Tuesday, July 29, 2008

House and Senate Agree on Housing Bill (Boulder Mortgage Update)


A comprehensive Housing Bill was agreed upon by the House, the Senate, and the President this week, and it was successful in increasing confidence in the guarantees provided by Fannie Mae and Freddie Mac.


As a result, mortgage rates ended the week modestly lower. Formal passage of the Housing Bill is considered a sure thing. One primary feature is that it authorizes the Treasury to provide credit to and buy shares in Fannie and Freddie, if needed. According to industry trade publications, Fannie and Freddie, along with the FHA, accounted for 90% of US home mortgages originated in the second quarter of 2008, up from just 49% one year earlier. Keeping the two firms healthy is vital for the US housing market.

Besides providing support for Fannie and Freddie, the Housing Bill will also help the housing market in other ways. One program will allow the FHA to insure up to $300 billion in new loans targeted at troubled homeowners. Another program adds tax credits for first-ti me homebuyers, which in essence will be a 15-year interest free loan for up to $7,500. In addition, the bill provides funds for more low income housing and grants to be made for local community redevelopment. A wide range of smaller programs are included as well.

The economic news in the housing sector was mixed. June Existing Home Sales fell slightly, and inventory levels of unsold homes increased.
In contrast, New Home Sales were significantly higher than expected in June, and the May figures were revised higher as well. High inventory levels will probably need to come down to achieve a meaningful recovery in the housing market, but the chief economist of the National Association of Realtors (NAR) believes that the Housing Bill will play a major role in helping the housing market to rebound. In particular, he expects the first-time homebuyer tax credit to boost future home sales.

Friday will be the big day next week. The important Employment report will come out that day. As usual, this data on the number of new jobs created, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month, since the health of the labor market is perhaps the single biggest factor in the performance of the economy. Early estimates are for a loss of 70K jobs in July.

The first reading of second quarter 2008 Gross Domestic Product (GDP) will be released on Thursday. GDP is the broadest measure of economic activity. The two national manufacturing indexes, the ISM and the Chicago PMI, will come out on Thursday and Friday. Consumer Confidence and Construction Spending will round out the schedule.


For Mortgage Information call Dave Schell at Insight Financial in Boulder Colorado 303-444-2885

Monday, July 14, 2008

Short Sale In Boulder Area and Northern Colorado

There are many ways homeowners can lose a home, but signing away ownership from foreclosure or bankruptcy can strip an owner of dignity and their nest egg. The option of a "short sale" or "discounted payoffs" may make more sense for the homeowner; however, there are some issues relating to these kinds of real estate transactions. The first issue, other than the Mortgage Forgiveness Debt Relief Act of 2007, the home owner should be aware the I.R.S. could consider such an act of debt forgiveness as income. There are no guarantees that a lender who accepts a "short sale" will not legally pursue a borrower for the difference between the amount owed and the amount paid. In a few states, the amount is known as a deficiency. The second issue is, even if the property does qualify, not all lenders will agree to do a short sale or discounted payoffs. S o when going though the varying requirements remember the following: When calling the lender do not speak with the "real estate short sale" or "work out" department(s); rather, get the supervisor's name, the name of the individual capable of making a decision. You will receive better cooperation if you prepare a "Letter of Authorization" to the lender (giving the lender permission to speak with third parties). The letter should include the following:
- Property Owners Name
- Property Address
- Loan Reference Number
- The Date- Agent's Name
- Agent's Contact InfoSome of the other documents needed to have a successful short sale are:
•Preliminary Net Sheet
•Hardship Letter
•Proof of Income and Assets
•Copies of Bank Statements
•Comparative Market Analysis
•Purchase Agreement & Listing Agreement