San Antonio Mortgage News

Feds rate cute on December 2009 makes history!

The Feds cut interest rates again today to an All time low of between zero and .250%.  Please stayed tuned to more info on how this will effect mortgage rates in the days ahead.

A Good Start

The National Association of Realtors (NAR) has been an active voice for homebuyers and real estate industry professionals.  Some recent changes and considerations are showing that the government is listening to NAR recommendations.  However, NAR warns that more changes are needed, and quickly, to assist American families who are in danger of foreclosure and to help potential home buyers get motivated enough to hurry up and purchase a home sooner rather than later. 

NAR is asking for a buy-down program to be put in place to help buy down mortgage interest rates or for the government to utilize all available resources to purchase mortgage-backed securities to reduce rats by 1 percentage point which would likely result in a half-million increase in home sales according to NAR data.  Charles McMillan, NAR President, said that “. . . we will continue to press ahead because rates are not coming down fast enough to impact the housing market.”  Actions need to be taken quickly to get ahead of falling home prices and troubled home owners instead of trying to chase the falling rates each month as they fall further in much of the nation.  In our last blog we mentioned that

San Antonio is still holding steady but improvements in the national housing market will affect us very positively as well. 

NAR has also asked Congress to make temporary higher loan limitations permanent and the $7500 tax credit for first time home buyers to be extended to all home buyers and the payback clause to be eliminated in a further attempt to encourage more home sales.  It is encouraging that the government is listening; I just hope that they have the ability and courage to take actions quickly so that we can see a welcomed turnaround in the national housing market for 2009. 

Military Medicalo Facilities Spell Good News for SA

After reading yet another article with good news for San Antonio and a heart stopping double overtime game where the Spurs pulled through last night, I must say. . .we are truly blessed to be living in the River City.

 

Ground breaking took place this week on a $720 million dollar military contract to expand local military medical facilities in San Antonio.  This huge project is estimated to take place over the next three years where almost two billion dollars will be spent on the total project.  As always, expansion projects mean more jobs which leads to a more prosperous local economy.  I think back to the series of events that led to me living and doing business in San Antonio and I am thankful for each and every event, I can't imagine another city I'd rather be in with all of the good fortune we are having. 

Lowering Mortgage Rates.....Again

In Washington there is still much speculation about how to further stabilize the nation’s housing market.  One plan as outlined in the Wall Street Journal’s Web Site proposes to do the following:

·        Lower 30 year mortgage rates to 4.5% (the lowest available rates since the early 1960’s)

·        The plan would take advantage of the spread between mortgage rates and yields on government debts

·        The lower rates would create a refinance boom (if it is allowed on Refinances) and result in extra money in the pockets of homeowners which would hopefully reduce the need for foreclosure

·        The lower rates could also help slow the price reductions we are seeing in the market because home buyers total monthly payments would be reduced allowing them to buy higher priced homes

One thing is for sure, President-elect Barack Obama, has been and will continue to receive a slew of ideas and pleas from everyone from struggling home owners to real estate agents to individuals in the mortgage industry to do whatever is necessary to help the nation’s housing industry recover from the hard hits that 2008 brought.  We are very blessed in San Antonio to continue to not feel the devastation that most of the rest of the country is feeling.  Keep your head up San Antonio, even more help should be on the way soon!

San Antonio Proclaimed the "Benchmark" for the Rest of the Nation

I just read a very positive article in the San Antonio Express News that showed a nice comparison between San Antonio’s housing market and the rest of the nation’s housing markets.  In previous writings I’ve mentioned that I didn’t think that San Antonio would be hit as hard as the rest of the nation because of a unique combination of a few key market factors.  The Express News mentioned the same factors:

·        High employment rates (95% in comparison with  % for the rest of the nation

·        Population growth (expected to remain above 2% next year in comparison with a negative growth rate expected overall in the US)

·        Better than average price appreciation (San Antonio experienced a 1% dip in October in comparison with October of 2007 while the nation experienced an average of 11.3%)

·        Lower tax rates (attracting new businesses to move to the area and existing businesses to continue hiring new employees)

As a result of these factors, we haven’t been hit nearly as hard as the rest of the nation during the wide spread housing slump.  David Kittle, Chairman of the Mortgage Banker’s Association, went on in the Express Article to call San Antonio, “the benchmark for the rest of the country in lending and building.”  Not only are we doing better statistically with prices and population growth, we also have a dramatically lower percentage of growth in the number of foreclosures, 22.7% this year in comparison to 45% as the nation’s average.  As a mortgage banker, I can assure you that I am doing my part to keep this number down by ensuring that I get my clients into loans that not only make it possible for them to purchase their dream home but, loan programs that will enable them to keep up with those payments for the life of the loan and, thus, stay in that dream home with comfort for many years to come.   

A Thanksgiving Treat from the Fed

Happy Thanksgiving – Mortgage Rates Plunge Finally, some good news for the mortgage industry! In a move to increase credit availability, the Federal Reserve and Federal Home Loan Banks announced that they would purchase up to $600 billion in Mortgage-Backed Securities (MBS), exciting news that sent interest rates for 30-year fixed-rate mortgages plummeting below 6.00% and near the lows for the year! If you have been on the fence about buying or refinancing a home, now is the time to act. Interest rates are extremely low and home prices in some areas are at 2003-2004 levels. Add to that recent declines in energy prices and lower consumer interest rates, and you have a great holiday recipe for success, but only if you give us a call. Don't wait until next week. Call us today and get pre-approved. Rates have already been very volatile and this opportunity might not survive the holidays. In many markets, falling prices are bringing out buyers that have been waiting to buy and they are scooping up both bargains and hot properties. Let me offer you some pointers to help you negotiate a great deal and lower your costs to close. Whether you are looking to buy or refinance, call me today. I'm here to help. If we don't speak before Thursday, however, I wish you and your family a wonderful and Happy Thanksgiving.

 

A Move to Reduce the Number of Foreclosures

Citigroup, the FDIC and a few other large banks are working to develop a plan to slow down the growing number of foreclosures of single family homes.  Citigroup plans on not allowing new foreclosures to be filed and homes in the middle of the foreclosure process will be halted for the time being.  In order for homeowners in trouble to be considered for this moratorium on foreclosures they must meet the following criteria:

·        The homeowner must want to stay in their home

·        The homeowner must cooperate willingly with the bank to develop an alternative payment plan

·        The homeowner must have the income necessary to make payments for the new alternative payment plan that is agreed to

 

Although this will first only affect borrowers with loans through Citigroup the plan is to expand these efforts to other loans that it services as well.  In order to reduce payments for current homeowners Citigroup plans on using the following avenues:

·        Reducing monthly principle amount

·        Extending the number of years left on the loan

·        Adjusting interest rates

 

I want to point out that this move is not a result of a “change of heart” but a result of incredible losses that Citigroup has suffered.  It has become very clear in the past few months that it is more profitable in the long term to work with struggling borrowers rather than going the foreclosure rate much of the time.  The staggering number of foreclosures has had a negative effect on the nation’s housing market.  To give you an idea of how widespread the problem is Mortgage News Daily reported in a recent article that 4 Million American homeowners are at least one payment behind on their mortgages.  If you or someone you know is at risk for falling behind on payments I would encourage them to contact the financial institution their loan is through and see if any alternative agreement can be reached.  For those getting new loans in the near future it is more evident now than it has been in many years that you need to be working with an experienced loan officer who can help educate you on not only what you qualify to purchase but, more importantly, what would be a wise amount to spend on a home in your particular situation. 

Will you pay more for a Green home?

Despite, or maybe because of the capricious economy, more Americans are going green when it comes to their homes, according to a recent survey conducted by Better Homes and Gardens at home shows in 15 cities across the country.   Despite "cost" being singled out by 36 percent of respondents as the greatest impediment to going green, half of those surveyed have paid more money for an energy efficient product in the past 12 months and one in three homeowners (30 percent) claim they would be willing to spend $5,000 or more on green improvements to increase a home's appeal to potential buyers. "As their environmental awareness grows, American homeowners are beginning to take action on green issues and are willing to spend their money accordingly," explained Sherry Chris, president and CEO, Better Homes and Gardens Real Estate. "These survey results confirm homeowners are identifying greater value in green and when the time comes to sell their homes, they will look to convert high consumer awareness levels on the green issue into a market differentiator." In addition, when preparing to buy or sell a home, more than half of those surveyed (51 percent) believe in the importance of working with a green certified real estate agent. This would include knowledge in regards to housing materials and construction, energy efficient appliances and systems, as well as the impact of landscaping on a home's environmental footprint.

A New President, A New Housing Agenda

 

I read a phenomenal article today by Inman News and wanted to share a few points with you that I think will be instrumental in returning the housing market to a place of stability.  It is no secret that the newly elected president will inherit a bit of a mess as far as the economy and the real estate market go.  What that president does with that “mess” will set us up either for success or failure over the next few years as far as the economy goes.  We have a bit of a cat and mouse game going on where more and more homes are being placed on the market, in part due to rising foreclosures, yet less and less of the general public can qualify to purchase these homes due to the tightening of credit regulations.  Below is a list of the items that need to be at the top of the new president’s agenda to help get us up and out of the current economic state of affairs.

 

The private loan market needs to be encouraged yet regulated.

 

Trust needs to be rebuilt in Freddie Mac and Fannie Mae to encourage investors to return their support.

 

Find the balance between promoting FHA loans yet keeping a close eye on its guidelines.

 

The rental market should be looked at as many Americans are left with no other option.  The condition of properties and pricing in the rental market needs to be explored.

 

Federal housing programs need to be revisited to ensure they are offering maximum support to low income families and those walking the fine line of foreclosure.

 

Stricter regulations need to be placed on real estate agents in this turbulent market to ensure that they are doing their fiduciary duties to their clients.  Ethical agents won’t need to make any changes in their business while unethical ones will be forced to drop out which will be better for everyone.

 

More respect should be placed with RESPA which helps regulate fees and relationships in real estate transactions.

 

Leadership needs to be looked at.  Housing administration leaders need to be free of conflicts of interest and have the greater good’s interests in mind.  Leaders need to not only be focused on a short term fix but, more importantly, on long term consequences.

 

I would love to hear your input on these ideas and answer any questions you may have regarding recent lending practices and changes.

Fed Drops Key Rate to 1 Percent

The Federal Reserve trimmed a half point off the key federal funds interest rate Wednesday, dropping it to 1 percent.

In a statement, the Fed acknowledged that the economy has few bright spots. “The pace of economic activity appears to have slowed markedly, owing importantly to a decline in consumer expenditures,” the central bank said.

It left open the possibility of further cuts, saying it would “act as needed” to stabilize prices and encourage growth.

Unemployment has risen to 6.1 percent from 5 percent in January as a result of the loss of 700,000 jobs. Analysts say this news is particularly alarming since job losses usually come early in a recession.

Source: The New York Times, Edmund L. Andrews (10/29/2008)