June Market Forecast and Pending Home Sales Up
Some developments from the National Association of Realtors:
Record low mortgage interest rates have brought pending home sales numbers up for three months in a row. Many of the buyers that are purchasing right now are utilizing the first time home buyer tax credit. About 45 percent of buyers across the country have been first timers- this is a number higher than the typical 35 to 40 percent in more normal markets. This is also less than in Arizona – where it seems to be nearly 50 percent of first time home buyers jumping at the opportunity to buy in the most favorable market conditions available in years and at fantastic interest rates. Pair that with the first time home buyer tax credit and it’s about the best opportunity out there we’ve seen.
June’s forecast shows good hope with the last three straight months of pending home sales on the rise. This is truly rock bottom mortgage rate pricing – and as we saw in 1994 to 1997 in years 3, 4 and 5 of the last Foreclosure market – it’s pretty likely that rates are going to hike up to at least 7 percent.
Warren Buffett has been saying he can’t see why it won’t follow trend.
Add this to all the Treasury auctions to help fund all the bail out and stimulus monies and it’s pretty apparent by simple rules of supply versus demand theory that there’s going to be way more supply versus demand. Rates have to go up – period.
Now’s the time to take advantage. By time you start hearing the “turnaround has happened” it will be too late – you will have lost your opportunity for “rock bottom” pricing and favorable conditions on all fronts.
Senator Introduces Bill to Extend, Expand Homebuyer Tax Credit
From NAR’s Washington Report:
Senator Johnny Isakson (R-GA) and 9 cosponsors have introduced S. 1230, a bill that would increase the homebuyer tax credit to $15,000 and extend it to all purchasers. It would extend the credit past December 1, 2009 by making the new credit available on the date of enactment (whenever the bill might get signed) and for one year after the date of enactment. Unlike current law, the proposed expanded tax credit would not be refundable. As a result, existing state-level bridge loan downpayment programs would be less available because the purchaser/taxpayer will not know his/her tax liability at the time of purchase.
It is not known when this legislation might be considered, as both tax-writing committees are working solely on health reform. In addition, the proposal has not yet been scored for revenue purposes. Housing and Urban Development Secretary has expressed concern about whether extending the credit to all purchasers would reduce the inventory of houses available for sale. He noted that in most cases a current owner must sell another home before purchasing a new one. NAR is pleased that so many legislators have shown interest in extending and/or expanding the credit.
Existing Home Sales rose 2.4% nationwide
Good news from the housing sector as shared with me by Lonnie Stevenson at Evergreen Home Loans:
May Existing Home Sales rose 2.4%. It was the first time since September 2005 that Existing Home Sales increased for two months in a row. The inventory of unsold homes declined to a 9.6-month supply from a 10.1-month supply in April. A NAR survey revealed that 29% of sales were to first-time homebuyers, helped by the $8,000 tax credit, low mortgage rates, and favorable affordability levels.
What To Do If You Think a Servicer Isn’t Following Making Home Affordable Program Guidelines
Here’s some information I got in the latest National Association of Realtor’s “Washington Report”. This is in response to people calling the NAR asking what to do if loan servicers aren’t following the guidelines for modifying eligible mortgages and refinancing Fannie Mae and Freddie Mac mortgages. Here are the recommended steps to take:
- First, go to www.makinghomeaff ordable.gov — the official Treasury website for the Making Home Affordable Program. At the site, determine whether the loan is owned or guaranteed by Fannie Mae or Freddie Mac by clicking “Loan Look Up” on the ribbon on the top of the home page. Only the holder of the loan is allowed to perform this, so do in the presence of your client or after obtaining their written permission.
If the loan is a Fannie Mae or Freddie Mac loan, call (1) 1-800-7Fannie or (1) 1-800-Freddie, as appropriate, describing the specific inconsistency. Do this whether the issue relates to the refinancing or the loan modification program.
- Next, if the loan is not owned or guaranteed by Fannie Mae or Freddie Mac you can determine if the servicer is participating in the Home Affordable Modification Program (HAMP) by going to the website and clicking “Contact Your Mortgage Servicer” on the top ribbon. To date, 16 servicers are participating, covering more than 80% of all mortgages.
If the servicer is participating, the first step is to contact the servicer using the phone number or email address listed on the site so you can appeal the issue to a supervisor. Be sure to identify the specific provision of the guidance that you believe is not being followed. If the supervisor cannot or will not correct the problem, call 1-800-7Fannie to report the disagreement. Fannie is administering the program for the Treasury Department and will work to resolve the issue
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The 1929 Crash of Stocks and Credit
John Mauldin’s E-newsletter from a few weeks ago included this:
Check out his thoughts on his website www.FrontLineThoughts.com – he did point out something in the article snapshot from above… The greatest crash in Wall Street’s History was caused by the trading of 19,000,000 shares. As he points out – this is something that occurs about every minute today.
It’s all relative. Cycles move up and down – keep your head on straight and don’t freak out, and everything is going to be alright.
Making Home Affordable… continues
Lonnie Stevenson from Evergreen Home Loans shared this information with me:
Making Home Affordable. The Saga Continues!
In an effort to fill in some of the gaps exposed in the initial Making Home Affordable (MHA) program, Washington has stepped up its efforts to assist more distressed homeowners. In a press release on April 28th, the U.S. Treasury announced an update to the program designed to assist nearly 50% of those homeowners seeking relief from the MHA program.
What’s New?
By some estimates, nearly 50% of all struggling homeowners actually have two mortgages. This is because many borrowers chose to split their mortgage in two to avoid an additional Private Mortgage Insurance monthly payment. The problem is, having two mortgages complicates attempts to refinance or modify home loans.
To minimize these complications, the new legislation is intended to assist mortgage servicers with new guidelines that give incentives for participation and help decrease payments for homeowners. These incentives have also been extended to homeowners enrolled in the program to assist them in making their future payments on time.
The news announcement also addressed the Hope for Homeowners (H4H) program created last year. The biggest news relating to H4H is that participating servicers will be required to look at H4H in tandem while considering a loan modification. In order to support more investor participation, incentives will be extended to the servicer and the Treasury will continue their buying program to help rates stay attractive as well.
What Does This Mean for You?
Despite these additional guidelines, the Making Home Affordable program is still best suited for helping a specific group of struggling homeowners.
If you’re interested in refinancing or looking into a modification, I’d be happy to help you examine your options. Even if a modification isn’t right for you, there may be an opportunity to refinance your mortgage and take advantage of today’s historic lows.
Lonnie can be reached at his office 928-854-9400 or lstevenson@evergreenhomeloans.com
HUGE news for first time home buyers
Hopefully you’ve already heard about the $8,000 dollar tax credit for fist time home buyers. If you haven’t – let me know! I can share the details with you.
Now, here’s a spin on that tax credit that is sure to be welcome news…
The Federal Housing Administration (FHA) is going to permit it’s lenders to use the $8,000 dollar tax credit as a down payment.
They wish to have the FHA consumers able to access the funds as they close on their home so the money can be used as a down payment!
If you’ d like more information about this program – or would like to see the National Association of Realtor’s News Release on this – please let us know. You can reach The Concierge Service Team at 928-854-5511.
Lonnie Stevenson of Evergreen Home Loans shared this article with us, he can share it with you – and answer your questions about home financing. If you’re interested in obtaining an FHA loan – this is a welcome benefit that might assist you more in getting into your home. You can reach Lonnie at 928-854-9400 or lstevenson@evergreenhomeloans.com
Jumbo Mortgage Market holding back recovery
Now might be the prime opportunity to look into higher end homes. While homes on the cheaper side of the market are selling more rapidly – quite often with multiple offers and sometimes many selling for more than asking price – the jumbo loan market is still experiencing woes.
Here’s some info I read from the National Association of Realtor’s Research update:
Limited availability and unusually high interest rates in the jumbo loan market are adversely affecting the rest of the housing market, according to the latest report. This and other findings on the jumbo market are detailed in the Impact of the Jumbo Mortgage Credit Crunch paper released at the Realtors® Midyear Legislative Meetings & Trade Expo earlier this month. The ongoing credit crunch in the jumbo mortgage market has stalled home sales of high-priced homes, despite some recovery taking place in some mid- and low-priced home markets. The national share of home sales above $750,000 has fallen from 4.4 percent in 2007 to approximately 2.3 percent in 2009, and the months’ supply of inventory has risen from 18.7 months to 41.1 months during that same period.
If you’re able to qualify for a jumbo mortgage, or if you are looking for a good investment – your market is here and now. Higher levels of inventory in this segment create the biggest buyer’s market opportunity ever in my opinion! There are some real steals to be had.
Pending Home Sales Rise, Housing Affordability near Record
The National Association of Realtor’s Research update brought some good news:
Pending home sales rose with many first-time buyers taking advantage of historically good housing affordability conditions, according to the latest survey. The Pending Home Sales Index, a forward-looking indicator based on contracts signed in March, increased 3.2 percent to 84.6 from a level of 82.0 in February, and is 1.1 percent higher than March 2008 when it was 83.7. Lawrence Yun, NAR chief economist, said it should take a few months for the market to gain momentum. “This increase could be the leading edge of first-time buyers responding to very favorable affordability conditions and an $8,000 tax credit, which increases buying power even more in areas where special programs allow buyers to use it as a downpayment,” he said. “We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around.”
