Phoenix Heritage Real Estate Group Blog

Mortgage Update 11-07-08

11/9/2008 8:18:00 PM

Interest Rates have dropped since last Friday. Keep in mind that several loan programs will change on January 1, 2009. The FHA minimum down payment goes from 3% to 3.5%. The FHA maximum loan amount goes from $346,250 down to around $318,550. Once a buyer has a purchase contract we can establish an FHA case number which is the date used for cutoffs. Also, the USDA “Rural” Housing Program will eliminate some of the areas that are currently still eligible for 100% financing. Right now Buckeye, Maricopa (the city), and parts of Anthem and Queen Creek are all still eligible for 100% financing on this program.

As of 11/7/2008 based on a 200k Primary Residence Purchase (or a no cash out refi), 720+ Credit, Full Doc Income Verification, paying no discount points and no origination fee. Please note, this information is intended for Real Estate Professionals.

95% 30 Year Fixed = 6.25% (Requires PMI)
80% 30 year Fixed = 6.25%
95% 15 Year Fixed = 5.75% (Requires PMI)
80% 15 Year Fixed = 5.75%
97% FHA 30 Year Fixed = 6.375% (Requires MI)
100% VA 30 Year Fixed = 6.375% (No PMI required)
75% Stated Income 30 Year Fixed = 7.5%
80% 5 Yr ARM up to $600k = 5.75%
75% 5 Yr ARM up to $1.5M =5.75%
Commercial Financing also available

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1715 W Northern Ave. #101
Phoenix, AZ 85021
Phone: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

Mortgage Update 10-31-08

10/31/2008 10:13:00 AM

Interest Rates have increased since last Friday. Smart Financial Mortgage now offers the FHA 203k Streamline Loan Program. This program allows a buyer to finance up to $35,000 worth of repairs and upgrades into their loan amount. Eligible improvements include Roofs, HVAC, Plumbing, Electrical, Flooring, Painting, Appliances, Windows, Doors and Kitchen Cabinets just to name a few. Normal FHA qualifications apply and this program may only be used to purchase a primary residence. Many times sellers will drastically reduce their listing price if they think the buyer will not be able to obtain a loan due to the condition of the property. This program can enable a buyer to get a “cash buyer price” while still obtaining financing to buy and fix up the property.

As of 10/31/2008 based on a 200k Primary Residence Purchase (or a no cash out refi), 720+ Credit, Full Doc Income Verification, paying no discount points and no origination fee. Please note, this information is intended for Real Estate Professionals.

95% 30 Year Fixed = 6.5% (Requires PMI)
80% 30 year Fixed = 6.5%
95% 15 Year Fixed = 6.25% (Requires PMI)
80% 15 Year Fixed = 6.25%
97% FHA 30 Year Fixed = 7% (Requires MI)
100% VA 30 Year Fixed = 7% (No PMI required)
75% Stated Income 30 Year Fixed = 7.5%
80% 5 Yr ARM up to $600k = 5.75%
75% 5 Yr ARM up to $1.5M =5.75%
Commercial Financing also available

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1715 W Northern Ave. #101
Phoenix, AZ 85021
Phone: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

Mortgage Update 10-03-08

10/3/2008 9:18:00 AM

Interest Rates are unchanged from last Friday once again. FHA loans continue to be very popular since they allow the lowest minimum down payment (other than VA which is 100%). There are two changes on the horizon for FHA loans. Effective January 1, the minimum required down payment goes up from 3% to 3.5%. Also, the FHA maximum loan limits will change. There has not been an official announcement but rumors are that our maximum loan limit in Maricopa County will be lowered from $346,250 down to $318,550. FHA bases their maximum loan limits on the Median Sales Price which has been dropping.

As of 10/3/2008 based on a 200k Primary Residence Purchase (or a no cash out refi), 720+ Credit, Full Doc Income Verification, paying no discount points and no origination fee. Please note, this information is intended for Real Estate Professionals and is not a solicitation to consumers.

95% 30 Year Fixed = 6.25% (Requires PMI)
80% 30 year Fixed = 6.25%
95% 15 Year Fixed = 5.875% (Requires PMI)
80% 15 Year Fixed = 5.875%
97% FHA 30 Year Fixed = 6.5% (Requires MI)
100% VA 30 Year Fixed = 6.5% (No PMI required)
75% Stated Income 30 Year Fixed = 7.5%
80% 5 Yr ARM up to $600k = 5.875%
75% 5 Yr ARM up to $1.5M =6%

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1715 W Northern Ave. #101
Phoenix, AZ 85021
Phone: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

Ed McMahon is doing a Short Sale

10/1/2008 7:14:00 AM

Hardship does not discriminate. ANYONE can find themselves in a situation where they need a short sale. Even Ed McMahon, the former announces on the Today show. Click here to read the full article.

CBS on Short Sales

10/1/2008 7:10:00 AM

Good piece on the basics of a Short Sale, and the importance of working with an experienced Realtor.

Top three tips for Sellers:

1. Call your bank to explore your options.
2. Contact a Realtor who has experience with Short Sales.
3. Seek legal counsel to understand your rights under the settlement. To this we would add - seek tax and credit counsel as well.

Top tip for Buyer:

1. Contact a Realtor who has experience with Short Sales.

Click here to view the full Episode.

Mortgage Update 09-26-08

9/26/2008 9:57:00 AM

Interest Rates are unchanged from last Friday. FHA made a major change to their underwriting guidelines this week with regards to a borrower that rents out his current primary residence and then buys a new primary residence. In the past, a borrower was allowed to provide a rental contract on the primary residence that he was vacating which could wash out the mortgage payment when calculating qualifying debt to income ratios. The new guidelines say that a borrower is only allowed to do this if they have 25% or more equity in the primary residence they are vacating. If they do not have 25% equity they need to qualify with both mortgage payments. Fannie Mae and Freddie Mac have already implemented a similar rule requiring 30% equity.

As of 9/26/2008 based on a 200k Primary Residence Purchase (or a no cash out refi), 720+ Credit, Full Doc Income Verification, paying no discount points and no origination fee. Please note, this information is intended for Real Estate Professionals and is not a solicitation to consumers.

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1715 W Northern Ave. #101
Phoenix, AZ 85021
Phone: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

Mortgage Update 09-19-08

9/20/2008 9:02:00 AM

Interest rates increased this week as the market tries to figure out the impact of all of the new government programs being implemented to stabilize the financial institutions of the world. It will likely take several weeks to months to find out where rates are going to settle in at. We see wild swings on a daily and even hourly basis. With the elimination of seller funded down payment assistance, obtaining down payment money will be one of the biggest hurdles to loan qualification. There are several specialized programs such as VA and Officer/Teacher Next Door that still allow 100% financing. Another 100% program is available for “Rural” Housing. Some of the cities in Arizona that have access to this program are Maricopa (the city), Payson, Prescott Valley, and Kingman to name a few. The greater Phoenix and Tucson areas are excluded as is Flagstaff. The property must be a primary residence and qualification for the loan includes the typical income, asset and credit. To find out more on this program and view a map of eligible areas you can go to http://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do

As of 9/19/2008 based on a 200k Primary Residence Purchase (or a no cash out refi), 720+ Credit, Full Doc Income Verification, paying no discount points and no origination fee. Please note, this information is intended for Real Estate Professionals and is not a solicitation to consumers.

95% 30 Year Fixed = 6.25% (Requires PMI)
80% 30 year Fixed = 6.25%
95% 15 Year Fixed = 5.875% (Requires PMI)
80% 15 Year Fixed = 5.875%
97% FHA 30 Year Fixed = 6.375% (Requires MI)
100% VA 30 Year Fixed = 6.375% (No PMI required)
75% Stated Income 30 Year Fixed = 7.5%
80% 5 Yr ARM up to $600k = 5.625%
75% 5 Yr ARM up to $1.5M = 5.75%

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1715 W Northern Ave. #101
Phoenix, AZ 85021
Phone: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

Mortgage Update 09-12-08

9/12/2008 10:04:00 AM

Interest rates took a nice drop this week and are sitting at some of their lowest levels of the year! The reason for this is the government’s takeover of Fannie Mae and Freddie Mac. A little background on the way the mortgage world works will explain why the two events are tied together. Banks and lenders do not lend out their customers savings account money for 30 Years to cover the mortgages they produce. Instead, they fund loans with their own assets, underwrite it to Fannie/Freddie guidelines, then sell the loan to Fannie/Freddie for a small profit and then typically service the loan (collect the payments) for a small monthly profit. Fannie/Freddie buy the mortgages that the lending world produces, package/bundle them, and then they sell them on Wall Street as Mortgage Bonds. Investors of the world can either put their money in stocks (risky) or they can buy Bonds if they want a safer investment. With the US government now running Fannie/Freddie these Mortgage Bonds are viewed as a safer investment and therefore the demand for these Mortgage Bonds has increased. The way that the lending world satisfies this increased demand is by lowering interest rates to produce more mortgages.

As of 9/12/2008 based on a 200k Primary Residence Purchase (or a no cash out refi), 720+ Credit, Full Doc Income Verification, paying no discount points and no origination fee. Please note, this information is intended for Real Estate Professionals and is not a solicitation to consumers.

95% 30 Year Fixed = 6% (Requires PMI)
80% 30 year Fixed = 6%
95% 15 Year Fixed = 5.625% (Requires PMI)
80% 15 Year Fixed = 5.625%
97% FHA 30 Year Fixed = 6% (Requires MI)
100% VA 30 Year Fixed = 6% (No PMI required)
75% Stated Income 30 Year Fixed = 7.375%
80% 5 Yr ARM up to $600k = 5.75%
75% 5 Yr ARM up to $1.5M = 5.75%

For more information contact,

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1715 W Northern Ave. #101
Phoenix, AZ 85021
Phone: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

Mortgage Update 08-29-08

9/6/2008 8:35:00 AM

Interest Rates improved a bit this week. Technically, Sunday August 31 is the last day you can register buyers to use FHA Down Payment Assistance programs such as AmeriDream. But, in order to have final underwriting approval in time (September 30) the borrower should have a 650+ fico and really needs to find a property this weekend. If you have someone that fits that profile please have them call asap. Going forward, VA loans will be the only 100% loans left on the market. FHA will now require a 3.5% down payment. This 3.5% down payment could be borrowed from your 401k or it can come from a gift. The gift must come from a blood relative or the gift can also come from an employer.

As of 8/29/2008 based on a 200k Primary Residence Purchase (or a no cash out refi), 720+ Credit, Full Doc Income Verification, paying no discount points and no origination fee. Please note, this information is intended for Real Estate Professionals and is not a solicitation to consumers.

95% 30 Year Fixed = 6.5% (Requires PMI)
80% 30 year Fixed = 6.5%
95% 15 Year Fixed = 6% (Requires PMI)
80% 15 Year Fixed = 6%
97% FHA 30 Year Fixed = 6.75% (Requires MI)
100% VA 30 Year Fixed = 6.75% (No PMI required)
75% Stated Income 30 Year Fixed = 7.375%
75% Jumbo 5 Yr ARM = 6.125% (417k+ Loan Amount)

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1715 W Northern Ave. #101
Phoenix, AZ 85021
Phone: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

Mortgage Update 08-22-08

8/22/2008 9:42:00 AM

Interest Rates held steady again this week. This may say sound like a broken record but this will be the last time you hear about it because………Next week is the last week that you can register buyers to use FHA Down Payment Assistance programs such as AmeriDream. Once registered, the borrower then needs to have final loan approval by September 30 at the absolute latest. This leaves a very, very small window of time to get buyers into homes without needing a 3.5% down payment from their own funds. Gifts from family members and loans from a 401k will still be allowed as acceptable down payment money after October 1. Also, sellers will still be allowed to pay for the buyers closing costs and prepaids.

As of 8/22/2008 based on a 200k Primary Residence Purchase (or a no cash out refi), 720+ Credit, Full Doc Income Verification, paying no discount points and no origination fee. Please note, this information is intended for Real Estate Professionals and is not a solicitation to consumers.

95% 30 Year Fixed = 6.625% (Requires PMI)
80% 30 year Fixed = 6.625%
95% 15 Year Fixed = 6.125% (Requires PMI)
80% 15 Year Fixed = 6.125%
97% FHA 30 Year Fixed = 6.75% (Requires MI)
100% VA 30 Year Fixed = 6.75% (No PMI required)
75% Jumbo 5 Yr ARM = 6.125% (417k+ Loan Amount)

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1715 W Northern Ave. #101
Phoenix, AZ 85021
Phone: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

Mortgage Update 08-15-08

8/15/2008 1:33:00 PM

Interest Rates held steady again this week. Here is the latest update on the end dates of seller funded Down Payment Assistance programs such as AmeriDream. All lenders have different policies with regards to the last day they will accept loan applications. We are still able to approve and register buyers for this program up until September 1. The borrower then needs to have final loan approval by September 30 at the absolute latest. This leaves a very, very small window of time to get buyers into homes without needing a 3.5% down payment from their own funds.

As of 8/15/2008 based on a 200k Primary Residence Purchase (or a no cash out refi), 720+ Credit, Full Doc Income Verification, paying no discount points and no origination fee. Please note, this information is intended for Real Estate Professionals and is not a solicitation to consumers.

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1715 W Northern Ave. #101
Phoenix, AZ 85021
Phone: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

Mortgage Update 08-08-08

8/9/2008 11:04:00 AM

Interest Rates held steady this week. The biggest news this week is still the news from last week. Seller Funded Down Payment Assistance Programs such as AmeriDream will end on October 1, 2008. The news that we have at this point is that all loans using this program must close by September 30. This leaves a very small window of time to get buyers into homes without needing a 3.5% down payment from their own funds (the new minimum down payment for FHA will go up to 3.5% on Oct. 1). If you are going to make an offer on a bank owned property the clock is really ticking since they are typically slow to give you a signed acceptance to your offer and then they are slow at the end of the transaction while you wait for them to sign the final paperwork that is needed in order to fund and record your loan.

As of 8/8/2008 based on a 200k Primary Residence Purchase (or a no cash out refi), 720+ Credit, Full Doc Income Verification, paying no discount points and no origination fee. Please note, this information is intended for Real Estate Professionals and is not a solicitation to consumers.

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1715 W Northern Ave. #101
Phoenix, AZ 85021
Phone: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

Mortgage Update 08-01-08

8/1/2008 2:30:00 PM

Interest Rates held steady this week. The president signed into law this week the 700 Page Housing Bill that recently passed in Congress. The most important item to us is that Seller Funded Down Payment Assistance Programs such as AmeriDream will end on October 1, 2008. This leaves a very small window of time to get buyers into homes without needing a 3.5% down payment from their own funds (this bill also provided a nice slap in the face by raising the FHA required minimum down payment from 3% to 3.5%). FHA underwriters will be slammed and everyone’s loan will be a rush since the entire industry is up against the clock to beat this deadline. The “Relief” part of the bill is not nearly as great as it sounds and there are still a lot unanswered questions with regards to implementation and qualification. In a nutshell…..the homeowner’s lender can choose to cancel the old mortgage and replace it with a new 30 Year Fixed Mortgage at 90% of the homes current appraised value. The lender would have to voluntarily agree to take the loss on the difference in principal of the old vs. new mortgage. In exchange for taking the loss, FHA would insure the new mortgage thereby limiting future losses for the lender. I have attached a good Q & A at the end of this email that gives more specifics and links to additional information on the bill.

As of 8/1/2008 based on a 200k Primary Residence Purchase (or a no cash out refi), 720+ Credit, Full Doc Income Verification, paying no discount points and no origination fee. Please note, this information is intended for Real Estate Professionals and is not a solicitation to consumers.

95% 30 Year Fixed = 6.5% (Requires PMI)
80% 30 year Fixed = 6.5%
95% 15 Year Fixed = 6.125% (Requires PMI)
80% 15 Year Fixed = 6.125%
97% FHA 30 Year Fixed = 6.625% (Requires MI)
100% VA 30 Year Fixed = 6.625% (No PMI required)
75% Stated Income 30 Year Fixed = 7.625%
75% Jumbo 5 Yr ARM = 6.125% (417k+ Loan Amount)

Questions and answers about the Hope for Homeowners Act of 2008, passed by Congress and signed by the President to try to steer struggling homeowners away from foreclosure:

Q: What exactly will the legislation do?
A: It will allow those who qualify to cancel their old mortgage loans and replace them with 30-year fixed-rate loans for up to 90 percent of the home's current value. The FHA will insure a total of $300 billion of the loans over a three-year period. But the decision on whether to write such a loan remains up to banks, which would have to be willing to take a loss on the existing loans in exchange for avoiding an often-costly foreclosure.

Q: Who is eligible?
A: Eligible borrowers must have spent more than 31 percent of their monthly incomes on their mortgages as of March 1, 2008. The troubled loan must have originated no later than Jan. 1, 2008, and be on the borrower's primary residence. The borrower's income must be verified. Borrowers' income must be deemed sufficient to cover the new loan. They cannot have any additional mortgage debt, such as a home-equity loan or 2nd mortgage.

Q: What must lenders holding troubled mortgages agree to?
A: Lenders must agree to take a loss comprising the difference between the mortgage balance and 90 percent of the home's current value. Lenders also must make an upfront payment to FHA amounting to 3 percent of the principal, to get out of the loan.

Q: When does the program start?
A: It takes effect Oct. 1 and runs through September 2011, although the FHA isn't likely to have it operating at full capacity until next year.

Q: Since lenders can pick and choose which loans to refinance, how can consumers determine if theirs will be selected?
A: Check with the bank or financial company servicing your mortgage, but it may be weeks before they make decisions concerning the new guidelines and assess individual loans. Even then, keep expectations limited. "Servicers are going to be reluctant to take the government up on their offer," predicted Mark Zandi, chief economist at Moody's Economy.com. "The earliest they'll start taking them up on it is early next year. And even then it's likely to be modest."

Q: Is there anything a homeowner can do to improve chances of benefiting from the program, such as crunching numbers to make a case for the bank?
A: Not really. The best step is to keep up your payments as best you can.

Q: But doesn't this provide an incentive to NOT pay your mortgage, if you're barely keeping ahead of bills and are underwater on your house, so you can qualify?
A: No. If your situation deteriorates enough, the bank may reject any possible new loan.
"Turning yourself into a financial basket case is not going to work," said Dan Seiver, a finance professor at San Diego State University. "If you turn into a complete deadbeat, the servicer is going to just foreclose and dump it."

Q: So what should I be doing now besides trying to keep up with payments?
A: Talk to a local credit counselor and call the toll-free hot line of the Hope Now alliance — an industry group trying to coordinate a response to the mortgage crisis — at 1-888-995-HOPE. It is available 24 hours a day to provide mortgage counseling in multiple languages.

Q: What happens if I'm able to sell my home after I refinance?
A: If you sell during the next five years, you must agree to share 50 percent of any profits from the resale with the government. What's more, homeowners can only retain equity gains based on a sliding scale. The homeowner would have zero equity from a sale in the first year, with the amount rising 10 percent in each succeeding year and capping at 50 percent from a sale in year five and thereafter. The equity must be repaid because the maximum amount on the new loans will be capped at 90 percent of the current market value, which automatically gives the previously troubled homeowner 10 percent equity in the home.

Q: Where can consumers find more detailed information about the plan?
A: There is a six-page summary of the housing act at
http://banking.senate.gov/public/_files/HousingandEconomicRecoveryActSummary.pdf
and the FHA's Web site at http://www.fha.gov is a place to watch for updated information. The entire 694-page bill is at http://www.house.gov/apps/list/press/financialsvcs_dem/hr3221_bill_text.pdf

Q: First-time home buyer tax break?
A: First-time buyers of a primary residence are eligible for a federal tax credit of 10 percent of the purchase price, up to $7,500. The provision, pertaining to homes purchased between April 9, 2008, and July 1, 2009, is aimed at reducing the stock of unoccupied housing. The credit, which must be paid back over 15 years, begins to phase out for taxpayers with modified adjusted gross income above $75,000, or $150,000 for a joint return.

Q: Will FHA, FNMA and FHLMC be permanently raising the loan limits?
A: Current interpretation of the Housing Bill is that the loan limits will only be permanently raised in areas previously identified as High Cost Areas. All other areas will remain as is.

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1715 W Northern Ave. #101
Phoenix, AZ 85021
Phone: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

U.S. Foreclosures Double

7/25/2008 9:18:00 AM

U.S. foreclosure filings more than doubled in the second quarter from a year earlier as falling home prices left borrowers owing more on mortgages than their properties were worth.

One in every 171 households was foreclosed on, received a default notice or was warned of a pending auction. That was an increase of 121 percent from a year earlier and 14 percent from the first quarter, RealtyTrac Inc. said today in a statement. Almost 740,000 properties were in some stage of foreclosure, the most since the Irvine, California-based data company began reporting in January 2005.

Full Article here.

Mortgage Update 07-18-08

7/18/2008 11:32:00 AM

After starting the week nicely, Interest Rates steadily increased later in the week. There have been a lot of rumors circulating that FHA no longer allows Down Payment Assistance programs such as AmeriDream. The fact is that these programs are still allowed with many lenders (including Smart Financial Mortgage). The Senate did recently vote to ban this program as part of its version of the housing stimulus package. But, the House of Representatives passed a bipartisan plan in May to preserve the program while tightening standards and protecting the FHA’s solvency. The next step is for representatives from the House and Senate to meet in the coming weeks to draft a compromise of their two plans. HUD tried to eliminate these assistance programs in 2007 but 2 Federal Courts ruled against HUD and in favor of keeping the programs alive so we will keep our fingers crossed for the outcome of this round. As with anything in our industry right now it is smart to take advantage of these programs ASAP because no one knows what the future will bring.

As of 7/18/2008 based on a 200k Primary Residence Purchase (or a no cash out refi), 720+ Credit, Full Doc Income Verification, paying no discount points and no origination fee. Please note, this information is intended for Real Estate Professionals and is not a solicitation to consumers.

95% 30 Year Fixed = 6.625% (Requires PMI)
80% 30 year Fixed = 6.625%
95% 15 Year Fixed = 6.25% (Requires PMI)
80% 15 Year Fixed = 6.25%
97% FHA 30 Year Fixed = 6.75% (Requires MI)
100% VA 30 Year Fixed = 6.75% (No PMI required)
75% Stated Income 30 Year Fixed = 7.375%
75% Jumbo 5 Yr ARM = 5.875% (417k+ Loan Amount)

Keep in mind…….Maximum Financing is still available on FHA loans. We still have access to AmeriDream which allows the seller to contribute for the borrower’s entire down payment and all of their closing costs/prepaids. Borrowers can still buy a home with nothing more than an earnest deposit if they can qualify for an FHA loan.

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1715 W Northern Ave. #101
Phoenix, AZ 85021
Phone: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

Another Reason for Short Sale vs. Foreclosure

7/18/2008 11:23:00 AM

Homes in foreclosure that become vacant provide sites for crime or other neighborhood problems. One foreclosure can impose up to $34,000 in direct costs on local government agencies, including inspections, court actions, police and fire department efforts, potential demolition, unpaid water and sewage, and trash removal. William C. Apgar, Mark Duda, and Rochelle Nawrocki Gorey, “The Municipal Cost of Foreclosures: A Chicago Case Study,” February 27, 2005, p. 2.

via PatrickRitchie.com

Mortgage Update 07-03-08

7/7/2008 10:39:00 AM

“A Paper” Interest Rates held steady this week. A little bit of local mortgage news this week……The State Senate finally passed the bill that will require individuals who originate mortgage loans be licensed by the state Department of Financial Institutions. Under the terms of Senate Bill 1028, loan originators must either have three years of experience in loan origination, or pass a course on the topic, before being eligible for licensing. They also must pass an exam administered by the Department of Financial Institutions. The bill will not take effect until January 2010. I wish you a happy and safe 4th of July weekend!

As of 7/3/08 based on a 200k Primary Residence Purchase (or a no cash out refi), 720+ Credit, Full Doc Income Verification, paying no discount points and no origination fee. Please note, this information is intended for Real Estate Professionals and is not a solicitation to consumers.

95% 30 Year Fixed = 6.5% (with PMI)
80% 30 Year Fixed = 6.5%
95% 15 Year Fixed = 6% (with PMI)
80% 15 Year Fixed = 6%
97% FHA 30 Year Fixed = 6.625% (with PMI)
100% VA 30 Year Fixed = 6.625% (No PMI required)
80% Stated Income 30 Year Fixed = 6.75%
80% Jumbo 5 Yr ARM = 5.875% (417k+ Loan Amount)

Keep in mind…….FHA loans are not affected by Declining Market policies or Private Mortgage Insurance restrictions which means maximum financing is still available. We have access to programs such as AmeriDream which allow the seller to contribute for the borrower’s entire down payment and all of their closing costs/prepaids. Borrowers can still buy a home with nothing more than an earnest deposit if they can qualify for an FHA loan.

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1751 W Northern Ave. #101
Phoenix, AZ 85021
Phone: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

Mortgage Update 06-27-08

6/30/2008 4:11:00 PM

“A Paper” Interest Rates dropped a bit lower this week. We have seen rates drift steadily higher over the past month and a half but it appears that we have hopefully hit the ceiling. This week saw rates drift very slowly lower. The big news this week was the Fed Meeting. As expected, they left their Fed Funds Rate unchanged. More important than that was their statement about their direction for the future. The Fed lowers their Funds Rate in an effort to stimulate the economy – this is what they have been doing over the past year. When the Fed is concerned about inflation they increase their Fed Funds Rate. Their statement in this meeting made it clear that their focus has changed to keeping inflation in check. It seems fairly certain that they will begin raising their Funds Rate if inflation continues to rear its ugly head. This is actually good news for Mortgage Interest Rates (part of the reason that rates improved this week).

As of 6/27/08 based on a 200k Primary Residence Purchase (or a no cash out refi), 720+ Credit, Full Doc Income Verification, paying no discount points and no origination fee. Please note, this information is intended for Real Estate Professionals and is not a solicitation to consumers.

95% 30 Year Fixed = 6.5%
95% 15 Year Fixed = 6%
97% FHA 30 Year Fixed = 6.625%
100% VA 30 Year Fixed = 6.625% (No PMI required)
80% Stated Income 30 Year Fixed = 6.75%
80% Jumbo 5 Yr ARM = 5.875% (417k+ Loan Amount)

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1751 W Northern Ave. #101
Phoenix, AZ 85021
Phone: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

Mortgage Update 06-13-08

6/17/2008 11:39:00 AM

“A Paper” Interest Rates are higher compared to last Friday. There is no way to sugarcoat it – this was a brutal week for interest rates. We had spent the last 4-5 months hanging around 6%, give or take .25% on a 30 Year Fixed with no points. This week, we broke loose from that and have jumped above 6.5%. There were several times when the market appeared to find a high point but at this point we are still moving in the wrong direction. Hopefully next week’s update brings better news. Don’t forget about Mortgage 101 on Tuesday June 17 from 10-1 in the 17th Ave / Northern Training Center (3 CE credits, no charge for the class)

As of 6/13/08 based on a 200k Primary Residence Purchase (or a no cash out refi), 720+ Credit, Full Doc Income Verification, paying no discount points and no origination fee. Please note, this information is intended for Real Estate Professionals and is not a solicitation to consumers.

95% 30 Year Fixed = 6.625%
95% 15 Year Fixed = 6.25%
97% FHA 30 Year Fixed = 6.75%
100% VA 30 Year Fixed = 6.75% (No PMI required)
80% Stated Income 30 Year Fixed = 6%
80% Jumbo 5 Yr ARM = 5.875% (417k+ Loan Amount)

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1751 W Northern Ave. #101
Phoenix, AZ 85021
Phone: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

Lenders slash prices to dump foreclosures, days of multiple offers return

6/9/2008 8:01:00 AM

"This week, the couple put in an offer for a three-bedroom house with a pool that's listed as a "short sale," where the home is sold for less than the amount owed on the mortgage.

They've given the property owner until July 18 to respond — an indication of the longer period it commonly takes for such arrangements to be worked out. Their offer of $195,000 was $6,000 over the asking price, in an effort to make it stand out from competitors.

Some in the real estate industry see such competition as a sign that the housing market's gloom is lifting."

A common question that I encounter when working with buyers is: "Are we at the bottom yet?" Nobody knows for sure when the bottom of the market will hit, but we have sure signs that the market is changing. Real estate, especially in Arizona, is flooded with bank owned and short sale properties. We see the signs and advertisements all over the place for these great deals, so how do we know if they are really a great deal? Speak with an expert and let us explain why it is the best time to buy in the past 30 years.

Read the text of the full article here.

Mortgage Update 06-06-08

6/7/2008 10:10:00 PM

“A Paper” Interest Rates are unchanged from last Friday. We had been drifting higher over the past few days but a disappointing jobs report this morning was bad news for the stock market which is good news for interest rates. Inflation caused by soaring energy prices will continue to be a major concern for interest rates as we move forward. Mortgage lenders raise their rates when they see inflation because the money they are paid back with over years and years is worth less than the money they are lending today.

As of 6/6/08 based on a 200k Primary Residence Purchase (or a no cash out refi), 720+ Credit, Full Doc Income Verification, paying no discount points and no origination fee. Please note, this information is intended for Real Estate Professionals and is not a solicitation to consumers.

95% 30 Year Fixed = 6.25%
95% 15 Year Fixed = 5.875%
97% FHA 30 Year Fixed = 6.375%
100% VA 30 Year Fixed = 6.375% (No PMI required)
80% Stated Income 30 Year Fixed = 6.625%
80% Jumbo 5 Yr ARM = 5.75% (417k+ Loan Amount)

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1751 W Northern Ave. #101
Phoenix, AZ 85021
Phone: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

Buy vs. Rent Calculator

6/2/2008 11:24:00 AM

This morning via the Get Rich Slowly blog, we came across a handy Buy vs. Rent Calculator on the New York Times site that can really help you put this decision into perspective. Contact us if you need any of the variables explained or any additional research to help your calculations.

Click here to check it out.

Mortgage Update 05-30-08

6/2/2008 9:37:00 AM

“A Paper” Interest Rates increased this week. Fannie Mae will eliminate its Declining Market policy on June 1. The announcement itself is good news but the overall benefit will be minimal. The Declining Market policy basically said that all of their loan programs in Areas deemed to be declining (this included Maricopa and Pinal County) would have the maximum allowable financing reduced by 5%. This announcement eliminates that rule but……..in almost all cases the Private Mortgage Insurance (needed on loans above 80%) companies now have rules in place that will keep maximum lending percentages at their current levels. For example, Fannie does have a 97% loan program but the Private Mortgage Insurance companies will not insure a loan in Arizona above 95% - and even at 95% you would still need a 680 fico. In this business positive media attention gets buyers off of the fence so I’ll still chalk this up as good news.

As of 5/30/08 based on a 200k Primary Residence Purchase (or a no cash out refi), 720+ Credit, Full Doc Income Verification, paying no discount points and no origination fee. Please note, this information is intended for Real Estate Professionals and is not a solicitation to consumers.

95% 30 Year Fixed = 6.25%
95% 15 Year Fixed = 5.75%
97% FHA 30 Year Fixed = 6.375%
100% VA 30 Year Fixed = 6.375% (No PMI required)
80% 30 Year Fixed = 6.5% (Stated Income)
80% Jumbo 5 Yr ARM = 5.75% (417k+ Loan Amount)

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1751 W Northern Ave. #101
Phoenix, AZ 85021
Phone: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

The Housing Crisis Is Over

5/13/2008 11:00:00 AM

Interesting opinion article in the Wall Street Journal about why the Housing Crisis is over for the most part.

The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now.

Read the text of the full article here.

Mortgage Update 05-02-08

5/2/2008 8:32:00 AM

“A Paper” Interest Rates went lower this week. The Fed dropped their Fed Funds Rate by .25% on Wednesday. More important than what the Fed did, was what the Fed said. They hinted that this would likely be the end of their rate cuts which is good news to Mortgage Lenders. The Fed now sees inflation as their number one concern (once again good news to Mortgage Lenders). When the Fed cuts their Funds Rate it spurs on the economy by dumping money into the economy immediately but also increases the likelihood for inflation. Inflation is always a major concern for Mortgage Lenders because they lend money today and then get paid back over many years.

As of 5/2/08 based on a 200k purchase (or a no cash out refi), 720+ Credit, Full Doc Income Verification, paying no discount points and no origination fee. Rates apply to Primary Residence and Second/Vacation Homes. Please note, this information is intended for Real Estate Professionals and is not a solicitation to consumers.

95% 30 Year Fixed = 6%
95% 15 Year Fixed = 5.625%
97% FHA 30 Year Fixed = 6.125%
100% VA 30 Year Fixed = 6.25
80% 30 Year Fixed = 6.25% (Stated Income Stated Assets)
80% Jumbo 5 Yr ARM = 5.625% (417k+ Loan Amount)

Keep in mind…….FHA loans are not affected by Declining Market policies which means maximum financing is still available. We have access to programs such as AmeriDream which allow the seller to contribute for the borrower’s entire down payment and all of their closing costs/prepaids. Borrowers can still buy a home with nothing more than an earnest deposit if they can qualify for an FHA loan.

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1751 W Northern Ave. #101
Phoenix, AZ 85021
Phone: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

Is this a good time to buy?

4/29/2008 11:19:00 AM

Perhaps one of the most frequently asked questions we get these days, is whether this is a good time to buy or not. The sound of "doom and gloom" in the media is hard to get over, but the reality is that most savvy Buyers and Sellers are contrarians by nature. They buy when everyone else is selling and they sell when everyone else is buying. In addition, the raw facts and data point to the reality that this is, indeed, a good time to buy, and in fact a great opportunity.

Here are three excerpts that we like from various sources:

1. "The best buyer's market in 35 years. In April of 1973, mortgage rates were about the same as they are today. Since that time, we have only had mortgage rates this low during 2001 and 2002, the height of the seller's markets where there was little inventory. In the last two major buyer's markets, one in the early 1980s and the other in the early 1990s, the rates were much higher. When I started in the business in 1978, interest rates were at 9.75 percent, en route to 18 to 21 percent in 1980. In the early 1990s, the rates were hovering in the 11 to 12 percent range. Thus, today's buyer's market, with exceptionally low mortgage rates plus a substantial supply of inventory, is the best time in decades to purchase."
Source: Inman News

2. "Consider a typical home that sells for $218,900. You put down 20% and get a 30-year fixed-rate mortgage at today's rate of 5.5%. Monthly principal and interest come to $994.31. Let's say that 12 months from now the same house goes for 10% less, or $197,010. But by then the recession is history and the Fed is jacking up rates to stem inflation. If mortgage costs rise a point, to 6.5%, your monthly payment would be $994.94 and you'd have saved nothing. Meanwhile, home prices might steady and sellers might become less willing to negotiate. And you have spent a year living someplace you'd rather not be."
Source: Time Magazine

3. "30-Year Rates Jump to 6.03%. Freddie Mac reports a jump in the 30-year fixed mortgage rate to 6.03 percent during the week ended April 24, from 5.88 percent the prior week, marking it the first time in six weeks that mortgage rates rose above 6 percent. The 15-year fixed mortgage rate climbed during the same period, edging up to 5.62 percent from 5.40 percent. The five-year adjustable mortgage rate increased to 5.68 percent from 5.48 percent, while the one-year adjustable rate shot up to 5.28 percent from 5.10 percent. Freddie Mac chief economist Frank Nothaft attributes the gains to heightened inflationary concerns."
Source: Baltimore Sun

The fact of the matter is: We will know for sure that we are at the bottom of the downturn, once the prices start going back up. When this happens, it is already too late. Every buyer that is currently sitting on the fence is going to jump in, and attempt to buy. This will create a fast paced, competitive market. The good deals will go to the strongest Buyers, and the options available will rapidly decrease. So, perhaps this is the best buying opportunity! Learn the lessons of the past decade – buy a house that you can afford. Don’t speculate. Work with a professional who knows and understands the market. More importantly, find a professional that works in and understands THIS market - with all of its unique challenges and opportunities. And most importantly – ignore the headlines, and have fun!

Mortgage Update 04-25-08

4/25/2008 2:34:00 PM

“A Paper” Interest Rates held steady compared to last Friday. We dropped lower early in the week and then bounced back up late in the week. Once again, exactly the opposite path as the stock market.

As of 4/25/08 based on a 200k purchase (or a no cash out refi), 720+ Credit, Full Doc Income Verification, paying no discount points and no origination fee. Rates apply to Primary Residence and Second/Vacation Homes. Please note, this information is intended for Real Estate Professionals and is not a solicitation to consumers.

95% 30 Year Fixed = 6.125%
95% 15 Year Fixed = 5.75%
97% FHA 30 Year Fixed = 6.25%
80% 30 Year Fixed = 6.375% (Stated Income Stated Assets)
80% Jumbo 5 Yr ARM = 5.625% (417k+ Loan Amount)

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1751 W Northern Ave. #101
Phoenix, AZ 85021
Phone: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

Mortgage Update 04-18-08

4/18/2008 10:09:00 AM

“A Paper” Interest Rates increased this week. The stock market had a good week which almost always means a bad week for interest rates and this week was no exception. Here is an FYI and hopefully some helpful advice. Due to lending restrictions and Declining Market Policies, Private Mortgage Insurance is no longer available on a condo in Maricopa County above 90% Loan to Value. Along the same lines, there are currently no 2nd mortgages that go above 90%. Conventional financing requires either Private Mortgage Insurance or a Combo 2nd mortgage in order to go above 80%. So what does this mean? Basically, the only way to buy a Condo with less than a 10% down payment is with an FHA loan (or VA). But…..in order to do this the condo must be an FHA approved condo. Use this link to find all the FHA approved condos for a particular zip-code https://entp.hud.gov/idapp/html/condlook.cfm It is important that all you do is type in the zip-code and then hit send in order to get the full list. If you have a Listing on a condo and the complex is FHA approved you have a huge advantage. I would recommend putting FHA APPROVED in big capital letters on your Property Description, Sign Riders and anywhere else that you advertise. Hope that helps – Good Luck!

As of 4/18/08 based on a 200k purchase (or a no cash out refi), 720+ Credit, Full Doc Income Verification, paying no discount points and no origination fee. Rates apply to Primary Residence and Second/Vacation Homes. Please note, this information is intended for Real Estate Professionals and is not a solicitation to consumers.

95% 30 Year Fixed = 6.25%
95% 15 Year Fixed = 5.75%
97% FHA 30 Year Fixed = 6.25%
80% 30 Year Fixed = 6.375% (Stated Income Stated Assets)
80% Jumbo 5 Yr ARM = 5.625% (417k+ Loan Amount)

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1550 E Missouri #203
Phoenix, AZ 85014
Phone: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

Fannie Mae - Walk Away and Feel the Pain

4/15/2008 10:42:00 PM

The country's two largest sources of mortgage money have a blunt warning for anyone thinking about joining the growing "walkaway" trend, where homeowners stop making payments and months later send the house keys back to their lender: You will feel the pain.

On March 31, Fannie Mae sent out new guidelines to lenders intended for walkaways and other foreclosure situations. Fannie will now prohibit foreclosed borrowers from getting another mortgage through the giant investor for five years, unless there are "documented extenuating circumstances." In those cases, the mortgage prohibition is for three years.

Even after five years, borrowers with foreclosures in their files will be required to make at least a 10 percent down payment, and will need minimum FICO credit scores of 680.

Freddie Mac, Fannie's rival, counts foreclosures as major credit blots for seven years, and a senior official said the company is now aggressively pursuing some walkaway borrowers "to preserve our deficiency rights" where permitted under state law.

The walkaway trend is particularly noteworthy in former housing boom markets - including California, Florida and Nevada - where many homeowners find themselves upside down on their loans, owing tens of thousands more than the current market value of their houses. If they invested little or nothing in down payments, some owners reason, continuing to make payments - even if they can afford to - may be throwing good money after bad.

A number of Web sites have popped up claiming to cut the hassles of bailing out of a mortgage. One company promises that clients "will be able to live in (the) home for up to eight months with no mortgage payments," after paying $895 for a customized plan. The same site says it will provide clients with "legal credit repair" to "improve your FICO scores."

Another Web site claims that "your credit can be repaired and (you will) be able to purchase a house in as few as two years" - after paying a $495 fee. Still another company says walkaways can expect "up to one year living payment free" as the lender goes about filing for foreclosure. That company charges $995 for its how-to-do-it kit.

Fair Isaac Corp. of Minneapolis, developer of the FICO scores used in most mortgage transactions, is unhappy at any suggestion that a foreclosure could be minimized or wiped away in a short period of time. Its scoring model counts foreclosure as a long-standing and severe event, nearly comparable with bankruptcy, with negative consequences for all forms of credit that walkaways might seek to obtain. That includes credit card applications, auto loans, student loans - and even insurance and employment.

FICO spokesman Craig Watts said that the impact of a foreclosure on an individual's score depends heavily on the payment history, length and number of credit trade lines in a consumer's file, but "it is always significant."

Robin Stout Migala, consumer outreach manager for Freddie Mac, said in an interview that "there are so many bad reasons for walking away" from a home loan. Not only are borrowers' credit standings wrecked - forcing them into excessively high interest rates on any credit they can manage to obtain. But they also face other potential problems, including federal income tax liabilities.

Federal legislation enacted last year allows homeowners who negotiate loan modifications with lenders and have portions of their principal debt eliminated to escape income tax liability for the amount forgiven. Walkaway borrowers, by contrast, have nothing forgiven, and the IRS may demand income taxes on the balance they never paid, according to Migala.

Many borrowers facing foreclosure today have endured serious financial crises, said Migala - loss of employment, loss of an income-earning spouse, medical issues, and predatory loan terms - that led to their inability to make their mortgage payments.

When they apply for a loan from either Freddie Mac or Fannie Mae, she said, the standard application form asks whether they have ever experienced a foreclosure or handed over their deed in lieu of foreclosure.

If applicants check "yes," the loan is immediately shifted to manual underwriting. Every piece of information is scrutinized by underwriters, who probe for the facts surrounding the loss of the house.

For borrowers who faced genuine financial hardships leading to foreclosure, underwriters are likely to be more sympathetic a few years down the road. But if you walk away, here's the deal: Don't expect to get a new home loan - certainly not one with favorable terms - for five to seven years.

Mortgage Update 04-11-08

4/12/2008 9:44:00 AM

“A Paper” Interest Rates held steady this week. It was a surprisingly quiet week on the economic and interest rate front.

As of 4/11/08 based on 200k purchase (or a no cash out refi), 720+ Credit, Full Doc Income Verification, paying no discount points and no origination fee. Rates apply to Primary Residence and Second/Vacation Homes. Please note, this information is intended for Real Estate Professionals and is not a solicitation to consumers.

95% 30 Year Fixed = 5.875%
95% 15 Year Fixed = 5.375%
97% FHA 30 Year Fixed = 6%
80% 30 Year Fixed = 6% (Stated Income Stated Assets)
80% Jumbo 5 Yr ARM = 5.625%

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1550 E Missouri #203
Phoenix, AZ 85014
Phone: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

Mortgage Update 04-04-08

4/4/2008 6:10:00 PM

“A Paper” Interest Rates dropped this week. Nearly all of the gains came on Thursday and this morning as the Labor Department came out with 2 dismal jobs reports. The rule of thumb is that most economic reports that are bad news for the stock market are good news for interest rates. The exception to this rule is inflation which is bad news for both. Luckily, inflation still seems to be under control but this is a constant worry due to energy prices.

As of 4/4/08 based on 200k purchase (or a no cash out refi), 720+ Credit, Full Doc Income Verification, paying no discount points and no origination fee. Rates apply to Primary Residence and Second/Vacation Homes. Please note, this information is intended for Real Estate Professionals and is not a solicitation to consumers.

95% 30 Year Fixed = 5.875%
95% 15 Year Fixed = 5.5%
97% FHA 30 Year Fixed = 6%
85% 30 Year Fixed = 6% (Stated Income Stated Assets)
80% Jumbo 5 Yr ARM = 5.625%

Keep in mind…….FHA loans are not affected by Declining Market policies which means maximum financing is still available. We have access to programs such as AmeriDream which allow the seller to contribute for the borrower’s down payment and their closing costs/prepaids. Borrowers can still buy a home with nothing more than an earnest deposit if they can qualify for an FHA loan.

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1550 E Missouri #203
Phoenix, AZ 85014
Phone: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

Mortgage Update 03-21-08

3/24/2008 4:24:00 PM

“A Paper” Interest Rates kept their momentum and dropped lower again this week. On Tuesday, the Fed lowered their Funds Rate by .75%. The mortgage interest rate market was happy that they did not lower by a full 1% as many had expected. The Fed’s policy statement also noted that they were keeping a close eye on inflation which the mortgage market likes as well. There was another item that did not get as much press but was equally as important in our market for mortgage interest rates. The government lowered Fannie Mae and Freddie Mac’s liquid reserve requirement which will allow them to buy more mortgages. This allows the lenders of the world to “create” more loans – and they do so with lower interest rates.

As of 3/21/08 based on 250k purchase (or a no cash out refi), 10% down payment (or 10% equity in the case of a no cash out refi), 720+ Credit, Full Doc Employment, paying no discount points and no origination fee. For No Income or Asset Verification with 10% down; 720+ fico = add .125% to rate, 700-719 fico add .25%, 680-700 fico add .375%. Rates apply to Primary Residence and Second/Vacation Homes. Please note, this information is intended for Real Estate Professionals and is not a solicitation to consumers.

30 Year Fixed = 5.75%
15 Year Fixed = 5.25%
Jumbo 5 Yr ARM (417k+ Loan Amount with 20% down) = 5.625%

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1550 E Missouri #203
Phoenix, AZ 85014
Phone: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

Mortgage Update 03-14-08

3/17/2008 5:30:00 PM

“A Paper” Interest Rates continued their see-saw and dropped this week. There has been more volatility in the market in the first 2 hours this morning than we used to see in a week. The market opened with a very tame Consumer Inflation reading for February (great news for interest rates). Then news hit that Financial Brokerage and Investment Giant Bear Stearns had seen is liquidity position deteriorate to the point that JP Morgan Chase and the Fed stepped in to lend them money to rescue them from possibly going out of business. These 2 events basically guarantee that Fed will lower its Fed Funds rate by .75% on or before next Tuesday’s meeting (bad news for mortgage interest because it could spur inflation in the future). In this market, we are seeing unforeseen surprises on a weekly and even daily basis. There is really no way to predict what mortgage interest rates (and the stock market) will do today, let alone next week. My opinion is that flipping a coin will probably be more accurate than anyone’s prediction for the future. Last, but definitely least……the FHA loan limit for Maricopa County has been increased to $346,250. This is great, great news for our market.

As of 3/14/08 based on 250k purchase (or a no cash out refi), 720+ Credit, Full Doc Employment, paying no discount points and no origination fee. For No Income or Asset Verification with 10% down; 730+ fico = add .125% to rate, 700-729 fico add .125%, 680-700 fico add .25%. Rates apply to Primary Residence and Second/Vacation Homes. Please note, this information is intended for Real Estate Professionals and not a solicitation to consumers.

90% Loan 30 Year Fixed = 6.125%
95% Loan 30 Year Fixed = 6.375%
15 Year Fixed = 5.375%
Jumbo 5 Yr ARM (417k+ Loan Amount with 20% down) = 5.625%

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1550 E Missouri #203
Phoenix, AZ 85014
Phone: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

2007 Foreclosure Rates Map

3/4/2008 9:55:00 AM

Why Housing Prices Are Nearing Bottom

3/3/2008 12:19:00 PM

Why Housing Prices Are Nearing Bottom

A recent BusinessWeek cover story touted the idea that housing prices could fall by another 25%. Although some areas are looking at a precipitous drop in prices, for the most part, current housing prices are nearing bottom. Forces other than loose lending standards and a corresponding spike in demand are responsible for the recent rise in housing prices, and these have not abated.

These are not your father's houses

The BusinessWeek article used an index that tracks home prices as far back as 1890 to conclude that home values have historically risen annually from 0.2% to 0.8% above inflation. Using these trend lines, the article found homes to be significantly overvalued. But there are problems with drawing this inference.

First, today's homes are not the same homes that were built three decades ago. Census data show that in 1973 the median size for a newly built home in the U.S. was 1,525 sq. ft. In 2006 it was 2,248 sq. ft., a 47% increase.

Second, today's homes feature sturdier construction materials, more expensive siding, outdoor additions like in-ground pools, more complex wiring to support an increasing number of electronic devices, sophisticated heating and cooling systems, and larger kitchens (which translate to increased cabinetry). Simply, these are better homes -- and "better" here means more expensive to build.

Third, prices of inputs into the construction process are more expensive these days in relative terms. The bull market in basic materials that started several years ago has raised the costs of construction, and these costs have been passed on to the consumer.

Taking these factors into account implies that housing prices should have grown at least 2% above inflation in the past 30 years, putting the current median home price about where it should be.

Check the margins

The largely fixed expense of building today's homes gets us to the next reason why most homes are probably priced near their fair value. The table below shows gross margins for a collection of eight publicly traded homebuilders. (For homebuilders, gross margins represent the difference between the price at which the home sold and how much it cost to build, inclusive of any land acquisition costs. The cost of superintendents and sales staff to move the properties is not recorded here; it's a part of SG&A and often runs above 10% of revenue.)

	1998	1999	2000	2001	2002	2003	2004	2005	2006

DR Horton (NYSE: DHI)	19%	18%	20%	21%	20%	22%	24%	27%	24%
Centex	7%	9%	9%	10%	11%	10%	13%	14%	13%
KB Home (NYSE: KBH)	20%	20%	21%	21%	23%	23%	24%	27%	20%
Lennar (NYSE: LEN)	N/A	12%	11%	15%	15%	14%	14%	16%	7%
MDC Holdings (NYSE: MDC)	8%	11%	14%	14%	14%	14%	18%	17%	24%
Meritage Homes (NYSE: MTH)	20%	19%	20%	21%	19%	20%	20%	24%	21%
Ryland Group (NYSE: RYL)	19%	19%	18%	20%	23%	24%	25%	27%	23%
Toll Brothers (NYSE: TOL)	23%	23%	25%	27%	28%	28%	29%	30%	26%

Average	17%	16%	17%	19%	19%	20%	21%	23%	20%
Median	19%	18%	19%	21%	20%	21%	22%	25%	22%

Source: Morningstar.com, Yahoo! Finance.

Most homebuilders operate without particularly high gross margins. Although there has been a steady rate of margin expansion since the late 1990s, note that margins in 2006 had already returned to 2003 levels, the beginning of the current housing boom.

Thus, even a 3% drop in prices would bring builders' gross margins well below the levels seen in the previous recession, threatening their profitability. (Land costs, which are not tied to increased costs of construction, would have to fall substantially to negatively influence home prices -- a general rule of thumb is that, for most residential homes, land comprises only 20%-25% of total value.)

This is important because it creates a floor for the price at which homebuilders will be willing to create additional inventory. Buyers will thus be faced with builders willing to slash prices drastically on existing inventory but unwilling to offer similar discounts on future projects.

What does all this mean for the housing market? When the financial institutions rediscover how to assess effectively borrowers' default risks, the supply of existing homes will fall fairly quickly. And the moment that the supply of existing homes begins to shrink, potential first-time homebuyers will realize that between low interest rates and homes that sell at (or below) replacement cost, they can grab the deal of a lifetime.

Objects in the rearview mirror ...

In 1999, tech investors bid up pieces of paper that were backed by fictitious profits of economically stillborn companies. When the bubble burst, the search for the asset's true worth -- often close to zero -- was a painful one. But houses are a different typw of asset; they depreciate slowly and meet a need for which there is plenty of demand: shelter.

Overall, the condition of the US housing market is not nearly as bad as some analysts would have you believe. So, the entire homebuilding industry is worth a closer look.

Source: Motley Fool

By Marko Djuranovic February 25, 2008

Under-$200,000 market gives home sales a push

3/1/2008 8:18:00 PM

Believe it or not, you are not the only buyer out there! Buyers are ready to snatch up a good deal and with so many on the market... they can take their pick.

"The real-estate slump has an upside for first-time home buyers looking to spend $200,000 or less."

"Homes that sold for less than $200,000 grew to 34 percent of the market in January, up from 16 percent of the market in January 2007, according to Jay Butler, director of Realty Studies at the Morrison School of Management and Agribusiness at Arizona State University's Polytechnic campus."

Read full article here.

Mortgage Update 02-29-08

3/1/2008 7:53:00 PM

“A Paper” Interest Rates have rallied and dropped lower this week. A month ago, we were at the lowest levels in years but that was followed with a slow steady increase in rates. It appears that we might have hit a ceiling and are now slowly dropping. The market has been extremely volatile in the past month as we have seen rates move over a full percentage point. Even the “experts” in our industry are really just flipping a coin when predicting if rates will rise or fall in the near future.

As of 2/29/08 based on $250k purchase (or a no cash out refi), 680+ Credit, Full Doc Employment, paying no discount points and no origination fee. For No Income or Asset Verification with 10% down; 730+ fico = add .125% to rate, 700-729 fico add .125%, 680-700 fico add .25%. Rates apply to Primary Residence and Second/Vacation Homes.

90% Loan 30 Year Fixed = 6%
95% Loan 30 Year Fixed = 6.125%
15 Year Fixed = 5.5%
5 Year ARM = 5.25%
Jumbo 5 Yr ARM (417k+ Loan Amount with 20% down) = 5.625%

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1550 E Missouri #203
Phoenix, AZ 85014
Phone: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

Foreclosure Activity Up 57 Percent From January 2007

2/26/2008 8:27:00 AM

Think you're alone?

"January 2008 U.S. Foreclosure Market Report(TM), shows foreclosure filings -- default notices, auction sales notices and bank repossessions -- were reported on 233,001 properties during the month, an increase of 8 percent from the previous month and an increase of nearly 57 percent from January 2007."

"California's January foreclosure rate ranked second highest among the states, and Florida's January foreclosure rate ranked third highest. Other states with foreclosure rates ranking among the top 10 were Arizona, Colorado, Massachusetts, Georgia, Connecticut, Ohio and Michigan."

Full report can be found here.

CNN story found here.

Mortgage Update 02-23-08

2/23/2008 6:00:00 PM

“A Paper” Rates jumped again this week but it appears that we are seeing a bit of a rebound over the past several days. I mentioned last week that the announced increase in the Fannie Mae/Freddie Mac Jumbo loan limit (417k) would have no impact for Arizona since it is tied to the HUD Median Price. Only 50 or so counties in the US would have their lending limits increased. This week it seems as if those 50 counties will see much less benefit than originally expected. Fannie and Freddie announced that these loans will be priced and sold separately from their loans under the 417k limit. This will almost guarantee that these 417k+ loans will carry higher rates as well as stricter down payment and equity percentage requirements (for refi’s).

As of 2/22/08 based on 250k purchase (or a no cash out refi), A Credit, Full Doc Employment, paying no discount points and no origination fee. For No Income or Asset Verification with 10% down; 730+ fico = add .125% to rate, 700-729 fico add .125%, 680-700 fico add .25%. Rates apply to Primary Residence and Second/Vacation Homes.

90% Loan 30 Year Fixed = 6.125%
95% Loan 30 Year Fixed = 6.25%
15 Year Fixed = 5.625%

5 Year ARM = 5.25%
Jumbo 5 Yr ARM (417k+ Loan Amount with 20% down) = 5.625%

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1550 E Missouri #203
Phoenix, AZ 85014
Phone: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

Mortgage Update 02-08-08

2/8/2008 10:20:00 AM

“A Paper” Rates ended the week at the same levels as last Friday. We are seeing some big fluctuations on a daily basis but rates seem to come back to the same level when the dust settles. It used to be very rare that lenders changed rates in the middle of the day but we are now seeing two and three changes per day on a regular basis. Traders on the stock and bond market seem to be on the edge of their seats right now trying to figure out what is going on with the world economy which has created somewhat of a herd mentality in their trading patterns. On a positive note, there seems to be more and more momentum in Washington to allow Fannie Mae and Freddie Mac to increase their jumbo limit from the current level of 417k to at least 625k and possibly more. That would be great news for the higher end of the market where current Jumbo loan requirements have gotten very tough.

As of 2/8/08 based on 250k purchase (or a no cash out refi), 10% Down, A Credit, Full Doc Employment, paying no discount points and no origination fee. For No Income or Asset Verification; 730+ fico = add .125% to rate, 700-729 fico add .125%, 680-700 fico add .25%. Rates apply to Primary Residence and Second Homes.

30 Year Fixed = 5.75%
15 Year Fixed = 5.25%

5 Year ARM = 5.375%
Jumbo 5 Yr ARM (417k+ Loan Amount with 20% down) = 5.625%

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1550 E Missouri #203
Phoenix, AZ 85014
Office: 602.889.2098
Cell: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

Mortgage Update 01-25-08

1/25/2008 10:17:00 AM

”A Paper” Rates held steady this week but that statement is not indicative of the wild week we had with the economy and interest rates. US markets were closed on Monday in observance of Martin Luther King Day. Worldwide stock markets took huge losses on Monday which basically guaranteed that the US stock market would face a frenzied sell off at the opening bell on Tuesday. In attempt to soften the blow, the Fed called an emergency meeting and announced a .75% cut to their Fed Funds rate prior to the market opening on Tuesday (great news if you have a Home Equity Line of Credit). The stock market still took huge losses all day Tuesday and into Wednesday morning. Midday Wednesday and all day Thursday saw the stock market claw back. The rule of thumb is that bad news for the stock means good news for interest rates and this week was no exception. Rates went quite low on Tuesday and Wednesday morning but have now come back over the last day and a half to an unchanged level since last Friday.

As of 1/25/08 based on 250k purchase (or a no cash out refi), 5% Down, A Credit, Full Doc Employment, paying no discount points and no origination fee. For No Income or Asset Verification; 730+ fico = add .125% to rate, 700-729 fico add .125%, 680-700 fico add .25%. Rates apply to Primary Residence and Second Homes.

30 Year Fixed = 5.75%
15 Year Fixed = 5.25%
5 Year ARM = 5.625%
Jumbo 5 Yr ARM (417k+ Loan Amount with 20% down) = 5.625%

“Home in 5” Down Payment Assistance funds are now available. The 30 Yr Fixed rate for this program is 6.55% along with a 5% down payment assistance grant. Feel free to call or email with any questions or potential buyers that you would like to qualify for the program. Free money is a great way to get a potential buyer excited about buying!

For more information contact:

Ryan Halldorson
Smart Financial Mortgage
Senior Mortgage Consultant
1550 E Missouri #203
Phoenix, AZ 85014
Office: 602.889.2098
Cell: 602.793.7204
Fax: 602.889.2258
ryan@hsmove.com

Lost your home to foreclosure? You may owe IRS.

1/22/2008 3:26:00 PM

Good article about potential tax liabilities in a foreclosure situation, although the short sale analysis at the end is wrong, now that the Mortgage Relief Debt Forgiveness Act has passed.

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If you thought a foreclosure ended the financial miseries associated with your former home, think again. You soon could be hearing from the IRS about taxes due in connection with the residence you no longer own.

"You can walk away from the big house payment, but not from the potential tax implications," says John W. Roth, senior tax analyst at CCH in Riverwoods, Ill. "And if you couldn't afford the mortgage, you probably can't afford the taxes."

As the lending crisis continues to shake out, more homeowners, particularly those who used creative mortgages to buy their houses, could be in this predicament. Even longtime homeowners who refinanced their properties based on increased value when the real-estate market was hot could find themselves in tax trouble if they lose their properties to the bank.

Read the full article here.

Phoenix Heritage in the News Again

1/3/2008 11:27:00 AM

Phoenix Heritage was interviewed by Arizona Republic as the Arizona Short Sale Experts once again:

Kutz said his companies have 60 short-sale listings around the Valley, and they aren't going away anytime soon. "I think the short-sale situation is going to be with us for five-plus years," he said. Even if the Valley's housing inventory is reduced, Kutz said many portions of the region are down to 2004 prices. Kutz said his team rarely sees short sales resulting from subprime mortgage problems. The sales can result from events including divorce, job losses, deportation and incarceration. But Kutz said the majority of short sales he deals with result from people who bought or refinanced houses at the peak of the real estate market and now have to sell.

"It's a very tedious process. It's a very calculated process," Kutz said. "It's the brain surgery of real estate."

To read the full article click here.
The article was also picked up by the Housing Bubble Blog, click here.

Maricopa / Pima County Foreclosures up 310%

1/1/2008 3:23:00 PM

Foreclosure filings in Maricopa and Pima counties rose from 777 in September 2006 to 2,414 in September 2007, according to Default Research, a foreclosure research company. Maricopa County led the state with 2,127 foreclosures in September and Pima County had 287, triple the amount of foreclosures both counties had the same time last year.

This is exactly why it's increasingly important for Realtors to offer short sale solutions to troubled homeowners. Sign up on our Short Sale Solution website by clicking here, to receive important information about how to avoid foreclosure with a bank approved short sale.

Mortgage Forgiveness Debt Relief Act PASSED!

12/27/2007 4:21:00 PM

In possibly the biggest news of the year for homeowners thinking about a short sale, President Bush signed the Mortgage Forgiveness Debt Relief Act into law December 20th, 2007. (Click here to read the full statement from the White House) This much anticipated relief will alleviate the concerns of many troubled homeowners worried about receiving a 1099 for the forgiven debt in a short sale or a foreclosure situation.

Millions of homeowners breathed a sigh of relief, as did many professionals working with short sale and pre-foreclosure clients. National Association of Realtors also applauded the measure (perhaps more than others, since it has been lobbying for this for close to 10 years). (Click here to read the statement by the NAR President)

Quite possibly the most welcome feature of the law is that it is retroactive to January 1, 2007. So, anyone that did a Short Sale on their primary residence in 2007, and going forward, would be covered under the scope. It is important to understand that this relief is only available to homeowners facing a 1099 from the short sale or a foreclosure of their primary residence (as defined by the IRS), and not an investment or a second home.

As always we recommend that you speak with a Tax Accountant to find out more about the tax consequences of a short sale or a foreclosure.

1099 in a Foreclosure

12/18/2007 10:01:00 PM

Notices of unpaid taxes, unanticipated and little understood, will probably multiply as more people fall behind on their mortgages, said Ellen Harnick, senior policy counsel at the Center for Responsible Lending, a nonpartisan research and policy center in Durham, N.C.

Foreclosure is one way that beleaguered homeowners can fall into this tax trap. The other is when homeowners are forced to sell their homes for less than the value of the mortgage. If the lender forgives that difference, they are liable for income taxes on that amount.

The 1099 shortfall, as it is called, stems from an Internal Revenue Service policy that treats forgiven debt of all types as income even if the taxpayer has nothing tangible to show for it, unless the debt is canceled through bankruptcy.

Read the full article here.

Senate Passes the Mortgage Cancellation Tax Relief Act

12/18/2007 5:47:00 PM

Many families and individuals are one step closer to seeing tax relief, thanks to the passage of the Mortgage Cancellation Tax Relief Act (also known as H.R. 3648) by the U.S. Senate and House of Representatives, according to the National Association of Realtors.

The current tax code requires a lender who forgives debt to provide a Form 1099 to the IRS stating the amount the borrower has been forgiven. This disclosure applies whether it is a short sale, foreclosure, deed in lieu of foreclosure or any similar arrangement that relieves the borrower of the obligation to pay some portion of their debt. If the property is sold at foreclosure or is sold for less than was borrowed, that difference is considered income and is subject to the tax.

The Mortgage Cancellation Tax Relief Act would ensure that any debt forgiven on any mortgage debt secured by a principal residence will not be taxed. The legislation includes a provision to safeguard against abuses. The provision, similar to one that already exists for commercial real estate owners, would treat commercial and residential property equally.

Read the full article here.

H.R. 3648 Overwhelmingly Passes in the House of Representatives

10/11/2007 11:58:00 AM

More good news for homeowners electing to perform a Short Sale on their house in order to avoid foreclosure. The House Resolution 3684 passed overwhelmingly last Thursday (10/04/07), and is moving to the Senate for consideration. The best news yet, is that this measure would be retroactive to January 1, 2007, so anyone who has done a Short Sale in 2007 would be effected.

Kenneth R. Harney reports:

In a tax-Peter-to-pay-Paul move, the House voted Thursday to permanently remove the "phantom income" tax penalty that haunts financially distressed homeowners whose debt is partially forgiven by a lender after a foreclosure or a short sale to avoid foreclosure.

...

Consider this scenario: To avoid foreclosure, you agree to sell your house to an investor for less than the amount you owe the lender. Say the shortfall is $20,000. If the lender cancels that balance as part of your negotiations, the IRS will demand income taxes on the $20,000. You never pocketed that cash, you have lost whatever equity you had in your house, and you are still reeling financially. It's phantom income, but the IRS requires your lender to file a Form 1099-C reporting that it canceled your debt. Think of it as the tax code's version of kicking you while you're down.

The bill, H.R. 3648, would exclude home mortgages from the tax code's "discharge of indebtedness" rules, retroactive to Jan. 1 of this year. Homeowners who fell behind on payments this year, lost their homes and had portions of their debt forgiven by lenders would be able to avoid the phantom tax. Owners who lost their homes in 2006 and earlier would not be eligible for relief.

The full article is found here.

The Mortgage Relief Act

9/3/2007 3:22:00 PM

Last week President Bush announced that he will include The Mortgage Relief Act in his initiative to help troubled homeowners affected by the current real estate market correction. Click here for the Press Release from Senator Stabenow who introduced the bill in Senate. We had previously blogged about it's companion, House Resolution 1876 here, and were speculating that it will pass this year, due to the recent rise in Foreclosures, and the increasing popularity of Short Sales as a tool for homeowners in trouble. While the bill still has to pass, with such overwhelming support from both Senate, the House and the President (and the National Association of Realtors) - It looks like we were right!

You can read the full text of the H.R. 1876 here.

To show your support, contact your Congressman or Senator.

The 1099 Issue

8/3/2007 11:25:00 AM

One of the most frequent questions about a Short Sale is the Borrower's potential tax liability after the sale. The IRS requires lenders to submit a Form 1099 stating the forgiven amount. Sellers who meet the Internal Revenue Service definition of insolvency (either in bankruptcy or with debts exceeding assets) will not have to pay taxes on the forgiven amount. Most good accountants know and understand this, and are aware of IRS Form 982, which is used specifically for this purpose.

Even more help is on the way, the U.S. House of Representatives has introduced the Mortgage Cancellation Tax Relief Act (H.R. 1876), which would eliminate taxes on any debt forgiven on a principal residence through either short sale or foreclosure. The NATIONAL ASSOCIATION OF REALTORS® has been working to support this bill.

National foreclosure activity up 55% in first half of '07

7/30/2007 2:36:00 PM

National property foreclosure activity was up 55 percent in the first half of 2007 over last year, according to new data released today, as many housing markets across the country continue to see slowing sales and stagnant price growth.

A total of 925,986 foreclosure filings -- which includes default notices, auction sale notices and bank repossessions -- were reported on 573,397 properties nationwide during the first six months of the year, according to a midyear report released today from foreclosure tracking service RealtyTrac. The findings show increases of more than 30 percent from the previous six-month period.

The report also shows a foreclosure rate of one foreclosure filing for every 134 U.S. households for the first half of the year.

"Despite a slight drop in June, foreclosure activity shows no sign of slowing down," said James J. Saccacio, chief executive officer of RealtyTrac. "Based on the rate of foreclosure activity in the first half of 2007, we could easily surpass 2 million foreclosure filings by the end of the year, which would represent a year-over-year increase of over 65 percent."

Nevada posted the nation's highest foreclosure rate, with one foreclosure filing for every 40 households during the first half of 2007, according to RealtyTrac. The state reported a total of 25,208 foreclosure filings on 14,687 properties, more than double the number of foreclosure filings reported in the previous six-month period and nearly triple the number reported in the first half of 2006.

Colorado reported one foreclosure filing for every 60 households during the first half of 2007, the nation's second-highest state foreclosure rate. The state reported a total of 34,287 foreclosure filings on 19,411 properties, a 15 percent increase from the previous six-month period and a 38 percent increase from the first six months of 2006.

With one foreclosure filing for every 69 households during the first half of 2007, California registered the nation's third-highest state foreclosure rate. The state reported a total of 189,560 foreclosure filings on 104,572 properties, up 122 percent from the previous six-month period and up 232 percent from the first half of 2006.

Other states with foreclosure rates among the top 10 included Michigan, Florida, Ohio, Georgia, Arizona, Connecticut and Indiana.

California's foreclosure filing total and unique property count were both highest among all the states in the first half of 2007. Florida reported the second-highest totals, with 102,213 foreclosure filings on 64,250 properties. Florida's foreclosure rate -- one foreclosure filing for every 81 households -- ranked fifth highest among all the states.

Texas reported 69,471 foreclosure filings in the first half of 2007 -- the nation's third-highest foreclosure filing total. But the state's unique property count of 41,592 came in fourth place behind Ohio's 44,594, RealtyTrac said. Ohio reported 60,728 total foreclosure filings, the fourth most of any state. Other states with foreclosure filing totals among the nation's 10 highest were Michigan, Georgia, Illinois, Colorado, New Jersey and Arizona.

Addressing concerns over the way RealtyTrac counts foreclosure filings, the company added the new "unique property" count, which presents the number of unique property addresses with some type of foreclosure action filed against them during the six-month period. RealtyTrac said the new metric counts a property only once, even if there were multiple foreclosure filings against the property during the report period.

The tracking service said it will issue this count four times a year, including a mid-year and annual report.

"The addition of this metric to our foreclosure report was spurred by a data request for unique property addresses from the Federal Reserve Bank, which is using our data for market and risk analysis, and we believe it will serve as a valuable complement to the total foreclosure filing count that we have been including all along," said Rick Sharga, RealtyTrac's vice president of marketing.

"It's interesting to note that the total foreclosure filings and unique property counts reveal almost identical trends on the national level: foreclosure filings are up 39 percent from the previous six months and 56 percent from the first half of 2006; unique property counts are up 32 percent from the previous six months and up 58 percent from the first half of 2006," he said.

The company notes the consistency is similar at the state level, where the same five states have the highest numbers of households in foreclosure and foreclosure filings, and the same six states have the highest percentages of both foreclosure filings per household and percentage of households in the foreclosure process.

"The bottom line," Sharga noted, "is that no matter how you count -- by individual households or by the total number of foreclosure filings -- foreclosure activity is up significantly in 2007. We hope that by providing both the total amount of foreclosure activity and the number of households involved, we're providing information that legislators, regulators, lenders, home buyers and sellers can use to make intelligent and informed decisions."

US housing difficulties cause for concern but no systemic threat

7/25/2007 6:39:00 AM

The downturn in the US housing sector, which has sparked market jitters, is of serious concern but poses no major risk of an overall US financial meltdown, the ratings agency Moody's said Wednesday.

"The shock-absorption capacity of the 'core' of the financial system is very high," Moody's said in a comment.

While the current crisis in the US "subprime" mortgage lending market "does not raise genuine systemic risk concerns, ... there are still serious reasons to worry," the report said.

Subprime lenders, who make loans to people with questionable credit histories, have lately suffered widespread mortgage defaults in the United States, sparking fears the trend will dampen consumer spending and overall US growth.

US Federal Reserve Chairman Ben Bernanke said last week that he expected "significant financial losses" from failed subprime real estate loans but only a limited effect on the economy.

"What we've learned since early this year is that a lot of the subprime mortgage paper is not as good as was thought originally, and there are clearly going to be significant financial losses ... associated with defaults and delinquencies on these mortgages," he said.

"Some estimates are in the order of between 50 billion and 100 billion dollars of losses associated with subprime credit products."

But the Fed chief said the crunch in subprime housing did not appear to have spilled over to the broader economy, although there was a risk it could occur.

"We have not seen a significant effect on consumption," Bernanke said.

Moody's on Wednesday maintained that the accounts of the leading US financial institutions were sound. "Their ability to withstand shocks is very high, perhaps never higher."

It pointed to five securities firms, Bear Stearns, Goldman Sachs, Lehman Brothers, Merill Lynch and Morgan Stanley.

"Profitability is very high, with 45 billion dollars (33 billion euros) accumulated in 2006 as opposed to 12 billion in 1998," the report said.

"The main risk in our view at this juncture is not that the system may suddenly collapse but rather that it derives a feeling of invulnerability from this episode, when losses have been eventually digested," Moody's warned.

As seen here.