The Mortgage Man

Get more out of your mortgage experience!

Archive for FSBO

$7,500 Tax Credit Available Through Dec. 31

Are you going to take advantage of the home buyer tax credit available through the end of the year?

For those of you interested in buying a home, but you are still on the fence about the current market, don’t forget that the window is closing for the housing stimulus tax credit good through the end of the year.  This tax credit is good for first time buyers (buyers who have not owned a home in the last 3 years), and it is available up to 10% of the purchase price to a maximum of $7500.

While your decision to buy a home should not be based solely on incentives, it is equally important not to ignore those incentives if you are serious about buying.  The difference between buying a home on December 1st and January 10th could mean significant tax savings for your 2008 return.  Be sure to contact your tax advisor for specifics and qualifying criteria.

For more information on qualifying for a mortgage, visit SteveRussellOnline.com or call 850-221-8334.

Advertisements

Foreclosures Up….Again

Nationwide foreclosure statistics continue to rise.

According to RealtyTrac, the number of foreclosures nationwide are up 14% over last month and over 121% over the same period last year.  For the 2nd quarter of 2008 there were more than 740,000 foreclosures filed nationwide.  That equates to more than 8000 foreclosure filings per day.

While this is a frightening statistic, there is a light at the end of the tunnel.  As we continue to see the bulk of foreclosures move through the system, a bottom in the housing market is eminent.  Some estimates claim that we will see a bottom before the end of the year.  For some areas of the country, the bottom has already come and gone.

This long term outlook is good for just about everyone except potential buyers.  Those who wait for a bottom before buying may very well lose any gains through the monthly payment as mortgage rates have now risen to the highest level in almost a year.  Over the last 9 months, we have seen the best buying opportunities available in decades, and those opportunities are going to become more scarce as we get closer to a bottom.

For those sellers still experiencing pain with their home, check out PreForeclosureFSBO.com.  There you can find resources to help sell your home through a short sale and avoid foreclosure with the help of a nationwide database of investors, and help finding a local professional to get the job done.

Thursday June 26, 2008

Mortgage Bonds have likely hit the ceiling today.

The FED came out with the results of their meeting yesterday, and as expected they did not move rates from their existing level of 2%.  This comes on the heels of 7 straight rate reductions in as many meetings.  There is increasing opinion that the next meeting will likely bring a rate hike with it to help strengthen the dollar and thwart off the rise in oil prices.

Mortgage bonds are trading slightly higher today, but they are up against a top side resistance level.  With the state of the stock market, and an upward correction looming, it is unlikely that mortgage bonds will break through that level of resistance.  In addition, since we already know that typically what is good for stocks is bad for bonds, if there is a rally in stocks in the coming days, you can place your bets on the fact that bonds will go through a sell off.  This means that mortgage rates will rise and it would be a good idea to lock in soon (or at least be prepared to lock in) to protect yourself from upward movement.

Existing Home Sales for May cam in at 4.9 million, in line with estimates.  This is a good sign for real estate because it shows some stability even though the market in general is slower than in recent past.  It is also an affirmation that regardless of the doom and gloom you may hear in the media, people are still buying houses.

Here in Pensacola Florida, even though we are statistically the poorest county in the state, we had the highest increase in average sales for the first quarter of 2008 out of 19 metropolitan areas surveyed.  We are also holding steady at 350 to 400 sales per month.  Not where we would like it to be, but not too shabby either.

Monday June 23, 2008

This week’s financial forecast is uncertain.  The FOMC meets this week for 2 days beginning tomorrow and concluding with their economic recommendations to be released at 2:15 ET on Wednesday.  The markets are expecting the FED to stop its rate decreases amidst increasing inflationary pressures and the weak dollar.

The interesting and uncomfortable position policy makers are in (firmly lodged between a rock and a hard place) requires them to choose between loosening rates to try and stimulate economic activity, and tightening rates to help increase the value of the dollar and therefore decreasing the overall cost of oil (since the price of oil on the open market is based on the US Dollar).

Most analysts are expecting the FED to hold the course with no rate increase or decrease, and I tend to agree with them.  With no other significant economic reports due out in the next few days, I don’t expect mortgage bond traders to get too aggressive buying or selling.  I would expect the mortgage rates to remain relatively flat, at least until the results of the meeting after lunch on Wednesday.  Enjoy your week, and check back for the economic news that affects you in the real estate industry.

Foreclosure Filings Continue To Soar

Foreclosure filings for last month were up 48% over the same period last year.

According to a recent article on MSNBC, 261,255 homes received some sort of foreclosure filing in the month of May.  This is an increase of 48% over May 2007, and a 7% increase from April.  Additionally, a report by Credit Suisse has predicted that as many as 6.5 million mortgages will fall into foreclosure over the next five years totaling 8% of the entire housing market.

Estimates are that between 50 and 60% of home owners in foreclosure will lose their homes.  The rest will be able to either sell or refinance.  Many of those sales will end up being “Short Sales”, meaning that they will sell for less than what is owed on the property in order to avoid foreclosure.

No “Hope Now” For Government Program

Hope Now government sponsored mortgage bailout program falls short.

While the Hope Now organization claims to have helped more than 1 million home owners since its inception late in 2007, a recent inquiry by another high ranking government official claims that the numbers are much lower.

For anyone who thinks that the government is going to swoop in and save you from your problems, here is yet another glowing example that government programs suck up tax payer money while providing little help.  According to a recent investigation by the treasury department, only 187,000 home owners have been helped by the program.  Of those, only 30,000 resulted in an actual mortgage modification.

This of course is no surprise to me, or most people in the real estate industry, but it is an example that you are better off in the private sector than muddling through a government program.  A press release posted on PRWeb.com today makes mention of a new company here in Pensacola that is seeking a solution (or at least more help) for the problem with foreclosures.  In many cases, the problem is deeper than a modification.  If you can’t afford to keep the house, you are better off selling to avoid foreclosure so that you can be in a better position to buy in the future.

PreForeclosureFSBO.com is using the simple concept of a short sale to help home owners sell with no equity to escape foreclosure.

What Is A Short Sale?

A short sale allows you to avoid foreclosure by selling your home for less than you owe.

Short Sale to avoid forelcosure

A short sale is a term that describes the sale of your property when the mortgage holder agrees to accept a payoff that is less than the outstanding balance as payment in full. In a short sale, the lender agrees that in an effort to avoid foreclosure, they feel that accepting the lower payoff is a better financial decision than foreclosing on the home and selling it at auction.

Why would a lender agree to a short sale?

On average, a foreclosure costs the mortgage company $25,000 to $50,000. In addition to the legal and carrying costs associated with the lender holding a home in foreclosure, there is the liability of owning a vacant and abandoned home. If curious kids jump the fence, and one drowns in the pool, the liability falls on the owner (who in a foreclosure is the lender). But, first and foremost, lenders are not in the real estate business, they are in the money lending business. Any activity that takes away from that core business model costs time and money. If there is an offer on the house that is less than the current balance owed, it is very likely that the offer will at least be considered if it can be justified that accepting the offer is less costly than actually foreclosing on the home.

For more information on short sales and how you can avoid foreclosure through this process, visit PreForeclosureFSBO.com .