In what looks like more bad news for flagging home sales, 70 percent of non-homeowners said they do not plan to purchase a home in the next 12 months, according to a survey conducted by real estate information service Trulia.

And nearly half (44 percent) of the respondents in the key first-time homebuyer age range (18-34) confirmed that high costs prohibited them from purchasing a property, despite recent home price declines.

Potential homebuyers in the 35-44 age range said concerns about obtaining home loan financing kept them on the sidelines.

And 92 percent of current homeowners who responded plan on staying put during the next year, which makes sense given the current turmoil.

In all, only 12 percent of non-homeowners said they expect to buy a home in the next year, not great new for the National Association of Realtors.

Interestingly, 77 percent of current homeowners who responded to the survey said they had not taken equity out of their homes in the past two years.

Of course, things had already made a turn for the worse back in late 2006, so it's not necessarily indicative of any financial responsibility on the parts of homeowners.

Many, in fact, pulled most of the equity out of their homes prior to the downturn that began around late 2006, and those looking to cash out later were met with low appraisals and more restrictive guidelines.

In spite of the ongoing crisis, 49 percent of homeowners still believe their home is a great long-term investment going forward.

The nation paused Thursday to mark the seventh anniversary of the Sept. 11 terrorist attacks with a heartfelt ceremony at ground zero and other solemn remembrances around the country.

Relatives of victims killed at the World Trade Center gathered at ground zero in lower Manhattan for readings from dignitaries and a recitation of the names of the dead. Later Thursday, presidential candidates Barack Obama and John McCain were due at ground zero to pay silent respects.

"Today marks the seventh anniversary of the day our world was broken," Mayor Michael Bloomberg said. "It lives forever in our hearts and our history, a tragedy that unites us in a common memory and a common story ... the day that began like any other and ended as none ever has."

The ceremony at ground zero included moments of silence at 8:46 a.m. and 9:03 a.m. - the times that two hijacked jets slammed into the twin towers. Two more moments of silence were to be held at the times the towers fell. Services were also being held in Pennsylvania and at the Pentagon, where a new memorial will be dedicated.

Relatives of victims began arriving at dawn at ground zero, now a huge construction site. American flags were draped over silent cranes.

Maureen Hunt, wearing a T-shirt with a picture of her sister, Kathleen, a 9/11 victim, said that it was comforting to be at the ceremony with so many who have lost loved ones.

"This is a place for us to meet," said Hunt, who has come each year to pay her respects. "It is not getting easier to attend these ceremonies."

Family members and students representing more than 90 countries that lost victims on Sept. 11 read the names of 2,751 people killed in New York, one more than last year. The city restored Sneha Philip, a woman who mysteriously vanished on Sept. 10, 2001, to its official death toll this year after a court ruled that she was likely killed at the trade center.

Among the readers was Laraine Angeline, who lost brother-in-law, Steve Pollicino. "Steve, your smiles live on with us," she said. "Our separation is temporary. Our love for you is forever."

McCain and Obama planned to visit the site after the ceremony concluded Thursday afternoon. The candidates agreed weeks ago to pull their campaign ads for the day and were appearing together Thursday night at a forum on volunteerism and service.

Former Mayor Rudy Giuliani was to speak at the ceremony, as he has every year in New York, along with officials including Bloomberg and Homeland Security Secretary Michael Chertoff.

Last year's reading by Giuliani, then a Republican presidential candidate, drew protests from family members who said the city was ill-prepared for the terrorist attacks under his leadership and questioned whether he should be there while running for the White House. They had no opposition to McCain and Obama' visit this year.

In Arlington, Va., Defense Secretary Robert Gates was scheduled to speak at a ceremony dedicating the memorial at the Pentagon, the first of three major Sept. 11 memorials to be completed.

The 2-acre park, located at the spot where American Airlines Flight 77 crashed into the Pentagon's west wall, consists primarily of 184 cantilevered benches, each bearing a victim's name.

President Bush and first lady Laura Bush marked the anniversary during a moment of silence on the South Lawn of the White House. The president was then to head to the Pentagon memorial.

In Pennsylvania, at least 200 people gathered Thursday morning at an observance in a reclaimed minefield in Shanksville where Flight 93 came down after passengers reportedly stormed the cockpit to thwart terrorists' plans to use that plane as a weapon like the others. Bells were to toll and victims' names would be read as part of the service.

McCain was also attending the memorial service in Shanksville for the 40 people killed aboard the hijacked flight.

Memorials are years away from being built in Pennsylvania and New York. As in past years, two bright blue beams of light will shine at night on the New York City skyline, in memory of the fallen towers.

On Sunday, the Treasury Department and the Federal Housing Finance Agency jointly summarized their plan to assume control of the troubled mortgage companies and to back the bonds issued by the companies with the full strength of the federal government.

"Fannie Mae and Freddie Mac are so large and so interwoven in our financial system that a failure of either of them would cause great turmoil in our financial markets here at home and around the globe," Treasury Secretary Hank Paulson said in a statement Sunday.

Fannie and Freddie own or guarantee more than $5 trillion in U.S. mortgages -- nearly half the mortgage loans in the country.

The takeover won't help current stockholders in the two companies, who will control a much smaller share of the equity. Counterbalancing the loss of equity, to a degree, will be greater confidence in the ability of the companies to surmount the challenges they now face.

Shares of Fannie Mae plunged $5.66, or 80.4%, to $1.38 this morning; Freddie shares slumped $1.06, or 20.8%, to $4.04.

The rest of the markets took off this morning on the takeover news. At 9:32 a.m. ET, the Dow Jones Industrial Average gained 330 points to 11,550. The Nasdaq Composite Index soared 46 points to 2,302, and the Standard & Poor's 500 Index had gained 29 points at 1,271.

In Japan, stocks were up better than 3 per cent on the news from the U.S.; in Hong Kong, they were up more than 4 per cent; and in Europe, between 3 and 5 per cent.

"This is about dealing with an immediate situation," Paulson told CNBC this morning. He said the next administration and Congress will have to decide how Fannie and Freddie will function going forward. Paulson suggested that the takeover " more than any other action that I've seen done here, has advanced the ball" to help push the housing markets toward recovery.

Paul Miller, an analyst at Friedman, Billings, Ramsey, told to MarketWatch this morning that the government move "will be viewed positively by investors in our opinion and should result in a rally in financial stocks."

Fannie Mae, created by the government in 1938, and Freddie Mac, created in 1970, were developed to help Americans purchase homes. Slumping home prices and soaring mortgage delinquencies have caused the companies to suffer a combined $14 billion in losses over the past year.

Details of the takeover

The FHFA will act as conservator of Fannie and Freddie, running the companies until they are restored to better financial health. The FHFA said that dividends on common and preferred shares of both companies' stocks will be eliminated, in order to preserve capital. The Treasury Department has said it will invest up to $100 billion in each firm to keep them from going bankrupt.

Stock Charts (Year)

Fannie Mae

Freddie Mac

The plan will also allow the Treasury Department to buy mortgage-backed securities from Fannie and Freddie.

Under the terms of the takeover, Daniel Mudd, of Fannie Mae, and Richard Syron, of Freddie Mac, will leave their posts as chief executive officers of the companies, but will stay on to help the companies transition to new leadership. Mudd willl be replaced by Herb Allison, who formerly served as chairman of TIAA-CREF and vice chairman of Merrill Lynch. Syron will be replaced by David Moffett, who has been working as a senior advisor at the Carlyle Group, having retired last year as CFO of U.S. Bancorp.

"This program is the best means of protecting our markets and the taxpayers from the systemic risk posed by the current financial condition of the GSEs," Paulson said in a press release. GSE stands for government sponsored enterprise.

"Because the GSEs are in conservatorship, they will no longer be managed with a strategy to maximize common shareholder returns, a strategy which historically encouraged risk-taking."

Reaction to the plan

"This is a historic event," said Brian Gardner, senior vice president at Washington Research, to MarketWatch.com. "It could be the biggest potential government bailout of a generation, much bigger than the savings and loan crises of the 1980s."

 But Gardner was cautious about the cost of the takeover: "If the housing market stabilizes, the costs to the government will be on the lower side. If the trends continue with growing credit losses, and no stabilization, then you'll see a higher cost to the taxpayers."

Federal Reserve Chairman Ben Bernanke supported the move.

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"These necessary steps will help to strengthen the U.S. housing market and promote stability in our financial markets," Bernanke said in a statement. "I also welcome the introduction of the Treasury's new purchase facility for mortgage-backed securities, which will provide critical support for mortgage markets in this period of unusual credit-market uncertainty."

"Effectively, the federal government has now become the nation's mortgage lender," Moody's Economy.com chief economist Mark Zandi told The Associated Press. "This takes a major financial threat off the table."

The mess has cost the financial sector more than $500 billion in losses and write-downs, according to statistics from Bloomberg.

Mortgage rates continued their long journey through the doldrums, drifting slightly lower during the week, according to mortgage financier Freddie Mac.

Freddie Mac chief economist Frank Nothaft attributed the improvement in rates to a perceived slowing in consumer spending.

Overall, interest rates continue to be favorable, but with slipping equity and tighter lending guidelines, many won't be able to take advantage of the situation, as evidenced by the lack of refinance applications.

Now is a great time to get your financing needs taken care of!

Home prices grew by 4.8 percent in the Raleigh area between the second quarter of 2007 and the second quarter of this year, new federal data say.

The figures, from the Office of Federal Housing Enterprise Oversight, tend to overstate the actual growth in home prices across the country. But they are useful on a comparative level, and by that measure, they place the Raleigh-Cary region at No. 13 among the nearly 300 areas tracked in terms of home price appreciation.

Prices in the Durham region, which also includes Orange County, grew by 4.1 percent, putting the region at No. 26 overall.

Nationally, OFHEO says, home prices slipped by 1.7 percent in the last year.

The OFHEO data have their limits. Specifically, they do not include homes with mortgages that can't be bought by government-sponsored enterprises Fannie Mae and Freddie Mac. That means most homes owned by subprime borrowers, the hardest hit part of the market, aren't included in the index - helping to make housing price declines look less severe in OFHEO data than in other indices.

For example, another widely cited barometer of housing prices, the Standard & Poor's/Case-Shiller index, said home prices fell by 15.4 percent nationally in the second quarter from a year earlier.

That 20-city index does not provide data on Raleigh housing, though they also provide some indication that North Carolina home prices are holding up better than most. Charlotte showed the lowest drop in prices among the 20 cities tracked, with home prices there falling just 1 percent from June 2007 to June 2008.

There seems to be a lot of confusion about this bill and if we still be able to make yield spread. 

The bill (HB 2188) which was signed by the Governor Mike Easley (D-NC) contained amendments to the: Mortgage Debt Collection and Servicing Act; the High Cost Loan Statute and the Rate Spread Home Loan Statue contained in HB 1817 which became law in August 2007)

This bill does not eliminate YSP to brokers.  Nor does any other bill that was taken up by the NC General Assembly this session.  NCAMP effectively kept all significant efforts to reduce YSP out of these pieces of legislation.

The legislation does eliminate the ability for brokers to earn income on a Rate Spread Home Loan (defined in HB1817) as a percentage.  A broker can still earn a flat fee on these loans as well as be paid a flat fee by a lender (very similar to how lenders pay on equity lines). The fees cannot increase based on loan size.  If the loan amount changes then this fee cannot change. 

In other words, you can still have a fee for your work on the loan on Rate Spread Home Loans, but it cannot be based as a percentage on loan amount. The fee has to be flat and fixed.

This provision ONLY applies to Rate Spread Home Loans.  Broker compensation (YSP) is still allowed on loans that are not considered Rate Spread Loans.

Former Federal Reserve chairman Alan Greenspan offered a bit of optimism about the housing market in an interview this week with David Wessel of the Wall Street Journal. Greenspan said that he expects housing prices to begin to stabilize in the first half of 2009 although they could continue to drift lower for quite some time thereafter, even after essentially reaching bottom. An end to the decline in house prices matters not only to American homeowners but, he said, is "a necessary condition for an end to the current global financial crisis." "Stable home prices will clarify the level of equity in homes, the ultimate collateral support for much of the financial world's mortgage-backed securities. We won't really know the market value of the asset side of the banking system's balance sheet -- and hence banks' capital -- until then." The former Chairman, a rapt student of the housing sector, bases his prediction on the supply of vacant, single-family homes for sale - both new homes and existing ones owned by investors and foreclosing lenders - and a comparison of the current prices of houses with the government's estimate of when it is cheaper to own than to rent. "It's the imbalance of supply and demand which causes prices to go down, but it is ultimately the valuation of the commodity�which tells you where the bottom is." The current excess supply of homes which he places at 800,000 units above normal will stabilize at some price level where investors will be willing to hold inventory and the excess will no longer act to depress prices. He argues that the government should avoid tax or other policies that encourage more home building which would delay reaching that bottom. He also points out that the number of new American households forming each year is about 800,000, exactly where he pegs excess housing inventory and that one third are immigrants and about 150,000 of those are skilled workers who earn enough to purchase a home. While admitting political difficulties in doing so, he suggests a major expansion in quotas for skilled immigrants. Greenspan, however, is not changing his long-standing belief that Freddie Mac and Fannie Mae represent the root of all evil. He acknowledges that the collapse in home prices was and is a major threat to the stability of the two government sponsored enterprises and that government backstopping was unavoidable given the widespread belief that the GSEs have always been backed by the full faith and credit of the U.S. government and the inevitability of government support increased after the bailout of Bear Stearns. He argues, however, with the methods used by the Bush administration. "They should have wiped out the shareholders, nationalized the institutions with legislation that they are to be reconstituted -- with necessary taxpayer support to make them financially viable -- as five or 10 individual privately held units," which the government would eventually auction off to private investors. Greenspan's worst fears about the GSE's are likely to be realized if the majority of economist responding to a poll taken by the Journal are correct. 53 economists felt, on average there was a 59 percent chance that the Treasury Department will have to step in to bail out one of the two if not both of the mortgage giants. Treasury Secretary Henry Paulson assured Congress last month that his plan to either extend credit to Freddie and Fannie or buy stock in the companies was merely a backstop that would hopefully never be used. However, that was before each of the two reported massive losses during the second quarter. One economist noted that "blank checks almost always get filled in and cashed." One third of those polled said that Freddie and Fannie should be nationalized immediately and then split into smaller companies when the housing market improves. The majority of respondents, however, feel that the GSEs should be pushed even harder to raise private capital in hopes that the market will improve and government assistance will not be necessary. Just one economist -- Lou Crandall at Wrightson ICAP -- said the Treasury Department should invest equity in them now, without nationalizing them.

It seems hard to believe, but there appears to be yet one more thing for which we can blame the mortgage crisis. And this is not a financial problem; it is a public health concern.

Several cable networks have reported over the last few weeks that the hundreds of foreclosed houses covering suburban neighborhoods may be contributing to the spread of the West Nile virus.

This is particularly true in warmer areas such as California, Arizona, Florida, and Nevada where homeowners tend to have a lot of outdoor playthings, chiefly swimming pools.

The pools, even if they had been drained for the winter, are collection spots for rainwater. The pools are not used, the water is not treated, and, instead of refreshing, cool aqua spots in which kids splash and where adults gather for cookouts, they are now dirty, brackish, maybe even bright green with algae. But these pools are prime breeding spots for the West Nile transmitting mosquito.

The West Nile virus does not make most people very sick, but several dozen have died in the few years it has been reported as a threat, and there have been incidents recorded of paralysis and other permanent disabilities.

CNN reports that Orange County, California alone may have as many at 1,500 pools located on properties that have been foreclosed, and while public health authorities are not sure to what extent they are encouraging the growth of the mosquito population, it only stands to reason that there is some impact, at least from a nuisance standpoint.

Banks and real estate agents who have not utilized the energy to secure the houses or mow the lawns are certainly not going to spend time and money to drain and cover pools and, even if the West Nile threat is insignificant, the increase in shear numbers of insects will make for a miserable fall and spring.

In addition to the pools, abandoned and neglected property has other water hazards; a kiddie pool left in the backyard, fish ponds, bird baths, a vertically hung tire swing, all have the capacity to catch and hold sufficient water to cause concern.

Cities and towns that fear a possible epidemic say they have little choice but to clear and/or treat the source at taxpayer expense even though it is the responsibility of the banks. This will not be as easy as it once was, as many of the effective mosquitos and larva sides are now prohibited for use because of their own possible public health problems or will stir up such protests from the community that municipalities dare not use them.

In the 1990s when banks and the FDIC stonewalled condo associations over HOA fees on foreclosed houses, affected states did not hesitate to pass super lien laws that gave the association the ability to levy senior liens for unpaid fees on the units. These liens took precedent over all others except taxes and the financial institutions shaped up pretty quickly. It is past time that legislation is passed to allow senior liens for the costs of securing property, keeping it from further deterioration, clearing out squatters and drug dealers and so forth. If the banks do not pay the bills the towns can foreclose, wipe out the banks' mortgages, and sell the homes to residents or investors at whatever price the market will bear sufficient to recoup taxpayer's losses and get the properties up and running again.

A new study released by Bankrate, Inc. shows that the cost of getting a mortgage continues to rise despite a soft housing market.

The 2007 average closing cost of $2,736 has gone up to an average of $3,118 in 2008, a 14% increase. In the study's geographical breakdown, New York City leads the nation at an average fee of $4,016, with Texas, Buffalo, Miami and Oklahoma rounding out the top five. North Carolina is the least expensive area with an average fee of $2650, replacing Indiana (now #45 with an average fee of $2878) at the bottom of the list.

"Often times, consumers forget about the added fees involved in buying a home," said Holden Lewis, senior reporter with Bankrate.com. "Closing costs can be extremely expensive if not researched thoroughly. Keeping closing costs at a minimum can make a big difference to homebuyers during difficult economic times."

Bankrate's Closing Cost study was conducted in June and July of 2008 by obtaining four to nine good faith estimates from the Web sites of online lenders. Researchers picked a ZIP code in some of the largest cities in each state and requested information on the closing costs for at $200,000 loan. They requested fees on a 30-year, fixed-rate mortgage for a borrower with a 20 percent down payment and good credit to buy a single-family house. Bankrate's survey includes lenders' origination fees and title and settlement fees, and not taxes or prepaid items.

2008 closing costs averages

2008  2007                   closing   2008  2007                 closing
    rank  rank        State       costs    rank  rank    State         costs

    1      1    New York - NYC    $4,016    30    14  Mississippi     $3,059
    2      2    Texas             $3,975    31    28  Arkansas        $3,048
    3     NA    New York -                  32    13  Louisiana       $3,042
                 Buffalo          $3,845    33    48  Nevada          $3,039
    4      3    Florida - Miami   $3,683    34    38  Washington      $3,028
    5      8    Oklahoma          $3,558    35    20  Virginia        $3,007
    6      9    New Mexico        $3,465    36    34  Montana         $2,970
    7      7    New Jersey        $3,432    37    44  Wisconsin       $2,940
    8      4    Pennsylvania      $3,411    38    18  Rhode Island    $2,932
    9     16    Alaska            $3,409    39    26  Minnesota       $2,929
    10    24    Colorado          $3,358    40*   21  New Hampshire   $2,922
    11    NA    California                  40*   23  North Dakota    $2,922
                 - San Francisco  $3,321    42    31  Georgia         $2,900
    12     5    Ohio              $3,317    43    43  Nebraska        $2,891
    13    17    California - LA   $3,250    44    32  Utah            $2,883
    14    35    Kentucky          $3,213    45    51  Indiana         $2,878
    15    27    West Virginia     $3,201    46    30  Vermont         $2,872
    16    11    Connecticut       $3,200    47    49  Illinois -
                                                       Chicago        $2,869
    17    25    Michigan          $3,191    48    NA  Illinois -
    18    NA    California                             Springfield    $2,826
                 - Sacramento     $3,179    49*   50  Wyoming         $2,804
    19    41    Oregon            $3,161    49*   36  Iowa            $2,804
    20     6    Hawaii            $3,134    51    40  South Dakota    $2,797
    21*   39    Alabama           $3,130    52    29  Maine           $2,792
    21*   12    Massachusetts     $3,130    53    45  Missouri        $2,757
    23    19    Maryland          $3,118    54    42  Kansas          $2,668
    24    15    Tennessee         $3,117    55    47  North Carolina  $2,650
    25    37    South Carolina    $3,103
    26    10    Delaware          $3,098              2008 average    $3,118
    27    46    Arizona           $3,096              2008 median     $3,086
    28    22    District of                           2007 average    $2,736
                 Columbia         $3,086              2007 median     $2,692
    29    33    Idaho             $3,064

"Many international buyers recognize that real estate is an excellent investment and are drawn today by abundant inventory, low interest rates and a softer dollar," said NAR president Richard F. Gaylord. "These conditions allow them to own their own piece of the American dream."

Gaylord said foreign exchange rates have helped make U.S. homes more affordable for foreigners, particularly in Florida and Arizona. He noted that the euro has surged in value 24% against the U.S. dollar over the past two years.

Single-family vacation homes at an average price of $297,400 were the most popular purchase for international buyers. The most popular states for purchases were Florida, California, Texas, New York, Washington and Nevada, NAR said.

The NAR survey found four in 10 foreign buyers paid for their purchases in cash, compared to 7% of domestic U.S. buyers. It also found that the average international buyer stayed at their U.S. property for 2.6 months during the year.

Purchases by international buyers also tended to be more expensive, with 14% of properties sold valued at $750,000 or more.

The 2008 NAR Profile of International Home Buying Activity survey is based on responses from approximately 4,000 Realtors who serve foreign buyers.