Bellevue Real Estate, Mortgage, and Economy 11/20/11
Posted on 20 November 2011 | No responses
Here is the Bellevue Real Estate Report for November 20, 2011:
Interest Rates Move Within A Tight Range: This week is still all about what comes from Europe as it continues to tilt at windmills unable financially to step up and cover the troubled countries that hang on the cliff of default. Italy made a positive step last week with Berlusconi agreeing to step down and a new leader in place (Monti), a financial guy, to form a technocratic government ( no politicians) to work out a budget that will save the country from defaulting. Italy is so big and carries more debt than the European Union and European Central Bank can handle so, there is still a tremendous amount of anxiety that all of these autonomous nations can come together on an agreement that will undoubtedly be painful for all involved. Interest rates spiked in Italy to an unsustainable level and Spain is not far behind. At the same time there is encouraging economic news in the US. Unemployment numbers continue to improve, inflation remains under control, housing starts are better, mortgage delinquencies dropped and overall sentiment is improving. This is keeping interest rates from improving. Many are concerned that interest rates are running out of steam at the present levels. The 10 yr note hasn’t been able to move below 2.00% and hold it; recent turmoil in Europe that isn’t lessening but becoming worse hasn’t generated the kind of safe haven moves into treasuries the last few weeks. Mortgage rates also finding resistance at present prices and yields. Although buying has slowed there isn’t much to suggest interest rates should increase either; the 10 yr is comfortable between 2.10% and 2.00% while mortgage rates are stable at present rates.
As long as the 10 yr fails to break 2.00% the opportunity for lower mortgage rates is absent. MBS markets have been flat for over two weeks as has the 10 year Treasury Note. Investors still hold somewhat of a negative bias as a safe haven against the ever changing situation in Europe but for the last week or so there has been no additional bad news to drive rates down. No shocks but no actual progress that is aimed at the banks in Europe that are in as bad, if not worse, shape than US banks found themselves in 2008 when Lehman failed and the sub prime bubble exploded. US banks were extremely leveraged just as Europe’s banks are now.
They say it takes two to tango…. And Stocks and Bonds continue to battle for investing dollars and trade in seesaw fashion. What’s causing this dance in the markets? Read on for details.
First, there was more pessimistic news out of Europe last week, as German leader Angela Merkel said that Europe is going through its toughest times since World War II, plagued by political unrest and a severe debt crisis. Reports showed there was a slowing in manufacturing to the point where recession fears have now gripped Europe.
Here lies another enormous problem for Europe: One way–and probably the biggest way–to lower government deficits, is to grow your way out and elevate Gross Domestic Product (GDP). However, many of the Southern Europe economies are on the brink of recession, which will make lowering the deficit through economic growth impossible.
So what does all of this mean for home loan rates here in the United States?
The problems in Europe should continue to support the US Dollar and US Bonds (including Mortgage Bonds, on which home loan rates are based) to some degree, as investors will view our Bonds as a safe haven for their money. Yet, if we continue to see better-than-expected economic data here like we did last week, this will offset the continued uncertainty surrounding the European crisis. And this is part of the reason that the Bond markets and home loan rates saw limited gains last week.
Some of the good news last week included tamer than expected wholesale inflation in the form of the Producer Price Index (PPI) and improved New York Manufacturing. Also, as you can see from the chart, the year-over-year headline Consumer Price Index (CPI) was down from the previous reading, which is good news for people concerned about inflation. However, the closely watched Core CPI rose by 0.1%, and though this was inline with estimates, it did push the year-over-year rate to 2.1% from 2%…a touch above the Fed’s comfort zone.
The bottom line is that home loan rates are still near historic lows, which means now remains a great time to purchase or refinance a home. Let me know if I can answer any questions at all for you or your clients.
Europe Update for this last week: Italian bonds and stocks erased early gains and declined as Monti met with leaders of the country’s political parties to discuss Cabinet nominees. The yield on Italy’s benchmark 10-year bond rose 19 basis points to 6.64% this morning. The professor, as Monti is known, already faces resistance to appointing some politicians to his so-called technical Cabinet. Europe is a dead man walking when it comes to dealing with the debt crisis; even if the ECB wanted to pump funds to Italy, it doesn’t have enough to make a dent in the debt. Germany and France will not pony up anymore funds as their citizens resist the financial stress it would out on each country. The inability to contain a regional debt crisis that started in Greece more than two years ago led to a surge in Italian bond yields as investors bet on which nation may need aid next. Monti, an economist and former adviser to Goldman Sachs Group Inc., will try to reassure investors that Italy can cut a 1.9 trillion-euro ($2.6 trillion) debt load and spur economic growth that has lagged behind the euro-region average for more than a decade. The EU’s gross domestic product increased 0.2% from the previous three months, when it rose at the same pace, according to EU data. The euro weakened as the cost of insuring French bonds climbed to a record and Spanish yields rose at an auction. Mario Monti, Italy’s premier-in-waiting, faced political resistance on forming a Cabinet during talks in Rome yesterday. Monti wants a technocratic government without politicians, politicians in Italy refusing to go along. French and Italian interest rates increased today. Germany and Britain exchanging words over Britain’s refusal to go along with a tax on financial transactions. 25% of Britain’s lawmakers are calling for a referendum vote to exit the EU. Germany has been at the forefront of calls for a European transaction tax, a levy Britain is only willing to countenance if the U.S. and Asian nations join in to prevent financial services from deserting London’s financial center. The European Commission has proposed a plan that it says would raise 57 billion euros ($77B) a year. Now France and Germany squabbling; Germany’s Angela Merkel rejected French calls to deploy the European Central Bank as a crisis backstop, defying global leaders and investors calling for more urgent action to halt the turmoil. ECB itself has also resisted calls to provide more support. Mario Draghi, the Italian who took over as president of the central bank this month, said Nov. 3 that backstopping government borrowing lies outside the ECB’s responsibility. The spread between French and German 10-year yields widened to as much as 204 basis points today as France sold 6.98 billion euros ($9.38 billion) of notes. Spanish bonds sank, driving 10- year yields to the highest since the euro was introduced in 1999, as borrowing costs climbed to the most in at least seven years at an auction of securities.
Real Estate Miscellaneous Stats:
Foreclosure Rates Rise But Delinquencies Drop: The national readings for the 3rd quarter of the year are encouraging even though foreclosure rates are higher. Most observers expected foreclosure rates to rise as banks got past the legal issues connected with the “Robo Signing” scandal. Many of the largest banks postponed their planned foreclosures for a large portion of 2011 while they worked through their exposure to litigation. Much of these increases were concentrated in the hardest hit area of the nation. The good news is the delinquency rate for mortgages dropped to levels not seen since 2008. The Mortgage Banker’s Association released their delinquency survey and it seems that the foreclosure trend may be changing course. The foreclosure start rate rose from .96% of all mortgages in the 2nd quarter to 1.09% in the 3rd. This is down from 1.34% during the same time last year. At the end of the 3rd quarter 4.43% of all mortgages were somewhere in the foreclosure process as compared with 4.39% at the same time last year. The good data was in delinquency rates. Delinquency rates include all mortgages where the payment is more than 30 days past due and are not in foreclosure. This includes loans where homeowners have not made payments for over a year. That rate was 7.99% in the 3rd quarter which is down from 8.14% last quarter and 9.13% last year. Even more encouraging is the 30 day delinquency rate is the lowest since the 2nd quarter of 2007 when the mortgage melt down began. The delinquency rate is still too high but a trend in the right direction is a welcome development. MBA officials predict that, at the current pace of distressed sales, it will be another 3- 4 years before we have a normal inventory of foreclosed properties. These same officials point out that 52% of all foreclosures are concentrated in 5 states. It is possible that many areas will recover more quickly than these hardest hit markets.
Housing Starts Encourage the Markets: October housing starts and permits were expected to be down 8.0% but came in much better as reported -0.3% at 628K. September starts were revised lower to +7.7% fr0m +15.0%. Single family starts up 3.9% while multi-family starts -8.3%. Permits were up 10.9% to 653K the best since March 2010.
Jumbo Loan Strategic Default Risk: Moody’s released a recently completed study of the risk associated with high dollar loans. These are loans that are above the standard conforming limit for Fannie Mae and Freddy Mac as well as above the temporary high balance conforming limit. These loans are portfolio loans originated and held by various financial institutions. In its study of mortgage backed bond portfolios, Moody’s found that about 50% had a negative equity position. Credit Rating Agency Fair Issac Corp, also has reported that strategic defaults on these loans is a growing problem. There are currently about 12 million mortgage borrowers who have negative equity and Fair Issac says that 30% of all foreclosures are strategic defaults. A strategic default is where a borrower can afford to make the payment but do not find it beneficial to do so. Many lenders are now using a new Fair Issac tool to predict which lenders are more at risk of walking away from their home. With the prospects of recovering lost equity being many years away in some markets, homeonwers are taking a long look at their options.
Loan Program Of The Week. New Portfolio Jumbo Loan: Guild Mortgage has just entered in to an agreement with a Jumbo Loan provider that offers some of the most flexible underwriting and creative provisions for loan approval. Here are a few bullet points:
• Loan Amounts Up to $5,000,000.00 and $10,000,000.00 on a case by case basis.
• True portfolio product with flexible underwriting policy. We just approved a loan that was declined with other portfolio lenders because of income problems.
• Asset Depletion can be used to supplement income. This can be done even if a client does not have a history of depleting assets on their tax retuBellevue Real Estate Reportrns. Income calculations from this source are based on age of the borrower. 4001K funds can only be used if the borrower is of retirement age.
• Pledged Assets can be used to reduce down payment. This allows the borrower to keep their assets invested. This can allow down payments as low as 10%. Pledge cannot come from a 401K, IRA or annuities.
This loan can be very helpful for high net worth borrowers that may not show a lot of income on their tax returns.
Bellevue Real Estate Report
Bellevue Real Estate, Mortgage, and Economy 11/12/11
Posted on 12 November 2011 | No responses
Here is the Bellevue Real Estate Report for Nov 11, 2011:
Interest Rates Move Slightly Higher This Week: Europe continues to control US markets; yesterday there was a passing thought that Italy’s debt problems would deal a serious blow to the country with its interest rates at record highs since the EU began. Yesterday another passing thought that the EU would eventually be restructured based on comments from French President Sarkozy that a two tier EU may be the best thing eventually. Yesterday the stock market dropped 389 points, the 10 yr note yield fell 12 basis points to close under 2.00% at 1.96%. That was yesterday; like it has been the last few weeks, one day its doom and gloom, the next not as bad. No one actually knows what will happen tomorrow; therein lies the difficulty in attempting to assess the situation on a day to day basis. Italy’s $2.6 trillion of debt is the world’s fourth-largest, behind the U.S., Japan and Germany, and more than that of Greece, Spain, Portugal and Ireland combined. Relative to gross domestic product, it is the highest in Europe after Greece, standing at about 120%. There is some encouragement today as reports are coming that Berlusconi is ready to resign and Italy will install a technocrat to solve their debt problems.
Industry News
State of the Economy:
Last Week in Review
“Should I stay or should I go now?” The Clash. And last week, Greece’s Prime Minister George Papandreou announced his resignation, a move seen as a way for new government to step in and implement the Euro rescue plan, thereby securing the financing necessary for Greece to avoid default. But that’s not the only news story making headlines last week. Read on for the details…and what they could mean for home loan rates.
The European crisis that has been lingering for 18 months continues to develop…and it’s not over yet. Lucas Papademos was named as interim Prime Minister of Greece. During his eight years with Greece’s Central Bank, he helped the country achieve very strong economic growth rates. But let’s not cue the sunset, happy music, and production credits just yet. Greece continues to be a very volatile situation, and continued uncertainty could once again push investors back into the US Dollar and US Bonds…helping home loan rates in the process.
In addition, as the soap opera in Greece continues, eyes have turned squarely towards Italy, whose Bonds yields have spiked on growing concern it is the next Greece. Italy is not in the same dire situation as Greece yet, but their economy is far larger–the world’s 7th largest, in fact–and a debt crisis in that region will be much more difficult to contain. To add to the Italian uncertainty, Italy’s Prime Minister Silvio Berlusconi is under heavy pressure to resign for a variety of scandalous reasons.
Here at home, another story to watch came on the words from Fed Chairman Ben Bernanke, who stated that the Fed has “considerable latitude” to choose its long-term inflation goal. Although Bernanke didn’t elaborate on specifics, the gist of his comment is that the Fed may tolerate higher inflation for a period of time in an attempt to help the economy recover and improve the employment sector.
Remember, the Fed is charged with a dual mandate of (1) controlling inflation as well as (2) supporting job creation. While inflation remains close to the Fed’s target range, unemployment is nowhere near where the Fed would want to see it, which is between 5% and 6%. So it appears the Fed may make decisions in the future to improve employment, possibly at the slight expense to inflation.
This is important because inflation is the archenemy of Bonds and home loan rates. So any increase in inflation could negatively impact home loan rates.
The bottom line is that now remains a great time to purchase or refinance a home, as home loan rates are still near historic lows. Let me know if I can answer any questions at all for you or your clients.
The G-20 meeting in France where leaders met seems like a waste of time and expense. Two things agreed upon; that Italy agreed to IMF and EU monitoring its progress on reforms; secondly the IMF said it will increase from $300B to $350B in special drawing rights. It took a lot of twisting to get the IMF to increase drawings rights by a measly $50B. Leaders of the 20 countries are refusing to put any money in the pot; reflecting frustration with Europe’s failure to end a crisis with Greece’s government edging towards collapse and Italy facing intensifying pressure to restore fiscal order.
Greece abandoned a referendum on the euro area’s latest bailout plan, reducing the risk of a disorderly default. Greek Prime Minister Papandreou faces a confidence vote in parliament today that will determine whether he stays on or calls an election. Papandreou yesterday abandoned his planned referendum on the country’s bailout after a warning from German Chancellor Angela Merkel that a no vote would cost Greece its membership of the 17-nation currency.
Real Estate Miscellaneous Stats:
King County Home Affordability Hits Record High: It was not too long ago that the Greater King County area was the least affordable in the nation. Affordability is measured by comparing average median home values to average median incomes. Washington State University runs the Washington Center for Real Estate Research. They calculate their own index and have announced that affordability is the best it has been since 1994. They have given this area a ‘127’ score which means the average family earns 27% more than necessary to afford a median priced home. This has been realized due to falling home prices and historic low interest rates. For many people this could mean that owning is cheaper than renting.
Tri- Copunty Area Sees Reduction in Foreclosure Activity: Ask any expert what it will take for the Real Estate market to rebound and they will likely tell you that unemployment needs to go down and distressed properties need to stop diluting the market. Bucking a national trend the King/ Snohomish/ and Pierce county areas showed significant downturn in foreclosure activity. October numbers were down 33% from September and 77% from the same time last year as related to ‘Notices of Default’ which is the warning issued to homeowners at risk.
Loan Program Of The Week. Government Loan Programs: The most flexible loan programs available concerning qualifications are FHA and VA loans. These loan programs allow for much lower credit scores and more negative history. There are limitations on many credit issues such as foreclosure and bankruptcy that can be explained with a consultation. There are many situations where borrower circumstances can be explained and compensated for with these loans where a conventional loan will not accommodate them. One of the most common is working around bankruptcy when the circumstances that caused the issue were beyond the borrower’s control, were temporary in nature, and no longer exist. This is subject to underwriter review and approval. Guild is unique in that they will allow a credit score down to 600 for these programs. Particular credit items on a report can be a problem so complete credit history is subject to review. Down payment is also favorable with FHA requiring 3.5% down up to certain loan amounts and VA can be $0.00 down based on eligibility. Call with questions about these programs.
Bellevue Real Estate Report
Thanks Veteran’s For All You Do – Awesome Discounts!
Posted on 11 November 2011 | No responses
Click Here for some fabulous Veteran’s Day Discounts:
Freddie Mac – A Decade to Liquidate Inventory?
Posted on 6 November 2011 | No responses
Here is an interesting Bellevue Real Estate Report regarding Freddie Mac Inventory:
Freddie Mac vendors sold fewer REO properties in the third quarter than they did earlier in the year as nonperforming loans continue to climb.
More than 25,300 repossessed homes held by Freddie Mac sold in the third quarter, down 13.5% from the nearly 30,000 in the previous three months. It was also a 17% decline from the record-setting 31,600 sold in the first quarter.
At the same time Freddie unloaded the 25,300 REO, it repossessed another 24,300 homes back into the inventory. At the end of the quarter, Freddie held 60,000 REO on its books, which has been trimmed — as new foreclosures are completed — from 75,000 one year ago.
If the current trend holds, and the GSE reduces a net 1,000 REO from its inventory every quarter, it would take 60 quarters to unload its entire inventory — roughly 15 years.
And that’s with a severely constricted foreclosure pipeline due to recent servicing problems and new regulations. As it opens up, the market will be asked to absorb even more REO sales just to remain on that current trend.
“The pace of REO acquisitions remained slow in 3Q 2011 due to continued delays in the foreclosure process for single-family mortgages,” Freddie said. “We expect these delays will likely continue into 2012. However, we expect our REO inventory to remain at elevated levels.”
Meanwhile, nonperforming assets continue to mount. These troubled mortgages totaled $127.9 billion, or 6.6% of its total mortgage portfolio, in the third quarter. That’s up 3.2% from the previous quarter.
To help manage the still mounting problem holding back housing and as an extension the overall economy, the Obama administration and the Federal Housing Finance Agency began asking market participants for ideas on selling these properties in bulk and even possibly renting them.
Before a House subcommittee Thursday, FHFA Acting Director Edward DeMarco reiterated that such a strategy will not be implemented nationwide but on a local level.
“We are not looking to develop a single, national program for REO disposition. We are most interested in proposals tailored to the needs and economic conditions of local communities,” DeMarco said. “We received nearly 4,000 responses to the RFI and are reviewing the submissions.”
Bellevue Real Estate Report
Bellevue Real Estate, Mortgage and Economy 11/5/11
Posted on 5 November 2011 | No responses
Here is the Bellevue Real Estate Report for November 5, 2011:
Interest Rates Move Higher 1 Week Ago and Then Improve This Week: And it is all about Europe. If you listen to financial analysts and stock experts you will hear moaning and groaning because, in spite of the fact that US businesses are doing relatively well, our stock markets are not improving due to continued concerns that Europe will not be able to orchestrate an orderly rescue plan. Extreme measures are being considered to save their banking and financial systems but individual autonomy in the nation states continues to prevent consensus and responsible action. The wheels started coming off yesterday on what was lauded as a big step forward in Europe to get a grip on Greece and other EU countries that are similarly facing potential defaults on their sovereign debt; Wednesday morning the wheels fell off completely—–at least at that moment. What is happening today is no assurance the same will be the case tomorrow based on the last two years out of the region. A huge shocker to financial markets in Europe and here in the US; in a surprising move no one saw coming, Greek Prime Minister announced he would not continue to fight the issues in the country and let citizens decide whether or not to go along with the austerity programs set out by EU officials. He is calling for a voter referendum and let citizens decide whether they want austerity or default that will eventually end Greece’s membership in the EU. Greece’s proposed referendum poses a threat to the region’s financial stability, Fitch Ratings said. No one saw this coming; letting voters decide, but the voting isn’t likely until early next year. Now this morning the Greek PM is backtracking from a referendum but confidence and certainty is waning.
Industry News
State of the Economy:
Trick or treat? Last week, there was big news out of Europe, as an agreement was reached to help keep Greece from going into default. But will this deal mean a frightful time is ahead for Bonds and home loan rates? Read on for more details.
On Thursday, the world was cheering on the news that a deal in Europe was reached, with private banks and other holders of Greek debt accepting a 50% haircut on their principal investment. Once the write down takes place, Banks who are holding Greek debt will have to recapitalize themselves by year-end, and government support will be available to fill voids that private money won’t fill. In addition, the Economic Financial Stability Facility (EFSF) rescue fund, which currently has $443 Billion in holdings, will be expanded and leveraged to $1 Trillion Euros or $1.4 Trillion US Dollars.
So the agreement is together…but like any effective plan, it now has to be put into action. And as this rolls out, the financial markets will be watching every step. When the sentiment is positive, like it was the day the plan was announced, Stock markets could benefit as investors would seek to take advantage of gains.
In fact, the Stock markets were set to have their biggest monthly gains on record as October came to an end. The closely watched S&P 500 Index is up 13.5% for the largest increase since October of 1974, while the Dow Jones advance of 12% is the biggest gain since January of 1987. Optimism surrounding the European crisis, positive economic data and better than expected earnings reports had fueled the rally. Then came the announcements from Greece mentioned above and the stock markets lost big. Most analysts still believe the European crisis will be around for a while and our interest rates will stay low as a result.
MF Global filed for bankruptcy yesterday: Ex New Jersey Governor Corzine ran MF Global after leaving office. It is said that he made highly leveraged bets with European government securities. Those bets went bad and a 200 year old company is now no more. There are also accounting irregularities, according to some sources, that show the firm was mingling client funds with the companies trading accounts. The NY Fed revoked its primary dealer status, overnight there has been talk that custodial funds (money in accounts of customers) possibly $100 mil that is not accounted for.
Sept Consumer Price Index increased 0.3% overall and when food and energy are removed up 0.1%; yr/yr CPI +3.9%, the core yr/yr up 2.0%. Yesterday’s PPI was stronger than expected increasing concerns that inflation may be increasing, today the CPI takes a little worry away but not totally.
Real Estate Miscellaneous Stats:
Obama Administration Proposes Changes to HARP: The original Home Affordable Refinance Program was designed to help millions of homeowners lower their interest rates and help lower foreclosures. The program helped far fewer people than was originally hoped because of the degree of equity loss in many markets. There will be no caps on how far underwater a homeowner is to be eligible under the new guidelines where there was a 125% limit before. The Federal Housing Finance Agency is coordinating the changes with Fannie Mae and Freddy Mac. Only loans sold to those agencies by March 31,2009 are eligible. This leaves many jumbo borrowers without options except committing large amounts of cash to a refinance. The new guidelines are expected to be released by November 15th and should help homeowners in the hardest hit areas of the country such as Florida, California, Nevada and Arizona. Here are a few highlights:
• Appraisals can be waived in some cases
• Fees are being reduced for higher loan to value loans
• No fees for borrowers going in to shorter term loans such as 20 and 15 year fixed.
• Relaxed ‘reps and warrants’ for lenders will make them more willing to offer these loans
• Some limitations apply so check with us regarding your specific situation
King County Home Values Take Surprising Drop: The Seattle Times is reporting a 15% year over year in Median Home Values last month. This is a new post-boom low at $320,000.00. Analysts are looking for explanations for this as the trends were not indicating this would happen. Glenn Crellin, director of the Washington Center for Real Estate Research at Washington State University, said he expects prices will continue to slip for another year. “There’s little pressure on buyers to be active, especially with interest rates not expected to rise for some time,” he said. Mortgage rates have been at historic lows — even dipping below 4 percent for a 30-year term — for much of this year. Sales Volumes are up 14% from the same time last year and it could just be that most of those sales are on the lower end of the price spectrum. Many analysts do not see much significance in the low values. Short sales and bank owned sales made up 31% of all sales in the county and that continues to put pressure on values. Brokers point out that many Eastside sales were distressed properties. Others point out that mixing King County regional numbers gives a skewed view. Sales last month in South King County were much higher than the more central areas. That area has had the biggest price drops. If you look at the numbers for Bellevue/ Seattle the price drops are not as significant. See full article here: http://seattletimes.nwsource.com/html/businesstechnology/2016682452_homesales04.html
Loan Program Of The Week. Government Loan Programs: The most flexible loan programs available concerning qualifications are FHA and VA loans. These loan programs allow for much lower credit scores and more negative history. There are limitations on many credit issues such as foreclosure and bankruptcy that can be explained with a consultation. There are many situations where borrower circumstances can be explained and compensated for with these loans where a conventional loan will not accommodate them. One of the most common is working around bankruptcy when the circumstances that caused the issue were beyond the borrower’s control, were temporary in nature, and no longer exist. This is subject to underwriter review and approval. Guild is unique in that they will allow a credit score down to 600 for these programs. Particular credit items on a report can be a problem so complete credit history is subject to review. Down payment is also favorable with FHA requiring 3.5% down up to certain loan amounts and VA can be $0.00 down based on eligibility. Call with questions about these programs.
Bellevue Real Estate Report
Top 10 Halloween Safety Tips
Posted on 31 October 2011 | No responses
This article is courtesy of Peggy Lee of Active Rain:
Top 10 Halloween Safety Tips
Trick-or-treating can be one of the most fun Halloween events for your kids. However, it can also be potentially dangerous because it happens outside in the dark. Here are some Halloween safety tips to make sure your kids come home safe and happy:
1. Never go into a stranger’s house – Only get candy from houses that give it to you at the door. If someone invites them in, tell them to just say “no, thanks” and leave immediately.
2. Use the buddy system – Kids should never go trick or treating without a sibling, friend, or parent. If they are going out without parents, make sure you know the area where they will be trick-or-treating.
3. Set a curfew – If you aren’t going trick or treating with your kids, set a time that they need to be home by or a time for them to check in with a phone call. That way, you know that they are safe.
4. Eat a snack / dinner before trick or treating – By eating something beforehand, your kids won’t be as tempted to eat their treats before they come home…which leads to the next tip…
5. Always cross streets at interections and walkways – Make sure your child knows how to cross a street and to only cross at designated intersections.
6. Always check candy before giving it to your child – Make sure none of the candy is open or looks like it was tampered with. If you have small children, make sure the candy is not a choking hazard.
7. Go on your local police website and search for sex offenders in your neighborhood – While this may seem overly precautious, you may want to steer clear of these houses or areas.
8. Wear something reflective in your costume and carry a flashlight – It’s going to be dark out by the time you go home, so make sure cars can see you at night. Put reflective tape on the costume and trick or treating bags.
9. Create well fitting costumes – Kids will be running from house to house, so make sure their costume is suitable for running. Make sure face marks still allow your child to see their full range, make sure capes are not too long to trip over, and ensure any swords are not too sharp. Have them wear gym shoes.
10. Choose flame resistant materials for costumes – Since there can be candles and other open flames at houses, choose a fire resistant material for costumes to avoid burn injuries.
Bellevue Real Estate, Mortgage, and Economy 10/29/11
Posted on 29 October 2011 | No responses
Here is the Bellevue Real Estate Report for October 29, 2011:
Rates Show Mild Deterioration This Week As News Out Of Europe Improves: The summit in Brussels on Thursday is being considered a success this morning; US stock indexes rallying and US interest rates increasing on news that Europe’s leaders have actually come with a plan that is supposed to isolate Greece from defaulting and taking some pressure off for the moment. Last-ditch talks with bank representatives led to the debt-relief accord, bondholders will take 50% losses on Greek debt and boosted the firepower of the rescue fund. Measures include recapitalization of European banks, a potentially bigger role for the International Monetary Fund ( translation: US taxpayers to some degree ) , a commitment from Italy to do more to reduce its debt and a signal from leaders that the European Central Bank will maintain bond purchases in the secondary market. The rescue fund (EFSF) is to be increased to 1 trillion euros ($1.4T). There are a lot of details yet to be worked out so while this is a breakthrough the problems are still not completely out of the woods; expect Europe to continue to drive global markets as more details must be resolved. It helped yesterday when China said it may be interested in buying some of the debt through the EFSF.
Industry News
State of the Economy:
When the Fed talks, people listen. And last week, the Fed made headlines when Fed Governor Daniel Tarullo called for the Fed to engage in another round of Mortgage Bond purchases…or in other words, another round of Quantitative Easing (QE3). Read on to find out what this could mean for the housing market and home loan rates.
In order to really have an impact on housing, the Fed would have to announce something significant to get people to buy a home. Why? Because even now, with rates at historically low levels and incredible affordability levels, the sales pace in housing is tepid, due to structural problems in the labor market, which the Fed can’t fix.
In fact, there is a lot to consider before the Fed starts expanding their balance sheet, and the biggest concern is rising inflation. Contrary to what the Fed has said about it moderating, year-over-year inflation is on the rise. The headline Producer Price Index (PPI) rose by a whopping 0.8% in the month of September, elevating year-over-year wholesale prices by a hot 6.9%. Meanwhile, the Consumer Price Index (CPI) for September rose by 0.3%, and while this was inline with estimates it pushed the year-over-year number to 3.9%. This is significant because the year-over-year figure was just 1.6% in January.
Remember, inflation is the arch enemy of Bonds and home loan rates. The concept is very simple: If inflation rises, investors in Bonds demand a higher yield to offset the lost buying power inflation imposes on a fixed payment. And as home loan rates are tied to Mortgage Bonds, this would mean home loan rates move higher.
And let’s not forget the ongoing drama out of Europe. French and German leaders will hold two summits in the span of four days to come up with a resolution to the European debt crisis. Whichever way this news goes could have a real effect on the markets, including Bonds and home loan rates.
With all the news to come this week, it’s still important to remember that now remains a great time to purchase or refinance a home, as home loan rates are still near historic lows. Let me know if I can answer any questions at all for you or your clients.
The last couple of months were marked with doom and gloom, savvy investors were heavily betting against the stock markets ( called shorting ) expecting the US and Europe would fall back into recession. The current news out of Europe that sent US stock markets up yesterday was in part fueled by shorts having to cover as the computers were screaming to get out. Putting some perspective on all of it; Europe’s problems are far from being under control, the US stock market has moved to anticipate the end of Europe’s problems is at hand; the bond market is simply tracking moves in equities with no confidence on the Fed or economic outlook—–letting stock traders set the tone.
Real Estate Miscellaneous Stats:
Case/Shiller home price index for 20 cities, expected down 3.5% yr/yr was -3.8%; for the month of August +0.2% frm July. Seattle-area home prices slipped in August, ending five straight months of increases, according the Standard & Poor’s index. Prices were down 0.3 percent from July. Of the 20 metropolitan areas tracked by Case-Shiller, only Atlanta and Los Angeles saw steeper month-over-month declines. Prices in Las Vegas and Miami also fell 0.3 percent. While the composite, 20-city index rose 0.2 percent, Seattle was one of 10 cities where prices dropped. The Seattle metropolitan area includes King, Snohomish and Pierce counties. Home prices were down 3.8 percent nationally and 6.1 percent in Seattle from August 2010. But the rate of year-over-year decline in 16 of the 20 cities tracked — including Seattle — was less steep than in July.
September New Home Sales, expected up 1.8% increased 5.7% to 313K annualized; at present pace there is a 6.2 months supply down from 6.6 months in August, the lowest since Apr 2010. The median sales price $204,400, down 10.4% yr/yr.
Housing Starts Show Big Jump Higher: Home builders started projects in September at the fastest pace in 17 months, a hopeful sign for the economy. Most of the gain was driven by a surge in volatile apartment construction. That could help create jobs and boost economic growth, but it doesn’t signal a comeback for the depressed housing market. Single-family home construction, which represents nearly 70 percent of homes built, rose only slightly. And building permits, a gauge of future construction, fell to a five-month low. While home construction represents a small portion of the housing market, it has an outsize impact on the economy. Each home built creates an average of three jobs for a year and about $90,000 in taxes, according to the National Association of Home Builders. Overall, homebuilding fell to its lowest levels in 50 years in 2009, when builders began work on just 554,000 homes. Last year was not much better. Cash-strapped builders are struggling to compete with deeply discounted foreclosures and short sales, when lenders allow borrowers to sell homes for less than what is owed on their mortgages. And few homes are selling. After previous recessions, housing accounted for at least 15 percent of economic growth in the United States. Since the recession officially ended in June 2009, it has contributed just 4 percent. New-home sales fell in August to a seasonally adjusted annual rate of 295,000, a six-month low. This year is shaping up to be the worst since the government began keeping records a half-century ago.
Loan Program Of The Week. Government Loan Programs: The most flexible loan programs available concerning qualifications are FHA and VA loans. These loan programs allow for much lower credit scores and more negative history. There are limitations on many credit issues such as foreclosure and bankruptcy that can be explained with a consultation. There are many situations where borrower circumstances can be explained and compensated for with these loans where a conventional loan will not accommodate them. One of the most common is working around bankruptcy when the circumstances that caused the issue were beyond the borrower’s control, were temporary in nature, and no longer exist. This is subject to underwriter review and approval. Guild is unique in that they will allow a credit score down to 600 for these programs. Particular credit items on a report can be a problem so complete credit history is subject to review. Down payment is also favorable with FHA requiring 3.5% down up to certain loan amounts and VA can be $0.00 down based on eligibility. Call with questions about these programs.
Bellevue Real Estate Report
Bellevue Real Estate, Mortgage, and Economy 10/15/11
Posted on 15 October 2011 | No responses
Here is the Bellevue Real Estate Report for October 15, 2011:
Well…..that did not last long: After seeing rates drop to new historic lows in the previous two weeks, they have bounced back higher as fear regarding Europe have subsided which caused a rebound in the stock markets. See details below. Until we get significant bad news out of Europe we will not likely get the low rates we saw for a few days a couple weeks ago. Although the rate markets look negative now, we expect some improvement simply because rates have increased for six sessions with no pause. As has been the case these days, any bounce is dependent on how equity markets trade. Traders are feasting on the trade, buy bonds on weakness in equities, sell them when the key indexes are rallying.
Industry News
State of the Economy:
People say that “life is full of surprises.” And indeed, last week’s Jobs Report contained several surprises. Read on to find out if they were good or bad…and what they meant for home loan rates.
Overall, the Jobs Report wasn’t great, but it did surprise by being better than anticipated. One thing that wasn’t a surprise was the unemployment rate which held steady at 9.1%. But the headline number came in at 103,000 jobs created, which was better than expectations of 60,000 and even higher than some of the more frothy expectations. In addition, 137,000 jobs were created in the private sector, which offset more government job losses and which was a lot better than the 83,000 private job gains expected.
Another surprise in the report was the significant upward revisions, which added 99,000 jobs to what was previously reported in prior months, and this added to the positive tone of the report. These upward revisions really change a very pessimistic jobs picture to something a bit more optimistic. For instance, last month the Jobs Report showed zero job creations and now that figure has been revised to show 57,000 jobs created. Once again, these aren’t great numbers—but they are better than bad, and they tell us that the economy is not in a recession…at least for now.
Moves in stocks was driven by news over last weekend that Germany and France came to an agreement to re-capitalize banks in the region after having to take much bigger losses on Greece debt. European Union and International Monetary Fund officials indicated Greece will get an 8 billion- euro ($11 billion) loan next month under a 110 billion-euro bailout, as European leaders move to reopen talks on a new package that may mean deeper writedowns on Greek debt. The debt crisis in Europe has reached a “systemic dimension,” European Central Bank President Jean-Claude Trichet said today. He spoke to European lawmakers in Brussels as Slovakia, the only country in the region that had not ratified the retooled bailout fund, prepared to vote on the package. Since then, Slovakia has voted for the measure.
So, what did all of this mean for home loan rates? It’s important to remember that when our economy is struggling, our Bond Market usually benefits as investors seek a safe haven for their money. And since home loan rates are tied to Mortgage Bonds, our home loan rates are sometimes at their best when our economy is struggling. In a way it makes sense…in times of economic struggle, good home loan rates can help kick start our economy in other areas.
Yet, when good or better than expected economic news hits the wires, like it did with Friday’s Jobs Report, investors often move their money out of Bonds and into Stocks in an attempt to take advantage of these gains. And that’s a big reason why we saw Bonds and home loan rates worsen late last week.
Real Estate Miscellaneous Stats:
New Consumer Protection Agency To Review Foreclosure and Modification Process of Lenders: The Consumer Financial Protection Bureau is starting to flex it’s newly formed muscles. This week the agency released its approach for examining big and midsize banks servicing mortgages, focusing on loans in default as part of an effort to ensure that troubled homeowners are made aware of their alternatives to foreclosure. The recently formed agency released a manual outlining how its examiners will be reviewing mortgage servicers. The release was part of an effort by the bureau to make sure troubled borrowers are well informed, and that illegal or duplicative fees aren’t being charged for borrowers undergoing loan modifications to avoid foreclosure. A senior CFPB official noted that the agency is still building its examination staff, yet it already has exams under way. He added that if a mortgage servicer is found to have violated laws, the agency could impose a civil money penalty.
The new examinations come in the wake of revelations about foreclosure-documentation errors at big banks and a stalled application process for many troubled borrowers seeking to modify their mortgages and avoid foreclosure. It also comes as millions of foreclosures are still expected in the wake of the financial crisis of 2008.
The Dodd-Frank Act, written in response to the financial crisis, gives the CFPB the authority to examine banks, thrifts and credit unions that have assets of more than $10 billion. The agency estimates that roughly 105 institutions fall in that category. The senior CFPB official noted that the bureau will be examining the largest banks on a continuing basis. The other banks, thrifts and credit unions will be checked periodically, he said. The agency’s examiners will be looking at samples of loans in default, and if they find problems — such as if a servicer hasn’t offered borrowers all the options available — then the sample size will be expanded, according to the official.
The new examinations also come as the major banks were sanctioned in April by federal regulators for “negligence” in residential mortgage-loan servicing and foreclosure processes. In addition, fines of some sort are likely on the way from a related, ongoing investigation on the part of state attorneys general and the Justice Department. Big bank servicers are also reorganizing their systems to meet new tighter servicing standards for loans owned by Fannie Mae and Freddie Mac. Those new standards take effect in January. The new standards will impact a huge segment of the mortgage market — the millions of loans owned or guaranteed by Fannie and Freddie. Roughly half of all U.S. mortgages are owned or guaranteed by Fannie and Freddie, and currently more than two-thirds of all new single-family mortgage originations are sold to Fannie and Freddie.
Freddy Mac Told To Do More To Recover Loses From Banks: The FHFA has just completed a review of Freddy’s books and is not happy that they have not been more aggressive in recovering loses for bad loans sold to them by US Banks. The banks have agreements with Freddy to compensate the agency for loans that go bad. The banks have not been enforcing these ‘buy back’ agreements aggressively enough according to the FHFA. At issue is the public’s expense to support the agency along with Fannie Mae which have required $170 billion in government money to remain solvent. At the end of this month Freddy Mac had $3.1 billion in outstanding buy back agreements. The FHFA recently filed suit against 17 lenders on behalf of Fannie and Freddy for $196 billion in bad loans. Before we shout, hurray, any threats of insolvency from these claims could result in more public bailout money so the public could be on the hook after all.
Fannie and Freddy Accused of Obstructing Loan Modifications: I suppose you can imagine that if you were a company in receivership with the Federal Government that you would try to find ways to avoid adding more loses to your balance sheet but, is this getting in the way of providing real relief to homeowners? The accusations are flying that Fannie and Freddy are holding up initiatives to help homeowners who are underwater on their homes. While many banks have received help from the Federal Government, individual homeowners have not been ‘bailed out’ in a like manner. There is a significant downside to reductions in principal balances by Fannie and Freddy but this is still what many are asking for. Read a full New York Times article here: http://seattletimes.nwsource.com/html/realestate/2016430387_realhousing09.html .
How About Some Good News? There Still Is Significant Equity In US Real Estate: Corelogic recently did an analysis of 42 million home mortgage loans. The Federal Reserve estimates that home owners have $6.2 trillion in equity. That is down from $13.2 trillion in 2005. Corelogic reports that of those with home mortgages; 48.5% have at least 25% equity in their homes. They note that 24.6% have over 50% equity and 22.5% have no equity. This is encouraging and it shows there is capacity for homeowners to move up or down upon sale of their homes. Areas with the most equity are affluent areas with the least amount of in-migration and low levels of mobility. It is noted that California demonstrates the extremes where the affluent coastal areas hold significant equity while the central areas have significant negative equity.
Loan Program Of The Week. Guild Conventional Fannie Mae Loan: Guild Mortgage is unique compared with most mortgage banking institutions. Most companies that strictly originate mortgage loans have strategic relationships with some of the major banks that buy their loans. Guild has these kinds of relationships but we can also sell our loans directly to Fannie Mae. This allows us to avoid many of the ‘overlays’ that the banks add on to Fannie Mae’s rules. These overlays can cause a borrower to be declined at a bank while Fannie would approve the borrower. We have closed many loans for borrowers in this situation. As an example: Fannie Mae has made an exception to their standard guidelines that prohibit a cash out refinance loan in the first 6 months of ownership. Most banks are not honoring that exception at this time but we can approve these loans at Guild. This is very helpful to investors who pay cash for homes.
Bellevue Real Estate Report
Bellevue Real Estate, Mortgage, and Economy 10/10/2011
Posted on 10 October 2011 | No responses
Here is the Bellevue Real Estate Report for October 10, 2011:
QUOTE OF THE WEEK…”Waste of time is the most extravagant and costly of all expenses.”–Anonymous
INFO THAT HITS US WHERE WE LIVE…The week before last, the Fed announced ‘Operation Twist,’ where they’ll switch their short term bond holdings to longer term maturities. This strategy wasted no time benefitting mortgage rates. Last week, national average mortgage rates were the lowest since Freddie Mac’s weekly survey began back in 1971. Some academic experts contend mortgage rates may have never been this low–even under a special loan program for war veterans in the mid-1940’s. Potential borrowers should take note.
Those borrowers, however, aren’t jumping into the fray in droves just yet. The Mortgage Bankers Association reported purchase applications were down 0.8% for the week and volume is still down from where it was a year ago. But, hopefully, the present super-low mortgage rates, supported by ‘Operation Twist,’ will get home sales and mortgage applications moving at a faster pace.
DOWN, UP, UP, UP, DOWN…That’s the way stocks went for five days, but all three major indexes ended the week up nicely anyway. The negatives as usual came from across the pond, with a ratings downgrade of Italy and Spain spurring investors’ fears of ‘contagion.’ In case you were wondering, this contagion refers to European governments’ debt problems spreading to major European banks whose difficulties could then cause losses at major U.S. banks…unless the European Union steps in. For the week, the Dow ended UP 1.7%, at 11103; the S&P 500 was UP 2.1%, to 1155; and the Nasdaq was UP 2.6%, to 2479.
For positives, the September Employment Report showed 103,000 new jobs, with upward revisions to July and August bringing the total to 202,000. But we’ve averaged only 72,000 jobs a month for the last six months, which isn’t enough to bring down the 9.1% unemployment rate. The services sector, providing about 85% of our jobs, still expands, with the ISM Services index on an upward, if slow, trajectory for 22 months. Even truck and rail volumes are up, two more signs of economic growth and no recession.
Bellevue Real Estate Report
Bellevue Real Estate, Mortgage, and Economy 10/1/11
Posted on 1 October 2011 | No responses
Here is the Bellevue Real Estate Report for October 1, 2011:
Rates Stay in a New Range: With the Fed buying Mortgage Backed Securities and swapping short maturities for long maturities, and saying the Federal Funds rate will stay at present lows through mid- 2013, interest rates will continue to remain low for a long time. Where the rubber meets the road though is; what is the definition of low? At 1.67% the 10 yr note has backed up against resistance to improve further, however the trend and technical indicators are still suggesting these low rates will continue. We continue to expect high levels of volatility such as we saw on Friday; big swings in both directions. The action in the stock markets still carries huge influence over the interest rate markets. If there is an announcement of a ‘solution’ out of Europe we will likely see a move up in rates but, most experts do not see that happening any time soon.
Industry News
State of the Economy:
“Both optimists and pessimist contribute to our society. The optimist invents the airplane, and the pessimist—the parachute.” G.B. Stern. And last week, we saw sentiment on the economy go from pessimistic, to optimistic, and back to pessimistic—all within a week! Here are the highlights of what happened.
On the optimistic side, several economic reports were better than expected. For example, New Home Sales for August were up 6.1% from a year earlier and the Case-Shiller Home Price Index rose in July from June in the 10 and 20 city survey, and was the fourth monthly gain in a row.
What’s more, there was some positive news from overseas. European leaders are designing a Special Purpose Vehicle (SPV) that would issue Bonds and purchase European debt to try to contain the malaise in that region. Plus, Germany voted in support for the expansion of the European Financial Stability Facility (EFSF), which will be used to help Euro member countries access capital. This is optimistic news, as it shows Germany is doing whatever it can to help debt laden countries avoid default and potentially threaten the Euro union.
While this mix of news was great for our economy and the global economy, the result was a “risk on trade” where investors fled the safe haven trade of Bonds and moved into Stocks to try and take advantage of gains. And since home loan rates are tied to Mortgage Bonds, when Bonds worsen home loan rates worsen as well. That’s what we saw happen in the early and middle part of last week.
But some pessimism crept back into the markets late last week as China’s Manufacturing PMI contracted for a third consecutive month. There is growing fear that a slowdown in China could affect the already fragile global economy. This is a developing story and one I will be watching closely because if China’s economy does meaningfully slow, it will likely take Stocks down another level and help Bonds and home loan rates. Also creating some pessimism late in the week: Personal Income was lower than expected, and seeing earnings contract is not a good sign for the economy.
Goldman Sachs Asset Management Chairman Jim O’Neill was on CNBC last week saying, global financial system risks repeating the crisis of 2008 if Europe’s debt crisis escalates and spreads to the U.S. banking industry. “The fear that it’s all dependent on the Fed, together with this mess in Europe, is really getting people more and more worried as this week comes to an end,”……. “The markets have taken the latest Federal Open Market Commitee move rather badly, which adds a whole new angle to it. It’s the first time since the global rally in stocks started in early 2009 that the markets have rejected a Fed easing.” ………“As the problem in Europe spreads from Greece to more and more other countries and in particular Italy, the exposure that so many people bank-wise have to Italian debt means the systems can’t cope easily with that and it would spread way beyond Europe’s borders,”…….. “This is why the policy makers need to stop being so sleepy and get on and lead.”
There is reason to believe that Greece will avoid default, at least based on the rallies in equity markets around the world in the last few days. It isn’t official and there are still a lot of hurdles to leap; German banks continue to object to further write downs on their Greek debt, banks and insurance companies might have to increase their contribution to the rescue package as Greece’s economy has deteriorated, Greek bonds have tumbled in recent weeks and credit insurance has soared, putting the chance of default at more than 90%. Meanwhile the European Commission refuted reports that euro-area nations are pushing for private Greek bondholders to accept larger writedowns. And the beat goes on, in over a year now the EU and ECB have been unable to create a plan to avoid sovereign debt defaults in Greece and other struggling economies. There is increasing comments from various experts that Greece will eventually default, while European officials and the IMF stand by their work that will avoid default. At the moment markets are believing a deal will get done soon. There is some positive movement from Germany. Germany’s lower house of parliament approved the expansion of a bailout fund for debt-stricken euro- area nations to help contain the sovereign-debt crisis. The lower house voted 523 in favor of legislation aimed at expanding the powers of the 440 billion- euro ($599B) European Financial Stability Facility, while 85 voted against the measures and three abstained. The next day, the upper house approved the measure. Lawmakers approved giving the EFSF powers to buy bonds in secondary markets, enable bank recapitalizations and offer precautionary credit lines. At the moment it looks increasingly like Greece will dodge the inevitable bullet on Oct 13th and avoid what will eventually end in default and restructuring Greece’s banks. In less than 2 weeks (Oct 13th) Greece will default unless it gets the funds to get by; it will get the money it needs but it won’t change much for Greece and the EU sovereign debt problems.
Real Estate Miscellaneous Stats:
August new home sales were expected down 1.7% to 293K units (annualized); as released sales fell 2.3% but July was revised better to -0.3% from -0.7%. 295K annualized units was about right on the number with the July upward revision. Based on sales levels there is a 6.6 moth supply, the median sales price at $209,100.00.
July Case/Shiller home price index for the 20 cities reported home prices increased 0.9%, the fourth month that home prices have increased. Not huge increases, but enough to suggest that property values may be closing in on a bottom. On a yr/yr basis prices still down 4.1%. Seattle market numbers show similar increases but down 6.4% year over year.
Summer New Home Sales Activity Worst In 50 Years: And this may only be because they only started keeping records 50 years ago. From the period from March through August, new home sales totaled 180,000. A healthy market would support about 400,000 sales. This number may speak more loudly to the lack of new inventory, the trouble for builders and the amount of distressed properties being sold. The existing home sales were down to 1997 numbers. While this is not good it is not catastrophic. Experts point to the same issue such as lost equity for homeowners, lack of employment, lack of consumer confidence etc. Resales during this period totaled 2.8 million where a healthy market would give us 3.3 million sales of existing inventory. While reading for this piece I ran across a statement by a writer that said a reason for lack of home sales is the difficulty in getting financing. Can I rant a bit by saying that these kinds of statements are irresponsible? One author said that banks were requiring 20% down. While that may be true at some banks it is not the norm. There are very good 3 to 5% down loan options.
The Great Divide In Real Estate; While most markets in the US are either trying to survive or are just now seeing some signs of recovery, there is a sector in many cities that is very active; the uber-luxury market. Stan Humprhies, chief economist with Zillow.com, recently told the Associated Press that the luxury market is the highest performing market in the country right now. Usually the luxury market moves in step with the rest of Real Estate but, not now. This market is occupied by 1.5% of the population and is also not limited to domestic buyers. For international investors, US Real Estate is the new undervalued asset. Foreign buyers accounted for $82 billion in Residential Real Estate business in 2010 which was up from $66 billion the year before. Almost 33% of all Real Estate sales were to international buyers who often pay with cash. Core Logic’s chief economist also makes note of how attractive the US luxury market is to international buyers. Real Estate experts in many markets say they have never seem such a disparity between rich and poor at they have in areas such as South Florida and Detroit. Across the country the high end market suffered the most during the 2008 crash. Many markets saw dramatic price drops in multi-million dollar properties. Those homes look like bargains today causing a recovery in that sector but, it is not enough to cause a full blown recovery in Real Estate. Prices for $1 million plus homes in the US have risen .7% since February while the rest of the country continues to move down or stay put for the most part; according to Zillow. Economists have made note that housing has led the country out of every recession since the end of World War II. Real Estate has not been available for rescuing duty this time.
Loan Program Of The Week. Guild Conventional Fannie Mae Loan: Guild Mortgage is unique compared with most mortgage banking institutions. Most companies that strictly originate mortgage loans have strategic relationships with some of the major banks that buy their loans. Guild has these kinds of relationships but we can also sell our loans directly to Fannie Mae. This allows us to avoid many of the ‘overlays’ that the banks add on to Fannie Mae’s rules. These overlays can cause a borrower to be declined at a bank while Fannie would approve the borrower. We have closed many loans for borrowers in this situation. As an example: Fannie Mae has made an exception to their standard guidelines that prohibit a cash out refinance loan in the first 6 months of ownership. Most banks are not honoring that exception at this time but we can approve these loans at Guild. This is very helpful to investors who pay cash for homes.
Bellevue Real Estate Report