April 18, 2008
Market and Economic Recap News on the new homes real estate industry, mortgage loans and the economy.
Business Week Ending April 18, 2008
April 15, 2008
Remember creating collages in art class as a kid? The conglomeration of words, images and elements selected and assembled became works of art that told a story of sorts.
Designers utilize the same concept to develop a new design plan and illustrate their ideas and concepts to their clients, and it’s called the design story board. You can use this same creative exercise to discover your design style, decorate a room or design your new home.
April 2, 2008
On Monday, Treasury Secretary Henry Paulson presented his blueprint to overhaul the way the U.S. regulates its financial system. If implemented, the plan would significantly alter the way banks, brokerages and insurance companies conduct their business. Some of the suggested changes would establish consistent licensing standards for mortgage lenders. Another proposal, strongly opposed by the banking industry, may eliminate thrifts that once funded a major share of mortgage loans for new home buyers.
March 14, 2008
Business Week Ending March 14, 2008
February 29, 2008
Business Week Ending February 29, 2008
February 18, 2008
Tucson, county seat of Pima County, is the second largest city in Arizona, with 518, 956 residents according to 2006 census figures. Nicknamed ”the Old Pueblo,” the city is located southeast of Phoenix, along Interstate 10 and I-19, just 60 miles north of the U.S. - Mexico border.
January 23, 2008
After global financial markets took a dive Monday on fears that the world’s largest economy was headed toward recession, the Federal Reserve took swift and immediate action. In an emergency meeting, the Fed cut its overnight lending rate by 75 basis points, hoping to prevent a complete market meltdown. At opening Tuesday, stocks plunged on Wall Street, with the Dow Jones dropping 465 points at its lowest point, then regaining some ground to close just below the 12,000 level - its lowest in 16 months. Fed Rate Cuts Will Help Subprime Borrowers Frank Nothaft, chief economist for Freddie Mac, calls the Fed’s cut “good news for people who have mortgages or are shopping for a mortgage.” Borrowers with adjustable-rate mortgages (ARMs) indexed to the prime rate will benefit as banks follow the Fed’s lead and lower the prime rate to 6.5. Subprime borrowers expecting interest-rate resets will see a smaller increase in their payment, and in some cases “maybe even a decline,” according to Nothaft.
What about long-term interest rates? The most recent Freddie Mac survey of mortgage rates put the 30-year fixed rate at 5.69 percent - the best it’s been for over 2 1/2 years. Where the long-term rates go from here depends largely on the perceptions of market investors and whether they believe the Fed’s cuts will be enough to boost the economy.
Borrowers seeking non-conforming jumbo loans (those not guaranteed by Freddie Mac and Fannie Mae) will continue to pay higher rates - at least a full percentage point higher than loans below the $417,000 loan limit.
Want to …
January 14, 2008
It’s in the news daily…banks closing their mortgage divisions, lenders writing off billions of dollars in subprime mortgage debt, the Federal Reserve holding auctions to inject more money into the financial system. With all the doom and gloom, you might think that the prospect of buying a new home and finding a lender that will give you a decent rate on a home mortgage is nearly an impossible feat. But it’s not. Mortgage Lenders Court Qualified Home Buyers There are a lot of mortgage companies out there that did little to no business in the non-conforming loan category, still loaning money to home buyers, just as they did before the subprime mortgage debacle. Many other lenders that felt the sting of exposure from bad mortgage debt did not pull up posts and exit the market. In fact, they’re even writing quite a few jumbo mortgages (loans for more than $417,000) these days. After all, banks are in the business to make money. To make money, banks still need to write loans. Sure, they’re more cautious, but if they used better business practices all along, would we be talking about a credit crunch and subprime mortgage crisis? Would you loan someone money who couldn’t prove he had the means or the method to pay you back? I sure wouldn’t.
So, what do you have to do to qualify for good mortgage rates these days? Lenders want to see:
a steady, documented work history pay stubs verified assets credit scores of 650 or more
Generally, if you have paid your bills on-time, and you can prove that you make the money to buy the house, you won’t have a problem qualifying …
January 11, 2008
More negative news this week on the economic front prompts more analysts to predict a recession in 2008. Bank of America announced it will rescue Countrywide Financial, the nation’s biggest mortgage lender, in a stock deal for $4.1 billion. Market and Economic Recap Business Week Ending January 11, 2008
News from the Commerce Department
Up>–U.S. Trade Deficit: The trade deficit, the gap between imports and exports, jumped by over 9%, a much larger increase than had been expected. Record foreign crude oil prices drove the increase, as the country’s bill for foreign oil climbed to an all-time high of $34.4 billion. U.S. Exports also set a record, rising by 0.4%, but the good news is overshadowed by a 3% increase in total imports of goods and services. With the weaker dollar, demand for exports has grown, providing a boost for U.S. manufacturers and farmers.
News from the Labor Department
No inflation. Import prices remain unchanged for December.
The Stock Market Stocks fell as investor’s fears rose about growing losses in the financial sector, and more major players prepare to announce they will take a big hit from the subprime mortgage debacle. Merrill Lynch & Co, the nation’s largest brokerage, is expected to suffer around $15 billion in losses from mortgage debt, according to the New York Times, and is currently seeking investors to infuse capital and offset its losses. Merrill, along with Citigroup Inc. and JPMorgan Chase & Co. will report results later next week. Gold Rush Gold futures spiked to their highest level ever this week, pushed higher by the weak U.S. dollar and rise in oil prices. …
January 7, 2008
It happens in the insurance industry all the time. You have a car accident, then boom…your insurance company raises your auto insurance premiums. The greater the risk…the more you pay for your insurance. In the wake of the subprime mortgage crisis, that is exactly what is happening in the mortgage lending business. Mortgage Lenders Move to Risk-based Pricing Most borrowers looking to finance loans for new homes in 2008 will end up paying higher prices. How much more? A fee, amounting to about $250 for every $100,000 borrowed will be charged to home buyers across the board. Fannie Mae calls this fee the “adverse market delivery charge.” Freddie Mac refers to it as a “market condition delivery fee.”
From there, more fees will be tacked on for buyers depending on their credit scores, the loan-to-value ratio and whether there is another loan piggy-backed onto the mortgage. With a credit score below 620, those needing to borrow more than 70 percent of their home value will pay about 2 percent of the loan amount more (about $2,000 for every $100,000). If the score is in the 640 - 659 range, the fee would be a bit lower, about 1.25 percent of the loan amount. Less risk…lower fees.
Need a piggy-back loan with 10 percent down-payment? Regardless of your credit score, if you can even get such a loan, you will pay a quarter-point fee for it.
With borrowers already facing tougher credit restrictions, why are Fannie and Freddie charging higher fees? As government-sponsored enterprises (GSE’s), they must collect fees to guarantee the …
