An Insider’s Guide to Living the Good Life in Naples

The National Association of Mortgage Brokers (NAMB) filed a lawsuit against the U.S. Department of Housing and Urban Development (HUD) after it issued the Real Estate Settlement Procedures Act (RESPA) Final Rule issued November 17, 2008.

NAMB, with the support of Baker & Hostetler LLP and the Federal Policy Group, argues that the Final Rule is in violation of law, finalized on a flawed consumer testing methodology and will have a detrimental impact on small businesses consequently having a negative affect on consumers.

“HUD has failed to examine properly the Final Rule’s impact on small businesses,” said Marc Savitt, NAMB President. “It will put small business mortgage professionals at a significant competitive disadvantage, impeding competition in the mortgage industry and ultimately hurting consumers. What we are looking for is a level playing field for consumers.”

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The Internal Revenue Service said it will try to make it easier for homeowners in financial straits to refinance or sell their homes.

The plan announced by IRS Commissioner Doug Shulman would speed up a process where financially distressed homeowners may request that a federal tax lien be made secondary to liens by the lending institution that is refinancing or restructuring a loan.

Taxpayers will also be able to ask the IRS to discharge, or remove, its claim to a property in certain circumstances where the property is being sold for less than the amount of the mortgage lien.

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Mortgage rates today are the lowest in 45 years.  This is one of the times where you can really capitalize on refinancing your home.

Below is some immediate information about refinancing rates being advertised:

- primary residences (but 2nd home rates are very close behind)
- loan amounts of $417,000 or below
- must have at least 20% equity as determined by a new appraisal (so a $417K loan means your   property must appraise at least at $521,250) or you will be paying mortgage insurance.  
Condo’s may require a bit more equity to qualify depending on the condo questionnaire answers.
- FICO scores of 740 get the best rates (rates incrementally increase as your score gets lower per new Fannie Mae rules this year)
- The rates you hear on TV/Internet are usually charging on average 6/10th of a point no matter what they tell you in their print advertisements so be wary. 
- All loan programs are FULL Doc loans these days for qualification.  There are no low/no doc loans anymore.  This means 2 year’s tax returns for everyone just like the old days
or the net income average of the two years if you are self-employed.  If you are a W-2 employee, you are qualified on your current base rate
and average your variable income (commission, OT, bonuses, etc.) for the past two years.

Treasury’s new plan - 4.5% mortgage rates
 
Homeowners may soon enjoy mortgage rates as low as 4.5 percent if the Treasury Department has its way.  According to The Wall Street Journal’s on-line addition, the department is discussing a plan that would use Freddie Mac and Fannie Mae to push banks to make mortgages available at more than a full percentage point below the current levels for a 30 year fixed rate mortgage.
 
The plan under review might lower rates to the 4.5 percent range and would be in addition to a program announced last week wherein the Federal Reserve will purchase up to $600 billion of debt either issued or backed by Freddie Mac, Fannie Mae, Ginnie Mae, and the Federal Home Loan Banks.  That program is already having an effect on mortgage rates, which have dropped and caused investors to pay more attention to the stocks of banks and homebuilders.
 
Probably in response to the earlier new program and the lower rates, mortgage applications jumped a record 112.1 percent as seasonally adjusted over the previous week, according to the Mortgage Bankers Association.  The Journal reported that the government would encourage banks to issue new mortgage loans at lower rates by offering to purchase securities backed by the loans at a price equivalent to the 4.5 percent rate, funding the program by issuing Treasury debt at 3 percent.
 
Source: The Wall Street Journal, Mortgage News Daily

Sterling at six year low and is moving towards a 20 year low but there yet.
Dollar is still the favourite for defensive investors.

Sterling lost 11 cents in the first four days of the week, touching below $1.46 on Thursday. Consolidation over the weekend allowed it to open in London this morning at $1.47, close to its lowest level for six years.

It was another week of general investor nervousness for all the same old reasons. If the mood was not of unremitting gloom then the bright spots were very few and far between. Even Beijing’s announcement of a $580 billion stimulus package fell into the bad news box for many investors; China’s economy must be in a parlous situation to require such a boost. Following the IMF’s lead a couple of weeks ago the OECD added its weight to forecasts that developed economies will remain in recession until at least the middle of next year.

The weekend’s G20 meeting in Washington attracted more advance optimism among the tabloids than it did among investors. As Britain’s Observer newspaper put it afterwards, the meeting was “…never, in a single afternoon, going to solve a crisis that has been a generation in the making.” If anything, it made investors more nervous about the banking sector’s recovery prospects: The word “stimulate” cropped up three times while “regulation” appeared 11 times.

There was no let-up in the downward pressure on Sterling. Weak financial institutions, falling interest rates, an ailing real estate market and mounting job losses all fuelled the perception that in a world of economic dogs, Britain is the undisputed pack leader. Wednesday’s quarterly Inflation Report from the Bank of England gave every indication that falling inflation would mean yet more interest rate cuts by the MPC. It was another concrete lifebelt for the sinking Pound.

Source: MoneyCorp

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One bright spot in the housing market: inventory decreased nationally according to ZipRealty¹s third Quarter 2008 Housing Market Report. At the end of Q3 2008, in the 28 major metropolitan areas monitored by ZipRealty, the total number of single family homes, condominiums and townhouses for sale decreased 9.6 percent over the same time last year, and 4.4 percent over Q2. Salt Lake City and Seattle saw the largest year-over-year increases in housing inventory  (13.2 percent and 8.8 percent respectively) Orange County and Las Vegas saw the largest year-over-year decreases in inventory (28.9 percent and 23.7 percent respectively) Price reductions continued to increase, but at a slower pace than previous quarters; In the markets monitored by ZipRealty:
 The number of homes with at least one price reduction continued to rise in the third quarter, but the growth rate has flattened.
45.2 percent of homes on the market were price reductions, compared with 43.2 percent in the second quarter 2008 and 41.4 percent in the first quarter 2008.
Markets that had the highest percentage of price reductions included Tucson (49.1 percent), Orange County (49.0 percent) and Las Vegas, Boston and Orlando (48.9 percent).
Out of six markets reviewed (Los Angeles, San Francisco Bay Area, Chicago, Boston, Washington, D.C. and Seattle), several zip codes have homes selling on average for over list price.

The Federal Housing Administration has grown so large that by the end of
this year it will guarantee mortgages for 3 in 10 U.S. borrowers, many of
whom
have bad credit or loans that required no verification of income.

Congress wants FHA to do more. The Hope for Homeowners program (H4H)
unveiled Oct. 1, authorizes the FHA to guarantee up to $300 billion of
30-year,
fixed rate home loans for struggling borrowers over the next three years.

The Congressional Budget Office estimates that 400,000 households will
get FHA- insured loans.

“FHA has completely replaced subprime and Alt-A,” said David Olson,
former director of market research at Freddie Mac.

Now only Fannie Mae is involved in a higher percentage of U.S. mortgages.

FHA’s growth mirrors the explosion in mortgage lending during the ho using
boom.

Credits
Bloomberg
Peter G. Miller

The government does everything possible to ease credit and mortgage markets. It went as far as  taking over Fannie Mae and Freddie Mac, promised hunderds of billions in bank capital infusions and bad assets buy outs, cut rates by 50 basis points. The primary purpose of all those efforts is to lower financing costs for residential and commercial property purchases. But if you watch TV these days, residential property mortgage rates are going up steadily for weeks now.

How can rates be going up when the economy is tanking and the government is throwing everything it can at the banking sector and credit markets?

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With the world bracing itself, as the global recession continues to bite with seemingly no sign of abating, Canadians it seems have been dealt a winning hand after an official think tank predicted that Canada will not follow suit. 

This forecast was delivered by the combined resources of analysts within a leading bank, a think tank in Canada and even more reassuringly, the International Monetary Fund. Obviously there will be some signs of a slow down, but it is generally business as usual and importantly, the housing market is still strong and flourishing.

The forecast for growth this year has been cut to 0.6 per cent from 0.8 per cent and in 2009 to 0.9 per cent from an earlier target of 1.7 per cent. Although disappointing that forecasts have had to drop, it is also very encouraging to see just how healthy the Canadian economy is and as such there will not be two consecutive quarters in which the economy dips into a negative, therefore there will be no recession.

This coupled with the International Monetary Fund’s prediction that Canada will have the fastest growing economy of the G7 major industrial countries next year, is all helping to keep Canada away from the murkier waters endangering so many other countries.

Canada also has the soundest financial system in the globe, according to a new Global Competitiveness Report from the World Economic Forum, which also placed Canada on the top 10 list of the world’s most competitive countries.

Source: themovechannel.com

Recovery in global property markets is likely to be slow as no one is predicting any fast movement in the bank lending systems despite unprecedented Government bailouts…

The real cost of the finance crisis is slowly emerging today as banks in Europe reveal just how much they need to avoid going bust and concern grows about the state of countries close to
Russia who are facing severe difficulties.

At least $65 billion is needed in the UK to shore up the country’s struggling banks including Royal Bank of Scotland and Lloyds TSB, it has been announced.

The French Government is making $55 billion available and in Germany a staggering $550 billion in guarantees for banks is being considered.

Japanese Finance Minister Shoichi Nakagawa, meanwhile, said his country would consider guaranteeing all bank deposits if necessary.

Australia and New Zealand have guaranteed all bank deposits and Indonesia upped its guarantee to $205,000 while India pledged more liquidity to help financial markets.
Qatar launched a $5 billion plan to purchase shares of its listed banks.

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