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1. Time 2-25-08 - The Case Against Waiting to Buy 2. Forbes.com: Best Blue-Chip Real Estate Investments 4. As most of you know the Fed just cut the rates by .25% again. Along with this cut most consumers (at least every single one that I spoke with over the last 2 weeks) assumed that meant mortgage rates would go down. Well rates are actually going up and have done so for 3 straight days and here is a brief explanation of why: 1. Market anticipation. Be not mistaken that the folks who work on wall street are slightly smarter than most of us when it comes to interest rates and the daily efforts of the federal reserve. This is why about 2 weeks ago mortgage rates went down and were at year LOW’s for about a week. Everyone knew that the fed was going to cut rates and the mortgage rates were adjusted accordingly in anticipation of that. Proactive not reactive, keep that in mind. 2. Fannie and Freddie are in TROUBLE financially. The article below if one of thousands over the past few weeks that details the BILLIONS of dollars that Fannie mae and Freddie mac have lost this year. Fannie and Freddie provide the money to all banks for virtually all the loans that you and I deal with. So when they are struggling mightly to keep the electricity on do you think that they are going to LOWER the rates they are charging the mortgage companies??? Of course not, just like when the price of oil rises the price of gas certainly doesn’t go DOWN to try and entice people to come to the pump right….. Fannie and Freddie have been, AND WILL CONTINUE TOO, raise the cost of money to the banks in order to offset there losses. That will trickle down tot the consumer for sure. This isn’t the end of the world and doesn’t mean rates are going to skyrocket by any means. What it does mean is the 30yr fixed at 5.75% of a week ago isn’t here today and probably wont be back. Be happy with 6% and be knowledgeable of why. 5. Fannie Mae execs to face shareholders Shareholders will want to know what steps the mortgage finance firm is taking to staunch its heavy losses. WASHINGTON (AP) -- Top executives of Fannie Mae will face shareholders for the first time in three-and-a-half years on Friday at an annual meeting bound to focus on the mortgage-finance company's massive losses and grim outlook. Fannie Mae, the largest U.S. buyer and guarantor of home mortgages, is holding its first annual shareholders meeting since May 2004, five months before a $6.3 billion accounting scandal that led to the ouster of its highest executives, tarnished its reputation, and prompted federal regulators to fine it and impose restraints on its operations. The meeting is scheduled to begin at 10:00 a.m. ET at a Washington hotel. Fannie and its smaller government-sponsored sibling, Freddie Mac, together own or guarantee around 40 percent of U.S. home-mortgage debt. They have cut their dividends and sold a total $13 billion of special stock recently to buttress their finances after posting third-quarter losses. The companies also have been forced to set aside billions of extra dollars to account for soured home loans, eroding their profits at a time when home prices are falling and defaults are spiking on high-risk mortgages made to borrowers with weak credit histories. Washington-based Fannie Mae said last week it expects to lose money in 2008 on eight to 10 of every 1,000 mortgages held on its $2.4 trillion book. That would be a steep increase from this year, when it expects four to six of every 1,000 mortgages to be money-losers. 6. Realtors Have Changed Lender Recommendation Practices in Recent Months, New Study Finds The dramatic turmoil in the mortgage market in recent months has prompted a significant number of real estate agents to rethink which lenders they recommend to home buyers. And increasingly, agents ap- pear to favor lenders owned by their own brokerage firm over large na- tional lenders. These are several of the major findings emerging from a just- completed national survey of real estate agents. The study, sponsored by Inside Mortgage Finance and based on a survey conducted by Campbell Communications in early December, questioned real estate agents about how the ongoing mortgage crisis has impacted the home purchase mar- ket. It also asked agents to rate individual lenders on their performance in the current liquidity-challenged mortgage lending environment. Significantly, realty agents reported that more than one-third of home purchase transactions over the last three months have either been postponed or failed. A hefty 13 percent failed for mortgage-related rea- sons, according to respondents. The new study highlights the problems the real estate sales indus- try is having adjusting to a mortgage market that is very much in transi- tion. Not surprisingly, real estate agents attributed a sharp jump in mort- gage-related problems with home sale transactions to both a tightening of underwriting standards and elimination of many previously popular mortgage programs. One agent complained about “lenders who don’t know what they are doing” and “wasting time trying to get approval on a loan product that the borrower will not qualify for anyway.” Another agent noted that some transactions fell through because “loan programs disintegrated dur- ing the closing week,” leaving borrowers to start over with other lenders and other programs. When asked for the specific reasons behind mortgage-related home sale transaction failures, respondents identified “credit score too low to qualify” as the biggest problem by far, followed by “insufficient income to qualify” and “insufficient downpayment.” One of the most noteworthy developments emerging from the study centers on recent changes in mortgage recommendation practices among real estate agents. According to the survey results, about 40 percent of respondents indicated they have modified their mortgage recommendation practices in light of the ongoing shakeup in the mortgage industry. Among those altering their practices, the most common change was to more frequently recommend a company’s “preferred mortgage provider.” This trend is in sharp contrast with past surveys of real estate agents conducted by Campbell Communications that showed very little loyalty to in-house or affiliated lenders. The latest survey found that respondents rated mortgage providers owned by their own real es- tate brokerage firm or their franchisors more highly than they did large national lenders. Specifically, firms like Weichert Financial, Coldwell Banker Mortgage and ERA Mortgage were found in the top half of rated lenders while Bank of America, Countrywide Home Loans, Chase Home Finance and Washington Mutual came in the bottom half. The new study, “How Agents View Lender Relationships in Stressed Markets,” is the sixth in a series of surveys examining the relationships between real estate agents and mortgage lenders. More than 2,400 agents responded to the latest survey and passed qualifying criteria for analysis. To obtain the full survey results, which include detailed ratings of individual lenders, contact John Campbell at Campbell Communications at john@campbellsurveys.com or (202) 363-2069. |
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