Fanny Mae

2009 Mortgages Have Found Their “Sweet Spot”!

Jim Walberg is in the residential real estate trenches everyday.  For the last few months a “sweet spot” has shown up as the hottest price point in the East Bay housing markets – $729,000 and below!

Remembering that all real estate is “local”,  the experience we are having in our San Francisco Bay Area real estate markets is close to a “feeding frenzy” when it comes homes selling in the $725,000 price point and below.  In fact, real estate is not just local, it is made up of dozens of “micro-markets” within miles of each other.  Yesterday, KCBS 740 AM radio  did a feature on this very topic and even asked me to comment about it as a Realtor who has been serving this region for over 30 years. Read more

Fanny Mae

2009 Mortgage Interest Rate Predictions!

We currently have the lowest mortgage rates in recorded U.S. history.  Is it time for Buyers to take action?  YES!  Jim Walberg’s conversation with Michael Tacconi.

Two days ago I sat down with one of the key loan officers in the East Bay, Michael Taconni, and had a discussion about what is happening with interest rates in 2009 and when should Buyers take action.  It was a very interesting discussion.  Here were three of the questions I presented to Michael to address.

When should home Buyers consider buying a home in 2009?  Michael’s immediate answer was NOW!  He said that Buyers have never had better home mortgage rates (YouTube)  to chose from than right now – April 2009!  Never in all the years of recording mortgage interest rates have they been so low.  The mortgage options available are all in this same category – from five year and seven year adjustable rate mortgages, to 30 year fixed mortgages.  He told me that the huge amount of activity of home purchases and refinancing that has hit his firm in the last few weeks has been like a “sumami”.

Will mortgage interest come down further in 2009?  Michael’s take on this question was an emphatic NO!  He let me know that the Fed rate is between ZERO and .25% (YouTube).  He said that there is no further room for it to go down further.  Again, the mortgage interest rates have never been as low as today in U.S. history!!!  So I followed it up with the next logical question…

Will mortgage rates go up in 2009 and when?  He was just as emphatic with his answer to this question – YES, and soon!  He gave me some indicators that Buyers need to pay attention to (YouTube).  The first one was watching the stock market and see if the March 2009 rally was actually going to be sustainable.  If it continues to rally, those that are currently invested heavily in bonds will start moving back into the stocks.  He referred to a blog that Elizabeth Weintraub posted late last year titled, Top 10 Real Estate Predictions For 2009.  Here were her predictions for mortgage rates. 

“Because mortgage rates are influenced by mortgage bonds and mortgage-backed securities, not fed rate cuts, I predict interest rates could rise to 7% in 2009. Maybe more if investors continue to worry about inflation and the government adds a new supply of U.S. Treasuries to the market to offset the looming deficit.”

Michael believes that these record low mortgage rates may not last longer than a month or six weeks at the most.  The Federal stimulus package is starting to be felt in a very positive manner throughout the economy.  As the consumer confidence begins to change direction, the stock market will continue it’s climb and rates will certainly go up.  He even felt it will be a dramatic interest rate climb that will leave many Buyers in the dust who are waiting for a better time to buy.  TODAY is the day to contact your mortgage professional, and your Realtor if you want to purchase a home in 2009.  Contact me today  if you would like to talk about you needs further.

Fanny Mae

The Bailout Package???: Guest Contributor – Michael Lissack

An Open Appeal to the President and the Treasury: Humbly submitted by Michael Lissack!

Wall Street and the general public are unimpressed by the latest bailout suggestions. The only solution for our economy is to FIX the mess regarding housing PRICES. The economy is suffering from the risk of foreclosures and the inability of banks to properly value the mortgage assets on their books.  There is a solution.  Create a loan repackaging service at Fannie and Freddie.

Any borrower may ask to have their loan purchased by the repackaging service, but the service should only repurchase loans related to the primary residence of the borrower or a home which had been the declared primary residence of the borrower for at least six months following January 1, 2007.  If a home equity line or a second mortgage exists on a home it must be included in the repackaging.  Loans aggregating more than $1 million per home shall be ineligible.

Loans to be repurchased shall be valued at the lesser of the outstanding principal balance or 100% of the average of three appraisals.  The existing mortgage servicer/holder shall NOT be required to sell the loan (but the existence of the offer will create a market value for marking to market purposes).

The borrower of a repackaged loan shall agree to add a deed covenant granting the repackaging service 50% of the increased value of the home as of the fifth anniversary of the date of the new loan not to exceed the amount of the principal reduction from the original loan and the new repackaged loan.   The home can only be sold during these five years subject to this secondary lien.  The repackaging service can sell the secondary lien to a new owner of the home prior to the fifth anniversary date and to the original owner of the home (if he or she is still the owner) on or after the fifth anniversary date.

The Treasury shall subsidize all repackaged loans such that the stated interest rate for the first five years shall not exceed 4.5%.  New home purchases shall be offered immediate purchase of their loans by the repackaging facility.  This plan will stabilize housing prices.

I have enjoyed conversations with Michael over the years, and I really like his thought process.  What your comments about Michael’s open letter to President Obama?