Mortgage Market Info: Marketing Info For Realtors and The Growth of Their Business!

Market Commentary - Fri, Aug 07 - 9:46 AM ET

Steve Snyder (RPM Mortgage Walnut Creek ) — Sun, 09 Aug 2009 18:27:36 -0500

Market Commentary - Fri, Aug 07 - 9:46 AM ET Employment headlines lead the news this morning, as the official Jobs Report revealed the US lost fewer jobs than expected in July. The markets had been expecting a loss of 328,000 but instead were greeted this morning with a loss of only 247,000, which is the lowest number of jobs lost in almost a year. Making matters even better, the numbers for May and June were revised to indicate that 43,000 fewer jobs were lost than originally reported. All of this news added up to a slight drop in the unemployment rate--which decreased from 9.5% the previous month to 9.4%. This marks the first time the jobless rate has fallen in 15 months. The better-than-expected Jobs Report gave stocks a boost in early trading this morning. In addition, the US Dollar rose against the Euro, as the positive economic news fueled speculation that demand for US equities would increase. Rounding out the positive headlines this morning was news that AIG posted its first quarterly profit in nearly two years. After receiving $180 Billion in Federal aide at one time, the company reported second-quarter net earnings of $1.8 Billion. That's a huge improvement over the $5.4 Billion net loss that AIG reported this time last year.

Real Estate Retirement - Pay Off Your Mortgage in Half The Time!

Steve Snyder (RPM Mortgage Walnut Creek ) — Wed, 26 Mar 2008 00:42:20 -0500

Our recommendation remains the same.

If you are interested in investing in real estate long-term, now is the time to be actively searching for properties to buy: There is little competition, so bargaining is easier.

If you plan to trade up there is not much risk, if you stay in the new property for a while: Selling your current property for less will be offset by the lower price on the new, bigger property.

If you have always planned on finding a second home, for vacations or for future retirement options, prices in desirable locations are returning to reasonable levels. We do not recommend trading up or buying a second home if that is going to stretch you financially.

If you have been preparing to do so, starting the property search now makes a lot of sense. I can help with that, especially in getting you pre-approved in a tough lending environment (planning ahead is critical today), and connecting you with other real estate advisors.

Further Questons? Feel free to ask here, or call!

When Will We Return To a Normal Market?

Steve Snyder (RPM Mortgage Walnut Creek ) — Wed, 26 Mar 2008 00:38:47 -0500

When Will We Return To a Normal Market? First, we all have to recognize that a normal market is not what we have been in for a number of years. Widespread stated income loans, 100% and/or piggyback loans and many of the interest-only programs were not “normal” as few as five years ago. So, seeing these programs disappear can be viewed as “returning to normal”. What needs to return to normal is the ability of lenders to package and sell their loans on to secondary markets, giving them the liquidity they need to lend again. Second, therefore, we have to get through the credit industry crisis. Financial assets must be re-priced so that “unrealized losses” stop hanging over every financial business’ head. Third, demand must begin to return to the housing market, so that a floor can be put under home prices. “We believe that revived buyer confidence is paramount to getting the market moving again,” said luxury home builder Toll Brothers in its most recent quarterly financial statement. “Only when customers believe we are done with housing deflation will the excess supply clear and the market return to equilibrium.” That may be starting to happen. On March 25, the Wall Street Journal reported that efforts of lenders to clear foreclosed houses, among other factors, “are starting to drive prices low enough to attract some buyers back into the market.” The paper also cited data from the National Association of Realtors that found sales of previously occupied homes jumped 2.9% last February over the previous month. Buyers waiting for ‘the bottom of the market’ may want to start looking around.

Has The Government Actions Helped? Let Us Know What you Think!

Steve Snyder (RPM Mortgage Walnut Creek ) — Wed, 26 Mar 2008 00:34:06 -0500

Has government action helped? Yes it has, by averting a complete shutdown of US financial markets. But no it hasn’t solved the basic problem: Financial institutions are saddled with immeasurable declines in the value of their assets, which prevent lenders from assessing the true solvency of those who wish to borrow. So lenders don’t lend, and borrowers who need funds cannot get their hands on it. In the housing business, this translates to a severe contraction in the type of loans that can be funded. Borrowers who can document their income, have credit scores of 640 or higher, and who seek “conforming loans” (loans that Fannie Mae and Freddie Mac can purchase) can get a loan. People who need larger loans (jumbo loans) or have poorer credit have trouble finding loans, and people who need to find stated income programs (most small businesspeople) are largely out of luck.

Are We Near the Bottom of the Housing Slump?

Steve Snyder (RPM Mortgage Walnut Creek ) — Wed, 26 Mar 2008 00:31:38 -0500

Are We Near the Bottom of the Housing Slump? A lot has happened since the beginning of the year in the housing and lending industries. Credit markets remain choked, limiting lending and keeping the housing marketing depressed. Big financial institutions like Bear Stearns and a number of hedge funds have failed to meet financial margin calls and have closed or been absorbed by healthier companies. Companies still struggle to measure the value of their financial assets as the exotic risk-sharing strategies of the early 21st Century failed to dissipate the risk. On the other hand, the Federal Government has taken significant action to keep financial markets liquid, with the Federal Reserve cutting its interest rates and providing a reliable source of funds to financial institutions who can no longer find funds through traditional channels. Congress has expanded the mandates of Fannie Mae and Freddie Mae, the two big providers of liquidity to the mortgage market, and has passed a tax rebate to help consumers.

How Many Affected by The Market?

Steve Snyder (RPM Mortgage Walnut Creek ) — Wed, 26 Mar 2008 00:28:15 -0500

How Many Affected by The Market? Whether or not each of us has been affected by the housing slump, it is affecting our financial markets and causing gloom among consumers, who feel less wealthy. The first quarter of this year saw a lot of ‘shoes dropping’ (Bear Stearns’ closure being just the biggest) balanced by a great deal of government activity to keep the dropped shoes from falling too hard on the economy. There is evidence that the Federal Reserves liquidity injections and rate cuts have helped, though the repercussions of all this activity will take years to measure. There is also some evidence that buyers are starting to respond to the significant drop in housing prices brought on by the need for homeowners, homebuilders and banks to clear out the inventory of homes they own. The housing market crisis doesn’t affect all of us directly, however, so in this issue we also take a look at other issues that may be of interest to homeowners: Green living, find a mover, and why none of us would ever be able to replicate the speed and success of “reality home renovations” seen on TV.

RE/Max The Innovator in The Industry

Steve Snyder (RPM Mortgage Walnut Creek ) — Mon, 17 Mar 2008 16:13:57 -0500

Please correct me if I am wrong, wasn't RE/Max the first "desk fee" Realtor in the country about 25 years ago?

Steve Snyder

Loan Officer

www.SFBayAreaLoans.Com

Raising Conforming Limits Not A Simple Task! Fannie, Freddie May have To Tiptoe Into The Jumbo Market!!

Steve Snyder (RPM Mortgage Walnut Creek ) — Mon, 11 Feb 2008 19:43:19 -0600

Raising conforming loan limit not a simple task

Fannie, Freddie may have to tiptoe into 'jumbo light' market

Monday, February 11, 2008

While Fannie Mae, Freddie Mac and the Federal Housing Administration will soon be allowed to dive into what until now has been the jumbo loan market, it remains to be seen how many borrowers will benefit.
Congress and the Bush administration have agreed to raise the $417,000 conforming loan limit until the end of the year, under a provision of the $150 billion economic stimulus package approved by Congress last week.

But the devil, as they say, will be in the details. The new formula for determining the conforming loan limit will allow Fannie, Freddie and FHA to guarantee loans of up to 125 percent of the median home price of an area. While housing markets where the median home price exceeds $216,840 will benefit from higher limits for FHA loan guarantee programs, one analysis suggests Fannie and Freddie will be able to tiptoe into the jumbo loan business in only 19 metropolitan statistical areas (MSAs).

The first step to be taken to implement the changes will be determining median home prices. The Department of Housing and Urban Development has been given 30 days to publish median-home-price data once President Bush signs the stimulus package into law.

But where will HUD get the data? And with prices falling rapidly in many markets, will the data be updated monthly, quarterly or annually? HUD spokesman Lemar Wooley said FHA will use a combination of existing government data sets and available commercial information to determine the median sales price. He said FHA loan limits are based on the county a property is located in, except when the county is part of a larger MSA, in which case the county with the highest loan limit determines the limit for the entire MSA. Not only does HUD have to come up with median-home-price numbers for every housing market in America, but Fannie Mae and Freddie Mac will have to come up with credit guidelines for a class of loans that, until now, has mostly been off-limits. The government-chartered mortgage financiers will have to decide what their standards will be for the loans they will purchase, or securitize and guarantee.

As they venture into the jumbo loan market, Fannie and Freddie will have to decide if they need to be more cautious about the minimum down payments they will accept, borrower's credit histories, and the fees they charge for taking on more risk. The task will be complicated by the fact that the maximum loan size will vary from market to market, instead of the uniform $417,000 limit in place today in 48 states other than Alaska and Hawaii. In high-cost markets, the $417,000 conforming loan limit for loans eligible for purchase or guarantee by Fannie and Freddie will be raised to 125 percent of the median home price, with an upper cap of $729,750. That formula means that the $417,000 conforming loan limit will remain in place in markets where the median home price is $333,600 or less.

While there's no time limit for Fannie and Freddie to publish guidelines for the new class of loans, the companies have promised to work with regulators to expedite the process. James Lockhart, director of the Office of Federal Housing Enterprise Oversight, told members of the Senate Banking Committee Thursday that the process could take months. The temporary increase in the conforming loan limit is likely to have a bigger impact on FHA loan guarantee programs, because the current limits for FHA are lower. In high-cost markets, the current ceiling for FHA loan programs is $372,790, and $200,160 in other markets. The new ceiling for FHA loan programs in normal markets will be $271,050 -- meaning that even borrowers in housing markets where the median home price is below $216,840 may be eligible for FHA-backed purchase or refinance loans up to that amount. In areas where the median home price is above $216,840, the limit for FHA loan programs will be 125 percent of the median home price, all the way up to $729,750.

Fannie and Freddie will be allowed to buy and securitize jumbo loans originated any time between July 1, 2007 and Dec. 31, 2008. That means jumbo lenders may be able to sell some of the loans they've made in the last seven months to Fannie and Freddie, freeing them up to make more loans.

One reason Congress and the Bush administration agreed to raise the conforming limit, at least for now, is that Wall Street investors will no longer buy most mortgage-backed securities that don't carry the backing of Fannie, Freddie or FHA. That means borrowers are paying about 1 percent more for jumbo loans that exceed the $417,000 conforming loan limit. But there's no guarantee investors will accept the jumbo loans backed by Fannie and Freddie -- which are private, publicly traded companies that face potentially billions of losses in the current mortgage morass -- as safe investments. They may also need some time to familiarize themselves with how FHA is handling the larger loans, said Jaret Seiberg, an analyst with Stanford Group Co. who follows the secondary mortgage market.

"Investors understand the risk characteristics of conforming mortgages that are securitized by Fannie and Freddie, and they understand FHA-backed loans securitized through Ginnie Mae," Seiberg said. "But they don't have experience with jumbo loans coming out of those channels. In a market with so much uncertainty, it's a real question whether investors are going to have an appetite for a new product." If Wall Street investors don't snatch up the larger loans backed by Fannie, Freddie and FHA after they are securitized, that would limit the benefits to the secondary mortgage market and do less to ease the credit crunch than backers of the move have hoped.

As Fannie's and Freddie's losses mount and they bump up against minimum capital requirements, their capacity to purchase and guarantee loans is not unlimited. And as Lockhart noted, it takes three times as much capital to guarantee one $600,000 loan as it does one $200,000 loan. While Seiberg is confident that HUD can implement higher loan limits for FHA programs, he said Fannie and Freddie have technological and capital issues to overcome before they become "meaningful players" in the "jumbo light" market.

As to which housing markets might benefit from higher conforming loan limits, Seiberg said Stanford Group used median-home-price data from the National Association of Realtors to analyze where Fannie and Freddie might be able to purchase or guarantee loans above the current $417,000 limit. Stanford Group identified 19 markets -- more than a third of them in California -- where Fannie and Freddie could enter the jumbo light market.

30 Year Conforming Pricing Better By 40 Bps This AM! Here's An Interesting Article!

Steve Snyder (RPM Mortgage Walnut Creek ) — Sat, 09 Feb 2008 00:55:12 -0600

Good Friday Evening ! 30 year fixed conforming pricing was better by as much as 40bps this morning! Here is an interesting article from this mornings news!

Stimulus Plan Helps Some Homeowners

WASHINGTON (AP) - The biggest winners in the economic rescue plan now awaiting President Bush's signature are likely to be Americans with more expensive homes who will be able to refinance their home loans at cheaper rates. For those who can take advantage of them, the bill's mortgage market provisions are likely to give more of a long-term financial boost than the tax rebates of $600 directed to individuals and $1,200 to couples, economists said.

The stimulus package temporarily raises the maximum size of mortgages that government-sponsored mortgage companies Fannie Mae and Freddie Mac can purchase and market as securities from $417,000 to as high as $729,750 in expensive parts of the country such as New York and California. It makes a similar change for loans backed by the Federal Housing Administration, a government agency that insures loans to borrowers with poor credit. As defaults have surged, investors have been extremely skittish about the U.S. mortgage market. With less money available to loan, banks are charging higher rates for riskier loans that can't be sold to Fannie and Freddie.

Right now, borrowers in expensive areas are "really stuck between a rock and a hard place," said Mark Vitner, senior economist with Wachovia Corp. Raising the caps, he said, will result in a refinancing boom for those properties. "We're more likely to see an immediate improvement at the upper end than we are at the lower end" of the housing market, he said.

The interest-rate gap between "jumbo" loans above the $417,000 limit and "conforming" loans below it has been stubbornly high for months. Last week it was close to a full percentage point, compared with 0.2 percentage point in July, according to financial publisher HSH Associates. While some critics say Fannie and Freddie should stick with financing loans on more affordable homes, Fannie Mae CEO Daniel Mudd said last week that over the past few years home prices rose so high in parts of the Northeast and West Coast, hiking the loan limits became necessary.

"The notion that we're talking about vacation homes in Colorado is not correct," Mudd said at an investor conference in New York. "We're talking about working-class homes."

Still, borrowers with little equity in their homes whose property value has plummeted could still could face foreclosure if they can't make their mortgage payments. And the new limits are due to expire by year-end unless Congress makes the changes permanent.

The law also prevents Fannie and Freddie from buying loans over the $417,000 limit made before July 1, 2007. But that provision would still let borrowers with older loans refinance into new loans that would be sold to Fannie and Freddie, because those loans would be considered new loans.

Groups representing Realtors, bankers and home builders, which have been hit hard by the mortgage market downturn, have been lobbying hard for increases in the Fannie and Freddie limits.

Still, the impact of the changes is likely to take several months to be felt in the mortgage market, said Doug Duncan, chief economist at the Mortgage Bankers Association. Investors are still working out whether loans above $417,000 will be packaged together as securities with loans below that level, or treated separately.

Also, Duncan said, investors will want to study default levels on loans above $417,000, and prices could reflect a higher level of risk until that is known. "Investors will have to see how those securities perform relative to others," he said.

The impact of the Federal Housing Administration change is likely to be smaller. The Congressional Budget Office estimated the agency could back $10 billion in additional loan guarantees through 2008 with higher limits - a tiny fraction of the more than $2 trillion in new mortgage loans made last year.

While economists call these changes positive, they aren't a quick fix for the housing industry's problems. Home prices are still falling, lenders have become more cautious about extending credit and investors worldwide are still leery of the U.S. mortgage market amid soaring losses on mortgage-linked investments.

"Congress and the President want to show that they're doing something about housing," said Nariman Behravesh, chief economist at forecasting firm Global Insight. However, especially in the short-term, he said, "the overall effect of this, we think, is going to be fairly small."

PUTTING A FREEZE ON IDENTITY THEFT! TODAY! DON'T WAIT!

Steve Snyder (RPM Mortgage Walnut Creek ) — Tue, 05 Feb 2008 09:09:17 -0600

In the time it takes to count to ten, five new people will become victims of identity theft. In fact, according to the U.S. Department of Justice Statistics, identity theft is now passing drug trafficking as the number one crime in the nation--with more than 15 million victims every year.

Rather than lay awake at night worrying and wondering if your identity has been stolen, you can actually take a simple step to protect yourself... it's called a credit freeze (or, sometimes, a security freeze). Essentially, a credit freeze gives you the ability to "freeze" or lock access to your credit file--which helps prevent someone from opening a new account in your name.

Here's How It Works

When someone tries to open an account in your name, they'll be stopped in their tracks. That's because one of the first things a creditor will do before opening the account is pull a credit report.

By having a credit freeze in place, creditors aren't able to pull your credit report. And, since very few lenders will issue credit without first seeing a credit report, identity thieves can't open fraudulent accounts using your name. However, when you want to apply for credit, you can temporarily lift the freeze using a PIN... thus, allowing your legitimate application to be processed

The Flip Side

First, it's important to remember that a credit freeze only stops someone from opening a fraudulent account. It can't stop them from using a stolen credit

you still need to keep the phone numbers of your credit cards handy, in case your cards are lost or stolen.

In addition, some critics argue that credit freezes have more of a downside than most people realize. That's because you won't be able to purchase a car, get a new credit card, or refinance a mortgage at a moment's notice. Instead, you'll have to plan ahead by lifting the freeze, which usually takes about three days.

For most major purchases, this won't be much of an issue--after all, how many of us buy a car or house on a whim? Typically, we make the decision to start looking and, at that point, can easily lift the credit freeze in anticipation of the purchase. However, a credit freeze can be problematic if you're at a department store and the cashier offers you 10% off your purchases if you open an instant credit card with the store.

Other Options

Opponents of credit freezes also argue that consumers can just as easily fight identity theft with fraud alerts, which require lenders to verify identity before issuing loans or credit. If you have reason to believe you've been a victim of identity theft, you can obtain a 90-day fraud alert. And if you provide reliable evidence that you are in fact a victim--using such documents as a police report--you can extend that fraud alert for up to seven years.

The problem is... fraud alerts only come into play AFTER you've been victimized. So for many consumers, credit freezes offer more protection and more peace of mind.

Here's the Shocker... You May Not Have a Choice!

Believe it or not, credit freezes aren't available in every state. Some states have yet to pass credit freeze laws. Why? Well... it all comes down to a battle between the big business of instant credit and the growing need for more secure personal information.

And, don't kid yourself, billions of dollars are at stake in this battle! Credit-reporting agencies sell credit reports to lenders, landlords, employers and other businesses. Department stores and retailers generate huge revenues by offering instant store credit cards that boost profits through interest and increased shopping. And, finally, we as consumers have simply grown accustom to receiving on-the-spot credit for our purchases.

To learn more about these issues and to find out if your state allows credit freezes, visit www.ConsumersUnion.org/finance/creditfreezeinfo.htm

As a Trusted Advisor, I always want to make sure you are clear on all details of the home financing process. If you or someone you know are interested in purchasing or refinancing a home, give me a call today! 800-720-5596

Don't forget to spread the wealth. The info below may benefit your friends! family, and coworkers. So pass it along!

Steve Snyder (RPM Mortgage Walnut Creek ) — Tue, 05 Feb 2008 09:00:57 -0600

It's that time again...time to start gathering all of that dreaded documentation to send to good old Uncle Sam! Recent stats say the IRS audited 1 out of every 97 returns last year, so it pays to be careful. And even though this may seem like a very painful process, taking just a few simple steps right now will make your tax filing far easier and more accurate.

Keep it together. Make a quick list of all the documents or statements that were needed to complete your return last year--or call your tax planning professional for a checklist. Use this as a checklist to make sure you have a good start on the documents you may need this year. As you receive tax documents in the mail, grab your checklist, and mark the item as received. Then, keep all of the tax documents together in a large file or envelope marked "2007 TAXES."

Do the math. According to the IRS, the most common mistake on tax returns is bad math--from transposed numbers to downright incorrect data. And with one document leading to the other, those errors can make a huge impact. And even if you use tax software, you're not off the hook--since they only add the info YOU put in. Double-check entries carefully.

Every last cent. The IRS receives copies of your Form 1099 earnings each tax season. So, they know how much you make in interest and dividend income, and they will use that info to double-check your filing information. Make sure you all your earnings statements and document them on your return.

Sign on the line. It sounds almost silly, but forgetting to sign a return is actually a fairly common oversight. And the IRS won't process a return that doesn't have a signature. So, make sure you sign to avoid resubmitting your paperwork and possibly paying late-filing fees.

Remember, there isn't a lot of room for error when you're dealing with the IRS. A slight miscalculation could mean the difference between getting a return and writing a check--or worse, paying a penalty. It pays to work with a tax professional. If you need a referral, contact me--I'm happy to help!

So pass it along! And call or email me with any questions: 800-720-5596 or visit: www.SFBayArealoans .Com

THE BEST THINGS IN LIFE ARE FREE

Steve Snyder (RPM Mortgage Walnut Creek ) — Tue, 05 Feb 2008 08:57:24 -0600

THE BEST THINGS IN LIFE ARE FREE! Ok...ok...maybe they're only "free" for identity thieves, but the Tax Man's a different story! Have no fear. The tax tips below can help you get through the process quickly and efficiently...and get to the real good news: a completed 2007 tax return!

Speaking of returns, how about returning a little peace of mind to your life? Did you know that more than 15 million people fall victim to identity theft each year? The next post article can help you put a freeze on thieves that are looking to steal your identity.

www.SFBayAreaLoans.Com Qualify them before they get in your car! Be smart!

What Happens When The Fed Cuts Rates? Take a Look!

Steve Snyder (RPM Mortgage Walnut Creek ) — Tue, 05 Feb 2008 08:53:47 -0600

What Happens When The Fed Cuts Rates?

Well, yesterday was practically one for the record books, with two-day volatility not seen since the late 1980's. In spite of yesterday's move, the market is pricing in further cuts at the meeting Tuesday & Wednesday. Rates have dropped since the beginning of 2008, and looked absolutely fantastic Tuesday and first thing yesterday morning. But then the tide turned, impacting those who waited to lock for whatever reason. The stock market underwent a 600 point swing, mortgage securities worsened in price between 1 and 2 points, depending on the coupon. Franklin American sent out 6 different rate sheets, Taylor Bean sent out 4. Chase worsened their rates by .375%. The speed of changes were lightning fast, and lenders across the nation underwent numerous changes, with some investors basically pricing themselves out of the market in mortgages regardless of the actual mortgage-backed securities market. This morning after a basically unchanged Jobless Claims number the 10-yr stands at 3.00% and mortgage prices have stabilized.

What Happened When The Fed Cut The Rate? Read This, PANIC! Read-on!

Steve Snyder (RPM Mortgage Walnut Creek ) — Sat, 02 Feb 2008 23:24:31 -0600

What Happens When The Fed Cuts Rates?

Keep in mind one thing, the financial industry is in disaray as we speak! All the banks left have cut their overhead to the bare minimum. So, last week when Benanke gave a us a suprise 3/4 of a point drop in Fed Funds, the Stock market got excited. And then the silogism is the best bet. And it is:

Fed Fund Rates get cut.

Stock market rallies up!
Bonds react to the stock market and go down!
Mortgage Rate go up!

And that's what happened.

Pay For Your Services, Escrows, Inspections, Stagers, Online With Safe Help With PayPal

Steve Snyder (RPM Mortgage Walnut Creek ) — Tue, 29 Jan 2008 08:15:41 -0600

Pay For Your Services, Escrows, Inspections, Stagers, Online With Safe Help With PayPal

Secrets That We Cannot Ignore About Today's Consumers!

Steve Snyder (RPM Mortgage Walnut Creek ) — Fri, 25 Jan 2008 11:01:53 -0600

Consumer Secrets Realtors Can't Afford to Ignore ............Buyers look online first

As their first step in buying a home, 48 percent of all buyers either go online to view houses (32 percent) or to locate information about the home-buying process (16 percent). To address this consumer search pattern, link your Web site to your local multiple listing service as well as including a wide variety of items about the buying process. Consider offering a series of downloadable educational reports. Examples include explanations about FHA, HUD, foreclosures, how adjustable- and fixed-rate loans differ, closing processes, or how to save money on closing costs.

House Leaders Back $625,000 Conformaing Loan Limit!

Steve Snyder (RPM Mortgage Walnut Creek ) — Thu, 24 Jan 2008 18:29:30 -0600

House leaders back $625,000 conforming loan limit

Senate, Bush administration must still go along

Thursday, January 24, 2008

A $150 billion economic stimulus plan being negotiated by the Bush administration and congressional leaders could include a temporary boost in the $417,000 conforming loan limit on mortgages eligible for purchase or guarantee by Fannie Mae and Freddie Mac.

The government-sponsored enterprises, or GSEs, may soon be allowed to back loans up to $625,000 nationwide and $700,000 or more in high-cost areas, according to published reports on the negotiations.

The Bush administration had previously tied any increase to the conforming loan limit to tighter regulatory oversight of Fannie and Freddie, where accounting scandals led both companies to fire top managers and restate several years of earnings.

Congress has been deadlocked on legislation overhauling oversight of Fannie and Freddie for several years, in part because of a separate debate over limits on growth in the companies' combined $1.5 trillion loan portfolios.

The Associated Press reported that House leaders of both parties have agreed to increase the conforming loan limit to $625,000 for one year, although Senate lawmakers and the Bush administration had not signed off on the idea.

Some Senate Democrats had been pushing for an even larger increase in the conforming loan limit in high-cost areas like California and Florida.

A Treasury Department spokeswoman told Reuters today that the administration still sees an increase in the conforming loan limit as tied to GSE reform.

The Bush administration may be seeking a compromise that would allow the smaller, temporary increase in the conforming loan limit agreed to by House leaders if Senate Democrats agree to move forward with a GSE reform bill.

The House of Representatives passed a GSE reform bill in May, HR 1427 , that would create an independent agency to oversee Fannie and Freddie. That bill would permit the companies to guarantee and resell loans of up to $625,000 in high-cost housing markets, but not hold them in their own investment portfolios.

A companion bill has yet to be introduced in the Senate. The influential chair of the Senate Banking Committee, Sen. Chris Dodd, D-Conn., supports raising the conforming loan limit but also wants the stimulus plan to include other programs targeted at foreclosure relief.

The economic stimulus plan agreed to by House leaders would provide $100 billion in tax rebates for individuals and $50 billion in tax incentives for businesses, but does not provide funding for housing efforts advocated by Dodd. Senate Majority Leader Harry Reid said he hopes to get a bill on the president's desk by Feb. 15, AP reported.

So-called "jumbo" loans that exceed the conforming loan limit have become more expensive and harder to find since August. Wall Street investors have drastically scaled back purchases of securities that had been a primary source of funding for jumbo, alt-A and subprime loans because of fears about rising defaults and falling home prices.

In states like California and Florida, where the median home price in some markets far exceeds the conforming loan limit, the increased cost and reduced availability of jumbo loans has been blamed for worsening the housing downturn.

The National Association of Realtors maintains that raising the conforming loan limit to $625,000 would prevent 140,000 to 210,000 foreclosures, bolster home prices by 2 to 3 percentage points, and increase economic activity by $42 billion

California Gov. Arnold Schwarzenegger this week urged Congress to pass legislation to raise the conforming loan limit to $625,000 in high-cost housing markets, saying about half of all home purchases in the state require mortgages that exceed the current limit.

Some critics say increasing the conforming loan limit could detract from Fannie and Freddie's mission of helping low- and moderate-income families, and that the GSEs already face considerable risk from the housing downturn.

Analysts at Credit Suisse Group this week warned that Fannie and Freddie may report as much as $16 billion in fourth-quarter write-downs tied to the declining value of securities backed by subprime mortgage loans. The problem is more pronounced at Freddie Mac, which could be forced to declare $11 billion in write-downs, Credit Suisse analysts predicted.

***

Treasury Securities Don't Pay Off!

Steve Snyder (RPM Mortgage Walnut Creek ) — Thu, 24 Jan 2008 13:47:42 -0600

US Treasury securities don't pay off

One of the big differences in bonds ~~backed~~ by the U.S. Government and those backed by first liens is that when rates decline, US Treasury securities don't pay off. Borrowers historically do refinance, and many a loan agent has a book of business based on refinancing. This time around, however, things may be different. Although mortgage rates are approaching the levels in 2002/03, unfortunately refinancings should be significantly lower. First, jumbo loan (and alternative documentation) availability is very limited due to underwriting guidelines, securitization economics, and bank balance sheet constraints. Second, even with FNMA & FHLMC, the soft housing market and increasing guarantee fees should keep refinancings slower than in previous years. The good news is that investors are more interested in owning securities backed by mortgages than they were in the past due to a lower fear of refinancing! Once again, let's hope for an increase in loan limits, and finding borrowers with equity and that can qualify is job #1.

What Happens When The Fed Cuts Rates?

Steve Snyder (RPM Mortgage Walnut Creek ) — Thu, 24 Jan 2008 13:37:28 -0600

What happens when the Fed cuts rates? Well, yesterday was practically one for the record books, with two-day volatility not seen since the late 1980's. In spite of yesterday's move, the market is pricing in further cuts at the meeting Tuesday & Wednesday. Rates have dropped since the beginning of 2008, and looked absolutely fantastic Tuesday and first thing yesterday morning. But then the tide turned, impacting those who waited to lock for whatever reason. The stock market underwent a 600 point swing, mortgage securities worsened in price between 1 and 2 points, depending on the coupon. Franklin American sent out 6 different rate sheets, Taylor Bean sent out 4. Chase worsened their rates by .375%. The speed of changes were lightning fast, and lenders across the nation underwent numerous changes, with some investors basically pricing themselves out of the market in mortgages regardless of the actual mortgage-backed securities market. This morning after a basically unchanged Jobless Claims number the 10-yr stands at 3.57% and mortgage prices have stabilized.

The Fed: Pressure Mounts For Big Rate Cut! Bernancke:Go, Charge The Market!

Steve Snyder (RPM Mortgage Walnut Creek ) — Sun, 06 Jan 2008 18:37:51 -0600

Pressure Mounting For Big Rate Cut

An uptick in the unemployment rate has Wall Street calling for the Fed to lower rates by a half-point.

With unemployment rising to 5 percent in December and jobs growth coming in well below forecasts, economists said the Federal Reserve may be forced to slash interest rates when it meets later this month in order to stave off a recession.

In another step to combat the slowing economy, the Fed also announced Friday that it was going to lend up to $60 billion more to banks in two auctions later this month and that it would decide by Feb. 1 if it will conduct more auctions. The auctions are part of a plan the Fed announced in December to to try and restore order to the distressed financial markets. But worries about a recession trumped the Fed's willingness to lend more money on Wall Street Friday. The Dow plummeted nearly 260 points, or 2 percent. The S&P 500 finished the day about 2.5 percent lower while the Nasdaq plunged 3.8 percent.

Bonds continued to rally, sending the yield on the benchmark 10-Year U.S. Treasury down to 3.86 percent. Bond prices and yields move in opposite directions and lower yields are typical during a sluggish economic environment.

The government reported December employment figures on Friday. Only 18,000 jobs were added to the nation's payrolls while economists were predicting job growth of 70,000. What's more, the unemployment rate was expected to come in at 4.8 percent, up from 4.7 percent in November.

As a result of these gloomy numbers, expectations for a half-point rate cut grew Friday morning. According to futures listed on the Chicago Board of Trade, investors are pricing in a 84 percent chance that the Fed will lower the federal funds rates by 50 basis points, to 3.75 percent, at the conclusion of its two-day meeting on January 30. There are 100 basis points in a full percentage point.

"The jobs numbers make a half point cut plausible," said Keith Hembre, chief economist with First American Funds in Minneapolis. "The unemployment rate has moved up to 5 percent from 4.4 percent last March and we've usually not had an upward movement of that magnitude outside of a recession."

Jobs weak, unemployment soars

Prior to the jobs report, investors were pricing in a 67 percent chance of a half-point cut as recession fears have grown in recent days. A report released Wednesday indicated that manufacturing activity is softening while oil prices, which hit $100 this week, have raised concerns that consumers may pull back on spending as a result of higher energy prices.

The Fed last cut the federal funds rate, a key overnight bank lending rate that affects rates for credit card debt, home equity lines of credit and auto loans, by a quarter-point to 4.25 percent on Dec. 11.

In the minutes from that meeting, released on Wednesday, the Fed hinted that more "substantial" rate cuts might be needed if the economy continued to show signs of weakness in the face of the credit crunch caused by last year's subprime mortgage meltdown.

John Lynch, chief market analyst for Evergreen Investments in Charlotte said that he thinks the Fed will now lower rates to at least 3.5 percent by mid-year. He said that despite the spike in oil and other commodities such as gold, the Fed would probably be more comfortable with inflation picking up a bit if it meant that the economy did not go into recession.

With the economy showing so many signs of sluggishness, it's going to be tough for the Fed to argue that inflation is the bigger bugaboo.

"There is no debate with the latest round of numbers. Everything points to a significantly slower economy," said Joe Balestrino, fixed income market strategist with Federated Investors in Pittsburgh.

Still, more rate cuts have the potential to lift oil and other commodity prices further since lower rates likely would further weaken the dollar. With that in mind, there are concerns that the Fed may not be as aggressive as Wall Street wants it to be.

"$100 oil is an unusual factor," Hembre said. "While it doesn't completely change inflation expectations it does complicate things a bit."

Nonetheless, investors are also worried that more rate cuts from the Fed may be too late to save the economy from dipping into a recession.

"A 50 point cut might not make that much difference in stopping a free fall if that is happening," said Oscar Gonzalez, economist with John Hancock Financial Services in Boston.

Gonzalez cautions that he thinks it's still too soon to say that the "sky is falling." But he would be worried if the jobs numbers for January are as bad as they were for December.

"If employment continues to weaken, we could be in for a very rough patch of economic news for at least the next few quarters," Gonzalez said.

Despite the weak numbers, economists said they did not think the Fed would hold an emergency meeting before Jan. 30 to talk about cutting rates.

Fed to investors: More rate cuts coming

Hembre said that it would take a "calamity" such as much weaker-than-expected retail sales figures for December or a lot more volatility in the stock and bond markets to justify an intermeeting move.

If there are more days on Wall Street like Friday, calls for a cut before the Fed's next meeting will increase. But Gonzalez suggested that a rate cut before Jan. 30 might actually cause stocks and bond yields to fall further since it could be construed as a sign of desperation by the Fed.

"An intermeeting move would be a cause for alarm," he said.

Instead, Gonzalez thinks the Fed is more likely to use creative ways to try to restore confidence in the markets and economy, such as the Term Auction Facility it announced last month in conjunction with central banks in Canada and Europe.

The Fed devised this proposal in order to encourage banks that need cash to ask for money without having to borrow directly from the Fed at the discount rate, which is higher than the federal funds rate.

The central bank has already loaned a combined $40 billion to financial institutions during two auctions last month. There was strong demand for these auctions and in both cases, the rates for the loans were below the discount rate of 4.75 percent.

The Fed said Friday it would hold its next auction, of up to $30 billion, on January 14 and that another auction of up to $30 billion would take place on January 28.

Balestrino is cautiously optimistic that a half-point cut, combined with the Fed's three rate cuts in 2007, could keep the economy from heading into a recession.

He adds that if the economy continues to slow in the next few months, the Fed could lower rates by a half-point at its March 18 meeting, or even at an unscheduled meeting in February.

How to Avoid Predatory Lending

Steve Snyder (RPM Mortgage Walnut Creek ) — Mon, 24 Dec 2007 21:22:19 -0600

How to Avoid
Predatory Lending

Most mortgage lenders and brokers have your best interests in mind. However, there are the bad guys, "predatory lenders" - lenders that act unscrupulously and may try to take advantage of you.

Although predatory lending is not defined by federal law and states define it differently, this type of lending usually involves loans with terms you can't meet - no matter how good the deal sounds - and practices that strip away the equity in your home.

Who do predatory lenders target?

Predatory lenders target people who may have fewer credit choices or are perceived as higher credit risks. Predatory lenders usually reach out to elderly and low-income homebuyers, minorities and women, people with less than perfect credit, and people who know very little about home loans and mortgages. These lenders usually tell you that you can get loans with very low monthly payments, refinance your existing mortgage, or take out a loan or second mortgage to help pay for expenses like medical costs and home-improvement work.

How can you spot a predatory lender?

Predatory lenders usually offer loans with high interest rates; broker fees; unnecessary costs like pre-paid life insurance; and unaffordable repayment terms. Be suspicious of anyone who offers you "bargain loans," whether they mail or E-mail you an offer, call you on the phone, or come to your door. Avoid promises of "No Credit? Bad Credit? No Problem!", and beware of offers that are only "good for a very short time." Remember this; If it is too good to be true, it is!

Avoid lenders who encourage you to borrow more than you need or more than the value of the home. Beware of terms that change at the last minute or offer next-day approval based on prepayments or up-front fees. Remember that when you sign the GFE (Good Faith Estimate) at the time you sign your application, (1003 application form), the figures at closing might be a little different because we are required to estimate what the costs will be. And normally there are some differences in fees maybe $50-100.00 or so.

What to do?

But if you see several or many hundreds of dollars difference than what you originally signed for, you are probably dealing with a "predatory lender." The differences will be so widely different at closing that it should alarm you. Then do not sign any further, and do not be intimidated by anyone at the closing. Just calmly say that you want to compare the GFE with the one you signed in the beginning. If the differences are so wide like several hundred dollars into the thousands, let the escrow officer know you need to go make a telephone call.

Have with you for your protection the telephone numbers of:

Local Police Department

Office of The District Attorney
The state Department of Real Estate
An office of a Real Estate Attorney, for your benefit.
Make the calls! You'll be glad you did!

Who is in charge? It is your money?

When you are in a transaction regarding your home, it is a huge undertaking. Most of us including myself get a little nervous about all we have saved, invested, or moving up into a new home. And sometimes we let our emotions carry us through by advice of the intended "Bad Guy." And that is where we can get in trouble.

If during a real estate transaction, you start to not to trust the situation, your initial guts could be correct. Remember you are not finally obligated until you have signed ALL of the documents no matter what anyone tells you. Remember this, it is your money and you are actually in charge, not all the people helping you close the transaction.

If you have any questions or I may be of service to you, feel free to call my office anytime: 1-800-720-5596.

Steve Snyder

C M G Mortgage Services, Inc.

Online Real Estate Ad Dollars Projected to Reach $8 Billion in 2012!

Steve Snyder (RPM Mortgage Walnut Creek ) — Fri, 07 Dec 2007 15:44:01 -0600

Online real estate ad spend projected to reach $8 billion in 2012
Report projects 48% growth in total local online ad spend in '08
Friday, December 07, 2007

Inman News

The "Big Three" classified advertising categories -- automotive, recruitment and real estate -- are expected to have a 37.7 percent share of all online ad spending in 2008, and to have an 18.3 percent share of total ad spending, a research and consulting company reported today.

Borrell Associates, in a 2008 forecast report released today, also expects real estate to have an 8.7 percent share of the total online advertising market in 2008, and a 4 percent share of all advertising.

About 23.5 percent of the anticipated $12.3 billion real estate ad spend in 2008 will be spent online, compared to 48.9 percent of recruitment ad spending and 9.4 percent of automotive ad spending.

And the total spend on online real estate advertising is expected to grow 12 percent in 2008 compared to 2007.

Total spending on local online advertising is expected to rise 48 percent in 2008, to a total of $12.6 billion, according to Borrell's "2008 Outlook: Local Online Advertising" report.

Local online advertising is expected to total $8.5 billion this year, up from $6 billion in 2006, $4.6 billion in 2005, and $2.8 billion in 2004.

Local-search advertising is expected to more than double in 2008, to $5 billion, with locally placed online video tripling to about $1.3 billion.

Locally owned real estate businesses are projected to spend about $3.5 billion on all advertising types this year, with about $702 million of that amount, or 20 percent, going to online ads.

Real estate services companies are projected to spend $8 billion on advertising in 2012, with about $3.3 billion, or 40.9 percent of this total, spent on online ads, according to a table in the report.

That would represent a 41.2 percent increase from the projected 2007 real estate ad-spending level.

Credit and mortgage services companies are expected to spend about $24.2 billion on all ad types in 2012, with $2.9 billion, or 12.1 percent, devoted to online ads. And financial services companies are expected to spend $6.4 billion on all advertising in 2012, with $952 million, or 14.8 percent, going to online ads.

Pure-play Internet companies are projected to account for about 43.7 percent of local online ad revenue this year, with newspapers taking in 33.4 percent, directories accounting for 10.1 percent and broadcast television pulling in 9.3 percent. Magazines, other print publications and radio have a small share of the pie.

"We ... expect that 2008 will bring more announcements about network affiliations between the pure-play Internet companies like AOL, Yahoo and others as these larger sites hit a wall in national sales," the report states.

"This trend began more than a year ago when Yahoo and Google started forming relationships with newspaper companies and television stations to drive both national and local online sales. Formerly sworn enemies are seeing the wisdom of combining their strengths to increase revenues for both sides."

Local advertisers, according to the Borrell report, "are becoming less willing to purchase mass advertising on the Internet and are much more inclined to try paid search and video advertising formats," and, "The decade-long era in which the banner ad ruled the Web appears to be drawing to a close."

Twice as much online video advertising will be placed locally compared to nationally, the report states, and "newspaper companies are at the forefront of online video sales."

Online banner advertising is forecast to slow to single-digit growth in 2008 as video and paid-search ads gain steam, according to the report.

Mortgage Rates Hit Two-Year Lows!

Steve Snyder (RPM Mortgage Walnut Creek ) — Fri, 07 Dec 2007 15:38:00 -0600

Mortgage Rates Hit Two-Year Lows!

30-year fixed rate mortgage falls below 6 percent, and some close to.............f..

Friday, December 07, 2007

Freddie Mac is the latest group tracking loan prices to report that rates on 30-year fixed-rate mortgages have fallen below the 6 percent threshold.

The McLean, Va.-based mortgage repurchaser's weekly Primary Mortgage Market Survey showed borrowers paying an average of 5.96 percent interest with 0.4 points for a 30-year fixed-rate mortgage during the week ending Dec. 6. That's down from 6.1 percent the previous week, and has not been lower since the last week of September, 2005, when it averaged 5.91 percent.

Lower housing prices, personal spending and income are factors pushing mortgage rates down, according to Freddie Mac's chief economist, Frank Nothaft.

"With lower consumer spending and personal income gains in October, interest rates on U.S. Treasury securities fell lower this week and mortgage rates followed," Nothaft said in a press release. He said the federal funds futures market has priced in "almost a 100 percent probability" that the Fed will lower rates at its Dec. 11 policy committee meeting.

Although fixed-rate mortgage rates are not directly tied to the federal funds rate or Treasurys, "These combined factors will likely diminish upward pressures on mortgage rates over the next few months," Nothaft said.

The Mortgage Bankers Association on Wednesday reported an average 5.82 percent rate for a similar loan with an average of 1.07 points for the week ending Nov. 30 (see Inman News story for other rates from in the MBA survey).

Freddie Mac reported that rates on 15-year fixed-rate mortgage this week averaged 5.65 percent with an average 0.5 point, down from 5.73 percent last week and the lowest rate since the second week of October, 2005 average of 5.62 percent.

Five-year hybrid adjustable-rate mortgages (ARMs) indexed to Treasurys averaged 5.75 percent with an average of 0.5 point, down from 5.86 percent a week ago and the best rate since the week ending Oct. 27, 2005, of 5.63 percent.

One-year Treasury-indexed ARMs averaged 5.46 percent with an average 0.6 point, up from 5.43 percent last week, which was also the average rate this time last year.

Housing Slump Not a Financial Disaster For Some Equity-Rich Homeowners!

Steve Snyder (RPM Mortgage Walnut Creek ) — Thu, 06 Dec 2007 19:51:25 -0600

Housing Slump Not a Financial Disaster For Some Equity-Rich Homeowners

Lafayette, CA -- The housing slowdown has hit, bringing with it record numbers of home inventories along with puzzled, frustrated, even angry sellers.

So what is a potential seller supposed to do? Steve Snyder of C M G Mortgage Services says, "Don't panic, the best advice I can give is simply ride it out. In 2000, when the stock market threw many investors into turmoil, the ones who rode out the storm benefited.

"Indications are that the housing slump is already correcting itself and that in another year it will be back to where it was a couple years ago," Snyder said. "If you're prepared, falling prices of housing are not necessarily a bad thing for homeowners."

Trading up opens some doors for many homeowners, who traditionally follow a very predictable buying home pattern. Most start out with a modest starter home as young adults. When they begin to have a family, they want to move into a home with more space. As the family grows and the children become older, they may change homes another time or two. As they become empty nesters and think about retirement they will look at downsizing into a smaller home or condo.

"This is a pretty good picture of the typical American homeowner." Snyder says. "For the average home owner, these rising and falling prices don't really affect them as much as one might think, especially those who are in it for the long haul." Remember, the long hall!

If you fall in the empty nester profile, you may actually be in a good position to sell your larger home, even for less then you think it may be worth, and then invest in a more modest and lower priced home.

Snyder says, "You have to have the right mindset. You have to forget that your neighbor sold his home, which he bought as a fixer upper 20 years ago for a huge profit. The money you save in the lower priced home may well make up for the lower selling price of your current home."

Interest rates today are still traditionally low when you remember the 17% days. and with lower housing prices, a little planning could cause this tempered slump to be a great advantage for many homeowners.

Snyder also pointed out that the economy in the United States has bounced back time and time again and it's normal to have occasional swings. He added, "And so this too shall pass." As we all watch history repeat itself, I predict a great 2008!

For answers to your questions and concerns on the current mortgage options and refinancing, contact Steve Snyder at (925) 287-2236 or visit www.LamorindaHomeLoans.com.

Foreclosure relief plan draws mixed industry response

Steve Snyder (RPM Mortgage Walnut Creek ) — Thu, 06 Dec 2007 19:39:10 -0600

Foreclosure relief plan draws mixed industry response

Some view interest rate freeze as more harmful than helpful
Thursday, December 06, 2007

A plan to freeze interest rates for a segment of homeowners who face the prospect of foreclosure is either political grandstanding, a delaying tactic, a finger attempting to plug a bursting dam, or the right cure for an ailing market, depending on who you talk to in the real estate brokerage community.

Real estate agents and brokers are definitely talking about the Bush administration's effort to bring together mortgage-market players in a program to assist some distressed subprime borrowers to refinance into safer loans and avoid resetting rates that would lead to more defaults.

An estimated 1.2 million subprime borrowers with adjustable-rate mortgages would be eligible to participate in a fast-track process to refinance or apply for modified loan terms under this program, the Treasury Department announced this morning.

The Treasury Department estimated that perhaps 1.8 million owner-occupied subprime mortgage resets will occur in 2008 and 2009. And Treasury Secretary Henry M. Paulson Jr. noted that the plan is "a private sector effort, involving no government money."
Even before the details of the bailout plan were revealed, real estate industry professionals were already talking about the potential impact to consumers and the real estate industry.
Some real estate professionals commented in online forums that they preferred to let the market problems run their course and do not favor any efforts to intervene, and some said a rate freeze could potentially do more harm than good to the overall housing market.
"I think it's going to be a negative," said Samuel Marcus, an associate broker for Century 21 Laffey Associates in Long Island, N.Y.

"I don't think it's going to help the market -- I think it's going to hurt the market, and it's going to cost somebody a lot of money, be it taxpayers or buyers who went with a conventional mortgage."

Marcus said he feels for people who were misguided or chose home loans that got them in over their heads, and a bailout program could have short-term benefits but will not likely solve all of the market troubles.

"I would favor no federal intervention. I think we have to lick our wounds and move forward. We should work on changing the system so something like this doesn't happen again," he said.

The program seems to have been brought out through political posturing, he said.
In addition to the Bush administration's efforts to put the rate-freeze plan together for distressed homeowners, Democratic presidential candidates Hillary Rodham Clinton and John Edwards also announced proposals this week to curb foreclosures, and Clinton criticized the Bush plan as too weak.

Clinton's own proposal would have set a 90-day moratorium and a five-year rate freeze for some troubled borrowers.
"I think it's grandstanding," said Mike Jaquish, an associate broker for Keller Williams Realty in Cary, N.C.

He said that a plan to freeze mortgage rates might harm liquidity in the mortgage market, as it could sap motivation from investors to purchase mortgage-backed securities.
If investor confidence in the mortgage market sinks further, that could make it harder for entry-level buyers, he said.

"I don't think (this) is going to make things easier for much of anyone," he said.
The principal of interfering with money markets could have a more dire impact on mortgage financing than the foreclosure problem, and he generally favors a hands-off approach to the workings of the market.

But he acknowledged that there are some very real problems with foreclosures. "I'm concerned about the overall status of the market. We've upset the apple cart big time. An adjustment is going to be made. If things get as grim as people say, the (Federal Housing Administration) is going to be the lender of choice."
Ultimately, the mortgage problems may heavily leverage the country, he said.
Realtor Krista Fuchs of Prudential Fox & Roach of Exton, Pa., said, "Something has to be done to stop the cycle of homes going into foreclosure," which can drive up inventory and drive down local home prices, potentially fueling more foreclosures.
But a rate freeze has pitfalls, too. "Freezing the rates will cause problems, possibly lawsuits," she said. "Hopefully, it won't deter future investors from buying mortgages. If that happens then the industry and economy is in much bigger trouble than we are now."
The problem is bigger than a "silver bullet fix," she said, and it appears "it's just the beginning."

Mark Anderson does see a silver lining, though, to a rate-freeze program. "If people are going to be losing homes, and they can keep them at a reduced rate or a current rate, I think it helps everybody. I think it helps Realtors, I think it helps mortgage investors," said Anderson, a Realtor for Keller Williams Classic Realty in Coon Rapids, Minn.
Buyers who were expecting a "huge fire sale" on homes may not like the idea of a rate freeze, Anderson said. "They want the market to continue sinking. But at the end of the day it's going to be helpful for everyone. It certainly beats the alternative of all those folks losing homes over the next five years."

And while there may be worries about lawsuits, Anderson said that was surely a part of the discussion in putting together a rate-freeze plan. "This could only be good for (investors)," he said, "They're not going to lose as much."

He added, "The breathing room and extra time should allow people with marginal credit to qualify and refinance themselves out of their adjusting ARMs."
The National Association of Realtors announced its support for the Bush administration's efforts to curb the rise in foreclosures by allowing loan modifications or a freeze in interest rates for some borrowers.

"The dream of homeownership should not turn into a family's worst nightmare," Richard Gaylord, NAR's 2007 president, said in a statement. "The loan modification program introduced by President Bush and U.S. Treasury Secretary Henry Paulson is a good first step in helping deserving families keep their homes."

The association also supports Fannie Mae and Freddie Mac reforms such as an increase in the conforming loan limit to aid home buyers in high-cost markets and improve mortgage liquidity, and also supports FHA modernization legislation.

Jerry Howard, president of the National Association of Home Builders, said that the plan has "the potential to get us out of this down cycle that we're in," as it could stabilize home prices and renew demand in new homes.

The home-building industry, he said, may start to see that increase in demand manifest itself in the second quarter of the year, with an increase in production by the third quarter.
He said that he didn't know how many owners of new homes might be eligible for the mortgage relief program introduced today.

Jennifer Bukaty, a broker for Bridgetown Realty Inc. in Portland, Ore., said she doesn't believe a rate-freeze plan is ultimately going to succeed because she believes there are too many legal complications.

She said that part of living in a free country is accepting responsibility for your actions.
"I think individual people made individual choices. I'm sorry about the mortgage industry, as well. I think the good ones are writing good, solid loans and doing the right thing," she said.
She acknowledges that the average consumer may not understand the intricacies of mortgage financing, adding that she directs her own clients to stay within their means and does not lead them to seek risky loans.

It might be more worthwhile to focus resources on the perpetrators of mortgage fraud, said Lenn Harley, broker for Homefinders.com, a real estate company that operates in Maryland, Virginia and Florida.

"I can't stand things that are unfair, and there's going to be a great deal of unfairness in this (plan)," she said.
She said any bailout plan will not prevent the inevitable -- properties that are already in a foreclosure process, though it may delay rather than prevent some aspects of the market downturn.

"Sooner or later the market will rule and when the market rules all of those people who didn't make mortgage payments go into foreclosure," she said.
Prices have been rising at a much faster clip than income, she said, and those prices will have to come down. "This isn't going to help," she said. "It's all political."

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How to Avoid Predatory Lending

How to Avoid Predatory Lending

Most mortgage lenders and brokers have your best interests in mind. However, there are the bad guys, "predatory lenders" - lenders that act unscrupulously and may try to take advantage of you.

Although predatory lending is not defined by federal law and states define it differently, this type of lending usually involves loans with terms you can't meet - no matter how good the deal sounds - and practices that strip away the equity in your home.

Who do predatory lenders target?

How can you spot a predatory lender?

What to do?

Have with you for your protection the telephone numbers of:

Local Police Department

Office of The District AttorneyThe state Department of Real EstateAn office of a Real Estate Attorney, for your benefit.Make the calls! You'll be glad you did!

Who is in charge? It is your money?

If you have any questions or I may be of service to you, feel free to call my office anytime: 1-800-720-5596.

Steve Snyder

C M G Mortgage Services, Inc.

Online Real Estate Ad Dollars Projected to Reach $8 Billion in 2012!

Mortgage Rates Hit Two-Year Lows!

Housing Slump Not a Financial Disaster For Some Equity-Rich Homeowners!

Foreclosure relief plan draws mixed industry response

How to Avoid
Predatory Lending

Office of The District Attorney
The state Department of Real Estate
An office of a Real Estate Attorney, for your benefit.
Make the calls! You'll be glad you did!