly now. Jumbo rates typically are at least 1/2% higher than conforming. Certainly welcome relief for San Diego home buyers. And we may see more refinancing as a result too. See the full article below… AARON SMITH - WWW.ROUTE56HOMES.COM
Article By: Patrick Rucker Fannie, Freddie eligible loans get $300,000-plus boost
WASHINGTON, Jan 24 (Reuters) - The size of home loans that may be bought or insured by Fannie Mae FNM.N, Freddie Mac FRE.N and the Federal Housing Administration would rise by more than $300,000 under an economic stimulus plan pitched by the U.S. House of Representatives.
Under the plan outlined Thursday, Fannie and Freddie would be permitted to invest in home loans valued as high as $729,750 for one year, while the FHA would be be permitted to indefinitely insure loans up to that level. Currently, Fannie Mae and Freddie Mac loans are capped at $417,000, while FHA loans may not exceed $367,000.
Since the summer, investors have shunned home loans that did not pass through Fannie Mae, Freddie Mac, or the FHA as they watched Wall Street firms take big losses on their risky home loan investments.
Fannie Mae and Freddie Mac are publicly trade companies that hold federal charters to nurture the nation’s housing market, while the Federal Housing Administration, set up after the 1930s depression, helps borrowers win favorable loan terms by guaranteeing mortgage payments to lenders.
The government ties of all three enterprises have been appealing to investors as the housing market has been rocked by a spike in foreclosures.
LOWER COSTS EXPECTED
Proponents of reform say the new loan levels will draw investors back into the home loan market, resulting in lower costs for mortgage borrowing. In recent months, the interest rate on high-cost loans has been about 1 percentage point above that for mortgages that could be financed by Fannie Mae and Freddie Mac.
Prospective home buyers in costly regions like California, Northern Virginia and New York have faced higher mortgage rates and tougher loan terms, and those areas would get relief under the plan, said Susan Wachter, a professor of real estate and finance at the Wharton School of the University of Pennsylvania.
“This is meaningful because the mortgage crisis and meltdown is geographically concentrated,” she said. “This response will assist the stressed areas” by lowering the cost of home ownership.
Thursday’s plan has been broadly endorsed by the U.S. Treasury Department and both Democrats and Republicans in the House of Representatives. Members of the U.S. Senate have yet to weigh in, and they could demand changes to the plan meant to boost the flagging economy.
And while Treasury broadly supports the initiative, it has long opposed giving Fannie Mae or Freddie Mac more investment powers before Congress ratifies root and branch reform legislation.
James Lockhart, the director of the Office of Federal Housing Enterprise Oversight that regulates the two, said in a statement that his agency was “very disappointed in the proposal to increase” the loan limits. As the main regulator for Fannie Mae and Freddie Mac, Lockhart has warned that he does not have the oversight tools he needs and so the companies’ business should not be allowed to expand.
Other industry critics have cautioned that Fannie Mae, Freddie Mac and the Federal Housing Administration are playing an outsized role in the housing market that is too risky and draining business from fully-private firms. (Editing by Leslie Adler)
January 25, 2008
On Tuesday, January 22, 2008 the Carmel Valley Planning Board (CVPB) held a special meeting to consider adding seats to the Board to incorporate the newer Pacific Highlands Ranch area of Carmel Valley. Pacific Highlands Ranch included the subdivisions of Airoso, Arabella, Portico, Santa Rosa, Bordeaux, Soleil as well as two apartment complexes.
The Board intends to add two seats to the existing Carmel Valley Planning Board. These two seats will be occupied by Pacific Highlands Ranch residents, yet to be named. The few members of PHR that did attend the meeting offered their opinions and suggestions and were appointed by the Board to the Pacific Highlands Ranch subcommittee to assist in getting the word out to PHR residents.
The issue will be addressed again at the CVPB’s regularly scheduled meeting the fist Tuesday of February.
For more information, contact Aaron Smith at email@example.com
January 24, 2008
Good Morning Friends and Clients,Many of you have recently contacted us asking about the latest overseas and domestic economic news… and in particular the aggressive move of the FED to cut rates by 3/4%. As you know, we are not mortgage brokers, but after consulting with our trusted colleagues, we’ve prepared a brief summary of this week’s news and how it will affect you as homeowner or potential homeowner. Always feel free to contact us directly for an analysis of your specific situation at firstname.lastname@example.org or 858-456-9152.
While we were enjoying our Martin Luther King Holiday, Asian and European markets were in a free fall. It turns out that yes, the U.S. economy is still the world’s leading economy. The old adage “when the U.S. sneezes, the world catches a cold” seems to hold true. While some European and Asian countries seemed confident that they were finally independent of our economy, it turns out that with the U.S. flirting with a major recession their economies suffered right along with ours.
Insert the Federal Reserve. The Federal Reserve is not owned by the government. In fact, it is largely owned by 5 large U.S. Banks who in turn have large shareholders from Europe and Asia. As these shareholders saw their own markets tumbling, they began to put pressure on the U.S. Banks to have Feds to step in immediately and make a drastic move to spur the U.S economy.
So, while some of us were enjoying the day off, the Feds held an emergency inter-session meeting and lowered both the Discount Rate and the Feds Fund Rate a whopping .75%. The last time the Feds held an emergency meeting between scheduled meetings was September of 2001.
Mortgage Rates had been falling prior to this move, and fell again in response to the Fed’s move. Rates are once again near all time lows. The stock market in turn has proved extremely volatile with huge early losses this morning and a rally midday. Mortgage Rates were re-priced two times yesterday. You’ll also see a 3/4% drop in your credit card rates, auto loans, adjustable 2nd mortgages and HELOCs (home equity lines of credit) as these rates are more directly tied to the Prime Rate.
Prime is now at 6.5%. Mortgage rates are already so low and the Feds meet again next week. Many feel the Feds will make another cut. There is pressure now for the European Central bank to lower their rates. So far, the Central Bank has held steady. If they do make a move, it will leave the door open for the Feds in turn to lower rates once more next week.
What does this mean to you, the homeowner? Well, it points out that the U.S. economy retains its position as the world’s dominant economy. It also means that rates are so low that now is definitely a great time to refinance your current mortgage. If you are on the fence and have been waiting to purchase a home, contact us now so that we can analyze your situation.
If the Feds make another move, it will most likely be soon. Real Estate is at or near the bottom in most areas and there are wonderful opportunities to roll the clock back and purchase a great property at a huge discount.
If you own a home, consult your mortgage broker and evaluate if you could lower your monthly payment by refinancing. If you have an adjustable mortgage consider refinancing to a fixed rate mortgage. If you are looking to purchase a home, many are now saying “sooner rather than later”. You will have a huge tax advantage and can lock in on a fixed rate mortgage in the low 5% range.
As always, I am happy to answer any questions you may have regarding any of this. 858-456-9152 or email@example.com.
Aaron & Michele Smith
January 18, 2008
For the past 30 years, the median price of existing homes has increased an average of more than 6 percent every year, and home values nearly double every 10 years.
Stories about mortgage fraud, foreclosures and crashing markets have far outpaced the good news — that owning a home is one of the most reliable ways to build wealth for most people.
An uplifting piece of information cited by Ruth Mills