December 28, 2008

Freddie Mac: Long Term Rates Fall For Eight Consecutive Week Setting

Another New Low

30-year fixed-rate mortgage: Averaged 5.14 percent with an average 0.8 point for the week ending December 24, 2008, down from last week when it averaged 5.19 percent. Last year at this time, the 30-year FRM averaged 6.17 percent. The 30-year FRM has not been lower since Freddie Mac started the Primary Mortgage Market Survey in 1971.

The 15-year fixed-rate mortgage: Averaged 4.91 percent with an average 0.7 point, down from last week when it averaged 4.92 percent. A year ago at this time, the 15-year FRM averaged 5.79 percent. The 15-year FRM has not been lower since April 1, 2004, when it averaged 4.84 percent.

Five-year Treasury-indexed adjustable-rate mortgages ARMs: Averaged 5.49 percent this week, with an average 0.6 point, down from last week when it averaged 5.60 percent. A year ago, the 5-year ARM averaged 5.90 percent.

One-year Treasury-indexed ARM: Averaged 4.95 percent this week with an average 0.6 point, up slightly from last week when it averaged 4.94 percent. At this time last year, the 1-year ARM averaged 5.53 percent.

Commentary

Interest rates on 30-year fixed-rate mortgages eased for the eighth straight week and set another record low since Freddie Mac's survey began in 1971," said Frank Nothaft, Freddie Mac vice president and chief economist. Real GDP growth fell 0.5 percent in the third quarter of the year, pulled down by the largest drop in consumer spending since the second quarter of 1980. The market consensus calls for an even larger decline in the last three months of the year.

The housing market, meanwhile, continues to contract. Existing home sales (excluding condominiums and co-ops) fell 8.6 percent in November to 4.0 million houses (annualized) in November, representing the slowest pace since July 1997. Moreover, the median sales price fell 12.8 percent from November 2007, the largest 12-month decline since records began in January 1968, according to the National Association of Realtors®.

Rates alone are not doing enough to slow the downward trend in housing prices. The Fed has just gone from making Qualitative loans to Quantitative loans. This means that we are ready to throw money at problems and worry less about the quality of the loan and more about the need to keep things afloat.

I am hoping that the Fed simply buys the 10 year treasury bond and puts money supply into the marketplace while lowering the interest rate which so many variable mortgages are tied to. This would be direct action that would be almost immediate help for all the sub prime and negative amortization loans that are still out there and defaulting. And, in effect, the Fed would be buying its own debt and providing serious help to the cause of the problem.

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Howard Bell

www.yourpropertypath.com

A web site of over 450 articles related to real estate focused primarily on property management.

Your Property PathSF

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December 23, 2008

Fannie Mae gets into property management while the banks say no

One of the sad and untold stories of the housing crises. Even if you have been paying your rent to the owner of the home you have rented, each time, on time.....you can be evicted. Many owners that are renting out their home are behind in mortgage payments and you, the renter have no idea. Once the bank takes possession they will evict you. They have the right,even though you have been a tenant in good standing. Banks will tell you, they are not in the business of being landlords or property managers. They want the house empty, because they think it will sell faster.

Fannie Mae is the owner of 67,500 properties in foreclosure. Fannie Mae recognizing the difficulty of good people who pay on time, being forced out into the streets will sign new leases with renters living in their foreclosed properties. This could help as many as 75,000 renters stay in homes owned by Fannie Mae.

According to the NY Times, it is the first nationwide effort to provide widespread relief to renters ensnared by the unfolding mortgage crisis, and it will effectively transform Fannie Mae — a government-controlled mortgage finance company — into a national landlord.

Banks as a landlord would be problematic. Property management firms are often family owned business and they couldnt stand up to that kind of competition. Given how poorly the banks have performed as far as reasonable business decision making, I would like to see smaller management companies be offered the business should it be decided that tenants in good standing cannot be evicted just because an owner got into financial trouble.

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Howard Bell

www.yourpropertypath.com

A web site of over 450 articles related to real estate focused primarily on property management.

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December 20, 2008

Mortgage Renegotiations: We Have Data Now

Mortgage work outs and renegotiation are not working. too many people are re defaulting on their mortgages. The Office of Comptroller of the Currency shows that a high re-default rate on mortgages that have been modified in the first two quarters of 2008.

Here are the results of the OCC statistics during the first and second quarter of 2008:

1. 36% of borrowers had re-defaulted by being more than 30 days past due

2. 56% defaulted after roughly six months

3. 58% of borrowers had re-defaulted after an eight month period

These numbers represent the number of mortgage work outs that had re-defaulted on their mortgages after the modification was completed. Clearly, the banks have not done enough in restructuring these loans to keep people in their homes. This coupled with a small amount of work outs completed and a terrible economy are adding to the housing mess that is now an across the board slowdown that is still not contained.

The fed is aware of the continuing spiraling down of the economy and is now shifting from making "qualitative loans" to making "qualitative loans". In other words, throwing so much money at the problem that eventually, the banks will have to free up and start lending.

I am a property manager and we recently chose to use an online rent collection company. I found this to be such an exceptional service, I chose to represent the company. Their property management software makes rent collection easy and saved us time and money. Tenants pay the bulk of the fees and we found most were happy to sign on. I have developed some tenant marketing materials for the program. If anyone has interest in learning more about how to limit the drudgery of rent collection and lower operating costs, please reach me here...

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Howard Bell

www.yourpropertypath.com

A web site of over 450 articles related to real estate focused primarily on property management.

Your Property Path news Brief

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Freddie Mac weekly Update: New Mortgage rate Lows

30 Year Fixed Rate Falls To AT A 37 Year Low

30-year FRM has not been lower since Freddie Mac started the Primary Mortgage Market Survey in 1971.

30-year fixed-rate mortgage: Averaged 5.19 percent with an average 0.7 point for the week ending December 18, 2008, down from last week when it averaged 5.47 percent. Last year at this time, the 30-year FRM averaged 6.14 percent. The 30-year FRM has not been lower since Freddie Mac started the Primary Mortgage Market Survey in 1971.

15-year fixed-rate mortgage: Averaged 4.92 percent with an average 0.7 point, down from last week when it averaged 5.20 percent. A year ago at this time, the 15-year FRM averaged 5.79 percent. The 15-year FRM has not been lower since April 1, 2004, when it averaged 4.84 percent.

Five-year Treasury-indexed adjustable-rate mortgages ARMs: Averaged 5.60 percent this week, with an average 0.6 point, down from last week when it averaged 5.82 percent. A year ago, the 5-year ARM averaged 5.90 percent.

One-year Treasury-indexed ARMs: Averaged 4.94 percent this week with an average 0.5 point, down from last week when it averaged 5.09 percent. At this time last year, the 1-year ARM averaged 5.51 percent.

Commentary from the Freddie Mac Site:

"Interest rates for 30-year fixed-rate mortgage rates fell for the seventh consecutive week, moving these rates to the lowest since the survey began in April 1971," said Frank Nothaft, Freddie Mac vice president and chief economist.

"The decline was supported by the Federal Reserve announcement on December 16th, when it cut the federal funds target to a record low and stated it stood ready to expand its purchases of mortgage-related assets as conditions warrant."

Thanks for Reading

Howard Bell

www.yourpropertypath.com

A web site of over 450 articles related to real estate focused primarily on property management.

Your Property PathSF

http://yourpropertypath.blogspot.com/

Trade talk for the San Francisco real estate industry. Your source for property management tips, policies and market trends.

Snap News updates real estate markets and all things of interest to property owners and real estate professionals

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December 13, 2008

Employment Report Allows Bond Yields to Fall

Long-Term Rates Follow As Short-Term Rates Rise

30-year fixed-rate mortgage:
Averaged 5.47 percent with an average 0.7 point for the week ending December 11, 2008, down from last week when it averaged 5.53 percent. Last year at this time, the 30-year FRM averaged 6.11 percent. The 30-year FRM has not been lower since March 25, 2004, when it averaged 5.40 percent.

The 15-year fixed-rate mortgage: Averaged 5.20 percent with an average 0.7 point, down from last week when it averaged 5.33 percent. A year ago at this time, the 15-year FRM averaged 5.78 percent. The 15-year FRM has not been since February 7, 2008, when it averaged 5.15 percent.

Five-year Treasury-indexed ARMs: Averaged 5.82 percent this week, with an average 0.6 point, up from last week when it averaged 5.77 percent. A year ago, the 5-year ARM averaged 5.89 percent.

One-year Treasury-indexed ARMs: Averaged 5.09 percent this week with an average 0.4 point, up from last week when it averaged 5.02 percent. At this time last year, the 1-year ARM averaged 5.50 percent

From the Freddie Mac Site

Following the release of the November employment report, which showed the largest monthly decline in jobs since December 1974, bond yields fell slightly this week allowing fixed-rate mortgage rates room to ease back a little further," said Frank Nothaft, Freddie Mac vice president and chief economist.

The housing market still hangs in the balance, however," continued Nothaft. On a year-over-year basis, after rising in both August and September, pending existing home sales fell 1.0 percent in October, based on figures from the National Association of Realtors®. Meanwhile, conventional mortgage applications for home purchases over the week ending December 5th were up 2.0 percent from four weeks prior, but were still 51 percent below the same period last year, according to the Mortgage Bankers Association.


Thanks for Reading

Howard Bell

www.yourpropertypath.com

A web site of over 450 articles related to real estate focused primarily on property management.

Your Property PathSF

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Trade talk for the San Francisco real estate industry. Your source for property management tips, policies and market trends.

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December 6, 2008

US Focuses on Mortgage Foreclosure Pain

Finally, A Bail Out for Industry and For People

1. The Federal Reserve announces that it would spend 600 billion to buy mortgage backed securities issued by Fannie and Freddie, pumping some liquidity into the market. Interest rates dropped 1% on the news. This is not a trial balloon but a fact, a program to be put in place. The net result will provide some much needed cash for new loans and workouts for the two quasi public agencies.

2. Treasury is also considering buying 600 billion of mortgage backed securities from Freddie. Fannie and Ginnie Mae, causing a huge influx of mortgage re-fi's. Treasury is looking to use the buying power of Freddie and Fannie to push mortgage rates down to 4.5% by soaking up supply and providing a sense of trust because there are buyers of mortgage loans again.

3. The FDIC has a loss sharing plan which aims to reduce monthly payments to 31 percent of the borrower's income. This proposal is designed to promote wider adoption of such a systematic loan modification program:
a. by paying servicers $1,000 to cover expenses for each loan modified according to the required standards; and
b. sharing up to 50% of losses incurred if a modified loan should subsequently re-default

This proposal focuses on the fact that lenders have been slow to renegotiate or work out problem loans. FDIC thinks this plan can help the estimated 1.4 million non-GSE mortgage loans that were 60 days or more past due as of June 2008, plus an additional 3 million non-GSE loans that are projected to become delinquent by year-end 2009.

Reports indicate that we will be looking at 2.25 million foreclosures this year, up from just over a million last year and no doubt, getting worse. This is just not sustainable if we are to look at keeping industry afloat and start putting people back to work.

Finally....we are looking at helping people as well as industry. Although this amounts to a direct bailout of home owners and the nationalization of the worlds capital markets, it may be the only way of saving us from a complete collapse.

Thanks for Reading

Howard Bell

www.yourpropertypath.com

A web site of over 450 articles related to real estate focused primarily on property management.

Your Property PathSF

http://yourpropertypath.blogspot.com/

Trade talk for the San Francisco real estate industry. Your source for property management tips, policies and market trends.

Your Property Path Amazon Store

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super deals on agent open house tools We hand picked Amazon for the tools you need