Long Beach, CA.  Notice to all school teachers:  Take advantage of the 80/17/3 CalSTRS lending program as soon as you can.  This is no doubt the easiest way to purchase a home if you are a school teacher.  The way it works is like this:  The investor will make a first trust deed at 80% of the sales price.  There will also be a silent second trust deed behind the first trust deed at the same interest rate as the first for five years.  Today's rate is 5.5% for both the first and silent second for a 30 year fixed loan.  The only down payment required from the teacher is 3% of the sales price!  Note this is .5% less then what HUD is requiring through an FHA loan and better pricing, too!  If you are a school teacher, contact Kirk Mulhearn at 562-989-4608  ext. 110 and get pre-qualified and your DU Certificate today.

Surprise, nationwide  new homes sales fell to an annualized rate of 324000 units, that means that less then 27000 new homes are moving a month.  It is very evident that some of the best buying opportunities are in the existing homes inventory on the multiple listing services.  We need to absorb the available housing that we have rather then continue to build.  Although, builders are trying to be very creative in giving bonuses, free kitchen appliances, and upgrades the sales will still be sluggish until the credit markets ease up. 

Last week the equity market continued in negative territory waiting for  the government to decide to nationalize or provide more capital to the Banks.   Bank regulators said they stand "firmly" behind the nation's banks and will begin examining this week whether they have enough capital to survive if the downturn in the economy becomes any sharper. Banks that are not able to raise money privately will have access to government funds. Treasuries have fallen this morning, especially on the long end of the curve, on speculation that the government may purchase up to a 40% stake in Citi, leading to more treasury auctions to fund this transaction.  Stock market is currently down 80 plus points. Gold is $989, oil is $40.00 a barrel  and the Ten Year yield is at 2.85% (2.76% on Friday).  The 30 year fixed MBS market is current off .125% from the close on Friday.

Part of this bank examination is where the regulators will conduct "stress tests" on the financial condition of the nation's 20 largest banks in an effort to determine how they will fare if the ongoing economic slump deepens. The tests come as concerns mount among analysts and investors regarding the Treasury Department's broad plan to shore up America's banking system, details of which may not be available for weeks. As further proof of the distress banks are under, Citigroup reportedly was in active negotiations with regulators this past week concerning plans for the federal government to take a larger ownership interest in the bank.

Meanwhile several Republican governors are debating President Obama's economic stimulus package and how to address budget shortfalls at the state level. At the annual winter meeting of the National Governors Association, some governors said the GOP should compromise with Democrats, but their more conservative colleagues said they should reject new spending and taxes to regain the trust of the party's base. And in the case of upmanship, the California Governor said he will accept any bailout money other states would not accept.  Those of you in California, now know the State budget passed, get ready for some added serious money to come from your wallet for taxes and when you register your vehicle

It is truly insane to raise taxes during an economic downturn; nevertheless, our politicos in Sacramento did just that!  Look, the State of California has over 200000 employees, and they have hired over 70 people a day, either directly or indirectly for the last 10 years.  No wonder, we are sinking into the Pacific. 

And last week, Secretary of State Hillary Clinton urged China to continue buying U.S. Treasury bonds to help finance President Barack Obama's stimulus plan, saying "we are truly going to rise or fall together." Do you think she could have told them to buy Mortgaged Backed Bonds as well?  If you think we have it bad, consider being one of the over 25 milllion Chinese that have been recently terminated.  Reason?  Lack of export demand; especially from the USA.

Kirk Mulhearn, a Long Beach Real Estate Broker and Professional Mortgage Planner can be reached at:  562-989-4608 ext. 110

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