It’s said that when rent and mortgage payments are around the same amount that changes start to occur which can mean we are close to or at a bottom. I hope that is true and here is another reason to BUY NOW. The WSJ reported that the relative cost of owning versus renting is swinging back in favor of homeownership in some U.S. markets, buoyed by several quarters of sharp declines in home prices.
http://online.wsj.com/article/SB123552129423664663.html
I know this has nothing to do with interest rates but we need to hear more positive news like this. I don’t know who heard Obama reference this in his speech last night but this is an amazing story that was not was not done for publicity. “Leonard Abess Jr., the Miami banker who quietly gave $60 million of his own money to his loyal staff of 399 current and 72 former workers, plans this evening to be watching President Barack Obama’s speech to a joint session of Congress from first lady Michelle Obama’s box.” Please make sure to read this
http://www.miamiherald.com/news/politics/AP/story/919394.html
Well according to The WSJ, “expose players in the financial game to greater personal loss if their risk-taking fails. When you worry that a mistake will cause you to lose your second home, your stocks and bonds and your club memberships, then you’re less likely to take the kinds of risks that expose the rest of society to your failures.”
http://online.wsj.com/article/SB123552702523065837.html?mod=todays_us_opinion
I guess a lot according to The WSJ. “Falling home prices are spurring an increase in all-cash home sales in markets that have been hardest hit by the foreclosure crisis, an indication that bargain hunters have descended on the markets looking for deals. Homes financed with cash comprised one-third of sales in Phoenix last month, up from 19% one year ago, according to a report by Raymond James & Associates Inc. In Sacramento, Calif., all-cash sales accounted for 24% of total home sales last month, up from 8% in January 2008 and 3% in January 2007, according to the Sacramento Association of Realtors. Sacramento and Phoenix have each seen home prices fall by one-third in the past year. Cash sales are up even more in many Florida markets. In Miami, cash offers accounted for 30% of sales last month, according to a report by Thomas Lawler, a housing economist based in Leesburg, Va. That share more than doubled in Gulf Coast communities such as Punta Gorda and Englewood, Fla., where cash financing accounted for 65% and 60% of sales, respectively.”
http://online.wsj.com/article/SB123552303469165085.html?mod=todays_us_money_and_investing
I guess their not that great. The WSJ reported that “As a home-mortgage lender, Bank of America Corp. avoided the excesses of many rivals during the housing boom. But an analysis of mortgage-backed securities sold to investors in 2007 by the Charlotte, N.C., bank shows its performance isn’t nearly as impressive in that area. For example, among 17 issuers of securities backed by adjustable-rate jumbo mortgages, Bank of America’s BAFC series has performed the worst, with payments on about 16% of the underlying loans 60 days or more overdue, according to a report from Walter Schmidt and other analysts at FTN Financial Capital Markets. FTN is a unit of First Horizon National Corp., a regional bank based in Memphis, Tenn. In comparison, about 7.6% of the underlying loans in similar securities from Wells Fargo & Co. were at least 60 days overdue, and J.P. Morgan Chase & Co.’s Chase unit posted a rate of 4.5%.”
The AP reported this morning that “Sales of existing homes unexpectedly plunged in January to the lowest level in nearly 12 years as pessimism about the economy grew and buyers waited for President Barack Obama’s plan to help revive the U.S. housing market. The National Association of Realtors said Wednesday that sales of existing homes fell 5.3 percent to an annual rate of 4.49 million last month, from 4.74 million in December. It was the weakest showing since July 1997, and some analysts don’t see sales bottoming out until later this year as prices continue to sink. Sales had been expected to rise to an annual pace of 4.79 million homes, according to Thomson Reuters.”
http://finance.yahoo.com/news/January-existing-home-sales-apf-14464459.html
FHFA officially announced the changes to the conforming loan limits for 2009. http://www.fhfa.gov/webfiles/1279/CLLarra022309_final.pdf
For the official documentation supporting the “Homeowner Affordability” plan, check out the following links: http://www.treas.gov/initiatives/eesa/homeowner-affordability-plan/ConsumerQA.pdf, http://www.ustreas.gov/news/index2.html, and http://www.ustreas.gov/news/index3.html.
Below is another great article about the tax credit for 2009 and 2008.
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/21/AR2009022100141.html
Here is a great link for the Homeowner Affordability and Stability Plan.
http://www.treas.gov/initiatives/eesa/homeowner-affordability-plan/ConsumerQA.pdf
Below are the details of Obama’s foreclosures plans. My only worry is that there won’t be enough principle reductions that take place. I know this may frustrate many because it is a “free lunch” so to speak but I think it has to be done for those who are over $100,000 upside down.
“The plan, which could cost as much as $275 billion, will enable as many as five million homeowners who have little equity in their homes — or even owe slightly more than their homes are worth — to refinance loans through government-controlled mortgage giants Fannie Mae and Freddie Mac. The administration set aside $200 billion in new backing for the pair, which will play a central role in the rescue.
In addition, the government plans to spend $75 billion to encourage lenders to modify loan terms for people at risk of foreclosure or already in foreclosure proceedings. Lenders and the government would jointly lower monthly payments to 31% of homeowners’ income. To encourage servicers, the plan includes incentives such as $1,000-a-year “pay for success” fees if a borrower stays current on the loan.”
http://online.wsj.com/article/SB123496582087411241.html?mod=todays_us_page_one
Located in South Florida, Justin Miller has established himself as a leader in the mortgage community for his expert advice and understanding of the current real estate climate. Contact him.
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