Adriana Steel

FYI~ Ladies and Gentlemen:

So......rate this morning dipped to near 4.75% and then rose back to around 5% by end of day. Many are saying that rates will be in the mid 4% range with or without the treasury plan - I completely agree. But with the dollar weakness and Opec's attempts, they may not last too long.

For $#%^# sakes! It is an absolute bargain time to buy. Read below.

Home loans cheapen after Fed steps in

By Lynn Adler Lynn Adler December 17, 2008

NEW YORK (Reuters) - The Federal Reserve's promise to expand a massive mortgage debt buying program pushed U.S. home loan rates to at least 5-year lows on Wednesday, putting them on track to hit the lowest levels in four decades.

Average 30-year fixed mortgage rates sank by about 1/4 percentage point to around 5 percent, but could end the week even lower and provide a much needed boost not only to consumer pocket books, but the economy.

The Fed said on Tuesday it might pump up a program to buy up to $500 billion of mortgage bonds issued by Fannie Mae, Freddie Mac and Ginnie Mae to free lenders to make new and lower-rate loans, and stimulate the worst housing market since the Great Depression.

Rates are still volatile in an unstable market, said Phil Immel, broker at Prudential California Realty in Dana Point, California. "But in two to four weeks, the goal of reaching 4-1/2 percent mortgage rates on conforming product should be a reality," he said.

That's a huge drop from October when the thirty-year mortgage rates were closer to 6-1/2 percent and equal to a more than $300 saving on each monthly payment for a $250,000 loan.

"It should be a great boon for home buyers and or people refinancing," added Immel.

After ending unchanged on Tuesday after the Fed action, the average 30-year mortgage fell to 5.05 percent on Wednesday afternoon from 5.30 percent, according to HSH Associates.

"The Fed did announce some important and expanding supports for other markets and mortgage markets especially," said HSH vice president Keith Gumbinger, in Pompton Plans, New Jersey.

If rates end the week at an average of 5-1/8 percent, as expected, it would be the lowest level in at least 46 years, he added.

By some other measures, the loan rate fell to 4.70 percent on Wednesday from 5.01 the day before, according to Zillow Mortgage Marketplace.

Bankrate said brokers are offering conforming loans near 5 percent. It expects to broach a new low this week or next for its 23-year-old weekly rate survey, under the prior record of 5.28 percent in June 2003.

Rates have edged lower in the past month since the Fed first announced this plan, as well as its intention to buy up to $100 billion of other debt issued by Fannie, Freddie and the Federal Home Loan Banks.

TOURNIQUET

The lowest rates in at least five years, and two years of steep home price declines improve home affordability, but will not recreate the record refinance and purchase boom seen earlier this decade.

As endemic of this cycle in which the boom turned into a bust of record late payments and foreclosures, even sharply lower rates won't be enough to help everyone.

"There will be a fair percentage, probably 35 percent or more," that might be unable to refinance because of income changes or their house is worth less than their mortgage, Immel said. "We're putting a tourniquet on a patient right now that could die easily. That wasn't happening four or five years ago."

Earlier this decade, when rates were last this low, money was easy and lenders offered a wider array of often riskier products that have been extinguished.

House prices still have room to fall because of near-record levels of unsold inventory, housing analysts said, keeping many buyers at bay. Unemployment is spiking.

The savings could be meaningful if a borrower has the employment, income and credit score to qualify, however.

A homeowner with a $250,000 30-year mortgage taken at 6 3/8 percent is paying about $1,559 each month. At the latest rate nearer to 5 percent on Wednesday, the payment could be cut to around $1,318, according to HSH Associates.

Still, "the market is very different today than four or five years ago," Gumbinger said. "Those lows were the result of private market investor appetites. We would not be at these levels without the government's stated appetite for mortgages and mortgage-backed securities."

David H. Stevens

President - COO

Long & Foster Companies

Hi everyone,

The renewal of the $5,000.00 first time D.C. home buyer tax credit (i.e., purchaser has not owned a principal residence in D.C. within 1 year of the date of settlement) was included in the Emergency Economic Stabilization Act of 2008, which the United States Congress passed on Friday, October 3, 2008 and was signed by President Bush the same day. The tax credit is retroactive to December 31, 2007 and will be good through December 31, 2009. Individuals and families buying a home in the District for the first time are eligible even if they have owned elsewhere but not in the city. Unlike the $7,500.00 tax “credit” that was made part of the Housing & Economic Recovery Act of 2008 the tax payer does not have to repay any of the $5,000.00 D.C. credit. Note, however, that you cannot utilize both credits, so I would favor the D.C. credit since the taxpayer does not have to repay it, even though it is a lower amount (check with your accountant of course). The credit is applied against the taxpayer’s total Federal income tax liability at the end of the year—not a credit of any sort at the time of settlement. It is subject to income limitations, so please review the attachment I provided to you which contains some additional detailed information about the credit. Please feel free to share this with any of your clients and colleagues.

Best,

Adriana Steel

Realtor

W.C. & A.N. Miller Realtors (A Long & Foster Co.)

Cell: 240-793-1791

Office: 202-966-1400

adriana@LNF.com

www.adrianasteel.lnfre.com

Hi Everyone,

My Regional Manager just sent this out. Hang in there! Things are improving!

Please see below, which is an excerpt from the Mortgage Banking Assoc.’s daily newsletter.

Pending Sales of Homes Up 7.4 Percent, Highest in 13 Months
Toledo Blade (OH) (10/09/08)
The beleaguered housing market received a piece of sorely needed good news, as the National Association of Realtors reported an unexpected jump in pending home sales in August compared to July. The group's monthly index reading of 93.4--the highest number in more than a year--was up 7.4 percent from July and up 8.8 percent from August 2007. Pending sales, which refer to home contracts that have not yet closed, typically result in a sale one to two months later. The numbers were higher across the United States, with the West posting a gain of 18.4 percent, the Northeast settling 8.4 percent higher, the Midwest weighing in 3.6 percent higher and the South up 2.3 percent.

Best,

Adriana Steel

Realtor/ W.C. & A.N. Miller Realtors (A Long and Foster Co.)

Cell: 240-793-1791

Office: 202-966-1400 ex:3335

adriana@LNF.com

www.adrianasteel.lnfre.com

Oh by the way ......... I'm never too busy for you or your referals!

So.... I suppose everyone's heard that the Bail Out Bill didn't pass. And, I know some of you out there are in panic mode. Try not to be. I for one am trying to be optimistic.

Some things to ponder....and maybe lift up your spirits.........

Ok so I know the 777 point drop yesterday seemed to be pretty drastic. However, in percentage terms it was NOT nearly as big as the 1987 S & L crisis (a.k.a. "Black Monday"). There was a 22.6% DOW drop in 1987 versus a 6.98% drop yesterday. Also, remember that the DOW rebounded over 30% over the next couple of years. Interest rates remained low also. (1)

Times are uncertain! The market is a bit crazy now, but I believe the Housing Bill will pass & when it does the market will come back. Also, as the bottom of the market gets closer, buyer's of stocks will emerge.

Hey did anyone else notice that that oil dropped yesterday. Only at $99 a barrel now. (Sorry to be sarcastic)!

The ten yr. treasury dropped to 3.63%. So hopefully interest rates on a 30yr. fixed will go under 6% again.

We are in a recession now! This may not be our best winter. But, we will emerge next spring in a more stable market....... interest rates will be low..... and buyers that had been waiting will finally come out.

2009 will be better than 2008.

Everyone, the end is almost near. Be patient. Dont' give up. And remember, housing will always led the market out of corrections.

And to those of you in the Real Estate Industry we will be in the forefront of this recovery. The best is yet to come!

Realtors, Lenders, Buyers, Sellers, I wish you all the best,

Adriana Steel

Realtor

W.C. & A.N. Miller Realtors (A Long & Foster Co.)

Cell: 240-793-1791

Office: 202-966-1400 Ex: 3335

adriana@LNF.com

www.adrianasteel.lnfre.com

By the way...... I'm never too busy for you or your referrals!

(1) Courtesy of Dave Stevens