bentleyWIRE | blogged

It certainly looks like there's a really good chance of this credit not only being extended but to become available to a broader group of homebuyers including existing homeowners who wish to "move up" and have lived in their home for at least 5 years.  Even so, the consensus seems to indicate that the overall economic effect would be minimal.

WSJ Article dated 10/29/09

In my 12/16 "Fed Commits to Slaying..." post, I indicated that "at no point during this credit crisis has it been more evident that the Fed is fully committed to propping up this country's economy!" That day may have been trumped by yesterday's announcement that they are more than doubling their purchase plan for mortgage debt bringing the total budget close to $1.5T!!!

Why is this good news for mortgage rates? In a nutshell, the Fed continues to "create demand" for mortgage debt. As demand increases, so do bond prices. As bond prices increase, their investment yields decrease and ultimately that trickles down to a lower mortgage rate.

Bond markets went nuts yesterday and we were expecting mortgage rate improvements from lenders. A few re-posted rates lower yesterday. However, the majority simply waited for today's morning price sheets. Rates are good and have improved 0.25% on average over yesterday morning's rates. Here's the link to Bloomberg's article on the subject.

Have a nice day!

Home prices in selected cities showing year-over-year changes.

Link to NYTimes page.

I thought this to be a great visualization for those still in the dark about what has led to the current U.S. housing crisis. 

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

Here's the Cliff Note version of the passed first-time homeowner tax credit as detailed at MortgageNewsDaily.com.

• Credit available to first-time homeowner defined as one who has not owned a home for the 36 mos prior to the new home purchase.
• Home must be purchased in 2009 before 12/1/09.
• Credit can be claimed either on '08 or '09.
• Credit equals 10% of purch price up to max $8k total.
• No repayment req'd unless homeowner sells home before 36 mos or if home ceases to be principal residence within that timeframe.
• Available to taxpayers w/ AGIs up to $75k or $150k for married taxpayers filing jointly. Credit is phased out above these limits.

Here's the IRS Form 5405 First-Time Homebuyer Credit form to claim your bounty.  Go wild!

It seems that some lenders are having a difficult time proving they are the actual owner of your mortgage.  BlownMortgage.com just reported on this phenomenon as did CNBC.  It does make you wonder...hmmm... 

p.s. - I just figured out that I could embed video into this otherwise "dull on the eyes" pure text bentleyWIRE blog.  Sweet!

HAPPY NEW YEAR EVERYONE!!!  I'm happy '08 came and even happier it went.  I've wiped the psychological slate clean, and I'm ready to take on whatever '09 throws at me.  In one word...OPTIMISM!  I'm ever optimistic that I will have the continued courage, determination and tenacity required to stay healthy, happy and to prosper in the New Year.  I truly wish everyone the same in a New Year that brings with it....hope for the future.

If you're having a tough time these days, stay afloat and dig deep within to survive and even prosper!  If you're doing well, reach down and offer your hand in support.  We're in this World together, and it's always more fun at the top in good company!

If lenders can be proactive versus reactive as it relates to loan modifications, I suspect it could greatly reduce the number of foreclosures. Good news for many homeowners who are needing some assistance.

More lenders allow “early workout” loan alterations

Borrowers with loans owned by Fannie Mae no longer have to be behind in payments in order to qualify for a loan modification. Borrowers facing financial difficulty, such as losing a source of income, now can apply for an “early workout” loan alteration. Under Fannie Mae’s program, borrowers who qualify will enter into a trial period of reduced payments, usually for four months. If the reduced payments are made on time each month during the trial period, the modified mortgage terms may become permanent.

To read the full story, please click here:

http://www.latimes.com/business/la-fi-harney21-2008dec21,0,5965944.story

    At no point during this "credit crisis" has it been more evident that the Fed is fully committed to propping up this country's economy!  Today marked a move equivalent to firing a bazooka where the Fed Funds rate was slashed 75 bps.  This will, almost immediately, lead to lower rates for most consumer debt pegged to the Prime Rate such as credit cards, Home Equity Lines of Credit and even small business loans.  More importantly, the Fed made it clear that they will keep the Fed Funds target rate low and do whatever it takes to ensure "sustainable economic growth" and to preserve market stability.  This will include the purchase of Fannie/Freddie Mortgage-Backed Securities as well as U.S. Treasury securities.  As a big buyer of these types of securities, they are injecting demand into the market which will boost prices, reduce yields and ultimately bring mortgage rates DOWN!

    We are advising our clients to look at refinancing existing mortgages within conforming and super-conforming loan limits of $625,500 or less.  Rates are close to 5.00% and even less in some cases.  Also, I believe it can be a great time to purchase in this buyer's market combined w/ very low mortgage rates.  Although rates may stay low for a while, there are no guarantees.  Contact me today to discuss your specific situation.  I always advise as if you were family!