Federal Mortgage Campaign Set To Expire

According to Freddie Mac rates on mortgages dropped below 5% again last week, just a few weeks before a government program designed to help keep rates low is scheduled to end.

The average rate on a 30 year fixed rate mortgage was 4.97% last week or down from 5.05% a week earlier. Rates had been as low as 4.71% in December of 2009 but have hovered close to 5% since then being held pretty much in check by a Federal Reserve program hoping to spur more home buying by lowering the cost of obtaining a loan.

The Fed set aside $1.25 trillion to buy mortgage backed securities. That campaign is scheduled to end or expire on March 31. Questions remain as to how effective the program has been. Most home buyers did not see any significant change in the cost of obtaining a new mortgage, although guidelines for lenders making mortgages have changed.

The other part of the equation of course, to encourage more lending by banks into the mortgage markets has not seemed to work at all. Data provided by the National Association of Realtors shows that pending sales, (homes in contract) of existing homes dropped 7.6% in January from December. That is the lowest reading since April 2009 and a disappointment. That index had declined for 2 of the past 3 months and was widely expected to improve.

Some market analysts think that mortgage rates may begin to rise once the Federal program ends later this month. This may be a good indication that potential home buyers and sellers should get into a contract and lock rates now.

If you or someone you know have been considering buying or selling a home in Southeast Florida please call me directly at 561-306-6736 or drop me an email at rebuygeorge@yahoo.com.

For more info on buying and selling visit www.ges-realty.com . It's easy to use and totally free. What could be better than free in this economy?

Appraisals & The Home Valuation Code of Concuct (HVCC)

On May 1, 2009 Fannie Mae and Freddie Mac implemented the HVCC (Home Valuation Code of Conduct) as a result of government pressures to reform valuation methods related to residential mortgage loans.

The impact of the HVCC has been chaotic. A myriad of inherent flaws with valuations methods has created more downward pressure on housing prices which in turn has contributed to a lagging housing recovery. Not the least among the unintended consequences of the HVCC has been the use of foreclosed and other distressed properties as comparables. Other inappropriate practices indicate that appraisers work in areas where they don't know the market. In many instances the value of comparables is determined by an exterior inspection only because the appraiser is unable to or unwilling to inspect the interior .

The following is an overview of the HVCC.

- Appraiser Selection

All members of the lender’s loan production staff are forbidden from selecting, retaining, recommending or influencing the selection of an appraiser.
Loan production staff consists of:

Individuals who are involved in origination, underwriting, presenting credit offerings for approval and credit decisions Any person who reports to a loan production staff member or is compensated on a commission basis upon the successful completion of a loan.

- Quality Control on Appraisals

Lenders agree to perform quality control tests on at least 10% of appraisals by use of retroactive or additional appraisal reports or other appropriate method.The quality control testing must be performed on randomly selected appraisals The lender must report the findings of the quality checks to the Independent Valuation Protection Institute (IVPI)

- Hotline Notification

Lenders must notify appraisers and borrowers of the IVPI’s telephone and email hotline for complaints concerning any improper or attempted improper influence on appraisers or the appraiser process.Lenders must notify every appraiser of the hotline in a separate letter. Each borrower must be notified of the hotline in a cover letter accompanying the appraisal.

- Effective September 1 2009:

Fannie Mae requires all lenders to obtain a signed and processed Form 4506 from all borrowers at application and again at closing. Form 4506 is an IRS document that allows a lender to verify a borrowers tax returns through the IRS.

According to a report by FAR (Florida Association of Realtors) housing industry groups such as the NAR (National Association of Realtors) and the NAHB (National Association of Home Builders) are calling on federal regulators to address the problematic HCVV and to develop "clear and concise guidance" for the use of foreclosed or distressed properties in appraisals in order to develop more realistic valuations in appraisals based on truly comparable properties.

For more information and updates on the HVCC please feel free to call me, George Sinacori, GES Real Estate, LLC directly at 561 306-6736 or email me at rebuygeorge@yahoo.com

Free $- Time Running Out For Homebuyer Tax Credit

Free $ Are You Getting Yours?

National Association of Realtors estimates that about 1.8 to 2 million first-time buyers will take advantage of the $8,000 First Time Homebuyer tax credit this year, with approximately 350,000 additional sales that would not have taken place without the credit.



Buyers have little time to act because they must complete the transaction by Nov. 30 to qualify for the credit. Unless extended, contracts signed but not completed by that date will not be eligible – it is taking approximately two months to complete home sales in the current market. If it's a short sale it can be longer.

© 2009 FLORIDA ASSOCIATION OF REALTORS®



contact me at 561-306-6736 for more info or email rebuygeorge@yahoo.com

July Home Sales Increase as Prices Decline

Homebuyers are taking advantage of depressed prices of existing homes. Home sales in July rose by 3.1% with many of the reported sales being foreclosed properties and private owners pressed to sell for less than they had originally paid for a home. The increase in sales is reported to be the largest single monthly increase since Feb. 2007.

Prices of existing or previously owned homes nationally were 7.1% lower in July than they were a year earlier according to the National Association of Realtors (NAR) as homebuyers took advantage of the lower prices and still favorable mortgage rates. Although sales have increased prices have continued to fall. The rule of supply and demand still applies and should continue putting pressure on prices as available homes for sale continue to outpace sales and more inventory comes on the market. . Anyone who does not need to sell quickly should wait until some of the dust settles before putting a home on the market.

Homebuyers may not want to wait to long on the other hand. It may be wise to grab up a property now considering some of the conditions that may affect buying ability or buying power over the coming months:

- On October 1 of this year FHA is required to have the ability to insure and refinance as much as $300 billion dollars in home loans for existing homeowners. This measure of the Housing and Economic Reform Act of 2008 could significantly reduce the number of homes entering the market over the last 3 months of this year.

- Interest rates are favorable now and may begin to rise as inflation becomes more of a threat.

- The First Time Homebuyer Tax Credit is available until June 30th of 2009. Taking advantage of buying this year allows the buyer to take that credit in 2008.

Anyone needing more information on available homes and prices in Southeast Florida can contact me directly either by phone 561-306-6736 or email at rebuygeorge@yahoo.com. You also may want to visit my website at ges-realty.com .