Housing Recovery To Begin Mid-2011

Dan Greenhaus, chief economic strategist at Miller Tabak & Co., says the only way to fix the imbalances in the housing market is to allow time to pass. He believes the market will begin to recover by the middle of next year.

Filed under: Uncategorized, Foreclosures, Housing Market, Inventory, Prices, Real Estate, Sales, Video, Views

Foreclosures Rise in 75 Percent of Major Metro Areas

Foreclosure activity rose in 75 percent of the nation’s top metro areas during the first half of the year compared to 2009. RealtyTrac’s Midyear 2010 Metropolitan Foreclosure Market Report shows 154 of the 206 metropolitan areas with a population of 200,000 or more posting year-over-year increases. James J. Saccacio, chief executive officer of RealtyTrac, said that, though there are signs that foreclosures have peaked in some of the hardest-hit markets, the fragile stability in the market is threatened by persistently high unemployment. Rick Sharga, also of Realty Trac, feels that there won’t be any real price appreciation until 2013. More here, here, and here.

Filed under: Uncategorized, Foreclosures, Housing Market, News, Prices, Real Estate, Trends

Purchase Demand Up For Second Straight Week

According to The Mortgage Bankers Association’s Weekly Applications Survey, demand for purchase loans was up 2.0 percent last week. But despite the highest Purchase Index in a month, the Refinance Index fell 5.9 percent, bringing the measure of total application volume down 4.4 percent. Refinance activity fell due to mortgage rates rising from the record lows recorded the week before. The average contract interest rate for 30-year fixed-rate mortgages increased to 4.69 percent from 4.59 percent. More here and here.

Filed under: Uncategorized, Housing Market, Interest Rates, MBA, News, Real Estate, Trends

Mixed News On Home Prices

According to Standard & Poor’s Case-Shiller Home Price Indices, prices rose 1.3 percent in May from April and 4.6 percent from 2009. But despite the improvement, David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s, warned that a broader look at price levels over the past year shows no sign of sustained recovery. Blitzer said that, since the lows of April 2009, the housing market has stabilized at a lower level and has been relatively flat for the past seven months. More here, here, and here.

Filed under: Uncategorized, Housing Market, News, Prices, Real Estate, Trends

New Home Sales Jump In June

Following a record low in May, new home sales surged 23.6 percent in June, according to estimates from the U.S. Census Bureau and the Department of Housing and Urban Development. The better than expected recovery is misleading, however. Year-over-year numbers were down 16.7 percent and the sales pace was the second slowest since the Commerce Department began tracking the data in 1963. The median sales price of new houses sold in June was $213,400; the average sales price was $242,900. Also, the estimate of new houses on the market at the end of June was 210,000, a 7.6 month supply at the current sales rate. That was down from 9.6 months in May. More here, here, and here.

Filed under: Uncategorized, Housing Market, Inventory, New Home Sales, News, Prices, Real Estate, Sales, Trends

Mortgage Rates, Prices, And Stabilization

Drew Kessler, managing director of Rand Mortgage, believes interest rates won’t fall much further than they have already and feels prices will stabilize through the end of the year.

Filed under: Uncategorized, Housing Market, Interest Rates, Inventory, Prices, Real Estate, Trends, Video, Views

Existing Home Sales Fall Less Than Expected

Sales of existing homes fell less than economists expected in June, according to a report from The National Association of Realtors. Sales were down 5.1 percent but, despite the downturn, up 9.8 percent from the year before. Lawrence Yun, NAR’s chief economist, said the market is undergoing understandable swings and sales will only return to a healthy level once jobs are created at a sufficient pace. The NAR also reports total housing inventory was up 2.5 percent to 3.99 million homes for sale at the end of June, which represents an 8.9-month supply. More here, here, and here.

Filed under: Uncategorized, Existing Home Sales, Housing Market, Inventory, News, Real Estate, Sales, Trends

Think You Can’t Refinance? Think Again!

In my last article, I covered loan modifications as a potential strategy for foreclosure avoidance. And, although the process has improved slightly at some banks and servicing companies, the ratio of loan modification applications to successful completions remains dismal. I have spoken to several industry professionals and the biggest reasons I hear for modifications not getting approved is that borrowers make too much money or that their loan has not adjusted YET.

If a loan has not adjusted yet and there is no evidence of financial hardship, pursuing a loan modification in an exercise in futility. However, what if you are underwater and/or have a loan that will be adjusting next year or six months from now and you are nervous about what is to come? Fortunately, you may still be able to refinance if your existing loan is owned by Fannie Mae or Freddie Mac under either the Fannie Mae Refi Plus program or the Freddie Mac Open Access program, respectively.

Both of these programs allow for negative equity up to 125% loan to value (1st mortgage balance / property value) for fixed rates and 105% for adjustable rates, as long as your original principal balance on your current loan was 80% or less of the appraised value at the time (if you don’t currently have private mortgage insurance aka PMI, you are probably in good shape). These programs are also streamlined to some degree, typically only requiring a current pay stub and verification of employment for a salaried borrower or the most recent year’s tax returns for a self-employed borrower.

Even if you have an existing 2nd mortgage that puts you above the 125% threshold, you may still be eligible. The guidelines only apply to existing first mortgages and do not place a limitation on the combined loan to value (1st mortgage balance + 2nd mortgage balance / property value).

Here is an example (assumes 1st mortgage is owned by Fannie Mae or Freddie Mac):

Current Home Value: $400,000
Existing 1st Mortgage Balance: $440,000
Existing 2nd Mortgage Balance: $75,000

Loan to Value: ($440,000 / $400,000) = 110%
Combined Loan to Value: ($515,000 / $400,000) = 128%

So, as you can see, our combined loan to value is beyond the 125% threshold but it does not matter since our 1st mortgage loan to value is only 110%. So, as long as the existing 2nd mortgage lien holder will subordinate to the new proposed 1st, we would be eligible to refinance under Fannie Mae / Freddie Mac guidelines.

If you would like to see if your loan is owned by Fannie Mae or Freddie Mac, you may click on the links below.

https://ww3.freddiemac.com/corporate

http://loanlookup.fanniemae.com/loanlookup

For any other questions, you may contact Matthew Carreon at:

Matthew R. Carreon
Certified Mortgage Planning Specialist
Leveraged Home Equity
895 Dove St., 3rd Fl.
Newport Beach, CA 92660
Phone: 888-386-3221
Cell: 562-244-2873
Fax: 877-500-8670
Email: mcarreon@leveragedhomeequity.com
Website: www.matthewcarreon.com

Filed under: Uncategorized, Fannie Mae, Freddie Mac, Interest Rates, Loans, Real Estate, Refinancing

Interest Rates Hit New Low, Spur Demand

According to The Mortgage Bankers Association’s Weekly Applications Survey, the average contract interest rate for 30-year fixed-rate mortgages fell to 4.59 percent last week from 4.69 percent the week before. The 0.10 percent drop brought rates to their lowest level since the survey began in 1990 and spurred the first increase in demand in five weeks. The Refinance Index was up 8.6 percent and the seasonally adjusted Purchased Index increased 3.4 percent. Michael Frantantoni, MBA’s vice president of research and economics, said refinance activity is up nearly 30 percent over the past four weeks. More here and here.

Filed under: Uncategorized, Housing Market, Interest Rates, MBA, News, Real Estate, Trends

Housing Starts Down, Building Permits Up

Housing starts fell 5.0 percent in June, hitting their lowest level since October 2009. But though the Department of Commerce’s residential-construction statistics show the second-straight month of declines in privately owned housing starts, they also show a 2.1 percent rise in building permits. The unexpected jump in permits suggests a boost for building activity in July. Michael Gaspen, an economist at Barclays Capital, said the market is trying to find a bottom following the expiration of the tax credit but he still expects housing starts to slowly rebound in the second half of the year. More here, here, and here.

Filed under: Uncategorized, Building Permits, Federal Programs, Housing Market, Housing Starts, News, Real Estate, Trends